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Israel Will Insist on No Cut in U.S. Aid, Cabinet Decides

Reports that Israel is prepared to forgo $80 million in U.S. military aid in recognition of U.S. efforts to cut the federal budget were officially denied Tuesday by the Defense Ministry.

There is no such intention and the issue was never discussed, a ministry spokesman said. “On the contrary, in the Cabinet’s meeting on Sunday it was agreed in accordance with a proposal by the defense minister that Israel will insist on receiving the aid in its entirety, especially in the face of the (Reagan) administration’s commitment in writing on the issue to the ministers of defense and finance, after cancellation of the Lavi project,” the spokesman said.

He added that the American administration has not approached Israel with respect to reducing aid, a direct contradiction of a report in Maariv on Monday that American officials are feeling out Israel on the matter.

The Cabinet dropped the Lavi jet fighter-plane project in the face of both U.S. and internal pressure that the plan was too expensive. The $80 million constitutes 4.5 percent of the $1.8 billion in U.S. military aid to Israel in the coming year.

Moreover, Premier Yitzhak Shamir and Foreign Minister Shimon Peres rejected a proposal Monday by Defense Minister Yitzhak Rabin to take preventive measures in the face of a cut in American aid, Haaretz reported Tuesday.

In this matter they joined Finance Minister Moshe Nissim, who proposed that the Cabinet wait until the state of the U.S. economy becomes more clear. Bank of Israel Governor Michael Bruno does not believe American aid will be affected by the economic uncertainties in the United States, according to Haaretz.

Shamir told the Knesset Security and Foreign Affairs Committee on Tuesday that to connect the stock market crisis with U.S. aid was “an immoral and brutal behavior, which contradicts our interests.”

Peres said Monday that it is too early to judge the significance of the American stock market plunge of Oct. 19 on the American economy. He said, however, that U.S. aid already has been reduced in real terms as a result of inflationary trends. But “considering the rising demand for weapons, the U.S. will certainly not harm the defense aid,” Peres said.

The Foreign Ministry meanwhile has instructed the Israel Embassy in Washington to refrain from any specific activities in Congress and the administration with respect to military aid, Haaretz reported.

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