The Cabinet here discussed today the proposal submitted earlier this week by Israel in the current talks on West German economic aid to Israel. While no details of the Israeli proposals have been revealed, it was learned that Israel made demands regarding both the amount of aid and the terms.
The disputed questions include the matter of interest rates on loans, which it was learned was between three and four percent. Another issue in disputes is a proposal for a three-year interim period without interest payments. A third is the total period in which interest payments will be made. Israel reportedly asked for an extension of the proposed limit.
State Secretary Rolf Lahr, head of the West German negotiators, reported on the talks to the Cabinet. The Israeli and West German delegations resumed talks which will be devoted today and tomorrow to minor technical points. When Dr. Lahr returns on Friday from talks in Brussels, the talks will be pushed for completion that day, if possible.
(From Jerusalem, it was reported today that official Israeli sources took a more optimistic view on the outcome of talks in Bonn on West German economic aid to Israel after receiving a report from Bonn on the latest phase of the lengthy negotiations. These sources indicated they now expected completion of the talks within a few days. According to unofficial reports, the West Germans raised the sum offered by another $5,000,000 for the first and precedent-setting year of West German aid. The initial offer was reported as being $40,000,000 a year. The Israelis are still seeking better terms in lower interest and longer maturity on loans.)
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