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Congress Looking to White House to Take Lead on Loan Guarantees

If the Bush administration does not back loan guarantees sought by Israel, Congress may not do so either, a key member of the House of Representatives has warned the Jewish community.

Israel is expected to ask the United States in September to guarantee $10 billion in loans over five years to provide housing and other infrastructure for Soviet immigrants.

Support for the guarantees is “politically difficult,” so if the administration did not support the loans, a “lot of people would hide behind it,” Rep. Dante Fascell (D-Fla.) said Monday.

Fascell, who is chairman of the House Foreign Affairs Committee, spoke to members of the national board of advisers of the American Jewish Congress, who were in Washington for daylong meetings with administration officials and members of Congress.

Henry Siegman, the organization’s executive director, said the 16-member delegation found that there is “frustration” in both the administration and Congress that Israel is continuing its policy of expanding Jewish settlements in the West Bank and Gaza Strip.

The group came to Washington after Israeli Ambassador Zalman Shoval caused a storm in Israel, when he said in weekend interviews that the administration may try to force Israel to choose between settlements and the guarantees, which are needed to help absorb Soviet immigrants.

NO ‘FORMAL LINKAGE’

Shoval said that administration officials have indicated a linkage between the settlements and U.S. approval of the guarantees.

The administration strongly opposes the building of new settlements and the expansion of existing ones, which Secretary of State James Baker last month called the “leading obstacle” to Middle East peace talks.

Siegman said that Brent Scowcroft, President Bush’s national security adviser, told his group there is no “formal linkage,” but he left the impression that in “the real world,” such a linkage in fact exists.

Robert Lifton, AJCongress president, urged that the administration keep the two issues separate and that the loan guarantees be seen as, “above all, a humanitarian issue,” Siegman said.

But he said the administration looks at the issue from the opposite perspective. Scowcroft gave the impression that the administration cannot understand why the Israeli government would “jeopardize” a critical humanitarian issue such as the successful absorption of Soviet immigrants for the sake of the settlements, Siegman said.

However, at a luncheon at the Israeli Embassy, Shoval told the AJCongress leaders that Israel cannot allow such linkage. He warned that if it did so, it would set a precedent.

“I do not think that it is advisable to give out signals that Israel can be pressured in matters vital to her, even where such important matters like the loan guarantees are concerned,” the ambassador said in his radio interviews.

Shoval told the Jewish Telegraphic Agency on Monday that he was optimistic that Israel would ultimately get the loan guarantees. “In spite of everything, it will be approved,” he said.

He said it is unthinkable that Congress “would not help in the effort to absorb” the Soviet Jews. At the same time, he pointed out that “even people in Congress who are favorably disposed link these two questions, which I think is unjustified.”

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