Dollars to Settlements, Dollars Less in Aid : Israel: America should be prepared to curtail assistance that frees a recipient to apply other funds for purposes unacceptable to us.

In the Middle East, a fragile peace process struggles toward honest dialogue between Israelis and Palestinians. In Washington a vulnerable foreign-aid program struggles for funds amid a ferocious budget scramble. Secretary of State James A. Baker III proposes to link the two in a way that deserves support: Make clear to our Israeli friends that future U.S. assistance will be affected adversely by additional Israeli settlements in the occupied territories of the West Bank.

As a general proposition, the United States needs to eliminate contradictions between foreign-assistance allocations and larger policy objectives. Usually it is wise to respect the sovereign preferences of states with whom we have assistance relationships. However, where those preferences collide with vital American interests, it is absurd not to defend our stake. That is now the case in the visible tension between the U.S. commitment to Israeli-Palestinian negotiations and Israel’s persistence in creating new “facts” on the West Bank.

We should be prepared to curtail assistance that frees a recipient to apply other funds for purposes unacceptable to us. This principle applies with particular force to the Middle East, where Israel and Egypt consume the largest share of U.S. economic and military assistance.

Courage and skill are needed to enforce this principle in a setting so volatile and so burdened with the barnacles of history. The delicate diplomacy now at work in the Middle East poses unique demands on the American political system, no less than on the parties directly involved. One of the gravest threats to that diplomacy is the extension of Israeli settlements.

The United States has condemned such settlements. Now there are new complications arising from the fear that the expanded flow of Soviet emigres--a flow that the United States has sought for more than a decade and for which Israel yearns--would encourage further settlements. That fear has persuaded the Soviets to delay an arrangement for direct flights to Israel, thus slowing the exodus for many Jews anxious to begin a new life.

Confrontation with a friend is never congenial, but a sharper line now seems necessary. American policy has already addressed this problem by requiring foreign-assistance contracts to prohibit certain expenditures on the West Bank. If Israel persists in investing in settlements on the West Bank, the United States should make clear that it will adjust assistance levels by comparable amounts. A dollar spent on settlements, whatever its source, should mean a dollar less in U.S. assistance.

Congressional willingness to help provide housing and other assistance for the thousands of Soviet refugees making their way to Israel is laudable, but not if it frees Israel to underwrite provocative settlements in the occupied territories. The question for U.S. policy must be: Does our assistance bolster or weaken the peace process? This is a case where we must apply linkage if policy is to be coherent.

Heirs of the Judeo-Christian heritage should not be subsidizing violations of the Eighth Commandment. Transactions under military occupation are intrinsically coercive. As Nelson Mandela observed, only a free man can negotiate; so, too, land transfers in the West Bank today are inevitably tainted by the unequal status of the occupied and the occupiers.

President Dwight D. Eisenhower faced a similar tough call in 1956 when he preserved the nation’s moral leadership by dissociating the United States from the invasion of Suez. If we cannot persuade Israel to alter its settlements policy, then the United States must distance itself from that policy or lose all credibility as an honest broker for peace. Unless that posture is reflected in our assistance commitments, it is bound to appear as mere rhetoric.

It is not practical for Congress to make the precise linkage between Middle East assistance commitments and the peace process, so a grant of greater discretion to the President would be wise. Such authority might usefully permit variations in assistance levels in a range of cases--for example, hostile intelligence operations in the United States, support for organizations or individuals engaged in terrorism or drug traffic, violations of human rights. Without ending its earmarking of all aid funds, Congress would do well to encourage the President to reduce assistance flows where the recipient thwarts essential American purposes.

In both Israel and the United States, the politics of such linkage will be arduous. But we cannot disentangle our own policy knots by constant homage to the contortions of others. Immanuel Kant wrote that the task of morality is not to make ourselves happy, but to make ourselves worthy of happiness. We do not make ourselves worthy of peace by encouraging friends to weaken its foundations.