357.AC/6–751: Telegram
The United States Representative on the Palestine Conciliation Commission (Palmer) to the Secretary of State
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232. Palun 407. Fol Shiloah’s invitation to dinner with Sharett 28 May (Palun 405)1 which I had declined, Sharett himself invited Barco and me to dine on Wed June 6. I had meanwhile explained to Shiloah that I had nothing to say to Israel Govt on subject of compensation but that I wld of course be happy hear anything which they had to tell us. It was on this basis that we accepted Sharett’s latest invitation and dined with him, Shiloah, Horowitz, and Comay at Sharettis house last night in Jerusalem. Immed after dinner Sharett said that he had been hoping for sometime discuss with USDel subject of Barco’s and Shiloah’s earlier talks (Palun 403).2 He wanted to say at outset that he was very much interested in line of thinking which had been subject of those talks. He cld not however raise matter with his govt without pursuing it further with USDel. Meanwhile he had reed several requests from Aras, Boisanger, and Andersen for mtgs which he had put off until he had had an opportunity talk to us. He asked Shiloah outline points of his conversation with Barco in order we might all be clear as to exactly what had been said. Shiloah recalled Barco had put forward seven points for consideration:
- 1.
- That refugee problem remained greatest obstacle to peace between Israel and her Arab neighbors.
- 2.
- That it was unlikely practical means cld be found for refugee repatriation on any large scale.
- 3.
- That there remained question of compensation, which if settled satisfactorily might be expected remove refugee problem as grievance against Israel.
- 4.
- That settlement of compensation question might be expected pave way to peaceful relations between Israel and her Arab neighbors.
- 5.
- That by relating compensation to reintegration, it might be possible avoid waste of compensation funds and encourage resettlement.
- 6.
- Assuming Israel was not now in a position undertake large scale financial obligations to refugees, it might be possible obtain internatl assistance through UN for such financing.
- 7.
- Wld Israel therefore consider it politically advantageous to settle compensation question by assuming large scale financial obligation if such obligation cld be guaranteed or financed with internatl assistance without jeopardizing Israel’s economic future, it being understood that settlement of compensation question wld be outside context of any overall peace settlement and without ref to Israel’s claims for war damages?
Shiloah explained that the discussions Barco and he had had on these points had always been on basis of personal inquiry and exploration, [Page 705] each party understanding that the other was not in a position to say what attitude his govt might take on matter.
Sharett then asked number of questions concerning manner in which compensation wld be carried out if Israel were to agree to assume obligation referred to. His questions related to how compensation funds might be used for reintegration; whether Israel wld be expected to pay to a trustee or to Arab govts; whether Israel having paid cld be regarded as acquitted of responsibility; whether if compensation fund was insufficient to pay all claims in full, refugees wld expect to maintain a claim against Israel for balance; if compensation fund was to be determined on basis of a global estimate but payment was to be made to individual claimants, how and when were individual claims to be examined; etc.
USDel replied to these questions that they had certainly not been overlooked in our thinking but that until discussions of principle had proceeded further, we had not thought it possible find answers to them. We felt however that procedures cld be worked out to answer each question satisfactorily and we had hoped when time came we cld work out answers in collaboration with them and refugee office. Sharett then pointed out that proposal under discussion was distinct departure from orthodox view of compensation as Israel had always understood it. Orthodox view had been that compensation was an incentive to a peace settlement and that as such it had to be played as trump card in overall peace negots. On one hand Israel felt it was prospect of compensation that provided best encouragement to govts of Arab states to talk peace and on other that if compensation were paid without requiring anything in return peace talks might be postponed indefinitely. Proposal under discussion however was based on an opposite theory, that with payment of compensation principal obstacle to peace wld be removed by depriving Arab states of their grievances, and he was personally somewhat sympathetic to this view. At this point USDel added that up to present govts comprising PCC had little persuasive power with Arab states so long as they cld not point to any substantial efforts by Israel to discharge its obligation, but that with payment of compensation by Israel, our govts wld be in much more persuasive position and might be expected have greater success in urging Arabs come to terms.
Sharett then raised problem of public opinion in Israel, pointing out that it wld be difficult for Israelis to accept payment of compensation to Arab refugees, many of whom had fought against them, if at same time Israel’s claims for reparations against Germany cld not be satisfied. He felt moreover that question of financing wld prove much less difficult if Israel cld expect repayment for losses Israel citizens had suffered at hands of Germans. He thought this aspect of problem shld be pursued further and intimated that Shiloah, who expected go [Page 706] to Washington at end of month, might take up question again in Washington. Emphasizing however his interest in present line of thinking, he asked whether our intention was take up question officially and privately with Govt of Israel or whether it was our intention to raise question publicly at time of our report to Gen. Assembly. He hoped it wld be possible have discussions of more official nature in near future. In this connection, I told Sharett Barco wld be going back to Dept for consultations and that following his return I hoped such official discussions cld take place.
This morning Sharett saw Aras in Jerusalem, who reported to USDel that for first time he had found Sharett’s attitude hopeful. Whereas in past discussions he had been evasive and indirect, in this morning’s conv he seemed much more receptive to Aras’s argument that with settlement of compensation question Israel wld be taking an important step toward peace with Arab states.