Era of Automatic US Assistance To Israel May Be Drawing to Close

WHEN Israel's interests are on the line, the legendary American lobby that represents it is usually unstoppable. Buoyed by a huge reservoir of American friendship for Israel, it has won more foreign aid from Congress, and on better terms, than any nation in history.

But Israel and its American friends have suddenly hit a wall of resistance. Despite months of urgent appeals, the Bush administration is still sitting on a request to underwrite a $10 billion loan to settle immigrating Soviet Jews. When and if it finally decides to go along, it is sure to be at a price Israel will find hard to swallow.

Israel's uphill battle on the issue of loan guarantees is partly the fault of an ailing United States economy. Generosity abroad is simply harder to sell now. But beyond the recession lie deeper problems that suggest the possible end of an era of automatic largess for Israel. "There continues to be a base of support for Israel, but that base is under constant attack and constant erosion," says a prominent political analyst in Washington.

The US has told Israel that it would insist on a halt to the construction of Jewish settlements in the occupied West Bank and Gaza Strip before it would agree to any loan guarantees. Israel says it will slow, but not stop, settlements. (Israel's quiet shift, Page 6.) Under terms offered by the US, Israel would be free to complete up to 9,000 housing units already under construction in the territories but would deduct from the total amount of the loan guarantees the costs of final construction.

For now at least, the tangible effects of the slow, perhaps temporary, decline in US public support for Israel are not likely to extend beyond the issue of loan guarantees.

One reason: What counts in Congress, in the end, is not public opinion but lobbying, which pro-Israeli groups still do with consummate skill. Even so, some American Jews note that weakening loyalties to Israel coincide with a shrinking economy at home. They are worried that if current trends persist, the size and terms of Israel's annual $3 billion foreign-aid package could also come under closer scrutiny. Concern about limits

"Military and economic aid to Israel has been uncontested for years," says David Cohen, co- director of the Center for Israeli Peace and Security. "Now we're concerned that Congress may begin to consider limits on this as well."

Ironically, these should be the best of times for Israel. With Iraq defeated, Russian immigrants pouring in, the Palestinian uprising under control, and Arab states negotiating with Israel face-to-face, the Jewish state may be more secure than ever before.

But against these hopeful developments for Israel is the hard reality that the relationship that has sustained it since its creation in 1948 has reached its lowest ebb in years. The main reason is the determination of Prime Minister Yitzhak Shamir's Likud government to tighten Israel's grip on the occupied West Bank and Gaza Strip, even as the US is determined to loosen it.

The US says the peace that it wants and that Israel needs can only come through territorial compromise. A defiant Shamir says, never. "Israel is in the awkward position of defending the status quo at the time the allies are pressing for change," says William Schneider, an expert on American politics and public opinion at the American Enterprise Institute. "The result is that Israel is more isolated now than it's ever been in history."

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