News Analysis: Bush Wins Fight over Guarantees, but at What Cost to U.s.-israel Ties?

President Bush has won his battle for a four-month delay in congressional consideration of Israel’s request for guarantees covering $10 billion in loans for immigrant resettlement.

But the cost of that fight to U.S.-Israeli relations and the Middle East peace process is not yet clear.

The future of both the loan guarantees and the relationship between Washington and Jerusalem may depend more than anything else on the Middle East peace conference that the United States still hopes to convene during the last week of October.

Bush said he pushed for a 120-day delay on the loan guarantees in order to avoid a divisive debate that could harm the peace conference.

But many in Congress and in the American Jewish community feel the president actually created a divisive debate through his harsh public words about Israel and especially his threat to veto any congressional move to approve the guarantees before January.

Israel and its supporters on Capitol Hill believe the loans, which would be used to help absorb thousands of Soviet and Ethiopian immigrants, are a humanitarian issue that should never have been linked to political issues, such as the peace process or Israeli settlements in the West Bank.

But once Bush made the linkage and threat- ened to veto congressional action, his request for a postponement was assured.

“Bush has never been beaten on a veto,” Mark Pelavin, Washington representative of the American Jewish Congress, observed. None of his 21 vetoes has been overridden.

BILL STILL TO BE INTRODUCED

The delay became a certainty when both Senate Majority Leader George Mitchell (D-Maine) and House Speaker Thomas Foley (D-Wash.) indicated this week they would support it.

Rep. Lawrence Smith (D-Fla.) said in a telephone interview Wednesday that while most of his colleagues in the House of Representatives supported the guarantees on their merits, they did not want to get caught in a political crossfire.

At one point, Bush threatened to go to the American people and cast the issue as whether the president should be the one to control U.S. foreign policy.

Smith said most lawmakers still want to find a way to support the loans in the right “political climate.” But he said the House will be following the Senate’s lead on how to proceed.

Sens. Daniel Inouye (D-Hawaii) and Robert Kasten (R-Wis.) still plan to introduce legislation authorizing the loan guarantees, with the proviso that it not be taken up until January.

The bill will have at least 67 co-sponsors, proving that supporters of Israel have, in theory, the two-thirds majority needed to override a presidential veto. But it is not certain the majority would hold after an actual veto.

Meanwhile, the American Jewish community plans to continue campaigning for the guarantees, focusing now on the January date. There remains a lot of enthusiasm for the loan guarantees in the Jewish community, said Jason Isaacson, the American Jewish Committee’s director of governmental and international affairs.

But Jewish leaders are also trying to heal the rift between Israel and the United States. In particular, they have tried to cool down the rhetoric between Washington and Jerusalem.

Bush began to tone down his remarks last week and even had his press secretary, Marlin Fitzwater, say that the president would support loan guarantees, although not necessarily for the full $10 billion.

ISRAEL URGED TO HELP EASE TENSION

A group of American Jewish leaders met in New York last Friday with Zalman Shoval, Israel’s ambassador to Washington, and urged the Israeli government to do its part to soften the tension.

But Malcolm Hoenlein, executive director of the Conference of Presidents of Major American Jewish Organizations, denied Israeli press reports that the meeting was a shouting match or that there were demands from the Jewish leaders that Israel freeze its building of settlements in the West Bank.

Kenneth Jacobson, director of international affairs for the Anti-Defamation League, also denied that such demands were made at the meeting. He described it as an exchange of question.

While a number of American Jewish organizations oppose Prime Minister’s Yitzhak Shamir’s settlement policy, most believe the issue should be kept separate from the loan guarantees proposal.

Jess Hordes, ADL’s Washington director, said that for the next few months, any congressional discussion of the loans will focus on such issues as assurances that they will not be used in the territories and perhaps even the need to insist on certain economic reforms in Israel.

But many expect the settlement issue could be settled by the negotiations at the proposed peace conference. Secretary of State James Baker has long argued that the first step in the peace process should be an Israeli freeze on settlements in return for an end to the Arab League boycott.

But many in Congress have argued that the president’s call for a delay in approval of the loan guarantees could sabotage the conference before it begins. They note that the Palestinians and the Arab countries did not raise the settlement issue as an obstacle to their participation, although now they are doing so.

Some believe that concern about Israel’s rapid expansion of settlements may have been one of the reasons that motivated the Palestinians and the Arab states to go to the conference.