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The Knesset approved on Tuesday in the first reading the "second Intifada law," a bill stipulating that the state of Israel is not responsible for damages caused by anti-terror military activities in enemy territories.

The chairman of the Likud faction, MK Gideon Sa'ar, supported the bill and announced that he would take action to expand its scope so that "Israel will not be the only country in the world that serves as an ATM funding terror against its citizens."

The bill, initiated by Justice Minster Daniel Friedmann, attempts to circumvent a High Court of Justice ruling to the contrary. The High Court has already anulled the first "Intifada Law" which aimed to similarly exempt the state from responsibility.

The law, if approved in the second and third readings, would make it impossible for Palestinians living in what is termed enemy territory to sue the state for damages incurred during Israel Defense Forces operations.

According to the bill, which was approved by a majority of 17 MKs versus eight, the state will not be compelled to compensate individuals who suffered damages during military operations aimed at preventing terror in enemy regions. The law would retroactively apply to damages beginning in September 2006, when the first Intifada law went into effect.

The law stipulates that in any lawsuit filed by a resident of an enemy territory, the first argument would be that of no state responsibility for damages. The law also states that if the court, in spite of the law, still orders the state to compensate the complainant, then the compensation will be calculated in accordance with the standard of living in the enemy territory in question.

The current "intifada law" bill aims to replace the first law, which was approved but later rejected by the court. On February 13, 2006, a panel of nine justices unanimously overturned the law, which gave the state of Israel immunity from compensation lawsuits filed by Palestinians, even if the damages were not incurred during wartime operations.

The justice minister said during the reading that "in fact, there is a war here. Damages incurred during the course of a war must be settles in inter-state talks."

Interior Minister Meir Sheetrit, who served as justice minister when the first intifada law was formulated, said "there is no country in the world that compensates the other side in an armed conflict. We are the only country in the world."

MK Yossi Beilin of Meretz said that the law "suffers from the banality of evil. This is a foolish and unnecessary law. It's a shame, and a stain upon our law books. It will cause such heavy damage."

Meretz faction chair Zahava Gal-On said "this is an attempt to harm and disrespect the High Court of Justice." The Chairman of the Hadash Party, Mohammed Barakeh, said the bill was a "law of cruelty and the act of being cruel."

The Association for Civil Rights in Israel said Tuesday that there was no significant difference between the current bill and the law that was overturned in 2006 by the court. However, the new bill was not submitted as an amendment to the Basic Law, which makes it vulnerable to another rejection by the court.