Middle East: Seething over Settlements

By Jill Smolowe

When violence erupts in the occupied territories, asking who started it rarely serves a useful purpose. More pertinent is what new hatreds have been etched in blood, and will kindle new violence.

Take the Palestinian attack two weeks ago on a bus bound from Jerusalem to the West Bank Jewish settlement of Shiloh. Dov Weiner, 11, was returning home from therapy for a gunshot wound in his shoulder sustained during an October bus attack. In the gunfire on Jan. 14, the boy was hit again, this time in the leg. Later that night, Jewish men drove to the home of Riad Malki, a Palestinian hard-liner, pelted the house with stones, broke several windows and spray-painted Stars of David on all the entrances. Although Malki's house is under Israeli surveillance, the army did not intervene. Neither did the Israeli police, who waited until morning to answer Malki's call for help.

The spiraling violence between Jewish settlers and Palestinians in the West Bank reflects how much the question of Israeli settlements in the occupied territories goes beyond political abstraction: it is an issue that cuts to the very dignity and survival of both Arabs and Jews. For them, the looming battle between Jerusalem and Washington over $10 billion in U.S. loan guarantees to Israel to help settle Soviet Jewish immigrants is a symbol not only of where the Bush Administration's sympathies lie but also of what the occupied territories' future is likely to be.

If the diplomatic tussle lives up to pre-bout rhetoric, either the U.S.-Israeli friendship or the Middle East peace process could suffer a knockdown. Last September the Bush Administration hinted strongly that the loan guarantees might be linked to limits on settlement construction. President Bush has not budged since. Last week Israeli Prime Minister Yitzhak Shamir answered by pledging to keep building, declaring that "no power in the world can prevent us from carrying on." In response, the Palestinian delegation to the U.S.-sponsored peace talks threatened to boycott the negotiations if the guarantees were granted unconditionally.

Small wonder that some U.S. analysts see a bruising battle ahead. But both Bush and Shamir are running for re-election this year, and neither relishes the prospect of a fight with an ally who can sway domestic voters from afar. Members of Congress, who must approve the guarantees, know they will suffer electoral consequences if the decision pits their loyalty to Israel against their commitment to the peace process. So in Washington, if not in the Middle East, compromise appears to be at hand.

There may have been a step in that direction in a meeting last Friday between Secretary of State James Baker and Zalman Shoval, Israel's ambassador to the U.S. Baker reportedly proposed to condition the loan guarantees on Israel's agreement not to begin any new construction in the territories. Officials in Washington refused to confirm the reports, insisting that the Baker-Shoval meeting was just the first of a series and that no deal was likely for at least another month.

But such an offer might be one that Shamir could live with. It would still permit Israel to complete the significant amount of housing it has under construction. At least 12,000 units of housing are estimated to be in the building stage in the territories, enough to shelter 60,000 new settlers. "It's not exactly what we wanted," says an Israeli official, "but it's not as bad as it looked in September."

Shamir can ill afford to do without the loan guarantees. About 400,000 Soviet Jewish immigrants have arrived since 1989, and an additional million are expected in the next five years, swelling the population by more than 20% and costing the government an estimated $26.5 billion. Israel's Finance Ministry predicts that U.S. failure to deliver on the guarantees would drive up unemployment from 11% to 16.2%. Ideologue though Shamir may be, he is a pragmatist who knows when he must deal. Says his spokesman Ehud Gol: "We are asking, after all, and they are giving."

But because Baker's reported proposal would fail to cap Israeli growth in the territories, it is being met with a grimace from the Palestinians. Their leadership knows that the current peace talks are the only means by which Palestinians may achieve a measure of self-rule. But any perception that the U.S. will subsidize Israel's settlement plans could lead the Palestinians to drag their feet in the peace process and subject those who favor the talks to criticism from rejectionist Arabs.

Even before the Baker-Shoval meeting last week, the Palestinians had threatened to withdraw from the talks. But Hanan Mikhail-Ashrawi, spokeswoman for the Palestinian peace negotiators, made it clear that if the guarantees were conditioned to "eliminate entirely any possibility of these funds being subsidies to occupation and settlements," the Palestinians would continue to negotiate. They are unlikely to be satisfied by the proposal that Baker reportedly made. "It is permission to put 10,000 obstacles on the road to peace," says Saeb Erakat, a member of the Palestinian negotiating team.

There is also the larger question of what is to become of the more than 170 Jewish settlements already in place in the West Bank and Gaza Strip. Quite a few of those have been erected or expanded since the Bush Administration launched its peace initiative last March. According to Peace Now, Israel's leading movement for reconciliation with the Arabs, the Shamir government pumped $1.1 billion into settlement expansion in 1991, adding 13,650 new housing units. Two opposition members of the Knesset recently presented documents showing that over the past 18 months, the Housing Ministry, intent on sealing Israel's claim to the territories forever, added more than 18,000 new homes in the West Bank alone, at a cost of $1.5 billion.

While politicians search their souls about the loan guarantees, Palestinian and Israeli hard-liners, ever eager to sabotage the peace process, press their opposing claims to the territories. Palestinians, who regard the sudden flowering of new settlements as a direct provocation, are meeting it with increased calls to armed action. Attacks on Israeli targets using firearms or explosives have risen from 179 in 1988, the first full year of the intifadeh, to 447 in 1991.

Militant Israelis have also adopted provocative tactics. In October settlers moved overnight into Silwan, a strictly Arab neighborhood in East Jerusalem, and occupied several houses. Accounts vary as to how many Arabs they evicted. The settlers' activities were temporarily restrained by an Israeli court, but in December they returned with the government's sanction. One Arab family now unhappily shares its home with settlers.

All over the West Bank, well-armed Jewish settlers are becoming a law unto themselves, stalking the countryside with guns, shooting up Arab homes and smashing cars. President Chaim Herzog has warned that vigilante attacks "could create a most dangerous situation in the future." Last week the army announced that it would increase its estimated 4,000-troop force in the territories by 20% to combat Palestinian violence. Yet the Israeli army continues largely to turn a blind eye to the settlers' miscreant activities.

In the past, such cycles of violence would have provoked frustration, even despair, among would-be American peace brokers. But Bush has staked a large measure of his political prestige on the continued progress of Middle East peace. To keep the parties talking, he must find a way around the contentious issue of the loan guarantees -- and ultimately, the settlements themselves.

With reporting by Lisa Beyer/Jerusalem and J.F.O. McAllister/Washington