Germany will link economic assistance to Israel to progress in the Middle East peace process, diplomatic quarters indicated Sunday.
They privately confirmed reports appearing in the Israeli news media that long-term credits to Israel would be contingent upon the Jewish state’s efforts to achieve peace — with particular emphasis on a halt or freeze on the building of new settlements in the administered territories.
Diplomats here point out that while Germany never actually promised Israel financial aid to house new immigrants. Chancellor Helmut Kohl told Israeli Foreign Minister David Levy on a visit here in March that he would give favorable consideration to an Israeli request.
When Levy returned to Tel Aviv on March 16, he told reporters that Israel could expect German aid but mentioned no precise amount.
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