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Israel shrugs off Mitchell's loan threat

Israel's finance minister, Yuval Steinitz, said on Sunday that Israel could do without loan guarantees after US envoy George Mitchell told PBS last week that the US could consider withholding the guarantees if Israel doesn't stop settlement construction.

By Ilene R. PrusherStaff writer / January 10, 2010

Palestinian construction workers work at a new housing development in the Jewish neighborhood of Har Homa in east Jerusalem, Dec. 28.

Dan Balilty/AP/File



Israeli officials on Sunday tried to downplay tensions looming with the United States after George Mitchell, the Obama administration's Middle East envoy, suggested in a PBS interview that the US could consider withholding support for loan guarantees for Israel.

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Israel's finance minister, Yuval Steinitz, said on Sunday that Israel has "no indication that there is any intention to pressure us through the guarantees ... only a few months ago we reached an agreement with the US treasury and state departments on the extension of their guarantees." However, he also said that Israel could do without the guarantees, if necessary.

"We don't have to use those guarantees. We are doing very well without them," Mr. Steinitz said Sunday. He added in his comments that Israel late last year agreed with the US on the guarantees for 2010 and 2011, and no conditions were placed on Israel at that time.
Israeli Education Minister Gideon Sa'ar also addressed Mr. Mitchell's remark at Prime Minister Benjamin Netanyahu's weekly cabinet meeting on Sunday, saying that Israel would act in its own interests and not according to external pressures.

"The American administration knows that those who are holding up the negotiations are the Palestinians," said Sa'ar. "Israel made many concessions while the Palestinians didn't do a thing."
From the Israeli point of view, Netanyahu's offer of a ten-month freeze in settlement construction back in November was a peace-making gesture that has not been met by Palestinian willingness to come back to the negotiating table. But from the Palestinian viewpoint, President Mahmoud Abbas is finally "standing up" to Western pressure to return to negotiations by insisting on a full moratorium on building of Israeli settlements, including in East Jerusalem. The Palestinians see the eastern half of the city – under Jordanian control until 1967 -- as their future capital, but Israel annexed the territory and does not consider East Jerusalem neighborhoods as settlements.

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