ISRAEL - a 1237

order to plan a program which would be acceptable to the United
States Congress, banking institutions and United Nations mem-
ber states, some measure of agreement between the Arabs and
the Jews and a definite prospect of peace in Palestine are essential ;
otherwise there would be no firm base on which the United States
or other members of the United Nations would be able to formu-

_ late and participate ina workable program. a!

It is also recommended that Mr. Porter continue to emphasize. to.
the representatives of the Arab statesat Lausanne: _ a

| that the United States continues to support the principle of repatria- |
tion of. those refugees who wish to return to Israel; but at the same
time, hopes that the representatives of the Arab states will be able
to make constructive suggestions with regard to the resettlement of
those refugees who do not wish to return. Failure to de so would have
the consequences indicated under 2(6), above. a ee
Recommendation: — | |
“Itis recommended that oe ,
1) Mr. Porter be authorized to approach the Arabs and the Israelis
privately asindicated above; © - mE ee

2) The representative of the Department recommend to the ExIm-

Bank that.it temporarily postpone further allocations under the loan.

24

2

pending positive action by Israel at Lausanne.?

[Here follow concurrences by officers of the Office of Near Eastern
and African Affairs and of the Office of United Nations Affairs. ] oy
‘In an attached undated memorandum, Mr. McGhee wrote: “Mr. Porter dis-

cussed this with the President yesterday and the President approved the course
of action recommended in this memorandum.” | a.

 

501.BB Palestine/7-1949 : Telegram | a,
_ ‘Lhe Ambassador in Israet (McDonald). to the Secretary of State

SECRET Tet Aviv, July 19, 1949—noon.
_ 549. Re Depcirtel July 16 received July 18. Department will have
noted in Embtel July 18, 5451 niact, that following my repeated
representations to Foreign Office Israeli Government through Shiloah

Not printed; it reported that Ambassador McDonald conversed with Mr.

Shiloah on the evening of July 15. The latter made known that he would replace
Mr. Wytan as head of the Israeli Delegation at ‘Lausanne, that he would be —
“taking with. him more ‘elastic program’ ” and that he hoped “for progress before
UNGA if PCC will bring two groups together.” The: Ambassador commented
to the Department. that “What Shiloah said and way he said it encourages. me.
to hope.that Israel’s policy especially on refugees is developing favorably.”. S

‘The following day, the Ambassador saw Mr. Eytan, who emphasized that Israel °
“intends to be ‘more.forthcoming’ at Lausanne and hopes that..‘Arabs and US.
delegates will also be more conciliatory’.” Mr. Eytan was said to have said that it
was “essential” that the “UN have success” in the negotiations. (501.BB Pales-
tine/7-1849) | : | | -

501~-887—77

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