Flatow's family has been trying to gain access to Iranian assets in the United States ever since a U.S. judge earlier this year ordered Iran to pay the family $247.5 million for its role in bankrolling the attack.

The provision would have helped the family collect the sum by forcing the sale of three Iranian properties in Washington. But the Clinton administration has opposed the move, calling it a violation of U.S. law and treaty obligations.

"If the United States permitted attachment of diplomatic properties, then other countries could retaliate, placing our embassies and citizens overseas at grave risk. Our ability to use foreign properties as leverage in foreign policy disputes could also be undermined," the White House said in a statement.

The bill gives the president the authority to waive the provision for national security reasons — and Clinton exercised that authority on Oct 21. Some lawmakers, however, are challenging Clinton's legal authority to waive the provision in the first place, arguing that it was not their intention when they negotiated the law.

Stephen Flatow, Alisa's father, had a mixed reaction to Clinton's action. He expressed disappointment at the waiver, but said he was heartened by the administration's declaration on Oct. 21 that it would help identify other Iranian commercial assets that may be available to them.

"We asked for that back in March and that's when they started stonewalling us," Flatow said of the Clinton administration, which has been seeking normalization of relations with Iran even as it has sought to punish countries that sponsor terrorism.

"I've been promised things in the past that have not been delivered by the administration, but never before has their promise been in writing," Flatow said. "The ball is in the White House's court."

Lautenberg fired off a letter to Clinton saying he was "deeply disappointed" with the waiver and urged the administration to make good on its commitment to help the Flatow family.