A pro-Israel U.S. senator warned the Jewish state this week that if its settlement drive in the administered territories continues, it cannot expect to receive U.S. guarantees for $10 billion in loans needed to help resettle immigrants.
During a visit here this week, Sen. Phil Gramm (R-Texas) told an army radio interviewer that “if it is clear that the loan guarantees end up in the territories through the fungibility of the Israeli budget, then the loan guarantees will not happen.”
By “fungibility” Gramm was referring to government funds freed for settlement activity by the money Israel could borrow from American commercial banks with the U.S. guarantees.
The Texas lawmaker delivered the same message at a private meeting with Prime Minister Yitzhak Shamir and in public and private encounters with some of Israel’s leading industrialists during the week.
Israel has gotten similar warnings from some of the most prominent American Jewish leaders, the Israeli daily Ha’aretz reported. It cited especially pointed language in that context from Brian Lurie, the new president of the United Jewish Appeal.
Israel formally requested the loan guarantees last September, despite warnings from the Bush administration that the timing was not propitious.
Concerned that a U.S. commitment to underwrite the loans would jeopardize the Arab-Israeli peace talks the United States was trying to engineer, President Bush persuaded Congress to delay consideration for 120 days, a period that expires this month.
Gramm said Bush was basically favorably disposed toward the loan guarantees but deeply angered by accelerated settlement activity in disputed territory.
His anger has been intensified by recent decisions of the government and the Knesset, Gramm said.
The senator was fairly optimistic, though, that a deal could be worked out.
But it would have to lay down strict limitations on the use of the funds Israel borrows, to ensure that other monies released by them are not employed in the territories.
The guarantees would make it possible for Israel to borrow up to $10 billion from commercial sources at moderate interest. They are considered essential to housing and resettling up to 1 million Jewish immigrants from the former Soviet Union expected to arrive in Israel over the next five years.
But Shamir believes firmly that the administered territories are an essential part of what he calls the Land of Israel.
Israel Television quoted him Wednesday as saying, “We cannot accept the claim that there are areas of the Land of Israel in which it is forbidden for Jews to live.”
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