News Analysis: Strain in U.s.-israeli Relations Becoming Campaign Issue in Israel

Israeli leaders are at odds over how to handle the current crisis in relations with the United States. In fact, they do not even agree how serious it is.

Jewish Agency Chairman Simcha Dinitz described the crisis this week as “the worst in the history” of the State of Israel.

Dinitz is well qualified to make that judgment. He is a former Israeli ambassador to Washington and maintains close personal relationships with key figures in the Bush administration and Congress.

But Dinitz is also a politician. Formerly a Labor Party Knesset member, his present post as head of the Jewish Agency and the World Zionist Organization is also a party appointment.

His comment in a radio interview Tuesday immediately raised hackles in government quarters, where it was seen as part of the ammunition the opposition plans to fire at the government in advance of the June 23 elections.

As Dinitz spoke, Cabinet ministers quarreled publicly over how the government should deal with the crisis.

Interior Minister Arye Deri declared it was “criminal” for ministers to speak of “boycotting” the United States or “tearing the mask” off Washington.

The mask-tearing came from an impassioned speech against Washington delivered by Economics Minister David Magen at Sunday’s Cabinet meeting, which was quickly leaked to the news media.

Such extreme expressions and conduct would do grave disservice to Israel’s most vital interests, the interior minister and leader of the Orthodox Shas party warned.

The “boycott” Deri referred to was the subject of a headline story in the daily Ma’ariv. It reported that Finance Minister Yitzhak Moda’i had ordered his top officials to boycott economic talks in Washington next week because of the U.S. refusal to grant Israel the loan guarantees.

Moda’i later denied the story. But he took the opportunity to bitterly criticize the United States for sending a team of military inspectors here to investigate charges that Israel illegally sold Patriot anti-missile technology to China.

“What are we, Iraq?” Moda’i demanded in a speech to high-school students in Tel Aviv. “This American behavior toward us is very strange, to say the least.”

NEED TO REORDER NATIONAL PRIORITIES

Political sources say the ministerial exchanges reflect an intense debate behind the scenes, especially within the Likud, over how to “play” the deterioration of ties with Washington in the election campaign.

Some Likud strategists are urging a line that would brand Washington an enemy of Israel. It would portray Likud as the only party capable of withstanding American pressures aimed at pushing Israel back to its 1967 borders.

So far, Labor has avoided soft-pedaling its own differences with Likud in the face of the rupture with Washington.

The party’s new chairman, Yitzhak Rabin, set the tone in his speech last week to United Jewish Appeal young leaders in Washington, when he distinguished between Labor’s policy of limited settlement in strategic areas and what he calls the government’s “political settlement” policy.

Rabin and other Labor figures have made it clear that if they are returned to power, they would scale down settlement building and hope to reopen negotiations over the loan guarantees.

Dinitz seemed to be following this Labor line when he criticized the government’s “order of national priorities” as a cause of the standoff with Washington over the loan guarantees.

While he faulted the Bush administration for “dictating political conditions to Israel,” he said “the magnitude of the crisis is also due to the government’s inability to establish a set of national priorities.”

First among these, the Jewish Agency chairman said, should be “the aliyah and the absorption of 1 million immigrants.”