March 1992, Page 7, 8, 86

Special Report

U.S.-Israeli Confrontation Over Jewish Settlements Has a Long History

By Richard H. Curtiss

"On the West Bank settlements, we worked out language that no new Israeli settlements would be established after the signing of this framework and that the issue of additional settlements would be resolved during the negotiations. Begin later denied that he had agreed to this, and claimed that he had promised to stop building settlements only for a three-month period. My notes are clear-the settlement freeze would continue until all negotiations were completed."
-U.S. President Jimmy Carter, 1982

American confrontations with Israel over Jewish settlements in Israeli-occupied territories have a long history. Plans for the first settlements were approved by the Israeli government in 1968, only a year after the West Bank, Gaza Strip, Golan Heights and East Jerusalem were seized by Israel in the Six-Day War of June 1967.

By the outbreak of the October 1973 war, there were 17 settlements in the Jordan Valley, running parallel to the Jordan border, in accordance with the plan of Israeli General Yigael Allon, who envisaged Jewish settlements as a "trip wire" giving warning and providing points of initial resistance to movements of Arab troops or armored columns from across the Jordan River.

The 1973 war halted Israeli government settlement activity for two years. Meanwhile, however, there emerged in 1974 the Gush Emunim movement, ideologically dedicated to annexation of the lands conquered in the Six-Day War.

As a result by 1975, two kinds of settlements were being built. The Labor government had resumed building secretary-related settlements in accordance with the Allon plan. It also at first resisted and later acceded to ideologically motivated Gush Emunim settlements being built near such major Arab population centers as Ramallah and Nablus.

When Menachem Begin took over the Israeli government in 1977, his Likud government and the semi-official World Zionist Organization, which is responsible for raising funds abroad for Israel, adopted the Gush Emunim master plan for putting 100,000 Jewish settlers into the West Bank.

The First Settlements Confrontation

This led to the first U.S.-Likud confrontation over Jewish settlements in the occupied territories at Camp David. As described in the quotation above from his memoirs, U.S. President Jimmy Carter thought he had won it.

He assured Egyptian President Anwar Sadat that Begin would freeze settlement activity while Israel and the Palestinians negotiated Palestinian autonomy. On that basis, all three leaders signed the Camp David "Framework for Peace" at the White House on Sept. 17, 1978.

The very next day, Begin began assuring Likud supporters in the United States that he had given up nothing at all at Camp David. Nevertheless, in what became known as the Camp David supplemental package, the U.S. increased its aid to Israel by some 250 percent, from $1.823 billion in fiscal 1978 to $4.923 billion in fiscal 1979, which began only two weeks after the three leaders came down from Camp David to shake hands before the television cameras.

Three months after Camp David, Begin resumed building settlements or, as he preferred to call it, "creating facts on the ground." Ever since, he and Carter, in effect, have called each other liars over what Begin did or didn't promise at Camp David.

Although U.S. aid to Israel dropped in fiscal 1980 to $2.146 billion, in retrospect it is clear that, when Israel resumed building settlements, instead of cutting back on aid to Israel, the U.S. should have cut it off entirely.

The circumstances in which Carter chose to appease Israel over the settlements bear an eerie parallel to those in which President George Bush finds himself today. At the time, the runup to the 1980 presidential election had begun. In addition to a formidable field of Republican candidates, Carter felt increasingly threatened from within his own party.

U.S. Domestic Political Role

Senator Ted Kennedy of Massachusetts sought to wrest the Democratic nomination away from the incumbent president. To do so, he unhesitatingly played the pro-Israel card, both to secure funding for his nationwide campaign and to win away from Carter New York's convention delegates.

Jimmy Carter backed off not only from a showdown with Israel, but from any further Middle East peace initiatives. He sought to preserve his Jewish support and survive to renew his peace efforts in his second term.

Carter, however, had no pro-Israel base left in the Democratic Party to preserve. Nor was there a second Carter term. Nor was there peace in the Middle East.

Instead there was an Israeli invasion of Lebanon in 1982 in which 20,000 Lebanese and Palestinians died, followed by the killing in Lebanon of 260 Americans in the subsequent year and a half. There also was the assassination of President Sadat, whom Egyptian fundamentalists blamed for making a separate peace with Israel.

Today, Jimmy Carter's successor once removed is eyeball-to-eyeball with Menachem Begin's successor once removed. The issue is George Bush's insistance that Yitzhak Shamir freeze settlement activity before the U.S. seriously considers Israel's request for $10 billion in U.S. loan guarantees, to be made available at the rate of $2 billion annually for five years.

Shamir is looking for some face-saving promise he can make to Bush in order to get U.S. loan guarantees, and still be able to assure his Likud supporters that he gave up nothing. Like Begin, he hopes to tell the U.S. president what he wants to hear in an election year for them both, and then break his word after the money has been received.

And, like Carter in 1980, George Bush in 1992 is more concerned by a challenger from his own party than the threat posed by an as-yet-unselected challenger from the other party. The parallel, fortunately for U.S. interests and for peace in the Middle East, ends there. If Israel's American supporters whisper "George Bush is an enemy of the Jews," they shout it when describing media commentator Patrick Buchanan. In New Hampshire, Buchanan was stalked by a Jewish group seeking to insert its signs into televised coverage of his appearances. Buchanan supporters with larger signs positioned themselves in front of the Jewish hecklers at each rally.

Nor have Bush's Democratic opponents sought to capitalize seriously on the estrangement between Bush and the Israel lobby. On the issue of aid to Israel, public opinion is strongly on Bush's side. So are some leaders of U.S. Jewish organizations, including the U.S. support group for Israel's "Peace Now" organization.

A Congressional Hearing

At a Feb. 21 hearing by Chairman David Obey's foreign operations subcommittee of the House Appropriations Committee, Co-Chairman Peter Edelman of Americans for Peace Now testified that "the best way for the U.S. to condition the loan guarantees is on Israel's freezing settlement activities."

Such a freeze, Edelman said, "is good for Israel and is supported by a majority of Israelis." It would allow Israel "to use all resources at its disposal for absorption of new immigrants and to improve the economic conditions for Israeli citizens." It also would "improve the prospects for success of the peace negotiations that are vital to Israel's security and economic well-being" and "would remove a major source of conflict between Israel" and the United States, and "a primary source of tension between the Israeli Defense Forces and the settlers."

"A freeze on Israeli settlement activities," Edelman added, "must include cessation of the construction of buildings, roads and other forms of new infrastructure, as well as a freeze on spending that takes account of all forms of fungibility."

Edelman recommended against proposals to subtract from U.S. aid a dollar for every dollar spent on settlements, arguing that a total freeze "avoids disputes between the United States and Israel on accounting for the amount Israel spends on settlement activity."

Edelman outlined to the committee a history of accelerated politically motivated settlement activity after Camp David:

"Suburban settlements were created complete with inexpensive large villas, investment zones, employment, schooling, services and amenities," Edelman said. "These new suburban settlements resulted in the creation of a new generation of Israeli stakeholders who would join the right-wing ideologues in creating a strong domestic lobby opposed to a freeze on settlements and territorial compromise."

In 1980, World Zionist Organization official Mattityahu Drobles called the settlement policy "a race against time" during which "everything will be mainly determined by the facts we establish in these territories and less by any other considerations." Settlement backers abandoned any pretense that they were creating "bargaining chips" for land-for-peace negotiations with the Arabs, and admitted they were creating "facts on the ground" to make territorial compromise impossible.

Accelerating the Pace

With the end of the joint Likud-Labor government in 1990, Edelman testified, the pace of settlements accelerated:

"The establishment of the Likud-led coalition government in the summer of 1990 brought about a dramatic increase in construction of Jewish settlements in the West Bank and Gaza Strip. . . The Likud government sensed that impending negotiations between Israel and the Arab world would jeopardize the status quo in these territories, and hence decided to strengthen its grip on them by expanding existing settlements, establishing new settlements, and investing heavily in infrastructure and in efforts to increase the number of settlers."

The amounts being spent on settlements are concealed in the budgets of virtually every Israeli ministry. "A financial swindle of massive proportions is taking place," Peace Now declared in a recent report issued in Israel. "This is in fact a hidden section of the budget, appearing in no budget proposal, with governmental and parliamentary approval neither sought nor given."

Similarly, Jackson Diehl reported in the Jan. 29 Washington Post: "As it has pursued the biggest settlement-building program in the 24-year history of its occupation of the territories, Shamir's government has appeared to pursue a policy of obscuring the true scale and cost of its campaign."

Peace Now reported in December that it had counted 13,650 housing units under construction, including 3,670 trailers and prefabricated units. These figures omit an estimated 10,000 units reported under construction in East Jerusalem.

Results of the Program

Deputy Director Geoffrey Aronson of the Foundation for Middle East Peace provided precise summaries for Obey's subcommittee both of how 248,000 Israelis have been moved into the occupied territories, and the costs of putting them there:

"Over the last generation Israel has settled almost one quarter million of its citizens-5 percent of its total population-in territories occupied as a result of the June 1967 war. Of these, 140,000 live in areas of Jerusalem annexed in June 1967; 91,000 live in approximately 150 different settlement communities in the West Bank; 5,000 live in 16 outposts in the Gaza Strip; and 12,000 reside in the 35 Israeli settlements constructed in the Golan Heights.

"In 1991, the government of Israeli allocated $2 billion for settlement-related purposes. Not included in this amount is private Israeli investment amounting to more than $1 billion. The 1991 budget funded the construction of 19,000 housing units of various kinds in the West Bank and Gaza Strip. This figure alone is larger than the combined construction from 1968 to 1984. When completed. . . these units will enable the current Israeli population of the West Bank and Gaza Strip to almost double.

"My best current estimate is that the settlement-related budget for 1992 will top $1 billion, including funding for as many as 8,000 additional homes in the West Bank and Gaza, perhaps 1,500 in the Golan Heights, and almost 5,000 in East Jerusalem. Altogether they will provide housing for about 60,000 people."

One of the Israeli commitments made to the United States for $400 million in U.S. housing loan guarantees granted early in 1991 was "not to direct or settle Soviet Jews beyond the Green Line." Aronson estimated, however, that 6,000 such immigrants in 1991 joined 8,000 Soviet immigrants who had moved to East Jerusalem in 1990. In the West Bank, where some settlements such as Ariel actually are recruiting settlers in the former Soviet Union, Aronson estimated that 3,200 Soviet immigrants had arrived in 1991. He estimated further that 10 percent of the settlers in the Golan Heights are recent Soviet immigrants.

The immigrants are attracted by what are, in effect, 1 percent mortgage loans, a 7 percent reduction in income taxes, and various employment, transportation and tuition incentives. It is estimated that Jewish settlers in the occupied areas can buy or rent housing three times larger than the housing they could afford in Israeli inside the Green Line.

Israeli Dependence on U.S. Aid

Despite the carefully concealed costs and accelerated pace, however, the settlement plans may have to be completed without U.S. funding. The extent of Israeli dependence upon U.S. taxpayer funding was described to Obey's subcommittee by Larry Nowels of the Congressional Research Service:

"Israel has been the leading recipient in terms of annual appropriations of U.S. foreign assistance during the post-World War II period, receiving approximately 13 percent of American aid since 1946. Beginning with small amounts of economic and food aid in 1951, the U.S. has provided Israel about $51 billion in foreign aid. In real terms, using constant 1991 dollars that take into account the effect of inflation, total U.S. assistance to Israel during this period has been about $81 billion."

A specialist on the Israeli economy, Dr. Alvin Rabushka of the Hoover Institution for War and Peace, told the Obey subcommittee that it would be a "wrong approach" to "saddle Israeli taxpayers with billions of dollars of additional debt" rather than force Israel to make reforms that would enable it to earn the money it needs to create jobs.

"What you have is an entire economy that revolves around the collection of unilateral grants and transfers, augmented by loans, the sale of Israel bonds, and to my mind makes no serious sustained effort to fix its economy in a way that would. . . produce investment rather than consumption," Rabushka asked.

Effects on the Peace Process

Just as Peace Now has reversed its position on loan guarantees since President Bush first asked last September for a delay in their consideration, Dr. Henry Siegman, executive director of the American Jewish Congress, now sees the settlements as endangering the peace process. "The notion that a peace process can go on for the next five years while Israel keeps building settlements is absurd," Siegman said.

For Clinton Bailey, an Israeli expert on bedouin life who previously has been skeptical of Palestinian claims, the last straw was the recent seizure by Jewish settlers of houses in the Muslim Silwan quarter of East Jerusalem. Describing the "humane Judaism of our fathers" as being replaced by "arrogance and oppression," he asked:

"Are we in such an orgy of self-assertion that, under the umbrella of our power and rule, we can take anything we want from an Arab? . . . Where is 'Deal justly with the stranger in thy gates'?"

Bush Administration Conditions

The Bush administration has put three conditions on loan guarantees in any amount. It would allow Israel to complete 6,000 houses the administration says, based presumably upon satellite intelligence, Israel has started. The administration insists on a complete halt to any new starts after the loan guarantees go into effect, with the understanding that if Israel violates that ban, the loan guarantees end. Finally, the administration, backed strongly by Democratic Sen. Patrick Leahy of Vermont, would deduct one dollar from aid to Israel or the loan guarantees for every dollar Israel spends in the occupied territories after Jan. 1, 1992.

These deductions would include money spent completing work on the 6,000 housing starts, and also on roads and other infrastructure. Secretary of State James Baker also has made it clear that this formula would be applied to East Jerusalem along with all other territories seized by Israel in 1967.

Israel's counteroffer, as transmitted by Israeli Ambassador Zalman Shoval, also is based upon three principles. Israel would consider a slowdown in new housing starts, but not a complete halt. It also insists on allowances for "natural growth," ranging from additional rooms on existing houses to new schools, stores and roads.

Shoval also quotes Israeli Housing Minister Ariel Sharon as insisting that there are 13,500, rather than 6,000, houses that have been started but not finished. Shoval told Baker Israel would accept the dollar-for-dollar reductions only if they were applied after completion of the 13,500 houses and the additional "natural growth."

Public statements in Israel were even less forthcoming. "Even an implicit understanding that there be no housing starts is out of the question," according to Shamir's chief of staff, Yossi Ben-Aharon. "Anything that can be perceived as a freeze is something that this government cannot live with."

There were reports in the Israeli press that Finance Minister Yitzhak Modai, who already had put into his 1992 budget the $2 billion in U.S. loan guarantees that he expected to get, has asked for a list of the world's wealthiest Jews to whom he might turn if the U.S. support is not forthcoming.

More Cuts for Israel?

Officials of U.S. Jewish organizations discounted the possibility that American Jews could make up such an enormous shortfall. They worried, instead, that the U.S.-Israeli confrontation would focus media attention on "special treatment," in the words of the Congressional Research Service, that Israel's regular U.S. assistance receives.

Among these benefits, which have been questioned by Senate Minority Leader Robert Dole (R-KS), are "fast disbursement" of Israel's regular $3 billion in economic and military aid in the first month of the fiscal year, which enables Israel to invest the money and collect an additional $160 million in interest before the money is spent. Israel is particularly vulnerable this year, since only one-half of the foreign aid total has been appropriated, with the second half scheduled for consideration by Congress in March.

Senator Leahy already has warned Israel that it cannot expect to get from Congress what it is unable to get from the executive branch. During his subcommittee hearings, Rep. Obey left the same impression. Noting disagreements among witnesses concerning the size of Israeli expenditures on the settlements, Obey summed up his feelings after hearing first-day testimony:

"Whether it's one billion or two billion, the question that falls on the shoulders of the secretary of state and this committee is 'would we and should we be underwriting settlement activities in the occupied territories which clearly are against policies of the United States?'. . . I do not want on my conscience any act which would make it less likely that all forces within the Middle East would move toward a settlement of the situation and I also think that the settlements are an impediment to that process."

The obvious unwillingness of a Republican administration and key Democratic Senate and House leaders to provide further funding to Israel without a freeze on settlements prompted an American official visiting the West Bank to ask an Israeli whether he regretted spending his money on a subsidized house in a settlement. Laughing off the question, the Jewish settler opined that loss of the occupied territories "would be the best thing that could happen to me. Like the settlers in Yamit when they were compensated for withdrawing from Sinai, I would get back from the Americans far more than what I paid for this house."

Richard H. Curtiss is the executive editor of the Washington Report on Middle East Affairs.

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