U.S. Welcomes Statement from Sharon, but Still Concerned About Jerusalem

Israeli Housing Minister Ariel Sharon’s statement that Soviet Jews would not be settled in the West Bank or Gaza Strip is a “hopeful development,” the State Department said Monday.

Sharon’s statement, made Sunday to delegates attending the Jewish Agency Assembly in Jerusalem, was also welcomed by a number of American Jewish groups.

But it remains unclear whether the United States will insist that Israel not encourage Soviet Jews to settle in East Jerusalem, as well.

The United States has said it will not release $400 million in loan guarantees to help build housing for Soviet Jews in Israel until it receives assurances that the immigrants will not be settled in the administered territories.

Israel considers East Jerusalem, which it formally annexed in 1967, to be an inseparable part of the capital. The United States views it as part of the disputed territories.

The $400 million in loan guarantees was contained in a multi-billion dollar supplemental appropriations bill signed into law by President Bush in late May.

Congress did not condition the $400 million guarantee on the administration receiving assurances on East Jerusalem. For its part, the Bush administration has been vague for months on what assurances it wanted.

COULD BE A STUMBLING BLOCK

While State Department spokeswoman Margaret Tutwiler on Monday said Sharon’s comments “responded to international concerns, including our own,” department sources said she was reluctant to fully endorse them, because of concern about East Jerusalem.

“Were still unclear, because we’ve seen various versions of (Sharon’s statements), and we honestly don’t know,” one official said.

A source in the pro-Israel community said he did not think “it would be useful” for the United States to press the East Jerusalem issue. But he said all indications are that the administration is still concerned about Jews settling there.

“If the State Department was not satisfied with Ariel Sharon’s remarks, then clearly, it could be a significant stumbling block,” the source said.

President Bush, when asked about the housing loans at his news conference last week announcing suspension of the U.S. dialogue with the Palestine Liberation Organization, said the money was not to be used to finance new settlements in Israel’s “post-1967 territories.”

When Assistant Secretary of State John Kelly was pressed on the issue last week at a House Foreign Affairs Committee hearing, he “made no distinction, bottom line, between East Jerusalem and occupied territory,” the source said.

An Israeli Embassy official said he “would be amazed” if Sharon’s announcement applied to East Jerusalem.

“I don’t think any Israeli government will ever take the position that Jews cannot live in a certain part of Jerusalem,” the official said.

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