August/September 1992, Page 7, 83

The Loan Guarantees and a Settlement Freeze

Rabin at Kennebunkport: Betting on the Polls or on History?

By Richard H. Curtiss

"The polls indicate a big Clinton victory. History favors Bush."

-Economic writer Robert J. Samuelson, Washington Post, July 22, 1992

From the day after he assumed office, the competing candidates in the U.S. presidential election have confronted Yitzhak Rabin with the choice of betting on the polls or betting on history. Deciding where to place his bet should not be insurmountable for the prime minister of a country that owes its creation to its ability to keep American leaders in its corner and American public opinion polls on its side.

But the choice Israel's politically resurrected prime minister has to make this month, starting at Kennebunkport, is a stark one, and he is a notoriously indecisive man. If he places his bet on Bush, he must begin making the serious compromises necessary for a lasting peace with his Arab neighbors in return for scaled-down but adequate long-term U.S. financial assistance, including a stretched-out version of Israel's loan guarantee request.

If he does so, there could be a White House ceremony between now and the November elections even more dramatic than the famous three-cornered handshake between Presidents Jimmy Carter and Anwar Sadat and Prime Minister Menachem Begin that ended 30 years of warfare between Egypt and Israel.

This time the result could be the beginning of the end of the bloody 100-year-old struggle between Jewish and Arab nationalisms. Such an agreement would ensure security for Israel, a homeland for the Palestinians, return of Israeli-occupied Syrian and Lebanese territory, and an end to America's biggest and longest-lasting headache in the Middle East, at the U.N. and in much of the rest of the world. It's the sort of incredible photo opportunity, symbolizing a political miracle, that could help decide a close U.S. election contest.

Two things will make Rabin hesitate. One is that emissaries claiming to speak for Gov. Bill Clinton have told Rabin that, whatever the Republicans offer, Clinton will offer more. The evidence they present is that, in addition to an awesome lineup of officials closely aligned with Israel in the top echelons of Clinton's campaign, Clinton already has promised Israel the loan guarantees.

Continuation by Clinton of U.S. aid at present levels, and the unconditional extension of U.S. loan guarantees, would allow Israel to resume its all-out colonization of the West Bank, and its profligate economic ways. Only Rabin knows whether or not he would consider that desirable.

Rabin's own character is the second factor that might induce him to seek a middle way-seeming to go along with Bush while stalling if polls indicate a Clinton victory. In 1974, in his first meeting with a brandnew U.S. president and the most pro-Israel secretary of state in American history, Rabin had an opportunity to make a land-for-peace deal that would have ensured long-term U.S. support for Israel.

Israel's prime minister is notoriously indecisive.

Rabin had just taken over as prime minister from Golda Meir, disgraced by her unpreparedness for the 1973 war. The meeting, arranged by Henry Kissinger, was President Gerald Ford's first with a Middle Eastern leader since assuming the presidency only days earlier after Richard Nixon's resignation over Watergate.

Ford later wrote in his memoirs that he knew Rabin, from the latter's time as Israeli ambassador in Washington, as "a dour, very serious man who dressed conservatively and spoke in a soft, almost inaudible voice." Ford then learned Rabin was a "tough negotiator" in their meeting.

"Toughness, I was convinced, was not the only ingredient needed to resolve the Middle East impasse," Ford wrote. "Flexibility-on both sides-was essential as well, and I wasn't sure how flexible Rabin could be." Rabin turned out to be inflexible, and little progress was made.

The Difference Between 1974 and 1992

"Both sides are facing a rare window of opportunity-or maybe even of necessity. The Palestinians must realize that Israel is here to stay. Israel has learned-in the hard school of American pressure-that a deadlock for which it can be blamed courts moral, political and economic isolation."

-Henry Kissinger, The Washington Post, Aug. 2, 1992

What could make Rabin decide in 1992 to take the gamble he rejected in 1974 is the knowledge that an even more anxious Bush, and an even more indefatigable secretary of state, James Baker, can deliver all of the Arabs for a reasonable land-for-peace agreement. That was not certain in the case of Ford and Kissinger.

Although King Fahd of Saudi Arabia, President Hafez Al-Assad of Syria, King Hussein of Jordan and PLO Chairman Yasser Arafat may diverge on many issues, all seem agreed that Bush and Baker have the best chance of any U.S. administration in history to remove the Israeli-Palestinian sword of Damocles that hangs over every Middle Eastern leader and every Middle Eastern country.

To save Bush and Baker, and thereby ensure an even-handed Middle East peace agreement, Arab leaders almost certainly will agree to match a gesture by Rabin with a tangible and significant "confidence-building" measure before November.

And, if the possibility of U.S. financial aid tied to a real settlement is the carrot for Rabin, there is also a stick. If he stalls Bush because he is betting on Clinton, and Bush wins anyway, the cost to Rabin, and Israel, could be very high. Bush already has suffered a yearlong pounding in the U.S. media triggered by his linking of loan guarantees to Israeli performance in the peace process. There would be no further political downside for Bush if the loan guarantees were not extended at all.

Evidence of Repeated Abuse of U.S. Military Aid

Meanwhile, there is evidence of repeated Israeli abuse of U.S. military aid. Previously there were reports of unauthorized Israeli sales of U.S. weapons to third parties such as China, South Africa, Guatemala and even Colombian drug dealers, and of the Israeli theft and sale to foreign powers of U.S. military technology.

Now evidence is accumulating that some of the total of $30 million to $40 million in U.S. military aid funds embezzled by former Israeli General Rami Dotan and General Electric Sales Manager for Israel Herbert Steindler was very likely intended for use in Israeli intelligence activities, possibly including spying in the United States. That by itself certainly is grounds for suspending U.S. military aid to Israel.

There also are grounds for United Nations Security Council actions against clear Israeli violations of the Fourth Geneva Convention, including expulsions of Palestinians from their own country, house demolitions, punitive curfews and death squad activities. The U.S. can let the U.N. impose sanctions just by not exercising the American veto. The ways in which Israel can be punished for continuing to stall the peace process are endless.

The choice, therefore, falls squarely on Rabin. He can enter into serious negotiations in Kennebunkport and subsequently in Washington confident that they will yield some agreements in time to help Bush's re-election, because that's what the Arabs want. However, if Rabin stalls because he is betting on Clinton's election and a better offer, by the time Clinton became president the Arabs might not be as willing to make gestures of their own.

Shape of a Short-Term Agreement

"Now that the huzzahs of praise for the Israeli government's new settlement curbs-and the settlers' cries of outrage-have died down, the prevailing noise in the occupied territories is once again that of bulldozers and cement mixers."

-Correspondent Peter Ford, Christian Science Monitor, July 30, 1992

What should emerge from a Rabin-Bush meeting at Kennebunkport are "confidence-building measures" signaling that the parties to the dispute are serious. The U.S. administration asked Israel to freeze further Jewish settlement activity in the occupied territories. Rabin hasn't yet agreed. Instead he has said he will halt plans for 5,364 residential units in the occupied territories that had not been started-largely because the U.S. declined to offer further on which construction already has begun.

Over the longer term, the Israeli prime minister has offered to freeze further "political settlements" but not "security settlements," which Rabin defines as those in the Jordan valley, in Syria's Golan Heights, and in and around Jerusalem. It's a distinction without a difference and it hasn't been accepted by the U.S.

According to an Israel Defense Forces radio report on July 28, there were other points of disagreement that remained after Secretary Baker's most recent visit to Israel. With the dramatic drop in Jewish immigration into Israel after the breakup of the Soviet Union, the U.S. has questioned the size of Israel's request for $10 billion over 5 years.

Nor has the U.S. dropped its insistence on deducting from guarantees of any size the equivalent of whatever Israel spends on settlements or logistical support to them after Jan. 1, 1992. The U.S. and Israel are not even agreed on the "scoring," meaning the amount of funds the U.S. will put away in case Israel defaults on the loans. Agreement on these costs is necessary, since there is no money for them in the U.S. budget for fiscal year 1993, and the Shamir government already had committed Israel to pay them rather than have the subject come up in Congress during debate over a special appropriation.

If Rabin froze all settlement activity pending completion of peace negotiations, the U.S. almost certainly would provide Israel much or all of the desperately needed loan guarantees. And the Arabs would respond by freezing their economic boycott of Israel, perhaps even before the month-long peace conference session scheduled to begin in August in Washington starts hammering out the first outlines of an autonomy agreement for the Palestinians.

That isn't going to happen unless the man who appears in Kennebunkport is a Rabin reborn. But if Rabin can't improve on his initial limited settlement freeze terms, the U.S. is unlikely to make loan guarantee commitments beyond one year, at best. And if Rabin's concessions remain as limited as those he initially announced, it's hard to see how the Arabs can come to the subsequent party at all.

Basics of a Long-Term Agreement

"The Arabs have repeatedly stated their readiness to accept a reasonable compromise. Concessions from Israel on the land-for-peace front will be met with Arab compromises on other fronts, such as water, trade and other issues being dealt with in the peace process's multilateral track."

-Middle East New Agency Editor Hassan Sabri, Christian Science Monitor, July 29, 1992

If Middle East peace negotiations are to succeed, the parties have to stay within narrow parameters. Palestinians can enter into an initial deal granting them limited autonomy. But, in any final agreement, they must retain control over Palestinian land and water.

Palestinians must regain the power to deepen their wells and resume cultivation of their own fields, without worrying about the wasteful practices of Jewish settlers within their boundaries, or the Israelis in Israel proper. Strict water-sharing agreements must be worked out, and internationally guaranteed. These may involve regional agreements compensating Syria and Jordan with water from other sources such as Lebanon or Turkey for ceding their rights to some of the water needed to sustain both Palestinians and Israelis.

Nor can the Palestinians compromise on borders. Under the 1947 U.N. partition plan, the Palestinians were granted 47 percent of the Mandate of Palestine. Under U.N. Security Council Resolution 242's land-for-peace formula, all that will be left to the Palestinians is 22 percent. There is no land left for further Palestinian territorial concessions, regardless of the security pretexts Israel devises.

What Palestinians can accept are arms limitations such as those already agreed to by Egypt, which is not permitted to move heavy weaponry into the Sinai area from which Israeli forces have withdrawn.

The same considerations apply to Lebanon and Syria. In any overall peace agreement Israel will have to give back all of the sovereign Lebanese and Syrian territory it presently occupies-specifically including all of the Golan Heights. What can be applied to those territories, however, are demilitarization agreements similar to that reached between Israel and Egypt, with provisions for United Nations enforcement which can be abrogated only with the consent of both parties.

Israel's irreducible conditions are international guarantees of its borders, demilitarization of the areas from which it withdraws, regional arms limitation and water-sharing agreements, and an undivided Jerusalem. Regarding Jerusalem, the Arabs, and European powers as well, must have international guarantees of the civil rights of all three communities, Christian, Jewish and Muslim, living in Jerusalem, and for access to the holy places of all three religions concerned.

Finally, Israel will have to abandon its schemes to make a separate peace with one or another Arab party. Neither Syria, Lebanon nor Jordan will enter into a peace agreement which does not also address the rights of the Palestinians. Nor can the Palestinians, who will be dependent for the foreseeable future on the goodwill of the Arab states, afford to make a separate peace that ignores the need of any of them.

None of this is particularly complex, and none of these requirements are mutually exclusive. What is essential, however, is that outside parties to the Middle East peace negotiations, the U.S. in particular, bear carefully in mind these irreducible demands of all of the parties concerned.

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