Foreign Relations of the United States, 1964–1968, Volume XIX, Arab-Israeli Crisis and War, 1967

361. Memorandum Prepared in the Central Intelligence Agency¹

No. 1367/67

Washington, July 13, 1967.

MAIN ISSUES IN A MIDDLE EAST SETTLEMENT

Note

This paper assumes that Arab-Israeli hostilities will not be resumed, at least at any early date. It explores the main issues facing Israel and the Arabs in the post-hostilities phase. It is intended to describe briefly the respective points of view of the adversaries, the considerations which affect their attitudes, and to assess the likelihood of resolving particular issues and the terms on which this might be done; in short, to suggest where there might be some room for compromise, and where not.

I. General Considerations

1. The outlook for settlement between Arabs and Israelis is dim indeed. Their respective positions on almost all questions are poles apart and emotions are running high. Arab policy toward Israel remains adamantly hostile. For many years, no Arab leader—except Bourguiba, who scarcely counts in this context—has considered it politically possible to contemplate the recognition of Israel. The Arab leaders are fully aware of magnitude of their defeat, but they do not draw the conclusion that they must acknowledge it. Hence, anything in the nature of peace negotiations is highly unlikely. The Arabs may feel compelled to sign some form of armistice agreements, but they may for a long time resist even this step if—as is likely—the price is significant concessions to Israel. But the shock of their swift and overwhelming defeat has, for the moment, probably prevented them from making decisions on all but immediate matters, and they are reduced to hoping that international pressures will somehow force the Israelis to withdraw from occupied territory.

2. As for the Israelis, promptly after their dramatic victory, they began talking about direct negotiations leading to Arab recognition of Israel and an overall settlement. Israel’s great objectives are to break the pattern of the last two decades, to gain Arab recognition of its right to exist, and assurances against further terrorism and other harassment. There are clearly divided counsels within Israel on the strategy and tactics of achieving these goals. The hardliners, represented by Dayan, have the advantage of being identified by many Israelis as the architects of Israel’s victory, and their positions have strong domestic appeal because they emphasize what Israel wants and feels it has won, with little regard to what might have to be conceded in the face of international pressures or opinion. Even if Dayan is forced out of the cabinet, Israel will probably remain largely impervious to external pressures to withdraw from occupied areas for months to come, unless there is unexpectedly quick progress toward a settlement tolerable to Israel. The short-term costs of holding captured territories are not high, around $10 million monthly, and are more than compensated by an extraordinary influx of hard currency since early June.

3. In the longer run, however, Israel faces a painful dilemma. The Israelis may hope that the Arabs (and the Soviets) will draw the “correct” conclusion from the recent war, and that a new order will emerge in the area which will involve acceptance of the Israeli state and assurances for its security. But so far there are few indications that any such new order is emerging, and unless it does, Israel must sooner or later face the problem of how to assure its security. Eventually, Israel is probably prepared to trade much of its captured territory in return for security arrangements. Experience does not incline the Israelis to put faith in guarantees by the great powers and certainly not in the effectiveness of UN arrangements. And while the Arabs may reluctantly enter into some more formal armistice arrangements, the chances remain slight that any significant Arab leader will undertake to associate himself with the kind of binding agreements that Israel wants and feels it must have.

4. Soviet actions will probably help to confirm the Arabs in this attitude. Nothing in the events of last month is likely to have altered the USSR’s conviction that Soviet interests in the area are best served by an alignment with radical Arab forces. There have been Arab defeats and Soviet miscalculations, and the principal instruments of Soviet policy—diplomatic, economic, and military—have either been damaged or at least had their efficacy called into question. But the Soviets have maintained their strong presence in the area. They are currently engaged in a noisy campaign to convince both the Arabs and the world at large that their ability and determination to maintain this presence has not been undermined by the outcome of the recent war and that among the great powers the USSR represents the only hope for the Arabs.

5. It is true that the USSR is the only major power the radical Arab states—Egypt, Syria, and Algeria—can depend on for meaningful support. It is no less true, however, that Moscow’s policies in the Middle East can only be served by the maintenance of ties with these states. For their own purposes, the Soviets and the Arabs thus need each other. In practical terms, this probably means that, within certain limits, the Soviets will in the main have to go along with Arab policies. While they would probably encourage an Arab disposition to compromise on issues such as Israeli passage of the Strait of Tiran, the Soviets would probably support Arab refusal to compromise, on most issues. For their part, the Arab states will simply have to recognize the limits on Soviet support, viz. the USSR’s determination to avoid direct involvement in active hostilities or to risk seriously a confrontation with the US.

6. No matter what the Israelis offer by way of a new order in Palestine or movement on the refugee question, the Arabs will press for a return to something as close to the status quo ante as they can get. In the process, there will be intense maneuvering, not only between Arabs and Israelis, but also among the Arab states. Husayn and Nasir have neither the same interests at stake nor the same attitudes, and the Syrians are something else again.

In addition, there will be considerable controversy and haggling between the regional adversaries and the great powers. The overall outcome is obscure, but it is possible to isolate and analyze contrasting positions on certain of the main specific issues, and to suggest where chances of accommodation now appear best, and where they do not. The following paragraphs are not an exhaustive analysis, and it should be noted that, except in a few obvious cases, they do not explore the relationship between specific issues, i.e., how bargaining over one question might affect any negotiations over another.

[Omitted here are sections II–VII, which show in tabular form the Israeli position, the Jordanian or Egyptian position, and the possibility of compromise or lack thereof on the issues of Jerusalem, the West Bank, the Gaza Strip, access to Eilat through the Strait of Tiran, the Suez Canal, Sinai, the Syrian highlands, and the refugee problem.]

1. Source: Johnson Library, National Security File, Country File, Middle East Crisis, Vol. VIII. Secret. Sent to the President with a covering memorandum of July 14 from Walt Rostow. A handwritten “L” on Rostow’s memorandum indicates the President saw it.