The Justice Department cited concern that such a hefty amount could "compromise the PA's ability to operate as a governmental authority."
While the US government could not legally submit a formal appeal, their "Statement of Interest" addressed to the court also said that the amount of damages required from the PA should be made taking into considering the "critical national security and foreign policy interests of the United States that should be considered."
A New York jury ordered that the damages be paid in February for attacks that killed 33 people and wounded hundreds more — a penalty that lawyers say would be automatically tripled under the US Anti-Terrorism Act, but that the State Department fears could weaken the stability of the Palestinian government.
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The case has represented one of the most notable efforts by American victims of the Israeli-Palestinian conflict to seek damages in US courts, though the plaintiffs may face challenges in trying to collect. The Palestinian Authority and the Palestine Liberation Organization, which were held liable for the bloodshed following dramatic testimony from survivors and victims' relatives, have indicated that they are unable to pay the damages and won't provide money while their appeal is pending.
The Justice Department also added to the appeal that, "The United States strongly supports the rights of victims of terrorism to vindicate their interests in federal court and to receive just compensation for their injuries."
But not all were convinced.
"We are gratified that the Department of Justice supports the rights of survivors of international terrorism to enforce their rights and collect the judgment but disappointed that the State Department failed to take any stand against the PLO and PA's policy of putting convicted terrorists on their payroll as soon as they are jailed," said Attorney Kent Yalowitz with Shurat Hadin Law Center which represented the plaintiffs in this case. "If the PA has enough money to pay convicted terrorists, it has enough to pay the judgment in this case."
Israeli Attorney Nitsana Darshan-Leitner added that, "We had hoped that the State Department would act to deter the PLO from using its funds to continue paying the convicted terrorists rather than trying to nullify the verdict of a unanimous New York jury."
The case was brought in New York by a group of American families and concerns a series of bombings and shootings between 2002 and 2004. Jurors heard dramatic testimony from relatives of people killed and survivors who never fully recovered.
The plaintiffs also relied on internal records showing the Palestinian Authority continued to pay the salaries of employees who were put behind bars in terror cases and paid benefits to families of suicide bombers and gunmen who died committing the attacks. But a defense lawyer argued that there was no evidence that the Palestinian authorities had sanctioned the attacks, as alleged in the lawsuit.
Associated Press contributed to this report.