COUNTRY REPORT ON PALESTINE REPORT TO THE SPECIAL AD HOC COMMITTEE BY THE SWNC SUBCOMMITTEE FOR THE NEAR AND MIDDLE EAST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A002900140001-4
• Release Decision: RIFPUB
• Original Classification: T
• Document Page Count: 12
• Document Creation Date: December 27, 2016
• Document Release Date: July 31, 2013
• Sequence Number: 1
• Publication Date: August 6, 1947
• Content Type: REPORT

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COUNTRY REPORT ON PALESTINE
Report to the
SPECIAL AD HOC COMMITTEE
by the
SWNC Subcommittee for the Near and Middle East
[No
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ENCLOSURE
COUNTRY REPORT ON PALESTINE
Report by the State-War-Navy Coordinating Subcommittee
for the Near and Middle East
I. ANALYaIS OF THE SITUATION IN THE COUNTRY.
1. Basic Forces.
a.- Economic.??
The economy of Palestine is unique in the Middle
East in that its agricultural and industrial develoPment has
proceeded at a-relatively rapid rate with the aid of substantial
amounts of foreign capital, much of it in the form of outright
grants by Jewish philanthropic organizations. Its development
has also been Conditioned by the influx rf European skills and
trades which have determined in large measure the character.of
industrial and ,commercial growth.
Prior to the war, the. caoital of Jewish immigrants.
plus the contributions of Jewish organizations accounted for
over half of'all foreign?exchange receipts. Between 1939 and
1944, an estimated $100 million in foreign capital,-principally
from these sources, came into the country1. The current rate
of capital inflow is higher than that existing prior tb or
during _World War II and probably exceeded $ 0 million in 19464
As a result of the inflow of foreign capital and
the development of industry and agriculture by skilled European
immigrants, the standard of living of the Jewish population has
risen greatly above that of the populations of adjacent count-
ries. There has also been a rise in the standard of living of
the Palestinian Arab population, though not to a level comparable
to that of the Jewish population.
Basically Palestine is poor in resources and its
capacity to improve current standards of living probably
even to sustain them, will depend on a continuation of the
influx of private foreign capital. Further large-sdale
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immigration would undoubtedly necessitate international
financial assistance in order to create in Palestine conditions
which would make possible the settlement of a large number of
immigrants. The amount and duration of such assistance would
depend on such a range of variables, both political and
economic, as to render estimates at this time of little or
no value, particularly priOr to any recommendations which may
be made by the UN. Under present conditions, no emergency
financial aid is required,'and the financial position of the
country, externally and internally, is such that it appears
reasonable to assume that capital requirements for development
can be met through ordinary channels.
b. Political.
The present political situation in Palestine
could hardly be wore. Terroristic activities in favor of
the formation of a Jewish State have forced the mandatory
power, Great Britain, to convert Palestine into an armed camp.
These activities have seriously affected the normal life of
the country. The Arabs, who form the majority in the country,
are uneasily quiescent. A UN decision which they regarded as
unfavorable might well precipitate civil war, and it is
virtually certain that irregular bands would be recruited in
neighboring countries, whose sympathy with the cause of the
Palestine Arabs is too well known to necessitate elaboration
here.
The Palestinian Arabs base their demand for
immediate complete independence on their historical claim of
having occupied the country for thirteen centuries. More re?
cently, they point to the promise of independence given in
the exchange of letters in 1915 between Sir Henry McMahon,
British High Commissioner in ,Egypt, .and the Sharif Hussein of
Mecca, ? and to the Anglo?French Declaration of -November 7, 1918,
which: promised them self?determination. The Balfour Decla?
ration.in,1917, the Arabs claim is void, since it was. made
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without the consent of the Arabs, who formed the majority of
those concerned, end who constituted at that time ninety percent
of the population of Palestine. The Arabs demand the ful?
fillment of the conditions set forth in the White Paper of
1939, in which England.declared its intention- to establish,
within ten years, an "independent Palestine State," in which
Arabs and Jews would share ?in'the government.. Such a govern?.
ment at 'present would give the Arabs the greater representation.
The Zionists also .base their claims for.an
autcnomous, independent Jewish State on historical grounds. .In
addition, they point to the Balfour Declaration, by virtue of
which they claim to have been promised the establishment of a
Jewish State In Palestine. The terms of the Mandate in 1922
stipulated the manner in which a Jewish National Home in
'Palestine should be encouraged and. developed. -The Churchill
Memorandum, Command.Paper of .1922 in interpreting the Balfour
declaration, expressly stipulated that Palestine was not to
become a Jewish State. However, most Zionists feel that neither
the. Balfour Declaration nor the terms of the .Mandate have been
fulfilled.
The critical condition of thousands of European
Jews has given added impetus to pressure by Zionist leaders
for a Jewish State in Palestine which would serve as a permanent
haven for Jewish Displaced Persons.
The internal Security of Palestine is of the
greatest concern to the British. Serious Arab outbreaks,
directed primarily against the Jews, occurred in 1920, 1921,
and 1929. The Arab Rebellion of 1936 was directed primarily
against the mandatory Government. The most recent dangers to
internal security, Which have arisen from Zionist terrorist
activities in Palestine, began in 1944 and have continued to date
Attacks have been directed against BritiSh military personnel,
military installations, communication centers, naval vessels,
airfields, oil pipelines, and refineries. The British have
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'countered these activities with local curfews and the imposition
of statutory martial
Attempted illegal Jewish immigration has continued
on a large scale, in spite of countermeasures by the British
Army, Navy and Air Force., The cost to the British GovernMent
Of these counter-measuretis considerably increased, by the
'transshipment of, and maintenance of Camps in ?Torus for, the
intercepted illegal immigrants.- .
2. Objectives and Methods of Other Great Powers,
Great Britain as the Mandatory Power can be said, to
have two principal objectives in Palestine at the present
time: (1) Restoration of peace-and the maintenance of:law and
order, with a minimum of friction between Jew and Arab, and
with the least possible damage to the British position in the
Arab world and to relations with the United States; (2) the
retention of bases or some form -of sphere of influence in
Palestine .as a strategic link in the road of empire. In the
first objective Great Britain has been only moderately.success--
ful, and there is doubt whether she will achieve the second,
at least in any satisfactory form.
Russian objectives in Palestine are, somewhat obscure
but presumably are directed towards (1) Eliminating British
influence in this area (2) conversely, extending communist
ideology to the maximum extent. Russian methods are typically
opportunistic. Gromykols attidtude at the recent special
session of UNGA was considered by the Zionists?to indicate
greater support of their aspirations, but other t regard it as
being but another example of the USSRts insincere political
maneuvering.
France has relatively little interest in Palestine,
except as One of the original protectors of the Holy Places.
Her interest has been traditionally further north in the
Levant States..
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S.
The Arab States1 have played the leading role in
opposing Zionist aspirations in Palestine. The greatest
unifying force behind the Arab League is the fear of political
Zionism and fear of Zionist Himperialismff, which they visualize
as involving Jewish expansion into Transjordnn and even into
other Arab States. All Arabs share this fear, nnd'the League
has been instrumental in coordinating such anti-Zionist
activities as the boycott of Zionist goods nnd the scheme for
saving Arab lands in Palestine.
II. ANALYSIS OF ASSISTANCE ALREADY RECEIVED INCLUDING MOST
RECENT DATA AVAILABLE.
The Palestine Government hs made no request for, nor
received, any aid. The Mandatory Power Great britain, has
however, indicated that American help would be needed if certain
American proposals for immigration were carried out, and if
large-scale public works shOuld bo undertaken.
III. U.S. OBJECTIVES IN THE COUNTRY.
.Briefly stated, U.S. objective 6 in Palestine are to secure
the greatest possible measure of self-government for the
people of Palestine, leading to ultimate independence, under
conditions in which Jews shall not dominate Arabs nor Arabs
dominate Jews, and in which the Spiritual and cultural interests
of Jews, Christians and Moslems shall be equally respected.
The whole question of Palestine is now under study by a special
committee of the UN, and while the past United States position
with respect to immigration and allied subjects is well known,
we have now taken the position that during the period of
consideration by the special committee it would be premature
to announce a. policy with regard to the substance of the
question and thereby possibly. limit full utilization of the
Committee's report. However, it must be pointed out that any
solution of the, problem to which the United States Can lend
support must take into consideration the strategic importance
Of maintaining the friendship of the Arab people*
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IV.? CONSIDERATION OF ALTERNATIVE MEANS OF REACHING OBJECTIVES.
. Economic.
Owing to the uncertainty over the United Nations
decision with regard to the Political future of Palestine,
it is impossible to work out a specific economic program at
the present time. Should a viable solution be adopted, it.
would be necessary to work out a broad program for the
economic development of ?Palestine, in which the United States,
because of its long professed interest in the country, would
undoubtedly be called upon to participate,
2. Political.
Our political objective is to do what we can to bring
about cooperation and peace in Palestine. To that end, it is
our, intention to support any plan for the future of Palestine
which is just reasrmable and workable, and which would
promote the independence and the social and economic well-26ing
of the inhabitants of Palestine.
3. United Nations,
The question of Palestine is at the present time
under active consideration by a United Nations Special Com-
mittee. This Committee will make its report by September 1,
1947. The General Assembly of the United Nations at its session
beginning September 15, 1947, will consider this report and
make recommendations concerning the future government of
Palestine.
While it is impossible at this stage to predict what
form the future government of Palestine will take, it is possible
that the United Nations will exercise important functions with
respect to Palestine. Thus, it may well be that the United
Nations will be an increasingly important medium through which
tae United States must act in working out its policy toward
Palestine.
During the period while the United Kingdom is the
Mandatory power or may be the; administering authority of
Palestine under trusteeship, the United Kingdom would be the
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channel through which economic and technical assistance from
the United Nations and its agencies for Palestine would'be
directed., Technical assistance by ECOSOC and the specialized
agencies, in the modernizing of agriculture and industry and ?
in extending health, welfare and educational services: might
well be recommended as complementary to
any financial aid
rendered by the United States, the Bank or the Fund.. . However,
because of the present uncertainty concerning the decision
which may be taken by the General Assembly, detailed recom?
mendations with respect to assistance-to-be furnished by.
United Nations agencies in Palestine cannot be made- at this
4. Other 0.1.0.
Since thebasic. need in Palestine is for skilled
technicians, particularly Arab, to improve agricultural and
health conditions and develop native industries, ? the United
States objective of economic and social well?being for all
Palestinian inhabitants could be ?attained in part through a
program of educational and technicalassistance. However, in
?order to implement the broader-objective Of helping to bring '
about cooperation and peabe in Palestine, the UnitedStates
should make every effort to divorce such informational,
cultural and technical assistance from politics. All elements.
of the population should benefit from this aid in proportion
to their needs.
U.S. cultural and technical assistance could take
the form of granting scholarships to Palestinian students' tP
be used in American institutions, beth in the U.S. and in the
Near East, and sending to Palestine technical specialists from
the U.S. to -assist in the development of the country, particular?
ly in the ?fields of agriculture and industry. ,The extent of
such a program would depend ?upon future political and economic
developments in Palestine and the degree of responsibility
assumed by the U.S. in that country. Another factor which
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would, materially affect such a program is the extent to whiOh
philanthropic and religious oru,nizations would participate
in the development of the country.
V. MAGNITUDE NATURE, AND TIMING OF THE MEASURES REQUIRED.
WITHIN THE NEXT THREE TO FIVE YEARS TO REACH THESE .
OBJECTIVES..
Here again the uncertainty with regard to the future status
Of. Palestine renders impOsSible any estimate as to the nature
and magnitude of measures to be taken.
VI. PROBABLE AVAILABILITY OF ECONOMIC AID FROM EXISTING SOURCES
UNDER PRESENT POLICIES,
1, U.S. Sources.
_Indirect aid to the Palestine Government is supplied
through subscriptions raised by various Jewish groups in the
United States. These are substantial, averaging $20 to $25
million per annum during the last five years. Total American
contributions for 1948 are estimated at about $30 million and
for _1947 may reach $40 million. In 1948, the figure is .
expected to exceed the 1947 .estimate by possibly $10 million.
In addition further indirect aid is furnished through contri?
loUtions for the maintenance and rehabilitiation of prospective
Palestinian immigrants.'
.2. Other Countries.
Great Britain, as the mandatory Power having primary
responsibility for the country, has incurred substantial.
expenditures during-and after the war for defense and internal
security,. having been forced to divert funds for. this purpose
which would. have otherwise.been used for the economic and
social deVelopment of the country. Great-Britaints expenditures
for defense and security are roughly estimated to have averaged
about T,20 million per year over the last five years.
3. ? International Source's.
At present be0aUse of its status as a mandated
country, Palestine is not 'eligible for.help from the Inter?
national Bank.
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VII. ADDITIONAL MEASURES REQUIRED FROM THE U. S.
These measures are also unpredictable. It may be anticipated
that the United States will be asked to help if the United
Nations is able to reach 'a satisfactory solution, but the
exact nature of such additional.measures cannot at present
be determined.
VIII. NATURE OF ABRAINGEMENTS WITH THE FOREIGN GOVERNMEN:2S TO
ASSURE ACCOMPLISHMENT OF OUR OBJECTIVES IN TAKING SUCH
MEASURES.
These arrangements are also unnredictable, but would be
presumably within the framework of the. United Nations.
IX. EFFECTS UPON THE? COUNTRY AND UPON U.S. FOREIGN,PULICY IN
U.S. REFUSAL TO GRANT AID OR FAILURE OF PROGRAM UNDERTAKEN.
.This part is also academic under existing circumstances.
X. POSSIBLE EMERGENCY SITUATIONS WHICH SHOULD BE ANTICIPATED
AND RECOMMENDED CUURSE OF ACTION OF U.S.
There is a possibility that a plan might be achieved for
the solution of the Palestine problem the success of which
would hinge on immediate and substantial assistance from
foreign sources. The United States should be prepared to back
up its longstanding interest in Palestine with substantial
aid, if the plan which ?is evolved for the future of Palestine
is just, reasonable and workable and which would promote the
independence and the social and economic well-being of the
inhabitants.
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Since the establishment of the Mandate economic develop-
ment in Palestine has been rapid, determined to an unusually
high degr.ee by the influx of large sums of foreign capital
and thousands of Skilled-European immigrants. Both capital
and immigrants have been preponderantly of Jewish origin and
,
have resulted in a notable rise in the standard of iiidng in
palestine, that-of the Jewish community; however, attaining
a considerably higher level than that of the Arab.
Politically the situation in Palestine has reflected
the sharply conflicting claims of the Jews and Arabs to
dominant control. 'The Jews base their claim to-Palestine?
upon historical assoCiation, the Balfour Declaration of 1917,
and the Mandate of 1922. The Arabs found their claim upon
thirteen hundred Years of occupatio4, British assurances given
during World War I, and latterly the British "White Paper of
1939 presaging independence for Palestine within ten years,
when the Arabs would stillbe in the majority.
These con-
flicting claims have resulted in fairly frequent, and some-
times sus:Gained, outbreaks of violence, not only between Jews
and Arabs but, during the past ten years by one or' the other
group against the mandatory power.
Great Britain's objectives in Palestine have been two-
fold; (1) as mandatory power, to maintain law an order and
restore peace; (2) to retain bases or some form of sphere of
influence- in Palestine as a strategic link.in the road of
?empire, RusSian objectives are somewhat Obscure but pre-
sumably directed towards 'elimination of the British and
in-
crease of Russian influence. The Arab States have been
.activiilF opposed to Zionist aspirationS in Palestine, their ,
opposition arising in part from fear of possible Jewish ex-
pansion-beyond Palestine into neighboring areas. U. S.
objectives in Palestine are to secure the b,eatost possible
measure of self-government for the people of Palestine, leading
to ultimate independence, under conditions in which .Jews shall
not dominate Arabs nor' Arabs dominate Jews, and in which the-
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spiritual interests o deWs, Christians and Moslems shall be
aplu..
equally respected. PIOWekrer, it elgettiti, be pointed out that any
solution of the probleb to which the United States can lend
support must take into considc.ration the strategic importance
of maintaining the friendship of the Arab people.
- While the future government ?f Palestine is under consider-
-ation in the UN, the formulation of a program to bring about
US objectives in that country is not feasible, and announce-
ment:of a policy would be premature and might limit full utili-
zation of the report of the UN Special Committee, Should a
viable solution for the Palestine question.be adopted, the
attainment of independence and of social and economic well-
being the inhabitants of Palestine Might be facillit-
ated by assistance from the US, directly or through the UN,
particularly in technical or cultural fields. The mainten-
ance or improvement of the current,standard of living will '--
depend on a continuation of the influx of private foreign
captial, and further large-scale immigration would undoubed-
ly necessitate international financial assistance.- However,
? while the future of. Palestine is uncertain, it is imPossible
to estimate the extent of the financial, cultural and tech--
nical aid which will be required by Palestine in order to
.achieve the above goals.
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