784A.5 MSA/3–1751

Memorandum Prepared in the Department of State 1

top secret

Considerations Relating to Israel Request for Grant Aid

1. Our established policy of impartiality as between the Arab states and Israel, as set forth in NSC 47/5, dated March 17, 1951,2 should be carried out. NSC 47/5 sets forth in part: “The political and economic stability of the Arab states and Israel continues to be of critical importance to the security of the US … The US should without partiality as between Israel and the several Arab states:

Seek legislative action which will permit the development of appropriate arms supply programs, and
Undertake and accelerate planned technical and economic assistance.”

2. The Department has in preparation a carefully integrated program of economic and military assistance for Israel and the Arab states designed to strengthen the capabilities of all countries in the Near Eastern area on an impartial basis.

3. Any special treatment for Israel in the matter of grant aid would produce a violent and hostile reaction in the Arab states, which would regard such a grant as proof that the US is following a pro-Israel and an anti-Arab policy. Strenuous objections have already been received from Lebanon, Jordan, Syria, Egypt, and Saudi Arabia.

4. Such a grant would have a particularly adverse effect on Egypt and Syria, which are presently on balance in the East-West question, and would probably drive them further into a policy of neutralism.

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5. This reaction in the Arab states would have serious consequences on our special strategic interests in Greece, Turkey, Iran, and Saudi Arabia, and upon the strategic interests the US shares with the UK in the other Arab states and Israel. The defection of the Arab states would jeopardize any possibility of defense and stability in depth.

6. The anticipated reaction in the Arab states might lead to a situation similar to that presently existing in Iran.

7. Israel’s need for financial aid is unquestionable. However, this request is an open-end liability, both as to amount and duration: it envisages the continued financing by the US of Israel’s immigration and internal development program without regard to the economic capabilities of the country. Because of Israel’s unlimited immigration policy, no opportunity is afforded for stabilizing Israel economy at any given level.

8. This request is for fiscal 1952, and is only a part of Israel’s three-year billion and a half dollar program. It is likely that private support will be adversely affected by direct US Government grant assistance, which would further increase the ultimate US vulnerability to requests.

9. A positive approach, however, to the Congress, outlining the balanced military and economic aid program which the Department has under consideration and stressing the difficulties involved in unilateral aid to Israel might result in a shifting of present support for the requested grant to support of a policy providing for reasonable grant aid for Israel and the Arab states on an impartial basis; maintenance of our even-handed approach to the area; improved prospects for peace between Israel and the Arabs, which should be a matter of as great importance to Israel and Israel supporters as direct grant-aid to Israel.

  1. This unsigned memorandum is the attachment to another document (which summarizes it) titled “Outline Analysis of Factors Concerning Israel: Grant Aid Request”. The latter paper, not printed, bears the handwritten date of March 17.
  2. NSC 47/5 is dated March 14 and was approved by the President March 17. For text, see p. 95.