Foreign Relations of the United States, 1977–1980, Volume VIII, Arab-Israeli Dispute, January 1977–August 1978

165. National Security Council Annual Report¹

Washington, undated

NSC ANNUAL REPORT

I. The Arab-Israeli Conflict

The Situation in Late 1976. At the end of 1976, the chances for progress in resolving the Arab-Israeli conflict seemed to require new diplomatic initiatives from Washington. During the previous year, there had been virtually no movement toward accommodation. The combination of an election year in the United States and the civil war in Lebanon had meant that 1976 was essentially a lost year in the peacemaking process.

Nonetheless, there were a number of positive signs. First, the United States was on comparatively good terms with all of the key parties. At the same time, the Soviet profile in the area was quite low, and it seemed unlikely that the Soviets would play a significant role in the upcoming round of diplomacy. The divisions in the Arab world that had become evident during the Lebanese civil war had just been moderated by the initiative of Saudi Arabia, and Saudi willingness to play an active and constructive role in support of peace was a new and welcome development.

When the Carter Administration assumed office in January, expectations were high that new initiatives would soon be launched. The choices that were generally considered were a resumption of step by step diplomacy, and the more ambitious objective of establishing a framework for a comprehensive settlement.

Initial Goals of the Administration. From the outset, there was strong agreement in the Administration that the Arab-Israeli conflict should be given very high priority. The most effective way for the United States to contribute to a Middle East peace was believed to be the development, in consultations with all of the parties, of a broad framework of agreed principles for a comprehensive peace settlement. Instead of concentrating on small steps toward an uncertain future, we would try instead to help sketch the outline of an agreement which would then be developed further through negotiations and implemented over a period of time.

From this perspective, a conference at Geneva was a desirable target, but was not an end in itself. Our initial goal was to develop a framework for negotiations, with Geneva being reconvened once that framework had been established. The United States would not try to impose a solution, but would use its influence with the various parties to encourage direct negotiations within some commonly agreed frame of reference. Above all, we wanted to keep the focus of the diplomatic activity on the need for movement toward an overall peace in the Middle East; to break the stalemate of the past year; to draw the Syrians and moderate Palestinians into the negotiating process; and to develop a momentum towards peace that would become self-sustaining.

Policy Implementation. The initial phase of our diplomacy involved high-level consultations with all of the principal parties to the conflict. Secretary Vance undertook an initial trip to the Middle East in February, which established several basic points. First, all agreed that a new effort to resume negotiations was necessary. The idea of a comprehensive agreement was welcomed, with different degrees of enthusiasm, by all of the parties. None preferred a resumption of step-by-step diplomacy. In addition, it was widely understood that the key issues that would have to be resolved through negotiations were the nature of peace, the establishment of recognized borders and of effective security arrangements, and the resolution to the Palestinian question.

The next phase of our efforts consisted of Presidential meetings with Prime Minister Rabin, President Sadat, King Hussein, Crown Prince Fahd, and President Assad. These talks took place between March and May, and resulted in a much clearer definition of the issues. The President began deliberately to reveal through his public comments the broad outlines of our strategy. One objective was to break down some of the conventional slogans that had come to characterize the positions of the parties. In March, he became the first President to emphasize the need for full normalization of relations as an essential element in a peace agreement. He spoke of open borders, trade, and diplomatic relations as tangible signs of Arab willingness to coexist in peace with Israel. He also introduced an important, but complex, distinction between the establishment of politically recognized borders and security arrangements that might exist along, and beyond, those borders during a transitional period, and even as part of a final agreement. With that distinction in mind, he expressed his view that it would be possible as part of a peace settlement for Israel to meet the fundamental Arab requirement of withdrawal to the 1967 borders with only minor modifications.

His third innovation was to concentrate attention on the Palestinian issue. In particular, he noted that the Palestinians would have to accept Israel’s right to exist, and that if they did so, they should have the right to establish a homeland on their own. It was clearly stated that these were issues that the parties should work out themselves through negotiations and that the United States could not impose the terms of an agreement. It was further said that the implementation of any agreement should be phased over time so that no party would be asked to make concessions without receiving something in return. Israel, in particular, would not be expected to withdraw all of its military forces in one step, but rather should have the opportunity to test Arab intentions over some period of time before full withdrawal would occur.

The United States had not anticipated that the May elections in Israel would bring about a change in government. Our approach had been predicated on the well-known positions of the Israeli government concerning withdrawal in exchange for peace. When Prime Minister Begin assumed office, it took some time to assess the new elements in his policy. The most obvious change had to do with the West Bank and policy on Israeli settlements in the occupied territories. On both of these points, Begin appeared to be adopting a harder line than his predecessor. A new formula was articulated which appeared to preclude Israeli withdrawal from the West Bank, which was difficult to reconcile with the formula that all issues were negotiable and that U.N. Resolution 242 remained the basis for a peace settlement.

In order to get a clearer picture of Prime Minister Begin’s views, the President invited him to Washington in July, and this led to some agreement on how to proceed in the months ahead. We would not talk about the 1967 borders with minor modifications, and we would play down the emphasis on a Palestinian homeland. Prime Minister Begin in return, committed himself to exercising restraint with respect to settlements and to consulting with us before undertaking any action in south Lebanon. He reiterated his position that all issues would be negotiable. He strongly preferred that the United States not deal with the substance of a settlement, but rather only with procedures to get the parties talking to one another.

Secretary Vance’s second trip to the area took place in August, and was designed to expand the areas of substantive agreement prior to the convening of the Geneva Conference. He took with him proposals on both substance and procedure, and had very useful exchanges of views with all of the leaders in the area. It was apparent, however, that the substantive gap remained very wide, and that in the absence of the ongoing negotiation process, it would be difficult to narrow that gap. At this point, a consensus emerged within the Administration that a shift of focus toward the early reconvening of the Geneva Conference was needed.

We arranged for talks at the Foreign Minister level during the UN General Assembly sessions in September and October, with the primary purpose of resolving procedural issues and allowing the early reconvening of the Geneva Conference. At the same time, however, we received from some of the parties draft treaties to be used as a basis for future negotiations.

Two difficult issues emerged concerning the reconvening of Geneva. First was the difference among the Arab parties themselves. Egypt, like Israel, preferred that negotiations take place primarily in bilateral groups to maximize flexibility. By contrast, the Jordanians and the Syrians, realizing their comparatively weaker positions in the negotiations, wanted negotiations to take place initially between Israel and a unified Arab delegation, a suggestion which the Israelis strongly opposed. The second area of disagreement concerned Palestinian representation at Geneva.

The United States, as well as the Arab parties, took a position that Palestinians should be represented in negotiations. The Arabs tended to insist that the PLO be involved in some form, although there was ambiguity on this point. Israel insisted that the only Palestinians that could be present at Geneva would be those who were members of the Jordanian Delegation. During the talks in September and October, some progress was made in narrowing these differences. All parties eventually agreed to the idea of a unified Arab delegation in which there would be Palestinians present. A formula for selecting Palestinians was also developed which might have been acceptable to all of the initial Geneva participants.

As these discussions were proceeding, however, the Soviets became increasingly anxious to be involved in the pre-Geneva process, and they took the initiative in September of proposing a joint statement to be issued by the Geneva co-chairmen. Their initial draft was comparatively moderate, and this encouraged the Administration to respond favorably to the idea of a joint statement.² Over a period of two weeks, a common document was negotiated, and on October 1st it was publicly released. Substantively, it contained a few new points. In particular, it committed the Soviet Union to normal peaceful relations and used the term the “legitimate rights of the Palestinians.” It was hoped that the US-Soviet statement would have a moderating effect on the more intransigent Arab parties. Shortly after the US-Soviet statement, the United States and Israel put the finishing touches on a document describing procedures for a Geneva Conference, and eventually the Israeli Cabinet accepted that document.

Once Israeli acceptance of the working paper had been achieved, the emphasis shifted to the Arab parties. The discussions began to bog down by mid-October. The Syrians, in particular, were very reluctant to respond to the working paper, although President Sadat gave his acceptance without qualification. We then urged the parties to overcome procedural differences, and toyed with the idea of issuing a joint call with the Soviet Union for a reconvened Geneva Conference, spelling out the basic rules of procedure and structure for that Conference in the invitation.

Before this could be done, President Sadat began to consider new initiatives of his own. We had urged him to take a public position in support of a peace settlement and Geneva. In early November he announced that he was prepared to go to Israel to lay his case before the Israeli Government and people. When this offer was taken up by the Israelis and an invitation was extended, a new phase in the peacemaking effort began.

President Sadat’s historic trip to Israel did more to break down the psychological barriers between Israel and the Arab world than any single step in the preceding thirty years. Expectations that peace was now possible rose sharply, and strong momentum developed behind the Egyptian-Israeli dialogue. The United States threw its support behind President Sadat and Prime Minister Begin, while emphasizing the link between this step and the goal of an overall peace settlement. By December, the United States, along with Israel, Egypt, and the UN representative, was committed to participation in a preparatory conference in Cairo. Geneva was less imminent than it had appeared to be in October, but the prospects for peace seemed better nonetheless. In order to assess the new situation, Secretary Vance undertook his third trip to the area.

Difficulties. The most controversial of the points in the President’s approach to a comprehensive peace settlement in the Middle East proved to be his idea of a Palestinian homeland. The reasons for this are complex. First, there was the unfamiliarity with the Palestinian issue, since it had not been seriously discussed by previous Administrations. Secondly, the debate over the Palestinian question tended to be taken out of context, and it was difficult to maintain a distinction between Palestinians and the PLO. An impression was created that the United States was placing the Palestinian issue at the head of the agenda, rather than keeping it within the context of an overall peace agreement which would include strong Arab commitments to peace and to security. The United States also made it clear that, under certain circumstances, it would agree to talk to the PLO, and this led many critics of the Administration to believe that the United States was promoting PLO participation in the Geneva Conference, with the ultimate objective of establishing a PLO-dominated state on the West Bank and Gaza.

By fall, there was a very intense domestic reaction. Part of the fault was of our own making, and part was no doubt over-reaction on the part of the media and of the American Jewish community. Nonetheless, it seems fair to conclude that the Palestinian issue was introduced too early and without adequate care to keep it in perspective. This resulted in a loss of domestic support for our policy, which came at a particularly unfortunate time in terms of the peacemaking efforts. If we had instead concentrated on getting the Egyptians and the Syrians to commit themselves to Geneva and to an overall peace settlement, the Palestinian issue would have more easily fallen into place at a later date. The offer of a dialogue with the PLO also proved to be premature, since the PLO, caught between Egypt and Syria, was unable to respond to our initiative.

The second difficulty which compounded our problems on the domestic front was the US-Soviet communique. Although the document in fact contained little new and had little substantive consequence, it set off a storm of protest, bringing together traditional anti-Soviet forces and supporters of Israel.³ It was widely believed that the United States was bringing the Soviet Union back into a prominent place in the negotiations. This created an atmosphere in which the negotiation with Israel over the working paper for Geneva was influenced by the need to calm the domestic crisis of confidence. We may have accepted some language that subsequently made it difficult for the Arab parties to respond positively.

With the working paper in hand, the Israelis made it clear that they would make no further concessions on procedures to get to Geneva. Pressure then was directed at gaining Arab acceptance of what was widely seen as a US-Israeli document, one which was clearly less acceptable than earlier drafts had been. For several weeks, we seemed to be concentrating excessively on words and legalisms, rather than on broad areas of agreement that would be required for the convening of the Geneva Conference. During this period, frustration grew in Egypt, Syria and Israel, and our own credibility seemed to suffer. The working paper exercise, in retrospect, was not very productive. The same results could have been achieved in other ways, and probably would have been if it had not been for the crisis set off by the US-Soviet statement.

Sadat’s bold initiative brought us into a new phase, and by December we were embarked on a course which enjoyed much wider support among the American public and which seemed once again to hold good promise of moving the parties toward a peace settlement.

Accomplishments. The Administration broke new ground by concentrating on the key elements of an overall peace. The President’s expression of the requirements of a real peace, including open borders, trade, diplomatic relations, was an important innovation. The distinction between political borders and security arrangements was also likely to be of enduring value. The focus on the need for a Palestinian homeland or entity was also well placed and has gained wide acceptance.

The Administration’s efforts clearly did help to break the stalemate that had existed throughout 1976, and new momentum was given to the search for peace. The emphasis on negotiations and direct talks was instrumental in ultimately bringing Egypt and Israel together.

Through its largely unpublicized efforts, the Administration helped to limit the dangers of the unstable situation in South Lebanon. Had this been allowed to get out of control, it could have jeopardized the broader movement toward a peace agreement. The same was true of the issue of Israeli settlements in occupied territory. There is no doubt that American influence was instrumental in limiting and containing the scope of Prime Minister Begin’s settlement policy, and thereby defusing its disruptive effects on the peace powers [process].

In addition to conducting diplomacy aimed at an Arab-Israeli peace settlement, the Administration maintained strong military relations with Israel, and expanded military ties with Egypt. These are particularly important achievements in light of the new Egyptian-Israeli peace effort.

Changes in Goals. Our long-term objective of an overall peace settlement in the Middle East has remained constant. There have been changes, however, in the means to that end. By the end of the year, it was clear that Geneva was no longer as central to our thinking as it had been several months earlier. The prospects for US-Soviet cooperation in promoting a comprehensive settlement had also dimmed. More emphasis was being placed on the Egyptian-Israeli dialogue and ensuring support for that part of the peace process. In particular, we were anxious to develop Saudi, Jordanian, and ultimately Syrian, involvement in the new approach to peace in the Middle East. Less emphasis was being placed on the PLO and more on moderate Palestinians.

The Next Stage. In the coming months, we will try to capitalize on the momentum developed by President Sadat’s trip to Israel and the initiation of direct Egyptian-Israeli talks. Saudi support will be essential, and we will also try to encourage Jordanian and moderate Palestinian participation in the peacemaking effort. The door should be left open for Syria, but it is [not?] essential that Syria participate at this stage. Nor should we go out of our way to bring the Soviets into the negotiations.

In brief, while our goal remains that of a comprehensive settlement, our own role has been modified somewhat as a result of the Egyptian-Israeli dialogue, and our policy is directed toward supporting and encouraging those talks, while trying to draw in other moderate Arab parties. If Egypt and Israel can develop common principles for an overall settlement, we should support that effort and urge other parties to join the negotiations. We should use our special relationship with Israel on behalf of increased flexibility. If an Egyptian-Israeli agreement is the only part of an overall settlement that can be resolved at an early stage, we will have to carefully consider how we can best support movement in that direction without losing sight of our longer term goals. In the process, we will want to strengthen our relations with our friends in the area—Israel, Egypt, Saudi Arabia, Jordan and Iran. This represents, after all, a potent coalition on behalf of peace, and is a good basis from which to protect virtually all of our regional interests.

[Omitted here is material unrelated to the Middle East.]

1. Source: Carter Library, National Security Affairs, Staff Material, Middle East File, Subject File, Box 67, Middle East: Policy/Goals: 10/77–4/78. Secret. Although no drafting information appears on the report, Quandt and Sick sent it to Brzezinski under a covering memorandum, December 9, in which they wrote that they had attached “our draft of the Annual Report for the Middle East.” They noted that they focused “on the Arab-Israeli diplomacy and Indian Ocean negotiations.” (Ibid.)
2. See footnote 4, Document 118.
3. In the days following the October 1 release of the U.S.-Soviet joint statement, several leading Americans excoriated the Carter administration for working with the Soviets on this statement. Senator Henry Jackson referred to it as “a step in the wrong direction.” Senator Robert Dole criticized the statement as an “abdication of Mideast leadership by President Carter.” Rabbi Alexander Schindler, Chairman of the Conference of Presidents of Major American Jewish Organizations, stated that his organization was “profoundly disturbed by the joint U.S.-Soviet statement which, on its face, represents an abandonment of America’s historic commitment to the security and survival of Israel.” George Meany, President of the AFL-CIO, noted that he did not “think it’s going to work.” (“Mideast Peace Initiative Provokes Criticism in U.S.,” New York Times, October 3, 1977, p. 6) The statement also impacted the New York City mayoralty race as candidates Edward Koch and Mario Cuomo provided strong rebukes of the Carter administration. Koch argued “that it is outrageous that the United States Government should associate itself in any way with the Soviet Union when it comes to the Middle East.” Cuomo accused Carter of using “mailed-fist techniques to make Israel submit to P.L.O. conditions.” (Frank Lynn, “Koch, Cuomo Assail Carter on Mideast,” New York Times, October 4, 1977, p. 8)