But the agency is also supposed to be a sort of "validator" of Palestinian efforts to fight terrorism, both on its own and with the Israelis.
Israeli security officials remained skeptical about Palestinian efforts to end attacks.
They also noted that the Israeli government appeared, for the first time since the fighting broke out, to be taking seriously Palestinian efforts to curb the violence.
A former Clinton administration official said the Americans had known of a Palestinian effort buy weapons for more than a year.
But Mr. Sharon strongly disagreed, declining to acknowledge the Palestinian effort at all.
But he attributed the drop to Israeli operations rather than any lessening of Palestinian efforts to attack Israelis.
The Israelis are becoming worried that lack of funds may seriously impair Palestinian efforts to begin self-government.
Despite the damage, he says he supports Palestinian efforts to hit Israel, however ineffective.
The Bush administration is rightly seeking to build on indigenous Palestinian efforts rather than imposing its own arrangements from outside.
Mr. Netanyahu has declared that Israel will make no concessions until he sees a sustained Palestinian effort against terrorism.