Israel has asked for $2 billion in grants as part of a
$10 billion aid package comprised mostly of loan guarantees.
Israeli officials said $2 billion of the proposed aid package would be a
grant that would help Israel's military and security forces. They said the
package was presented to the Bush administration during a visit by a senior
Israeli delegation on Monday.
The aim of the $2 billion grant was not specified by the officials. But
they said the intent was to use the money to make up for the huge shortfall
in the defense budget for fiscal 2003.
Israel is meant to obtain about $2.1 billion in military aid for fiscal
2003. Under a formula drafted between the two countries, Israel receives
annual increases of $60 million in military aid in exchange for a cut of
$120 million a year in economic aid. The arrangement is meant to continue
until 2008.
Officials said the delegation in Washington, which includes Finance
Ministry director-general Ohad Marani and the director of the prime
minister's bureau, Dov Weissglass, has asserted that Israel should obtain
the same treatment as Jordan and Turkey in U.S. planning for the war in
Iraq. The administration has determined that both of these countries would
be eligible for aid to compensate for any damage expected by a war to topple
the regime of President Saddam Hussein.
On Monday, Marani and Weissglass met U.S. National Security Adviser
Condoleezza Rice. Marani briefed the White House team on the economic
situation in Israel and its need for aid.
"A detailed discussion about the content of the request was subsequently
held," an Israeli government statement said. "The entire meeting was good
and friendly; it was promised that a reply to the request would be
forthcoming in the near future."
The government of Prime Minister Ariel Sharon has placed high hopes on
additional U.S. aid for its fiscal 2003 budget. Sharon was quoted as saying
that the $2 billion increase in U.S. military aid could help shelve a
government decision for a $1.7 billion decrease [8 billion shekels] in the
defense budget.
Earlier, a senior military official said the decision to implement such
a budget cut had been shelved. The official said the military was prepared
for a 1 billion shekel [$213 million] reduction.
Any Israeli aid request would require congressional approval and
officials hope that Washington would decide on the issue by May 2003. Last
week, Congress failed to approve a last-minute administration request for
$200 million in additional U.S. aid to Israel for counter-insurgency
efforts. The aid request is expected to be discussed during the next
congressional session, which begins in January.
