U.S. DISTRICT Judge Royce Lamberth has handed down an important decision clarifying the inviolability of diplomatic properties and the authority of the president to protect frozen foreign assets. The context could not be less comfortable: At the request of the federal government, Judge Lamberth quashed an effort by a man whose daughter was killed in a suicide bombing in the Gaza Strip to satisfy a judgment he had obtained against Iran by tapping such frozen assets as that country's old embassy. The opinion is not just, but it is correct. The executive branch's ability to conduct foreign policy simply must trump the right of any individual plaintiff to collect money damages against a sovereign state.

The problem is that the 1996 antiterrorism law waives the normal immunity of foreign countries in order to allow lawsuits in American courts against terrorist states -- suits brought by victims of acts committed by these countries or by terrorist groups they back. Stephen Flatow sued Iran, which supports the Palestinian Islamic Jihad movement, for the 1995 murder of his daughter. When Iran did not show up in court to defend itself, Judge Lamberth awarded him a $248 million default judgment. Since the Iranians showed no inclination to pay up, Mr. Flatow sought to tap Iranian assets, which have been frozen in this country since the Islamic revolution. The administration, at that point, went to court to stop him.

Frozen assets are a tangible bargaining chip in international relations, and the government has, to boot, treaty obligations to protect consular properties. Permitting the seizure of the Iranian Embassy by a litigant would invite disrespect for American diplomatic properties abroad. Congress made matters worse in 1998 by amending the law explicitly to permit frozen assets to be tapped -- leaving the administration to argue that an ambiguous waiver authority permitted the president to continue protecting the frozen assets.

Judge Lamberth rightly ruled both that the waiver power is broad and that the embassy is off-limits. "The court regrets," he writes, "that [Mr. Flatow's] efforts to satisfy his judgment against Iran have proven futile. . . . It appears that plaintiff Flatow's original judgment against Iran has come to epitomize the phrase `Pyrrhic victory.' "

The administration and Congress both deserve blame for a law that is, in large measure, a lie. Because frozen assets -- whether consular or otherwise -- are tools of foreign policy, the executive branch has to resist their being turned over to private plaintiffs. Congress never should have passed, nor President Clinton signed, a law that could only offer Mr. Flatow justice by depriving the administration of control over important instruments of foreign policy. This law should be repealed.