JERUSALEM (Jun. 29)
What appears to be Israelis first major stop toward paying compensation to Arabs for property they once held within the borders of the present Jewish State was announced today by Minister of Justice Yaacov Shapira. Shapira said that a bill he has submitted to the government, with the approval of the Premier and the Minister of Finance, would obligate Israel to pay an estimated minimum of $100 million to Arab residents of East Jerusalem for immovable property they possessed in Israeli territory prison to 1948. The East Jerusalemites became official residents of Israel following the 1967 Six-Day war. Under the proposed bill, the East Jerusalem Arabs, whether refugees or not, will be compensated on the basis of the their property in 1947 as determined by a united Nations commission, plus 25 percent, the total to be multiplied by the factor of 8,4 to allow for inflationary value Increases over the past 24 years. The formula for compensation is in accordance with the recommendations of the UN palatine Conciliation Commission of Oct. 2,1001.
Compensation will be in the form of non-transferable Israel government bonds redeemable in equal yearly installments over a period of 20 years commencing in 1975. The bonds will bear 51/2 percent interest and will be linked to the cost-of -living index. They will be identical to the State of Israel Bonds sold abroad except that the latter have a 17 year maturation period. The Arabs will not have the right of choice between compensation and the actual restoration of their property under the Shapira bill. Claims for compensation will have to be submitted within two years from the form of the law. In outlining his measure, Shapira said payment would be made in the form of bonds because the burden on the Treasury consequent upon the obligation to pay compensation will be onerous and the Treasury can-not make the payments at once. Another consideration, he said, was that the flow of large sums into the market at one time would hold peril for the economy.