A New Deal for Israel

By Ed Magnuson

After a two-year chill, the U.S. warms up to an old friend

Reagan gave away the store and got nothing in return," said a White House critic of the Administration's Middle East policies. At a State Department dinner for Israeli Prime Minister Yitzhak Shamir, a few guests even joked about raising the Star of David flag over the White House to signal the "Israeli victory."

The verbal barbs were aimed at a new "strategic cooperation" agreement between the U.S. and Israel worked out during a three-day visit to Washington by Shamir and his top aides. Although the details need to be ironed out in future meetings between lesser officials of both nations, the package of military aid and trade concessions places Israel back in the forefront of U.S. policy in the Middle East, at the calculated risk of upsetting the moderate Arab states. As such, it was an abrupt shift in the Administration's Middle East policy, which had stressed U.S. efforts to play an evenhanded mediator's role.

The improvement in U.S.Israeli relations was engineered largely by Secretary of State George Shultz, who has felt personally betrayed by the refusal of Syrian President Hafez Assad to carry out a promise to withdraw troops from Lebanon after Israel not only agreed to do so but unilaterally and prematurely drew back to safer positions in southern Lebanon, actually against U.S. wishes. The agreement is virtually a return to former Secretary of State Alexander Haig's "consensus of strategic concerns," in which U.S. and Israeli military cooperation was seen as vital to discouraging Soviet intrusion into Middle East politics and, more broadly, to keep Western oil supplies flowing from the Persian Gulf. Explained one U.S. diplomat: "The U.S. can have a Middle East policy with Israel or one without Israel. For the past 15 months we've had one without Israel. Now we're going back to one with Israel."

In a second burst of Middle East diplomacy just 22 hours later last week, President Reagan met with Lebanon's embattled President Amin Gemayel, and heard the closer U.S.-Israel ties criticized in a personal meeting with Prince Bandar ibn Sultan, Saudi Arabia's Ambassador to the U.S. Although mostly planned in advance, the week's activity had an air of urgency. Repeatedly frustrated in its efforts to solve the Lebanon crisis and the Palestinian dilemma, and with U.S. Marines still exposed to terrorism, shelling and sniper fire at the Beirut airport, the Administration felt it was time to shake up the ingredients in the Middle East mix. Its thin but persistent hope was that greater tragedies could be averted and a semblance of stability restored.

Some degree of stability was sorely needed. Forces, events and even leaders in the Middle East are in a state of increasing flux. The Soviet Union has rearmed Syria, which defiantly refused to withdraw from any of the Lebanese territory from which it has supported Shi'ite and Druse factions fighting Gemayel's Christian-dominated central government. More ominously, Assad was reported to be seriously ill. The White House heard reports that he had blood cancer, and suffered partial paralysis after developing a clot in his left leg. U.S. intelligence sources, however, believed that Assad was recovering and was able to take part in some governmental meetings. At any rate, he walked across a bridge in Damascus last week and waved vigorously to cheering pedestrians. Any chance that Assad's control was waning could be seen as both an opportunity and a danger. On the one hand, his determination to dominate Lebanon might be softening, and weaker successors might be willing to withdraw troops; on the other, those successors might be even more radical and more difficult to cope with.

Above all, the devastating terrorist attacks, believed to be Syrian-backed, against U.S., French and Israeli troops in Lebanon had forged a new bond of mutual interest between Washington and Jerusalem. Relations between the two countries have been cool since 1981, when Israel bombed a nuclear reactor in Iraq and annexed the Golan Heights. After Israel invaded Lebanon in June 1982, the ties became more strained. Menachem Begin's angry rejection of Reagan's Middle East peace plan in September 1982 was another serious blow. But Shamir's rise to Prime Minister eight weeks ago (see box) and the sense of shared loss in the Beirut attacks cleared away much of the ill will. As Shamir said before leaving for Washington, "It is no trifling matter when the same tragedies, coming from the same dens of iniquity, befall the American and Israeli peoples at the same time. This strengthens our cooperation from both an ideological and practical perspective."

The Administration had decided that Israel might respond more readily to inducements than to bullying. When relations between the nations are frayed, explained one U.S. policymaker, the Israelis "tend to act boldly and badly." Bolstering Israel's sense of security, he contended, was more productive.

Shamir's busy Washington itinerary took him through long meetings at the State Department, a one-hour lunch with Reagan, a 50-minute session with aides of both leaders in the Cabinet Room and an appearance on ABC-TV's Good Morning America.

The most tangible result of his trip was to obtain the Administration's agreement to provide more military aid in the form of outright grants, instead of loans that have to be repaid. In the next fiscal year, under tentative plans, total U.S. military help would drop from $1.7 billion to $1.275 billion, but all of it would be a nonrepayable gift. Israel would get another $910 million in economic aid, also as a grant. It would not, moreover, need to spend all of its military-aid money on U.S. weapons and supplies, as every other recipient is required to do. It would be permitted to use 15% of the aid on military products from its own manufacturers. Reagan agreed with Congress that Israel should be given some $550 million to produce an advanced jet fighter plane, the Lavi, even though the aircraft will be sold abroad in competition with U.S. airplanes.

The Administration cleared the way for Israel to resume purchases of American-made cluster bombs, which were cut off after Israel used them against civilians as well as military targets in its invasion of Lebanon, contrary to U.S. restrictions. Israel will be permitted to buy the bombs if it will sign an agreement to use them only for defensive purposes. Shamir did not commit himself to making any such "defensive purposes" pledge.

Shamir carried home a White House offer to negotiate a trade pact under which certain products in both countries would enter the other free of duties. This would help Israel much more than the U.S., permitting it to export competitively such products as jewelry and electronic equipment. Most of the U.S. aid concessions were, in fact, designed to help Israel through its present economic crisis. Israel's inflation rate is approaching 175% a year and its per capita foreign debt, about $5,000 a person, may be the highest in the world. Shamir, who boldly devalued the shekel after taking over, needs an economic recovery to retain his fragile political hold on his office.

Reagan, too, could benefit politically from the renewed U.S. generosity toward Israel, although his aides insist that broader strategic concerns motivated the Administration's moves. Reagan has long championed Israel's Middle East cause, but his Administration's recent coolness toward Israel has angered Jewish voters in the U.S. The risks entailed in the commitment of Marines in Lebanon is also seen by his political aides as a worrisome liability for Reagan in next year's elections. Shamir similarly has a domestic political interest in reducing Israeli casualties in Lebanon as well as the cost of keeping 30,000 troops there.

Whether the broader agreement on military cooperation will help either the U.S. or Israel to extricate forces from Lebanon without leaving an even more dangerous void in that chaotic country, remains in doubt. A joint political-military committee is scheduled to meet in Washington in January to discuss mutual military problems, including Lebanon. Officials hinted last week that U.S.-Israeli cooperation could extend to contingency planning for a joint defense of the Persian Gulf if the need ever arose. The President reminded Shamir that any interruption in oil supplies to the West would quickly hurt Israel's economy.

The agreement also included the pre-positioning of U.S. military supplies in Israel for quick use in any enlarged military crisis. Joint military exercises are envisioned, although U.S. officials said they will be air and sea maneuvers rather than land operations, which would be more threatening to Arab nations.

But will the U.S.-Israeli cooperation help break the bloody impasse on the ground in Lebanon? Shultz and other U.S. policymakers have felt that Syria's intransigence stemmed from Assad's belief that Israel had lost its military will during its internal debate over the invasion of Lebanon. The transition from Begin to Shamir in October and the ongoing economic crisis have intensified this perception. U.S. planners see Shamir as moving forcefully as a leader now and believe that his stronger ties with Washington may impress Syria. "The idea that we plan to unleash the Israelis on Syria is just not right," insists one U.S. official. "But if Syria sees that neither we nor Israel intends to give way, it may behave differently." The new arrangements were meant, says one senior Administration official, as "a message to Syria and a message to the Soviets. But there is no joint planning to move against any Arab state."

The American officials urged Shamir to consider making further unilateral withdrawals from Lebanon, this time in full consultation with both Washington and Gemayel. Shamir indicated that he might do so, but only if he were confident that Gemayel's forces could control any territory vacated by Israel. The sequence sought by U.S. planners was for Gemayel to share power with opposing factions, gaining control of more territory in return, followed by Israeli withdrawals. The power sharing would have to be worked out in Lebanon's national reconciliation talks. Shamir was asked to use Israel's influence with the Phalange and with Muslim groups to push the talks forward. Gemayel, in turn, was encouraged in Washington to be bolder both in the reconciliation negotiations and in sending his own forces into contested territory.

The White House was confident that progress on all this had been made with Shamir. "The Israelis are going to have to cooperate with us and Gemayel if there is going to be a Lebanon," an aide said. "They have come to the view that without Gemayel, Israel will be left holding the can in Lebanon."

The talks with Gemayel were less productive. The U.S. reportedly promised to continue to strengthen his forces, mainly with training advisers, so that they can control more territory. Any such progress would, of course, give Washington a rationale for moving its Marines to safer positions or to withdraw them completely. Privately, however, some U.S. officials fear that Gemayel is too timid and preoccupied with his personal safety to make any decisive moves.

The Washington developments were played out against the background of continued violence in Lebanon. Heavy shelling from Druse positions in the mountains above Beirut airport pinned down U.S. Marines in their bunkers. A French soldier was killed by sniper fire in a Beirut suburb. Sheik Halim Takieddin, a high-ranking Druse holy man, was assassinated in his home in Beirut by a young man who embraced him, then shot him with a silencer-equipped handgun.

As for long-term peace prospects involving Israel and Palestinians, Shamir was asked by Shultz to improve the quality of life for West Bank Palestinians. TIME Jerusalem Correspondent David Halevy was told by one of the Prime Minister's top aides that "Shamir is ready to enable the local population of the West Bank to run their own lives. He will seek ways to re-establish Arab mayors at all of the West Bank urban centers." More surprising, Shamir hinted that he was willing to "take a second look at the U.S. peace plan" advanced by Reagan last year.

American officials, however, did not sense that much flexibility on Shamir's part. They feared that the civil warfare among factions of the Palestine Liberation Organization had eased pressure on Israel to pursue negotiations toward autonomy for the Palestinians, since there was no one in a position to speak with authority for those West Bank residents. Although King Hussein last week reportedly was willing to renew conversations with Yasser Arafat on whether Jordan should open talks with Israel on the future of the West Bank and Gaza, the P.L.O. leader's besieged position in Tripoli made him seem irrelevant to any negotiations.

What did the U.S. extract from Shamir in return for its largesse? "Nothing," Shamir told Israeli journalists when he returned home. "We did not pay for whatever we got from the Americans." Shamir made no promise to freeze settlements in the West Bank or to go along with U.S. plans to continue to provide sophisticated military aid to moderate Arab nations. U.S. officials insist they never expected Shamir to yield on such matters. Their modest hope, said one, is that Shamir, unlike Begin, will not "throw a tantrum" whenever the U.S. tries to strengthen its friendship with Arab nations.

In reaching a rapprochement with Shamir, the Administration overrode the objections of Defense Secretary Caspar Weinberger, who has long feared that the closer the U.S. draws to Israel, the more it will lose its influence with the moderate Arab nations on whom eventual stability in the Middle East, and its oil, depends. Said a Pentagon official about the role of Reagan and Shultz in the decision to embrace Israel: "They went over us like a steamroller." In effect, Shultz and Reagan decided that it was better to cast America's lot even more fully with an old friend, no matter how vexatious, than with unproven acquaintances. --By Ed Magnuson. Reported by Douglas Brew and Johanna McGeary/Washington

With reporting by Douglas Brew, Johanna McGeary/Washington This file is automatically generated by a robot program, so viewer discretion is required.