Israel OKs Arbitration of Egypt Dispute : Peres Wins Cabinet Support, Resolving Coalition Conflict

Senior Israeli ministers agreed early today on a proposed package deal to thaw the “cold peace” with Egypt after a 12-hour Cabinet session during which the future of the national coalition government hung in the balance.

While the complicated agreement defused a potential Israeli government crisis, it was unclear whether the terms would be acceptable to Cairo.

The official Israeli government proposal, which must also be approved by the Egyptian government, includes arbitration to resolve a longstanding border dispute between the two nations over a sliver of Red Sea beachfront called Taba and the return of Egypt’s ambassador to Tel Aviv.

Israel radio reported that an Israeli team will go to Egypt shortly in hopes of preparing the way for a summit meeting between Prime Minister Shimon Peres and Egyptian President Hosni Mubarak. It said the meeting could take place as early as next month.

Concessions Indicated

From initial reports after the sometimes stormy Cabinet session, ministers from the rightist Likud half of the coalition appeared to have won several concessions from Peres and other ministers of his centrist Labor Alignment.

“There will have to be more negotiations with Egypt,” Peres told Israel radio after the marathon session. “But what we accepted is in line with the accords already worked out.”

Peres had refused in a six-hour Cabinet session last Thursday to accept any Likud amendments to his proposal that would require changes in formulas already worked out during an intense period of shuttle diplomacy with Cairo in recent weeks.

Egypt and Israel signed a historic peace treaty in 1979, after more than 30 years of hostility, but normalization of relations ended abruptly in 1982 with Israel’s invasion of Lebanon and the subsequent massacre by Israel’s Lebanese Christian allies of Palestinian refugees in the Sabra and Chatilla camps south of Beirut.

Troops Pulled Out

Israel has since pulled most of its troops out of Lebanon, fulfilling one condition established by Mubarak for an improvement of relations. But Cairo had continued to demand that the Taba dispute be submitted to binding arbitration.

The Likud half of Israel’s so-called national unity government had steadfastly opposed arbitration, preferring a non-binding process known as conciliation first.

The meeting of Israel’s so-called inner Cabinet, which began about 6:30 Sunday evening, was held to vote on a draft proposal submitted by Peres. The inner Cabinet includes five senior ministers each from Labor and Likud.

The Cabinet accepted a staged arbitration of the Taba dispute, but included wording demanded by the Likud that during the first six to eights months of the process the two sides will try to settle their differences by conciliation. While it appears to be mainly a semantic difference, the change from Peres’ original proposal could be a stumbling block since Egypt has repeatedly and publicly rejected conciliation, arguing that this is only a stalling tactic.

The final Israeli position foresees a period of several weeks during which the two sides will draw up important terms of reference for the arbitrators. At the same time, it requires that the two nations agree in advance on arrangements for free access and use of facilities already at Taba for the side which loses the arbitration.

Site of Luxury Hotel

Taba is the site of $35 million luxury hotel and a neighboring village serving food and beverages. In another change from the original Peres proposal, Israel foresees a preamble to the Israeli-Egyptian package deal under which each side would pledge to prevent terrorist raids against the other from its territory. It also seeks efforts to halt “hostile propaganda.” Likud also won wording that specifically ties the arbitration process to normalization of tourism and cultural, economic and political relations, including advance agreement on a timetable to implement these improvements.

“The Likud position and the principles that the Likud insisted upon are safety valves,” said Likud Deputy Premier David Levy, who was one of the principal figures pushing for a harder line.

Egypt Accused

Likud has accused Egypt of manipulating the Taba dispute in its quest to regain status in the Arab world. Likud ministers have said they feared that once Israel agreed to arbitration under the more lenient Peres formula, Cairo would simply stall on its promises to fully normalize relations.

Complicating the internal Israeli debate is a rotation clause in the agreement that set up the so-called national unity coalition government. The clause calls for Peres to trade jobs nine months hence with Foreign Minister Yitzhak Shamir, leader of the Likud Bloc.

Likud leaders contend that Peres is looking for an excuse to back out of the rotation in hopes of holding onto the top spot by means of new elections or the formation of a narrow coalition with several smaller parties.

Using Issue as Pretext

“There is no justification for a coalition crisis” over relations with Egypt, Shamir told pro-Likud academics last Friday, “unless someone in Labor is seeking to use this issue as a pretext to bring down the government and renege on the rotation agreement.”

Internal feuds within Likud also complicate the situation, however. Shamir is being challenged for leadership of Likud by two other members of the inner Cabinet, Levy and hawkish Trade Minister Ariel Sharon.

While the Likud ministers assert that by taking a hard line on Taba, they are “faithfully giving voice to national interests without any ulterior motives,” others accuse them of trying to outdo one another in appealing to the right-wing voters who are Likud’s natural constituency.