President Bush’s words to the press as he welcomed Secretary of State Powell back from the Middle East suggest that the mission, for all of our concerns at the outset, may have had at least something of a positive outcome. The secretary went to both Jerusalem and Ramallah under what amounted to a public presidential instruction to try to get Israel to comply with a demand that it withdraw its forces. It ended with Messrs. Bush and Powell sitting together in front of the press and voicing the understanding that there was real good reason for Israeli forces to be remaining at Ramallah and Bethlehem. We’d like to think that Mr. Bush hearkened, at least somewhat, to the extraordinarily moving protest that was mounted Monday at Washington by those sympathetic to Israel’s cause. We’d also like to think that Mr. Powell gained an appreciation for what Mr. Sharon and his countrymen are facing. As Mr. Bush made clear in his remarks, the killers of Israel’s Minister of Tourism are still holed up in the basement of the very building in which sits Yasser Arafat.

Yet for every step forward in the Middle East this administration seems determined to take a step back. Earlier this week, it exercised a waiver that will permit it to dodge a law that blocks sending financial aid to the Palestinians. Incredibly, the waiver will open the way for something like $100 million in taxpayer funding to make its way to the Palestinians and, given that money is fungible, make it easier for the Palestinian Authority to hold out during the terror campaign aimed at killing Jewish women and children. According to the Zionist Organization of America, which has been alerting the press to this absurdity, the law that Mr. Bush just waived stipulates that if Mr. Arafat violates the Oslo Accords, America may not give any financial aid to the Palestinian Arabs unless the president decides that it is “in the national security interest of the United States.” The Oslo pact, it pointed out, requires the Palestinian Authority to refrain from violence against Israel, disarm terrorists and outlaw their terror, surrender them for prosecution, and halt anti-Israel incitement.

Years from now, students of history are going to look back on the American funding of the Palestinian Authority the way they look back now on, say, the collaboration of the Swiss banks with the enemy in World War II. Or the discovery that some American businesses were dealing with Germany and Japan even while the war was looming or under way. There will come a time when all this will seem scandalous even to those who give it a pass today. One wonders why Senators Schumer and Clinton, to name but two, aren’t screaming bloody murder. In any event, Mr. Bush’s decision to permit a diversion of taxpayer funding to the Palestinian regime sends precisely the wrong signal as the administration prepares to try to organize an international peace conference. A peace conference at a time when there is no indication of peaceful ambitions in the enemy camp is folly enough. But a conference that is bought with American money for the Palestinian Authority at a time when it is actively funding terror will be a cockpit for appeasement.