US/ISRAEL: Israeli leaders yesterday tried to downplay a decision by the US to slash almost $300 million from loan guarantees they have been granted, as a penalty for continued settlement construction, while Palestinian leaders complained the amount was far too low to deter Israel.
"The fact is they [the US] aren't putting any political pressure on us to do anything on the substantive issues of the political process," said deputy Prime Minister Mr Ehud Olmert, after the US announced that the sum would be deducted from $10 million in loan guarantees Israel will receive over three years.
The deduction represents not only investment in settlement building, but also Israeli spending on part of the barrier it is building in the West Bank and which it says is meant to keep Palestinian suicide bombers out of its cities.
The Palestinians did not try to hide their disappointment at the US decision. "We want steps from the Americans that will definitely stop the settlements and the wall to give peace a chance," said Palestinian Cabinet Minister Mr Saeb Erekat. "I'm afraid that this step, as a message, will not deter Israel." Judging by Israel's reaction yesterday, Mr Erekat is right. Despite the deduction over the barrier, a senior aide to Prime Minster Ariel Sharon indicated the government planned to forge ahead with its construction.
The Palestinians strongly oppose the barrier, having watched it dip further and further into the West Bank, gobbling up land on which they hope to build a future state. President Bush has also criticised Israel over the route of the fence.
The loan guarantee deductions and Mr Bush's criticism of Israel's settlement policy during his recent trip to London, both indicate a new frostiness between Jerusalem and Washington, which until now has given Israel almost unfettered support.
The Americans also appear to be sending another pointed message to the Israeli leader - that his diplomatic inactivity is untenable - with growing official declarations of support for two unofficial Israeli-Palestinian peace initiatives. Both been met with fierce criticism by Mr Sharon. There were reports yesterday that Secretary of State Mr Colin Powell would meet with the formulators of the two peace plans.
While there was no immediate confirmation from US officials, a spokesman for one of the groups, headed by former Israeli Shin Bet security chief Mr. Ami Ayalon and moderate Palestinian intellectual Dr. Sari Nusseibeh, said a meeting with Mr. Powell would take place in Washington on December 12th.
In Gaza yesterday, Palestinian doctors said a nine-year-old boy was by killed by Israeli army fire in the southern town of Rafah.