Israeli officials are increasingly concerned that drastic cuts in American aid to Israel may be in the offing because of Washington’s need to cut the huge federal deficit, made more urgent by the rapid decline of the U.S. dollar and the Oct. 19 stock market crash.
Israel presently receives $1.8 billion in military aid from the United States and $1.2 billion in economic assistance each year, a total of $3 billion, all in the form of grants. Haaretz reported Wednesday that the United States Information Service has distributed a position paper saying that aid to Israel may be cut by 8.5 percent in the next fiscal year.
The possibility of curtailed aid is considered one of the main reasons for Premier Yitzhak Shamir’s visit to Washington this week, where he is expected to raise the issue with members of Congress and the Reagan administration. He is scheduled to meet with President Reagan at the White House Friday.
But Foreign Minister Shimon Peres said Tuesday that the administration is ready to commit itself to continue the present level of aid if Israel agrees to “direct negotiations with an international opening.”
He was referring to the plan he favors for direct negotiations with Jordan and possibly other Arab states and the Palestinians within the framework of an internationally sponsored peace conference.
PERES REPORTS OFFER OF MEMO
Peres, speaking to a group of visiting American B’nai B’rith leaders, said the Reagan administration was prepared to sign a memorandum of understanding with Israel defining the nature and limitations of an international conference.
It would also, according to Peres, assure Israel that U.S. aid would be continued at least at its present level even beyond the term of the Reagan adminstration, which ends in January 1989.
There is precedent for an outgoing administration to bind its successor to certain foreign policy undertakings. A memorandum of understanding formulated in 1975 pledged that the United States would not talk to or have any contacts with the Palestine Liberation Organization unless it recognized Israel’s right to exist and renounced terrorism.
The memorandum has applied through the Carter and Reagan administrations. But officials at the Israel Embassy in Washington were reported Wednesday to have misgivings over what appears to be a trade-off of continued American assistance in return for Israel adopting a certain policy.
Those officials point out that there has never been a linkage between Israeli policy and American aid.
The 1975 pledge, however, was part of a package whose main point was Israel’s withdrawal from key areas of Sinai, which it continued to hold after the 1973 Yom Kippur War. Israel eventually returned all of Sinai to Egypt under terms of the Israeli-Egyptian peace treaty, signed in Washington in March 1979.
The State Department had no comment Wednesday on Peres’ report of the Reagan administration’s offer. The issue of an international conference has sharply split Israel’s coalition government.
A spokesman for Shamir said Tuesday that the prime minister had no knowledge of any offer from Washington of a memorandum of understanding. But, the spokesman added, such a document would be irrelevant because an international conference will never take place.
Shamir, for his part, is expected to discuss in Washington how the United States and the Soviet Union, at their summit meeting in Washington next month, can contribute toward advancing negotiations between Israel and the Arab states.
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