75. Memorandum of a Conversation, Department of State, Washington, August 9, 1956, 3:40 p.m.1


  • Suez Canal, Canadian Jets for Israel, Export-Import Bank Loan


  • Abba Eban, Ambassador of Israel
  • Reuven Shiloah, Minister Plenipotentiary
  • The Secretary
  • NESlator C. Blackiston, Jr.

Suez Canal: Ambassador Eban remarked that Israel was the only state discriminated against by Egypt in the matter of passage through the Suez Canal. However, the Security Council resolution of 1951 does not specifically refer to Israel shipping but to the right of free passage of all vessels of all nations to all ports wherever bound. Israel supports the London statement confirming the right of all nations to passage through the Canal. Although Israel has no financial interest in the Suez Canal Company, it is naturally interested in the preservation of international contracts. The discrimination by Egypt against Israeli shipping began while the British were still in control of the Suez base and the Canal Company in the “plentitude” of its rights.

[Page 179]

Ambassador Eban said Selwyn Lloyd had explained the failure to invite Israel to the Conference on the grounds that were Israel to attend, Egypt might refuse. Assuming that Egypt does not attend, could not an invitation to Israel be reconsidered?2

The Secretary said that invitations to countries in the third (pattern of trade) category were based on a mathematical formula. Thus, in this category only nations 50% or more of whose trade passed through the Canal were invited. The Government of Israel intends to seek assurances from the 24 nations invited to the forthcoming conference that they support the 1951 Security Council resolution. These assurances were being sought in a confidential manner but public expressions of support would be appreciated. Ambassador Eban stated that he was confident of the U.S. position and had therefore informed his Government of United States support of the resolution.

An assurance from the U.K. has already been obtained. The Secretary asked whether memorandum on this subject would be submitted since we wished to know how the question was formulated before giving a definitive reply. Our Panama Canal relationship has to be considered. The Ambassador replied that a note would be forthcoming.3

Ambassador Eban expressed the opinion that if Nasser was able to get away with his seizure of the Suez Canal, he would seek new worlds to conquer. Control of the oil resources of the ME and the elimination of Israel were his goals. Whether or not the present crisis is overcome, it has become obvious that the strength of the Western [Page 180] world is dependent upon the whim of one man who controls the lifeline of the Suez. Means to lessen this degree of dependence should be explored. Suggested projects to this end include:

Increased experimentation in the field of nuclear reactors to replace the need for oil as a fuel.
Larger tankers for use on the Cape of Good Hope route.
An alternate canal through Israel to lessen the bargaining power of Egypt. Whether or not the need is sufficiently great to justify the enormous expense of construction is the principal question.
A pipeline from the Gulf of Aqaba through Israel to the Mediterranean with an extension to Haifa to permit the refining capacity located there to be utilized. A pipeline had been considered by the Anglo-Iranian Oil Company some years ago. A somewhat prophetic report on this project was prepared in which it was stated that the continued security of the Suez route for the future was not assured and that a pipeline through Israel would be beneficial in negotiations with the Arab states through which the present pipelines pass. The report estimated that the Israel pipeline could be completed in one year and would cost £20 million. A present obstacle in the pipeline is Egypt’s control of the islands at the mouth of the Straits of Tiran. It can be assumed that a tanker with oil bound for the Israel terminus of the pipeline would be fired upon by Egyptian batteries. Such resort to force would not be sustained by public opinion and resistance to the assault would be justified.

A discussion of the legality of Egyptian control of the Straits of Tiran ensued. The Secretary wondered whether the three mile limit did not constitute a legal basis for Egyptian control. Ambassador Eban held that the Corfu ruling4 sustained the freedom of navigation of such restricted seas. Ambassador Eban said that Israel hoped for a peaceful solution to the Suez problem but that failure of the conference might result in Western military action. The West would therefore be placed in need of bases from which to operate. It was inferred that such bases would be available in Israel.

To speculate that Israel will not be attacked by Egypt would not be wise, said the Ambassador, since Nasser was reckless and had displayed his recklessness in nationalization of the Canal.

According to the Secretary excessive dependence on Suez has been a problem which has bothered the State Department for a long time. Any situation which jeopardizes the Canal is likely to jeopardize the pipelines as well and thus far, we have no alternatives. The Western world can get over the loss of Arab oil on a short-term basis. However, the long-term effect would be critical. Although the West is dependent on oil, the Arab countries are likewise dependent on oil royalties. A possibility of alternatives to the Canal is however, [Page 181] very important. History has shown that when a monopolist attempts extortion alternatives to the product of the monopolist are found. It is a good idea to permit it to be known that other Canal routes and new pipelines are being considered.


Canadian Jets for Israel: The Israel Ambassador expressed the opinion that the implementation of the “agreement” between the U.S. and Canada to permit Canadian jets to be supplied to Israel should go forward in secret with the U.S. supplying the arms which would justify Canadian action. If this could be done, Israel would inform Canada that the U.S. had fulfilled its commitment and would seek to convince the Canadians to sell F–86s without publicity.

The Secretary replied that we still felt that it would not be prudent to seem to be expediting planes to Israel lest it appear as a retaliatory move against Nasser. The Suez situation is not improved if it takes on the aspect of an Israel-Arab dispute. Despite public pronouncements to the contrary, there is a genuine feeling among certain influential groups in Arab nations that Nasser’s attitude gives rise to fears of his ultimate intentions. We do not wish any action on our part with respect to Israel to cause this opposition to Nasser to change to support.5

Export Import Bank Loan: The Ambassador stated that, according to his information, the Export Import Bank had completed its report on Israel’s loan application. Israel would appreciate being able to bring this matter to a satisfactory conclusion. The Ambassador hoped to be able to see Under Secretary Hoover on this subject after Mr. Hoover returns from his vacation.
  1. Source: Department of State, Central Files, 974.7301/8–956. Secret. Drafted by Blackiston. The time of the meeting is from Dulles’ Appointment Book. (Princeton University Library, Dulles Papers)
  2. During a conversation with Assistant Secretary Allen on August 4, Shiloah requested, on instructions from the Israeli Government, that Israel be invited to the forthcoming Suez Conference. Shiloah said that similar representations were being made in Paris and London. Allen said that he would repeat the request to Secretary Dulles, but advised that it was not in the interest of the United States or Israel that the Palestine dispute be interjected into the Suez affair. (Memorandum of conversation by Blackiston, August 4; Department of State, Central Files, 974.7301/8–456)
  3. On August 13, the Israeli Embassy forwarded to the Department of State a note which contained the Government of Israel’s position concerning Israel’s right to transit the Suez Canal. In paragraph 10 of the note, the Government of Israel noted the verbal assurances given by Secretary Dulles on August 9 that the United States would continue to uphold the right of free passage through the Canal by ships of all nations wherever bound, and stated its assumption that the United States would insist on ensuring free passage for Israeli shipping. In paragraph 11, the Government of Israel expressed the confident hope that during the forthcoming Conference in London, the U.S. representative “will demand the abolition of the present restrictions against Israeli shipping and will seek the inclusion in any arrangement of the future operation of the Canal of effective guarantees to avert the recurrence of any discrimination against Israel shipping and against the shipping of other nations bound to and from Israel.” (Ibid., 974.7301/8–1356) On August 16, the Israeli Embassy forwarded to the Department of State a supplementary note, which quoted several U.S. statements made before the Security Council in support of the Israeli position. (Ibid., 974.7301/8–1656)
  4. Reference is to the Corfu Channel Case decided by the International Court of Justice in 1949.
  5. On August 10 Eban forwarded to Dulles a letter which among other points asked that the United States: (1) clarify to the Governments of France and Canada that the postponement sought by the United States affected publication of specific arms shipments to Israel, not the actual measures toward shipment; and (2) issue normal export permits for the arms requested without publication. (Ibid., 611.84A/8–1056)