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August 11, 2015

The Obama administration, citing the potential for economic and political harm to the Palestinian Authority and the broader peace process, asked a judge on Monday to “carefully consider” the size of the bond he requires for the authority to appeal a huge damages award for its role in six terrorist attacks in Israel that killed and injured Americans.

The Palestinian Authority and the Palestine Liberation Organization were found liable in the attacks after a lengthy civil trial in Manhattan that ended in February. The antiterrorism law under which the case was brought provided for the tripling of the jury’s award of $218.5 million, leading to a total of $655.5 million.

The plaintiffs included 10 families, comprising about three dozen members, eight of whom suffered physical injuries in the attacks, which occurred from 2002 to 2004.

Defense lawyers had argued that the Palestinian Authority could not afford to post the appeal bond, which they said was typically 111 percent of the judgment, and asked that the judge waive the bond requirement altogether.

The plaintiffs sharply opposed the request, and late Monday night the administration took the unusual step of filing a formal “Statement of Interest of the United States of America” with the judge, George B. Daniels of Federal District Court, with the government’s view on the matter.

“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,” the Justice Department said in the document.

The filing also included a declaration by Antony J. Blinken, the deputy secretary of state, elaborating on the government’s concerns about the impact of requiring a high bond. Depriving the Palestinian Authority of “a significant portion of its revenues would likely severely compromise the P.A.’s ability to operate as a governmental authority,” he wrote.

“A P.A. insolvency and collapse would harm current and future U.S.-led efforts to achieve a two-state solution to the Israeli-Palestinian conflict,” he added.

The declaration also included a strong endorsement of the rights of terror victims to seek and receive “just compensation” from terrorists and sponsors of terrorism, and said the government was not taking a position on the merits of the case, only the impact of the bond.

The case has been a source of tremendous friction between the State Department and the Justice Department, according to federal officials involved in the discussions.

The State Department had argued that the Palestinian Authority, which has faced financial problems for years, could not afford to pay the bond without jeopardizing vital government services. And as a diplomatic matter, the United States has seen a viable Palestinian Authority as essential to maintaining stability in the region.

At the Justice Department, however, senior officials argued strenuously that the government should not intervene in any way that makes it harder for victims of terrorist attacks to receive compensation after a fair trial.

More than 20 plaintiffs also signed a letter to Attorney General Loretta E. Lynch in support of the jury’s verdict, as did several members of Congress, including Senator Charles E. Schumer, a Democrat of New York.

Conspicuously absent from the document was the office of Preet Bharara, the United States attorney for the Southern District of New York. That office, long regarded as the pre-eminent federal prosecutor of international terrorism cases, ordinarily handles federal court filings in Manhattan. The office declined to comment.

The case had been brought under the Anti-Terrorism Act, which allows Americans who have been the victims of international terror to sue in the United States.

At trial, family members and others offered graphic and often emotional testimony about the attacks, which occurred on the street, inside a bus, at a crowded bus stop and in a cafeteria on the Hebrew University campus. The plaintiffs also included the estates of four victims who were killed.

In building their case, the plaintiffs offered evidence that many of those involved in planning and executing the attacks were employees of the Palestinian Authority, and that the authority had made payments to the families of suicide bombers and paid salaries to convicted terrorists imprisoned in Israel.

The defense had argued that the Palestinian Authority and the P.L.O. were not involved in the attacks.

Last month in court, Judge Daniels made it clear he wanted some sort of bond as a “significant demonstration” that the defendants were “willing and able to pay a judgment, if a judgment is entered and is affirmed on appeal.”