Rabin and Bush, Meeting in Maine, Could Repair US-Israeli Relations

IF June's national elections were a watershed for Israel domestically, next week's summit between President Bush and Israel's new Prime Minister Yitzhak Rabin should constitute a turning point diplomatically.

"Fundamentally the Rabin visit provides an opportunity to turn a new page in US-Israeli relations," says a Washington-based Middle East analyst.

Relations between the United States and Israel have deteriorated over the past four years, strained primarily by disagreements between the Bush administration and former Prime Minister Yitzhak Shamir over ways to advance the Middle East peace process.

With Mr. Shamir now out of the picture, Monday's meeting at the president's home in Kennebunkport, Maine, offers Mr. Rabin and Mr. Bush a chance to repair the relationship and give the peace talks, which will resume later this month, a needed boost.

The agenda will be dominated by old issues, including the peace process and Israel's request for a $10 billion in loan guarantees to help settle immigrants from the former Soviet Union. But with Rabin in charge, old issues are likely to be dealt with in a new way. "The negotiations will be conducted in an entirely different atmosphere," predicted Israeli foreign minister Shimon Peres in an interview earlier this week in Jerusalem.

One drag on the peace process has been the failure of the US and Israel, under Shamir, to agree on the basic goals of the talks. Israeli sources say one of Rabin's primary goals will be to come to a strategic understanding with the US on plans for an interim autonomy regime for the occupied West Bank and Gaza Strip, the immediate object of negotiations between Israel and Palestinians.

Prospects for early movement are likely to be enhanced by an expected Israeli proposal that a council of 13 to 15 Palestinians be elected to help administer the territories during the autonomy period.

Rabin will also want to talk about strategy for the other bilateral talks, between Israel and Syria, Lebanon, and Jordan.

Bush extended the invitation to Rabin immediately after the election. Since then Secretary of State James Baker III has traveled to the region to revive the peace process, which began last October but has since languished.

In one of a number of promising developments since June, Rabin ordered a partial freeze on settlements in the West Bank and Gaza, then traveled to Cairo for a summit meeting with Egyptian President Hosni Mubarak.

Under the partial freeze Israel would complete some housing starts in the territories and allow limited "natural growth" in the Jordan Valley and the Jerusalem area. The Rabin proposal falls short of a longtime US demand for a complete construction halt, which the administration had cited as a precondition to underwriting the $10 billion loan guarantees.

But eager to improve relations with Israel in an election year and convinced that Rabin is serious about making a deal with his Arab neighbors, Bush appears ready to settle for less than a full loaf.

Bush is expected to authorize the loan guarantees if Rabin agrees to strict limits on natural growth and on the number of housing units now under construction that can be completed.

The Arab parties had threatened to abandon the peace talks if the loan guarantees were given without a halt to all building, but they may reconsider if the limits are strict enough, analysts say.

In an effort to make the loan guarantees more palatable at home in an election year, US officials are said to be pressing Israel to spend half the money borrowed against the guarantees on US-made products.

But "this request is a contradiction to America's own policy," objects Mr. Peres. "They want most of the money to be used by private enterprise. How can you force private enterprise to buy American?"

Bush will also be looking to Rabin for clear assurances that the money will not be used in the territories.

"The Americans would like a formula about spending the money which will satisfy their wish that the money be used as we have declared, for the absorption of immigrants, not for new construction [in the territories]," Peres says. "We have to find common language which I hope we shall. There are still many problems open to negotiation."

In the runup to next week's meeting, Yaacov Frenkel, head of Israel's central bank, has been in Washington discussing the technical aspects of the loan guarantees.

In separate discussions with Defense Secretary Richard Cheney, Rabin will seek to complement a political warming trend by reaffirming that strategic ties cemented during the cold war remain strong.