28. Telegram From the President's Special Assistant (Rostow) to President Johnson in Texas/1/

Washington, December 29, 1967, 2231Z.

/1/Johnson Library, National Security File, Memos to the President, Walt W. Rostow, Vol. 55, 12/20-31/67. Secret; Eyes Only.

CAP 671244. Lacking his secretary, who alone has security clearance in his office, Bob Anderson expressed the following views on the Middle East, which he asked me to make available to you.

1. It is his quite objective judgment that we are on the way to losing the Middle East rapidly. In a matter of months there will be a military confrontation in which the Soviet Union will be prepared not only to arm the Arabs, but directly to engage, perhaps via technicians, if not more openly. They will use the same techniques as we have used in Vietnam and a similar rationale; namely, that they have a right to help their friends deny others acquisition of their territory. The Israelis have no more right to impose their government on the West Bank of Jordan than the North Vietnamese have a right to impose their government on the South. They will accuse the Israelis of aggression; and, as we know, the concept of aggression can be defined in ways that suit the interests of the party making the definition.

2. Bob said that he is wholly aware of our legitimate sense that the Arab leaders have proved themselves unreliable. They have created by their own statements and actions a monster in their public opinion which makes it impossible for them to negotiate directly with Israel. They are widely divided among themselves except on the issue of Israel.

3. Specifically, Bob believes it is unwise for us--and unwise for the Israelis--to increase Israeli arms in order to balance Arab arms acquired from the Soviet Union. He believes it would be a disaster if we made dramatic announcement when Eshkol is here of increased arms for the Israelis. It would be tantamount to a U.S. commitment to engage the Russians directly in the Middle East.

4. Positively, we believes we must now make a move towards the Arab moderates. We must indicate that our concept of territorial integrity applies not only to Israel, but to the Arabs. We must pick up Nasser's offer to re-establish relations promptly and not insist on our concept of apologies. The Russians are unpopular throughout the Arab world. There are moderates who want peace. They will accept any amount of U.S. commitment to the integrity of Israel and its borders. They will accept the President's five points of June 19./2/ But if we appear to throw out weight fully behind Israel and ignore their overtures to us, they will turn, whatever the cost, to the Russians.

/2/See footnote 5, Document 10.

5. We must understand, Bob says, that in the Arabs we are dealing with a different breed of cat than any others in the world. To them, face is more important than substance. It means more to them than to the Israelis or to us. Moreover, he believes that if we help them save face, we have the possibility, if we ac fast, of getting a livable settlement for Israel which would block Soviet influence out of the Middle East, He underlined that we must more fast. He concluded that we are on the edge of a war in the Middle East, at least as serious for us as Vietnam, unless we balance our accounts with the moderate Arabs and avoid, on the occasion of the Eshkol visit, any dramatic move in the arms field with Israel which would polarize the Arab world again and lay the basis for their turning once and for all to Moscow.

WWR Comment:

1. I believe Bob's comment that we are heading toward a new military confrontation assumes that there is no progress toward Israeli withdrawal and a peace settlement. Ambassador Jarring is now on his second round of talks, and you will be discussing with Eshkol the importance of Israel's doing everything possible to encourage the Arabs to negotiate rather than fight. We don't know what this will bring, but we've told the Arabs we'd put our weight behind Jarring.

2. While we're all wary and unsure of Soviet intent, I'm less certain than Bob that the Soviets are ready for the kind of involvement he predicts. We've seen them shy away from it several times this year.

3. I agree that there should be no dramatic announcement of an arms deal in connection with the Eshkol visit. But I do believe we have a clear interest in Israel's being able to defend itself.

4. We have the following in the works for the Arabs:

--I am sending you separately a proposed reply to Nasser./3/ It's restrained but positive. Maintaining a relationship with Cairo is central to competing with the USSR in the area.

/3/See Document 31.

--You are aware of the arms discussions with Hussein.

--Gene Black is going to Kuwait, Saudi Arabia, Jordan and the UAR in January and can do some handholding for us if we wish./4/ Luke Battle is also considering a trip to the area.

/4/Saunders sent a memorandum to Rostow on December 18 in which he observed that Eugene Black was planning to visit the Middle East in late January in his capacity as a Director of the International Bank for Reconstruction and Development. The question, Saunders noted, was whether to encourage Black to visit Cairo with a message for Nasser. (Johnson Library, National Security File, Country Series, United Arab Republic, Vol. VI, Memos, 8/67-7/68)

29. Telegram From the Embassy in Jordan to the Department of State/1/

Amman, December 30, 1967, 1545Z.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1967-69, DEF 19-8 US-JORDAN. Secret; Immediate; Nodis.

2832. Ref State 91343,/2/ Amman 2831./3/

/2/Telegram 91343 to Amman, December 30, informed the Embassy that President Johnson wanted an assurance that if the United States decided to meet some of Jordan's military needs, it would not be embarrassed by having Jordan also accept military assistance from the Soviet Union.

/3/Telegram 2831 from Amman, December 30, transmitted the text of an oral message from King Hussein to President Johnson, which Hussein asked be passed to the President on an urgent basis. Hussein indicated that he was and remained a friend of the West and had no desire to buy arms from the Soviet Union. He noted that he had been patient in waiting for a U.S. decision to resume arms shipments to his country. To meet U.S. concerns in making that decision, Hussein offered an assurance that if the United States supplied Jordan's needs he would not buy military equipment from the Soviet Union. He offered that assurance, he noted, on the assumption that in due course Jordan's legitimate requirements would be met. He added that it was imperative that he be able to say that Jordan's military requirements were being satisfied by the time of the scheduled Arab Summit meeting on January 17. To pave the way for the necessary understanding, Hussein proposed to send his Chief of Staff, General Khammash, to Washington as soon as possible to meet with the appropriate U.S. authorities. (Johnson Library, National Security File, Country File, Jordan, Vol. IV, Cables, 5/67-2/68)

1. I saw King Hussein this afternoon to take up reftel. I told him I had another personal message for him from the President and explained that the President would like assurances we would not subsequently be faced with Jordan's acceptance of Soviet arms offers.

2. King responded that providing such assurances gave him no difficulty at all. This had always been his understanding of arms arrangements with us. He has no desire to buy arms from the Soviets provided his legitimate requirements can be met by the United States. He said he realized that resumption of shipments would not "bring tanks to Jordan immediately." But he did need to have a clear understanding of what the USG is prepared to do for Jordan. In giving us assurances about not going to the Soviets he did not want to be left in position of having some of his essential requirements unsatisfied.

3. I responded that shipments to be resumed initially would include some of items on General Khammash's "emergency list." I said I saw this as an important beginning. It would remove pressures from him and would give us all time to see what success Jarring would have. We would all gain time to form a better picture of what kind of military establishment Jordan would need in the years ahead.

4. The King said he would want in any case to have General Khammash proceed at once to the US to discuss Jordan's requirements. I said I recognized he would want Khammash to discuss Jordan's requirements in detail at some point, but I believed it should be put off until things had settled a bit, until we could see where we stood.

5. At this point King asked if I could wait while he called Khammash to the Palace to join our discussion. When Khammash arrived we went over most of the same ground again with Khammash emphasizing that he could not keep the army loyal to the King if Jordan was only to be provided with a "few spares" and other equipment from his "emergency list." He was not asking for all of Jordan's needs at once, but he believed His Majesty would have to have a clear understanding of what the USG proposes to do beyond the "emergency list." Discussions with the Soviets could be postponed, but Jordan was faced with a summit meeting on Jan 17 and had to be in a position to state authoritatively that its needs were going to be met by the USG. Revival of the UAC is on the summit agenda, and he (Khammash) has already been told that Jordan and other Arab countries at the summit will be expected to indicate how their re-equipping is being accomplished. Beyond this, there is the seriously deteriorating morale of the Jordan army to be considered. They had to have an idea of what comes after the "emergency list."

6. Discussion went back and forth over the same ground. The King at one point introduced the Israeli F-4 Phantom request and said he earnestly hoped the USG would not take this step. In the course of our conversation I, of course, emphasized that buying Soviet arms might help to meet a short-term problem but would in its train bring a host of long-term problems. The King's comment was "I am sorry to have to say that you will have been responsible if that happens."

7. Our discussion was concluded with the King suggesting an oral message to the President. We went over the substance of such a message several times, and it has been transmitted separately.

8. Comment: I tried throughout conversation to talk the King into going along with a general statement of resumption of shipments at this time and putting off a Khammash visit until we could see where things were going. Both he and Khammash were prepared for such moves on my part and had no intention of leaving things fuzzy. Although they did not say so, it was obvious that Khammash's visit would mean much to them psychologically. It would be a sign that we had moved back together and would be so interpreted by Jordanians and other Arabs. Both the King and Khammash made a special point of emphasizing "legitimate requirements," and they reiterated statements made in other recent conversations to the effect that if Jarring is successful, their longer term military requirements would change. Although they were fairly insistent that they will need to know before January 17 what we are prepared to do (with the implication that this means the longer term), we believe that discussions with Khammash need not take the form of a complete long-term statement of force goals and equipment. It seems to us that it would be acceptable to the King and Khammash if we approached the problem in stages. We could resume shipment of our recommended list now and try to agree with Khammash on making up some of Jordan's other losses and deficiencies in a series of stages. This will enable both sides to buy time and provides, we believe, sufficient scope for Khammash's discussions to satisfy the King before the summit meeting.

9. The object of this whole exercise has been to buy time, to maintain our position here while a Middle Eastern settlement is being worked out. This object is still important to us, and therefore we strongly recommend that Khammash be invited to proceed to Washington as requested by the King.

Symmes

30. Memorandum From Harold H. Saunders of the National Security Council Staff to the President's Special Assistant (Rostow)/1/

Washington, January 2, 1968.

/1/Source: Johnson Library, National Security File, Country File, Israel, Vol. VIII, Cables and Memos, 12/67-2/68. Secret.

SUBJECT
Status Report on the Jarring Mission--For Your Talk with Evron/2/

/2/No record of Rostow's meeting with Evron has been found.

Eppie probably just wants to set the stage for Eshkol's visit, but you ought to know how the Jarring mission stands before you see him. The Israelis presumably know all of this, although they may not know how much we know. We got some of it from the Egyptians.

Jarring hasn't had much luck so far. On the plus side, he has gotten the Israelis to release 500 Egyptian prisoner and apparently has talked Nasser into letting the ships trapped during the Six Day War leave the Suez Canal. On the minus side, no one has moved from the positions of two months ago on the major issues of settlement.

The Israelis are still taking the position that peace treaties have to be negotiated. They outlined their stand in a letter to Jarring which he passed on to the Egyptians./3/ The Israelis have not come out with any specific solution to problems, but the letter to Jarring mentions agreed boundaries, normal economic relations, free navigation and recognition without mentioning the refugee problem.

/3/The text of this letter was transmitted to the Department in telegram 1276 from Cairo, January 1. (Johnson Library, National Security File, Country File, Israel, Vol. VIII, Cables and Memos, 12/67-2/68)

The UAR is holding to the line that Israel must withdraw its troops as the first step. There is no indication that Nasser is willing to talk directly to the Israelis./4/

/4/The UAR position was outlined in an aide-memoire handed to Jarring by Foreign Minister Raid on December 30. The text was transmitted to the Department on January 1 in telegram 1275 from Cairo. (Ibid.)

The Jordanians also are pushing for an Israeli withdrawal, but haven't revealed their position on the specifics of a solution.

The Lebanese appear willing to accept almost any solution, but they're the least of Jarring's problems.

The Syrians won't talk to Jarring.

In sum, Jarring has managed to get a highly indirect dialogue going between the Israelis and the Arabs, both sides still say they want peace, and positions have not hardened during his travels. He is certainly no farther from a solution than when he started, but Jarring himself says he doesn't expect too much. It looks as if the next job may be how to help Jarring break through to some meaningful exchanges.

I think the main point with Eppie is to get pre-Eshkol atmospherics from him.

Hal

31. Telegram From the Department of State to the U.S. Interests Section of the Spanish Embassy in the United Arab Republic/1/

Washington, January 3, 1968, 2332Z.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1967-69, POL UAR-US. Secret; Priority; Nodis. Drafted by Parker on December 21; cleared by Battle, Davies, and Bromley Smith; and approved by John P. Walsh in S/S.

92844. Cairo's 1136./2/

/2/Document 13.

1. President Johnson received Birdsall briefly afternoon December 18./3/ Birdsall delivered letter and oral message from Nasser. Letter extends greeting to President and his family, and has short substantive text as follows:

/3/See Document 21.

"At this time which is sacred to both our people I feel that good relations should exist between our people.

I have sent a special message through Mr. Birdsall. I trust you will receive it in the spirit which I send it.

With highest personal regards. Sincerely. Signature, in Arabic."

2. Oral message was: (1) Nasser asked Birdsall convey expressions of his highest esteem for President and wished him to know that he regrets break in relations, desires resume them and will endeavor induce other Arab countries who broke relations to resume. (2) Nasser also expressed hope President will use his influence to bring about an Israeli withdrawal. At same time Nasser would permit himself to accept "state of non-belligerency" between UAR and Israel. (3) Nasser hoped solution to refugee problem consistent with continued existence Israel could be found. (4) He hoped President would make gesture of friendship to Arab nations after resuming relations, but he understood our relations with Israel. (5) Nasser would appreciate invitation to visit United States and hoped that President would acknowledge messages conveyed by Birdsall.

3. President thanked Birdsall and said he would consider messages and what form appropriate reply might take.

4. Birdsall in separate conversations with Walt Rostow and Battle was somewhat fuzzy on details and it difficult to tell how much of oral message was Nasser and how much Birdsall.

5. We believe we should reply to Nasser in reasonably forthcoming manner but do not think we should send special emissary for purpose. Accordingly, and unless you think it would be unwise do so, you should seek immediate appointment with Khouly and tell him you have Presidential oral and written messages for delivery Nasser only. We can visualize some difficulties arising from fact Khouly apparently unaware of Birdsall visit, but Nasser presumably able to handle that. You should decline discuss contents messages except with Nasser. When you see Nasser you should explain that we are taking the extraordinary step of asking for your meeting with him because we do not know who in his government is privy to the Birdsall conversations and wish both to avoid embarrassment to him and to insure that he gets the message in its original form.

6. Following is text of written message./4/

/4/A signed copy of this letter, dated December 30, which was subsequently sent by pouch to Cairo, is in the Johnson Library, National Security File, Special Head of State Correspondence File, UAR-Presidential Correspondence (1 of 2).

"Dear Mr. President: Thank you for your kind letter of December 9 and for your greetings to myself and my family. In turn, I send best wishes to you and your family, and special greetings for the New Year.

I share your belief that good relations should exist between our people and your regret at the break in relations between us. I hope that we can move calmly and deliberately to the restoration of those relations on a basis of mutual trust and respect.

Mr. Birdsall has delivered your special message to me and I am asking Mr. Donald Bergus to convey my reply to you personally. He is fully authorized to convey any response you may wish to send and enjoys my full confidence. Sincerely, signed Lyndon B. Johnson."

7. Following is verbal message from President:/5/

/5/A copy of this message, dated December 30, is ibid.

(a) I share President Nasser's desire for resumption of relations. It is imperative, I believe, that diplomatic relations be resumed in a climate conducive to friendship between our two countries. Diplomatic relations cannot be isolated from the attitudes of trust and confidence that they should represent, and I would suggest that each of us examine ways in which we can improve the atmosphere both in the United States and in Egypt. I have in mind, for example, an effort to clarify public misapprehensions surrounding the unfortunate events of June 5. It is inconsistent with friendship to leave an impression that the United States engaged in military actions against his people which caused loss of life and hardship, when we in fact had no part in them. Mr. Bergus is prepared to discuss further steps.

(b) I am pleased to note President Nasser's readiness to accept a state of non-belligerency with Israel. We hope he shares our belief that a resumption of hostilities is unthinkable. With regard to his request that I use my influence to get the Israelis to withdraw, the United States Government is prepared to put its full weight behind a reasonable settlement of the Arab-Israel dispute within the terms of the November 22 Security Council Resolution, which I am pleased that the UAR supported. As President Nasser knows, that resolution affirms that a just and lasting peace should include Israeli withdrawal as well as the termination of all claims and rights of belligerency. To achieve this end, I think it essential that all of us cooperate fully with the Secretary General's personal representative, Ambassador Jarring, and that we seek to find a settlement all parties can accept. I assure him of my willingness to cooperate with all parties in an effort to bring success.

(c) I share President Nasser's hope that a solution to the refugee problem consistent with the continued existence of Israel can be found. President Nasser may be assured that when I said on June 19 that any solution must include justice for the refugees, I meant it.

(d) It is not clear what President Nasser has in mind in asking that I make a gesture of friendship to the Arab nations and we are not sure whether Mr. Birdsall has reported this request accurately and in its proper context. Perhaps President Nasser would wish to clarify. In meantime, I would like to point out that we have long sought to maintain an even-handed policy as between the Arab states and Israel and to have good relations with both sides, and we have helped in the economic development of the entire Middle East. The deterioration of our relations with the UAR in the past year has been due largely to unfortunate misunderstanding of our motives and tragic suspicions as to our intentions. If now the UAR wishes to move into a new period of friendship based on trust, I think friendly and mutually satisfactory relations are possible. If they are not ready, I do not think isolated gestures of friendship by either side will have much effect. There must be a basic wish for meaningful relations and a determination to bring them about.

(e) I have noted President Nasser's interest in a trip to the United States and would be pleased if such a visit can be arranged in the wake of a settlement of the Arab-Israel crisis.

(f) President Nasser should be assured that I have great respect for his person and his country. Although we have had our share of problems in recent years, this need not prevent the establishment of a relationship based on mutual respect for each other and mutual recognition of the limitations each of us must face in dealing with our common problems.

8. You authorized provide substance of above to Nasser as an aide-memoire if you deem appropriate. Since Elsie Hafez aware Nasser message, you may use him as channel rather than Khouly if you wish.

9. Signed original being pouched.

Rusk

32. Memorandum From Secretary of the Interior Udall and the Chairman of the Atomic Energy Commission (Seaborg) to President Johnson/1/

Washington, January 3, 1968.

/1/Source: Johnson Library, National Security File, Files of Harold H. Saunders, Israel-Nuclear-Dimona-Desalting, 1/1/67-2/29/68. Confidential. For additional documentation on the Israeli desalting project, see Foreign Relations, 1964-1968, vol. XXXIV, Documents 130-174.

SUBJECT
Israeli Nuclear Desalting Plant

In addition to the background material which the State Department has prepared for this item, which has been discussed with our Departments, the following views of our agencies concerned with the principal programmatic matters of nuclear desalting plants may be pertinent:

1. Construction of the plant will significantly advance the Department of Interior and AEC program on large-scale nuclear desalting which you have strongly supported. We need to have several large-scale nuclear desalting plants constructed in order to get this new technology successfully launched.

2. Israel has characteristics which make it uniquely suited for the early application of large-scale nuclear desalting. Its natural water resources will be fully committed by the mid 1970's, and further expansion of water supply for industry and agriculture in Israel can be accomplished only through desalting. The advanced agricultural practices in Israel enable a higher value to be assigned to the water than in most areas of the world.

3. It has been recognized from the outset that the plant would not meet conventional economic criteria for AID financing, and that some additional financial assistance would be required. This is often the case for multipurpose power and irrigation projects. Because of the large investment involved, the cost of the water produced by the project will depend heavily on the terms of financing. Financing which would lead to a water cost of no more than 30 cents per 1000 gallons (corresponding to an average interest rate of 2.7%) may allow Israel to proceed with the project, although Israel will undoubtedly propose a much lower target initially.

4. There is extensive Congressional support as evidenced by the Baker Resolution, co-sponsored by 53 Senators, which expressed the support of the Senate for a large-scale regional nuclear desalting program in the Middle East. Congressional action to support the financing of the project will probably be needed. Sen. Anderson made it clear that adoption of the resolution should not interfere with proceeding with this project.

If appropriate otherwise, we believe that it is timely to reaffirm to Prime Minister Eshkol our serious interest in the project. We therefore recommend that you take the following approach in your discussions with him.

(a) That the United States is prepared to continue to consider seriously, jointly with Israel, whether a mutually satisfactory basis for financing the project can be found, pointing out that our ability to proceed with the project may well be influenced by the rate of progress toward a political settlement in the region.

(b) That to expedite action on this project, you will shortly name a successor to Ambassador Bunker as a special negotiator, and

(c) That we look upon the Israeli plant as a first step in a broader regional solution to the water problems of Israel and the Middle East. Toward this end, we would want to include in the further consideration of the project alternatives which will provide additional water to meet at least some regional needs. We would also want to initiate at the earliest appropriate time a broader regional study, involving the role that large-scale nuclear desalting can play in meeting the area's water needs.

Respectfully submitted,
Stewart Udall
Glenn T. Seaborg

33. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/

Washington, January 5, 1968.

/1/Source: Johnson Library, National Security File, Country File, Israel, Eshkol Visit Briefing Book, 1/7-1/8/68. Top Secret. A handwritten notation on the memorandum indicates that it was received at the LBJ Ranch on January 6 at 10 a.m.

SUBJECT
The Issues for Eshkol

You are so fully immersed in this problem that I need not go into detail, but I do want to found up for you in capsule form where we stand on each major point you will be discussing. I am attaching a one-page checklist of these points, an interpretation of Eshkol's political position and Secretary Rusk's comprehensive memos./2/

/2/A briefing book prepared in the Department of State including memoranda dealing with all of the issues anticipated in the discussions between President Johnson and Prime Minister Eshkol was sent to the White House on January 5 under a covering memorandum from Rusk, which incorporated suggested talking points. The interpretation of Eshkol's political position was in a January 5 memorandum from Saunders and John Foster to Rostow. All of these documents, including the checklist, are ibid. There is also a full set of the briefing materials in National Archives and Records Administration, RG 59, S/S Files: Lot 70 D 418, PM Eshkol Visit, Briefing Books I and II.

1. The main issue--peace. The real issue between us is that the Israelis think the Arabs will come around if they just sit tight and we think the Israelis may have to go more than half way to get the Arabs to negotiate. We can't dictate Israeli tactics, and we may not even know of some secret contacts. But we must be assured that the Israelis aren't going to sit themselves tight right into a "fortress Israel" that we would not want to be tied to. In this context, Eshkol may ask you what kind of support he can count on from the US if he gambles territorial security for an uncertain peace deal with the Arabs.

One point we haven't discussed with you recently is our willingness to facilitate Arab-Israeli contacts anywhere it makes sense. We don't want to get in the middle, but we think it would be worth offering to help if we can be useful.

2. Israeli moves toward peace. When we say the Israelis shouldn't just sit tight we have in mind specifically their: proposing a refugee settlement that would include compensation and some repatriation; offering Hussein some accommodation in Jerusalem; letting refugees from the June war back onto the West Bank; evacuating Tiran Island which is Saudi territory; and avoiding further actions that convince the Arabs they're just consolidating their conquests.

3. Nuclear weapons and missiles. We have been at the Israelis ever since your last talk with Eshkol in 1964 to get assurance that they won't go nuclear or acquire surface-to-surface missiles. The most they'll say is that they won't be the first to introduce nuclear weapons into the Mid-East and that they're developing missiles with French help just "in case they have to counter Arab missiles." We'd like to stop the Mid-East arms race short of either weapon, but so far we haven't made much headway.

With prospects for an NPT improving, we may have a new handle on this problem. I think we ought to make it clear that we expect Israel to sign and that we think Israel's long-term security will be well served by signing. Eshkol may say he can't give up his nuclear option unless he can be assured that the Arabs won't achieve conventional superiority. I think we might well pose that problem to the Russians if Eshkol makes it a condition for signature. It might also be worth finding out whether he'd give up getting missiles if the Soviets would not give them to the Arabs.

4. Soviet penetration. Eshkol may claim that Israeli action in June stopped the momentum of Soviet-UAR gains. We're not so sure. The USSR lost a few yards in June, and we set them back in the UN. But they seem to have picked themselves up quickly to exploit new openings in the area. I think we want to shake Eshkol's reliance on Israeli force and intransigence to stop the USSR. We think a peace settlement is the only thing that can give any of us a real chance to build a Mid-East where constructive nationalism and regionalism can block the Soviet thrust. Meanwhile, we want Eshkol's acceptance of our resuming aid to Jordan.

5. Vietnam. You will be the best judge of what would help you most. We've had one report via Dick Helms that Eshkol may be thinking of an open endorsement of our Vietnam effort and even some active help. We ought to look at that pretty carefully because it would further fix the image of Israel as our stooge--an image we need to blur if we're ever to persuade the Arabs that Israel won't just do what we tell it. It may be that the best help Eshkol could give us would be some strong words to the Conference of Presidents of major Jewish organizations in New York and a modest endorsement in his departure statement.

6. Balance of payments. Israeli reserves are about $720 million. Of this, $45 million is in gold and about $600 million in dollar holdings. Last year, they put about $200 million in long-term dollar securities. They expect reserves to decline this year by maybe $100 million, largely because of lower remittances from the US. They hesitate to put more of their reserves into long-term dollar holdings because of their war chest psychology and consequent concern for liquidity. Nevertheless, once you've thanked him for past help, Secretary Fowler thinks it would be reasonable to suggest that he put another $100 million into long-term holdings plus an amount equal to any increase in their reserves. We can assure them we'd make these liquid if they really needed cash.

7. Aircraft. To keep the Skyhawk production line going, we have to decide soon, and I think we should give a secret go-ahead on the 27 additional Skyhawks. The 48 already being delivered will replace Israel's war losses, and the extra 27 would bring inventory to about 225 (pre-war 200) even if France delivers nothing. The real issue is the 50 Phantoms because that's what the Israelis really want and it is so clearly superior to anything the Arabs have that it would introduce a significantly advanced weapon into the area. (You might be interested in reading the comparison of these two planes and Soviet aircraft in the briefing book at the red tab under Background Tab A.)

I suggest saying we will amend the present Skyhawk agreement to add 27. We will deliver as quickly as the production line permits. (At present view, the most compressed plan would deliver the first plane in May 1969 and complete delivery in March 1970.) We would like to make this a cash sale (about $32 million) but could consider credit if they press. We must hold off the Phantom decision for another few months until we have a clearer picture of Soviet and French policy and of Jarring's progress. But you can assure Eshkol that we would not delay one day if we thought it would jeopardize Israel.

The crucial point is how we satisfy Eshkol that delay in our decision will not delay their acquisition because of lead-time if we decide to go ahead. One possibility is to offer to divert from our own production if the Arab strength increases unexpectedly. Another proposal which Eshkol may put to you is for us to let the Israelis (a) begin engineering discussions with the manufacturer to decide on the configuration they might want and (b) even finance some long lead-time items with no commitment from us on our ultimate decision. We had actually been considering financing these items ourselves. Letting the Israelis do it would unquestionably make it harder for us not to sell later.

8. Desalting. We are not ready to make a decision. What we know now is that the project as originally planned (100 million gallons per day water, 200 megawatts electricity) would cost about $216 million. The Israelis have since considered two larger plans-one to increase electrical output to 300 megawatts for $224 million and a second to increase electrical capacity to 350 megawatts and water output to 175 MGD for $336 million. For the $336 million plant, there would be a gap of about $150 million that would need to come from "soft" (30 years, 2% or less) loans even if the Israelis paid $84 million in local costs, the US were able to contribute research and development grants of $25 million and $75 million in commercial financing could be found.

In addition to overcoming financial problems, we feel strongly that this project should become a stepping-stone to more rational overall management of the water in the Jordan Valley.

We suggest you discuss frankly with Eshkol the substantial financial gap and then try to get some sense of how much Israel is willing to put in and how willing Eshkol is to integrate this into a regional system (apart from just watering Gaza, which he probably hopes to keep).

The one concrete step we can take at this stage would be to appoint a Mid-East water man to pick up where Bunker left off. Our bureaucracy is still divided (memo from Secretary Udall and Commissioner Seaborg/3/ is in your briefing book at Background Tab C but this is not the whole story.) A new Bunker may be needed to whip a recommendation into shape.

/3/Document 32.

9. PL 480. The Israelis have asked for about $32 million in wheat, feedgrains, tobacco and vegetable oil. This is larger than last year's $27 million program because the Israelis took no wheat when we were tight. State has some reservations about a larger program which could be interpreted as our support for Israeli conquests, but I think the difference is narrow enough to be manageable. If you wish, you can simply say we can do at least as much as last year.

The other issue is that the Israelis will want at least the 50/50 split between local currency and dollar purchases. Treasury and Budget argue rightly that there is no economic justification--given our aid criteria--for this not to be a 100% dollar sale. I believe we have to keep moving toward 100% to meet Congressional requirements, but I think you could get away with a 75% dollar sale this year if you want. You may not want to be this specific with Eshkol, but you might avoid later misunderstanding by mentioning the problem.

[1 paragraph (8 lines of source text) not declassified]

Walt

34. Telegram From the U.S. Interests Section of the Spanish Embassy in the United Arab Republic to the Department of State/1/

Cairo, January 6, 1968, 1400Z.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1967-69, POL UAR-US. Secret; Priority; Nodis.

1310. 1. I was received by Nasser at his residence at 12:30 PM today (Jan 6). Conversation lasted forty minutes. Nasser seemed in excellent health and good spirits. He was clad in sweater and slacks. There were no manifestations of his nervous habits, such as knee-jiggling or finger-cracking although he still has his little giggle. He was friendly and cordial throughout, making usual inquiries about family, etc.

2. I referred to Birdsall visit to Cairo Dec 9, Birdsall's return to US and his being received by President Johnson Dec 18. I then handed text of letter from President Johnson to Nasser which he carefully read./2/

/2/See Document 31.

3. I then stated that in addition to delivering letter from Nasser to President Johnson, Birdsall had also passed an oral message./3/ I then reviewed five points set forth in para 2 State 92844./4/ Nasser's eyes got bigger and bigger as I read this. I said one of main reasons why I had asked to see him personally was that we were not sure how much of these five points had been Nasser and how much Birdsall. This got a big laugh from Nasser.

/3/Documents 12 and 21.

/4/Document 31.

4. I then slowly and carefully read out President Johnson's verbal message to Nasser. He listened attentively after which I handed him aide-memoire summarizing substance of verbal message.

5. Nasser began his remarks by asking me who was Birdsall (whom he calls Birdswell) and who was Saddiqi. I gave as much biographic data as I could, emphasizing fact that Mr. Birdsall and his associates had no connection whatsoever with USG. Nasser said he had come to conclusion that Birdsall was a purely unofficial emissary. Since Birdsall visit Dec 9, tentative arrangements had been made at Birdsall's request to receive him in Cairo again on Jan 4. However, Nasser had subsequently heard from Birdsall that response to his messages to President Johnson would be coming through another channel.

6. Nasser then, using aide-memoire based on verbal message as text, went over it and commented on a number of its points.

7. First of all, he said he had made no requests through Mr. Birdsall. He had told Birdsall that he did not believe there was any direct conflict between the United States and the UAR and that the UAR had good intentions toward the US. There were, however, a number of "indirect questions" which troubled US-UAR relations.

8. As to diplomatic relations, Nasser said he had told Birdsall that their resumption would be to the mutual interest but this would take time despite the fact that there were good intentions on both sides. Nasser was pleased at steps recently taken to improve the atmosphere in US-UAR relations. He mentioned specifically the return of American personnel, the American University at Cairo, and the prospective return of the Ford Foundation.

9. Nasser then went into the question of charges of US military participation in June war. He mentioned he was aware of suggestion I had made to Vice President Mohieddin last October that Heykal publish denial in El Ahram. When Mohieddin had conveyed this suggestion to Nasser, latter had said, "What is there to deny?" Nasser went on to say that apart from what may have appeared in the newspapers, there had never been any official declaration that US aircraft had taken part in the attack on the UAR. He said he had been asked by his own high command at noon on June 5 to issue statement that US and British aircraft were participating. He had told high command that he would not make such a statement until they could produce American pilot or plane. He then reviewed history of telephone call with Hussein, etc., and said he had only quoted what Hussein had told him. He noted that Hussein had since retracted. He therefore felt that question was being exaggerated and that one should make distinction between what was said officially and what appeared in the papers so far as direct US assistance to Israel was concerned. He went on to state that there remained the question of "indirect participation" of the United States in that the US had given Israel considerable quantities of arms and money.

10. Nasser then moved on to para B of verbal message, saying UAR had made clear its policy re Arab-Israel settlement. If Israel willing to withdraw, UAR willing to accept state of non-belligerency. If Israel unwilling to withdraw, then it not only Nasser's policy but his duty to liberate Egyptian territory occupied by Israel. Nasser asked if his FonOff had shown me Eban letter to Jarring. I replied affirmatively. Nasser said he took this message as indication Israelis "were not very serious." As to the Suez Canal, Nasser said it was well known that this issue was linked to the question of justice to the Palestinian refugees.

11. On para D of verbal message, Nasser disclaimed any request that the US make a special gesture towards the UAR or the Arabs generally. He said that he had told Birdsall his feeling that the US stand at the United Nations had been one hundred percent in favor of Israel. He had told Birdsall that he did not want economic aid from the United States, he wanted justice. He repeated to me now that that was still his position. He preferred justice to aid. He referred favorably in this connection to statements made by President Kennedy to effect US would oppose aggression from any quarter in the Middle East.

12. As to British Security Council resolution,/5/ Nasser recalled that his government had asked through me for assurances of US support for this resolution. GUAR valued subsequent USG assurances and celerity with which they had been given.

/5/See footnote 3, Document 1.

13. Nasser then dwelt at some length on second half of para D of verbal message where it refers to "new period of friendship based on trust" and "tragic suspicions." On "tragic suspicions" he referred to his 1966 conversation with Birdsall which he said was based largely on suspicions created by Mustapha Amin affair. At this point I interposed that I had spent over five years of my life directly concerned with improvement and strengthening of US-UAR relations. I felt that dark suspicions were perhaps the major obstacle. I had discussed this many times with his associate and my good friend, Hassan Sabri El Kholi, and urged that whenever suspicions arose, we should talk them out together fully and frankly. Nasser made approving but noncommittal noises. Nasser then went on to say, "If I told you that it was now possible to move into a new period of friendship based on trust, I would not be myself. It is impossible for me to say that as of today I now have full confidence and trust in US Government. I think we can get these but it needs time. We must work together to build confidence."

14. Nasser denied that he had asked Birdsall to tell President Johnson that Nasser would like to visit the US. It had been Birdsall who raised this point. He said, "Of course, I would like to visit the United States but I know that it would be impossible in the absence of diplomatic relations between us."

15. At this point I said that my government would not agree with some of the statements of substance which President Nasser had made. I had discussed these issues at length, however, with members of his government and I was sure that he was aware of our viewpoint. Nasser said he was.

16. Nasser then turned to President Johnson's written message to him. He said he would like to thank the President for this letter and to express all his best wishes to the President and his family. He hoped we could work for better relations between the two countries based on trust and confidence. He also hoped we could work for the resumption of diplomatic relations which might take some time. He thanked the President also for his verbal message.

17. Nasser said he was always prepared to discuss any question with which the United States wished to deal and that he was "ready to receive Mr. Bergus at any time the United States Government so desired."

18. Comment: I will be pouching details of circumstances under which this meeting was arranged. I have, however, assured GUAR of willingness that Nasser's receiving me would be kept secret./6/

/6/Bergus reported on January 8 that Nasser told Foreign Minister Riad that he was pleased with the tone and content of President Johnson's message and that Johnson had mentioned a possible Nasser visit to the United States. (Telegram 1313 from Cairo, repeated by Rostow to President Johnson on January 9 in White House telegram CAP 80218; Johnson Library, National Security File, Country File, United Arab Republic, Vol. VI, Cables, 8/67-7/68)

Bergus

35. Telegram From the President's Special Assistant (Rostow) to President Johnson in Texas/1/

Washington, January 6, 1968, 1639Z.

/1/Source: Johnson Library, National Security File, Country File, Israel, Eshkol Visit, Memos and Miscellaneous, 1/7-1/8/68. Secret.

CAP 80151. We sent to you in the pouch early this morning two late memos on Eshkol from Dick Helms/2/ without comment. After reflecting on them this morning, I find that they bring the following points into sharper focus:

/2/The CIA memoranda, both dated January 5, have subject lines that read: "Agency Views Regarding the Political Future of Eshkol" [text not declassified]. (Ibid.)

1. More than just seeking a specific number of aircraft, Eshkol may be looking for a firmer commitment to Israel's security. He must understand that security guarantees and treaties are out, but he may seek a guaranteed source of arms. According to Dick's plausible report, the June war destroyed Eshkol's policy of putting out as many support lines as possible. His French and Russian policies are bankrupt, and he now seeks the closest possible tie with us.

2. To seal this relationship, he may come offering to associate Israel with our position in Vietnam.

3. He is apparently willing to acquiesce in our resuming military aid to Jordan. To do otherwise would be inconsistent with his increased fear of the USSR.

If this report is true--and we have to make the normal allowance for the fact that it reflects only one [less than 1 line of source text not declassified] man's opinion--it raises the problem of Eshkol trying to get too close to us. His possible offer to associate with us on Vietnam runs the risk of sharpening the image of Israel as our stooge and driving the wedge further between us and the Arabs. We want to consider whether Eshkol's quiet support wouldn't help you as much while avoiding damage abroad.

It's hard to know how much the Israelis are pushing the Soviet threat merely to justify their case for more arms.

36. Telegram From the President's Special Assistant (Rostow) to President Johnson in Texas/1/

Washington, January 6, 1968, 2333Z.

/1/Source: Johnson Library, National Security File, Country File, Israel, Eshkol Visit, Memos and Miscellaneous, 1/7-1/8/68. Secret; Eyes Only.

CAP 80159. Secs. Rusk and McNamara, Clark Clifford, Luke Battle, and I had lunch today.

Following this memorandum is the consensus of all, as expressed by Sec. Rusk.

In Clark's view the "overriding consideration" must be our avoiding a polarization of the Middle East in which a small Israel, backed by a U.S. with an ambiguous commitment, faces the Arabs, led by extremists and backed by a determined USSR.

The positive elements for Eshkol here are, essentially two, one general, the other specific:

--"We are prepared to see that Israel receives weapons needed to defend itself." This is hedged about in various ways but it is a very important message for Eshkol to take back to his Cabinet in the light of French and Soviet attitudes.

--As for the Phantoms, Bob McNamara can offer 12 month lead time on delivery (or perhaps less) whereas the Israelis are thinking of 24 months. Therefore, they and we really do have time to examine:

--What the French do about Mirages;
--What the Russians do about further deliveries;
--What Jarring can accomplish.

As noted, there would be real advantage in releasing the Hussein message/2/ before Eshkol arrives.

/2/See footnote 3, Document 29.

Sec. Rusk's memorandum/3/ follows.

/3/The original of this memorandum is in the Johnson Library, National Security File, Country File, Israel, Eshkol Visit, Memos and Miscellaneous, 1/7-1/8/68.

Subject: Your forthcoming meeting with Prime Minister Eshkol.

In accordance with your instructions I had lunch today with Secretary McNamara, Walt Rostow, Clark Clifford, and Luke Battle to review the Israeli arms request which will be before you in the course of the visit of Prime Minister Eshkol.

It is our conclusion after a lengthy discussion that the security of Israel cannot be assured by military hardware alone but must involve an arrangement for peaceful existence with the Arab states.

In addition, Soviet penetration of the area cannot be limited by the provision of military hardware alone but necessitates that Israel finds some means of establishing a basis for peace beginning as soon as possible with a step of encouragement to the moderate Arabs in their contest with extremist Arab states.

We concur, after having reviewed the situation, with the recommendation of the original position on arms as set forth on page 5 in Tab A of the papers provided you./4/

/4/See footnote 2, Document 33. Tab A to Rusk's January 5 memorandum to the President listed suggested talking points. Pages 5 and 6 suggested that in discussing the Israeli arms request the President might want to say, in addition to the sentence quoted in Rusk's memorandum that the United States would be prepared to amend the Skyhawk agreement to include an additional 27 aircraft, that the Israeli request for F-4 fighters would be kept under review, and that if the U.S. position changed in the months ahead, an effort would be made to be helpful with regard to lead time.

We emphasize the important first sentence of the recommendations which states "we are prepared to see that Israel receives weapons needed to defend itself, but must avoid arms shipments not warranted by the actual threat." In addition to the points made in the paper, we would like to add, on the basis of Secretary McNamara's assurances, that the lead time for the delivery of F-4 Phantom aircraft could be shortened to twelve months or less rather than the twenty-four months which we assume the Israelis contemplate. The delivery of fifty such planes could be made without serious problems to United States needs based on any situation presently foreseeable once the decision is made by the United States to provide the planes.

We would like to point out that it is highly desirable to avoid a total polarization of the area with the USSR lending full support to an Arab world led by extremists against an Israel with qualified American support.

The United States should continue to avoid being cast in the role of principal supplier of arms to any country in the area. Until such time as an understanding with respect to arms limitations in the area is reached, we consider it essential that there be, to the maximum extent possible, a diversity of suppliers.

We continue to be concerned about the situation with respect to Jordan. A Russian mission including military experts will arrive in Amman on January 9 and undoubtedly a new offer of Soviet arms will be made to King Hussein who is increasingly despondent with respect to his relations with us particularly in connection with arms supplies. Moreover, the King will be attending, as presently planned, the Arab Summit meeting beginning on January 17 when the pressure will be very strong from the radical Arab countries for him to accept Soviet arms in the absence of a United States willingness to continue its traditional role. An arrangement with the Russians could have attractions from a financial point of view given the likelihood that the United Arab Command can arrange financing through Soviet channels for Jordanian purchases, possibly without cost to the Jordanians.

If the response to King Hussein is to have the maximum effectiveness, it should be made prior to the arrival of Prime Minister Eshkol to avoid the charge that will be leveled at the King that the minimum equipment to be released to him grew out of an understanding reached at that meeting and with Prime Minister Eshkol's concurrence. We therefore recommend that you act favorably, if possible today, on the telegram before you in response to King Hussein's latest message on this subject./5/

/5/A handwritten note by Jim Jones apparently gives the President's response to this final recommendation: "OK--We'll act favorable on this altho I'm [sic] think mistake." For the telegram the President approved, see Document 37.

Dean Rusk

37. Telegram From the Department of State to the Embassy in Jordan/1/

Washington, January 7, 1968, 0625Z.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1967-69, DEF 19-6 US-JORDAN. Secret; Immediate; Nodis. Drafted by Houghton on January 2; cleared by Davies, Battle, Paul C. Warnke, Counselor of the Department Robert R. Bowie, and Wotring at the White House; and approved by Rusk.

94729. Ref: Amman's 2831./2/

/2/See footnote 3, Document 29.

1. President has requested following oral message be passed to King Hussein in reply King's message of December 30:

2. "I appreciate the assurances you have given me in your oral message of December 30 with regard to Jordanian procurement of arms from the Soviet Bloc. On our part, we are prepared in principle to resume arms shipments to Jordan and would begin with the following items from the priority requirement list which General Khammash gave to Colonel Jordan in London August 1967:

106 mm rifles
2-1/2-ton trucks
communications equipment
aerial target drone systems
ammunition
and spare parts for previously delivered US equipment.

We welcome General Khammash's contemplated visit to Washington and would expect to discuss with him details (including quantities) of the above shipments and various aspects of the arms question in general. We would hope that he might arrive in Washington around January 10."

3. FYI. We would resume arms shipments to Jordan with the $6.5 million package contained in Amman's 2396./3/ End FYI.

/3/Telegram 2396 from Amman, November 27, 1967, transmitted eight categories of priority requests for military equipment from a list prepared by General Khammash. (National Archives and Records Administration, RG 59, Central Files 1967-69, DEF 12-5 JORDAN)

Rusk

38. Telegram From the President's Special Assistant (Rostow) to President Johnson in Texas/1/

Washington, January 7, 1968, 1330Z.

/1/Source: Johnson Library, National Security File, Country File, Israel, Vol. VIII, Cables and Memos, 12/67-2/68. Secret.

CAP 80169. Herewith Secretary McNamara's views on Israeli aircraft.

I shall have with me today a copy with statistical tables attached./2/

/2/A copy of McNamara's January 7 memorandum to the President includes a 2-page attachment providing a comparison of aircraft held or sought by Israel and the Arab states. (National Archives and Records Administration, RG 59, NEA/IAI Files: Lot 80 D 102, Arms Deals with Israel)

Subject: Aircraft for Israel.

In response to your request of yesterday, here is my assessment of the threat Israel faces, Israel's aircraft requirements, and my recommendations with respect to the Israeli request for A-4 and F-4 aircraft.

The threat to Israel and Israel's response.

Air superiority is crucial to military success in the Arab-Israeli environment. Israel knows this, and assumes the Arabs have learned this lesson. General Weizman, Israeli Air Force, argued here last September that the Arabs are acquiring more and better aircraft from the Soviet Union, and will continue to do so into the 1970s; that they will now be providing better protection for aircraft at existing airfields and will be building new airfields and improving techniques and training; and that the Arab states will now cooperate more efficiently in their military and political efforts against Israel. Israeli representatives continue to press these points. Weizman concluded that Israel needs additional versatile aircraft in order to confront successfully a growing Arab capability, and also to make up Israeli war losses (43 combat aircraft) and to replace certain of Israel's order aircraft. Weizman projected an air force of 250 combat aircraft by the end of 1968 and 350 aircraft in the early 1970s. (Comparisons of Arab-Israeli aircraft capabilities and inventories are attached.)

We agree, by and large, with the Israeli data on current Arab air inventories and on post-war Soviet resupply. And although uncertain, the Israeli numerical projections of Arab (including Algeria and Saudi Arabia) inventories for 1970, totaling 924 aircraft, appear reasonable. The number of aircraft in Arab inventories has never been, however, the principal factor in the Arab-Israeli military equation. Israel always has been numerically inferior. But despite their large numbers of aircraft, the Arabs have never been able to maintain or use these effectively; thus the numbers of aircraft which can be brought to bear effectively against Israel is much smaller than the totals of their inventories. The offensive (attack) capabilities of the Arab aircraft are limited, and considerably inferior to those of Israel. Also, not every Arab state is militarily relevant to the conflict. Saudi Arabia, Iraq and Algeria, for example, cannot bring effective power to bear against Israel. The decisive factor is the superior overall quality in the maintenance, command and control, training, equipment and, especially, personnel of Israel. Their training, organization, technical competence, and will to fight is far superior to the Arabs. This will remain so for the foreseeable future. Although Arab aircraft losses will undoubtedly be fully replaced by the Soviets in coming months, the Arab military forces were decimated and their morale shattered; it will take them a number of years to exceed their pre-war capabilities. Arab territorial losses will make it more difficult in the future to conduct air or ground operations against Israel-the Sinai will surely be demilitarized, even if returned to Egypt.

In sum, the Israeli military position has improved markedly since 4 June. I am sure that the Arabs will learn some lessons from the recent conflict, and that there will be improvements in Arab air forces. They have shown some modest evidence of this already. They are unlikely, however, to make dramatic gains. And Israel's air force is itself improving: the supply of 48 A-4H aircraft is underway, and we have recommended to you the sale of an additional 27 A-4s. Israel would thus be adding over the next 18-24 months at least 75 new attack aircraft to its inventory, more than overcoming, quantitatively and qualitatively, Israel's June losses. Israel will have by the end of 1969, an inventory of over 225 combat aircraft. I believe this is presently adequate for Israel to maintain its security. The Joint Chiefs have stated: "The Israeli capability to prevail in any renewal of hostilities, even without the Mirages, is considered assured for at least the next 18 months. Release of the 27 additional A-4s would further raise this level of assurance."

Further, although the delivery of the 50 new French Mirage V remains uncertain, there is a reasonable possibility that France will deliver these as earlier promised. Israel would then be able to phase out some older aircraft, and have an air force clearly superior to the Arabs. This would preserve Israel's margin of superiority into the 1970s without further aircraft from us. Israel further hopes to buy or fabricate 100 F-1 French aircraft when this airplane is produced (1972-4).

A-4H Skyhawks.

We agreed in March, 1966 to accede to the Israeli request of the previous October for attack aircraft, to supplement its inventory of high-performance French fighters and fighter-bombers./3/ On 2 June 1966 a specific agreement provided for the sale of these 48 new production A-4 attack aircraft, plus support, for $70.6 million to be credit-financed over ten years at 3-1/2 percent interest./4/ Delivery was to be in Israel in flyable condition, commencing with four in December 1967 (which have been delivered), and completed by December 1968. These terms and delivery schedules are being adhered to. The agreement was to be secret. The Israelis agreed to look primarily to Europe for arms and noted our expectation that they would request no additional US military aircraft for at least five years.

/3/Regarding the March 1966 agreement, see Foreign Relations, 1964-1968, vol. XVIII, Document 283.

/4/The text of this agreement is in the National Archives and Records Administration, RG 59, NEA/IAI Files: Lot 80 D 102, Arms Deals with Israel.

Israel now wishes 27 additional A-4H Skyhawks and I recommend we accede to this request. To minimize the possible impact, we propose to amend the 1966 agreement to increase the number sold by 27 (for a total of 75 A-4H's). We prefer to sell these for cash. Military sales credit funds have been sharply curtailed and Israel's financial position permits a straight cash sale. If some credit seems desirable, however, we suggest offering to finance up to $20 million of the A-4H program (which will probably total between $30 and $35 million for the 27 aircraft plus support) at 5-1/2 per cent interest. If necessary, we could finance the whole sale, but at the cost of reducing the credit available for other sales, including any for Israel.