Recalled our hope that a plateau in Near East arms supply had been reached about a year ago after we had concluded arms sales to certain Near East countries, and our hope that a sustained pause in the further supply of arms to the area could be maintained; noted that meanwhile the Soviet Union had continued to ship arms to certain countries in the Near East, and that soundings we had taken with the Soviet Union on the possibility of an arrangement with it on the control of arms shipments to the Near East had been negative; and agreed that the Soviet Union probably continued to see advantages in its military relationship with certain Near East countries, and that there was no evidence that the Soviet Union would be interested at this time in an understanding with Western suppliers on controlling arms shipments to the area.
Noted that our arms policy toward the area is aimed at, and is affected by, not only the Arab-Israeli confrontation but also the relations between the so-called "progressive" Arab states (e.g., UAR, Syria, Iraq) and the more traditional Arab states (e.g., Saudi Arabia, Jordan), as well as the prospects for internal stability in certain of the Arab countries which are friendly to us (e.g., Jordan, Lebanon); noted that urgent considerations arising out of the Israeli attack on Samu in November 1966 had most recently caused us to agree to provide certain additional military equipment to Jordan; noted also that there is a direct relationship between our policy on arms for the Arab states and Israel and our policy on arms for Iran, given the Shah's concern over the threat he sees from Nasser; and noted finally that, when it is consistent with our broad foreign policy objectives, we have a balance-of-payments interest in selling arms to certain buyers.
Agreed that our interests would be best served by the maintenance of only such military forces and capabilities in the area as would deter the outbreak of hostilities between the Arab states and Israel, and/or among the Arab states themselves. The Group agreed that a drastic reduction--if not a complete moratorium--on imports of arms into the area would be desirable, not only to help maintain peace but also to permit countries in the region to devote maximum resources to internal economic and social development; and agreed that it remains particularly important to avoid the introduction into the area of sophisticated new types of weapons systems, including nuclear weapons. The Group agreed, furthermore, that Soviet cooperation is essential for effective arms control in the Near East and that we should continue to explore on all appropriate occasions the possibilities of an understanding with the Soviet Union on this subject; and that an effective understanding would also require the cooperation of various other European countries (e.g., the United Kingdom, France, the Federal Republic of Germany, and Italy, as well as Czechoslovakia).
The Group agreed that, while working toward our long-run objective of effective arms control for the area, we should continue to exercise maximum restraint in supplying arms to countries in the Near East. Given our current lack of control over other external sources of arms for the area, we must retain the flexibility to supply arms selectively so as to help maintain an equilibrium that may deter an outbreak of hostilities. As regards the Arab-Israeli confrontation, despite Soviet shipments to the Arabs we should avoid becoming involved as the major supplier of arms to Israel and should encourage the Government of Israel to look generally to Western European suppliers for arms needed to maintain an effective defense against Arab forces. The Group also agreed that, within a general policy of maximum restraint, it may also continue to be desirable for us to supply limited quantities and types of arms to help friendly countries in the area to maintain internal security and political stability; but that the supply of arms in such cases should be decided upon only with full consideration of the aim to avoid an escalation of the arms race and to maintain peace in the area.
In considering the pending request of the Government of Israel for (1) the grant of 200 armored personnel carriers (APC's--Model M-113 A1) valued at approximately $7.4 million, (2) the grant of tank parts valued at $2 million, and (3) the supply on soft concessional credit terms of follow-on Hawk missile spares and M-48 tank parts valued at $14 million, the Group:
Agreed that Israel does not have a valid military requirement at this time for the APC's; that, in any event, the recency of Israel's attack on Samu (Jordan) made it undesirable for us to accede at this time to the supply of new weapons; that the supply of improved new APC's of the M-113 A1 type would tend to escalate the Near East arms race; and that if Israel were adamant about obtaining new APC's, our own interests dictated that the United States should not be directly involved.
Reaffirmed that we should maintain our established policy against supplying grant military aid to Israel and that we should reject the Government of Israel's request of grant aid for APC's and tank parts. The Group agreed, furthermore, that we should refuse to sell Israel the M-113 A1's or to agree to the sale of the similar U.S.-licensed, Italian-made Model M-113, for either credit or cash; and should the Government of Israel ask to purchase our APC's, we should encourage it to look to other sources in Western Europe for equipment.
The Group also reaffirmed its view that it would set an undesirable precedent to provide credit for Israel for the purchase of follow-on military spares and parts. The Group agreed, however, that if it should be determined that some concession on military supply should be made to Israel, a credit in the range of $7-10 million might be offered at the current going rate (5 1/2% interest, 7 years, 10% down payment) for the purchase of spares and parts.
On the Lebanese request for M-48 tanks,/2/ the Group:
/2/Documentation on U.S.-Lebanese discussions concerning possible U.S. arms sales to Lebanon is in the National Archives and Records Administration, RG 59, Central Files 1964-66 and 1967-69, DEF 12-5 LEB and DEF 19-8 US-LEB.
Noted that a Lebanese request for tanks had been made more than a year ago; that we had recently made Lebanon an offer, pursuant to a long-standing request, to supply two Hawk missile batteries on concessional credit terms, and that our offer was now before the Government of Lebanon for decision; and that the prospects of funds for additional military purchases by Lebanon have been adversely affected by Lebanon's commitment to purchase fighter aircraft from France, the probability that no further funds will be available from the United Arab Command, and conflicting budget demands in Lebanon. The Group also noted the importance attached by the Government of Lebanon to the purchase of tanks, the importance of continued support by the Lebanese armed forces to the stability of the moderate government of President Helou, the fact that we have not supplied any military equipment--apart from a few recoilless rifles--to Lebanon for several years, and the desirability of maintaining some U.S. military tie to Lebanon.
The Group agreed that, because of the various factors noted above and because of the relatively small size of the proposal in question, that our agreement to supply a limited number of M-48 tanks to Lebanon would not be inconsistent with our broader policy on the supply of arms to the Near East and would not constitute a major factor in accelerating the arms race; and agreed that we could now offer to sell up to 35 M-48 tanks to Lebanon, together with necessary support spares and basic load ammunition. Lead time on delivery of the tanks is estimated at 24 months, and the estimated cost of the entire package is $4.25 million. The Group agreed that no further financial accommodation should be offered to Lebanon beyond the amount of concessional credit already contemplated for the supply of Hawks, and that the burden of any decision on procurement as between Hawks and tanks should be left to the Government of Lebanon; if part of the contemplated credit is not used for the Hawks, it could be applied to the sale of tanks.
[Here follows a list of members present, including Acting Executive Chairman Battle, Hoopes, Saunders, Williams of AID, Critchfield of CIA, Brigadier General Sibley of the JCS Staff, and Nevins of USIA. Others present included Handley, Davies, Wolle, Kitchen, Colonel Jordan, and Sober.]
Source: Johnson Library, National Security File, Files of Harold Saunders, Israel-Arms. Secret. Prepared on March 29 by Sidney Sober, Staff Director.