"The administration has conducted a very thorough inter-agency review led by Treasury Secretary John Snow, and it was determined that the sale was fine," said US Under-Secretary for Public Diplomacy Karen Hughes during a meeting with the Press yesterday.

Hughes, however, denied allegations of Islamophobia with regard to the sale of the P&O to the DPW. The sale eventually resulted in the taking over of six US ports by DPW. "I don't believe Islamophobia is the case. What I have seen in quotes from our lawmakers are questions about security and concerns in line with the fact that a couple of the September 11 hijackers did come from the UAE," Hughes explained.

She stressed that as per National Security Advisor Condoleezza Rice's statement, the US government has decided to allow the sale after a "thorough security review was conducted."

"Perhaps, it is important to understand that in my country, there's a very open environment for debate and members of the congress are always questioning, debating, discussing. Secretary Rice said the administration would be happy to share with them additional information about the  inter-agency security review," Hughes added.

The Under-Secretary also mentioned that the US had long-standing alliance with the UAE and that both governments had been partners in the war against terror. "So I hope the people and the government of the UAE will understand that in a democracy, there is indeed a process of debate," Hughes said.

AP adds:  Michael Seymour, president of the North American arm of Peninsular & Oriental Steam Navigation, said in a statement that company lawyers would have to examine the lawsuit before he could comment on it.

He noted, however, that his company “is itself a foreign-owned terminal operator that has long worked with US government officials in charge of security at the ports to meet all US government standards, as do other foreign companies that currently operate ports in the United States.”

“We are confident that the DP World purchase will ensure that our operations continue to meet all relevant standards in the US through ongoing collaboration between the port operators and American, British, Australian and port security officials throughout the world,” Seymour said.