281. Memorandum of a Conversation, Department of State, Washington, September 28, 1956, 3:14 p.m.1
Part II of II2
SUBJECT
- Military and Economic Assistance to Israel
PARTICIPANTS
- The Secretary
- Mr. Abba Eban, Ambassador of Israel
- Mr. Reuven Shiloah, Minister, Embassy of Israel
- Mr. Fraser Wilkins, NE
Ambassador Eban said that his third matter related to the Canadian decision to supply Israel with Saber jets. The Israeli Foreign Minister had already been in touch with Ambassador Law-son in Tel Aviv and had expressed the gratification of the Israeli Government with respect to the Canadian action. He said that this action had improved the balance of forces in the Near East which would result in some deterrent to general conflict. Nevertheless, the general situation was one short of total settlement.
The Secretary said that he had been anxious that Israel receive some F–86 jets. For a time it had seemed problematical that Canada would take this step. Israel’s retaliatory action against Jordan had almost prevented the step. The Secretary had felt, however, it important that Israel receive planes of this type and learn how to fly them. Experience with F–86 jets would open up another vista of assistance. He recalled that the President in March 1956 had stated publicly that assistance would be provided in the event of aggression.
Ambassador Eban said he understood the situation. In reply he wished first to refer to the past. He cited figures regarding the number of Israelis killed and wounded for the two years preceding March 1956 and for the period thereafter. These figures showed a substantial increase. Ambassador Eban continued that Israel had tried not to react. They had discussed the situation with General Burns and Secretary General Hammarskjold. There was no question in Israel’s mind that the present state of affairs between Israel and Jordan had been initiated by Jordan. He added that Israel had had to [Page 609] act, otherwise the Israeli people would not sustain the Israeli Government.
Ambassador Eban continued that with reference to the future, there was nothing farther from their mind than to cause general conflict. Israel was willing to agree on a cease-fire but believed it should be reciprocal. Israel had suggested to Secretary General Hammarskjold that King Hussein make a statement which would have an important effect in Jordan. Secretary General Hammarskjold had not been willing, but Israel would continue to urge the issuance of a statement by Jordan. Meanwhile, Israeli borders with Syria, Lebanon, and Egypt were tranquil.
Ambassador Eban said that his fourth point related to economic assistance. It was vital for Israel. Recently the economic burdens of security had increased greatly. In effect the USSR had caused all of the Near Eastern states to increase their security expenditures. At the present moment, however, Israel was concentrating upon its water development. Ambassador Eric Johnston had told him that his efforts were now bogging down, and that there was no prospect of his resuming the initiative in the immediate future. Ambassador Eban thought that the Export-Import Bank was the only way Israel could be assisted at this time and thus avoid complete paralysis within Israel. He said he understood the Export-Import Bank had reached an advanced stage of its discussions with the Department. He himself planned to discuss Israel’s loan application with the Bank on October 3rd.
The Secretary said that the result of Israel’s loan application to the Export-Import Bank was not as clear as Ambassador Eban and the Secretary had thought. The Export-Import Bank doubted whether the loan would be a good one. The Secretary asked if Israel had borrowed heavily from the Bank.3
Ambassador Eban and Minister Shiloah replied that $39 million had been repaid, leaving $105 million outstanding. They pointed out that the water development which would be undertaken under the loan would increase production out of which the loan could be repaid. The Secretary asked whether water would be taken from the Jordan at Jisr Banat Yacub. Ambassador Eban replied that no water would be taken from this source but only from within Israel.
The Secretary said that because of his preoccupation with Suez he had been unable to give the Israel loan application his personal attention. He said that Mr. Hoover had been working directly with [Page 610] the Export-Import Bank. The Secretary had thought that the matter was nearer conclusion and that the Bank planned to send out a technical group to Israel for further study, but that apparently the Export-Import Bank had had second thoughts regarding the merits and the total size of the loan. He hoped, however, that matters regarding the loan would move forward. Minister Shiloah urged that a decision in principle be reached at this time, leaving technical matters to a later date. The Secretary made no further comment.
Ambassador Eban said that his final point related to alternatives to the Suez Canal for transport of oil. He said that the possibility of a pipeline from the Gulf of Aqaba to the Eastern Mediterranean through Israel had been discussed with private interests in the United States. Although there were some differences of view, there seemed to be some support for this proposition. However the question of access had arisen. Ambassador Eban said that he would like to have the Secretary’s opinion regarding the international right of innocent passage through the Straits of Tiran between the Gulf of Aqaba and the Red Sea. He said that Egypt had no legal right to obstruct passage through the Straits of Tiran by force. He would also like to be assured of a regular supply of oil at the source. This source would have to be outside of the states of the Arab League. It could come from Saudi Arabia but it might come from Kuwait or from Qatar.
The Secretary made no substantive comment, although he did remark that he had heard that the French Government was interested in the construction of a pipeline across Israel.
- Source: Department of State, Central Files, 784A.5–MSP/9–2856. Secret. Drafted by Wilkins. The time of the meeting is from Dulles’ Appointment Book. (Princeton University Library, Dulles Papers)↩
- Part I is printed supra.↩
- On September 29, Eban forwarded to Dulles a letter which contained additional views of the Israeli Government on the question of its indebtedness to the Export-Import Bank and on other considerations pertinent to the Israeli loan applications. (Department of State, Central Files, 884A.10/9–2956)↩