Myths & Facts Online

U.S. Middle East Policy

By Mitchell G. Bard

“The creation of Israel resulted solely from U.S. pressure.”
“The United States favored Israel over the Arabs in 1948 because of the pressures of the Jewish lobby.”
“Most Americans oppose a close U.S. relationship with Israel.”
“U.S. policy has always been hostile toward the Arabs.”
“The United States has supported Israel automatically ever since 1948.”
“The U.S. has always given Israel arms to insure it would have a qualitative edge over the Arabs.”
“U.S. aid in the Middle East has always been one-sided, with the Arabs getting practically nothing.”
“The U.S. has always given Israel billions of dollars without expecting repayment.”
“Israel continues to demand large amount of economic aid even though it is now a rich country that no longer needs help.”
“Israel boasts that it is the fourth strongest nation in the world, so it certainly doesn't need U.S. military assistance.”
“U.S. military aid subsidizes Israeli defense contractors at the expense of American industry.”
“U.S. loan guarantees provided Israel with billions of dollars from American taxpayers that was used to build settlements in the West Bank and Gaza Strip to house Soviet Jews.”
“Israel was never believed to have any strategic value to the United States.”
“Israelis are able to live comfortably because of American aid, and they see no reason to reform their country's economic system.”
“Israel takes protectionist measures that create impediments to American trade.”
“The employment of Jonathan Pollard to spy on the United States is proof that Israel works against American interests.”
“Israel tricked the United States into selling arms to Iran in exchange for hostages, and helped divert the profits to the Contras.”
“U.S. dependence on Arab oil has decreased over the years.”
“The major American oil companies never take positions on the Arab-Israeli conflict.”
“The United States and Israel have nothing in common.”
“America's support of Israel is the reason that terrorists hijacked four airplanes and attacked the World Trade Center and Pentagon on September 11, 2001.”
“The hijacking of four airliners in one day on September 11, 2001, was an unprecedented act of terror.”

MYTH

“The creation of Israel resulted solely from U.S. pressure.”

FACT

When the UN took up the question of Palestine, President Harry Truman explicitly said the United States should not "use threats or improper pressure of any kind on other delegations."¹ Some pressure was nevertheless exerted and the U.S. played a key role in securing support for the partition resolution. U.S. influence was limited, however, as became clear when American dependents like Cuba and Greece voted against partition, and El Salvador and Honduras abstained.

Many members of the Truman Administration opposed partition, including Defense Secretary James Forrestal, who believed Zionist aims posed a threat to American oil supplies and its strategic position in the region. The Joint Chiefs of Staff worried that the Arabs might align themselves with the Soviets if they were alienated by the West. These internal opponents did a great deal to undermine U.S. support for the establishment of a Jewish state.²

Although much has been written about the tactics of the supporters of partition, the behavior of the Arab states has been largely ignored. They were, in fact, actively engaged in arm-twisting of their own at the UN trying to scuttle partition.³

MYTH

“The United States favored Israel over the Arabs in 1948 because of the pressures of the Jewish lobby.”

FACT

Truman supported the Zionist movement because he believed the international community was obligated to fulfill the promise of the Balfour Declaration and because he believed it was the humanitarian thing to do to ameliorate the plight of the Jewish survivors of the Holocaust. He did not believe the rights of the Arabs should or would be compromised. A sense of his attitude can be gleaned from a remark he made with regard to negotiations as to the boundaries of a Jewish state:

The whole region waits to be developed, and if it were handled the way we developed the Tennessee River basin, it could support from 20 to 30 million people more. To open the door to this kind of future would indeed be the constructive and humanitarian thing to do, and it would also redeem the pledges that were given at the time of World War I.⁴

The American public supported the President's policy. According to public opinion polls, 65% of Americans supported the creation of a Jewish state. During the third quarter of 1947 alone, 62,850 postcards, 1,100 letters and 1,400 telegrams flooded the White House, most urging the President to use American influence at the UN.⁵

President Truman with David Ben-Gurion and Abba Eban

This public support was reflected in Congress where a resolution approving the Balfour Declaration was adopted in 1922. In 1944, both national parties called for the restoration of the Jewish Commonwealth and, in 1945, a similar resolution was adopted by Congress.

Rather than giving in to pressure, Truman tended to react negatively to the "Jewish lobby." He complained repeatedly about being pressured and talked about putting propaganda from the Jews in a pile and striking a match to it. In a letter to Rep. Claude Pepper, Truman wrote: "Had it not been for the unwarranted interference of the Zionists, we would have had the matter settled a year and a half ago."⁶ This was hardly the attitude of a politician overly concerned with Jewish votes.

MYTH

“Most Americans oppose a close U.S. relationship with Israel.”

FACT

Support for Israel is not restricted to the Jewish community. Americans of all ages, races and religions sympathize with Israel. This support is also nonpartisan, with a majority of Democrats and Republicans consistently favoring Israel by large margins over the Arabs.

The best indication of Americans' attitude toward Israel is found in the response to the most consistently asked question about the Middle East: “In the Middle East situation, are your sympathies more with Israel or with the Arab nations?” The organization that has conducted the most surveys is Gallup. Support for Israel in Gallup Polls has remained consistently around the 50 percent mark since 1967.

Some people have the misperception that sympathy for Israel was once much higher, but the truth is that before the Gulf War the peak had been 56 percent, reached just after the Six-Day War. In January 1991, sympathy for Israel reached a record high of 64 percent, according to Gallup. Meanwhile, support for the Arabs dropped to 8 percent and the margin was a record 56 points.

In 54 Gallup polls, going back to 1967, Israel has had the support of an average of 45 percent of the American people compared to just over 12 percent for the Arab states/Palestinians. Americans have slightly more sympathy for the Palestinians than for the Arab states, but the results of polls asking respondents to choose between Israel and the Palestinians have not differed significantly from the other surveys.

The most recent poll, reported by Gallup in February 2001, found that sympathy for Israel was 51 percent compared to only 16 percent for the Palestinians. This was the highest figure for each since August 1991 and still below the all-time high level of support for Israel during the Gulf War. The results of that poll were somewhat surprising because the survey was taken in the midst of a major outbreak of violence between Israelis and Palestinians and just before the expected election of "hardline" Likud politician Ariel Sharon.

Since 1998, roughly three-fourths of respondents have said the United States should take neither side in the conflict, but those who do pick a side overwhelmingly choose Israel (15-17% vs. 1-2% for the Palestinians' side). More than three-fourths of Americans also believe Palestinian-Israeli peace is somewhat or very important to the United States.

Polls also indicate the public views Israel as a reliable U.S. ally, a feeling that grew stronger during the Gulf crisis. A January 1991 Harris Poll, for example, found that 86 percent of Americans consider Israel a “close ally” or “friendly.” This was the highest level ever recorded in a Harris Poll. In March 1991, an ABC/Washington Post poll reported that 69 percent of Americans gained respect for Israel because of the war.

MYTH

“U.S. policy has always been hostile toward the Arabs.”

FACT

Arabs rarely acknowledge the American role in helping the Arab states achieve independence. President Wilson's stand for self-determination for all nations, and the U.S. entry into World War I, helped cause the dissolution of the Ottoman Empire and stimulate the move toward independence in the Arab world.

The Arabs have always asserted that Middle East policy must be a zero-sum game whereby support for their enemy, Israel, necessarily puts them at a disadvantage. Thus, Arab states have tried to force the United States to choose between support for them or Israel. The U.S. has usually refused to fall into this trap. The fact that the U.S. has a close alliance with Israel while maintaining good relations with several Arab states is proof the two are not incompatible.

 The U.S. has long sought friendly relations with Arab leaders and has, at one time or another, been on good terms with most Arab states. In the 1930s, the discovery of oil led U.S. companies to become closely involved with the Gulf Arabs. In the 1950s, U.S. strategic objectives stimulated an effort to form an alliance with pro-Western Arab states. Countries like Iraq and Libya were friends of the U.S. before radical leaders took over those governments. Egypt, which was hostile toward the U.S. under Nasser, shifted to the pro-Western camp under Sadat.

Since World War II, the U.S. has poured economic and military assistance into the region and today is the principal backer of nations like Jordan, Saudi Arabia, Morocco, Egypt and the Gulf sheikdoms. Although the Arab states blamed the U.S. for their defeats in wars they initiated with Israel, the truth is most of the belligerents had either been given or offered American assistance at some time.

On occasion, the U.S. has appeared to condone Arab aggression against other Arabs. In 1963, for example, the U.S. recognized the puppet regime set up by the Egyptians in Yemen. In 1991, while rolling back Saddam Hussein's aggression in the Gulf, the Bush Administration looked the other way while Syria completed its virtual annexation of Lebanon.

Whereas Israel has only been able to rely on the United States for assistance, the Arab states could always count on a variety of Western countries as well as the Soviet Union and its allies.

MYTH

“The United States has supported Israel automatically ever since 1948.”

FACT

The United States has been Israel's closest ally throughout its history; nevertheless, the U.S. has acted against the Jewish State's wishes many times.

The U.S. effort to balance support for Israel with placating the Arabs began in 1948 when Truman showed signs of wavering on partition and advocating trusteeship. After the surrounding Arab states invaded Israel, the U.S. maintained an arms embargo that severely restricted the Jews' ability to defend themselves.

Ever since the 1948 war, the U.S. has been unwilling to insist on projects to resettle Arab refugees. The U.S. has also been reluctant to challenge Arab violations of the UN Charter and resolutions. Thus, for example, the Arabs were permitted to get away with blockading the Suez Canal, imposing a boycott on Israel and committing acts of terrorism. In fact, the U.S. has taken positions against Israel at the UN more often than not, and did not use its Security Council veto to block an anti-Israel resolution until 1972.

Perhaps the most dramatic example of American policy diverging from that of Israel came during the Suez War when President Eisenhower took a strong stand against Britain, France and Israel. After the war, U.S. pressure forced Israel to withdraw from the territory it conquered. David Ben-Gurion relied on dubious American guarantees that sowed the seeds of the 1967 conflict.

At various other times, American Presidents have taken action against Israel. In 1981, for example, Ronald Reagan suspended a strategic cooperation agreement after Israel annexed the Golan Heights. On another occasion, he held up delivery of fighter planes because of unhappiness over an Israeli raid in Lebanon.

In 1991, President Bush held a press conference to ask for a delay in considering Israel's request for loan guarantees to help absorb Soviet and Ethiopian Jews because of his disagreement with Israel's settlement policy. In staking his prestige on the delay, Bush used intemperate language that inflamed passions and provoked concern in the Jewish community that anti-Semitism would be aroused.

Though often described as the most pro-Israel President in history, Bill Clinton also was critical of Israel on numerous occasions. In his first few months in office, George W. Bush's administration has also shown no reluctance to criticize Israel for actions it deems contrary to U.S. interests.

MYTH

“The U.S. has always given Israel arms to insure it would have a qualitative edge over the Arabs.”

FACT

The United States provided only a limited amount of arms to Israel, including ammunition and recoilless rifles, prior to 1962. In that year, President Kennedy sold HAWK anti-aircraft missiles, but only after the Soviet Union provided Egypt with long-range bombers.

By 1965, the U.S. had become Israel's main arms supplier. This was partially necessitated by West Germany's acquiescence to Arab pressure, which led it to stop selling tanks to Israel. Throughout most of the Johnson Administration, however, the sale of arms to Israel was balanced by corresponding transfers to the Arabs. Thus, the first U.S. tank sale to Israel, in 1965, was offset by a similar sale to Jordan.⁷

The U.S. did not provide Israel with aircraft until 1966. Even then, secret agreements were made to provide the same planes to Morocco and Libya, and additional military equipment was sent to Lebanon, Saudi Arabia and Tunisia.⁸

As in 1948, the U.S. imposed an arms embargo on Israel during the Six-Day War, while the Arabs continued to receive Soviet arms. Israel's position was further undermined by the French decision to embargo arms transfers to the Jewish State, effectively ending their role as Israel's only other major supplier.

It was only after it became clear that Israel had no other sources of arms, and that the Soviet Union had no interest in limiting its sales to the region, that President Johnson agreed to sell Israel Phantom jets that gave the Jewish State its first qualitative advantage. "We will henceforth become the principal arms supplier to Israel," Assistant Secretary of Defense Paul Warnke told Israeli Ambassador Yitzhak Rabin, "involving us even more intimately with Israel's security situation and involving more directly the security of the United States."⁹

From that point on, the U.S. began to pursue a policy whereby Israel's qualitative edge was maintained. The U.S. has also remained committed, however, to arming Arab nations, providing sophisticated missiles, tanks and aircraft to Jordan, Morocco, Egypt, Saudi Arabia and the Gulf states. Thus, when Israel received F-15s in 1978, so did Egypt and Saudi Arabia. In 1981, Saudi Arabia, for the first time, received a weapons system that gave it a qualitative advantage over Israel — AWACS radar planes.

Today, Israel requires near top-of-the-line U.S. equipment, but many Arab states also receive some of America's best tanks, planes and missiles. The qualitative edge may be intact, but it is undoubtedly narrow. 

 MYTH

“U.S. aid in the Middle East has always been one-sided, with the Arabs getting practically nothing.”

FACT

After Israel's victory in its War of Independence, the U.S. responded to an appeal for economic aid to help absorb immigrants by approving a $135 million Export-Import Bank loan and the sale of surplus commodities. In those early years of Israel's statehood (also today), U.S. aid was seen as a means of promoting peace.

In 1951, Congress voted to help Israel cope with the economic burdens imposed by the influx of Jewish refugees from the displaced persons camps in Europe and from the ghettos of the Arab countries. Arabs then complained the U.S. was neglecting them, though they had no interest in or use for American aid then. In 1951, Syria rejected offers of U.S. aid. Oil-rich Iraq and Saudi Arabia did not need U.S. economic assistance, and Jordan was, until the late 1950s, the ward of Great Britain. After 1957, when the United States assumed responsibility for supporting Jordan and resumed economic aid to Egypt, assistance to the Arab states soared. Also, the United States was by far the biggest contributor of aid to the Palestinians through UNRWA, a status that continues to the present.

Israel has received more direct aid from the United States since World War II than any other country, but the amounts for the first half of this period were relatively small. Between 1949 and 1973, the U.S. provided Israel with an average of about $122 million a year, a total of $3.1 billion (and actually more than $1 billion of that was loans for military equipment in 1971-73) . Prior to 1971, Israel received a total of only $277 million in military aid, all in the form of loans as credit sales. The bulk of the economic aid was also lent to Israel. By comparison, the Arab states received nearly three times as much aid before 1971, $4.4 billion, or $170 million per year. Moreover, unlike Israel, which receives nearly all its aid from the United States, Arab nations have gotten assistance from Asia, Eastern Europe, the Soviet Union and the European Community.

Israel did not begin to receive large amounts of assistance until 1974, following the 1973 war, and the sums increased dramatically after the Camp David agreements. Altogether, since 1949, Israel has received more than $90 billion in assistance. Though the totals are impressive, the value of assistance to Israel has been eroded by inflation. While aid levels remained constant in total dollars from 1987 until 1999, the real value steadily declined.

Arab states that have signed agreements with Israel have also been rewarded. Since signing the peace treaty with Israel, Egypt has been the second largest recipient of U.S. foreign aid ($2.2 billion annually while Israel received $3 billion). Jordan has also been the beneficiary of higher levels of aid since it signed a treaty with Israel (increasing from less than $40 million to more than $200 million). The multibillion dollar debts to the U.S. of both nations were also forgiven. After the Oslo agreements, the United States also began providing funding to the Palestinian Authority.

MYTH

“The U.S. has always given Israel billions of dollars without expecting repayment.”

FACT

U.S. economic grants to Israel ended in 1959. U.S. aid to Israel from then until 1985 consisted largely of loans, which Israel repaid, and surplus commodities, which Israel bought. Israel began buying arms from the United States in 1962, but did not receive any grant military assistance until after the 1973 Yom Kippur War. As a result, Israel had to go deeply into debt to finance its economic development and arms procurement. The decision to convert military aid to grants that year was based on the prevailing view in Congress that without a strong Israel, war in the Middle East was more likely, and that the U.S. would face higher direct expenditures in such an eventuality.

For several years, most of Israel's economic aid went to pay off old debts. In 1984, foreign aid legislation included the Cranston Amendment (named after its Senate sponsor), which said the U.S. would provide Israel with economic assistance "not less than" the amount Israel owes the United States in annual debt service payments.

MYTH

“Israel continues to demand large amounts of economic aid even though it is now a rich country that no longer needs help.”

FACT

Starting with fiscal year 1987, Israel annually received $1.2 billion in all grant economic aid and $1.8 billion in all grant military assistance. In 1998, Israel offered to voluntarily reduce its dependence on U.S. economic aid. According to an agreement reached with the Clinton Administration and Congress, the $1.2 billion economic aid package will be reduced by $120 million each year so that it will be phased out in ten years.

Half of the annual savings in economic assistance each year ($60 million) will be added to Israel's military aid package in recognition of its increased security needs. In 1999, Israel received $1.08 billion in economic aid and $1.86 billion in military aid. In 2000, economic aid was reduced to $949.1 million and is scheduled to be reduced to $720 million by 2002. Military aid to Israel increased to $1.92 billion in 2000 and is expected to reach $2.04 billion in 2002.

Israel made the offer because it does not have the same need for assistance it once did. The economy today is strong; still, Israel remains saddled with past debts to the U.S., which, unlike those of Jordan and Egypt, were not forgiven. In addition, Israel still can use American help. The country still has the tremendous financial burden of absorbing tens of thousands of immigrants from the former Soviet Union, a very high rate of unemployment and an alarmingly high number of people who fall below the poverty line. Furthermore, concessions made in peace negotiations have required the dismantling of military bases and the loss of valuable resources that must be replaced.

MYTH

“Israel boasts that it is the fourth strongest nation in the world, so it certainly doesn't need U.S. military assistance.”

FACT

Israel has peace treaties with only two of its neighbors. It remains technically at war with the rest of the Arab/Islamic world and several countries, notably Iran and Iraq, are openly hostile. Given the potential threats, it is a necessity that Israel continue to maintain a strong defense. Israel is a powerful country, but as the arms balance chart indicates, it is still outmanned and outgunned by its enemies, and therefore must rely on its qualitative advantage to insure it can defeat its enemies and that can only be guaranteed by the continued purchase of the latest weapons. New tanks, missiles and planes carry high price tags, however, and Israel cannot afford what it needs on its own, so continued aid from the United States is vital to its security. Furthermore, Israel's enemies have numerous suppliers, but Israel must rely almost entirely on the United States for its hardware.

MYTH

“U.S. military aid subsidizes Israeli defense contractors at the expense of American industry.”

FACT

Contrary to popular wisdom, the United States does not simply write billion dollar checks and hand them over to Israel to spend as they like. Only about 26 percent ($490 million) of what Israel receives in Foreign Military Financing (FMF) can be spent in Israel for military procurement. The remaining 74 percent is spent in the United States to generate profits and jobs. More than 1,000 companies in 47 states, the District of Columbia and Puerto Rico have signed contracts worth billions of dollars through this program over the last several years. The figures for 1999 are below:

The Value of Foreign Military Financing (FMF) Orders by State¹⁰

MYTH

“U.S. loan guarantees provided Israel with billions of dollars from American taxpayers that was used to build settlements in the West Bank and Gaza Strip to house Soviet Jews.”

FACT

Since 1989, approximately one million Jews have immigrated to Israel. The majority, roughly 80 percent, has come from the former Soviet Union. Israel must provide these immigrants with food, shelter, employment and training. The task is even more challenging when it comes to absorbing Jews from relatively undeveloped countries like Ethiopia, who often must be taught everything from using a flush toilet to how to withdraw money from a bank. To meet these challenges, Israel has invested billions of dollars. In addition, the American Jewish community has contributed hundreds of millions of dollars through the United Jewish Appeal’s Operation Exodus campaign and other philanthropies.

Still, the task was so daunting, Israel turned to the United States for help. To put the challenge in perspective, consider that the United States — a country of 250 million people and a multi-trillion dollar GNP — admits roughly 125,000 refugees a year. In 1990 alone, nearly 200,000 Jews immigrated to Israel.

The United States led the Free World in helping secure the freedom of Soviet Jews. Beginning in 1972, Congress appropriated funds to help resettle Soviet Jews in Israel. Since 1992, $80 million has been earmarked for this purpose.

After the Soviet Union opened its gates, the trickle of immigrants became a flood, skyrocketing from fewer than 13,000 people in 1989 to more than 185,000 in 1990. Israel then asked for a different type of help. The United States responded in 1990 by approving $400 million in loan guarantees to help Israel house its newcomers.

Guarantees are not grants — not one penny of U.S. government funds is transferred to Israel. The U.S. simply cosigns loans for Israel that give bankers confidence to lend Israel money at more favorable terms: lower interest rates and longer repayment periods — as much as 30 years instead of only five to seven. These loan guarantees have no effect on domestic programs or guarantees. Moreover, they have no impact on U.S. taxpayers unless Israel were to default on its loans, something it has never done. In addition, much of the money Israel borrows is spent in the United States to purchase American goods.

When it became clear the flood of refugees was even greater than anticipated, and tens of thousands continued to arrive every month, Israel realized it needed more help and asked the United States for an additional $10 billion in guarantees.

In 1992, Congress authorized the President to provide guarantees of loans to Israel as a result of Israel's extraordinary humanitarian effort to resettle and absorb immigrants. These guarantees were made available in annual increments of $2 billion over five years. While the cost to the U.S. government was zero, Israel paid the United States annual fees amounting to several hundred million dollars to cover administrative and other costs.

Under existing guidelines, no U.S. foreign assistance to Israel can be used beyond Israel's pre-1967 borders. Moreover, to underline dissatisfaction with Israel’s settlement policies, the President was authorized to reduce the annual loan guarantees by the amount equal to the estimated value of Israeli activities in the West Bank and Gaza Strip undertaken the previous year.

Thus, as the table indicates, the State Department determined that Israel spent just under $1.4 billion for settlement activity from 1993-1996. The President was authorized, however, to rescind deductions when making the funds available to Israel was in the security interests of the United States. President Clinton used this authority in the last three years of the program, so the actual reduction in the amount of guarantees available to Israel was $773.8 million.

The money related to settlements also had nothing to do with the new immigrants, none of whom were forced to live in the territories. In fact, only a tiny percentage voluntarily chose to do so.

By all measures, the U.S. loan guarantee program was a huge success. Israel used the borrowed funds primarily to increase the amount of foreign currency available to the country’s business sector and to support infrastructure projects, such as roads, bridges, sewage and electrical plants. The guarantees also helped Israel to provide housing and jobs for virtually all of the new immigrants. Unemployment among immigrants, which peaked at 35 percent, has dropped to 6 percent, roughly the same rate as for the rest of the population.

Besides contributing to Israel's success in absorbing immigrants while maintaining economic growth, the loan guarantee program also sent a strong message to the private international capital markets about the confidence the U.S. has in Israel's ability to bear this potential economic burden. Consequently, Israel's credit rating was upgraded and Israel can borrow hundreds of millions of dollars in international financial markets on its own.

MYTH

“Israel was never believed to have any strategic value to the United States.”

FACT

In 1952, Gen. Omar Bradley, head of the Joint Chiefs of Staff, believed the West required 19 divisions to defend the Middle East and that Israel could supply two. He also expected only three states to provide the West air power in Middle Eastern defense by 1955: Great Britain, Turkey and Israel. Bradley's analysis was rejected because the political echelon decided it was more important for the United States to work with Egypt, and later Iraq. It was feared that integration of Israeli forces in Western strategy would alienate the Arabs.¹¹

Israel's crushing victory over the combined Arab forces in 1967 caused this view to be revised. The following year, the United States sold Israel sophisticated planes (Phantom jets) for the first time. Washington shifted its Middle East policy from seeking a balance of forces to ensuring that Israel enjoyed a qualitative edge over its enemies.

Israel proved its value in 1970 when the United States asked for help in bolstering King Hussein's regime. Israel's willingness to aid Amman, and movement of troops to the Jordanian border, persuaded Syria to withdraw the tanks it had sent into Jordan to support PLO forces challenging the King during "Black September." In addition, the Soviets knew that all the squadron leaders of the Sixth Fleet landed in Israel to coordinate activities.¹²

By the early 1970s it had become clear that no Arab state could or would contribute to Western defense in the Middle East. The Baghdad Pact had long ago expired, and the regimes friendly to the United States were weak compared to the anti-Western forces in Egypt, Syria and Iraq. Even after Egypt's reorientation following the signing of its peace treaty with Israel, the United States did not count on any Arab government for military assistance.

The Carter Administration began to implement a form of strategic cooperation (it was not referred to as such) by making Israel eligible to sell military equipment to the United States. The willingness to engage in limited, joint military endeavors was viewed by President Carter as a means of rewarding Israel for "good behavior" in peace talks with Egypt.

Though still reluctant to formalize the relationship, strategic cooperation became a major focus of the U.S.-Israel relationship when Ronald Reagan entered office. Before his election, Reagan had written: "Only by full appreciation of the critical role the State of Israel plays in our strategic calculus can we build the foundation for thwarting Moscow's designs on territories and resources vital to our security and our national well-being."¹³

Reagan's view culminated in the November 30, 1981, signing of a Memorandum of Understanding on "strategic cooperation." On November 29, 1983, a new agreement was signed creating the Joint Political-Military Group (JPMG) and a group to oversee security assistance, the Joint Security Assistance Planning Group (JSAP).

The JPMG was originally designed to discuss means of countering threats posed by increased Soviet involvement in the Middle East. It has placed increasing emphasis, however, on bilateral concerns about the proliferation of chemical weapons and ballistic missiles.

The JSAP was formed in response to Israel's economic crisis in the mid-1980s. It is a binational group that meets annually in Washington to examine Israel's current and future military procurement requirements. It also formulates plans for the allocation of U.S. Foreign Military Sales credits in light of current threat assessments and U.S. budgetary capabilities.

An example of cooperation between the branches occurred January 23, 1987, when Congress designated Israel as a major non-NATO ally. This law formally established Israel as an ally, and allowed its industries to compete equally with NATO countries and other close U.S. allies for contracts to produce a significant number of defense items. 

In April 1988, President Reagan signed another MOU encompassing all prior agreements. This agreement institutionalized the strategic relationship.

By the end of Reagan's term, the U.S. had prepositioned equipment in Israel, regularly held joint training exercises, began co-development of the Arrow Anti-Tactical Ballistic Missile and was engaged in a host of other cooperative military endeavors.

Since then, U.S.-Israel strategic cooperation has continued to evolve. Today, these strategic ties are stronger than ever. Israel is now a de facto ally of the United States.

MYTH

“Israelis are able to live comfortably because of American aid, and they see no reason to reform their country's economic system.”

FACT

Israelis are among the most highly taxed people in the world with income taxes ranging up to 50 percent. This in a country where the average Israeli earns a little more than $16,000.

For years Israelis saw their standard of living decline in large part due to the government's extraordinary defense burden, which comprised roughly one-fifth to one-fourth of the budget. The situation has improved in recent years, thanks largely to the peace process, so defense spending has been reduced to 16% of the budget.

When Israel gave up the oil fields it developed in the Sinai as part of the peace agreement with Egypt, it sacrificed the opportunity to become energy-independent. Consequently, its economy suffers from oil price swings.

Most recently, with the influx of hundreds of thousands of immigrants from the former Soviet Union and Ethiopia, Israelis have voluntarily accepted even greater sacrifices to facilitate the absorption of the newcomers.

Israelis have long recognized the need to dramatically reform their economy. In 1985, Israel implemented a stabilization program that included several major features: a large cut in subsidies on basic products and services; a large currency devaluation followed by a stable exchange rate against the dollar; wage and price controls and the cessation of direct indexing of wages and savings to inflation; and a monetary policy that would control the growth of credit, thus driving interest rates upward.

The New York Times later described the sacrifices of the Israeli people, and the message of the stabilization program, as "Everybody takes a step backward — together."¹⁴

Israel's stabilization program worked like "a mini-miracle." Inflation fell sharply, from triple digits to zero in 2000. The exchange rate of the shekel stabilized, foreign-currency reserves recovered, exports increased and the budget deficit contracted.

Today, Israel is striving to go beyond stabilization, to make the underlying structural changes required for sustained economic growth. The government has continued to slash subsidies on food and public services, including health care and education, remove price controls and reform its tax structure. The government has moved to privatize state-run companies. Such steps are painful, but Israelis recognize the need for such difficult measures.

Israel has welcomed the U.S. as an involved partner, and has proved to be one of the few U.S. foreign aid recipients that has responded positively to U.S. overtures to make major reforms in its economy.

MYTH

“Israel takes protectionist measures that create impediments to American trade.”

FACT

Israel has one of the most open markets for U.S. goods. Much of the growth in U.S.-Israel trade is a result of the 1985 Free Trade Agreement (FTA). The FTA affords U.S. products the opportunity to compete equally with European goods, which also have free access to Israel's domestic markets. This was the first such agreement signed by the United States with any foreign government.

Since signing the FTA, U.S. exports to Israel have grown by 437percent, while the total volume of trade between the two countries has risen 345 percent to nearly $21 billion. This growth has resulted in more sales and profits for American exporters. In fact, Israel is second only to Canada in terms of per-capita imports of U.S. products.

MYTH

“The employment of Jonathan Pollard to spy on the United States is proof that Israel works against American interests.”

FACT

In November 1985, the FBI arrested Jonathan Pollard, a U.S. Navy intelligence analyst, on charges of selling classified material to Israel. Pollard was subsequently sentenced to life imprisonment. His wife, Anne, got five years in jail for assisting her husband.

Immediately upon Pollard's arrest, Israel apologized and explained that the operation was unauthorized. "It is Israel's policy to refrain from any intelligence activity related to the United States," an official government statement declared, "in view of the close and special relationship of friendship" between the two countries. Prime Minister Shimon Peres stated: "Spying on the United States stands in total contradiction to our policy."¹⁵

The United States and Israel worked together to investigate the Pollard affair. The Israeli inquiry revealed that Pollard was not working for Israeli military intelligence or the Mossad. He was directed by a small, independent scientific intelligence unit. Pollard initiated the contact with the Israelis.

A subcommittee of the Knesset's Defense and Foreign Affairs Committee on Intelligence and Security Services concluded: "Beyond all doubt...the operational echelons (namely: the Scientific Liaison Unit headed by Rafael Eitan) decided to recruit and handle Pollard without any check or consultation with the political echelon or receiving its direct or indirect approval." The Knesset committee took the government to task for not properly supervising the scientific unit.

As promised to the U.S. government, the spy unit that directed Pollard was disbanded, his handlers punished and the stolen documents returned.¹⁶ The last point was crucial to the U.S. Department of Justice's case against Pollard.

Pollard denied spying "against" the United States. He said he provided only information he believed was vital to Israeli security and was being withheld by the Pentagon. This included data on Soviet arms shipments to Syria, Iraqi and Syrian chemical weapons, the Pakistani atomic bomb project and Libyan air defense systems.¹⁷

Pollard was convicted of espionage. His life sentence was the most severe prison term ever given for spying for an ally. It also was far greater than the average term imposed for spying for the Soviet Union and other enemies of the United States.¹⁸

Though initially shunned by Israel, the government of Benjamin Netanyahu admitted that Pollard had worked for Israeli intelligence and granted him citizenship. Netanyahu requested clemency for Pollard during Middle East peace talks at the Wye Plantation in Maryland in 1998.

Pollard's supporters in the United States also routinely request that he be pardoned. President Clinton reportedly considered a pardon, but defense and intelligence agency officials vigorously opposed the idea. At the end of Clinton's term, the issue was again raised and Sen. Richard Shelby (R-AL), chairman of the Senate's Select Committee on Intelligence, along with a majority of senators argued against a pardon. "Mr. Pollard is a convicted spy who put our national security at risk and endangered the lives of our intelligence officers," Shelby said. "There not terms strong enough to express my belief that Mr. Pollard should serve every minute of his sentence...."¹⁹

Meanwhile, Pollard's attorneys have been trying to gain access to the a top-secret declaration by then-Secretary of Defense Caspar Weinberger that was used at Pollard's sentencing.

MYTH

“Israel tricked the United States into selling arms to Iran in exchange for hostages, and helped divert the profits to the Contras.”

FACT

According to the Report of the Congressional Committees Investigating the Iran-Contra Affair issued in November 1987, the sale of U.S. arms to Iran through Israel began in the summer of 1985, after receiving the approval of President Reagan. The report shows that Israel's involvement was stimulated by separate overtures in 1985 from Iranian arms merchant Manucher Ghorbanifar and National Security Council (NSC) consultant Michael Ledeen, the latter working for National Security Adviser Robert McFarlane. When Ledeen asked Prime Minister Shimon Peres for assistance, the Israeli leader agreed to sell weapons to Iran at America's behest, providing the sale had high-level U.S. approval.²⁰

Before the Israelis would participate, says the report, they demanded "a clear, express and binding consent by the U.S. Government." McFarlane told the Congressional committee he first received President Reagan's approval in July 1985. In August, Reagan again orally authorized the first sale of weapons to Iran, over the objections of Defense Secretary Caspar Weinberger and Secretary of State George Shultz.²¹ Because of that deal, Rev. Benjamin Weir, held captive in Lebanon for 16 months, was released.

When a shipment of HAWK missiles was proposed in November of that year, Israeli Defense Minister Yitzhak Rabin again demanded specific U.S. approval. According to McFarlane, the President agreed.

By December 1985, the President had decided future sales to the Iranians would come directly from U.S. supplies.

According to the committees' report, NSC aide Lt. Col. Oliver North first used money from the Iran operation to fund the Nicaraguan resistance in November 1985. He later testified, however, that the diversion of funds to the Contras was proposed to him by Ghorbanifar during a meeting in January 1986.

Saudi billionaire oil and arms trader Adnan Khashoggi said in an interview on ABC-TV on December 11, 1986, that he advanced $1 million to help finance the first arms shipment in the Iran-Contra arms scandal and put up $4 million for the second shipment. According to the President's special review board chaired by former Sen. John Tower, a foreign official (reportedly Saudi King Fahd) donated $1 million to $2 million monthly from July 1984 to April 1985 for covert financing for the Contras. Saudi Arabia denied aiding the Nicaraguan rebels, but the New York Times reported the contribution may have been part of a 1981 secret agreement between Riyadh and Washington "to aid anti-communist resistance groups around the sophisticated American AWACS radar planes, according to United States officials and others familiar with the deal."²²

The Joint House-Senate Committee praised the Israeli government for providing detailed chronologies of events based on relevant documents and interviews with key participants in the operation. Its report also corroborated the conclusion of the Tower Commission: "U.S. decisionmakers made their own decisions and must bear responsibility for the consequences."²³

MYTH

“U.S. dependence on Arab oil has decreased over the years.”

FACT

In 1973, the Arab oil embargo dealt the U.S. economy a major blow. This, combined with OPEC's subsequent price hikes and a growing American dependence on foreign oil, triggered the recession in the early seventies.

In 1973, foreign oil accounted for 35 percent of total U.S. oil demand. By 2000, the figure had risen to 53 percent, and OPEC accounted for 46 percent of U.S. imports. Saudi Arabia ranked number one and Iraq (#5) and Kuwait (#11) were among the top 20 suppliers of petroleum products to the United States in 1999. The Persian Gulf states alone supply 23 percent of U.S. petroleum imports.²⁴

The growing reliance on imported oil has also made the U.S. economy even more vulnerable to price jumps, as occurred in 1979, 1981, 1982 and 1990 and 2000. Oil price increases have also allowed Arab oil-producers to generate tremendous revenues at the expense of American consumers. These profits have subsidized large weapons purchases and nonconventional weapons programs such as Iraq's.

America's dependence on Arab oil has occasionally raised the specter of a renewed attempt to blackmail the United States to abandon its support for Israel. PLO chairman Yasir Arafat suggested such a tactic, for example, in 1990:

When the North Sea oil dries up in 1991, the United States will want to buy Arab petroleum. And when American oil fields themselves run dry and oil consumption in the United States increases, the American need for the Arabs will grow greater and greater.²⁵

The good news for Americans is that the principal suppliers of U.S. oil today are more reliable and better allies than the Persian Gulf nations.

MYTH

“The major American oil companies never take positions on the Arab-Israeli conflict.”

FACT

Egypt's President Sadat persuaded the late Saudi King Faisal to threaten to withhold oil from the West to exploit for political advantage the growing dependence of the industrialized West on Arab oil. The tactic was effective: Soon the major American oil companies backed the Arab cause in public and privately worked to weaken U.S. support for Israel.²⁶

According to a 1974 report of the Senate Foreign Relations subcommittee on Multinational Corporations, the ARAMCO consortium — Exxon, Mobil, Texaco and SOCAL — attempted to block America's emergency airlift to Israel during the 1973 war. The companies also cooperated closely with Saudi Arabia to deny oil and fuel to the U.S. Navy.²⁷

On other occasions, the major oil firms have advocated the positions of the Arab countries, particularly Saudi Arabia. The major oil companies vigorously lobbied Congress on behalf of the sale of F-15s in 1978 and AWACS aircraft in 1981. Together with Saudi foreign agents, these corporations enlisted many other American firms to lobby on the Saudis' behalf.²⁸ Saudi Arabia has a powerful lobby in the United States because hundreds of America's largest corporations do billions of dollars worth of business with the Kingdom. “And each of these corporations,” Hoag Levins noted, “had hundreds of subcontractors and vendors equally dependent on maintaining the good graces of Muslim leaders whose countries now collectively represent the single richest market in the world.”²⁹

The Saudis often attack what they claim is the excessive influence of Israel's supporters in the United States, but investigative journalist Steve Emerson turned that claim upside down. After detailing many of the ties between Saudi Arabia and U.S. businesses, universities, lobbyists and former high-ranking government officials, he concluded:

The breadth and scope of the petrodollar impact is beyond any legal remedy. With so many corporations, institutions, and individuals thirsting after-and receiving-oil money, petrodollar influence is ubiquitous in American society. The result is the appearance of widespread, spontaneous support for the policies of Saudi Arabia and other Arab oil producers by American institutions ranging from universities to the Congress. The proliferation of vested ties has allowed special interests to be confused with national interests.

Never before in American history has any foreign economic power been as successful as Saudi Arabia in reaching and cultivating powerful supporters all across the country. The Saudis have discovered that one quintessential American weakness, the love of money, and the petrodollar connection has become diffused throughout the United States.³⁰

MYTH

“The United States and Israel have nothing in common.”

FACT

The U.S.-Israel relationship is based on the twin pillars of shared values and mutual interests. Given this commonality of interests and beliefs, it should not be surprising that support for Israel is one of the most pronounced and consistent foreign policy values of the American people.

Although Israel is geographically located in a region that is relatively undeveloped and closer to the Third World than the West, the Jewish State has emerged in less than half a century as an advanced nation with the characteristics of Western society. This is partially attributable to the fact that a high percentage of the population came from Europe or North America and brought with them Western political and cultural norms. It is also a function of the common Judeo-Christian heritage.

Simultaneously, Israel is a multicultural society with people from more than 100 nations, including more than 45,000 who came in the dramatic airlifts from Ethiopia in the 1980’s. Today, approximately four in ten Israelis are Eastern or Oriental Jews who trace their origins to the ancient Jewish communities of the Islamic countries of North Africa and the Middle East.

While they live in a region characterized by autocracies, Israelis have a commitment to democracy no less passionate than that of Americans. All citizens of Israel, regardless of race, religion or sex, are guaranteed equality before the law and full democratic rights. Freedom of speech, assembly and press is embodied in the country’s laws and traditions. Israel’s independent judiciary vigorously upholds these rights.

The political system does differ from America’s — Israel’s is a parliamentary democracy — but it is still based on free elections with divergent parties. And though Israel does not have a formal "constitution," it has adopted "Basic Laws" that establish similar legal guarantees.

Americans have long viewed Israelis with admiration, at least partly because they see much of themselves in their pioneering spirit and struggle for independence. Like the United States, Israel is also a nation of immigrants. Despite the burden of spending nearly one-fifth of its budget on defense, it has had an extraordinary rate of economic growth for most of its history. It has also succeeded in putting most of the newcomers to work. As in America, immigrants to Israel have tried to make better lives for themselves and their children. Some have come from relatively undeveloped societies like Ethiopia or Yemen and arrived with virtually no possessions, education or training and become productive contributors to Israeli society.

Israelis also share Americans’ passion for education. Israelis are among the most highly educated people in the world. Twenty-nine daily newspapers are published in 10 languages. More books are published per capita in Israel than anywhere else.

From the beginning, Israel had a mixed economy, combining capitalism with socialism along the British model. The economic difficulties Israel has experienced — created largely in the aftermath of the 1973 Yom Kippur War by increased oil prices and the need to spend a disproportionate share of its Gross National Product on defense — have led to a gradual movement toward a free market system analogous to that of the United States. America has been a partner in this evolution.

In the 1980’s, attention increasingly focused on one pillar of the relationship — shared interests. This was done because of the threats to the region and because the means for strategic cooperation are more easily addressed with legislative initiatives. Despite the end of the Cold War, Israel continues to have a role to play in joint efforts to protect American interests, and strategic cooperation has progressed to the point where a de facto alliance now exists. The hallmark of the relationship is consistency and trust: The United States knows it can count on Israel.

It is more difficult to devise programs that capitalize on the two nations’ shared values than their security interests; nevertheless, such programs do exist. In fact, these Shared Value Initiatives (SVIs) cover a broad range of areas such as the environment, energy, space, occupational safety and health. Nearly 400 American institutions in 47 states, the District of Columbia and Puerto Rico have received funds from binational programs with Israel. Little-known relationships like the Free Trade Agreement, the Cooperative Development Research Program, the Middle East Regional Cooperation Program and various memoranda of understanding with virtually every U.S. governmental agency demonstrate the depth of the special relationship. Even more important may be the broad ties between Israel and each of the individual 50 states and the District of Columbia.

MYTH

“America's support of Israel is the reason that terrorists hijacked four airplanes and attacked the World Trade Center and Pentagon on September 11, 2001.”

FACT

The heinous attacks against the United States were committed by Muslim fanatics who had a variety of motivations for these and other terrorist attacks. These Muslims have a perverted interpretation of Islam and believe they must attack infidels, particularly Americans and Jews who do not share their beliefs. They oppose Western culture and democracy and object to any U.S. presence in Muslim nations. They are particularly angered by the existence of American military bases in Saudia Arabia and other areas of the Persian Gulf. This would be true regardless of U.S. policy toward the Israeli-Palestinian conflict. Nevertheless, an added excuse for their fanaticism is the fact that the United States is allied with Israel. Previous attacks on American targets, such as the USS Cole and U.S. embassies in Kenya and Tanzania, were perpetrated by suicide bombers whose anger at the United States had little or nothing to do with Israel.

MYTH

“The hijacking of four airliners in one day on September 11, 2001, was an unprecedented act of terror.”

FACT

On September 6, 1970, members of the Popular Front for the Liberation of Palestine (PFLP) hijacked three jets (Swissair, TWA and Pan Am ) with more than 400 passengers on flights to New York. A fourth plane, an El Al flight, was also targeted, but Israeli security agents foiled the hijacking in mid-air and killed one of the two terrorists when they tried to storm the cockpit. On the 9th, a British BOAC jet was also hijacked by the PFLP.³¹

The UN could not muster a condemnation of the hijackings. A Security Council Resolution only went so far as to express grave concern, and did not even bring the issue to a vote.

Instead of flying their planes into buildings, they landed them on airfields (three in Jordan, one in Cairo). All four hijacked planes were blown up on the ground – after the passengers were taken off the planes — on September 12.

More than three dozen Americans were among the passengers who were then held hostage in Jordan as the terrorists attempted to blackmail the Western governments and Israel to swap the hostages for Palestinian terrorists held in their jails. On Sept. 14, after releasing all but 55 hostages, the terrorists said all American hostages would be treated as Israelis.

A tense standoff ensued. Seven terrorists were ultimately set free by Britain, Germany and Switzerland in exchange for the hostages.³² The turning point, however, was when King Hussein decided this was the final insult in the Palestinian campaign to take over his country and waged an all-out war against Yasser Arafat and all the PLO factions, ultimately driving them out of Jordan and into Lebanon. This came to be known among Palestinians as "Black September" (another terrorist group adopted this as its name and murdered 11 athletes two years later at the Munich Olympics).

After the hijackings, shocked congressman called for immediate and forceful action by the United States and international community. They insisted on quick adoption of measures aimed at preventing air piracy, punishing the perpetrators and recognizing the responsibility of nations that harbor them.³³ Virtually nothing was done and hijackings and other terrorist atrocities have continued up to the present day.

The PFLP as an organization, and some of the individual participants responsible for those hijackings still are alive and well, supported by Syria, the Palestinian Authority and others. In fact, Leila Khaled, the person who tried to hijack the El Al jet, was going to be admitted into the territories to attend the Palestine National Council meetings in 1996, but she still refused to disavow terrorism. Today, she is said to live in Amman.

Notes

¹Foreign Relations of the United States 1947, (DC: GPO, 1948), pp. 1173-4, 1198-9, 1248, 1284. [Henceforth FRUS 1947.]
²Mitchell Bard, The Water's Edge And Beyond, (NJ: Transaction Publishers, 1991), p. 132.
³FRUS 1947, p. 1313.
⁴Harry Truman, Years of Trial and Hope, Vol. 2, (NY: Doubleday, 1956), p. 156.
⁵John Snetsinger, Truman, The Jewish Vote and the Creation of Israel, (CA: Hoover Institution Press, 1974), pp. 9-10; David Schoenbaum, "The United States and the Birth of Israel," Wiener Library Bulletin, (1978), p. 144n.
⁶Peter Grose, Israel in the Mind of America, (NY: Alfred A. Knopf, 1983), p. 217; Michael Cohen, "Truman, The Holocaust and the Establishment of the State of Israel," Jerusalem Quarterly, (Spring 1982), p. 85.
⁷Memorandum of conversation regarding Harriman-Eshkol talks, (February 25, 1965); Memorandum of conversation between Ambassador Avraham Harman and W. Averill Harriman, Ambassador-at-Large, (March 15, 1965), LBJ Library; Yitzhak Rabin, The Rabin Memoirs, (MA: Little Brown and Company, 1979), pp. 65-66..
⁸Robert Trice, "Domestic Political Interests and American Policy in the Middle East: Pro-Israel, Pro-Arab and Corporate Non-Governmental Actors and the Making of American Foreign Policy, 1966-1971," (Unpublished Ph.D. Dissertation, University of Wisconsin-Madison, 1974), pp. 226-230.
⁹Memorandum of conversation between Yitzhak Rabin et al., and Paul Warnke et al., (November 4, 1968), LBJ Library.
¹⁰Israeli Ministry of Defense.
¹¹Dore Gold, America, the Gulf, and Israel, (CO: Westview Press, 1988), p. 84.
¹²Yitzhak Rabin, address to conference on "Strategy and Defense in the Eastern Mediterranean," sponsored by the Washington Institute for Near East Policy and Israel Military Correspondents Association, Jerusalem, (July 9-11, 1986).
¹³Ronald Reagan, "Recognizing the Israeli Asset," Washington Post, (August 15, 1979).
¹⁴New York Times, (August 9, 1987).
¹⁵Wolf Blitzer, Territory of Lies, (NY: Harper & Row, 1989), p. 201.
¹⁶New York Times, (December 2 and 21, 1985).
¹⁷Blitzer, pp. 166-171.
¹⁸Alan Dershowitz, Chutzpah, (MA: Little Brown, & Co., 1991), pp. 289-312.
¹⁹Washington Post, (December 23, 2000).
²⁰Much of this information was verified by the disclosure of tapes of conversations involving key figures in the scandal, "Nightline," (October 2, 1991).
²¹Report of the Congressional Committees Investigating the Iran-Contra Affair, (DC: GPO, 1987), pp. 164-76.
²²New York Times, (February 4, 1987).
²³The Tower Commission Report, (NY: Bantam Books and Time Books, 1987), p. 84.
²⁴ Energy Information Administration.
²⁵Al-Musawwar, (January 19, 1990).
²⁶See Steven Emerson, “The ARAMCO Connection,” The New Republic, (May 19, 1982), pp. 11-16; Russell Howe and Sarah Trott, The Power Peddlers, (NY: Doubleday, 1977), pp. 342-343; Anti-Defamation League, The U.S.-Saudi Relationship, (NY: ADL, 1980), p. 6.
²⁷Steven Emerson, The American House of Saud, (NY: Franklin Watts, 1985), pp. 36-37; Steven Spiegel, The Other Arab-Israeli Conflict: Making America's Middle East Policy from Truman to Reagan, (IL: University of Chicago Press, 1985), pp. 258-59; Anthony Sampson, The Seven Sisters, (NY: Viking Press, 1975), pp. 248-50; Hoag Levins, Arab Reach: The Secret War Against Israel, (NY: Doubleday, 1983), p. 51.
²⁸Steven Emerson, “The Petrodollar Connection,” The New Republic, (February 17, 1982), pp. 18-25; also Emerson, (85), pp. 177-213.
²⁹Levins, p. 19.
³⁰Emerson (85), p. 413.
³¹Henry Kissinger, The White House Years. (MA: Little Brown & Co., 1979), pp. 600-617.
³²Guardian Unlimited, (January 1, 2001).
³³Near East Report, (September 16, 1970).

See also: Israel
U.S.-Israel Relations
Peace Process

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