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ing interest rates on out-
standing U.S. military loans
for Israel. Key lawmakers are
working with the Administra-
tion to determine if some sort
of creative bookkeeping for-
mula might be found to cut
those interest rates in half.
The Congress, led by
Democratic Senator Daniel
Inouye of Hawaii and Re-
publican Senator Bob Kasten
of Wisconsin, was well on its
way toward doing exactly
that late last years. Israel
would have won an initial
bonanza of over $500 million.
But Pollard was arrested and
overnight, the political
climate changed. It was not
seen as a good time to reward
Israel. The Inouye-Kasten in-
itiative was shelved.
Yet now things are back to
normal. If Shamir and the
Israeli government maintain
the flexible and responsible
posture projected by Peres
these past two years, they
have a very good chance of
getting that interest-reduc-
tion process back on track.
That will require some good
sense in Jerusalem. Talk of
expanding West Bank set-
tlements — even if largely
rhetorical, aimed only at ap-
peasing Herut hardliners —
can be extremely damaging.
Perception often is more im-
portant than reality. The im-
age of a stubborn Israel — so
often portrayed when Mena-
chem Begin was Prime
Minister — can have a devas-
tating impact on American
attitudes toward Israel.
There is also the pending
Israeli request for "major
non-NATO" military status
— something that would open
greater opportunities for
Israeli defense contractors to
win lucrative Pentagon con-
tracts. Israel would also
become eligible for lower
prices in purchasing Amer-
ican planes, tanks and other
advanced weaponry
Shamir, in an interview in
The New York Times, sought
to project a positive image.
"Of course, I will try to im-
prove our contacts with all
our neighbors;' he said. "I
don't say that I will accept
their positions. That's im-
possible. But we will try to
discuss and find common
ground. You don't have to be
desperate. Never be des-
perate. That .is my slogan:'
The Americans, in recent
years, have become increas-
ingly more frustrated by the
Arabs. On that, there can be
no doubt. Arab oil clout is
also no longer as potent as it
once was. This strategic shift
has also certainly benefited
Israel. Shamir, as Prime
Minister, can capitalize on all
of these developments. A
truly strengthened American-
Israeli connection is the prize.

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