Bush Wins on Mideast, Increases Leverage


Washington. -- In decisively facing down Israel's supporters in Congress, President Bush has cleared away what may be the last domestic impediment to his control of foreign policy and greatly increased his own leverage to prod a Middle East peace settlement.

The way he did it showed once again his willingness to play political hardball when the stakes are high enough. At a hasty White House press conference, he threatened to veto a $10 billion loan-guarantee package for Israel. He said he was up against "powerful political forces" but was determined to carry out "the foreign policy of the United States."

This tactic carried an echo of the 1988 Willie Horton message. Once again, Mr. Bush was arousing a dark vein of resentment in the body politic; in this case, the suggestion that American Jews are too influential and divided in their loyalty between the United States and Israel.

It confronted pro-Israel forces, who had sought to frame the loan-guarantee issue in purely humanitarian terms, with a lose-lose choice. If they pressed ahead and won, they would prove Mr. Bush's point and possibly stir an increase in anti-Semitism, while alienating a powerful president likely to be reelected.

The Bush tactic worked. No one expects the loan guarantees to be brought up before January. This gives Mr. Bush and his supporters more time to craft conditions that ensure the loans will go to resettle Soviet Jews and not be diverted to new settlements in the occupied West Bank.

That Mr. Bush was prepared to take on the fight was a measure both of his and Secretary of State James A. Baker's mounting frustration with Israel's settlement policies and their growing confidence that Middle East peace negotiations finally will get under way.

The administration sees Israel's headlong rush to expand settlements on occupied Arab land as seriously undermining the best mechanism for securing a Middle East settlement: a trade of territory for peace.

Officials feared that if Israel entered the negotiations not only with a vow to press ahead with the settlements but with access to $10 billion to finance it, the Arabs would balk and the talks could collapse.

Until early September, there was debate within the administration about confronting Israel on the loan guarantees, and there were strong doubts that Mr. Bush would do it. Up until then, the administration had settled for Israeli assurance that no actual American aid was funding the settlements and had not demanded any curbs as a condition for aid.

Those doubts had been fed during an earlier visit by Israeli Defense Minister Moshe Arens. In a friendly warning, Vice President Dan Quayle told Mr. Arens privately that it would be difficult politically to avoid linking the $10 billion with settlements once the debate came up in Congress.

Questioned by reporters the next day, Mr. Arens all but denied the conversation had occurred, implicitly challenging Mr. Quayle contradict him. He didn't; and Mr. Bush, in July, said there shouldn't be a "quid pro quo" between a settlements freeze and the loan guarantees.

But by September, prospects for a peace conference had greatly increased. Only details contained in letters of assurance, to be shared among all the parties involved, seemed to be holding things up. Those details still haven't been ironed out fully. But with Palestinian cooperation, it is increasingly likely that the conference will occur and that Mr. Bush will escalate its importance by opening it personally.

A direct confrontation with Israel over settlements has been building for years and seemed, to many, inevitable. But some administration officials had hoped to avoid a fight over the loan guarantees, believing that the issue could be dealt with in negotiations.

The Bush victory has heightened Israeli wariness about the American role in negotiations. Since the start of the Bush administration, Israel's supporters in the U.S. have sensed that Mr. Bush feels less of the emotional bond with Israel that characterized Ronald Reagan's attitude.

Israel has never allowed itself to be dependent on mere emotional ties. While seeking American aid, it has always insisted on defending itself. But the closeness of the Reagan era offered at least a psychological boost to Israel.

bTC Arabs, not surprisingly, were gratified, sensing that the United States would approach negotiations in a neutral broker's role.

In the September battle, Mr. Bush focused public attention on Israel's settlement policies and on increasing amounts of U.S. aid. Recent polls show strong public support for his stand, increasing his ability to use economic leverage on Israel as part of the peace process.

Amid the U.S.-Israeli bitterness, however, Israel remains committed in principle to entering negotiations. And no one has questioned Mr. Bush's commitment to Israel's security.

In the peace process, moreover, Israel may gain additional economic benefits, though not necessarily in the form of direct aid.

Israel's and Egypt's handsome gains from their peace accord were driven home last spring, in a joint appearance by their ambassadors at a Washington lunch.

The plastic plates had run out by the time the two envoys arrived, and the two men agreed to share.

Israeli Zalmon Shoval, an elegant man whose straight talk

sometimes gets him into trouble, quipped: "We've been eating off the same plate since Camp David."

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