Ethiopia sees the dam as key to plans to become Africa's largest power exporter. Egypt, which gets more than 90% of its scarce fresh water from the Nile, fears the dam across the Blue Nile could devastate its economy.
In early December Sudan accused Ethiopian "forces and militias" of ambushing Sudanese troops along the border, leaving four dead and more than 20 wounded.
Refugees are continuing to flee the unrest in Ethiopia's northern Tigray region, with 800 having crossed the border with eastern Sudan since the New Year.
Conflict erupted in Darfur in 2003, when African minority rebels rose up against Bashir's Arab-dominated government, which they accused of marginalising the region.
The bill also appropriates an additional $150 million for Sudan's settlement payment, in order to redistribute the funds in a way the bill's sponsors say is more equitable.
President Donald Trump announced in October that he was delisting Sudan, a step desperately sought by the nation's new civilian-backed government as the designation severely impeded foreign investment.
Hundreds, possibly thousands, of people have died since Ethiopian government troops launched a war two weeks ago in northern Tigray state against regional authorities they accused of staging a surprise attack on federal forces.
Under the US-brokered deal announced last week, the UAE becomes the just third Arab country to forge full relations with Israel in more than 70 years.
The Emirates' move is a brave and bold step and contributes to putting the Arab world on the right track to build peace in the region and to build sustainable peace.
Major General Lul Ruai Koang told AFP that the fighting erupted on Saturday as security forces carried out an operation to disarm civilians in the area which has seen deadly inter-communal clashes.
The trial of Bashir over the military coup that brought him to power more than three decades ago, as well as of 27 other defendants, opened with a brief hearing in July.