By Sean Malloy
An Israeli push to colonise the occupied territories of the West Bank and Gaza is complicating US President George Bush's efforts to stitch together an Arab-Israeli peace conference. As a result, there has been an almost unprecedented public display of friction between the two governments.
Seven new Israeli settlements are to be built along the "Green Line" — the borders between Israel and the West Bank and Gaza before Israel occupied the areas in 1967.
Israel's Likud government plans to spend US$2 billion on new settlements in 1992.
The US doesn't have a direct interest in the occupied territories. It does have an interest in increasing its political and economic weight in the region by stabilising relations with Arab countries that supported the US in the Gulf War.
Washington has promised Syria that the return of the Golan Heights, annexed by Israel in 1981, will be on the agenda of the October peace conference. US secretary of state James Baker has also stated that United Nations Security Council resolutions 242 and 338 will be a centrepiece. These call on Israel to withdraw from the occupied territories in exchange for secure borders.
Applying mild pressure, Bush asked the Israeli government to hold off an application for a $10 billion US loan guarantee until after the US-organised conference. When the Israelis refused, Bush threatened to veto any loan bill that Congress passed.
The loan, labelled "humanitarian aid" for Soviet Jewish emigres, will free funds for investment in new settlements.
Israeli rulers appear divided over how far to risk angering their traditional patron. The Israeli Labour party is taking a softer line than Likud on further settlements in the occupied territories.
The Palestinian National Council met in Algiers last week and discussed Palestinian attendance at the proposed peace conference.
The Palestine Liberation Organisation is prepared to participate in a peace conference that would guarantee Israeli withdrawal from occupied territories and Palestinian self-determination on that land.
Israel has said it refuses to meet PLO representatives or residents from East Jerusalem and that it won't withdraw from the occupied territories.
To sweeten the pill for Israel, Bush is working on improving Israel's international image by calling for the repeal of the United Nations "Zionism is racism" resolution. Australian foreign minister Gareth Evans and Soviet foreign minister Boris Pankin have both supported Bush's call. Repealing the resolution will not change the reality of Zionism for those Palestinians who have been denied basic human rights and are constantly suppressed by the Israeli Defence Forces and armed Zionist settlers.