; and (5) the President should report to Congress annually on specific steps being taken by the United States to encourage Arab League states to normalize their relations with Israel to bring about the termination of the Arab League boycott of Israel, including those to encourage allies and trading partners of the United States to enact laws prohibiting businesses from complying with the boycott and penalizing businesses that do comply. Palestinian statehood 7036. (a) Limitation on assistance None of the funds appropriated under titles III through VI of this Act may be provided to support a Palestinian state unless the Secretary of State determines and certifies to the appropriate congressional committees that— (1) the governing entity of a new Palestinian state— (A) has demonstrated a firm commitment to peaceful co-existence with the State of Israel; and (B) is taking appropriate measures to counter terrorism and terrorist financing in the West Bank and Gaza, including the dismantling of terrorist infrastructures, and is cooperating with appropriate Israeli and other appropriate security organizations; and (2) the Palestinian Authority (or the governing entity of a new Palestinian state) is working with other countries in the region to vigorously pursue efforts to establish a just, lasting, and comprehensive peace in the Middle East that will enable Israel and an independent Palestinian state to exist within the context of full and normal relationships, which should include— (A) termination of all claims or states of belligerency; (B) respect for and acknowledgment of the sovereignty, territorial integrity, and political independence of every state in the area through measures including the establishment of demilitarized zones; (C) their right to live in peace within secure and recognized boundaries free from threats or acts of force; (D) freedom of navigation through international waterways in the area