Limitation on Assistance to the Palestinian Authority Act of 2006 - States that it shall be U.S. policy to promote the emergence of a democratic Palestinian government that: (1) denounces and combats terrorism; (2) is actively working to disarm and dismantle terrorist agencies, networks, and facilities; (3) is actively working to eliminate terrorist incitement and the commemoration of terrorists in Palestinian society; (4) respects its neighbors' boundaries and sovereignty; (5) recognizes Israel's existence and its right to secure borders; and (6) upholds the human rights of all people.
Amends the Foreign Assistance Act of 1961 to provide assistance under such Act or any other provision of law to the Palestinian Authority (PA) only during a period for which a presidential certification has determined that the PA: (1) is not controlled by a foreign terrorist organization; and (2) recognizes Israel's right to exist, disarms all militias, renounces violence against Israel, takes definitive steps to be an active and willing participant in peace negotiations, and removes people with ties to terrorist organizations from its security services.
Directs the President to make and transmit such certifications to Congress every six months.