Israel Disappointed over U.S. Aid

Finance Ministry circles expressed disappointment today over the amount and form of economic aid the U.S. has offered Israel to carry out the terms of its peace treaty with Egypt. As a result, the possibility arose that Premier Menachem Begin and other ministers accompanying him to Washington over the week-end will have to discuss the matter again with President Carter before the treaty is signed on Monday.

This new development emerged after Defense Minister Ezer Weizman reported that the U.S. agreed to the sum of $3 billion for Israel of which $800 million would be in grants and the $2.2 billion balance in the form of loans, albeit on favorable terms. Weizman, who returned from Washington this afternoon, seemed well satisfied with the American offer even though Israel-had asked for $3.9 billion to help evacuate its forces from Sinai, redeploy them in the Negev and construct new air bases in the Negev.

But Treasury officials had expected the larger portion of the money to be a grant and the lesser part as a loan. They claimed the American decision would place an unbearable burden on Israel’s economy and that when Begin discussed this aspect with Carter in Washington several weeks ago, the impression had been that most of the sum would be given as a grant. Some ministers are already insisting that Israel make its signature on the peace treaty conditional to a satisfactory settlement of the financial questions with the U.S.

Weizman told reporters on his arrival that while he was in the U.S. “I heard very familiar words that reminded me of home. They speak of inflation and the high cost of living and price hikes. America has its problems and it is nice that they give us what they said they would,” Weizman said. He said that in addition to the loan and grants, the U.S. will provide Israel with military items that had been requested but until now denied. “This is quite fair on their part,” he said.

He announced that while all of the details of the withdrawal from Sinai were settled in his talks in Washington with the Egyptian Defense Minister, Kamal Hassan Ali, agreement has yet to be reached on one point. This is the question of Israel’s withdrawal from the off-shore oil fields discovered recently in the Gulf of Suez. Israel insists that it will pull out of the oil fields nine months after the treaty is signed but the Egyptians want to take over at a much earlier time, Weizman said. He said that EI Arish in eastern Sinai would be evacuated in 3-4 months after the treat signing.