U.S. agrees to consider additional $13 billion in aid to Israel over 5 years WAR IN THE GULF

January 24, 1991|By Mark Matthews and Peter Osterlund | Mark Matthews and Peter Osterlund,Washington Bureau of The Sun

WASHINGTON -- The United States continued quietly urging Israel to stay out of the Persian Gulf conflict yesterday while promising to give "full consideration" to its request for an additional $13 billion in aid over five years.

Tuesday night's Scud attack on a residential Tel Aviv neighborhood, the most serious so far, produced a hectic series of calls between Washington and Jerusalem, with Secretary of State James A. Baker III on the phone eight times that night and yesterday morning with his deputy, Lawrence S. Eagleburger, who is in Jerusalem.

At midnight (EST), President Bush spoke with Prime Minister Yitzhak Shamir.

Israel has vowed to retaliate against Iraq's terror attacks on its civilian population, but in a manner and at a time of its choosing.

Despite mounting indications that it could do so without disrupting the anti-Iraq coalition -- which includes Syria, Egypt and Saudi Arabia -- Israel is still being urged by the Bush administration to show restraint.

"It's clear they can't break up the coalition, but certainly Israel's in

volvement would change the equation and satisfy something that Iraq wants," a U.S. official said. Such involvement would present "an unnecessary complication," he said.

In public statements, the administration took pains to express appreciation for what State Department spokeswoman Margaret D. Tutwiler called the "extraordinary restraint, courage and resolve" shown by Israel's government and people.

Mr. Baker, in a brief encounter with reporters, denied any connection between Israel's current policy and the U.S. promise to consider its aid request.

"We frequently consider additional aid requests for the government of Israel," Mr. Baker said.

Finance Minister Yitzhak Modai, in a meeting Tuesday with Mr. Eagleburger, sought $3 billion in compensation for war damages and $10 billion to help resettle Soviet Jews.

The request came as Mr. Baker, under growing pressure from Congress, grappled with trying to get other countries to increase their contributions to the war effort. Specific dollar commitments have not been disclosed.

On Capitol Hill, Charles A. Bowsher, who heads the government's watchdog agency, the General Accounting Office, told a Senate

panel that the conflict was gobbling up any projected peace dividend from the end of the Cold War relaxation of tensions with the Soviets at a rate of up to $750 million a day.

"The massive military response to the Iraqi invasion of Kuwait means that the fiscal benefits from any reassessment [of relations with the Soviets] will be offset to some degree -- perhaps totally swamped -- by the costs of Desert Shield and Desert Storm," Mr. Bowsher said.

But he warned against slapping a war surtax on wage earners to pay for the bill -- at least for now -- because such a levy could further undermine a shaky economy.

His comments echoed remarks made Tuesday before the House Budget Committee by Federal Reserve Chairman Alan Greenspan, who had warned against tampering with tax rates in the near future.

Also yesterday, the United States, working with allies, sought to head off a formal U.N. Security Council session on the gulf sought by five African countries -- Morocco, Libya, Tunisia, Mauritania and Algeria.

While an informal Security Council meeting to deal with the request is possible today, U.S. and allied officials predicted that their bid for an open, formal session would probably get nowhere.

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