Declares that the President should increase his efforts to gain the cooperation of U.S. allies in addressing international terrorism. Directs the President to seek the negotiation of a multilateral agreement with U.S. allies which would establish strategy and procedures for responding to international terrorism. Amends the Foreign Assistance Act of 1961 to prohibit U.S. aid under such Act, the Agricultural Trade Development and Assistance Act of 1954, the Peace Corps Act, the Export-Import Bank Act of 1945, or the Arms Export Control Act, to any country which fails to apprehend and prosecute or assist in the prosecution of any individual who is alleged to be responsible for a terrorist incident. Provides for waivers of such sanctions if justified by national security or humanitarian reasons.