157 Status report on the peace process in the Middle East by Ambassador at Large Atherton- 15 June 1978

The 30-year search for peace between Arab and Jew in the Middle East has been called a history of lost opportunities. Our concern as a nation, and as a friend of both sides in the Arab-Israeli conflict, must be to seize the opportunity of the present and the promise of the future - to do all in our power to ensure that the tragedies of the past are not again repeated in the Middle East. I would urge that all of us here today keep our eyes fixed on this overriding objective as we reflect on the complex issues, the fears and hopes, and the difficult choices that must be faced by all concerned in the search for peace in the Middle East.

There are few areas in the world where so many compelling American interests intersect. These interests have been constant over recent years and are generally familiar to us all, but it is worth taking a few moments to review them in light of changes that have taken place in the area in recent years and of our own evolving perceptions in response to these changes.

A. We have long recognized that it is imperative that the United States seek to prevent conflict in the Middle East from again becoming a flashpoint for global crisis. We have also recognized that helping strengthen the independence of Middle Eastern countries will contribute to stability in the region and make war less likely.

The Arab-Israeli wars of 1967 and 1973 have demonstrated to us in the heat of crisis that the Middle East is an area where U.S. and Soviet forces could confront each other in .the context of a local war. Now, with estimates of the Soviet Union's own changing energy needs, a new dimension has been added to the traditional Soviet interest in a strong position in that area. These facts provide an important part of the backdrop against which we pursue our interests in the area.

B. Our irrevocable commitment to the security, strength, and well-being of Israel has been reaffirmed by every American Administration since the modern state of Israel was born thirty years ago. It is a permanent feature of American foreign policy. Many Americans share this commitment to a people who have suffered beyond our ability to comprehend and who have yet contributed so much to our heritage and to our world.

In this decade this commitment has been broadened and strengthened by the passage of time and the steady development of relations between our two countries.

Today Israel and the U.S. must face together new and more difficult circumstances.

It is increasingly obvious that Israel's security can best be guaranteed over the long term by a policy of continued military strength coupled with a peaceful relationship with its neighbors. Close American cooperation with key Arab states is essential to achieving and guaranteeing that peace.

In the past year, the opportunity for peace has increased dramatically. Before 1967, when no Arab state would talk of recognizing Israel and making peace with it, the basis for a final, peaceful settlement of this conflict did not exist. Following President Sadat's historic trip to Jerusalem and Israel's warm reception, Israel for the first time since its founding as a modern state is dealing with an Arab state which has stated as a matter of official record that it is prepared to accept and recognize a Jewish State in the Middle East and to make peace and establish normal relations with it. Attitudes in the Arab world toward Israel have shifted gradually since 1967, and the shift accelerated after the 1973 war. In going to Jerusalem, President Sadat dramatized that shift and broke out of the thirty year cycle of war and truce to create a new psychological climate in which there can be progress toward peace between Israel and all its neighbors. The issue is no longer whether there can be peace, but whether there can be agreement on the terms of peace.

In considering what those terms must encompass, we have come to recognize increasingly the importance of a just resolution of the problem of the Palestinian Arabs for a peace settlement. This is no longer seen as only a refugee problem; it is a problem of fulfilling the legitimate rights of the Palestinian people in ways that enable them to participate in the determination of their own future. The Palestinians for their part must demonstrate a willingness to live in peace and mutual security with Israel.

C. We have long recognized the importance of the Arab world. The strength and moderation of the major Arab countries have been a bulwark against radical forces in the Middle East, and they have in turn looked increasingly to the United States for support in ensuring their security and independence. The oil which some of them produce has long been vital to our allies and it is increasingly so to us.

Today, there is a new degree of interdependence between the U.S. and the key Arab nations that are prepared to work with us constructively. The achievement of a peaceful settlement of the Arab-Israeli conflict is surely a central goal in this relationship. There are other benefits as well.

The rapid increase in investable surplus which the Arab governments hold - now approximately 140,000 million dollars - has added a new dimension to our interests in this area. Some of their increased revenues come from the willingness of some oil-producing states to meet increasing demand in the rest of the world by producing more oil than their domestic revenue needs would require them to sell. How those revenues are used will affect the ups and downs of the world economy and of the dollar, and they can play a significant role in the development of poorer nations. At the same time, the U.S. economy is important to the Arab oil-producing nations in accommodating these enormous amounts of capital.,

Thus, the Middle East figures in our calculations on energy, as well as in our balance of payments position and efforts to maintain a stable dollar, in ways that would have been unthinkable ten years ago.

Finally, the key oil-producing nations of the Middle East are increasingly important to the world economy as well. The rise in oil prices in 1973 demonstrated clearly how oil pricing decisions and the related decisions on production levels can be a major cause of economic dislocation in most countries of the world, from the most industrialized to the least developed. They also play an increasingly positive role in development. For example, by the end of 1977 cumulative OPEC bilateral aid commitments totalled about 26,000 million dollars.

D. America has long felt a moral and human commitment to the people of the Middle East to help end a conflict that has caused a generation of suffering and to help remove other obstacles that have impaired social and economic progress.

In the past year in this administration, we as a nation have redoubled our commitment to a fuller realization around the world of basic human rights. Leaders in the Middle East have repeated to us in many ways at many times that they want to achieve peace so that they can devote their energies and their resources to the well-being of their people. Many of them have a vision of an era of growth and development which could follow a peace agreement. Many of them have asked us to cooperate with them in making that vision a reality. We remain prepared and want very much to provide this cooperation.

This analysis of U.S. interests in the Middle East in the (mid) 1970's suggests four premises about U.S. policy toward that area in the late 1970's.

First: Because each of our interests in the Middle East is important, the only viable national policy is one which enables us to pursue all of those interests at the same time.

Defining our interests this broadly and recognizing how they are interrelated helps us in seeking the most effective ways the U.S. can help strengthen all of its allies and friends. Reciprocally, all of our friends share a common interest in our strength, in our success, and in a strong American role in fostering peace, independence, and growth in the Middle East. This interdependence of all our interests deserves the most serious consideration.

For the United States, the pursuit of all of these interests reflects a coherence of policy in which our moral commitments and our human concerns on the one hand and our strategic and pragmatic national interests on the other are mutually reinforcing.

Second: The experience of the past four years has shown that we are best able to pursue all of those interests simultaneously in circumstances where there is progress toward a peaceful settlement of the Arab-Israeli conflict.

When there is no movement toward a settlement, tension between Israel and the Arab states rises and relations between the U.S. and Arab nations become strained. The pressure on Arab states to look elsewhere for assistance increases and there is a corresponding diminution in the U.S. ability to play a role in influencing events. Additionally, Israel becomes increasingly isolated and harmony between the U.S and its allies is jeopardized. When the U.S. is actively engaged in the peace process and when progress is being made toward achieving agreements as has been the case in the past four years, Israel has enjoyed greater security. When as a consequence, the U.S. can strengthen its ties with all of the important Middle Eastern countries, the momentum toward peace grows and our vital interests become self-reinforcing.

Peace, therefore, is not only the best assurance of a secure and prosperous Israel, but also would strengthen moderate governments in the region and enhance U.S. global interests. It is crucial to the understanding of U.S. policy in the Middle East to recognize that our urgent national commitment to an Arab-Israel settlement is based both on our enduring commitment to Israel's security and on the fact that peace is a necessity for the U.S. and its allies.

Before leaving this point, I want to address openly a question that deeply concerns many Americans today, as well as our friends in Israel. The question is often put obliquely this way: What kind of U.S. relationship with the Middle East can we see five or ten years from now? Usually the real underlying question is: Are we not reducing our support for Israel in favor of the Arab nations?

The answer to the latter question is unequivocally no.

So long as all of our friends in the Middle East share a common interest in peace, in a strong U.S. role in the Middle East and in checking the growth of radical influence, close relations with one party do not mean diminished relations with others. None of our friends, nor we, will gain from a diminished U.S. relationship with any of the key states there. To the contrary, a closer relationship with each party enhances our ability to pursue objectives common to all.

It follows from this that, in pursuing all of our interests in the Middle East, including our historic and unchangeable commitment to a strong Israel, our diplomacy must work toward creating conditions and a framework of relationships that make pursuit of these interests complementary. To do otherwise would not be consistent with our moral, strategic or economic interests. We believe our friends have an interest in our success.

Third: There has been a significant shift toward the West in the relations between principal Middle Eastern nations and the major powers outside the Middle East over the last several years.

Compared with the two decades beginning the mid-1950's, when the Soviet Union and its Eastern European allies appeared to be in the ascendant and the U.S. position was eroding to a point that most Arab countries broke diplomatic relations with us after the 1967 war, the present position of the U.S. is a significant change for the better. This is not to say that the Soviet Union does not have legitimate interests in the Middle East or that it will not have an important role to play in the future of that area. Our present position does, however, testify to recognition in many of these nations that their economic progress and national independence require a significant relationship with the West.

Entirely apart from political ideology, many Middle Eastern nations have recognized that the West offers the technology and the managerial skills needed to develop their countries, and that U.S. diplomacy can make an essential contribution to a peace which will lift the burden of heavy defense expenditures from their shoulders and let them get on with the constructive work of economic and social development.

The future orientation of the important nations of the Middle East is thus also at stake in the Arab-Israeli negotiations. Moderate Arab leaders have turned to the U.S. for cooperation in achieving both peace and development. Their success will in turn in large part determine whether Israel faces the future surrounded by radical and hostile states or by nations which are committed to peace and orderly progress.

The fourth premise is that without in any way detracting from our other commitments a definition of U.S. interests in the Middle East must take serious account of the new dimensions of U.S. economic relations with the area.

These economic factors explain why our strategy in the past four years has had two thrusts - not one. The more dramatic has been our high priority drive for an Arab-Israeli settlement. Less dramatic, but of great importance, has been the effort to encourage the broadest possible range of relationships between the economic and social sectors of the U.S. and of the Middle Eastern countries. We have recognized not only the nation's economic need for these relationships, but also the fact that the U.S. presence in the future of the Middle East will be a truly national presence - not just a governmental one.

Let me turn briefly from this general framework to the details of the peace process. The focus of attention in recent weeks has been on United Nations Security Council Resolution 242, adopted unanimously by the council in November 1967. That resolution was and remains the basis for all the peacemaking efforts over the past decade. At its heart is a very simple formula: In return for Israeli withdrawal from territories occupied in the 1967 conflict, the Arabs will recognize Israel within a framework of peace and security agreed by both. It calls for a just and lasting peace based upon the right of every state in the area to live in peace within secure and recognized boundaries and upon Israeli withdrawal from territories occupied in 1967. Resolution 242 is clearly a package. The parts are linked together to make a balanced whole, to be carried out together or not at all.

It took another war in 1973 to reach the point where the parties were ready to negotiate in the real sense of the word on the basis of Resolution 242. The result was the disengagement agreements of 1974-75, within the framework of the December 1973 Geneva Middle East Peace Conference, which helped lay the groundwork for future, more comprehensive negotiating efforts.

In a visit to the Middle East early in this administration, Secretary Vance and the Governments involved agreed on a definition of the three issues at the core of the dispute that would have to be resolved in an overall settlement:

The nature of peace; withdrawal from occupied territories in conjunction with security arrangements that will make recognized boundaries also secure boundaries; and resolution of the Palestinian problem.

Beginning in March 1977 in Clinton, Massachusetts, the President, and subsequently other Administration officials, set forth our thinking on these issues. We did this not to put forward an American blue print or plan for a settlement, but to help stimulate the thinking of the parties about new ways to overcome old obstacles to the peace process. Let me elaborate a bit on our thinking about each of these three issues.

- First, the definition of true peace. Peace does not mean simply a cessation of hostility of belligerency. It means open borders, normal commerce and tourism, diplomatic relations and a range of official and unofficial contacts, free navigation through waterways, and an end to all boycotts. The keystone of normal relations is the recognition of Israel's right to exist permanently, and formal recognition of her nationhood.

- Second, is the dilemma of providing borders that are both secure and acceptable to all this is the other half of the withdrawal-for-peace equation in Resolution 242. Israel, which has fought for its very existence for thirty years, must be able to feel secure within recognized borders. But borders that might give Israel the greatest sense of security in geographic and military terms are not those acceptable to Israel's neighbors. They could not, therefore, provide true security.

We understand the very real security concerns posed for Israel by withdrawal from occupied territory. But we also believe that without withdrawal, coupled with meaningful security arrangements, there can be no peace, and without peace between Israel and its Arab neighbors, Israel can have no true security. The goal has to be -the territorial integrity and sovereignty of all states in the area.

- Third, is the issue of the future of the Palestinian people.

While Resolution 242 calls for a just settlement of the "Refugee" problem, it does not deal in a comprehensive way with a solution to the Palestinian issue. In the decade since the passage of that resolution it has become inescapably clear that a solution to the Palestinian problem is essential in reaching a lasting settlement of the Middle East conflict. No party to the conflict today disputes that the Palestinians have a sense of identity which must be taken into account. President Carter has recognized this by speaking of the need for a homeland for the Palestinians. In our own view, as I said earlier, no settlement in the Middle East can endure which does not include a just solution of the Palestinian problem in all its aspects. This involves meeting the humanitarian need of the Palestinian refugees, responding to the aspiration of Palestinian Arabs for an identity of their own, and agreement on the future status of the West Bank and Gaza - those parts of the former Palestine mandate outside Israel's 1967 boundaries.

It also involves vital security considerations for Israel which must be taken into account, as well as interests of other Arab states, in particular Jordan and Egypt, and the interests of the Palestinian Arabs themselves, over one million of whom reside still in the West Bank and Gaza.

A way must be found for the Palestinians to participate in the determination of their own future. Any solution, if it is to be viable and lasting, must be based ultimately on the consent of the governed.

Throughout 1977 sharp differences over procedural problems related to reconvening the Geneva Middle East Peace Conference divided the parties as they began to focus on these issues. President Sadat's initiative and Israel's response last November sought to break the impasse. His visit to Jerusalem, and Prime Minister Begin's visit to Ismailiya, did not resolve the basic issues in the dispute, but these historic steps began to break down the psychological barriers which have prevented serious negotiations for so long.

For the first time, the leader of an Arab state demonstrated not by words alone but by a tangible act his country's acceptance of the peace-for-withdrawal formula of Resolution 242. President Sadat recognized in an unprecedented official and public act Israel's sovereign existence. Prime Minister Begin, on his part, responded with serious negotiating proposals relating both to the Sinai and to the West Band and Gaza - proposals which in our judgement represent a good first step and a basis for negotiations.

Since November, the negotiating process has proceeded on two tracks. Following an initial preparatory conference in Cairo in December, attended by Egyptian and Israeli delegations and also by representatives of the United States and U.N. Secretary General Waldheim, Egypt and Israel agreed to establish two committees at ministerial level. A military committee was convened in Cairo to negotiate essentially Egyptian-Israeli bilateral issues. A political committee was convened in Jerusalem to negotiate multilateral Arab-Israeli issues, in which we participated.

The United States from the beginning has supported Egyptian-Israeli negotiations. Our efforts are directed toward assuring, first, that there is tangible and early progress in the negotiating process begun by Egypt and Israel in Jerusalem last November, and second that out of this process there emerge a basis and an incentive for the negotiations to be broadened to include other Arab parties. Both Egypt and Israel have stated that this is also their objective.

When President Sadat withdrew his delegation from Jerusalem in January, we continue as a middleman with the support of both parties to seek to advance the work of the political committee. Our role is in many ways unusual by traditional diplomatic standards. We are not a party to the conflict, nor are we a negotiator only for our own interests with the parties to the conflict. We have used our good offices to convey the positions of one party to another, and we have played an active role in trying to help the parties resolve their differences. Rather than substituting ourselves for the parties in these negotiations, we are complementing their own efforts while encouraging them to return to direct negotiations.

The initial focus of our consultations with Egypt and Israel was on helping them achieve agreement on the first objective they set for themselves in the political committee - the negotiation of a declaration of principles for a comprehensive peace settlement. This declaration, building on Security Council Resolution 242, is fundamental to bringing other Arab parties, in particular Jordan and Palestinian representatives, into the negotiating process.

A large measure of agreement has already been achieved on those principles dealing with the nature of peace and the recognition of Israel. We and the Arab governments who are key to the peace process agree that the common objective is a peace settlement based on Security Council Resolution 242 which, among other things recognizes Israel's right to exist as a sovereign state. Specifically, with Egypt we have reached agreement that such a settlement should encompass the full range of normal relations that are customary between states at peace with one another.

The key differences remaining to be bridged related to the issue of withdrawal and an approach to the Palestinian problem, including the future of the West Bank and Gaza. Some understanding between the parties on these issues as they relate to these territories is essential to achieve agreement on the declaration of principles itself. Therefore, in the most recent consultations with Mideastern leaders, the President and Secretary Vance have reviewed a number of ideas for coming to grips in concrete ways with these questions. We shall continue this intensive consultation with both Israel and Egypt. Since this question is the key to progress at this stage in the negotiations, let me try to explain where the present difficulties lie.

In 1967 the authors of Resolution 242 and all the Governments concerned understood that the withdrawal-for-peace concept applied wherever territory was occupied in 1967. Today, the Israeli government does not agree that Resolution 242 involves a prior obligation in principle to withdraw from any West Bank and Gaza territory. I emphasize here an obligation in principle because actual withdrawal would of course take place only in the context of a final peace treaty embodying commitments to normal peaceful relations and agreed security arrangements which can include agreed border modifications. We have stated frankly that we differ with Israel on this issue, which has not only complicated efforts to make progress in the negotiations between Egypt and Israel, but has also inhibited efforts to broaden those negotiations to include other Arab parties, in particular Jordan and Palestinian representatives. At the same time, it is important to emphasize the areas where Israel and we are in fundamental agreement. We agree on the need for full peace and normal relations. We also agree that potential threats to Israel's security from areas from which Israel withdraws must be dealt with satisfactorily - both the threat of invasion by conventional military forces and the treat of terrorist and guerrilla attack.

There are also areas of agreement and disagreement between ourselves and the Arab governments concerned. We and they agree that a settlement must include a just solution of the Palestinian problem in all its aspects. We also agree that all the principles of Resolution 242, including the principle of withdrawal, apply to all fronts where territory was occupied in 1967, including the West Bank and Gaza. On the other hand, we have made it clear over the past months that we do not agree with some key elements of the position of some Arab states. For instance, we do not agree with their call for a prior commitment of Israel to total withdrawal from every bit of occupied territory. That is not part of Resolution 242. We have also made clear that in our view the future of the West Bank and Gaza lies in close association with Jordan and that an independent Palestinian state harboring irredentist feeling in this truncated territory would not be a realistic or durable solution. In the end, of course, these are issues that can only be resolved in the negotiating process itself.

Because the West Bank-Gaza issue is so complex and no instant solution seems possible, we believe that there need to be interim arrangements for the West Bank and Gaza agreed between Israel, Jordan, Egypt and Palestinian representatives. During this interim period an ultimate solution can be worked out combining security for Israel and its neighbors and a territorial solution which will not threaten the peace in the future.

We realize that the withdrawal-for-peace formula as it applies to the West Bank and Gaza, and the Palestinian issue generally, raise difficult security issues for Israel. But we believe that formula must apply if there is to be progress. In all our deliberations, we constantly have before us the very real security questions posed for Israel. We cannot conceive of any solution the United States - or Israel - could accept which did not make fullest provisions for these security concerns as part of a peace settlement.

To supplement the commitments and security arrangements the parties may agree to incorporate in peace treaties between themselves, and if we judge it essential to cement final agreement, we have said we are prepared to consider whatever bilateral United States security guarantees Israel may consider desirable as part of the peace settlement. This would of course be done in close consultation with the Congress in full consonance with its constitutional authority and responsibilities.

At this stage of the negotiating process, we are awaiting responses to questions we have put to the Israeli Government which seek to clarify Israel's views about when and how an ultimate solution to the West Bank/Gaza question will be achieved. In effect, we are exploring whether a way can be found to separate the issue of security from the issue of the final status of the West Bank and Gaza. We understand the need for time for these questions to be debated within Israel's democratic political process. We know that these questions - dealing as they do with the key issues for Israel of security, withdrawal, the Palestinian question, and the future of the West Bank and Gaza - require agonizingly difficult choices to be made. We hope nevertheless that Israel's responses will be positive, because we believe this offers perhaps the only possibility for renewing the momentum of the Egyptian-Israeli talks and ultimately the overall Arab-Israeli negotiating process.

Nothing stands still in the Middle East, it is always moving - toward peace, or toward war, so long as the basic conflict is unresolved. Despite the apparent deadlock, the deep differences, and the cycle of violence so tragically reflected in terrorist attacks and counterattacks, we still believe the dynamics of the process favor a negotiated peace.

What we are seeing today, for the first time in the history of the conflict, are genuine attempts by key parties involved to come to terms. We are also seeing an unprecedented public debate over the core issues of the Arab-Israeli conflict. Given the depth of hostility and suspicion which underlie that conflict, and the painful decisions needed to make negotiations succeed, no one should expect results overnight.

There are strong forces - forces of historical distrust and suspicion of bitterness and violence, of national ambition and ideological commitment, of perceived injustices on both sides - which are working against the success of all that we and our friends in the middle east are seeking to achieve. And time is on their side, not ours.

But despite the risks and difficulties, this is a period of dramatic new opportunities for the people of the Middle East and for the relationships between the United States and the Middle East. How we together handle these opportunities may well determine the character of the Middle East, the American role there, and many aspects of the economic health of the world for many years to come. It is because the stakes are so high that I have taken so much time today to analyze them in detail. We are engaged in an intensive effort, of which today's meeting is a part, to discuss this issue with the American people, because it is essential that we enter this period of opportunity with a truly national policy and sense of direction. Our purpose is to formulate a policy that encompasses the full range of American interests and concerns; and that has the support of the American people, of our friends around the world, and of our friends on both sides of the conflict in the Middle East.

We must not, we do not intend, to let this moment in history become simply another lost opportunity.