When a Palestinian gunman burst into a bat mitzvah celebration in northern Israel in 2002, killing 6 people and wounding more than 30, the attack sparked anger and despair, and military retaliation by Israel. It also prompted a lawsuit in New York, which has taken an unusual turn.

The family of the sole American, Aharon Ellis, killed in the attack, charged the Palestine Liberation Organization and the Palestinian Authority with orchestrating the shooting that killed him. The suit was brought under a law that allows American victims of international terrorism to sue for triple damages in federal court.

A federal judge awarded the family a default judgment of $192.7 million in damages after the P.L.O. and the Palestinian Authority refused to defend the suit on the merits.

But now the Palestinians, holding themselves out as a partner in the Middle East peace process, have changed lawyers, and asked the judge for a second chance. The judge, Victor Marrero of Federal District Court in Manhattan, has agreed to set aside the judgment and give them that chance.

But there's a catch. He is requiring the Palestinians to post a bond of $192.7 million so that if they lose again, the damages would be paid...

..."Civil litigation, even in normal circumstances, is time-consuming, expensive, and you certainly can't be certain of victory," said John F. Murphy, a Villanova University law professor. "That kind of problem is exacerbated in the terrorist context."

Professor Murphy estimated that there had been a few dozen cases under the law, which was passed in the early 1990s after the murder of Leon Klinghoffer in a Palestinian hijacking of the cruise ship Achille Lauro. Another expert, Beth Van Schaack, an associate law professor at Santa Clara University, said that the legal process, if the Palestinians do participate fully, could allow an inquiry into Palestinian finances, and whether money went to support terrorism.

"The Abbas administration has gotten themselves in a little bit of a bind," Professor Van Schaack said. "If they are claiming, 'We can't put up the bond because we don't have the money,' " she said, "that opens the door to do some level of discovery about money."...