Anglo-israeli Financial Parley Stalled on Top Levels; Informal Talks Continue

The Anglo-Israeli financial talks, which began here May 2, seem to have stalled on the higher levels but are proceeding point-by-point on the technical level. Last week only one full-dress delegation meeting took place and this week none is scheduled. But informal talks between Israeli financial representatives and members of the Board of Trade, the Bank of England and the British Treasury are understood to be taking place.

An informed Israeli source told correspondents today that the major bone of contention–ignoring all the technical clashes–is that Britain is so far unwilling to differentiate between blocked “balances, as those of Egypt and India incurred by wartime expenditures, and Israeli balances which are not debts owed by Britain, but rather tank deposits not complicated by political questions.

It is also reported that Britain fears to allow any wholesale freeing of Israel’s sterling balances lest this be regarded by India and Egypt as a precedent in their cases. It is not known how long the talks will continue. Last week they were described by an Israeli spokesman as “protracted and difficult,” and today both adjectives were regarded by Israeli representatives as still applicable.

Britain cannot survive as a Middle East power without the friendship of the Jews since Israel is the only democracy in that area of the world, Richard. Crossman, Labor M.P., warned yesterday at a rally celebrating the first anniversary of Israel’s independence. Lt. Col. D.H. Amery, Conservative M.P., and Clement Davies, leader of the Liberal Party, also spoke at the meeting.