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On Eve of Baker Visit, Shamir Trying to Tone Down Confrontation with U.S.

Prime Minister Yitzhak Shamir is trying to de-escalate Israel’s confrontation with the Bush administration over the guarantees it is seeking for $10 billion in loans needed for immigrant resettlement.

With Secretary of State James Baker due here Monday on his seventh visit since the Persian Gulf War ended last March, Shamir urged his Cabinet ministers to avoid public utterances that could further exacerbate tension with Washington.

But he failed to muzzle Rehavam Ze’evi, head of the extreme right-wing Moledet party, whom Shamir named to his Cabinet earlier this year as a minister without portfolio.

Ze’evi, a retired Israel Defense Force general, called Bush a “liar” and “anti-Semite” for his angry criticism of Israel at a news conference last week. The right-wing minister made the charge at the weekly Cabinet meeting and repeated it in radio and television interviews.

Defense Minister Moshe Arens used a brief appearance Sunday on the ABC television program “This Week With David Brinkley” to repudiate his colleague’s invective.

He said Ze’evi’s expressions were “not the opinion” of the Israeli government. Asked if he repudiated them, Arens replied, “I certainly do.”

Shamir, describing himself as being “under personal attack in the American media,” said he would not respond in kind for fear of worsening the situation.

He urged equal restraint on his colleagues. Nevertheless, the prime minister said he saw no reason for Israel to back away from its position regarding the loan guarantees.

SHAMIR URGED TO SEEK COMPROMISE

Foreign Minister David Levy delivered an impassioned plea for moderation and caution on the part of his ministerial colleagues. The United States is not Israel’s enemy but its best and strongest friend, he reminded them.

In an interview with the German weekly Der Spiegel, Levy stressed that Israel was seeking peace with or without American loan guarantees.

Shamir’s government found itself locked in political battle with the White House after defying Bush’s urging that it hold off formally requesting the loan guarantees for 120 days, so as not to interfere with the Middle East peace process.

Bush, at a news conference last Thursday, threatened to veto any legislation authorizing the guarantees at this time. He said he would do so to “avoid a contentious debate” that could upset the Middle East peace conference he hopes will convene next month under joint U.S.-Soviet sponsorship.

This week’s visit by Baker was originally intended to tie up loose ends in advance of the conference. Instead, it is expected to focus on ways to end the bruising public dispute between Shamir and Bush.

Reports from Washington said key American Jewish leaders and friends of Israel in Congress were seriously urging the Israeli government to seek a compromise. They warned Shamir that there were not enough votes to override a presidential veto.

Israel wants the guarantees so that it can borrow $10 billion from banks on advantageous terms. The money is to be used to help absorb 1 million Soviet olim expected to arrive here over the next few years.

Arens told the American TV panel, “If the government of the United States finds that it cannot or will not provide the guarantees, then we will simply have to pay the higher interest rates on these loans.”

COMMITMENT FROM BUSH WANTED

Israeli officials hoped Baker would bring a compromise proposal that would allow both sides to resolve their altercation with dignity intact.

But the tone set by the prime minister indicated he would not make the first gesture. On Friday, Shamir said in Paris that Israel would be “waiting to hear whether there is a desire to compromise on the U.S. side.”

Nevertheless, Yosef Ben-Aharon, director general of the Prime Minister’s Office, hinted Sunday at what might be acceptable to Israel.

Ben-Aharon emphasized that the Bush administration has never made a commitment to act favorably on the loan guarantee request, even if it is delayed until January, as the president wants.

He seemed to imply that a firm undertaking by Bush to back the guarantees could form the basis of a compromise which Israel would accept, albeit reluctantly.

Brent Scowcroft, Bush’s national security adviser, who also appeared on the ABC-TV program, denied that the president is angry about Israel’s rejection of his demand.

Bush made the proposal because he believes it is in the best interest of peace, Scowcroft maintained.

He repeated the U.S. position that East Jerusalem is part of the disputed territory whose sovereignty should be decided at a peace conference, without “prior action on either side.”

Israel regards East Jerusalem, which it annexed in 1967, as an inseparable part of its capital.

NO $10 BILLION FOR SHARON

The loan guarantee issue came up Sunday on several other American television talk shows.

Sen. Sam Nunn (D-Ga.), appearing on NBC’s “Meet the Press,” said the loan guarantees should not be connected with the peace process. “But I think we have every right to say to Israel, ‘If we put down this much money, what are you going to do with it?’ “

Nunn said the United States should not use the loan guarantees to press Israel to give up territory but can demand that the money not be used “directly or indirectly” for settlements.

“I don’t think Americans ought to put up $10 billion for Mr. Sharon’s housing policy,” he said. He was referring to Israeli Housing Minister Ariel Sharon, who has announced a program to expand Jewish settlements in the West Bank.

Sen. Warren Rudman (R-N.H.), speaking on CBS-TV’s “Face the Nation,” said, “This is a matter which should be worked out between two friendly allies. If Congress tries to cram this down his (Bush’s) throat, in the long run, everybody would lose.”

Also on the CBS program, Sen. Bill Bradley (D-N.J.) said, “This is the largest exodus of Jews since the creation of Israel. That’s why the State of Israel was created. For us to try to get into making it part of negotiations violates a fundamental moral principle.”

But Rudman interjected that Bush “feels it might hurt the peace process, which in the long run is most important to all parties. I sincerely hope that it can be worked out, because that’s in everybody’s interest.”

(Contributing to this report were JTA correspondents David Friedman in Washington, Michel Di Paz in Paris and David Kantor in Bonn.)

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