Israel Demands Equal Treatment if U.S. Forgives Egypt’s Arms Debt

Israeli Finance Minister Yitzhak Modai said Tuesday that if the United States goes ahead with proposals to forgive Egypt’s multibillion-dollar debt, Israel will demand that most of its debt to the Americans also be erased.

Egypt owes the United States about $7 billion from previous arms sales, and Israel owes $4.6 billion. The two are the largest recipients of U.S. foreign aid. Each year, Israel receives $3 billion and Egypt gets $2.3 billion.

“It doesn’t make sense that Egypt gets a waiver and Israel stays out of it,” Modai told Israel Radio. “It is ridiculous.”

He said he will raise the subject when he visits Washington in two weeks.

U.S. officials have said President Bush plans to forgive the Egyptian debt as a reward to Egypt for joining the U.S.-led multinational force in the Persian Gulf and taking part in the trade embargo against Iraq.

Israel has maintained a low profile in the crisis, reportedly at the request of the Americans, who worry that an Israeli role could break up the alliance of moderate Arab states against Iraq.

Prime Minister Yitzhak Shamir said he hopes that Israel will receive additional economic aid from the United States.

“It’s not a question of cancellation (of debt), but I think that our representatives will ask the United States for finding some ways to solve, to help us solve our economic problems,” Shamir told reporters Tuesday.