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Israel Not Seeking Billions More in U.S. Aid, Ambassador Maintains

January 25, 1991
See Original Daily Bulletin From This Date

Israeli Ambassador Zalman Shoval has labeled as a “canard” news reports that Israel has asked the United States for $13 billion in additional aid.

Israeli Finance Minister Yitzhak Moda’i was said to have asked for that amount over five years during a meeting in Israel on Tuesday with visiting U.S. Deputy Secretary of State Lawrence Eagleburger.

Speaking to reporters Thursday at the National Press Club here, Shoval explained that what Israeli officials did was to outline to Eagleburger the costs of the Persian Gulf war and of absorbing tens of thousands of Soviet Jewish immigrants.

The war has cost Israel about $3.2 billion from lost tourism, increased oil prices and increased costs for military preparations, such as the around-the-clock manning of Israeli fighter planes, Shoval said. He said this figure does not include the cost of the damage from the Iraqi missile attacks on Israel.

Shoval did not say Israel would ask the United States to help recoup its costs. But he pointed out that the international community has been compensating Jordan and other countries that have been economically hurt by the war.

“Israel has a right to be compensated by the international community,” he said.


Israel receives $3 billion a year in economic and military aid from the United States, a figure that has remained constant for several years, despite inflation.

The other $10 billion of the $13 billion mentioned by Moda’i was part of the estimated $20 to $30 billion cost of absorbing Soviet Jewish immigrants over the next five years, Shoval explained.

“We do not want any direct financial aid from the United States for that,” he stressed. Israeli taxpayers have shouldered a large part of this burden, Shoval said.

But Israel might ask the United States to guarantee loans of some $10 billion to make it easier for Israel to get the money from private banks, Magen Altuvia, assistant economic minister at the Israeli Embassy here said Thursday.

The Bush administration last year approved $400 million in loan guarantees to help Israel provide housing for Soviet Jewish immigrants.

Altuvia said Israel would try to seek the rest of the money needed for immigrant absorption, which includes the creation of jobs as well as housing, from other countries and Diaspora Jewish communities.

On the present war situation, Shoval said Israel cannot allow Arab enemies to believe the Jewish state can no longer defend itself, since this would invite aggression against it.

While not saying so directly, Shoval indicated that if such a perception develops, Israel might decide the time has come to retaliate for the SCUD missiles Iraq has fired at the Tel Aviv area over the last week.


“Israel’s security depends on the ability to defend itself,” the ambassador said. He claimed Israel still has the strongest army and the mightiest air force in the Middle East.

But “close relations with the United States are of strategic importance for the defense of Israel,” the envoy added.

Those relations have become stronger since the start of Operation Desert Storm, as Israel has acceded to U.S. wishes to let the coalition arrayed against Iraq try to eliminate the SCUD missile launchers in Iraq.

Israel’s restraint has been met with a shower of praise from President Bush, administration officials and members of Congress.

The Israeli government has stressed, however, that it retains the right to retaliate and plans to do so.

Israel will stay on the sidelines “up to a point,” Shoval said Thursday. He said the government will make its decision when it concludes the disadvantages of not acting outweigh the advantages.

After all, Shoval said, “America won’t be there (in the Middle East) forever. We will.”

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