The United States and Israel suddenly find themselves in a poisonous dispute that must be ironed out at the highest level -- and soon. Immediately at issue is the U.S. decision to seek a delay on an Israeli request for $10 billion in loan guarantees to house Soviet emigres. Washington's fear is that Arab countries would interpret such guarantees as a green light for further Jewish settlements on the West Bank and use this as an excuse to scuttle a Middle East peace conference.
So there is "linkage," however much the administration might try to gloss it over. Americans should be very clear on two points. One is that this country, after years of pressuring the old Soviet Union to let its Jewish people go, now has a moral obligation to help defray the enormous financial burden of resettling them in Israel. Another is that the $10 billion in question is not a direct aid outlay, but merely a guarantee for low-interest loans.
Nevertheless, Israel would be most unwise to try to defeat Mr. Bush on this issue. Even if Congress were to override his veto by mandating immediate loan guarantees, the administration could easily tie up the money in the labyrinth of the executive branch. It would not be the first time. More important, Israel would risk alienating a president who might well occupy the Oval Office for another five-plus years -- a president with lofty prestige in the Middle East after his triumph in the gulf war.