A. The current policy issues between the United States and Israel are of two categories: (1) Israel's security concerns, and (2) frictions in the conduct of our relations.
B. Israel's security interests have been expressed to us as lying in 1) a close military relationship with the US, 2) a security guarantee specifically for Israel from the US, 3) access to a wider range of US military equipment including specifically the Hawk Missile, and 4) assurance, through US support, that Israel's water diversion program will be permitted to proceed without interference.
C. The frictions arising in US-Israel relations (other than those relating to Israel's security interests) are found in 1) Israel's policy of retaliatory raids, 2) Israel's uncooperativeness with the UN and its peacekeeping machinery in the area, 3) Israel's distrust of Dr. Johnson's mission on the refugee question, 4) questions on the definition of sovereignty over Lake Tiberias, 5) Israel's objection to US initiative toward persuading other states not to establish diplomatic missions in Jerusalem, 6) Israel's pursuit of a "direct negotiations" resolution in the UNGA, and 7) our policy of restraint on training of third country nationals in Israel.
D. The juxtaposition of several unrelated occurrences (U.S. opposition to an Israel-inspired direct peace negotiations resolution at the General Assembly last fall, the Security Council censure of Israel for recourse to a major retaliatory raid in March of this year, and announcement of increased US aid for the UAR), together with the favorable climate provided by the forthcoming US election have led Israel to greatly step up the pace of its diplomatic activity here in recent months in pursuit of the long-standing objectives described in B and C above.
E. The Ambassadors assembled in Athens June 12-15 concluded that the Soviets appear to have been unable to capitalize in the past several years on earlier successes in Egypt, Syria, and Yemen and that the relatively high standing of the US in the area among the Arabs, while still fragile, now provides us a minor degree of maneuvering room in terms of adjustments with respect to Israel. However, they considered it essential that the US avoid creation of too many issues with the Arabs and exercise caution in undertaking new initiatives beyond the Johnson Mission and Jordan waters. In their view, the security position of Israel today probably is as satisfactory as in the past and an Arab attack is not to be expected in the new future.
F. The exchange of letters between the President and Prime Minister Ben-Gurion has already dealt with United States concern for Israel's security and well-being, Israel's policy of retaliation, strengthening of the UN peacekeeping machinery, and our support for Israel's water diversion plan together with Israel's assurance that its withdrawals of water will remain within the terms of the Unified Plan. In addition, Ben-Gurion has made clear Israel's intention to press the direct negotiations resolution.
G. Our considerations are 1) to review our relations with Israel on an overall basis, rather than piecemeal, from the standpoint of our national security interests including maintenance of reasonably good relations with the bulk of the Arab states; 2) to provide adequately for the security and well-being of Israel; and 3) to alleviate insofar as possible the frictions between us. We believe that Israel is determined to seek from the US the broadest concessions during the current pre-election period and that Israel's fall-back position lies well short of its current maximum demands. We consider our recommendations below to be well-balanced, to be feasible, to duly safeguard US interests, and to meet Israel's needs realistically.
1. Military Relationship with Israel. In our view, supported by the assembled ambassadors at Athens, it is essential to avoid establishing a special military relationship with Israel. To create what would in effect be a military alliance with Israel would destroy the delicate balance we have so carefully maintained in our Near Eastern relations and would bring insufficient compensatory advantages. (We have prepared no paper on this subject.)
2. Security Guarantee. The President already having given Israel an assurance of our continuing concern for the security and well-being of Israel, we propose to take no further action for the moment. At a suitable juncture we would wish to reactivate unilaterally that portion of the Tripartite Declaration dealing with aggression, perhaps in conjunction with our efforts with the Arabs to damp down the Jordan waters controversy or to achieve an arms limitation arrangement. If sale of the Hawk missile to Israel is delayed, we would propose an early strengthening of our security assurances to Israel (via unilateral reactivation of the Tripartite Declaration) in order to bolster Israel's confidence. Our ambassadors at Athens supported this approach.
3. Hawk Missile. Provision of the Hawk would enable Israel to reduce considerably its vulnerability to surprise air attack by low-flying aircraft. Greater confidence in its defenses would enable Israel the better to resist any temptation to engage in preemptive attack against the UAR air strike capability. Conversely, significant reduction of its vulnerability would remove one deterrent to Israeli preemptive attack. Despite the justification found in a strictly military equation, we cannot recommend at present sale of the Hawk to Israel for the following reasons: a) existence of effective deterrents to UAR action and of UAR vulnerabilities and limitations, and absence of conditions requiring or favorable to UAR attack; b) cogent factors operating on the US such as the undesirability of assuming responsibility for the initial introduction of missiles into the Arab-Israel arms race, problems of production and training schedules, and reactions from allies and friends; and c) a strong preference first to seek Nasser's reaction to a proposal for an arms limitation arrangement.
However, if US intelligence positively confirms that the UAR has in fact obtained or is in the process of obtaining comparable missiles from the USSR, we would recommend that after consultation with the British and discussion with the UAR we offer the Hawk to Israel in absence of real prospects for arms limitation. The ambassadors at Athens supported the foregoing..
4. Arms Limitation. Athens telegram No. 1337, concurred in by the assembled ambassadors, deals with this problem, assuming that meetings by the President with Ben-Gurion and Nasser would be necessary initially. Inevitably many months of delay would be entailed in this approach. Therefore, we would suggest that Ambassador Badeau be instructed by the President to talk with Nasser, explaining our considerations and seeking a reaction from Nasser. While we are not sanguine, we believe the attempt should be made. A similar approach would be made to Ben-Gurion if Nasser's response so warranted.
5. Jordan Waters. The President has already given a written assurance to Israel and has received a reciprocal assurance. At Athens the ambassadors to Arab countries neighboring Israel agreed that whenever circumstances required we should seek to discourage Arab action against Israel's water scheme, reactivating the aggression portion of the Tripartite Declaration in conjunction therewith, but in the meantime we should encourage from behind the scenes Jordanian-Syrian development of the Yarmouk (recently we have had an indication from an important UAR official that the UAR has decided not to embarrass Jordan and Syria over their Yarmouk Plan).
6. Retaliatory Raids. Ben-Gurion has given the President a vague assurance that means other than the retaliatory raid will now be employed in an attempt to prevent serious trouble on Israel's frontiers. At the first suitable opportunity we propose to inform Israel that we interpret Ben-Gurion's letter as a pledge to abandon the retaliatory policy. On the other hand, we plan to continue to use our influence to the best of our ability to seek restraint by the Arabs in line with your discussion with Ambassador Harman.
7. Strengthening of UNTSO. A good deal of preparatory work has been done to determine measures both feasible and practical to improve the effectiveness of the UN machinery in the area. Ben-Gurion has informed the President of Israel's willingness to cooperate more fully.
8. Dr. Johnson's Mission. We have discussed next steps with Dr. Johnson and, in line with the view of the ambassadors at Athens, have agreed with him that he should endeavor to have his project for a poll of the refugees launched at least on a small scale prior to UNGA debate of the UNRWA item. At some point prior to the debate it will be necessary to reach a private agreement with Israel on the maximum number of refugees Israel would be required to take and on financial arrangements. Likewise, prior to the private agreement, it will be necessary to obtain Presidential consent for financial support of the whole project, together with the concurrence in principle of key Congressional leaders.
9. Sovereignty over Lake Tiberias. We have the choice of letting the issue lie dormant, of stating our position publicly, or of informing Israel privately of our views. In order that we may have our position clearly on the record, we favor an aide-memoire to Israel stating the position set forth in the first portion of Tab H./15/ Informally the Israelis have led us to believe our language will be acceptable to them, though we do not rule out further Israeli attempts to persuade us to a view more favorable to them.
10. Diplomatic Missions in Israel. In line with Ambassador Barbour's recommendation, and with the concurrence of the ambassadors to the Arab countries, we propose to cease taking the initiative to persuade other countries not to establish missions at Jerusalem. However, we would retain the right to respond to queries from other states. We would give the Embassy in Tel Aviv greater latitude in conducting business and accepting social engagements in Jerusalem. This should serve to meet the current Israeli complaint.
11. Direct Negotiations Resolution. In mid-June Mr. Feldman informed Ambassador Harman that we expected to be consulted before Israel undertook to campaign for a new direct negotiations resolution in the next UNGA. Ben-Gurion, however, in his reply to the President, appeared to stress the importance Israel attached to the direct negotiations principle, thus indicating that we may have difficulty in persuading Israel to desist. In the view of the ambassadors at Athens the direct negotiations issue holds danger for the US. Our first preference is to dissuade Israel and other countries from pursuing it. Our second choice is to vote against such a resolution if introduced, provided Dr. Johnson has made some progress and provided it is necessary at the time in support of our tactical position in the debate. Otherwise we believe we could live with an abstention. In our view our foreign policy interests clearly would not be served by a vote in favor.
12. Training of Third Country Nationals in Israel. In the past we have been willing to sponsor the training of nationals of a number of third countries in Israel in accordance with the third country training program of the aid program. However, as a matter of practice in the past year we have tightened up considerably. Following a review of the issue with the ambassadors assembled at Athens we believe that we should within reason permit training of third country nationals in Israel in conjunction with our aid programs a) provided Israel's training facilities best meet our needs and b) provided we do not become engaged in the Arab-Israel cold war in Africa. Hence we propose to give field missions outside of Africa authority to make such arrangements subject to provision of notice to Washington but to require missions in Africa to refer all such proposals to the Department for approval.
13. Upon receipt of your views we would prepare a comprehensive memorandum for the President if you so wish.