611.80/5–953
No. 605
Department of State Position
Paper1
secret
STA D–3
[Washington, May 5, 1953.]
[Page 1189]
Israel
Summary Paper2
- 1.
- Financial and Economic Aid to Israel—Israel
is not a viable state and requires outside financial assistance. It
has been largely sustained by United States contributions, private
and public. However, we are endeavoring to follow a policy which
will (1) avert financial collapse causing even greater area
instability; (2) hold our contribution to the minimum; and (3)
encourage development and fiscal policies in Israel that will allow
us to terminate United States Government grant aid as quickly as
possible.
- 2.
- Military Aid to Israel—Israel may now
purchase military supplies and equipment from official United States
sources on a cash reimbursable basis. Israel wishes to be found
eligible for grant military aid. Among the reasons we have declined
grant aid are, (1) military aid is a regional problem, (2) Israel’s
military establishment is believed to be greater than that of any
present combination of Arab states, and (3) no Near East state has
been found fully eligible for grant assistance. While we are
prepared to give grants to Israel at the appropriate time, we are
not indicating this while Egyptian negotiations are going on.
- 3.
- MEDO (Middle
East Defense Organization)—Israel thinks MEDO should include her. She feels her
geographic position and her military establishment entitles her to
charter membership. We hold that with the present Arab-Israel
tension, no Arab state would share military information with a
MEDO which includes Israel. We
have evolved a formula whereby Israel would not be a charter member
but would be kept generally informed by means of parallel
arrangements.
- 4.
-
Refugees (Arab)—These problems include
blocked Arab accounts, compensation to Arabs for property in
Israel, and refugee resettlement in Israel. Israel has agreed to
release the blocked accounts and has agreed to the principle of
paying compensation, and, in connection with an overall peace
settlement once offered to accept up to 100,000 refugees.
The United States has provided considerable sums for the care and
resettlement of refugees in Arab states and has urged Israel to
make a unilateral declaration that up to 100,000 Arab refugees
would be permitted to settle in Israel. We have also urged
Israel and the Arab states to settle their differences,
including those over refugees, by direct
negotiations.
- 5.
-
Jerusalem—Israel believes that in any
plan for internationalization of Jerusalem, political control
should remain with states now occupying it. Israel further
believes that, as Jerusalem is Israel’s capital, all government
ministries should be there. The Ministry for Foreign Affairs is
to be moved to Jerusalem about June of this year.
We are obligated by UN resolutions
to oppose annexation of Jerusalem by Israel and Jordan, the
occupying states. At the same time we realize that the present
uncertain status should not continue indefinitely. We have
informed the Israel Government we do not intend to transfer our
mission from Tel Aviv to Jerusalem.
- 6.
-
Border Problems—Israel until recently
followed a policy of armed retaliation against Jordan border
settlements as a means of controlling infiltration into Israel
by Jordan nationals. Jordan–Israel border troubles have been
referred to as a “miniature war”. We have urged both parties to
follow policies of patience and restraint and to make fullest
use of United Nations machinery and procedures. To make United
Nations machinery more effective, we are considering two ideas:
(1) to have three (instead of one at present) Jordan–Israel
Mixed Armistice Commissions and (2) to have whole border
situation aired in Security Council.
General Riley
USMC (Ret.), present UNTSO Chief of Staff, has
resigned effective May 15 and we are looking for a
successor.
- 7.
- Immigration—Israel’s Jewish population
increased from 650,000 in May 1948 to approximately 1,425,000 at
present (plus 175,000 Arab population today). Israel’s policy of
unlimited immigration has been drastically curtailed for economic
reasons. A potential threat to Near East stability is the number of
Jews in the Soviet Union (about 2,500,000). Should they be able to
emigrate, we consider it would be a problem for the world rather
than for Israel. The United States has contributed to Israel during
the past two years well over $100,000,000 for rehabilitation and
settlement of Jewish refugees already in Israel.
- 8.
- The Arab League—The Arab states have
organized themselves against Israel in an economic boycott and in a
collective security pact. The boycott is hurting economically but is
not likely to strangle Israel. The cost to Israel is paid by the
United States, in effect.
Israel is particularly concerned about Egypt’s Suez Canal restrictions on
commerce to and from Israel and has asked our assistance to force Egypt
to comply with the Security Council Resolution of September 1, 1951
calling on Egypt to desist from restricting commerce. We have declined
to comply with Israel’s requests in the belief that the present Egyptian
Government should not be hampered in its effort to gain prestige, which
will be necessary to enable it to talk peace with Israel.
[Page 1191]
[Tab 1]
Financial and Economic Aid for
Israel
Background
Israel’s present agricultural and industrial resources are inadequate
to support a population of 1,600,000 people accustomed for the most
to a relatively high standard of living. While immigration is no
longer high and an austerity standard of living is being enforced,
substantial outside aid is necessary simply to maintain the present
level of consumption. Additional help is required (1) to provide
service and repayment on a heavy foreign indebtedness, and (2) to
finance a development program which might some day make Israel
self-sustaining.
The United States Jewish community has contributed some $700,000,000
since 1945 to Jewish Palestine and Israel. This private aid has not
been sufficient in recent years, however, and has been supplemented
by United States Government aid. Specifically, in fiscal years
1950–51 $135,000,000 in Export-Import Bank loans and $23,250,000 in
free agricultural commodities were provided. Technical economic aid
totalling $64,950,000 was granted in fiscal 1952 and $73,000,000 in
fiscal 1953.
Israel Position
Israel has requested MSA aid of
$118,000,000 for fiscal 1954 to be used for immigrant relief and
resettlement and for economic development. In addition, Israel has
requested a “one-time” grant of $70,000,000 to pay its short- and
intermediate-term debts falling due during a twelve-months’ period.
This additional request is supported by Israel on the grounds that
its large overhanging foreign debt threatens to paralyze its supply
program, seriously encourages internal inflation and jeopardizes its
hopes for peace with the Arab states by stimulating Arab
expectations that Israel’s economy will break down.
United States Position
Our analysis indicates that MSA aid
of $50–60,000,000 should be adequate to maintain present austerity
standards of living and provide possibly $10–20,000,000 for modest
capital development toward viability. We question whether
large-scale aid to pay Israel’s debts would be justified at this
time. While there are strong political and economic reasons why we
should help Israel, if necesary, to avoid default, we are inclined
to feel that if default becomes imminent, consideration might first
be given to meeting the problem from loan funds or, if this is not
feasible, by making emergency use of MSA funds already appropriated for Israel’s
benefit.
[Page 1192]
[Tab 2]
Military Aid
Background
The armed conflict between Israel and the Arab states of the Near
East was terminated in 1949 by armistice arrangements. Efforts to
conclude peace agreements have not been successful.
Israel considers her existence is endangered by the absence of peace
with her four Arab neighbors (Lebanon, Syria, Jordan and Egypt) and
their threats of a “second round” with Israel. Israel therefore
believes it essential to her existence to maintain defense forces
(Army, Air, Naval) capable of effectively resisting attacks by any
combination of the Arab states.
There are three procedures whereby Israel may procure military
equipment from the United States, namely, from United States
official stocks on a cash reimbursable basis, from the United States
Government on a grant basis, and from commercial sources. Israel was
found eligible in July 1952 for cash reimbursable assistance and has
submitted a list of items desired, part of which has already been
approved. Israel continues to purchase military supplies in the
United States and elsewhere from commercial sources. Israel has not,
however, been found eligible to receive grant military assistance
from the United States.
Israel’s Position
Israel considers most unusual the furnishing of military aid by a
friendly power (United States) to a country which considers itself
to be at war with Israel (e.g., Egypt) and believes peace with
Israel and appropriate regional defense arrangements should precede
military aid to any Arab state.
United States Position
While recognizing the legitimacy of Israel’s concern, the United
States position has been that the best possibility of peace in the
Near East at present is through Egypt’s Premier General Naguib, whose regime must be
strengthened before his public opinion will permit him to arrange a
settlement with Israel. For this reason Egypt has been found
eligible for grant military assistance for training, and the
necessary agreement is under negotiation. Also, we have offered to
sell Egypt $11,000,000 of military equipment. We are prepared in
principle to offer Israel grant aid, but we cannot do it now without
jeopardizing present tendency of Arabs to move toward peace with
Israel. We are therefore not saying anything about this step.
[Page 1193]
The only other Near East state found eligible for grant military
assistance is Saudi Arabia, where special considerations (Dhahran
Air Base) made the finding necesary.
[Tab 3]
MEDO (Middle
East Defense Organization)
Background
Because de jure peace does not exist between
Israel and the Arab states of the Near East, it would not be
possible at this time to set up a MEDO which would include both Arab and Jewish members.
Therefore, efforts to establish MEDO have considered only the Arab states as charter
members (plus, of course, certain Western powers).
Israel’s Position
Israel believes that her geographic position, and the fact that she
has the most effective military establishment in the Middle East,
exclusive of Turkey, makes essential her membership in MEDO for it to be a success. She
considers it lacking in logic for the West to organize MEDO without her.
United States Position
The United States and other powers trying to organize a MEDO recognize there could not be a
MEDO with Israel as a charter
member. They also recognize the validity of Israel’s contentions.
They have therefore evolved the formula whereby only the Arab states
would be invited to become charter members but parallel arrangements
would be made with Israel and Israel would be kept generally
informed of developments. This formula has been made known to the
Israel Government.
[Tab 4]
Arab Refugees
(See Regional Paper on Refugees)3
Background
The end of the armed conflict in 1949 found almost one million Arabs
as refugees, having fled or been driven away from their homes in the
new State of Israel. The Arab states hold Israel responsible
[Page 1194]
for the status of the
Arab refugees. They insist on recognition by Israel of the “right”
of the refugees to return to their homes, on payment of compensation
by Israel for their property losses, and on release of the blocked
refugee bank accounts in Israel.
Israel’s Position
Israel has agreed to the release of the blocked Arab accounts, which
amount to the equivalent of approximately $14,000,000, and to the
actual payment of a first installment of one million pounds
sterling. Details of the transfer were worked out by the PCC (Palestine Conciliation Commission)
and the mechanics of the operation are being carried out by certain
banking institutions, assisted by United Nations Relief and Works
Agency. Some Arabs have signed the application for the release of
their funds but the vast majority, on the urging of Arab governments
and Arab leaders, have refused to sign the complex application form
pending a clarification of its exact implications.
Israel has agreed to the principle of paying compensation for Arab
properties in Israel. The extent of the problem is now being
examined by the PCC and the amount
of the obligation is expected to be known within the next few
months. The question then will be where Israel is to obtain the
funds with which to make the payment. Israel believes that it would
be unrealistic for her to attempt to pay such a large obligation as
long as the Arab states continue their economic boycott against
Israel.
Israel offered to accept, in connection with an overall peace
settlement, up to 100,000 Arab refugees. While that offer has since
been withdrawn, Israel would probably agree to it again as a part of
a general peace settlement with the Arab states.
United States Position
The United States has worked with the United Nations and its various
organizations, both directly and by diplomatic support, in trying to
find solutions to the various problems mentioned. We have
successfully urged Israel to release the blocked Arab accounts, to
agree to the principle of compensation without any quid pro quo, and we have provided substantial sums for
the care and resettlement of the refugees in the Arab states. We
have urged the Israel Government and her Arab neighbors to enter
into direct negotiations in order to solve or alleviate mutual
problems. It is probable that in the near future we shall want to
make a new effort to get the parties together to resolve the refugee
and other problems blocking Arab-Israel peace.
[Page 1195]
[Tab 5]
Jerusalem
Background
The United Nations resolution of November 29, 1947, contained a
provision for the internationalization of Jerusalem which has thus
far not been possible to implement, although the UN has had before it proposals extending
from complete territorial control by a UN authority to the Swedish-Belgium proposals for a
UN supervisor of the Holy Places
with the administration of the city to remain with the states in
occupation. In December 1949, despite UN admonition, Israel began the transfer to Jerusalem
of its legislature and ministries. At present only the Ministry for
Foreign Affairs has not moved to Jerusalem.
In addition to the political problems of Jerusalem, the city and its
environs are of tremendous importance to three of the world’s
principal religions. It contains the third most holy Moslem shrine;
it is closely associated with the life of Jesus Christ; it was the
site of ancient Jewish religious life and contains the Wailing Wall
and other places of religious significance to the Jewish people.
Israel’s Position
Israel believes that political control of Jerusalem should be left
with the states now occupying it, but is willing to provide
guarantees of free access to the Holy Places and would accept a form
of internationalization which would limit United Nations functions
to supervision of the Holy Places.
The Israel Government has informed us that it intends to complete the
establishment of the government in Jerusalem by the transfer of its
Foreign Ministry from Tel Aviv to Jerusalem in about June of this
year.
United States Position
The UN should have an opportunity to
devise a workable status for Jerusalem. We have recognized that the
occupying states should not be required to wait indefinitely for
determination of the city’s future status. It has been foreseen
that, if the UN fails, complete
control will remain with the occupying states by default. In the
meantime, we have declined to recognize that Jerusalem is the
capital of Israel and have joined with other states in requesting
the Israel Government not to transfer its Foreign Ministry from Tel
Aviv to Jerusalem. We have informed the Israel Government that we
have no intention of transferring our mission to Jerusalem although
we understand the inconvenience that is involved for the
[Page 1196]
Israel Government in
having its ministries located in the two separate cities.
[Tab 6]
Border Problems
Background
Israel’s neighbors are the Arab states of Lebanon, Syria, Jordan and
Egypt. With each of these states Israel has an armistice agreement
setting forth the armistice boundaries and the elementary rules for
keeping the peace. The United Nations has set up a Truce Supervision
Organization (UNTSO), the Chief of
Staff of which is Lt. General William
Riley, USMC (Ret.),
and a Mixed Armistice Commission (MAC) for Israel and each of the four Arab states. These
four MACs have national members but
the chairman of each is a military officer of a neutral state. Their
primary function is to investigate violations of the armistice
agreements. They have no enforcement authority.
Israel’s borders with Lebanon, Syria and Egypt have been relatively
quiet for the past year or so. The border with Jordan, however, has
been the scene of almost constant marauding and infiltrating into
Israel territory with resulting killings, thefts and disturbance of
the peace of the border areas.
The Jordan-Israel MAC has become so
bogged down with complaints that it has not been able to investigate
them promptly even on an emergency basis.
Israel’s Position
Israel’s analysis of the Arab character has led Israel leaders to
believe that the only language the Arabs understand is that of
force. This has brought about a policy of armed retaliation against
Jordan border villages when infiltration has reached a point
considered unbearable by Israel. From the Israel viewpoint the
policy is justified by the heavy losses in lives and property
suffered by communities along the border. Prime Minister Ben Gurion has referred to the
Jordan-Israel border troubles as “a miniature war.”
United States Position
In addition to our responsibilities as a member of the United
Nations, the United States, with France and Britain, is a signatory
of the Tripartite Declaration of May 25, 1950. We have therefore
urged both Jordan and Israel to make fullest use of the United
Nations machinery and procedures (MAC, UNTSO, and
Security Council) and not to resort to armed retaliation. As a
Tripartite Declaration
[Page 1197]
signatory we have joined with Britain and France in diplomatic
respresentations to both parties urging them to follow policies of
patience and restraint, and to cooperate fully with the United
Nations agencies.
In addition, we are considering ways and means of making the United
Nations machinery more effective. Two ideas are now being examined.
One is to have, say, three Jordan-Israel MACs instead of one as at present in order to provide
prompt and more effective investigations into causes and to fix
responsibility for armistice violations. The other idea is for the
whole border in question to be aired in the Security Council in
order to clear the atmosphere and permit the new UNTSO Chief of Staff (to be appointed
to succeed Gen. Riley who has
resigned effective May 15) to get a clean start. In the meantime we
are urging restraint on both sides.
[Tab 7]
Immigration
Background
One of the most important stones in the foundation of the State of
Israel is that Israel is declared to be the homeland for Jews
everywhere and hence must be open to any Jew who wishes to go there.
A total Jewish population of about 650,000 in May 1948 has increased
to approximately 1,400,000 today.
A policy of unlimited immigration almost caused the economic collapse
of the state, so that a de facto policy of
limited immigration was necessary and was begun early in 1952. The
Government still publicly adheres to a policy of unlimited
immigration.
Although the communist satellite states have permitted Jews to
emigrate until quite recently, the USSR has not permitted emigration. The Israel
Government hopes the 2½ million Jews in the Soviet Union will be
permitted to emigrate.
This attitude is one of the main causes of Arab fears with respect to
Israel. The Arabs’ reason that further large-scale immigration will
force Israel into an expansionist policy, to get “lebensraum” for
the increased population.
Israel’s Position
Even though the State of Israel is being kept alive today by foreign
governmental and private contributions, access to a haven in Israel
is offered to any and all Jews permitted to emigrate from the
communist states.
[Page 1198]
United States Position
The United States has not really formulated its position in the event
of immigration into Israel of an additional mass of Jewish people
from the communist countries. Preliminarily, however, we have felt
chaos would be created in Israel and the Arab states by the sudden
influx into Israel of any appreciable number of immigrants. Our
thinking is that the release of a large number of persons from the
USSR should be treated as an
international problem which would require the settlement of the
majority in countries other than Israel.
Well over $100,000,000 of United States Government economic aid to
Israel during the past two years has been extended for the
rehabilitation and settlement of refugees already in Israel.
[Tab 8]
Israel and the Arab League
Background
The Arab states of Lebanon, Syria, Iraq, Jordan, Egypt, Saudi Arabia
and Yemen, having seen their armies defeated by Israel in armed
conflict, have taken two important measures against Israel. They
have organized among themselves an economic boycott and they have
joined in a Collective Security Pact.
The economic boycott has been effective. It has taken the form of 1)
discontinuing the supply of oil through the pipe line from Kirkuk
(Iraq) to Haifa (Israel), 2) the blacklisting of American and other
foreign firms having branches in Israel, 3) refusing to admit
travelers whose passports contain Israel visas or otherwise show the
traveler has been in Israel, 4) the denial of entry visas to persons
of the Jewish faith regardless of nationality, and 5) refusal of
facilities to vessels transitting the Suez Canal carrying goods
destined to or from Israel. The latter restriction is particularly
onerous because it denies Israel access to cheap markets for
purchases and sales, including petroleum from the Persian Gulf for
the Haifa Refinery.
While the exact cost of the Arab boycott to Israel can not be
accurately determined it is estimated to be several million dollars
annually. It should be noted that this cost to Israel is, in effect,
paid for by grant aid funds authorized by the United States
Congress.
The Arab Collective Security Pact is at present only potentially
disadvantageous to Israel as, with the exception of Jordan’s Arab
Legion, the Arab states generally are militarily impotent.
[Page 1199]
Israel’s Position
Israel, of course, objects to the Arab economic boycott, particularly
the Egyptian regulations pertaining to the Suez Canal. Israel
periodically addresses the Governments of the United States, United
Kingdom and France calling their attention to the Security Council
Resolution of September 1, 1951 requiring Egypt to discontinue the
restrictions.
United States Position
The United States has made representations to certain Arab
governments whenever the economic boycott against Israel has
appeared to discriminate against American business interests, and
was one of the powers sponsoring the Security Council resolution of
September 1, 1951 mentioned above. However, because of the delicate
negotiations imminent between Egypt and the United Kingdom for the
past year and now taking place, and because we believe the present
Egyptian regime requires substantial support, we have declined to
insist that Egypt comply with the Security Council resolution. We
are nevertheless aware that the time will probably come when we must
join with other powers and insist that Egypt comply.
