Rabin Says He Hopes to Secure Deal on Loan Guarantees During U.S. Visit

Prime Minister Yitzhak Rabin said he hoped to wrap up an agreement on loan guarantees during his visit next week to the United States to meet with President Bush.

But Rabin cautioned that even if he is successful with Bush, the guarantees would require congressional approval, which is unlikely before Congress goes into recess later this month.

In Washington, administration officials acknowledged that the issue of loan guarantees was on the agenda for Rabin’s visit, but were unwilling to comment on the likelihood of reaching an agreement.

Earlier this year, Bush had rejected an Israeli request for $10 billion worth of loan guarantees because of the previous Likud government’s aggressive policy of settling the administered territories.

Rabin has vowed to discontinue that policy and has already frozen much of the construction in those areas. Observers in Washington and Jerusalem say this change will help clear the path for Bush’s approval of at least part of the original proposed package.

In remarks to his governing coalition in the Knesset, Rabin seemed anxious not to raise expectations too much. He noted that political and economic aspects of the guarantees package still remain to be worked out.

Regarding the overall peace process, Rabin also warned against “expecting hocus-pocus” as a result of the change of government in Jerusalem.

But he acknowledged that there had been a change of attitude “in various quarters” as a result of what was rightly perceived to be “a greater importance” attached by the new Israeli government to the peace talks.

Tangible expression of this new attitude, he continued, was the decision to hold talks for an entire month in Washington beginning Aug. 24, during which time “the parties will sit and look for solutions.”

Sources close to Rabin told the Jewish Telegraphic Agency he would be briefing leading American columnists in New York before the weekend, but would not give on-the-record interviews until after he had met with the President on Aug. 10 and 11. Later in the week, Rabin is likely to appear before the National Press Club in Washington.