Close Allies Adjust to New Realities

FOLLOWING a week of angry exchanges between the United States and Israel over loan guarantees and arms sales, there are several ways to size up their increasingly troubled relationship.

The optimistic view is that recent tensions, epitomized by President Bush's rejection Tuesday of a plan to underwrite a $10 billion loan for Israel, are the product of transient circumstances. Once Mr. Bush or Israeli Prime Minister Yitzhak Shamir passes from the scene, the theory goes, harmony between the old allies will be restored.

A more pessimistic view is that recent strains, which this week were heightened by allegations of improper Israeli sales of US military technology, reflect deeper trends that permanently threaten years of friendship.

Somewhere in the middle is the perception of most analysts, who see the week's events as part of a limited adjustment made inevitable by the Gulf war and the end of the cold war. Alliance still strong

While no longer at the artificial high of the Reagan years, when the Jewish state was considered a US "strategic ally," say these analysts, the relationship is hardly in tatters. Despite the recent proliferation of friction points, they add, it remains important to both sides and the relationship enjoys the solid, if somewhat diminished support of both Congress and the US public.

Moreover, with $10 million flowing to Israel each day, relations between Washington and Jerusalem are still buttressed by the largest bilateral aid giving program in history - a circumstance that is not likely to change any time soon despite the recent wear and tear to which the alliance has recently been subjected.

"We have a flat out, frank, upfront disagreement with Israel because the way it's proceeding on settlements [in the Israeli-occupied West Bank] is destructive to the peace process," says Richard Murphy, who served as assistant secretary of state for Near Eastern and South Asian affairs during the Reagan administration. "But the ties that bind are still very real. There's no basis for speculating that the US is turning its back or pulling the plug on Israel." Relationship has changed

"It's like going from a super-special, privileged relationship to a normal, close relationship" more typical of the Nixon and Carter administrations, adds Brookings Institution scholar William Quandt.

Analysts note that the US-Israeli relationship has never been trouble-free. Even during the Reagan presidency, when ties were strongest, the US was angered by revelations of an Israeli spy operation and reports of secret Israeli arms sales to Iran.

But strains were always subordinated to the deeper need for cooperation in the context of the cold war. Since then the relationship has changed in important ways. Sustained press coverage of the Israeli's sometimes excessive response to the Palestinian uprising has weakened public support for the Jewish state.

Meanwhile, the end of the cold war has diminished Israel's strategic value to the US, forcing a rethinking of mutual interests.

More recently, the relationship has been taxed by the contentious debate over Jewish settlements that has been waged between the two countries' strong-willed leaders, leading to Bush's rejection of a $10 billion loan guarantee sought by Israel to absorb a wave of immigrants from the former Soviet Union.

"The President and [Secretary of State James] Baker are convinced that to guarantee the loans without a settlements freeze would be to finance the destruction of the peace process they worked so hard to design," says Mr. Murphy.

The erosion of trust was also demonstrated this week in the aftermath of news reports, based on unnamed administration sources, that Israel has been selling sensitive US weapons technology to third parties, including China and South Africa.

In the past, such allegations, which have been angrily denied by Israel, would have been the subject of private consultations between the two governments.

In the tense atmosphere that now prevails, the reports have generated bitter public exchanges, with the US accusing Israel of impropriety and Israel accusing the US of a deliberate smear campaign against the Jewish state.

"These stories have surfaced in the press from time to time in the past," says Marvin Feuerwerger of the Washington Institute for Near East Policy. "What's different today is that the administration has not expressed any support for the Isreali point of view. It's leaving Israel to hang out to dry on this one."

"This administration has essentially reached strategic judgment that Shamir is bad news for the peace process and stability in the Middle East and is not making efforts to smooth over the irritants," says Dr. Quandt. "They're holding their breath and saying maybe Shamir is on the ropes." Rabin could help ties

Many other analysts agree that the US-Israeli relationship could be reinvigorated if, after national elections in June, Shamir were replaced or joined in a new national unity government by former defense minister Yitzhak Rabin.

As ambassador to Washington from 1968 to 1973, Rabin helped forge the special relationship with the US that has existed since. As prime minister he would devote more time to managing the crucial Washington relationship, analysts predict.

As one who believes Israel's security can be maintained without holding on to the entire West Bank, he would also be a man the US could do business with more easily.