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U.S. Denies Dragging Its Feet on Guarantees for $400 Million

The Bush administration has denied reports it is delaying the implementation of an agreement under which the United States would provide Israel with guarantees for $400 million in private loans that would be used to build housing for thousands of arriving Soviet immigrants.

The State Department said Wednesday that it remains satisfied with assurances Israel provided on the use of the loans, which the Bush administration approved in early October.

News reports in Israel this week alleged that Secretary of State James Baker was holding up the process because of concern over Israel’s settlement policy.

The reports said Baker had prevented a team from the Agency for International Development from going to Israel to evaluate the intended use of the loans, a step required before the guarantees can be issued.

“I’ve seen those reports, and I can tell you that he has not frozen the implementation,” State Department spokeswoman Margaret Tutwiler said Wednesday. “We are still working out the details and the implementation.”

Asked if Baker is dissatisfied with the Israeli assurances, which were spelled out in an Oct. 2 letter from Foreign Minister David Levy, Tutwiler replied, “He did not have a question about it.”

An Israeli official here concurred that Levy’s assurances were acceptable to the United States. “We are on safe ground,” the official said.

CONCERN OVER USE OF ISRAELI FUNDS

But sources say the main sticking point at present is not with any Israeli use of the $400 million, but with Israel’s plans to use its own funds to increase Jewish housing or settlements beyond its pre-1967 borders.

The delay in sending the AID delegation to Israel appears to be a maneuver to extract greater assurances from Israel about its overall plans for Jewish housing beyond the 1967 borders.

Specifically, there is concern with Housing Minister Ariel Sharon’s recent announcement that Israel plans to build 15,000 new housing units in East Jerusalem.

In what one Jewish official called the “creative ambiguity” of Israel’s assurances, Soviet Jews could decide to live in East Jerusalem and the Israeli government could claim it did not “direct or settle” them there, as Levy promised in his Oct. 2 letter.

But Malcolm Hoenlein, executive director of the Conference of Presidents of Major American Jewish Organizations, said any U.S.-Israeli difference over the loan guarantees is “on its way to resolution,” with “mostly technical difficulties” to be worked out.

A State Department official who requested anonymity said the AID team’s mission will be commenced “very soon.”

“The feeling is that it will done quickly,” said Jess Hordes, Washington representative of the Anti-Defamation League of B’nai B’rith. “This ought to be resolved within a day or so.”

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