Plans Approved to Create Cabinet Level Committee to Handle Economic Relations Between Israel and the

Plans to create a Cabinet level committee to handle economic relations between the United States and Israel were approved today at a meeting here between Secretary of the Treasury William Simon and Finance Minister Yehoshua Rabinowitz. They set up four working groups to implement the agreement and agreed to meet again in Nov. in Washington to discuss the progress of the groups which will make studies of the possibilities of American private investment in Israel, raw material supplies, technical aid and expansion of trade.

Israeli officials reported that Rabinowitz repeated to Simon the Israeli government’s request for an additional $1.5 billion in military aid over the next three years, stressing that Israel’s defense burden was very high. Simon said, at a meeting with Rabinowitz and Commerce and Industry Minister Haim Barlev, that he hoped the United States would continue providing massive economic aid to Israel despite growing opposition in Congress to foreign aid in general. He said he believed that investments in Israel were economically worthwhile.

Barlev asked Simon for reasonable terms for purchase of equipment for nuclear and electric power, adding that Israel expects to buy $800 million worth of such equipment during the next seven years. Barlev also asked for a cut in customs duties between Israel and the U.S. and help for the development of Industrial research.

IMPORTANCE OF U.S.-ISRAELI TIES

In a statement replying to Rabinowitz’s welcome at Ben Gurion Airport, Simon declared: “I promise you that we will be helpful in every way we can with the help and the assistance that has been so characteristic of our relationship these past years and which reached its peak during our President’s recent visit here.”

He noted that his visit in the wake of the visits by President Nixon and Secretary of State Henry A. Kissinger “attests to the high importance my country attaches to the exceptionally close ties which have developed between our countries in recent years. Now we stand on the threshold of a new era in these relations, as expressed in the joint statement of June 17 by President Nixon and Prime Minister (Yitzhak) Rabin.”

Simon had lunch with Rabinowitz here today and is scheduled to have dinner with Foreign Minister Yigal Allon. He is scheduled to visit Yad Vashem tomorrow and then go on a tour of the Galilee. Israel is Simon’s second stop on a two-week tour of the Middle East and Europe. He arrived here yesterday after a visit to Egypt and leaves for Saudi Arabia tomorrow and is then scheduled to go to Kuwait, West Germany, France and Britain.