Report to Senate Unit Questions Administration’s Handling of Israel’s Security, Economic Problems

A 7500-word report to the Senate Foreign Relations Committee on U.S.-Israeli relations prepared by its Middle East staff specialists questions President Carter’s statement that a “reassessment” of relations between the two countries has not and will not take place under his Administration and stressed “the need” by the U.S. “to understand and address Israel’s security and economic problems.”

The report was prepared by staff members Barry Schochet and Graeme Bannerman following their July visit to Israel and was presented to the Committee on Oct. 15 by Sen. Richard Stone (D.Fla.), chairman of its subcommittee on Near Eastern and South Asian Affairs. It is expected that hearings on Middle East issues will be held by Stone when Congress returns from its Presidential election recess to conclude this session’s business.

“This report,” Stone wrote the full Committee in a memorandum released yesterday, “raises a number of serious questions regarding the Administration’s handling of Israel’s security and economic problems and makes specific recommendations regarding ways in which this committee can address these problems.”

In an interview following the report’s release, Stone was asked by the Jewish Telegraphic Agency about Vice President Walter Mondale’s statement Oct. 18 to the Zionist Organization of America’s 82nd national convention here that appeared to vary with the report’s criticism of U.S. military policy.

NO INFORMATION AVAILABLE ON M-60 TANKS

Pointing out that Israel’s strength is being increased by U.S. aid, Mondale said “the reason that they (Israel) will have substantially more than a thousand of our best M-60 tanks, the reason our Joint Chiefs of Staff … and our Undersecretary of Defense just went to Israel to work with her leaders is that the President sent them on these missions and made these decisions.”

However, neither Stone nor the Committee staff had information on the 1000 tanks nor could information on their delivery be obtained from Administration sources.

“I’ve never heard about these 1000 tanks,” said Stone through whose subcommittee the Administration would start seeking Congressional authorization for delivery. “But even if they were to be provided, how is payment to be made?” Stone asked. “Israel is out of money. If the Administration had not escalated the arms race in the Middle East to the disadvantage of Israel this situation would not have arisen.”

Committee specialists felt Israel could make its own tanks. Their report showed that U.S.-Israel co production of an advanced “Merkava Tank” allows Israel to produce it at a savings of $400,000 per tank and the project “has substituted for the otherwise needed purchase of approximately 170 M-60 tanks.” It added, “this program is a good example of providing funds for Israel to produce its own products while it purchases substantial quantities of materials in the United States. This tank project is in need of further funding.”

SAYS U.S. MIDEAST POLICY IS SHORTSIGHTED

Commenting on the report, Stone said, “present U.S. policy toward Israel and the Middle East is shortsighted. It is helping to accelerate the Middle East arms race and to endanger efforts to convince Israel to take the additional risks that will be necessary to reach agreement on the peaceful future of the West Bank and Gaza Strip.”

“Undermining Israeli confidence in the U.S as a long-term ally is not the way to successful peace negotiations,” he said. “Yet, Israel’s doubts and insecurities have been heightened by the U.S. in many ways.” Noting “Israel is an important strategic asset to our country,” Stone said the Administration has been increasing sophisticated weaponry to Saudi Arabia and coordinating joint military exercises with Egypt which it also is supplying with major weapons while down-grading Israel’s strategic importance.

“We are giving and selling military weapons to countries that refuse to join the peace process,” Stone added. “And by rewarding Jordan, Saudi Arabia and others for refusing to talk peace, we are penalizing Israel for the major concessions it made in the Camp David agreement. This makes no sense since peace is our goal.”

Pointing out that the report “shows how counter-productive our policies are to the chances of expanding the peace process,” Stone raised these questions. “What incentive do the confrontation states have to turn from belligerency to peace? What are we trying to prove in denying ourselves the military expertise and regional knowledge of our strongest ally, the State of Israel? What are we trying to prove by escalating the arms race in the Middle East? And what are we trying to prove by requiring that Israel’s weakened economy bears still larger defense burdens?”

While the report was prepared prior to the signing Oct. 17 of the U.S.-Israel oil agreement that assures U.S. supplies to Israel in time of emergency although at the highest U.S. prices paid for imported oil, the report’s conclusions set forth a number of other “tangible steps” to alleviate Israeli concerns.

These include a recycling of Israel’s debt servicing into programs which can strengthen Israel’s economic base by improving its ability to export goods and technology to the U.S. Another suggestion is lifting of U.S. restrictions on Israel’s military export sales which would allow Israel to sell military items which it produces or which is surplus to its needs to third countries which are friendly to the U.S.

International financial assistance also is recommended. Israel is excluded from development capital under most international financial institutions because its per capita income level is too high but these institutions do not take into account a country’s per capita debt.

Israeli participation in U.S. aid projects for Egypt was urged. This could serve “as a natural bridge” for stimulating Israel-Egypt normalization economically and be a source of economic benefit to Israel, the report said.

“There can be no doubt that the body politic of Israel is undergoing great political, economic and security stress — much of which has arisen as a direct result of the Camp David process, ” the report said. “Israeli political, economic and military leaders have been surprised, discouraged and even angered by what is perceived as a lack of interest and understanding by the U.S. of the effect of the peace process upon Israel.”