Israeli government angered by new US Middle East initiative

The Israeli government is in an uproar over the new American policy line for the Middle East reportedly contained in a letter from President Ronald Reagan to Prime Minister Menachem Begin.

According to reports leaked to an Israeli journalist close to Defense Minister Ariel Sharon, the letter called for a strong future link between the Israeli-occupied West Bank and Gaza Strip - home to 1.3 million Palestinians - and the Kingdom of Jordan, and for a halt to the building of new Jewish settlements in these territories or the expansion of old ones.

Despite rumors of new American ideas for resolving the Palestinian problem in the aftermath of the war in Lebanon, the American message, which came just before the arrival of United States Defense Secretary Caspar Weinberger, took Israel by surprise. It sent Prime Minister Begin rushing back from a holiday to consult his ministers before a special Cabinet meeting called for Sept. 2.

While the text of the message has not yet been made public, senior officials here indicated these new proposals were seen as a deviation from the Camp David accords. They call for a five-year period of ''autonomy'' for the occupied territories after which their final status will be negotiated.

''We should proceed with the establishment of autonomy,'' said one government official, and ''any other ideas can be raised only after five years.''

At a recent Cabinet session Prime Minister Begin made it clear that Israel would refuse to discuss any proposals whatsoever which it felt departed from the lines of Camp David. Senior officials here stress that any attempt to alter Camp David accords would leave Israel free to apply its law to the West Bank and Gaza in de facto annexation. In what may be a preview of tough Israeli response, Cabinet Minister Yuval Ne'eman, leader of the right wing Tehiya Party suggested that the Israeli government respond with a massive investment in new settlements equal to the cost of the war in Lebanon.

Israel's aggitation stems from the fear that new American positions may herald future pressure on Israel to give up occupied territory for a Palestinian homeland. ABC television reported Sept. 1 in the US that President Reagan was preparing a major Mideast policy speech calling on Israel along with the Arab states to look for a home for the Palestinians. However, the ABC report said the President would also call on Arab states to lift their boycott against the Camp David process. And a White House official denied that the President's letter deviated from the Camp David accords or made demands on Israel.

Despite Israeli unhappiness at US contemplation of the future of the occupied territories, Israel itself has not been reticent in spelling-out its version of their final status. In early May, Mr. Begin said that Israel would demand sovereignty over the West Bank and Gaza at the end of the five-year autonomy. He also vowed that no Jewish settlement in the territories would be dismantled as a result of any future peace negotiations. ''The autonomy agreements,'' he said, ''are a guarantee that under no condition will a Palestinian state be established in western Eretz Israel (Israel plus the West Bank).''

Defense Minister Sharon has said repeatedly that Jordan is the Palestinian state, a position with which the US has publicly disagreed.

Israel's interpretation of autonomy as a barrier to ultimate Palestinian sovereignty is the key reason why the Palestinians have rejected the concept. Both Egypt - which has said it won't resume negotiations on autonomy until Israel withdraws from Lebanon - and Jordan have repeatedly urged the US to put forward its own vision of the ultimate future of the Palestinians in the West Bank and Gaza.

The new American ideas appear to be a response to these urgings. Moreover, President Reagan's reported emphasis on links between the Palestinian territory and Jordan appears to be an effort to draw Jordan into the autonomy process. This comes at a time when the Palestinians are desperate for a diplomatic initiative, despite King Hussein's renewed insistence this week that the Camp David process is totally unacceptable to Jordan.

Egypt and Jordan, along with Palestinian leaders in the occupied territories, have also repeatedly urged the US to demand a halt to Jewish settlement on the West Bank. They have argued that the settlements were changing West Bank geography so as to preclude in advance any return of territory to Arab sovereignty. Israel has always contended that Camp David does not rule out such Jewish settlement (an argument which former President Jimmy Carter originally disputed but finally dropped). Recently President Reagan and Secretary of State George Shultz said that expansion of such settlements was ''not a constructive move.''

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