US loans for Israel hit a wall

2003-11-26 07:50

Washington - The United States will deduct $289.5m this year from loan guarantees currently available to Israel because of disagreements over Israeli activity in Palestinian territories, the Israeli Embassy in Washington announced late on Tuesday.

The embassy said in a brief statement that the amount was "suggested" by Israel.

"Israel accepts that the United States does not view some of the Israeli activities to date in parts of Judea, Samaria and Gaza as being consistent with US policy," the statement reads.

"Israel understands that the US should not finance directly, or indirectly, activities with which it does not agree."

Israel "therefore suggested that the US deduct the agreed sum of $289.5m from the $3bn in loan guarantees currently available."

An Israeli diplomat said the decision was taken after a meeting in Washington between US national security adviser Condoleezza Rice, and Dov Weisglass, Israeli Prime Minister Ariel Sharon's chief of staff.

White House national security spokesperson Sean McCormack said the United States welcomed what he also characterised as Israel's "suggestion" that the loan guarantees be reduced because of the disagreements.

"This suggestion acknowledges US policy concerns and US law regarding activities in the West Bank and Gaza and is a reflection of close and continuing consultations between our two governments," he said.

During a speech in London last week, US President George W Bush publicly criticised Sharon's hardline policies in the West Bank and Gaza Strip, after behind the scenes pressure failed to bring results.

Walls and fences

Bush said Israel must "freeze settlement construction, dismantle unauthorised outposts, end the daily humiliation of the Palestinian people and not prejudice final negotiations with the placement of walls and fences," in reference to the Israeli separation barrier being built across the West Bank.

The $289.5m figure is the amount Washington has estimated will fund building in the occupied territories - including building parts of Israel's "security barrier" deep within the West Bank.

For Israel, the structure is a separation barrier designed to prevent infiltrations by Palestinian extremists intent on carrying out terror attacks in Israel.

Palestinians regard the barrier as an attempt to pre-empt the borders of their future state and seize some of their most fertile land.

Chief Palestinian negotiator Saeb Erakat has urged Bush to "force Israel to immediately stop the construction of the apartheid wall."

In October, the United Nations General Assembly overwhelmingly called for a halt to the project.

Israel can, in theory, still receive up to $3bn in loan guarantees in 2004, but the government has claimed for only $1.6bn, the state department said in September.

- AFP