BACKGROUND
The Prince
And The
President
Did President Bush make a deal
last year with Saudi Prince Bandar
that sank Israel's guarantee request?
DOUGLAS DAVIS
Foreign Correspondent
T
he Bush Administra-
tion decided to reject
Israel's request for
loan guarantees fully one
year ago — not because of its
objection to settlement ac-
tivity but in exchange for a
commitment from Saudi
Arabia to "deliver" key
Arab states to the negotia-
ting table, according to a
report in Israel this week.
It is understood that in
April 1991, just one month
after the end of the Gulf
War, President Bush met
with Saudi Arabia's Ambas-
sador to Washington, Prince
Bandar Bin-Sultan, and
promised to turn down
Israeli requests for loan
guarantees if the Saudis
would convince Syria and
Jordan to join the peace pro-
cess.
According to a report in
the Hebrew-language daily,
Ma'ariv, a full account of the
highly sensitive and poten-
tially explosive deal was
transmitted to Jerusalem
from the Israeli Embassy in
Washington last weekend.
If the report is correct, the
question of Jewish set-
tlements in the West Bank
and Gaza Strip did not form
part of the deal and no
linkage was established
between the loan guar-
antees, needed to absorb the
wave of Soviet immigrants,
and a settlement freeze.
Yet after months of cliff-
hanging, the Bush ad-
ministration earlier this
year provoked a crisis in re-
lations with Jerusalem by
turning down its formal re-
quest for a $10 billion loan
guarantee unless Israel
halted all settlement ac-
tivities.
It is now believed that
after cutting a deal with the
Saudis on the basis of loan
guarantees-for-peace talks,
Washington's overriding
priority was to ensure it im-
posed terms for guarantees
that no Israeli government
would be able to accept.
To achieve this, the Bush
administration is believed to
have designed a carefully
calculated triple strategy
which added up to a total
settlement freeze as the
precondition for granting
the loan guarantees:
First, it could cite
America's longstanding op-
position to Jewish set-
tlements in the occupied ter-
ritories and its stated belief
that settlements were a
"major obstacle to peace."
Second, it believed that
confrontation with Israel on
this issue would win sym-
pathy, if not outright sup-
port, from .at least some
American Jewish leaders, as
well as from a significant
constituency of dovish
Israelis.
Third, and most important
of all, Washington was con-
fident that its demand for a
total settlement freeze was a
condition that both Israel's
present Likud government
and a future, more corn-
promising, Labor ad-
ministration would be forced
to reject.
To ensure the success of its
strategy, said the sources,
the administration not only
demanded a total settlement
freeze in the West Bank and
Gaza Strip, but also
stipulated that construction
activity must cease in all
areas of Jerusalem that were
conquered from Jordan and
officially incorporated into
Israel 25 years ago.
Washington, they say,
must have known at this
point that its demands
would be unacceptable not
only to Yitzhak Shamir's
Likud- led government, but
also to any future Labor
government, whether led by
Shimon Peres or Yitzhak
Rabin.
Sources note that the ad-
ministration was quick to re-
j..ict attempts by both United
States and Israeli con-
ciliators to reach a com-
promise that would over-
come the obstacles and allow
the Israelis to save face
while simultaneously satis-
Artwork from Newsday by Ned Levine. Copyright. 1991. Newsday. Distributed by Los Angeles Times Syndicate.
fying the demands of the
administration.
Among these was a con-
gressional proposal that
would have handed Wash-
ington a virtual veto over
Israeli activities in the ter-
ritories, coupled with a
clause that would have
allowed Washington to pull
the plug on the loan guar-
antees any time it decided
that Israel's conduct was
"inappropriate."
When the administration
rejected the proposal, said
The reported deal
has demystified
much of the
confusion in Israel
about why the
administration was
so adamant on this
issue.
one source, Israeli officials
privately concluded that
Washington was, for the
moment at least, not
prepared to grant the loan
guarantees at any price or
under any circumstances.
The reported deal has
demystified much of the con-
fusion in Israel about why
the administration was so
adamant on the issue, even
after the peace process had
got off the ground and even
after the administration was
handed a fistful of com-
promises.
It explains why Washing-
ton assured Jerusalem after
the Gulf War last March
that it would not link loan
guarantees to other issues,
and then almost immedi-
ately embarked on a cam-
paign to stall Israel's formal
application for the guar-
antees.
It explains why the ad-
ministration chose this occa-
sion to break with precedent
and create linkage for loan
guarantees involving a
strictly humanitarian issue,
even though profound polit-
ical differences had not
previously inhibited ap-
proval of unconditional loan
guarantees to such states as
Iraq and Algeria.
It also explains why the
administration did not em-
brace a compromise even
when the delegates were
safely seated in the Madrid
conference hall and events
had transcended fears that
an overtly pro-Israeli tilt
would derail the peace train.
One Israeli source, who
spoke with sadness but not
surprise of Washington's
"duplicity" and "cynicism,"
noted ruefully that the
report also explained one of
the big surprises of the
Madrid peace conference last
October — the dramatic,
unexpected arrival of Prince
Bandar on the day the con-
ference opened.
The Saudi prince, who is
well-integrated into Wash-
ington's political circuit,
played a vigorous behind-
the-scenes role in the peace
process, but his hands-on in-
volvement surfaced in public
only briefly, albeit decisive-
ly, in Madrid.
It was well known at the
time that his unstinting
efforts were responsible for
breaking down the
resistance of Syrian Presi-
dent Hafez Assad, who even-
tually relented and allowed
his delegates to hold face-to-
face talks with the Israelis
after leaving them to cool
their heels for 12 hours
following the start of their
scheduled meeting.
It may never be known
what price the Saudi prince
agreed to pay for coaxing the
tough-minded, but supreme-
ly pragmatic, Syrian leader
back from the brink, winn-
ing his compliance and
taking the process another
painful step forward.
Israeli officials, however,
are now satisfied they know
what Washington paid for
Saudi Arabia agreement to
exercise its "good offices" in
promoting the peace talks. ❑
THE DETROIT JEWISH NEWS
33