US-Israeli Summit Warms Ties and Spurs Peace Talks Prospects

Bush backs $10 billion in guarantees to help Israel absorb its large flow of immigrants

AFTER a day of cordial talks at the summer White House, President Bush and newly elected Israeli Prime Minister Yitzhak Rabin have set relations between the United States and Israel on a new course, brightening prospects for rapid progress on Middle East peace talks.

In the most visible sign that a period of strained relations between the two old allies may now be ending, President Bush announced Aug. 11 that the US is now ready in principle to guarantee $10 billion in loans needed by Israel to help create homes and jobs for hundreds of thousands of emigrants from the former Soviet Union.

The loan-guarantee request was first tendered by Israel 18 months ago. Despite heavy pressure from pro-Israeli lawmakers and lobby groups to go along, Mr. Bush insisted on linking the guarantees to a halt in construction of Jewish settlements in the occupied West Bank and Gaza Strip. Israel was unhappy, but administration officials believed that the unregulated expansion of settlements encouraged by the Likud government of Yitzhak Shamir was a major obstacle to progress in Middle East peace talks.

"I've long been committed to supporting Israel in the historic task of absorbing immigrants and I'm delighted that the prime minister and I have agreed to an approach that will assist these new Israelis without frustrating the search for peace," Bush said Aug. 11, "We can thus pursue these two humanitarian goals at one and the same time."

Right-wing Israeli politicians insist that the settlements are needed to anchor Israel's claim to the territories, which, they say, are needed for Israel's defense. But Mr. Rabin favors territorial compromise and has agreed to limit settlement construction to "stategic" areas, including the Jordan Valley and the environs of Jerusalem.

Bush and Rabin met reporters Aug. 11 to discuss their first meeting since Rabin was elected prime minister last June. A former ambassador to Washington during the Nixon administration, Rabin is a popular and well-known figure in the US. The Bush administration has welcomed the new prime minister's more moderate views on Middle East peacemaking.

Rabin's visit is being watched closely by American Jewish leaders who were unhappy with Bush's hard-line policy toward Israel under Shamir. Regaining the support of Jewish voters could help the president's reelection bid in crucial states like New York, Florida, and California.

In his meeting with Bush, Rabin also reaffirmed his commitment to putting Middle East peace talks on a fast track. Unlike Shamir, Rabin is eager to coordinate his negotiating strategy with the US, which Rabin will count on to help pressure the Arab parties to the talks - Syria, Jordan, Lebanon, and the Palestinians.

With the conclusion of the Bush-Rabin summit, all the pieces are in place for rapid progress on the peace talks, which began last October and which are scheduled to resume Aug. 24.

Bush hopes the talks, which will be held in Washington, will showcase one of his most visible foreign policy achievement to American voters.

Rabin would like to translate his electoral mandate and the credit that will come from winning the loan guarantees, into progress at the bargaining table.

For their part, the Arab parties will also be eager for movement before the November elections. They have come to trust Bush as an honest broker and are worried about Democratic challenger Bill Clinton's strong pro-Israeli views.

"This may be one of those rare moments when improved US-Israeli relations are seen by the Arab parties as a good sign and not as a danger," says William Quandt of the Brookings Institution.

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