State Dept Officials at Variance with Dulles on Arab-israel Peace

State Department circles today continued to express a view that Arab-Israel peace prospects were improving despite statements yesterday by Secretary of State John Foster Dulles and Israel Foreign Minister Moshe Sharett. Mr. Sharett warned yesterday that the situation might be getting worse while Secretary Dulles said there were no concrete developments indicating peace between the Arab and Israel.

Because of the “improvement” in the situation and the desire to avoid jeopardizing it by an arms race, one source suggested that hasty action would be avoided on Israel’s arms list. The list is now under consideration by the State and Defense Departments.

A consensus of opinion among sources in the government was that action on the list, whether affirmative or negative, could not be expected until early 1956. It was pointed out here that the United States is on the verge of improving relations with Egypt through American assistance on the construction of the “high Aswan” dam project on the Nile. Therefore, it was hinted, the United States does not deem it diplomatically wise to jeopardize chances for regaining rapport with Egypt by announcing at this time any favorable decision on the Israel arms purchase application.

On the other hand, some elements in the government feel that Israel should get at least a portion of the arms requested. But the element of timing is today regarded as the key factor by U.S. diplomats who wish to avoid further injury to the already strained American-Egyptian relations.

Mr. Sharett lunched today with Eric Johnston, President Eisenhower’s special envoy to the Middle East, who has sought regional irrigation cooperation.