Washington is penalising Israel for building the ”security fence” through the West Bank and its continued expansion of Jewish settlements by cutting nearly $300-million in loan guarantees.
The largely symbolic move will cost Israel a fraction of the $1,4-billion in guarantees the US agreed to provide this year so the Jewish state could raise loans at a preferential rate to revive its ailing economy.
The size of the cut — $289-million — is equivalent to the amount Israel spent on construction of the fence and new infrastructure for settlements in the occupied territories this year.
As a result, Israel will pay about $3-million in additional interest on the loans. The total cost of building the concrete and steel barrier through the West Bank could rise to more than $1-billion.
The move follows President George Bush’s speech in London last week criticising continued expansion of Jewish settlements and construction of the fence, which he said prejudiced final negotiations for a Palestinian state.
Palestinians said the cut was an important symbolic step, but called on the US to do more to discourage what critics refer to as the ”apartheid wall”.
”We want steps from the Americans that will definitely stop the settlements and the wall to give peace a chance,” said Saeb Erekat, the chief Palestinian negotiator. ”I’m afraid that this step, as a message, will not deter Israel.”
Israel’s prime minister, Ariel Sharon, vowed to continue building the barrier. He wants to extend it up to 592 kilometres from its current length of 100 miles so that it surrounds the main Palestinian areas.
Under pressure from the US, the Israelis have temporarily halted some of the most controversial construction, where it was planned for the fence to run further into the West Bank to encircle big settlements, such as Ariel.
Washington has also been pressing Sharon to fulfil the promises made to Bush to dismantle Jewish outposts in the West Bank.
Elliot Abrams, Bush’s Middle East adviser, met Sharon last week to press him on his commitments. William Burns, assistant secretary of state for near eastern affairs, is travelling to the region this weekend for his first visit since August.
The cut in loan guarantees comes as the US tries to revive the American-led road map in the wake of the installation of a new Palestinian government.
Israel’s deputy prime minister, Ehud Olmert, yesterday told army radio that pressure from the US was limited: ”The fact is they aren’t putting any political pressure on us to do anything on the substantive issues of the political process.”
Sharon has been hinting at concessions amid growing public doubt about his policies and the emergence of an unofficial peace plan — known as the Geneva accord — which was negotiated by leftwing Israeli politicians and Palestinian leaders.
The accord agrees to a Palestinian state on almost all of the occupied territories in return for a renunciation, by Palestinians, of the right of return of refugees to Israel. – Guardian Unlimited Â