Israel wants more than total US foreign aid budget
Jan 8
James Tyson in Washington, Bloomberg
A delegation from Israel, the largest recipient of US foreign aid, has sought $US12 billion ($21 billion) in assistance at a meeting with State Department and White House officials, Israeli officials said.
The request, covering the next three to five years, exceeds the total $US11.6 billion budgeted last year by the US for all countries.
The request is to help Israel weather the Palestinian uprising and a possible US war with Iraq.
Meanwhile, responding to Sunday's suicide bombing in Tel Avivin which 22 people died, the Israeli government barred Palestinian officials from travelling to London for planned talks on reform, setting off a diplomatic dispute with Britain.
British Foreign Secretary Jack Straw said he regretted the move, as did US Secretary of State Colin Powell in a conversation with Israeli Foreign Minister Benjamin Netanyahu.
Prime Minister Ariel Sharon's office said Israel was asking for $US4 billion in direct assistance and $US8 billion in loan guarantees. A US official indicated before the meeting that the US was open to the request.
"We always try to do what we can to help our friend and ally," the official told reporters. The meeting was intended to focus on "Israel's current economic situation and Israel's expected request for supplemental assistance", he said.
Dov Weissglas, Sharon's chief of staff, led the delegation, according to Mark Regev, spokesman for the Israeli Embassy in Washington.
Israel's gross domestic product fell about 1 per cent in each of the last two years because of flagging global demand for technology and the damage to tourism and other industries over Palestinian violence.
The US was likely to attach conditions to an offer of assistance, Mr Sharon's office said, adding that Israel would reject terms that compromised its security. Israel receives about $US3 billion a year in military and civilian assistance from the US.
Israel's Finance Ministry said the 2002 budget deficit was 3.97 per cent of gross domestic product, close to the government's 3.9 per cent target.
The deficit narrowed to 19.3 billion shekels ($7 billion) from 21.3 billion shekels in 2001, when it reached 4.5 per cent of GDP, the ministry said.
The deficit did not include the offsetting factor of US aid for 2002, which had not arrived by the end of the year, the ministry said.
"Meeting the deficit target strengthens Israel's economic standing in the world," Finance Minister Silvan Shalom said in a statement.
Israel's deficit and high level of debt have provoked concern among investors and credit-rating services. The government intends, through budget cuts this year, to reduce the deficit to 3 per cent of its GDP.
Israel received US loan guarantees in 1992 to help it finance the cost of absorbing hundreds of thousands of immigrants entering the country from the former Soviet Union. Israel has about $US4.2 billion in foreign loans falling due in 2003, according to the Bank of Israel.
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