Office of the Historian

114. Telegram From the Department of State to the Embassy in Israel1

Washington, January 9, 1960—6:11 p.m.

527. Following based on uncleared Memorandum of Conversation:2

Acting Secretary January 8 discussed Israel’s water development plans and US assistance to Central Conduit project with Israel Ambassador Harman.

1)
Acting Secretary reviewed study given subject by Department and long exchange between two governments re compatibility Israel’s projects and plans with basic Johnston Plan. We had some real concerns on latter point but November technical talks did great deal relieve our minds.3 We now much nearer agreement and understanding of each other’s positions. Acting Secretary then handed note to Ambassador4 a) reaffirming US conviction unified development of Jordan River System will best serve interests of riparians; b) stating USG has taken note of specific figures for total stream depletion provided by Wiener in November talks, and of Israel’s contention its plans pose no major problem from viewpoint remaining within Johnston allocations; and c) expressing gratification at reiterated GOI assurances that it intends take no action which will conflict with Johnston Plan or which will prejudice prospects of obtaining international agreement on such a plan.
2)
Acting Secretary said he could now inform Harman Department has no further political objections re financing $15 million foreign exchange costs of Central Israel Water Conduit project but we still studying best means make financing available. It might be desirable [Page 252] use an intermediate institution which could relend money for Conduit; also loan or credit might advantageously be extended in two stages, $10 million followed by $5 million. Noted Conduit is to carry water originating outside Jordan Valley for first few years.
3)
Loan application can now be considered by appropriate lending agencies in usual manner. Standard procedure is for DLF application to be submitted to Export-Import Bank for prior consideration. We do not know Bank’s interest in this loan but in present circumstances there is a limit to total Israel indebtedness which Bank can undertake. If Bank wishes undertake financing for Conduit, DLF would take loans for other projects or vice versa. Department has not yet looked into economic factors or even considered whether or not this is good economic project. Earlier Israel water development projects undertaken by Ex-Im Bank (credit of $24.2 million announced March 4, 1958).
4)
Re publicity for eventual loan or credit, Acting Secretary indicated this could have unfortunate impact on future of unified development of Jordan River System. Consequently he hoped assistance from US would not be publicized.
5)
Harman expressed gratification at information. Commented GOI all along felt Conduit project from all points of view fitted into DLF framework because of its long-term development character and expressed hope pending study would result in DLF undertaking loan. Re publicity he said Israel had no intention or interest in publicizing loan, but Jordan water problem being aired in provocative propaganda from Arab side. Israel which has active public opinion has tried resist provocation and hopes agitation re Jordan waters will die down.
6)
Washington agencies now considering modalities of extending assistance and Department will take up with Israel Embassy in next few days.
Dillon
  1. Source: Department of State, Central Files, 684A.85322/1–960. Secret; Limit Distribution. Drafted by Wahl, cleared in draft with Jones, and approved and signed for Dillon by Meyer.↩
  2. A memorandum of Dillon’s conversation with Harman is ibid., 884A.2614/1–860.↩
  3. No record of these talks has been found.↩
  4. Not found.↩