That's not correct. AMR and American Airlines never agreed to pay TWA's obligations to its Israeli employees nor was it ordered to pay them.
The Israeli court case was
Ezra Berman v Trans World Airlines, Inc., Tel Aviv District Court 1225/01, 2001(1) 29448. A related case was
Insolvency Case - Trans World Airlines 2005(4) 10352.
Some of the details are described in the book
Private International Law in Israel by Talia Einhorn. Here is a link to the relevant
on Google Books [link updated to Amazon "Look inside" relevant info is on pp. 163/4]. According to Ms. Einhorn, the court ordered that the Israeli assets of TWA be seized and sold to pay the Israeli employees in a similar manner to that used to pay TWA's employees in France. After those claims were paid, any leftover proceeds from the sale of the assets were to be turned over to the US bankruptcy court trustee for distribution among all the other creditors on an equal basis.
There weren't enough assets in Israel to satisfy the court order. The balance is owed by the of estate Trans World Airlines, Inc., in the Delaware Bankruptcy Court, not by American Airlines or its then parent AMR or its successor American Airlines Group.