Flow of Regular U.S. Aid to Israel Continues Despite Deadlock on Loans

While the Bush administration and Israel remain at odds over the Jewish state’s request for U.S. loan guarantees, the flow of regular American aid to Israel continues unimpeded.

An agreement to provide Israel with another $600 million in U.S. economic aid was signed at the State Department last Friday. It represents the second half of the $1.2 billion grant in U.S. economic assistance that Israel receives annually.

The signatories were Reginald Brown, the U.S. Agency for International Development’s assistant administrator for the Near East, and Amnon Neubach, the Israeli Embassy’s minister for economic affairs.

A similar agreement had been signed a week earlier for $900 million, representing the second installment of the $1.8 billion grant in U.S. military aid Israel receives each year.

Israel normally receives its annual aid package from the United States at the beginning of the fiscal year.

But this year, half the money was held up, because instead of adopting a regular foreign aid bill last fall, Congress passed a resolution authorizing the continuation of 1991 funding for another six months.

Passage of a foreign aid bill covering the rest of the year was delayed as members of the Senate unsuccessfully sought to get President Bush to agree on a compromise for the loan guarantees.

Bush has demanded that Israel stop building settlements in the West Bank before the United States approves the guarantees for the loans, which are needed to aid in the absorption of Jews from the former Soviet Union and Ethiopia.

But Brown stressed that the $3 billion in annual aid to Israel is proof of the solid relations between Israel and the United States.

Neubach expressed Israel’s appreciation for the economic aid, which has helped Israel’s economy over the last decade.