501.BB Palestine/5–2849: Telegram
The Acting Secretary of State to the Legation in Switzerland 1
Unpal 133. For USDel, Lausanne. For your info only, since USG regards refugee problem as overriding factor in determining eventual disposition Gaza strip (Palun 174 May 28), USG would approve incorporation area in Israel as part final territorial settlement provided this cld be achieved by negot with and full consent Egyptian Govt and provided territorial compensation made to Egypt according Pres’ formula if Egypt desires such compensation. Event transfer to Israel, USG considers fol provisions wld be essential to safeguard refugees and residents Gaza strip: (1) clear and unequivocal assurances by Israeli Govt concerning acceptance refugees and resident population Gaza strip as legitimate cits Israel with same rights and same protection accorded Jewish cits, and Israeli Govt undertaking that its civil and military authorities will respect spirit and letter of such assurances; (2) provision for UN supervision of transfer of area and of subsequent status and treatment of population for appropriate period of time.
In opinion Emb Cairo (Palun 181 June 2) without consulting Egyptian auths, Egypt might well be willing cede Gaza strip to [Page 1091] Israel provided latter assumes refugee burden, since area wld ultimately become administrative and financial liability to Egypt. Azzam Pasha2 (Cairo A–565 May 163 rptd you) expressed similar views. Emb considers it probable Egyptian Govt wld reserve final decision until formal peace negots and wld use as bargaining point.