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The bill is part of broader French efforts to fight extremism in recent years that gained new urgency after a teacher was beheaded in October and other attacks.
President Emmanuel Macron says the efforts are also needed to protect French values like gender equality and secularism from encroaching on fundamentalism in some communities.
But many French Muslims say the draft law limits religious freedom and unfairly targets them, and say France already has enough laws to fight terrorist violence.
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The bill is expected to win approval in the National Assembly, which is dominated by Macron’s centrist party, as well as the conservative-led Senate.