I. As accommodations to Israel views, Talbot said that:
1. USG has reiterated its concern for security and well-being of Israel.
2. US has confirmed its approval and readiness give appropriate diplomatic support Israel's planned water withdrawals from Lake Tiberias provided these adhere Johnston Plan allocations. Israel has given reciprocal assurances. This exchange is solid foundation upon which consider in coming months steps which may usefully be taken by Israel and US to ensure that execution of Israel's projects has minimum disruptive consequence for area stability.
3. US has examined previous practice of taking initiative in giving its views on status of Jerusalem to other governments when we learn establishment of a diplomatic mission in Israel is being considered. We have decided practice can be discontinued without consequence for our position on status of Jerusalem. We will continue regard interests of international community as paramount and precluding recognition of Israel's claims to Jerusalem as its national capital. This voluntary action and fact we have not taken stronger position closure FLO should not be construed as watering down of our stand on principle nor as inference we would acquiesce in moves by Israel which we would regard as eroding principle such as requesting that official Americans obtain visas for travel within corpus separatum or that US consular officers in Jerusalem obtain Israel exequaturs.
4. While not prepared subsidize any fixed number of spaces, we willing support training in Israel of third country nationals on normal case-by-case basis and provided training in Israel clearly makes best sense for US programs.
5. Foregoing accommodations should be viewed against background of "uniquely generous" US economic assistance to Israel.
II. Talbot said that as consequence US deep concern for stiffening fibres area stability against new tensions which will be caused by Israel's water withdrawal and in keeping USG objective of facilitating establishment permanent peace between Israel and Arab states:
1. US gratified have Israel's pledge that retaliatory raid has been abandoned as an adjunct of Israel policy toward Arab states and full use of UN machinery will instead be Israel's policy in efforts prevent serious trouble on frontiers. US will naturally continue use its influence seek restraint by Arabs.
2. US reviewing with UN several proposals for strengthening UNTSO. We hope these will shortly be put into discussion with Israel and other states concerned.
3. Department has carefully considered Ambassador's July 6 comments re desirability move for direct negotiations resolution at 17th General Assembly (Deptel 22 to Tel Aviv). We do not think such resolution would realistically contribute progress nor can we concur Israel's estimate its tactical utility for UN consideration of Johnson mission. On contrary, we see renewal moves for such resolution as certain feed immoderate Arab influences and place further obstacles in Johnson's path. We strongly and seriously urge Israel not pursue this course. US views will be made clear to other governments which seek them.
Re accommodations cited Section I, Harman expressed appreciation.
Re retaliatory raid, Harman said there might be situations such as prolonged series provocations by Arabs which would compel Israel take action restore the peace on its borders to which it entitled. Talbot said it important break cycle provocation and reaction.
Re UNTSO, Harman asked for opportunity present Israel views on strengthening this body, to which Talbot assented.
Re direct negotiations res, Harman asked whether US has abandoned its attachment to UN Charter and support of principle for concept of direct negotiations. He dissented sharply from US estimate tactical undesirability for Johnson mission of renewed proposal similar to 16-power Brazzaville res at 16th GA. Requested opportunity present Israel's views in detail and undertake general discussion Near East 17th GA issues at early opportunity. Talbot said Department would be glad hear Israel's views if Israel comes to assessment different from ours; i.e, if Israel concludes direct negotiations res will genuinely contribute to optimum atmosphere for advancing Johnson mission which is to USG of "extraordinary importance".
For USUN: In line Talbot statement II(3), Mission authorized express this US attitude re introduction direct negotiations res at 17th GA to such other delegations as may inquire. However, we wish avoid lobbying against this move.