Reaffirms support for a negotiated solution to the Israeli-Palestinian conflict resulting in two states, a democratic Jewish state of Israel and a democratic Palestinian state living in peace and mutual recognition. States that any Palestinian unity government must forswear terrorism, accept Israel's right to exist, and reaffirm previous agreements made with Israel. Opposes any attempt to establish or seek recognition of a Palestinian state outside of an agreement negotiated between Israel and the Palestinians. Urges Palestinian leaders to: (1) cease efforts at circumventing the negotiation process, including through a unilateral declaration of statehood or by seeking recognition of a Palestinian state from other nations or the United Nations (U.N.); and (2) resume direct negotiations with Israel. Supports the Administration's opposition to a unilateral declaration of a Palestinian state. Calls upon the Administration to lead a diplomatic effort to oppose a unilateral declaration of a Palestinian state and to oppose recognition of a Palestinian state by other nations within the U.N. and in other international forums prior to a final agreement between Israel and the Palestinians. Affirms that Palestinian efforts to circumvent direct negotiations will harm U.S.-Palestinian relations and will have implications for U.S. assistance programs for the Palestinians and the Palestinians Authority (PA). Reaffirms the U.S. statutory requirement precluding assistance to a PA that includes Hamas unless that PA and all its ministers accept Israel's right to exist and all prior agreements and understandings with the United States and Israel.