Dubai Ports World said that it was prepared to give up its management stake in six U.S. ports, a move made as congressional leaders warned President Bush that both the House and Senate appeared ready to block the takeover.
What could be a solution to this political nightmare for the Bush administration came in a letter read on the Senate floor by Virginia Republican John Warner, reports CBS News correspondent Bob Fuss.
"Because of the strong relationship between the United Arab Emirates and the United States and to preserve that relationship, DP World has decided to transfer fully the U.S. operation of P&O Operations North America to a United States entity," DP World's chief operating officer, Edward H. Bilkey, said in the statement
Other Republicans said the firm had privately pledged full divestiture.
Despite the announcement, the Republican-controlled Senate continued on its course to stop the deal, rejecting an effort by Republican leaders to kill a Democratic initiative. The Senate voted 51-47 to consider the Democratic legislation, falling 16 short of the 67 votes GOP leaders needed to prevail.
DP World said it will transfer all interest in U.S. port operations to an American-based company, but it was unclear immediately how DP World would manage the divestiture. The company indicated that details of the surprise deal were still being worked out.
Warner said Sheikh Mohammed Al Maktoum, prime minister of the United Arab Emirates, "advised the company ... that this action is the appropriate course to take." Dubai is in the UAE.
Just after Warner's announcement, Sen. Charles Schumer, D-N.Y., a chief critic of the deal, was cautious.
"This is obviously a promising development, but the devil's in the details," Schumer said. "Those of us who feel strongly about this issue believe that the U.S. part of the British company should have no connection to the United Arab Emirates or DP World."
Fuss reports that Schumer and other Democrats still want a Senate vote to make sure the Dubai deal is finished.
Rep. Peter King, a leading critic in the House, also applauded the decision, but he said the controversy wasn't over yet.
"It would have to be an American company with no links to DP World, and that would be a tremendous victory and very gratifying," said the New York Republican, chairman of the House Homeland Security Committee.
"If they are in fact divesting themselves of the American part of the deal, then there's nothing more to be done," King said after a meeting at the White House.