THE OUTLOOK FOR ISRAEL
Document Type:
Collection:
Document Number (FOIA) /ESDN (CREST):
CIA-RDP79R01012A018500020001-6
Release Decision:
RIPPUB
Original Classification:
S
Document Page Count:
12
Document Creation Date:
December 23, 2016
Document Release Date:
April 9, 2014
Sequence Number:
1
Case Number:
Publication Date:
October 5, 1961
Content Type:
NIE
File:
Attachment | Size |
---|---|
![]() | 839.21 KB |
Body:
EMU -N --
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/04/10:
CIA-RDP79R01012A018500020001-6 1 2 OCT 1961
NIE 3 5 ? 6 1
-CONF ENTIA
1 8 3 5 October 1961
NATIONAL INTELLIGENCE ESTIMATE
NUMBER 35-61
(Supersedes 35-58)
THE OUTLOOK FOR ISRAEL
Submitted by the
DIRECTOR OF CENTRAL INTELLIGENCE
The following intelligence organizations participated in the
preparation of this estimate: The Central Intelligence Agency
and the intelligence organizations of the Departments of State,
the Army, the Navy, the Air Force, The Joint Staff, and AEC.
Concurred in by the
UNITED STATES INTELLIGENCE BOARD
on 5 October 1961. Concurring were The Director of Intelli-
gence and Research, Department of State; the Assistant Chief
of Staff for Intelligence, Department of the Army; the Assist-
ant Chief of Naval Operations (Intelligence), Department of
the Navy; the Assistant Chief of Staff, Intelligence, USAF;
the Director for Intelligence, Joint Staff; the Atomic Energy
Commission Representative to the USIB; the Assistant to the
Secretary of Defense, Special Operations; and the Director of
the National Security Agency. The Assistant Director, Fed-
eral Bureau of Investigation, abstained, the subject being
outside of his jurisdiction.
DOCUVENT NO.
NO CHANGE IN CLASS. L
Li OFCLAFS!RED
CLASS. CHANCED TO: TS S 9
NEXT REV:EW DATE:
AUTH: HR 70-2
DATE: g t14 in REVIEWER 00 7 4q
CONFI ENTIAI;
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/04/10:
CIA-RDP79R01012A018500020001-6
N9 370
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/04/10:
CIA-RDP79R01012A018500020001-6
CENTRAL INTELLIGENCE AGENCY
DISSEMINATION NOTICE
1. This estimate was disseminated by the Central Intelligence Agency. This copy
is for the information and use of the recipient and of persons under his jurisdiction on
a need to know basis. Additional essential dissemination may be authorized by the
following officials within their respective departments.
a. Director of Intelligence and Research, for the Department of State
b. Assistant Chief of Staff for Intelligence, Department of the Army
c. Assistant Chief of Naval Operations (Intelligence), for the Department of
the Navy
d. Director of Intelligence, USAF, for the Department of the Air Force
e. Director for Intelligence, Joint Staff, for The Joint Staff
f. Director of Intelligence, AEC, for the Atomic Energy Commission
g. Assistant Director, FBI, for the Federal Bureau of Investigation
h. Assistant to the Secretary of Defense, Special Operations, for the Department
of Defense
i. Director of NSA for the National Security Agency
j. Assistant Director for Central Reference, CIA, for any other Department or
Agency
2. This copy may be retained, or destroyed by burning in accordance with applicable
security regulations, or returned to the Central Intelligence Agency by arrangement
with the Office of Central Reference, CIA.
3. When an estimate is disseminated overseas, the overseas recipients may retain it
for a period not in excess of one year. At the end of this period, the estimate should
either be destroyed, returned to the forwarding agency, or permission should be requested
of the forwarding agency to retain it in accordance with IAC?D-69/2, 22 June 1953.
4. The title of this estimate when used separately from the text should be classified:
FOR OFFICIAL USE ONLY
WARNING
This material contains information affecting
the national defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Secs. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
DISTRIBUTION:
White House
National Security Council
Department of State
Department of Defense
Atomic Energy Commission
Federal Bureau of Investigation
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/04/10:
CIA-RDP79R01012A018500020001-6
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/04/10:
CIA-RDP79R01012A018500020001-6
?42,
THE OUTLOOK FOR ISRAEL
THE PROBLEM
To assess the outlook for Israel over the next two or three years.
CONCLUSIONS
1. The recent elections in Israel did not
produce any significant change in the
political situation. While the socialist
Mapai party, dominated by Ben Gurion,
lost a few seats in the parliament, it will
remain the key political element over the
next few years. We foresee no change
in the pattern of its forming coalitions
with lesser parties to govern the country.
Nor do we foresee any significant diminu-
tion of Ben Gurion's power so long as he
remains active. His death would precipi-
tate a contest for power in the Mapai
party, but we believe the main lines of
Israeli domestic and foreign policy would
remain essentially unchanged. (Paras.
9-13)
2. Israel's economy continues to grow at
an impressive rate, but its substantial ad-
verse trade balance will continue to keep
Israel heavily dependent on private and
governmental aid from abroad. The
sharp diminution of West Germany's
reparations and restitution payments
over the next few years will probably
cause some cutback in investment and
development, in spite of Israeli efforts to
increase the contributions of world Jewry
and to attract foreign industrial invest-
ment. (Paras. 15-17)
3. There has been no improvement in
Arab-Israeli relations. Sporadic border
incidents are likely. Israel's plans to di-
vert substantial amounts of Jordan
waters to the Negev and the Israeli nu-
clear program will continue to cause
much apprehension among Arab leaders,
and could lead to forceful action. If the
breakup of the UAR following the 28 Sep-
tember revolution in Syria does not lead
to turmoil on Israel's borders, we foresee
no significant immediate impact on Israel.
We believe, however, that Israel will be
able to maintain its military superiority
over its Arab neighbors?a superiority
which the Arabs recognize and which in-
hibits deliberate attack on Israel. More-
over, reluctance to provoke great power re-
actions inhibits Israel's undertaking pre-
ventive war. Primarily for these reasons,
we consider the chances of a third round
of major hostilities to be less than even.
(Paras. 27,33-35)
tgoBeilerlr
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/04/10:
CIA-RDP79R01012A018500020001-6
1
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/04/10:
J.
Aki
4.3=Erf3=RIE'r 2
CIA-RDP79R01012A018500020001-6
5. Israel's foreign policy will remain based
principally on its need for strong sup-
port from the West, particularly the US
and France. With two and a half mil-
lion Jews in the USSR, Israel will
endeavor to keep its relations with the
USSR at least correct. It will attempt to
preserve good relations with non-Arab
Middle Eastern countries, e.g., Turkey and
Iran. Israel will pursue an active pro-
gram of aid to certain African and Asian
countries and will seek US cooperation in
this field. (Paras. 38-41, 43-44)
DISCUSSION
I. INTRODUCTION
6. In its 13 years of independence Israel has
accomplished much. It has maintained a
stable democratic system of government; it
has made tremendous strides in economic de-
velopment; it has absorbed a net inflow of
some 850,000 persons, more than doubling its
Jewish population. On the other hand the
surrounding Arab states continue hostile.
Israel remains heavily dependent economi-
cally on contributions from world Jewry as
well as on foreign investment and govern-
mental aid. Diversity of background among
its citizens is increasingly giving rise to in-
ternal political and social problems, although
the Jewish majority remains firmly united
against the Arab states.
7. Perhaps foremost among these is the ques-
tion of the dominant political and social
philosophy in the state. Jewish settlement
in Palestine through the early 1930's was pri-
marily undertaken by East European Zion-
ists who believed that Jewish regeneration
could come about only when Jews were set-
tled as an agricultural society in Palestine.
Later immigrants, uprooted from Europe by
World War II or from the Arab States after
1948, mostly came to Palestine for lack of any
other place to go and did not share the Zion-
ist ideal. The earlier group has provided vir-
tually all the state's leaders and its socialist
ideals have set the tone for Israel. Increas-
ingly these ideals are being successfully chal-
lenged by the newer elements. The modest
success of the Liberal Party in the 1961 elec-
tions probably reflects this trend. It is likely
that agriculture-oriented socialisin will con-
tinue to decline in favor of more free
enterprise and industrialization. Sweeping
changes in the country's leadership, however,
will probably not occur during the period of
this estimate.
8. There are other sharp cleavages in Israeli
society. The politically organized orthodox
minority has, through its participation in
coalition governments, succeeded in enforc-
ing sabbath and dietary laws which the ma-
jority of Israelis regard as archaic. There
is also considerable communal friction be-
tween European and oriental Jews. The lat-
ter, mostly from Arab states, have less de-
veloped cultural and educational backgrounds
and constitute the lowest stratum of Israeli
Jewish society. There is little intermarriage
between European and oriental Jews, and the
latter, like the Arabs remaining in Israel,
feel they are discriminated against economi-
cally, politically, and socially. European
Jews are continuing to receive material and
moral support from the West which will fur-
ther contribute to their domination over the
oriental element.
44.0e4:05.513..
_
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/04/10:
CIA-RDP79R01012A018500020001-6
50X1
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/04/10:
CIA-RDP79R01012A018500020001-6
SECRET 3
II. POLITICAL
9. Since the achievement of independence in
1948, Israel has been dominated politically by
Mapai (the Israel Labor Party) , heading a
series of coalition governments. Over five
elections, the principal parties have held
roughly the same percentages of the vote,
despite a growth in population from 900,000
to over two million. No party has approached
a clear majority.l All these parties have de-
veloped from groups active in Mandate days
and most of them have roots in longstanding
political and cultural movements in the Jew-
ish past. Israelis play the political game with
vigor and zest and are remarkably tenacious
in holding to political ideologies.
10. The coalition governments headed by
Mapai have, at one time or another, included
all other major parties except the extremist
right-wing Herut and the Communists. How-
ever, Mapai has always held the Prime Min-
istership and the Ministries of Foreign Af-
fairs, Defense, and Finance. Mapai's strength
derives in large measure from its control of
Histadrut (the Israeli labor federation) , from
the proportionately large share of Jewish
Agency funds at its disposal, and from its
identification in the public mind as defender
of the security of the state. While a coali-
tion government excluding Mapai is theoreti-
cally possible, the diversity of the other par-
ties is so great as to make it highly unlikely.
'REPRESENTATION OF PARTIES IN ISRAELI
KNESSET (120 Seats)
1949
1951
1955
1959 1961
Mapai
46
45
40
47 42
Arab affiliates of Ma-
pai
2
5
5
5 4
Herut
14
8
15
17 17
Nat'l. Relig. Pty.
10
11
12 12
Agudat Yisra'el
16
5
6
6 6
Progressives
5
4
5
6 Liber-
Gen'l. Zionists
7
20
13
85 ale 17
Mapam
9
9 9
Achdut Ha'avoda
19
15
lob
7 8
Communists
4
5
6
3 5
Others
7
3
All religious parties in 1949.
? Achdut Ha'avoda split from Mapam in 1954.
Progressives and General Zionists joined to form
Liberal Party in 1961.
We believe that no significant shift in party
strengths is likely in the next several years
and that Mapai will continue to be the prin-
cipal partner in multiparty coalition govern-
ments.
11. Mapai's perennial Prime Minister, Ben
Gurion, combines a personal charisma with
a tough and skillful wielding of political
power. His highly autocratic manner of run-
ning the state has brought him into numerous
conflicts within and without the party. His
refusal to accept the judgment of his minis-
terial colleagues in the "Lavon Affair" 2 pre-
cipitated this year's elections and dissatisfac-
tion with his stand on it contributed to
Mapai's loss of five seats.
12. We believe that Ben Gurion will exercise
decisive influence on Israeli Government poli-
cies as long as he remains mentally alert. He
will probably remain Prime Minister, although
he might find it expedient to engage in a
temporary tactical retirement as he did in
1954. When the 75-year old Ben Gurion dies,
important governmental changes are virtually
inevitable. The rivalry between young lead-
ers whom Ben Gurion has made his proteges
and the old timers in Mapai is likely to be
sharpened. We believe, however, that the old
guard will maintain its ascendency over the
next few years. Any Prime Minister prob-
ably would be recruited from less domineering
Mapai stalwarts such as Levi Eshkol, Pinhas
Sapir, or Moshe Sharett.
13. The Israeli system of democratically
elected responsible government is sufficiently
well established for us to estimate with con-
2Pinhas Lavon, Minister of Defense, was forced
to resign in February 1955 after a sabotage operation
directed by Israeli military intelligence and aimed
at exacerbating US-Egyptian relations was exposed
by the Cairo authorities. In 1960, new evidence in-
dicated that Lavon's alleged authorization of the
operation was a forgery and he asked for an investi-
gation. A committee of seven cabinet members
cleared him of responsibility amid a torrent of
charges between Lavon and Ben Gurion and the
latter's supporters in the Ministry of Defense. Ben
Gurion, irked at Lavon's correct implication that
Ben Gurion's proteges were responsible for the for-
gery, refused to accept the committee decision and
resigned, thus forcing new elections.
SECRET
I Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/04/10:
CIA-RDP79R01012A018500020001-6
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/04/10:
CIA-RDP79R01012A018500020001-6
SECRET
`J
fidence that it will remain so. Although the
military establishment, under Ben Gurion's
aegis, is accustomed to autonomy in the se-
curity field, it generally accepts the principle
of civilian control. The military leaders
would be likely to attempt to seize power only
if they thought it necessary to cope with a
critical threat to the existence of the state.
14. The quarter-million Arabs in Israel con-
tinue to be treated as second-class citizens.
They do not consider themselves, nor are they
considered by the Jewish population, to be
really part of the nation. Most of them live
under military administration in designated
areas with limited trade and work opportuni-
ties and restrictions on their political activi-
ties. Much of the electoral support for the
Israel Communist Party is an Arab protest
vote against this situation. The Arab minor-
ity will continue to be an unassimilated and
unassimilable element in Israel for the in-
definite future, but it scarcely presents a
threat to the security of the state.
III. ECONOMIC
15. The Israeli economy is developing and ex-
panding rapidly. Gross national product
(GNP) doubled between 1955 and 1960. The
current annual increase in GNP is on the order
of eight percent. The causes behind this
progress are the character and competence of
the people, effective planning, strong incen-
tives for foreign investment, and massive aid
from abroad. Israel can count upon sub-
stantial private contributions from world
Jewry (averaging $70 million yearly since
1948) , plus the proceeds of State bond sales,
chiefly from the US. In recent years it has
also received an average of $65 million in aid
from the US Government. Finally, the West
German Government pays reparations to the
State as well as restitution to individuals.
These averaged $125 million annually in 1955-
1960. These resources have given Israel the
wherewithal to accomplish the economic
miracle in Palestine.
16. The inflow of foreign funds has enabled
Israel to compensate for a persistent adverse
trade balance of approximately $300 million
annually. Israel has made strenuous efforts
4
to reduce this trade imbalance. It has suc-
ceeded in increasing exports to a point where
they cover over 40 percent of commercial im-
ports, although inflation has made this diffi-
cult. However, it has not found it possible
to reduce its imports because of the need for
bringing in substantial quantities of capital
goods and industrial raw materials. Addi-
tionally there has been sizable military pro-
curement abroad ($53 million yearly from
1958-1960). Nevertheless, in the past three
years, external aid and foreign investment
have been more than adequate to cover the
trade deficit and the government's foreign ex-
change holdings have risen sharply.
17. West German reparations payments will
virtually cease in 1963. Private restitution
payments, which amounted to $97.8 million
in 1960, will drop off sharply and it is esti-
mated that the total of reparations and resti-
tution payments will have fallen to about $40
million in 1964. Israel will be faced with the
necessity of compensating for the loss of these
funds. Its requirements for imports of mili-
tary equipment and capital goods will remain
high. Public opinion is liable to react strong-
ly to sweeping restrictions on imports of con-
sumer goods. Israel will have to rely on a
variety of methods to cover the trade gap.
These will include efforts to increase foreign
private investment. Israel has created a gen-
erally favorable climate for foreign invest-
ment and has had considerable success in
attracting US firms. There will also be some
restrictions on imports of consumer goods,
expanded drives for more exports, and greatly
increased pressure through the Zionist or-
ganizations for larger contributions from
world Jewry. While these measures will have
some success, Israel will probably be forced
to cut back on imports of capital goods, thus
slowing the rate of investment and of eco-
nomic development.
18. The Arab boycott has been a source of
harassment to Israel in its efforts to find
markets abroad. The boycott and the denial
of the Suez Canal to Israeli goods and ship-
ping have forced Israel to make investments
in transportation facilities, particularly for
oil. On balance, however, Israeli foreign
trade has not been seriously affected.
SECRET
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/04/10:
CIA-RDP79R01012A018500020001-6
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/04/10:
CIA-RDP79R01012A018500020001-6
SECRET
19. The Israeli economy is characterized by
an increasing emphasis on industrialization.
Industrial enterprises include production of
building materials and phosphates, diamond
cutting, and other light manufacturing.
Even the Kibbutzim (the Zionist agricultural
collectives) are turning to industry to increase
income. This trend is perhaps typified by
the plans for the large-scale settlement and
development of the Negev, Israel's arid, deso-
late southern portion. These plans hinge on
the completion of the diversion of a portion
of the Jordan River waters to the Negev.
While about half the water will be used for
irrigating new farmland, only 3,000 of a pro-
jected 105,000 population will be employed on
the land. The vast majority will work in in-
dustry, mining, and services.
20. The Kibbutz-oriented socialism of earlier
years is giving way to a greater emphasis on
private enterprise in many fields. The harsh
realities of trade deficits and the need for
foreign capital are taking precedence in the
minds of Israel's leaders over theories of so-
cialist egalitarianism. Old kibbutznik though
he is, Ben Gurion is pushing for more private
investment, local and foreign, to stimulate
production for export. In the past, the sys-
tem has provided virtually equal wages to all
workers, regardless of occupation. Pressures
for wage incentives and higher pay for the
skilled and professional classes are now
steadily increasing.
21. The General Federation of Labor, Histad-
rut, is at once the trade union organization
for most Israeli workers, and through its in-
dustrial enterprises, the largest single em-
ployer of labor in the country. It is also a
major source of Mapai's political strength.
This multiple role creates dilemmas both in-
ternally and externally. Histadrut as em-
ployer finds itself opposing demands of its
trade union sector. It is a strong source of
inflationary wage pressures, although Mapai's
government leaders are trying to maintain
wage stability. Mapai leaders recognize these
contradictions but, for the next few years at
least, Mapai will be able to reconcile them on
an ad hoc basis.
5
IV. MILITARY
22. The Israel Defense Force (IDF) occupies
a special positiOn in the country. In addi-
tion to its defense role, the IDF serves, through
compulsory military training, as the means of
teaching Hebrew and the social ideals of the
state to thousands of immigrants from dozens
of cultural and linguistic backgrounds. Fi-
nally, it is the agency through which a number
of scientific and technological programs?par-
ticularly nuclear energy and rocketry?are
developed.
23. The Israeli defense establishment is offi-
cially responsible to the Cabinet as a whole.
In practice, however, Ben Gurion, as Prime
Minister and Defense Minister, exercises per-
sonal control over the IDF. In matters which
he considers seriously affect the national se-
curity, the Defense Ministry commonly takes
action on his authority and justifies itself to
the Cabinet afterward. (The military col-
laboration with France in 1956 was effected
between the respective defense ministries
without the participation of the Foreign Min-
ister.) Even if he leaves public office, Ben
Gurion will continue to exercise effective in-
fluence in the IDF through his proteges in the
armed forces and in the Defense Ministry
itself.
24. Israel relies on a relatively small cadre of
professional officers and noncoms backed by a
ready reserve system able to expand the cur-
rent ground forces strength of approximately
30,000 to 250,000, organized in units, in 48
hours. A similar system is used for the air
force and the navy, although these services
maintain proportionally larger numbers of
personnel on active duty than does the army.
25. In order to be self-sufficient as far as
possible, Israel manufactures virtually all in-
fantry weapons, ammunition, and spare parts
domestically. It relies on foreign sources,
principally France, for artillery, armored ve-
hicles, aircraft, and electronic equipment.
The UK has supplied Israel with destroyers
and submarines. France has furnished Israel
with successive types of jet aircraft?My-
stere and Super-Mystere?and has com-
mitted itself to supply Mirage Ills. These
SECRET
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/04/10:
CIA-RDP79R01012A018500020001-6
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/04/10:
CIA-RDP79R01012A018500020001-6
SECRET
aircraft have been supplied in quantities suffi-
cient to match UAR acquisitions of com-
parable Soviet models.
26. Israeli military doctrine emphasizes seizing
and holding strategical and tactical initiative,
and destroying enemy forces before they can
penetrate Israel. The main emphasis is on
mobile, hard-hitting striking forces?armor,
mechanized infantry, paratroops, and strong
air support. Israeli intentions are to main-
tain military superiority over any and all Arab
forces which may be brought against the state.
In meaningful terms, this has meant main-
taining superiority over the UAR. Israeli
plans call for a program of re-equipment in
the period 1961-1964, which would involve an
average yearly foreign exchange expenditure
of about $100 million.
27. We estimate that Israel is presently
capable of defeating the military forces of any
combination of its Arab neighbors should they
attack. The Israeli forces are capable of seiz-
ing the Gaza strip and Sinai, or the western
half of Jordan or the southwest corner of
Syria including Damascus, while defending all
other fronts. We believe that Israel will re-
tain this capability for the period of this esti-
mate. The principal danger to Israel would
be an Egyptian surprise attack by jet bombers.
Because of the short distances involved, tacti-
cal warning of an attack would be of little
value. However, Israeli intelligence would be
likely to supply some early warning. Egyp-
tian advantages of numerical superiority are
offset by Israeli defensive capabilities, includ-
ing superior air combat ability, to such a de-
gree that a surprise air attack would almost
certainly not be decisive.
6
50X1
50X1
SECRET
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/04/10:
CIA-RDP79R01012A018500020001-6
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/04/10:
CIA-RDP79R01012A018500020001-6
SECRET
VI. FOREIGN AFFAIRS
A. The Arab States
33. The Arabs consider that a state of war
still exists between them and Israel. The
situation will remain tense indefinitely, with
the constant possibility of localized military
action. Nonetheless, we believe the chances
of a third round of major hostilities in the
period of this estimate are less than even.
Israel has been concerned by the buildup of
Arab, particularly UAR, military strength in
recent years and has devoted considerable
effort and money to keeping its military
superiority. We believe the Israelis are
basically confident of their ability to maintain
a military superiority for the foreseeable fu-
7
ture, and that the chances of Israel's launch-
ing preventive war are slight in the next few
years. Also, Israel will continue to be re-
strained by the prospects of adverse great-
power reaction to any Israeli aggressive ac-
tion. Disunity among the Arabs will inhibit
any combined initiative by them and we be-
lieve that they consider that they could not
defeat Israel militarily. In these circum-
stances, the Arabs will probably consider that
the Palestine problem will be solved by time
and inexorable Arab economic and political
pressure rather than by military force.
34. If the breakup of the UAR following the
28 September Revolution in Syria does not
lead to turmoil on Israel's borders, we foresee
no significant immediate, impact on Israel. A
realignment of Arab states would not affect
their hostility to Israel and might increase
border tensions as Arab leaders feel the need
to strengthen themselves by making anti-
Israel gestures. However, increased disunity
among the Arabs, particularly the dissolution
of the UAR, decreases the threat to Israel of
simultaneous hostilities on two fronts, thus
enhancing Israel's security position.
35. Nonetheless, there are two emerging situ-
ations which give particular promise of raising
Arab-Israeli tensions critically?Jordan waters
and Israeli nuclear developments. Israel
plans to divert a sizable portion of the waters
of the Jordan River to the Negev during 1963.
The Arabs have expressed an intention to
block such a development, e.g., by diverting
the waters of Jordan tributaries. In this
situation, actions and counteractions could
lead to hostilities. With respect to the Israeli
nuclear program, if, at any time and irrespec-
tive of the true facts, Nasser came to believe
that Israel was on the verge of producing a
nuclear weapon, he might be tempted to risk
a preventive surprise attack. However, this
would involve him in hostilities which he
would almost certainly lose and we believe he
recognizes this.
36. Another point of possible friction is the
Arab claim to the right to exclude Israeli
traffic from the Gulf of Aqaba on the ground
that its waters are within Arab territorial
limits. The Egyptian gun positions corn-
SECRET
?
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/04/10:
CIA-RDP79R01012A018500020001-6
50X1
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/04/10:
CIA-RDP79R01012A018500020001-6
caSiFizekR13=s1
manding the straits have been controlled by
the UN Emergency Force since the Suez cam-
paign of 1956. Should Egypt regain these
positions and threaten Israeli shipping, Israel
would almost certainly react vigorously.
37. Perhaps the most intractable problem
arising from Israeli-Arab tensions is that of
the one million Palestine refugees, now
mostly supported by UNRWA. The inability,
from a political point of view, of any Arab
leader's officially recognizing the existence of
Israel even prevents open negotiations for a
solution. Furthermore, any solution would
almost certainly require the repatriation to
Israel of a portion of the refugees and com-
pensation and resettlement for others. The
Arabs appear to view the solution largely in
terms of repatriation with or without com-
pensation, while the Israelis see it mainly in
terms of resettlement with or without com-
pensation. In these circumstances, there is
little likelihood of an accommodation that
would be a significant improvement on the
present situation.
B. Other Powers
38. Israel's principal concern in its foreign
policy is to attract and keep outside support
necessary to maintain its own existence in the
face of intransigent Arab hostility. Over the
past several years, Israel has sought to link
its conflict with Nasser to the Soviet-Western
confrontation?Israel and the West (par-
ticularly the US and France) versus Nasser
and the Soviet Bloc.
39. Israel's leaders regard their country as
essentially Western. They will continue to
use every effort to promote existing ties with
the West and to develop new ones. Israel is
trying to join the Organization for European
Cooperation and Development (OECD) and
has indicated interest in association with the
Common Market, fearing possible damage to
its foreign trade if left outside it since 60 per-
cent of Israel exports are to Western Europe.
Militarily, Israel has made some efforts to
establish informal ties with NATO and would
8
probably welcome the opportunity for a more
formal association. Israel carries out a wide-
spread program of technical aid to under-
developed countries in Africa and Asia, and it
would like Western support in countering
Arab attempts to freeze Israel out of the
underdeveloped world.
40. Israel's strongest western ties are with the
US and France. The Israelis believe they
have a special ability to influence US policy.
They harbored high hopes of special treat-
ment by the present administration and have
shown resentment and annoyance at being
considered as an equal among a number of
small friendly countries. Israel realizes, as a
result of US opposition to the Suez venture in
1956, that it cannot count on US support for
or acquiescence in preventive military action
against the Arabs.
41. France and Israel have developed what
amounts in practice to a military alliance.
We believe that relations will continue to re-
main close a's long as both parties feel they
are facing a common enemy in the Arabs.
Satisfactory settlement of the Algerian ques-
tion would reduce French incentives for close
association with Israel.
42. The UK has sold Israel military equip-
ment and naval ships over the years and
British Jewry contributes regularly to Zionist
causes. There is also a segment of political
life which is sympathetic to Israel, but this
has little effect on traditional British policy
toward the Arab states, which are com-
mercially and militarily important to the UK.
43. Israel's relations with the Soviet Bloc are
coolly correct. Despite the Bloc's massive aid
to some Arab states, Israel has taken care not
to offend the USSR unnecessarily out of con-
sideration for the fate of the two and one-half
million Jews living there. Rumania is per-
mitting its Jewish population to go to Israel at
a rate of about 1,000 a month and Israel does
not wish the flow to be disrupted. We foresee
no change in Soviet-Israeli relations in the
next few years, unless it comes on the initia-
tive of the USSR.
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/04/10:
CIA-RDP79R01012A018500020001-6
Declassified in Part - Sanitized Copy Approved for Release e 50-Yr-014/04/10 :
CIA-RDP79R01012A018500020001-6
44. Israel has worked diligently to develop
close ties with many Asian and African states.
It has established diplomatic relations with
many of the new states in Africa and has had
considerable success in counteracting Nasser's
efforts to line up the Afro-Asian states behind
the Arabs .on the Palestine problem. Israel
9
has a reservoir of civilian and military ex-
pertise for use in the underdeveloped areas.
Israel has close but discreet links with Iran,
from which it gets oil and with which there is
collaboration on intelligence matters. Israel
enjoys good relations with Turkey and
Ethiopia.
iSaFrezzitlit=lisEP
Declassified in Part - Sanitized Copy Approved for Release e 50:yr 2014/04/10 :
_
CIA-RDP79R01012A018500020001-6
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/04/10:
CIA-RDP79R01012A018500020001-6
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/04/10:
CIA-RDP79R01012A018500020001-6
50X1