The Saudi Pipeline: Petro-dollars, Palestinian terror -- and a U.S. blind eye.(Saudi Arabia's role in conflicts in Israel)

Moral clarity, it seems, is always in danger when the U.S. foreign- policy establishment gets around to addressing the issue of Saudi Arabia. Documents of indisputable authenticity, captured by Israel during its West Bank incursion earlier this year, show in stunning detail how Saudi petro-dollars are fueling Palestinian terrorism; to which documents the U.S. State Department is turning a very deliberate blind eye.

The Bush administration has endeavored to cut off funding for terrorist networks by freezing assets and blocking terrorists' access to banks in nations allied to the U.S. It is apparent, however, that some Saudi cash was transferred to Palestinian terrorists by way of the Cairo- Amman Bank in Egypt -- which is to say, it passed through two nations that are our nominal allies. How could funds headed for known terrorist organizations have moved unchecked through systems in these countries? Some of the Saudi funds actually reached a Hamas-allied group, the Tulkarm Charity Committee (TCC), by going through banks in an even more surprising place: the United States. Financial binders found at TCC's West Bank offices showed Saudi fund transfers through both Chase Manhattan Bank and Citibank in New York State.

Given that the Treasury Department has compiled a list of known terrorists and terrorist organizations -- with which U.S. banks are forbidden to do business -- it would appear that these banks have made a colossal error, and failed to follow a pretty clear presidential order to block terrorist funds.

Unfortunately, though, this perception is incorrect. In fact, neither the Saudi organization primarily responsible for funding Palestinian terrorism nor the TCC is found in the president's executive order listing group and individual sponsors of terrorism. This should be at least somewhat surprising, given the wealth of information showing that Saudis gave money explicitly intended for families of homicide bombers and other terrorists. But it's less surprising when you consider that the State Department is in the business of burying the truth about Saudi Arabia. In May, secretary of state Colin Powell was asked on NBC's Meet the Press whether the Saudis were giving money to families of homicide bombers; despite clear evidence to the contrary, he responded that he believed the Saudi line that the funds were being used purely for humanitarian aid.

The documents Israel found in the West Bank constitute a substantial paper trail connecting terrorists to the House of Saud. Memos show that Saudi funds came into the Palestinian territories as block grants for families of terrorists and others, with individual payments made to recipients explicitly listed by the Saudis.

The Saudi Committee for Support of the Intifada Al Quds -- Al Quds is the Arabic phrase for Jerusalem -- spearheaded a much-publicized $109.6 million Saudi fundraising telethon for Palestinian "martyrs," and is also the subject of the most damning evidence. Even before the telethon, the group had transferred at least $55.7 million to various groups in the West Bank and Gaza; according to informed sources, the actual amount most likely is significantly higher than that. The Saudi Committee -- headed by Saudi interior minister Prince Nayif bin Abd al- Aziz and financially supported by the royal family -- knowingly gave money to homicide bombers and other terrorists responsible for attacks that killed more than 90 Israelis and wounded over 600. And that's just in the last of ten payment rounds.

The TCC, which received the funds from the Saudis, works hand-in-glove with Hamas, the group responsible for 40 percent of the homicide bombings during the intifada. The TCC doles out social and welfare benefits to Palestinians, and thus constitutes the chief means by which Hamas buys support among the Palestinian people. The headquarters of this supposedly humanitarian group had materials encouraging the murder of Jews, and even a celebratory poster of the homicide bomber who murdered 29 and injured 140 in the Netanya Passover massacre.