Loan backing for Israel unlikely Political considerations stall guarantees.

February 24, 1992|By Cox News Service

JERUSALEM -- Chances are fading that Israel will receive $10 billion in loan guarantees from the United States to house Soviet immigrants, according to a government minister and confidante of Prime Minister Yitzhak Shamir.

In a veiled threat to the peace talks, Zalman Shoval, Israel's ambassador to the United States, said yesterday it was unfortunate that the United States had chosen to link both the talks and the guarantees to expanding Jewish settlements in the occupied West Bank.

These comments support the views of several other Israeli officials and of Western diplomats in Jerusalem that Israel won't get the guarantees anytime soon. A delay seemingly serves the policies and political needs of both the Bush administration and Mr. Shamir's hard-line government.

Both governments are engaged in election campaigns. For either side to change its position on the guarantees and on the settlements would create major campaign problems, diplomats and Israeli officials said.

At yesterday's cabinet meeting, Health Minister Ehud Olmert blamed the Bush administration for the failure of the two countries to reach a compromise.

He said President Bush and U.S. Secretary of State James A. Baker III were no longer disposed to seek an agreement on the guarantees. At a meeting on Friday, Mr. Baker and Mr. Shoval failed to close the gap between the two countries.

Congress, also caught up in election-year politics and a sour economy, appears to be turning against more foreign aid. That makes rejection and delay even more probable.

In a clear reference to the Israeli election, Mr. Olmert said, the Bush administration showed no understanding for the views of the Shamir government and sensitivity to its political situation.

Congress is considering making the guarantees subject t cancellation if new construction is begun after the guarantees are approved.

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