- JERUSALEM -- Israel is putting
the final touches on a $15 billion special aid request to the United States
to bolster an economy under pressure from the Palestinian uprising and
preparations for any attack by Iraq.
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- Israeli treasury officials, who have met with aides to
Prime Minister Ariel Sharon and U.S. National Security Advisor Condoleezza
Rice, are preparing to present the package to Bush administration officials
in the coming weeks.
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- The package, comprising about $5 billion in new military
aid and $10 billion in loan guarantees, would be spread out over a three-
to five-year period. It would be in addition to nearly $3 billion that
Israel receives from the United States each year.
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- "Fighting terrorism is not only about security,
it's about the economy," said Finance Ministry Director General Ohad
Marani.
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- "It's very difficult funding the extra needs of
defense. The burden is made more difficult because the economy has shrunk.
We're asking the Americans to share part of the burden," Mr. Marani
said.
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- Israel, the largest recipient of U.S. foreign aid, receives
about $2.1 billion annually in military aid and $600 million in civilian
aid.
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- A State Department official declined to comment on Israel's
supplemental aid request but reiterated long-standing U.S. support for
the Jewish state.
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- The official said the United States is committed "to
maintaining and enhancing Israel's security and qualitative edge over any
combination of adversaries."
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- The Palestinian uprising is straining Israel's budget
by inflating military expenditures while putting the economy in recession.
That, in turn, has forced the government to cut spending in line with lower
tax receipts.
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- The Israeli economy is expected to shrink 1 percent this
year, compared with the 4 percent annual growth that analysts believe should
be within the country's ability.
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- Analysts say the timing of the request as war clouds
gather in the Persian Gulf isn't coincidental.
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- Israel hopes to receive the aid as a reward for good
behavior during a war in which it may be asked once again to restrain itself
even if it absorbs missile strikes from Iraq.
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- "The unspoken word is that it is going to be part
of an inducement package for Israel to stay on the sidelines," said
Scott Lasensky, a research fellow at the Council on Foreign Relations in
New York.
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- "It's a positive inducement. It's like political
risk insurance. Companies buy it and so do countries," he said.
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- Israeli officials believe it is unlikely that a new aid
package would be approved in Washington before a campaign to topple Iraqi
dictator Saddam Hussein, for fear of alienating Arab countries whose political
support will be crucial in the effort.
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- The aid, they say, will help defray costs of deploying
the Arrow missile, Israel's anti-ballistic missile system on which the
country will rely to intercept Iraqi Scud missiles.
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- The military package also would make up for $800 million
in aid pledged by the Clinton administration to ease the burden of Israel's
withdrawal from southern Lebanon in 2000. Neither President Clinton nor
President Bush has followed through on the promise.
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- The loan guarantees, in which the United States would
act much as a co-signer, would provide Israel a cheaper alternative to
finance its national debt than floating bonds on local financial markets.
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- http://www.washtimes.com/world/20030103-83943580.htm
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