Foreign Relations of the United States, 1955–1957, Arab-Israeli Dispute, 1955, Volume XIV

469. Telegram From the Embassy in Israel to the Department of State¹

Tel Aviv,December 24, 1955—4 p.m.

643. Reference:Deptel 411.² Following is continuation subject matter Embtel 632.³

Believe it reasonable assumption that, after period coyness and indecision,GOI may indicate willingness to negotiate trade simple overpass or underpass land connection Jordan–Egypt for cession to Israel Gaza Strip without the refugees. Also may be willing accept repatriation very small number these refugees. Within framework present Alpha project doubt whether Israel prepared to go much further. Assume neither Nasser nor US and UK would regard foregoing as satisfactory concessions. If so we could get fast and satisfactory performance out of Israelis only if we can come up with a revised program which they will view as a real answer to their security and economic problems. Firstly believe we should aim at a definitive final settlement between Israel and Egypt. With current judgments here re Nasser, any program falling short of this will be regarded by Israel as no settlement at all. Secondly, believe territorial question should be aimed at creating maximum buffer of sand and stone between populations and armies two countries and elimination or reduction two prongs which extend along each other’s territory. Unlike present approach such an arrangement would effectively reduce rather than increase defense problems two countries. Finally if we are going to offer Israel a way out of her disguised economic insolvency it can not be done by increasing her already heavy financial burden or by failing to make provision opening up nearby Arab markets. This would require US to raise its sights re financial participation and, as in case of territorial changes, objective of a complete rather than partial settlement between Israel and Egypt.

In pursuance foregoing suggest following possible modifications Alpha project:

. . . . . . .

2. Agreement by Israel to repatriate over a period of five years one-half Gaza refugees, i.e., 114,000 persons, with other half to be resettled Sinai project and elsewhere.

3. Israel–Egypt treaty of commerce and navigation with most-favored-nation provision (to contractually end blockade and boycott, primary and secondary).

4. Notification to Israel that present form of economic aid will end as of July 1, 1956.

5. USG and UJA to take policy decisions to spend in Israel next five years as much as they have spent past five; defined as average $60 million per annum for each.

6. Economic and development program concentrated on following:

(a) Completion Israel’s agricultural development through USG–UJA acceptance financial responsibility Israel segment unified water plan. This would require sum $30 million from USG per annum for five years for reservoirs, Jordan power and diversion works, and primary and secondary canals, and a similar amount from UJA for agricultural settlement i.e. agricultural equipment, tools, housing and land preparation. (Assume Israel’s own local currency expenditures would take care of secondary agricultural projects.)

(b) UJA continued participation in moving existing settlements toward economic viability.

(c) USG financing participation in developing mining and communications facilities in Negev areas remaining in Israel, possibly including roadstead and other facilities Gazokui Askel-on for potash and phosphate rock to compensate for loss of Eilat.

(d) Possibly USG financial assistance to supplement reparation deliveries in completing Israel’s industrial plant.

7. US–UK guarantee new boundaries.

While above approach raises sights regarding land concessions by Israel and in volume repatriation refugees by Israel, assume this is necessary because of considerations Arab side. It does have several overriding advantages from Israel’s standpoint: Names [Means?] improved defense; real hope of an economic solution; and above all a real rather than vague hope of peace. Larger absorption refugees and loss Eilat are two obstacles (largely psychological) which would have to be overcome in this country. Believe that after analysis Israelis will conclude refugees by thousands are less of a security threat with definitive settlement than by tens with a partial solution which, under current circumstances, would be regarded by Israelis as no settlement at all. Eilat problem will be viewed here in both economic and emotional terms. Its economic attractiveness is largely a mirage and could be neutralized by alternative program suggested. While I believe the foregoing has advantages which may offset emotional problem of Eilat … Israelis are so reluctant to make serious concessions that in my judgment settlement can only be brought about by clear and firm presentation of alternatives.

One prong of the alternative would be the recommendation of notification that regular US economic aid will cease next year. The other prong is in the hands of the leaders of the UJA. I recommend bypassing the professional Zionist leaders in the US, Nahum Goldmann et al, who by aptitude and disposition can exert pressures for but not on Israel. On other hand, the UJA is an important and possibly decisive element in our ability to deal effectively with Israel in this matter. With bond revenues as well as regular donations in the hands of that organization the Israeli Government knows full well that, while it might stagger along without USG aid, the UJA is indispensable to Israel’s future existence.

Those UJA leaders whom I have met, … impressed me … possibly, as having some reservations about where Israel’s political and economic policies will lead it. Suggest examination desirabilityWhite House call in key group of these leaders with a view to enlisting their assistance through detailed examination of problem and proposed solutions, as well as patriotic duties inherent in relationship Arab-Israel problem to threat to America’s entire position in the Middle East. Not only would Israelis listen carefully to them for financial reasons but they would view with less suspicion and more confidence people of their own religion who have amply demonstrated their interest in Israel’s survival.

Ambassador Lawson is returning to Tel Aviv this evening and may wish to transmit other or additional views this matter.

White

1. Source: Department of State, Central Files, 684A.86/12–2455. Top Secret; Alpha; Limit Distribution. Received at 8:09 a.m., December 25. Repeated to Cairo and London.
2. Printed as Document 446.
3. Document 465.