Israeli leaders are expressing confidence that a mutually acceptable formula can be worked out with the United States enabling Israel to receive billions of dollars in loan guarantees desperately needed for immigrant resettlement.
They now believe it will be possible to satisfy concerns voiced by the Bush administration and members of the U.S. Congress that the money will be used indirectly to bolster Israeli settlement-building in the administered territories.
Optimistic statements to this effect were voiced over the weekend by Prime Minister Yitzhak Shamir, Finance Minister Yitzhak Moda’i and other government officials after Israel’s U.S. ambassador, Zalman Shoval, met Friday in Washington with Secretary of State James Baker.
It was a preliminary talk, and all acknowledge that arduous negotiations lie ahead.
For the moment, the government seems to be stressing the positive aspect: the Americans’ genuine desire to assist Israel in a major humanitarian undertaking.
They are vague about the quid pro quo that inevitably will be asked of Israel and may conflict with the government’s ideological commitment to settle as many Jews as possible in the West Bank and Gaza Strip.
“Between the two poles, there are many positions,” Moda’i said optimistically after meeting Sunday with the new U.S. ambassador to Israel, William Harrop.
Harrop said he, too, thought there were good prospects the loan guarantees would materialize.
And Justice Minister Dan Meridor was quoted Sunday as saying there is room for both the Israeli and American positions in the framework offered by Baker.
SHAMIR REJECTS SETTLEMENT FREEZE
Baker made clear to Shoval that if the United States is going to underwrite Israel’s loans, the money cannot be spent, directly or indirectly, to further a policy that runs counter to American principles and interests, meaning Israel’s intensified settlement drive.
Speaking to congressional leaders before meeting the Israeli envoy, Baker said the administration might consider asking Israel to freeze all “housing starts” in the territories.
This presumably would block the construction of new housing in the West Bank, but would not interfere with the construction of thousands of other units that has already begun.
Shamir made clear Sunday that he was not about to halt settlement activity entirely.
“I am not talking of any freeze of settlements,” he told some 300 delegates to the fourth International Conference of the Jewish Media, which is meeting here under the auspices of the World Zionist Organization. “Forget about it.”
But he went on to smooth the picture. “The United States (has shown) readiness to assist in the unprecedented task of absorption” he said.
He added that for Israel, settlements are “a matter of principle” in the development of “Eretz Yisrael.”
A formula must be found to solve the problem between the two allies, and “further negotiations are required,” Shamir said.
Baker did not present Shoval with any final position on what terms and conditions the Bush administration might demand in exchange for the loan guarantees.
ELECTION PRESSURE A FACTOR
Shoval told reporters as he left the State Department that the meeting was “constructive” and that Baker assured him the administration was “fully committed to the principle of helping Israel in the vast humanitarian task of absorbing up to 1 million immigrants from the (former) Soviet Union and elsewhere.”
U.S. officials would like to settle the dispute as quickly and amicably as possible. The Middle East peace talks, engineered almost entirely by the United States, are still fragile.
The multinational phase, dealing exclusively with Middle East regional issues but attended by many powers from outside the region, will open Tuesday in Moscow.
There have been three rounds of bilateral talks between israelis and Arabs since the peace conference was launched in Madrid on Oct. 30. The fourth round is due to start next month.
The administration knows that if the terms imposed on the Israeli government for the loan guarantees are too harsh, it could walk out of the American-sponsored negotiations. If the terms are without bite, the Palestinians may well walk out.
The situation is complicated by this being an election year both in Israel and the United States. Shamir, whose government has lost its parliamentary majority, may face the voters before President Bush does.
That may account in part for his absolutism with respect to settlements. Shamir is under intense pressure from his extreme nationalist settlers constituency.
The Council of Jewish Settlements in Judea, Samaria and Gaza urged the prime minister Sunday to stand by his pledge to maintain the momentum of settlement-building and accept no compromise.
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