Who Pays for the Palestinian Occupation?

Jeanne Butterfield

Revision History
  • April-May 1992Newspaper: Funded by Syracuse University students.
  The Alternative Orange: Vol. 1 No. 5 (pp. 8-9)
  • August 27, 2000Webpage: Sponsored by the ETEXT Archives.
  DocBook XML (DocBk XML V3.1.3) from original.

[Excerpted and edited from Z Magazine, December 1991, by the Post-Colonial Forum]

Whatever the outcome of the U.S. brokered Middle East peace conference in Madrid, one thing is certain that the Israeli military occupation over 1.7 million Palestinians in the West Bank and Gaza is not about to end. Fed by an unprecedented wave of Soviet Jewish immigration, Israeli settlement activities in the occupied Palestinian territories are expanding as never before. “Settlement momentum is unstoppable,” Israeli Prime Minister Shamir proclaimed recently. “All the territories that we have available for construction will be populated by Jews up to the horizon’s edge.” A great big Israel, stated Shamir, is needed to absorb the hundreds of thousands of new immigrants.

Israel’s request for $10 billion in housing loan guarantees to aid in the “absorption” of the new Soviet Jewish immigrants has touched off a political debate in the U.S. that has finally begun to reveal the nature and extent of U.S. financial support for Israeli occupation. And when the question comes back around for congressional decision in early 1992, its outcome may determine the shape and duration of an occupation that is now in its 25th year.

The Debate Begins With “Linkage”

In early September, despite requests from the Bush administration that it delay, the Israeli government presented its request to the U.S. to provide $10 billion in housing loan guarantees over the next five years. Declaring that this question was a high priority for the Jewish community, the pro-lsraeli lobby rolled up its sleeves and prepared the most massive lobbying effort it has ever mounted. Major Jewish organizations joined ranks and formed a “joint absorption loan guarantee task force” in Washington, DC to organize support for the loans. And on September 12, AIPAC organized a national lobby day, flying in 1,000 constituents to work Capitol Hill.

All indications were that the request would be viewed favorably by Congress. But the Bush administration had other concerns. The “peace process” that Bush and Baker had been working so hard to implement in the wake of the Gulf war seemed precarious. On September 6, Bush asked Congress to delay action on the Israeli request for 120 days in order to “give peace a chance.” While Bush claimed that he was not “linking” the loans to any freeze in Israeli settlements, Secretary of State Baker had himself said in congressional testimony in the spring that Israeli settlements represented a major obstacle to peace.

The press quickly took up the linkage theme, and the Chicago Tribune, New York Times, and Washington Post all carried lead editorials not only supporting Bush’s request for a delay, but maintaining that indeed the Israeli government’s settlement policy was at the heart of the loan guarantee debate. “This policy directly compromises both the atmosphere of the [peace] conference and the geographic possibility for trading land for peace.” (New York Times, September 17, 1991). An ABC news poll conducted in mid-September reported an astounding 85 percent support for the President’s request for a delay.

Peace and justice groups and religious communities from every spectrum of the rainbow opposed the loan guarantees, clearly seeing that the issue was inextricably linked to Israel’s rapidly expanding settlement activity. If U.S. funds continued to pour into Israel without conditions, Israel could continue to refuse to negotiate “land for peace” and could complete the de facto annexation of the West Bank and Gaza Strip. Stopping the loan guarantees, or putting conditions on them, could provide the leverage to insist that Israel freeze the settlements, end the occupation, and negotiate the terms for a just and lasting peace with the Palestinian people.

The Israeli Peace Movement Is Divided

The most progressive sector of the Israeli peace movement weighed in early in the debate. In a June interview, Mikado Warshavsky, founder and director of the Alternative Information Center in Jerusalem, stated, “We need to make the American people understand that by providing material support to Israel, they are not only harming the Palestinians—they are harming themselves and prospects for any kind of meaningful peace in this world.”

In an open letter circulated to Congress in late July, several leading Israeli academics and activists including Matti Peled, Yossi Amitay, Adam Keller, Yael Lottan, and Ruhama Marton told Congress that humanitarian aid to new immigrants should not be turned against the principle of “Land for Peace.”

On the other hand, Yossi Sarid, a member of the Israeli Knesset from the Ratz Party, said:

“...in practice, the American government funded the policy of occupation with huge sums given to both Labor and Likud governments [over the past 24 years of occupation]. Without outside sources of funding, the settlements in the territories could not have been built.... The United States has regained its voice... with the observation that the peace process and the settlement process are connected by their diametrically opposed effects. If the settlements continue, there will not be peace; and if there is peace, there will not be settlements. Peace talks cannot progress as long as new settlements are being established or existing settlements enlarged.”

The Jewish peace groups in the U.S. largely echoed the stand taken by Warshavsky, Peled, and the signers of the open letter. The International Jewish Peace Union and the New Jewish Agenda has long called for an end to aid for occupation and opposed the loan guarantees.

Finally, on September 12, the day that AIPAC lobbyists descended on Capitol Hill to promote the loan guarantees, 50 NGOs and associated individuals placed an ad in the Washington Post. The signers included George Crockett, former member of Congress, Ray Davis of the DC Student Coalition Against Apartheid and Racism, the National Jobs With Peace Campaign, the National Mobilization for Survival, Clergy and Laity Concerned, the Washington Peace Center, Women’s Strike for Peace, the Unitarian-Universalist Association of Congregations, along with Palestine Solidarity Committee and other Middle East, Jewish, Palestinian, and Arab American organizations and individuals. The ad concluded, “We oppose these loan guarantees that would perpetuate illegal settlement activity, impede substantive peace negotiations, and facilitate the de facto annexation of occupied Arab territories.”

In late September, Congress was forced to accept Bush’s request for a delay and indicated that it would deal with the loan guarantee request when it reconvened in January. The press continued to write about the nature and extent of U.S. aid to Israel. Bush himself, in defending his request for a delay, stated at his September 12 press conference “...during the current fiscal year alone, and despite our own economic problems, the United States provided Israel with more than $4 billion in economic and military aid, nearly $1,000 for every Israeli man, woman, and child, as well as with $400 million in loan guarantees to facilitate immigrant absorption.”

Israeli Settlement Policy And Practice

At the heart of the debate is the question of Israeli settlement policy. With the opening up of Jewish emigration from the USSR in 1988, the Shamir government saw a golden opportunity. The influx of Soviet Jews would swell the Israeli population (currently at 4.5 million, including nearly I million Palestinian Arabs) and allow it to rapidly expand its colonizing settlements in the occupied Palestinian territory of the West Bank, Gaza Strip, East Jerusalem and Golan Heights. This would create an irreversible Israeli claim to the remaining territory that by rights and by original UN mandate was to have been an independent Palestinian state.

The settlements are clearly illegal under international law. The Fourth Geneva Convention of 1949 established the international standards governing the behavior of an occupying power and provided for the protection of the civilian population living under occupation. Both the United States and Israel are signatories to the Fourth Geneva Convention. Article 49 of the Convention explicitly states, “The Occupying Power shall not deport or transfer parts of its own civilian population into the territory it occupies.”

Israeli settlements, built on expropriated Palestinian land, now number more than 200. The land on which they sit, and the land which has been expropriated to build the infrastructure of roads, electrical grids, security zones, and military encampments which support and protect them, now totals nearly 70 percent of the entire West Bank and 50 percent of the Gaza Strip. Settlers now number 239,000 in the West Bank, Gaza, and East Jerusalem—13 percent of the entire Palestinian population of 1.7 million.

The Israeli settlements are for Jews only—no Palestinian can rent, buy, or live in a settlement. The Israeli Jews in the settlements live under a separate system of laws and regulations—they are subject to Israeli law, while Palestinians live under military occupation and are subject to military orders. The system extends even to license plates. Israeli settler cars bear yellow plates, while West Bank Palestinian cars carry blue plates.

The result would be three Palestinian “zones,” in effect Palestinian Bantustans, in the north (Nablus), the middle (Ramallah), and the south (Hebron). The plan includes the construction of 24,000 new housing units throughout the West Bank, Gaza, and East Jerusalem. Israel states that it plans to “settle” another 100,000 Jewish citizens in the illegal settlements in the next year or two, bringing the total settler population to over 300,000 in a short time.

The settlements are connected by their own separate roads and electrical grids and serviced by their own water lines. A whole separate infrastructure is under construction which bypasses Palestinian towns and villages and superimposes a “Jewish-Israeli-only” grid on the whole of the West Bank and Gaza.

Israeli settlement policy is also designed to erase the green line, Israel’s 1967 border with the West Bank. In a plan referred to as the “star plan,” the government intends to build 12 new Jewish towns in a north/south line at the very edge of the green line. These new towns are positioned so that they are paired with illegal West Bank settlements just over the border. The plan is to create a series of expanding urban blocks which will in effect eliminate the green line.

In addition to the star plan, Israel seems determined to destroy 120 Palestinian villages inside Israel which have remained “unrecognized” under Israel’s planning process. In what may be the beginning of the process, 96 Palestinian residents of the village of Ramya, near the Israeli “development town” of Carmiel in the Galilee, have been notified that they must leave and demolish their homes so that apartment complexes for the new Soviet Jewish immigrants can be built on their land. While a court order has delayed the destruction of Ramya for two months (until the end of November), the mayor of Carmiel has asserted, “There is a price for the Judaization of the Galilee.”

Soviet Jews Are Pawns

Soviet Jewish Immigration has been a dream come true for Shamir and the Likud government. In the 10 years between 1980 and 1989, only 87,000 new immigrants arrived in Israel. About 28,000 of these were from the Soviet Union. Israel could easily absorb these new immigrants and provide housing, job training, and education without straining the economy too badly. Settlement in the West Bank and Gaza grew at a relatively slow pace as well. The settler population nearly doubled in size over the decade, topping 200,000 by 1990. But 110,000 of these settlers lived in the huge apartment colonies surrounding East Jerusalem. Those in the more remote areas of the West Bank and Gaza numbered only about 90,000.

In 1990 the situation changed dramatically. Nearly 200,000 immigrants arrived in Israel, 90 percent from the Soviet Union. As a result of changes in Soviet emigration policy and the unavailability of open doors anywhere else in the world, Soviet Jews who wanted to leave were forced to “choose” Israel. The massive influx of new immigrants quickly resulted in an economic crisis in Israel. Absorption packages, subsidies, housing, and jobs were in short supply. Israel began constructing housing at a rapid pace—not in Israel, but in the occupied Palestinian territories. While Soviet Jews were not forced to locate there, the massive housing crisis in Israel propelled huge numbers of Israeli citizens and many new immigrants into the West Bank Gaza, and Golan settlements. Current construction plans will result in 15,000 new units of housing in the West Bank and Gaza, bringing the settler total to over 300,000 within a year and to half a million in the next 2 to 4 years. Such “facts,” Israel believes, will make the establishment of a Palestinian state impossible.

Soviet Jewish immigrants continue to face a severe housing shortage and skyrocketing unemployment as they arrive in Israel. As many as 80 percent of the new immigrants remain unemployed. As word gets back to the Soviet Union, these conditions have led to a drop-off in the number of immigrants arriving in Israel. The flow of 20,000 per month has now slowed to less than 7,000 per month. The fact remains that the vast majority of Soviet Jews do not wish to immigrate to Israel. Given a choice over 90 percent would choose to go to the U.S. or Western Europe. But Soviet Jews have not had much choice.

The Soviet Union is now issuing passports to all of its citizens. Soviet Jews can therefore apply for visas for other countries besides Israel. Those already in Israel are attempting to get Soviet passports under the new Soviet law, which would enable them to leave Israel. New immigrants are not entitled to an Israeli passport for one year. After that time Soviet Jews are not given Israeli passports until they have repaid the money Israel spent on their resettlement. Since most remain unemployed, few can pay back these “loans.” They remain captive pawns in Israel’s game of colonizing Palestinian territory.

Contrary to public perception, the U.S. has never lowered the number of refugee visas available to Soviet refugees. In 1988, when the Soviet Union first began to lift its restrictions on Jewish emigration, a little over 20,000 people were allowed to leave and 95 percent of these came to the U.S. In 1989, the U.S. ceiling was raised to 43,500 for Soviets, out of a worldwide total refugee ceiling of 85,000. But the lifting of restrictions in the Soviet Union meant that more than 100,000 applied for admission to the U.S. in 1989. The U.S. refugee numbers could not meet that demand. In addition, the U.S. had changed its policy regarding refugee status. Previously, any Soviet citizen was considered to have an automatic claim of persecution, and thus automatically qualified as a “refuge” according to U.S. law. In 1988, this policy changed. Soviets, whether Jewish or not, now have to demonstrate that they have a “well-founded fear of persecution,” just like any other person claiming refugee status in any part of the world.

The U.S. world wide quota must accommodate refugees from every corner of the globe. The proportion of refugee visas going to Soviet Jews is already extraordinarily high. Should the U.S. meet the increased demand? Refugee advocates differ on this question. Some argue that since the U.S. was so instrumental in forcing the Soviet Union to lift its restriction, it has a special responsibility to accommodate the new immigrants. In addition, if the U.S. does not allow these Soviet Jews to enter, they will continue to be used by the Israeli government to displace and dispossess Palestinians. Others argue that Soviet Jews face less political/religious persecution than other refugees elsewhere in the world—Central America, Southeast Asia, Africa—and that assigning more of the worldwide quota to Soviets is not fair.

Settlements And Aid: What Is U.S. Policy?

In 1991, Congress released $400 million in housing loan guarantees for Israel. Foreign aid continues at the level of $3.1 billion per year, supplemented by an additional $650 million in military aid at the end of the Gulf war and by numerous other supplemental grants and write-offs, bringing the actual figure to at least $4 billion per year.

The issue of the settlements and U.S. aid began to be of increasing concern to U.S. Legislators last spring, when Israel seemed to announce a new settlement on the eve of each of Baker’s visits to the region.

In recent weeks, Peace Now has demonstrated that more than $500 million was spent by Israel on illegal settlements in 1990. According to Israel’s Central Bank, Israel’s proposed $39 billion budget for 1992 includes $2 billion for Jewish settlements and related infrastructure in the occupied Palestinian territories.

U.S. aid to Israel, whether it be military and economic aid or housing loan guarantees, is given outright with no strings attached and no oversight. It is impossible to determine which U.S. dollars eventually end up paying for Israeli settlements or for other aspects of the occupation However, it is possible to say without a doubt that U.S. aid is essential to Israel. According to Yossi Sarid, a member of the Israeli Knesset from the Ratz Party:

“In theory, the Israeli government was obligated not to channel American aid into construction in the occupied territories. In practice, however, even if the building funds did not come from the same pocket, they were from the same pair of pants....”

Through a simple circular movement, dollars flowed to security, education and welfare while shekels freed from these budgets flowed into the construction of at least 200 settlements. Thus, the Israeli government ‘deceived’ the American government, which agreeably played dumb.”

Housing Loan Guarantees Are Not Free

Israel has argued that the housing loan guarantees will not cost the U.S. taxpayers a cent—they are merely guarantees, and Israel surely will not default on the loans. Israel’s own budget deficit seems to suggest the strong possibility of default, as does Israel’s low credit rating. Even if Israel never defaults, the loan guarantees still bear a big price tag for the U.S. taxpayer. Careful preliminary estimates are that $800 million to $1 billion will have to be “set aside” for the Israeli loan guarantees of $10 billion. So in a “best case” scenario, with no Israeli default, the foreign aid budget will have to include nearly $1 billion in a set-aside in the U.S budget for the Israel loans. The entire U.S. foreign aid budget is just over $15 billion. Israel is already allocated $3.1 billion of that amount. Add another $1 billion and Israel would be consuming nearly 30 percent of the entire worldwide foreign aid package—a country with 1 percent of the world’s population.

Funding Occupation

The $10 BILLION in housing loan guarantees will be considered by Congress in January 1992. U.S. taxpayers seem loathe to allocate $10 billion in loan guarantees for housing, job training, and infrastructure for Israelis when those very things are desperately needed right here at home. The $10 billion request stands in stark contrast to the $5.2 billion for an extension of 20 weeks of unemployment benefits that Bush refused to approve. The $10 billion seems like a luxury to the 37 million Americans who have no health insurance, and who drive on the 61 percent of the nation’s roads which are badly in need of repair. And the $10 billion looks obscene to the 3 million homeless people in the United States, or to the 27 million who live in substandard housing. Who will pay the bill for the 4.2 million units of affordable housing that are desperately needed right here in the U.S.?

Clearly, the small fraction of the overall U.S. budget that goes to foreign aid is not going to solve the social and economic crisis at home. Total U.S. foreign aid of $15 billion is a small fraction compared to the $300 billion U.S. defense budget. But an infusion of $10 billion in housing loan guarantees to Israel, on top of over $4 billion in annual foreign aid, makes the U.S. the biggest funder of occupation in the world. It is clear that without U.S. funding the settlements would stop and the occupation would have to end.

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