"The Palestine Liberation Organization today issued a statement in which it accepted United Nations Security Council resolutions 242 and 338, recognized Israel's right to exist and renounced terrorism. These have long been our conditions for a substantive dialogue. They have been met. Therefore I have authorized the State Department to enter into a substantive dialogue with PLO representatives. The Palestine Liberation Organization must live up to its statements. In particular it must demonstrate that its renunciation of terrorism is pervasive and permanent. "The initiation of a dialogue between the United States and PLO representatives is an important step in the peace process, the more so because it represents the serious evolution of Palestinian thinking towards realistic and pragmatic positions on the key issues. But the objective of the United States remains, as always, a comprehensive peace in the Middle East.
"In that light, we view this development as one more step toward the beginning of direct negotiations between the parties, which along can lead to such a peace.
"The United States' special commitment to Israel's security and well-being remains unshakable. Indeed, a major reason for our entry into this dialogue is to help Israel achieve the recognition and security is deserves."
The U.S.-Israel Memorandum of agreement of September 1, 1975, signed by then Foreign Minister Yigal Allon and Secretary of State Henry Kissinger gave Israel what it thought would be the power to veto PLO participation in any international peace conference.
It says: "The U.S. will not recognize nor negotiate" with the PLO as long as the PLO does not recognize Israel's right to exist and Security Council resolutions 242 and 338.
The refusal to open a dialogue with the PLO until it renounced terrorism was considered by the State Department to be implicit in UN resolutions 242 and 338, but was made explicit by act of Congress later. In the Anti-Terrorism Act of December 22, 1987, passed by Congress after the Achille Lauro hijacking, U.S. law stated that the PLO was responsible for "the murders of dozens of Americans" and that Yasser Arafat himself was "implicated in the murder of a U.S. ambassador."
"Therefore the Congress determines that the PLO and its affiliates are a terrorist organization and a threat to the interests of the U.S., its allies and international law and should not benefit from operating in the United States." The law barred contact with the PLO except for the purpose of receiving "informational material" and barred the PLO from establishing an office in the U.S.
The termination clause of the act states: "The provisions of this title shall cease to have effect if the President certifies in writing to the President pro tem of the Senate and the Speaker of the House that the Palestine Liberation Organization, its agents, or constituent groups thereof no longer practise or support terrorist actions anywhere in the world."
Sources: Public Papers of the President