867N.48/4–2249
Memorandum Prepared Presumably in the Office of the Coordinator on Palestine Refugee Matters (McGhee)
Palestine Refugee Problem
notes for discussion with president
Of the attached papers the most important is Policy Recommendations: No’s. 1 and 8 are the critical recommendations.
No. 1: The real question is how far we go in putting pressure on the Israelis to repatriate a considerable number of refugees (at least 200,000), which Ethridge feels necessary for success of the Lausanne talks and which is believed to be necessary for any ultimate solution of the refugee problem. So far the strong talks given the Israelis by the President and the Secretary on this subject have not resulted in tangible concessions. The present issue is whether we go further through such action as holding up remainder of Eximbank loan ($49,000,000) and withdrawing Eximbank Mission.
No. 8: This represents an internal decision on the part of the executive. It means that, subject to Congressional approval, reasonable assistance from other UN nations and cooperation from the states concerned, we have decided that we intend to “see through” financially a minimum refugee program, before we raise Arab hopes through assuming leadership in an economic survey group to be created by the PCC. If there are not adequate loans forthcoming from the International and Exim Banks, we intend to request our share as a grant from Congress. Final decision should, of course, be made on the basis of the best advice we can get from Congressional leaders and Bank officials. Ethridge needs such a decision in order to know how far to go in holding out hope to Israel and the Arab states for assistance in repatriation [Page 965] and resettlement, as an inducement to get them to face these issuer realistically and constructively. The range of grant funds that the US might be called upon to make is believed to lie between $25,000,000 and $50,000,000 a year for 3 years, depending upon ultimate cost, amount of Israeli compensation, amount available from the Banks and amount contributed by other UN states.