Why not? They're already deliberately circumventing Congressional anti-terror laws so they can fund Hamas. A healthy amount of their legal security assistance goes either to Fatah terrorists or to Hamas terrorists. The rest of their Middle East presence is divided between funding anti-Semitic, anti-American, and anti-Western media and funding no-Jews-allowed business programs. They go out of their way to diplomatically screw Israel in US-led talks and international forums. Just think of this as protecting their investment:

The State Department is considering supporting the Palestinian Authority in its quest to avoid paying hundreds of millions of dollars in judgments won by American victims of Palestinian terrorist attacks in Israel, according to Palestinian officials and defense lawyers involved in the cases. U.S. officials insist that no decision has been made regarding the complex litigation, which could force the Bush administration to choose between supporting compensation for victims of terrorism and bolstering the Palestinian government as the United States presses for a breakthrough in Israeli-Palestinian peace talks. Testimony in Israeli courts has connected senior Palestinian leaders -- such as the late Yasser Arafat -- to specific terrorist attacks involved in the lawsuits. But Palestinian officials have argued that it makes no sense for the United States to be providing millions of dollars in aid to the Palestinian Authority while U.S. courts are threatening to bankrupt it.

This is so mindbogglingly craven that it's gotten the attention of One Jerusalem. They've obviously got bigger fish to fry right now, so their attention to this is a pretty good sign of how bad things have gotten at Foggy Bottom.

References:
* State Department Deliberately Circumvents Anti-Terrorism Laws, Funds Hamas [MR]
* Israel Captures Terrorist Who Was Leading Abbas's Anti-Terrorism Forces [MR]
* Hamas Has 200 Tons Of Explosives That The US Gave To Fatah (Plus: Egypt Says It's Israel's Fault) [MR]
* Karen Hughes - Public Diplomacy Chief, Utter Failure - Finally Resigns [Video] [MR]
* State Department Tries To Cleanse Obviously Illegal "No Jews Allowed" Application But Is Too Fucking Stupid To Turn Off Track Changes [MR]
* Annapolis As A Rosetta Stone For How Anti-Israel Bait And Switch Diplomacy Works [MR]
* Confirmed: Rice Went Out Of Her Way To Screw Israel On Lebanon II [MR]
* Palestinians Ask U.S. To Intervene in Suits Over Terrorist Attacks [WaPo]
* State Department Outrage [One Jerusalem]
* Palestinians say Jerusalem still high on agenda [Reuters]

Previously:
* US State Department Shines Again
* It's Official: State Department Positions More Anti-Israel Than What Palestinians Demand
* State Department Anti-Israel Ideology Gets Silly, Kills Americans