Loan Guarantees for Israel


Fresh momentum attends the Middle East peace talks, which resume in Washington on Aug. 24. The biggest danger now is that expectations may have risen even faster than realism allows.

President Bush has announced he will recommend that Congress approve $10 billion in loan guarantees for Israel, because Prime Minister Yitzhak Rabin left him little alternative. To be true to his reasons given for delaying approval last year, Mr. Bush had to approve now.

The U.S. will co-sign for Israel's loans from commercial institutions. Not once has Israel caused the U.S. to pay on past loan guarantees. The purpose is to build housing and jobs for some 400,000 immigrants, mostly from the former Soviet Union but also from Ethiopia and elsewhere. Mr. Rabin leaves no room for doubt that this is the real purpose. His predecessor Yitzhak Shamir, for reasons of territorial claim, wanted the loans to build housing no immigrants wanted in the occupied West Bank

Whether the U.S. and Israel are totally in agreement is not clear. The U.S. disapproves any new settlements; Mr. Rabin is committed to continue those which are for "security" and to halt those built for "political" reasons. Nonetheless, the area of disagreement between the two governments has been reduced to a very small one.

The announcement delivers one of Mr. Rabin's chief campaign promises before the June 23 election -- that he could obtain the loan guarantees Mr. Shamir's policies blocked. Congress should look at this request sympathetically. The U.S. enforced trade restrictions on the Soviet Union to let these Jews emigrate, would not admit them here and should ensure that its own policies succeed.

Israel has not removed every hurdle to negotiation. The law making contact with the PLO a crime, which zealous police officials use to harass Palestinian negotiators, is one of those obstacles. The Rabin government made known its intention to repeal this law in October, which is a long time to wait. Although Israel and the U.S. both bar the PLO from the peace process at this time, the connection to the Palestinian negotiators makes the PLO indirectly a party to the talks, which is their strength.

The movement of Israel to a more accommodating position will switch the spotlight to Arab intentions. "What we seek is real peace," Mr. Bush said, "codified by treaties, characterized by reconciliation and openness, including trade and tourism. And it must be a comprehensive peace on all fronts, grounded in U.N. Security Council Resolutions 242 and 338, born of direct negotiation." That raises questions about the PLO's ambiguity and Syrian dictator Hafez el Assad's hostility.

Peace means peace, nothing less, a permanent condition. Israel must make more concessions to obtain it but should not make them for anything less than peace.


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