867N.01/6–1049

Memorandum by the Department of State to the President 1

top secret

Subject: United States Relations with Israel.

On June 8 Israel replied to the United States note which Ambassador McDonald delivered in Tel Aviv upon your instructions on May 29. The reply firmly rejected the points made in the United States note concerning a final territorial settlement and the disposition of the refugee problem. Under the circumstances, the following course of action vis-à-vis Israel is suggested.

1.
Immediate adoption of a generally negative attitude toward Israel. This would include: refusing Israeli requests for United States assistance, such as for the training of Israeli officials in this country and the sending of United States experts to Israel; maintenance of no more than a correct attitude toward Israeli officials in this country and toward American organizations interested in promoting the cause of Israel; and failing to support the position of Israel in the various international organizations.
2.
Export-Import Bank Loan. The Export-Import Bank should be immediately informed that it would be desirable to hold up the allocation of the $49,000,000 as yet unallocated of the $100,000,000 earmarked for loan to Israel.
3.
United States Contributions to Israel. The time is appropriate to undertake explorations as to whether it is proper, now that a Jewish state has been established as an independent foreign country, for United States contributions to the United Jewish Appeal and to other Jewish fund-raising organizations to continue to be exempt from income tax as having been made for charitable purposes. Such contributions are now of direct benefit to a sovereign foreign state.
4.
Reply to Israel Note. A reply to the Israeli note will be drafted, answering the points made and reiterating the United States expectation that Israel will take action along the lines suggested by the United States.
  1. Drafted by Mr. Rockwell.