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U.S. and Israel Still at Odds on Assurances for Housing Loans

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The agreement that Israeli Foreign Minister David Levy and Secretary of State James Baker failed to hammer out on housing loan guarantees Wednesday appears to be eluding their deputies as well.

Eitan Ben-Tsur, the assistant director general of the Israeli Foreign Ministry, and Daniel Kurtzer, deputy assistant secretary of state for Near Eastern and South Asian affairs, met Wednesday evening and throughout the day Thursday, but did not reach agreement on $400 million in loan guarantees requested by Israel.

Israel asked for the loan guarantees in order to build housing for the thousands of new Soviet immigrants coming to Israel, and won congressional approval for them last spring.

The Bush administration, however, has held up the guarantees because of concern over the possible expansion of settlements in the administered territories. The administration wants reas- surances that the loan money will not be used for that purpose.

Levy has predicted confidently that language will be hammered out that will “bridge the gap” between the U.S. position and that of the present Israeli government coalition, which contains parties committed to continued settlement of Jews in the territories.

At a news conference Wednesday afternoon, after his 90-minute meeting with Baker, Levy said that the U.S.-Israeli team would have an agreement by Thursday morning.

By Thursday evening, however, there was still no agreement, though the Israelis continued to express a belief that the differences would be resolved.

“By the time David Levy departs from New York on Tuesday, it will be worked out,” an Israeli spokesman said.

Seymour Reich, chairman of the Conference of Presidents of Major American Jewish Organizations, said Thursday that his “sense is that Israel and the United States are close to an agreement.”

Reich made the assessment after meeting with Kurtzer and Dennis Ross, director of the State Department’s policy planning staff. He said he sensed that the State Department, too, wants to conclude the matter before Levy departs next week.

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