Thursday, July 23, 2009

IDF Mulls Possible US Aid Halt Effects

By Yaakov Katz And Herb Keinon
23 July 09

(The wise man is he who can anticipate the future)

Amid growing tension between Jerusalem and Washington, the IDF and Defense Ministry have held brainstorming sessions to discuss the possibility that the United States would cut military aid to Israel, The Jerusalem Post has learned.

On Tuesday night, senior Defense Ministry and IDF officers gathered in Tel Aviv for a discussion on US-Israeli relations, during which they discussed new Pentagon regulations regarding the way Israel can use the almost $3 billion in military aid it receives from the US.

According to defense officials, the Pentagon informed the Defense Ministry that the foreign military financing (FMF) needed to be used strictly for weaponry and defense-related projects. In past years the Pentagon had made exceptions and allowed the IDF to purchase nonessential items such as covers for trucks, uniforms and even food for soldiers.

During the discussion, the officials also discussed the possibility that the US would cut the FMF due to the political tension between the countries or because of the global financial crisis.

The discussion in the Defense Ministry came just hours before a State Department spokesman said at a press briefing that it was still "premature" to talk about financial sanctions against Israel for its refusal to freeze settlement construction.

Israeli defense officials said it was possible to interpret the remark as meaning that now it is premature, but that at a later date sanctions might be realistic.

Israeli diplomatic officials, on the other hand, completely discounted the likelihood that the current disagreements with the US would lead to punitive sanctions against Israel.

"This is nonsense,"one official said, responding to the State Department spokesman's answer to a query on the matter.

"This US Administration believes in dialogue until the bitter end" the official said. "There is no way that at the same time it wants to engage with the Iranians, it is going to take sanctions against Israel. It just doesn't make sense"

The official said there was no concern at this time in the Foreign Ministry that Washington would use this weapon, especially since its pressure on the Arab world to take gestures toward Israel is not bearing any fruit, but no one is talking about potential sanctions against the Arab world for not positively responding to the US president.

The US has in the past used loan guarantees as a lever to try to alter Israel's construction policies in the settlements, withholding these guarantees in the early 1990s, during the wave of Soviet immigration, because of then-prime minister Yitzhak Shamir's settlement polices.

The US currently subtracts from loan guarantees to Israel money that the government spends in the settlements.

The FMF is mostly spent in the US on advanced military platforms such as fighter jets, attack helicopters and missiles.

At the meeting on Tuesday night, officials who were present discussed the consequences of US financial sanctions but reached the conclusion that while Israel would have difficulty replacing the $3b. in aid that it receives from the Americans, it would be able to establish new relations with European countries from which it could receive military equipment.

One official who was familiar with the discussion said that Israel was recently approached by France to jointly develop an unmanned fighter jet. Russia, the official said, has for years been urging Israel to purchase some of its military platforms.

"We turned down these offers because of our relationship with the US," the official said. "If that relationship changes we could always renew the partnership with France and other countries."

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