A bill to provide for direct consultations between the United States and the participants in the Contadora process in order to develop a common policy for promoting peace in Central America, for a resumption of bilateral negotiations between the United States and Nicaragua, and for a temporary suspension of United States support for or participation in military and paramilitary activities in Central America in order to provide a favorable climate for the Contadora process.

Declares that the United States: (1) shall initiate a dialogue with the participants in the Contadora process to develop a common strategy for regional stability; (2) should assist efforts to implement specified objectives by offering such advisory services as may be requested and by exerting vigorous diplomatic efforts to persuade other governments involved in Central America to observe these conditions; and (3) should announce its willingness to pursue multilateral negotiations with the Central American countries.

Requires the United States to communicate to Nicaragua its desire to resume negotiations to: (1) further the aims of the Contadora Act for Peace and Cooperation in Central America; and (2) promote the normalization of relations between the United States and Nicaragua.

Declares that for the 90 days following enactment of this Act: (1) the United States shall suspend certain military assistance and arms sales to Central American countries except for medical facilities or supplies; (2) the United States shall suspend construction of military facilities in Central American countries; (3) the United States shall not participate in training exercises in or off shores of Central American countries; (4) the number of members of U.S. armed forces in any Central American country may not exceed the number in that country on the date of enactment of this Act unless needed to protect U.S. citizens; (5) the United States shall suspend all air reconnaissance flights for armed forces of any Central American country; and (6) there shall be no obligation or expenditure of Central Intelligence Agency funds, Defense Department funds, or any other U.S. funds to support military or paramilitary operations in Nicaragua by any nation, group, organization, movement, or individual. Requires the President to report to the Congress within 90 days of enactment of this Act on the results of U.S. policy in Central America.