Shamir May Be Ready to Cut Back on Settlements to Win U.S. Loans

Prime Minister Yitzhak Shamir is believed to be quietly seeking a deal with the Bush administration in which Israel would reduce settlement activity in the administered territories in exchange for desperately needed U.S. loan guarantees.

Shamir is said to have conveyed that impression in several private conversations, including an hour-long talk Tuesday with Shoshana Cardin, chairman of the Conference of Presidents of Major American Jewish Organizations, and its executive director, Malcolm Hoenlein.

Cardin and Hoenlein flew to Israel to brief Shamir on the climate in Washington and offer a frank appraisal of the chances the loan guarantees would be forthcoming if Israel continues expanding Jewish settlement in the territories.

Their trip coincided roughly with the end of the 120-day waiting period during which Congress was asked by the White House to forgo consideration of Israel’s request for the guarantees.

The guarantees would cover $10 billion in loans that Israel would use to help absorb the 1 million immigrants expected to arrive here over the next five years.

With the 120-day moratorium about to expire, Israel’s ambassador to Washington, Zalman Shoval, was scheduled to meet Thursday with Secretary of State James Baker, to present Israel’s case for the loan guarantees as convincingly as possible.

Baker is expected to lay down stringent conditions and possibly offer to guarantee smaller amounts than Israel is asking for.

The United States may also demand from Israel firm commitments to make various economic reforms.

NEITHER SIDE WANTS CONFRONTATION

But Hoenlein believes both countries want to reach an accord that would enable the administration to recommend underwriting the loans.

“Both governments are facing elections this year,” and “neither wants confrontation,” he told the Jewish Telegraphic Agency.

High-placed Israeli sources say the prime minister may be prepared to slow settlement-building in practice without disavowing it in principle or declaring a change of policy.

“We cannot make concessions on the principle of settlement in Eretz Israel,” Defense Minister Moshe Arens said in a television interview Tuesday night. But he left open the question of whether the government is prepared to back off in practice.

Hoenlein said negotiations to reach an understanding between Jerusalem and Washington have already begun at a discreet diplomatic level.

Be he stressed the final decision would rest with President Bush, who on this issue seems to have bipartisan congressional support. It is highly unlikely Congress would approve the loan guarantees without a prior agreement having been worked out between the administration and the Israeli government, Hoenlein said.

During the meeting Tuesday with Shamir, Hoenlein and Cardin are believed to have raised the issue of recent hard-line public pronouncements on settlement policy by several government ministers, including the premier himself.

The Shamir government is reported to have gotten some tough feedback from American Jewish leaders.

Seymour Reich, the immediate past chairman of the Conference of Presidents, was quoted by the media here Wednesday as sharply critical of Shamir’s declaration earlier in the week that settlement-building would continue, no matter what.

The Israeli media also headlined a report that delegates attending next month’s annual plenum of the National Jewish Community Relations Advisory Council may push for a resolution urging an Israeli settlement freeze.

Cardin and Hoenlein apprised Shamir of the economic recession in the United States and the trend toward political isolationism influencing large sections of opinion there.

In that atmosphere, foreign aid is not very popular, Hoenlein explained. He said a key part of American Jewry’s efforts to overcome resistance to Israel’s requests would be educational.

The organized Jewish community will stress to American opinion-makers that the guarantees to Israel are not tantamount to loans from American taxpayers.

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