Economy, Peace on U.S. Agenda of Israeli Leader

Benjamin Netanyahu, Israel’s first American-style prime minister, is making his maiden state voyage to Washington next week with a Milton Friedman-style economic policy in his pocket and a media blitz to convince Americans that he is sincere about seeking peace with the Arabs.

The right-wing leader said in a wide-ranging interview Thursday that he was elected to finish the peace process with Israel’s Arab neighbors and that he wants to continue U.S.-backed negotiations with Syrian President Hafez Assad, as well as with Yasser Arafat’s Palestinian Authority.

“I wasn’t elected to achieve a stalemate, I was elected to achieve peace in the way the majority of the Israeli public understands a genuine peace,” Netanyahu said. “I do not intend to freeze or stop the negotiations but to pursue them on broad fronts, perhaps in some new areas.”

Yet, having rejected most of the fundamental demands of the Palestinians and Syrians for a permanent peace agreement with Israel, Netanyahu declined to expound on any of the “new areas” or to publicly offer fresh ideas for making peace.

He refused to commit to meeting with Arafat or to taking Israeli soldiers out of the West Bank city of Hebron in keeping with the Israeli-Palestinian peace accords that Arafat signed with the previous administration.

The Massachusetts Institute of Technology graduate in business administration was more anxious to talk about Israel’s economy, asserting that the existence of the Jewish state is finally secure enough for a prime minister to shift his attention from defense policy to economics. He vowed to complete Israel’s transformation from socialism to capitalism by speeding up deregulation and privatization of state-held companies.

In anticipation of the trip, Netanyahu persuaded his Cabinet this week to approve a $1.6-billion budget cut to reduce the projected deficit for 1997 by a third. He is taking his finance minister, Dan Meridor, and the governor of theBank of Israel, Jacob A. Frenkel, with him to Washington and New York to woo Wall Street investors.

Referring to the $3 billion in U.S. foreign aid that Israel receives each year--more than any other country--Netanyahu said, “I would like to see Israel move very rapidly from a position of a dependent nation to a position of full economic independence, to become a significant economic power in the world.”

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Waxing enthusiastic about Israel’s future, he suggested that the country’s economic development depends on high-tech information companies, such as Intel and Motorola, that have taken advantage of government subsidies to build factories in Israel.

Israel may be the only country in the world, Netanyahu said, “that can move into the post-industrial Information Age without having really gone through the phase of being an industrial power. That, paradoxically, has turned out to be not a disadvantage but a huge advantage because we do not carry the baggage of obsolete industries.”

He made no apparent link between progress in peacemaking and economic progress.

The 46-year-old prime minister exuded his trademark confidence throughout the interview despite a tough first two weeks on the job. His challenges included a tabloid scandal involving the firing of his sons’ nanny after she burned a pot of soup and a threat by his foreign minister to resign if the combative former army general Ariel Sharon is not sworn in as a member of government by Tuesday. Sharon was reportedly prepared to accept a top ministry, but a partner in the governing coalition raised objections Thursday, again delaying resolution of the crisis.

“There have been snags, and the press seizes on them. I have found throughout my career that people do not see the big moves that I make until I make them and they are completely obsessed with the minor oscillations,” Netanyahu said dismissively.

“I’ve had the great fortune of being the recipient of the greatest favor any politician can have, and that is a systematic underestimation by one’s opponents. I doubt very much I would be here today if it weren’t for that,” Netanyahu said.

Netanyahu most probably would count President Clinton among those who underestimated his chances of victory in the May 29 election. Clinton all but endorsed Labor Party incumbent Shimon Peres and is expected to make amends when he meets with Netanyahu on Monday to discuss how to advance peace negotiations.

Netanyahu has backed away from the concept endorsed by the United States of trading land that Israel captured in 1967 for peace with Israel’s Arab neighbors--the premise of negotiations until now. He also advocates strengthening Jewish settlements in the predominantly Palestinian West Bank--a policy that the U.S. government has long opposed and over which it clashed with an earlier Likud Party government.

But Netanyahu’s advisors do not expect any conflict with the Clinton administration on these issues or any others before U.S. elections, a view reinforced last month when Secretary of State Warren Christopher visited the region and publicly adopted Netanyahu’s emphasis on Israeli security in peace negotiations.

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Again on Thursday, Netanyahu ruled out Palestinian demands for a sovereign state in the West Bank and Gaza Strip with East Jerusalem as its capital, just as the elected Palestinian Legislative Council reiterated them at a meeting in the West Bank town of Ramallah.

A Palestinian state within Israel’s post-1967 borders, Netanyahu said, “would lead to a breakdown of the desirable peace.”

Netanyahu said that while some of Israel’s neighbors have accepted Israel’s existence in the Middle East, he is not convinced that Arafat had.

While asserting that he is willing to continue negotiations with Syria begun by the previous government, Netanyahu insisted that Syria must curb Hezbollah guerrilla attacks on Israeli soldiers in southern Lebanon before negotiations can proceed.

Netanyahu has ruled out returning the Golan Heights to Syria, which is Assad’s demand for peace.

During his visit to the United States, Netanyahu is also scheduled to address a joint session of Congress. He will meet with American Jewish leaders, many of whom felt slighted by the previous Labor government and now are concerned about the influence of ultra-Orthodox Jews in the Netanyahu government.