Israeli team in Washington to discuss request for $4 billion plus $8 billion on loan guarantees
By Aluf Benn and Moti Bassok
Ha'aretz - January 5, 2003:
A delegation of top Israeli officials set off Saturday night for talks with their
counterparts in Washington.
The dscussions will focus on Israel's request for $4 billion to cover security expenses related to Palestinian terror and the anticipated war in Iraq, and another $8 billion in loan guarantees over a three to five-year period to help Israel recover from economic stagnation. Israeli officials hope to wrap up an assistance package prior to a U.S. offensive in Iraq.
Officials in Jerusalem are keeping close tabs on talks between the U.S. and Turkey about an agreement for a similar aid package, which apparently will be finalized within a few days. Dov Weisglass, Prime Minister Ariel Sharon's bureau chief, heads Israel's delegation for the talks in Washington. He is accompanied by the directors-general of the finance and defense ministries respectively, Ohad Marani and Amos Yaron. The Israelis will meet Monday with an American team headed by Gary Edson, deputy national security adviser for
international economic affairs. The Israeli team will detail economic
hardship faced by Israel as a result of Palestinian terror, and the anticipated
war in Iraq.
Connections between American aid and Jewish settlements in the territories will also come up in the talks. During previous contacts, officials discussed the renewal of linkage between loan guarantees and Israeli settlement policy which was advocated by the White House in 1992. In the 1992 loan guarantee arrangement, the Americans insisted on reducing the guarantees by sums equivalent to investments made by Israel in Jewish settlements, and on imposing a ban on the use of U.S. aid beyond the Green Line.
Israel could agree to deduct from current American aid packages sums equivalent to its investments in the territories due to a desire to forestall still more onerous American pressure.
For example, Israel is concerned that the Americans might demand a total freeze on construction beyond the Green Line as a precondition for the conferral of aid. On Capitol Hill, the two houses of the U.S. Congress will convene this week for the first since the congressional elections in November.
Israel's requests for civil and security assistance and loan guarantees will require approval by the new Congress. Israeli officials expect that Congress will approve the various assistance requests, with a number of preconditions. In addition to anticipated attempts in Washington to link the aid to an Israeli commitment not to use the money in the territories, Washington could also demand that economic assistance not be used by Israel to reduce its deficit.
U.S. officials could demand that Israel take additional steps to decrease its
deficit via steps such as the reduction of spending and services in its public