Israel May Turn to World Jewry if U.S. Balks on Loan Guarantees

Israel may have to turn to world Jewry if the United States does not approve loan guarantees that the Jewish state badly needs to help absorb immigrants.

That is one of the options being considered by the Prime Minister’s Office, the Israeli daily Ma’ariv reported Wednesday.

But the head of the United Jewish Appeal says “it is not possible” for American Jewry to replace the $10 billion that Israel plans to borrow in U.S.-guaranteed-loans over the next five years.

Israel’s 1992 budget, passed by the Knesset last week, counts on receiving $2 billion in guaranteed loans this year.

In September, President Bush balked at an Israeli request for the loan guarantees, expressing concern that any quick approval might imperil the face-to-face talks between Arab and Israelis. Bush promised instead to revisit the matter in 120 days, a period that ends this month.

Now the expected point of conflict will be the administration’s opposition to Israeli settlement policy. Before releasing guarantees for $400 million in loans last year, Bush secured assurances from Israel that it would not use the aid to increase settlements in the territories.

Since then, the Israeli government has funded what the opposition describes as an unprecedented growth in settlements. As a result, the Bush administration is expected to impose far stiffer conditions on the new loan guarantees.

‘NO WAY WE CAN WIN’

“There is simply no way we can win a battle with the administration and Congress if Israel continues with a vigorous settlement program,” said Henry Siegman, executive director of the American Jewish Congress.

Siegman and other Jewish organizational officials expressed the hope that Israel and the United States will be able to reach a compromise.

The Ma’ariv article said Prime Minister Yitzhak Shamir sees obtaining the guarantees as more difficult than it was previously, but is waiting until the U.S. Congress reconvenes on Jan. 20 to begin action on the issue.

“If by the end of March we have not received a $2 billion guarantee for the current year, we will have to find other sources, including appealing to United States Jewry,” a senior source in Shamir’s office was quoted as saying.

But UJA President Brian Lurie said Israel could not bank on American Jewry replacing the “terribly important” government loan program.

To do that, “in addition to what (world Jewry) is doing now, is not possible,” he said.

Lurie pointed out that American Jewry raised $610 million for Israel through UJA in 1991, $98 million more than ever before.

The Operation Exodus campaign for Soviet Jewry has obtained pledges for more than half the $1 billion goal, and after two years, the campaign has received in cash more than 90 percent of the initial three-year target.

(JTA correspondent Hugh Orgel in Tel Aviv contributed to this report.)

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