Peace Will Alter U.S.-Israeli Relations Too

At the Capitol Hill headquarters of the American Israel Public Affairs Committee, nerve center of the nation’s pro-Israel lobby, the phones were ringing off the hook. “People are frantic, worried and confused,” a staff member said. “They want to know what we’re going to do after there’s peace.”

Inside the White House, political aides to President Clinton were trying to divine what peace between Israel and the Palestine Liberation Organization would mean for the election of 1996. The last two presidents who had major successes in Middle East diplomacy, they noted, were Jimmy Carter and George Bush--and both lost their jobs a few years later.

And at Lockheed Corp. in Calabasas, aerospace executives were puzzling over what peace would mean for military sales to Israel and its Arab neighbors. “This is something we’ve been thinking about for years,” said one, “but we certainly didn’t expect it to happen this fast.”

For most Americans, the agreement between Israel and the PLO was a cause for wonderment and pride. But for others, it brought anxiety as well. The diplomatic earthquake in the Middle East has sent a sharp tremor through one of the pillars of American political life: the special relationship between the United States and a perpetually embattled Israel.

If the Middle East’s long state of war really does give way to peace, the impact at home could be far-reaching--not only on foreign policy but also on business, domestic politics and the life of the nation’s Jewish community, long energized by Israel’s plight.

“This could change the whole environment, just as the end of the Cold War did,” said John Harbison, a vice president and defense industry expert at Booz, Allen & Hamilton in Los Angeles. “We aren’t there yet. We’re still a long way from real peace. But one thing we’ve learned from the events of the last few years is never say never.”

Over the long run, the list of potential changes is long. If peace comes, the $1.8 billion the United States grants Israel each year in military aid could be put to other uses. The U.S. Navy and Air Force could reduce deployments in the Middle East. Purchases of U.S. military hardware by both Israel and its Arab neighbors might eventually decline--but other American exports might increase, especially if peace ends the Arabs’ economic boycott of Israel and touches off a regionwide boom.

At home, the dynamics of congressional and presidential elections could shift. As the issue of Israel’s survival becomes less acute, Jewish voters may focus on other issues, and pro-Israel campaign contributors may give less money to both Democrats and Republicans. And the American Israel Public Affairs Committee, one of the most effective lobbying groups in Washington, would have to redefine its mission.

None of these changes is likely in the short run. The Middle East will not arrive at peace simply because of a ceremony on the White House lawn. The settlement with the Palestinians must now be made to work, and accords must also be reached with Syria, Jordan and other Arab countries. Even then, Israel will be likely to face massive military threats from Iraq and Iran, terrorism from Palestinians who do not accept the peace--and the fear that the moderate regime in Egypt, the largest Arab state, could be overthrown by Muslim fundamentalists who would try to lead the Arab world back to war.

The American link with Israel, founded on sentiment and shared traditions as well as strategy, is not likely to weaken abruptly. Americans have supported the idea of a Jewish homeland since President Woodrow Wilson endorsed it in 1916, 32 years before President Harry S. Truman gave instant diplomatic recognition to the infant state of Israel.

But the U.S.-Israeli “special relationship” has been forged by the constant threat of war. If that threat wanes, the relationship will change as well. Some areas where the impact is likely to be felt:

* Foreign Aid. “The aid question is the one everybody is asking,” said Sen. Richard G. Lugar (R-Ind.), a member of the Senate Foreign Relations Committee. “It’s also very dicey, because the (overall) figures for foreign assistance are moving down, not up.” Israel has long been the world’s No. 1 recipient of U.S. economic and military aid. As a Senate aide warned, “It’s going to be hard to sustain a case for continuing more than $3 billion in aid a year if the military threat diminishes.”

In the short run, Clinton has promised to maintain Israel’s aid at current levels and has pledged to raise even more money from both Congress and other countries to help support the peace agreement. Steven Grossman, president of the American Israel Committee, argues that Israel needs more military aid, not less, because Saudi Arabia and other Arab states have bought new planes and tanks since the 1991 Persian Gulf War.

“There will be a temptation (to reduce aid), but in the end Congress and the American people will have the patience and the wisdom to resist,” said California Rep. Howard L. Berman (D-Panorama City), a powerful ally of Israel in the House. But over the long run, other members predict, the temptation is likely to grow.

* Business. The Middle East is the largest overseas market for American weaponry. U.S. sales to the region could approach $28 billion this year. But real peace presumably would reduce the demand for hardware not only from Israel but from Saudi Arabia and other major Arab buyers as well.

That will not happen right away. For one thing, the biggest military threats in the Middle East come from Iraq and Iran, neither of which is likely to make peace soon. “Countries will still need defense systems, and the Middle East isn’t a safe neighborhood yet,” noted Susan Pearce, a Lockheed vice president. Israel, for example, is moving ahead with a planned purchase of $2 billion in U.S. warplanes, with Lockheed’s F-16 one possible choice.

But over the long run, consultant Harbison warned, “the message for defense industries in the United States is more of the same. The environment we’re facing is dramatically and permanently different from where we were during the Cold War.”

Companies that produce “cutting edge” equipment will still do well, he predicted. It’s the “mature programs” in aircraft and armored vehicles that will suffer. Big defense firms like Lockheed, he noted, “do both.”

Some U.S. firms, on the other hand, may benefit. Coca-Cola and Ford, once locked out of the Arab world because they did business in Israel, may find vast new markets open to them.

* U.S. Politics. Clinton is hoping to boost his stature at home by hosting the ceremony concluding the Israeli-PLO pact Monday. But aides said it is impossible to predict how the accord will affect his fortunes over the next three years.

For one thing, U.S. officials have acknowledged that they had little part in actually negotiating the pact. Instead, the United States is being asked to bankroll its implementation with foreign aid--hardly a popular issue at home.

Over the longer run, peace could alter one significant factor in American politics: the importance of Jewish donors who contributed to pro-Israel candidates, whether Democratic or Republican.

“I was thinking about it this morning,” said a major Jewish fund-raiser for Clinton’s 1992 campaign who asked not to be identified.

“There are Jews who give because of Israel, and there are (other) Jews who give because they’re Jewish and liberal,” the fund-raiser said. “Most of the Democratic money is people who give because they’re Jewish and liberal”--and that is likely to continue.

* The Pro-Israel Lobby. Long considered one of the nimblest lobbying organizations in Washington, the American Israel Committee began redefining its mission last week even before the peace agreement was signed.

“In a world of change, we have to be flexible,” Grossman said.

One of his group’s immediate missions, he said, will be to help the American Jewish community understand the startling sight of Yitzhak Rabin greeting Yasser Arafat. “The community is somewhat disoriented,” he noted. “They want this explained to them. Is the security of Israel protected here? So we’ll be doing a lot of education.”

Grossman and other leaders of the nation’s major Jewish organizations met in New York last week and agreed to support the accord.

Times staff writers David Lauter and Alan Miller contributed to this report.