Israel in Contact with Washington over the $2.2 B Aid Package

Foreign Minister Abba Eban reported yesterday to the Cabinet that contacts with Washington are continuing in connection with the $2.2 billion in aid to Israel which the U.S. has promised. The U.S. Congress voted the $2.2 billion as an aid package last Dec. but specified that Israel should repay $700 million. Congress also stipulated that President Nixon should determine how much of the remaining $1.5 billion would be a gift and how much would be in credit sales.

Well placed sources here said they still hoped that the entire $1.5 billion would be a grant. The sources said they were unperturbed by the current delay and recalled that Secretary of State Henry A. Kissinger had indicated to both Eban when he visited Washington about two months ago, and to Defense Minister Moshe Dayan when he was in Washington two weeks ago that the sum would come through as Israel hoped.

These hopes were expressed even as a bureaucratic wrangle developed between the State Department and the federal Office of Management and Budget over how much of the $1.5 billion would be in outright grant. The Office of Management and Budget is arguing that Israel should pay for all the aid.

The State Department wants most of the funds given as a grant. When Kissinger was asked about the status of this money at a closed meeting last week of the Senate Foreign Relations Committee he was reportedly evasive and said the decision is now up to Nixon. According to reports, a decision will be announced within the next few weeks as part of the Washington Administration’s budget presentation for foreign aid in fiscal 1975 which begins in July.