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- 3 - TOP SECRET to the Palestine dispute to take measures leading to a sound and equitable peace. The strategic interests of the United States demand early termination of the present conditions of instability and mutual suspicion, which provide such a favorable atmosphere for Soviet penetration and exploitation of the Near East. The present instability will certainly continue if the Lausanne talks break down as a result of the new Israeli position, which is susceptible of interpretation by the Arabs as confirming their constant fears of Israeli territorial expansionism. Failure of the Israelis to modify their present demands will inevitably aggravate Arab distrust of Israel and bring about renewed Arab charges that the United States remains passive no matter how unreasonable the demands of Israel. The Department of State is firmly convinced that the Israelis as well as the Arabs must therefore be prepared to make some concessions, and that, if Israel will modify its present demands, a solution can be achieved which will be both advantageous to Israel and acceptable to the Arabs. 5. Recommendations (a) The Department believes that the time has come to make a basic decision concerning our attitude toward Israel. The United States has given generous support to the foundation of the Jewish State, since we believed in the justice of this aspiration. We are convinced that there is no reason why the Jews and the Arabs cannot live together in peace in the Near East, providing they each adopt a reasonable attitude toward the other. In the light of all the foregoing, the Department considers that it is now essential to inform the Israeli Government forcefully that, if it continues to reject the friendly advice which this Government has offered solely in the interest of a genuine peace in the Near East, this Government will be forced with regret to revise its attitude toward Israel. There is attached a draft note to the Israeli Government for your consideration (TAB B) This note has been discussed with Mr. Ethridge, who believes that it would strengthen his hand at Lausanne and strongly recommends that it be sent. (b) If the Israeli Government does not respond favorably to this proposed representation, it will be necessary to take measures designed to convince Israel of the importance to this Government of a revision of Israel's present policy. Such measures, in addition to a generally negative attitude in the future toward Israel, might include (1) refusing the request of the Israeli Government for United States technical advisers and for the training of Israeli officials in the United States; (2) withholding approval of the $49,000,000 as yet unallocated of t he $100,000,000 earmarked by the Export-Import Bank for loan to Israel. DECLASSIFIED E. O. 11652, Sec. 3(E) and 5(D) or (E) Dept. of State letter, By NLT- HC NARS Datef:2622 TOP SECRET

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    "ocrText": "- 3 -\nTOP SECRET\nto the Palestine dispute to take measures leading to a sound and\nequitable peace. The strategic interests of the United States demand\nearly termination of the present conditions of instability and mutual\nsuspicion, which provide such a favorable atmosphere for Soviet\npenetration and exploitation of the Near East. The present instability\nwill certainly continue if the Lausanne talks break down as a result\nof the new Israeli position, which is susceptible of interpretation\nby the Arabs as confirming their constant fears of Israeli territorial\nexpansionism. Failure of the Israelis to modify their present\ndemands will inevitably aggravate Arab distrust of Israel and bring\nabout renewed Arab charges that the United States remains passive\nno matter how unreasonable the demands of Israel. The Department of\nState is firmly convinced that the Israelis as well as the Arabs\nmust therefore be prepared to make some concessions, and that, if\nIsrael will modify its present demands, a solution can be achieved\nwhich will be both advantageous to Israel and acceptable to the\nArabs.\n5. Recommendations\n(a) The Department believes that the time has come to make a\nbasic decision concerning our attitude toward Israel. The United\nStates has given generous support to the foundation of the Jewish\nState, since we believed in the justice of this aspiration. We are\nconvinced that there is no reason why the Jews and the Arabs cannot\nlive together in peace in the Near East, providing they each adopt\na reasonable attitude toward the other.\nIn the light of all the foregoing, the Department considers\nthat it is now essential to inform the Israeli Government forcefully\nthat, if it continues to reject the friendly advice which this\nGovernment has offered solely in the interest of a genuine peace in\nthe Near East, this Government will be forced with regret to revise\nits attitude toward Israel. There is attached a draft note to the\nIsraeli Government for your consideration (TAB B) This note has\nbeen discussed with Mr. Ethridge, who believes that it would\nstrengthen his hand at Lausanne and strongly recommends that it be\nsent.\n(b) If the Israeli Government does not respond favorably to\nthis proposed representation, it will be necessary to take measures\ndesigned to convince Israel of the importance to this Government of\na revision of Israel's present policy. Such measures, in addition\nto a generally negative attitude in the future toward Israel, might\ninclude (1) refusing the request of the Israeli Government for\nUnited States technical advisers and for the training of Israeli\nofficials in the United States; (2) withholding approval of the\n$49,000,000 as yet unallocated of t he $100,000,000 earmarked by\nthe Export-Import Bank for loan to Israel.\nDECLASSIFIED\nE. O. 11652, Sec. 3(E) and 5(D) or (E)\nDept. of State letter,\nBy NLT- HC NARS Datef:2622 TOP SECRET"
}