The surprise concession late Thursday cools the standoff building between the Congress and President Bush over his administration's previous approval of the deal. In early reaction, lawmakers praised the temporary hold. But some critics pressed anew for an intensive examination of the deal's risks.
As part of its new offer, coordinated with the White House, Dubai Ports World said it would agree not to exercise control or influence management over U.S. ports pending further discussions with the administration and Congress. It did not say how long it would wait for these discussions to be finished.
"A delay makes sense to give the Congress and the American public a chance to gather information on the implications of the sale and to sort out the issues," says former staff member of the House International Relations Committee and CBS News foreign affairs analyst Pamela Falk.
The announcement effectively leaves existing American and British executives in charge of the company's seaport operations in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.
Rep. Peter King of New York, chairman of the House Homeland Security Committee, described the offer as "definitely a positive step." A leading Republican critic of the deal, King said the president still must disclose new details about the administration's review and approval of the agreement last month.
A senior Dubai Ports executive, Edward H. Bilkey, said the company will otherwise move forward with its $6.8 billion purchase of London-based Peninsular & Oriental Steam Navigation Co., which operates in 18 countries. Although Dubai Ports agreed to temporarily segregate the company's U.S. operations, Bilkey expressed bewilderment over the security concerns expressed in Congress.
"The reaction in the United States has occurred in no other country in the world," Bilkey said. "We need to understand the concerns of the people in the U.S. who are worried about this transaction and make sure that they are addressed to the benefit of all parties."
The company, timing its announcement before financial markets opened in London, assured British shareholders they will be paid as previously planned.
"It is not only unreasonable but also impractical to suggest that the closing of this entire global transaction should be delayed," Dubai Ports said in a statement.
Early reaction on Capitol Hill was mixed.
"A simple cooling-off period will not allay our concerns," said Sen. Charles Schumer, D-N.Y.
Sen. Hillary Rodham Clinton, D-N.Y., urged Mr. Bush to conduct a broader review of potential terrorism risks. Rep. Vito Fosella, a New York Republican, said the administration should more fully explain why it concluded the sale was safe.
The announcement came amid a persistent political furor over the business deal, otherwise expected to be completed in early March. Republicans and Democrats alike have threatened to introduce legislation to block or delay the deal, citing unease over what they describe as inconsistent support against terrorism by the United Arab Emirates.
Raising concerns about national security in an era of terrorism, Republicans and Democrats alike are crafting legislation blocking or delaying the deal with an Arab country tied to some of the Sept. 11, 2001 hijackers. But CBS News chief White House correspondent Jim Axelrod reports White House officials emphasize Mr. Bush won't back down from his threat of a veto if Congress passes legislation to try and stop the deal.