Palestinian Anti-Terrorism Act of 2006

Palestinian Anti-Terrorism Act of 2006 - (Sec. 2) States that it shall be U.S. policy to: (1) support a peaceful, two-state solution to the conflict between Israel and the Palestinians in accordance with the Performance-Based Roadmap to a Permanent Two-State Solution to the Israeli-Palestinian Conflict (Roadmap), and oppose those organizations, individuals, and countries that support terrorism and violently reject such two-state solution; (2) promote democracy and the cessation of terrorism and incitement in institutions and territories controlled by the Palestinian Authority (PA); and (3) urge members of the international community to avoid contact with and refrain from financially supporting the terrorist organization Hamas until it agrees to recognize Israel, renounce violence, disarm, and accept prior agreements, including the Roadmap.

Amends the Foreign Assistance Act of 1961 to provide assistance under such Act to the Hamas-controlled PA only during a period for which a presidential certification has determined that: (1) no PA ministry, agency, or instrumentality is controlled by Hamas unless the Hamas-controlled PA has publicly acknowledged the Jewish state of Israel's right to exist and is adhering to all previous agreements and understandings with the United States, Israel, and the international community, including agreements and understandings pursuant to the Roadmap; and (2) the Hamas-controlled PA has made demonstrable progress toward purging from its security services individuals with ties to terrorism, dismantling all terrorist infrastructure and cooperating with Israel's security services, halting anti-American and anti-Israel incitement, and ensuring democracy and financial transparency.

Directs the President to make and transmit such recertifications to Congress every six months (except for the first recertification which must be made within 90 days of the initial certification).

States that assistance to the PA may not be provided until 15 days after the date on which the President has provided notice to the Committees on International Relations and on Appropriations of the House of Representatives and to the Committees on Foreign Relations and on Appropriations of the Senate (Committees) in accordance with specified reprogramming notification provisions under such Act.

Exempts from such limitation, upon certification to Congress, assistance for: (1) administrative and personal security costs of the Office of the President of the PA; (2) activities of the President of the PA to fulfill his or her duties as President, including controlling border crossings, fostering the Middle East peace process, and promoting democracy and the rule of law; and (3) the judiciary branch of the PA and other entities.

Requires with respect to such exempted assistance that: (1) it is in U.S. national security interests, and the proposed recipient is not a member of, or controlled by, Hamas or any other foreign terrorist organization; and (2) the President consults with the Committees.

Applies such assistance limitations to the unexpended balances of funds obligated under such Act to the PA prior to enactment of this Act.

(Sec. 3) States that: (1) assistance may be provided under such Act to nongovernmental organizations for the West Bank and Gaza only during a period for which a certification is in effect; and (2) such assistance shall be marked as assistance from the American people or the government of the United States unless the Secretary of State or the Administrator of the United States Agency for International Development (USAID) determines that such marking will endanger the persons delivering such assistance or would have an adverse effect on implementation of the assistance.

Exempts certain categories of assistance from such limitations.

Provides presidential notification requirements.

Directs the Secretary, for FY2007 and FY2008, to certify to the Committees that the Government Accountability Office (GAO) will have access to appropriate U.S. financial information in order to review assistance use.

Directs the Secretary to take steps prior to obligating funds to ensure such assistance is not provided to or through an individual or entity with terrorist ties.

Prohibits using such funds to recognize or honor individuals or the families of individuals who commit terrorism.

Sets forth auditing requirements.

(Sec. 4) Expresses the sense of Congress that during any period for which a certification is not in effect the PA-controlled territory should be deemed to be in use as a terrorist sanctuary for purposes of the Export Administration Act of 1979 and the Foreign Relations Authorization Act, Fiscal Years 1988 and 1989.

(Sec. 5) Prohibits during any period in which a certification is not in effect visa issuance to any alien who is an official of, affiliated with, or serving as a Hamas-led PA representative, except: (1) the President of the PA and his or her personal representatives, provided that the President of the PA and such personal representatives are not affiliated with Hamas or any other foreign terrorist organization; and (2) members of the Palestinian Legislative Council who are not members of Hamas or any other foreign terrorist organization.

(Sec. 6) States that the President, during any period in which a certification is not in effect, should restrict to a 25-mile radius of U.N. headquarters the travel of PA and Palestine Liberation Organization (PLO) officials and representatives, other than the President of the PA and his or her personal representatives (provided that the President of the PA and such representatives are not affiliated with Hamas or any other foreign terrorist organization), who are stationed at the United Nations.

(Sec. 7) Prohibits during any period in which a certification is not in effect establishment of an office, headquarters, premises, or other facilities within U.S. jurisdiction at the direction of, or with funds provided by, the PA.

Authorizes the President to waive such prohibition upon certification to the Committees that such waiver is vital to U.S. national security interests.

(Sec. 8) States that the President should direct the U.S. executive director at each international financial institution to use U.S. influence to prohibit assistance to the PA unless a certification is in effect. Exempts from such prohibition: (1) assistance for basic human health needs; and (2) assistance to promote democracy, provided that such assistance does not directly benefit Hamas or any other foreign terrorist organization.

(Sec. 9) Prohibits funds for the State Department from being used by any U.S. officer or employee to negotiate with members or official representatives of Hamas, Palestinian Islamic Jihad, the Popular Front for the Liberation of Palestine, al-Aqsa Martyrs Brigade, or any other Palestinian terrorist organization (except in emergency or humanitarian situations) until such organization: (1) recognizes Israel's right to exist; (2) renounces terrorism; (3) dismantles the terrorist infrastructure; and (4) recognizes all previous agreements and understandings between Israel and the PA.

(Sec. 10) Directs the Secretary to establish the Israeli-Palestinian Peace, Reconciliation and Democracy Fund.

Requires the Secretary to submit an annual report to the Committees.

Authorizes FY2007 appropriations.

(Sec. 11) Directs the Secretary to submit an annual report to the Committees concerning direct assistance to the PA by other countries and international entities.

(Sec. 12) Defines "appropriate congressional committees" and "Palestinian Authority" for purposes of this Act.