For Israel, It’s Time to Choose : U.S. loan deal appears tied to a freeze on settlements

Israel’s ambassador to the United States shocked his government over the weekend by bluntly warning that it can no longer avoid making the choice that Prime Minister Yitzhak Shamir has wanted to believe wouldn’t have to be made.

Ambassador Zalman Shoval said that if Israel expects to get the $10 billion in housing loan guarantees that it plans to formally ask for in September, it will have to agree to freeze its settlement activities in the occupied West Bank and Gaza Strip. This is the most explicit indication so far that the Bush Administration intends to link the settlement and loan guarantee issues, and there’s no reason to think that it’s not authoritative. Ambassadors are paid to transmit the views of the government they are accredited to, as well as the views of the government they represent. There’s no doubt that Shoval was reflecting what U.S. officials told him.

Israel is seeking the loan guarantees as part of a long-term, $40-billion effort to absorb 1 million or more Soviet Jewish immigrants by 1995. With the United States as co-signer, Israel can arrange for 30-year commercial loans on favorable terms; otherwise it would face the daunting prospect of making repayment within seven years. Helping Soviet Jews emigrate is a compelling humanitarian priority. The pages of Russian history are smeared with frequent and terrible incidents of Jewish persecution, especially in times of trouble, like now, and the recent reappearance of nationalist extremism sends chilling signals that anti-Semitism is alive and threatening. Right now there’s a window of opportunity for a Jewish exodus on a mass scale. Israel is ready to welcome all who would settle there. That enterprise deserves to be helped.

But that help should not be provided unconditionally and without reference to other aspects of policy, both Israeli and American. For nearly 20 years the view of successive U.S. governments has been that settlements in the occupied territories are an impediment to hopes for peace based on territorial compromise. Settlement activity increased significantly after the accession to power in 1977 of the Likud bloc, which is ideologically committed to annexing the whole of the West Bank. It goes on today, part of the process to try to so thicken the Israeli presence in the territories that withdrawal would become politically impossible.

Does this maximalist position reflect dominant Israeli opinion? By no means. The latest Guttman Institute poll finds that 69% of Israelis are ready to make territorial concessions on the West Bank as part of a peace process, while 78% would give up the Gaza Strip. It is the prospect of achieving peace based on territorial compromise, not the aim of retaining land at all costs, that an Israeli majority firmly endorses.

Shamir says he finds it “totally unreasonable” to link housing guarantees to the settlement question. On the contrary, it has become necessary to make that connection, just as it was necessary--and proper--for Congress in the 1970s to link denial of American trade benefits to the Soviet Union’s restrictive emigration policy and abuses of human rights.

Washington is under no obligation to tacitly support and indirectly subsidize a settlement policy that it has for so long regarded as inimical to long-term American policy goals in the Middle East. The United States must do everything within its power to facilitate the movement of Soviet Jews to Israel and their efficient absorption. It has every right, in pursuit of its own interests, to insist that its aid for this effort be tied to a freeze on settlement activity. The choice is the Israeli government’s: It can choose to put aside its ideological baggage or it can try to tough it out, seeking other ways to finance immigrant absorption. There’s little doubt what most Israelis favor, but that’s no assurance that the government will make the right choice.