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U.S. Hint About Linking Immigrant Aid to Diplomatic Progress Angers Israel

Israeli leaders are angered by recent American hints that the Jewish state cannot expect continued U.S. economic aid to help resettle thousands of Soviet immigrants if it categorically rejects territorial compromises for peace.

The proliferation of Jewish settlements in the administered territories has become a major bone of contention between Washington and Jerusalem, especially since new settlements were hastily erected during Secretary of State James Baker’s recent diplomatic visits to the region.

The issue was raised in unusually blunt language by the U.S. ambassador to Israel, William Brown, in an address to Israeli business leaders last Friday at the Commercial and Industrial Club in Tel Aviv.

Observing that Israel has given “tremendous priority” to “providing housing in the territories,” Brown said there was “no guarantee” Israel would receive the billions of dollars in loan guarantees it plans to request from Washington.

Brown’s comment drew an angry response Monday from Finance Minister Yitzhak Moda’i. “I don’t like what I heard,” the Likud minister told Israel Radio’s English-language newscast. He said he assumed the U.S. envoy was expressing the Bush administration’s views.

Israel will not sell its vital interests in return for the money it needs to absorb the immigrants, Moda’i said, echoing a statement made in New York last week by Housing Minister Ariel Sharon.

Sharon, who returned from an American tour Sunday furious over being snubbed by the administration in Washington, warned against pressure on Israel to trade “land for Jews,” meaning to give up some disputed territory for the money needed to absorb Soviet olim.

HOMES INSTALLED OVERNIGHT

Israel’s ambassador in Washington, Zalman Shoval, confirmed Sunday that Israel would seek some $10 billion worth of loan guarantees this fall for absorption needs.

“We are going to approach the American government, and we can only hope and pray” that the response “will be a humanitarian one and that this will not be linked with political considerations of the moment,” Shoval said in an address to the 85th annual meeting of the American Jewish Committee.

Israel has already received a $400 million loan guarantee from the United States for Soviet immigrant housing. In exchange, it pledged not to direct Soviet emigres to the administered territories.

But Ambassador Brown implied strongly that the Israeli government was evading that commitment by making it vastly easier for the new comers to obtain housing in the territories than in Israel proper.

“Indeed, as we found out recently, mobile homes that sometimes take months to install on this side of the Green Line seem to be installed overnight in the West Bank,” Brown said.

The “Green Line” is the boundary between the Arab territories Israel captured in the 1967 war and Israel proper.

Brown warned Israel in general not to count on foreign aid to absorb its immigrants.

“As a friend, I must tell you that to base your hopes mainly on the generosity of foreign governments, even my own, is not the whole solution.

“There can be no assurances that tens of billions of dollars will materialize that way,” he said.

Although Israel says it is prepared to negotiate directly with the Arab states and Palestinians, Prime Minister Yitzhak Shamir has vowed repeatedly that Israel would make no territorial compromises.

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