The Obama administration has signaled it may intervene next week in a civil lawsuit in which 11 American families won a potential billion-dollar judgment from the Palestinian leadership over a series of bombings and shootings that killed or wounded dozens of U.S. citizens, a move that critics say would find the government siding with terrorists over its own citizens.

The families won a $218.5 million judgment in February after a seven-week trial in Manhattan Federal Court in which a jury found the Palestine Liberation Organization and Palestinian Authority were responsible for a string of attacks from 2001 to 2004 that killed 33 and injured hundreds. A 1992 law that requires damages in such cases to be tripled, as well as interest on the award, would push it to as much as $1.1 billion. The judgment, which the Palestinians are appealing, would equal nearly a third of the Palestinian Authority’s annual operating budget.

Late last month, the Department of Justice, which had previously not been involved in the 11-year-old case, informed the court it was considering filing a “statement of interest” in the case by Aug. 10, but officials would not elaborate. A source said the Department of Justice was working with the State Department on the matter.

“As the filing states, the United States is considering whether to submit a Statement of Interest in the [Sokolow v. Palestine Liberation Organization] matter,” a DOJ spokeswoman told FoxNews.com. “Any filing would be made on behalf of the United States, not on behalf of any other party.”

“An administration which claims to be fighting terror is planning to weigh in favor of the terrorists.”

- Kent Yalowitz, atttorney for families who sued Palestinian leadership

The Palestinian leadership would not have to pay the award unless it is upheld on appeal, but U.S. District Judge George Daniels said he may require the Palestinians to post bond while the case works its way through the process to show “some meaningful demonstration that the defendant is ready and willing to pay the judgment.”

The plaintiffs included the estates of four U.S. citizens who were killed and several dozen Americans who were physically or psychologically injured in the attacks as well as their families. Kent Yalowitz, the families’ attorney, has requested that the Palestinian leadership be required to place $30 million per month in escrow while the case is appealed. Yalowitz suspects the U.S. government is considering intervening to help the cash-strapped Palestinian leadership avoid the bond.

“An administration which claims to be fighting terror is planning to weigh in favor of the terrorists,” Yalowitz told FoxNews.com. “If our government actually came in favor of convicted terrorists, it would be a really sorry statement about the way our government treats terror.”

John Bolton, former U.S. Ambassador to the United Nations and a Fox News contributor, said the administration would be wrong to assert a diplomatic role in the case.  

“Palestine is not a state, and is therefore, not entitled to be treated like a state,” Bolton told Fox News. “It does not enjoy sovereign immunity and it would be wrong for the United States government to argue otherwise in federal court.”

The complicated damage formula includes tripling the award to $655.5 million under a 1992 U.S. anti-terrorism law, as well as interest, which lawyers for the families place at $165 million, and which would also be tripled. Although Daniels has indicated he is unlikely to impose interest, the total sought by the families’ attorneys is $1.15 billion.

"This could be the end of the Palestinian Authority," Palestinian Authority attorney Mitchell Berger said in court. "And that's why we're here to argue over the judgment."

Families of the victims say the jury has spoken, and note the PLO and Palestinian Authority pays stipends to the very terrorists and their families who carried out the attacks.

“The U.S. government and the DOJ should be ashamed that they are even considering telling an American court that the PLO and the PA can afford to pay convicted terrorists, but cannot afford to pay the victims of those very same terrorists,” Alan Bauer, a family member, told Fox News.

The federal jury in February found the PLO and Palestinian Authority liable over six shootings and bombings between 2002 and 2004 in the Jerusalem area, which have been attributed to the al-Aqsa Martyrs Brigades and Hamas.

In two cases, the attackers were Palestinian Authority police officers; in another, a suicide bomber was shown to have worked closely with the PA’s military intelligence office in planning the attack; and in a 2004 suicide bombing of a bus, in which 11 were killed and 50 wounded, PA police and security officials admitted to participating in the plot and making the bomb.

In each case, the Palestinian Authority paid the families of suicide bombers and those later jailed for their participation in the attack.