An Interview with Yitzhak Shamir

"Relations with the U.S. are better than ever, and Israel's international position has improved."

Prime Minister Yitzhak Shamir, in full voice but visibly fatigued from the dual responsibilities of being head of government and a candidate on the hustings, welcomed Correspondents Kelly and Halevy to his Jerusalem office and talked at length about his government's prospects. Excerpts:

On the economy. The answers of the Likud and Labor are the same, more or less. In the Western countries, there is a classic answer for inflation: unemployment. We don't accept it, we don't tolerate it. Therefore we have to look for other ways, and we say [there has to be] a social contract. There must be a national agreement among all the main factors of the economy--workers, industrialists and government--to freeze prices, wages and taxes. It is the only way to bring about a decline of the rate of inflation without having unemployment.

On Lebanon. There will not be a quick withdrawal from Lebanon. We are trying to create conditions that will enable us one day to pull out our forces: by strengthening the Lebanese Army, by reaching agreements with local groups of the population. The Likud does not want to stay in Lebanon. But for the moment, the Lebanese government does not have anything to offer. It does not even control Beirut.

On the West Bank. Almost nobody [in Israel] wants to give up any territory. It doesn't mean that all these people want Israeli rule over all the territories. I think we are faithful to the Camp David agreements. We will stick to this agreement. In the end there will be negotiations, without a doubt, because in any such situation there is some point where the parties decide that they have to agree.

On the future. We can see Israel becoming more and more a developed modern country with a dynamic society.

We are making important technological progress, we are im proving the moral basis of the society. The social differences are becoming smaller, and we have more justice in our social structure than we had seven years ago. At that time there were two Israels, and the second included the suburbs and development towns where the new immigrants from Arab countries lived. Now even this definition has disappeared. The feeling of belonging to Israeli society is now much more general. I think it is a great accomplishment of the Likud.

On relations with the U.S. One of the arguments in 1977 was that if the Likud came to power there would be a war with the Arab countries because of the [occupied] territories and then relations with the U.S. and with all the Western world would become terrible.

Nobody would be ready to speak with us. What was the outcome? Exactly the opposite. Relations with the U.S. are better than ever before. We concluded a peace treaty with Egypt. We have problems with this treaty, but it is still peace. It means that Israel's international position has improved.

On the possibility of a closer alliance with the U.S. It has been the hope of all Israeli Prime Ministers since Ben-Gur-ion; there are very few countries in the world that are isolated and do not belong to a group. We have a kind of agreement on strategic cooperation with the U.S. During the Yom Kippur War, the airlift from the U.S. did not come as a surprise. It was known that the U.S. would not let Israel stand alone in such a situation.

On Israel's debt. International debt is now a problem everywhere. But it is not a problem of independence. Can you say that Brazil and Mexico, which are suffering from enormous debts, have lost their independence? On the contrary. They are now asking the U.S. to help them pay their debts.