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Israel Optimistic About $12
Billion More In US 'Loans'

1-7-3

JERUSALEM (Reuters) - The United States has not attached any conditions
so far in considering Israel's request for some $12 billion in aid and
loan guarantees, the Globes business daily quoted an Israeli official
as saying Tuesday.
 
Last week, media reports said the United States would deduct from the
loan money any funds Israel spent in areas it occupied in the 1967
Middle East war, including the West Bank and Gaza Strip.
 
Israeli and White House officials met Monday in Washington, where the
Israeli team requested $4 billion in direct aid and $8 billion in loan
guarantees to help Israel cope with a two-year-old recession, Globes
said on its Internet site.
 
"I am unaware of any U.S. demands (on Israel)...as a condition for
granting loan guarantees," Globes quoted Finance Ministry
Director-General Ohad Marani as saying.
 
But he said the United States still had time to attach conditions in
subsequent meetings.
 
"If the Americans intend to raise these issues, they can do so in
follow-on talks," he said. "The negotiations with the U.S. have opened
well. We have no reason not to be optimistic."
 
When Israel received $10 billion in loan guarantees in the early 1990s
as it sought to settle one million immigrants from the former Soviet
Union, then-President George Bush imposed restrictions on settlement
funding.
 
Israel has established 145 settlements in the West Bank and Gaza Strip
on land Palestinians want for a state of their own. The international
community regards the settlements as illegal. Israel disputes this.
 
ISRAEL WANTS MONEY FAST
 
Israel, battered by the global economic slowdown and two-year-old
Palestinian uprising, has asked Washington to expedite its request for
the loan guarantees.
 
Israel, which has never defaulted on its loans, would find it easier to
raise funds with U.S. backing.
 
"Approval of the U.S. loan guarantees is likely to be faster than
usual, thanks to the administration's great understanding of Israel's
economic distress caused by the security situation and war against
terrorism," Globes quoted Dov Weissglass, Prime Minister Ariel Sharon's
chief of staff, who is leading the talks, as saying.
 
Globes cited sources in Washington as saying there would be no formal
response to the aid request from the U.S. administration before April.
 
Israel is already the top recipient of U.S. foreign aid, receiving
close to $3 billion in mostly military assistance each year. A new aid
package would come on top of existing U.S. commitments.
 
 
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