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In the post-9/11 era, scholars have scrutinized the impact of law, policy, and practice upon the construction of Arab and Muslim identities as “terrorists.” In this paper, I argue that such analysis stands to benefit from a more pointed examination of U.S. foreign policies, specifically regarding the Palestinian-Israel conflict. I contend that such an examination reveals how racial constructions of American national identity are shaped, and how this informs the construction of the prototypical “terrorist.” By incorporating a transnational perspective in order to engage with the impact of U.S. foreign policy in the Middle East, I conclude that the prototypical terrorist is not only Arab and Muslim, as would be the case if the examination was limited to US-domestic policy only, but also Palestinian. I demonstrate this by examining two inter-related sites: federal court proceedings grappling with the Arab-Israeli conflict and decisions by the legislative and executive branches that impact such proceedings. In both instances, I trace how the three branches of the US political establishment work in concert to construct the national boundaries of the “true American” that include Israel and exclude Palestinians.