446. Telegram From the Department of State to the Embassy in Egypt1

1230.Russell met with Shiloah,2 Minister Israel Embassy, December 8 pursuant to suggestion by Secretary to Sharett (Deptel 12293) that we would be willing to indicate to IG our thinking about nature of equitable settlement of Israel-Arab dispute as result of intensive consideration which USG had given to problem starting last spring.Russell said that Egyptian-Soviet arms deal had in no way altered our ideas on elements of settlement. However, rapidly evolving events including arrival Soviet shipments in Egypt and Soviet offers to other Arab states made early attainment of settlement imperative. Time at our disposal was short and might be measured in terms of few weeks. At present Arab states appeared relatively receptive to settlement. Nuri had indicated Iraq would not oppose negotiations by another Arab state and Nasser had stated publicly he prepared to consider agreement.

Russell described elements of what we would regard as an equitable settlement and one which we hoped would sufficiently reflect vital interests of both sides so that it would be acceptable to them:

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Refugees. Repatriation to Israel of perhaps 75,000 Arab refugees at agreed annual rate. Repatriated refugees to assume all rights and obligations of Israel citizens. Resettlement of remaining refugees in Arab states or other areas. Israel to pay compensation for real property left by refugees and to renounce counter claims for Jewish property left in Arab areas in return for renunciation by refugees of claims other than for real property. Israel and international Jewish community to raise substantial portion funds required pay compensation. US and perhaps other countries to assist Israel in meeting portion of obligation through long-term low interest loan.

Jerusalem. US would support UN review of status of Jerusalem as stated in Secretary’s August 26 speech.

Boycott. Arab states to cease efforts enforce secondary boycott against Israel, defined as attempts prevent trade between Israel and non-Arab countries including termination of pressures on non-Arab firms trading with Israel. Arab states to remove all restrictions on shipping, including Israel vessels, transiting Suez Canal or entering Gulf of Aqaba. Unrealistic to endeavor at this time force direct trade between Arab states and Israel.

Termination of state of belligerency. Appropriate legal formula to be found covering Arab acknowledgment termination of state of belligerency. Unrealistic hope obtain formal peace at this time.

Communications arrangements. Israel to offer Jordan free port facilities at Haifa and free access to port. Other arrangements to be worked out, for example, overflight rights, telecommunications, use of roads.

Unified Development Jordan Valley. Parties to agree to plan presented by Ambassador Eric Johnston.

Territorial. Mutual agreement on definitive border in accordance with following principles: Division of present “Demilitarized Zones” and “No Man’s Lands” created by armistice agreements. Restoration to Arab border villages of portion of adjoining farm lands upon which they dependent for livelihood and from which they cut off by existing armistice line. Cession to Israel of portion of Latrun salient making possible resumption use direct road from Tel Aviv to Jerusalem. Adjustments in Negev to provide Arab area joining Egypt with rest of Arab world; land involved need not be appreciably populated or of any substantial economic value.

Territorial Guarantees. US and perhaps other countries to join in formal treaty engagements as stated by Secretary August 26.

Shiloah said he did not wish “negotiate” regarding any element mentioned. Although Israel would have comments, all points appeared based on decent effort approach problem from point of view of equity except suggestion regarding Negev. Negev vital to Israel [Page 843]and he unable to see why Western powers thought it necessary to foster Egyptian aspirations to Arab leadership by giving Nasser slice of Negev.Russell replied settlement might stand or fall over Negev. It should be possible reconcile opposing views of Israel and Egypt without impairing vital interest of either. Major question was whether Israel would agree that Negev problem is negotiable. Would be great tragedy if either side stated it not prepared even negotiate on subject. US convinced that if settlement is to be reached it must be worked out with Egypt and Egypt would not consider settlement unless some arrangements made regarding Negev.

Shiloah stated would refer points immediately to Sharett and hoped discuss further with Department shortly.

Dulles
  1. Source: Department of State, Central Files, 684A.86/12–1055. Top Secret; Priority; Alpha. Drafted by Burdett and Russell, approved by the Secretary and Russell, who signed for Dulles. Also sent to Tel Aviv and London.
  2. No other record of this conversation has been found in Department of State files.
  3. See footnote 6, Document 440.