US May Cut Aid to Press Israel to Halt Wall, Say Officials

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Last updated at: (Beijing Time) Wednesday, August 06, 2003

US May Cut Aid to Press Israel to Halt Wall, Say Officials

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The United States is considering a cut of nine billion dollars in loan guarantees for Israel as a way to press for a halt in the construction of a barrier separating Israelis from Palestinians, the New York Times quoted US officials as saying Tuesday.

The nine billion in loan guarantees approved by the US Congress in the spring are intended for housing and commercial projects. They were part of a package that also included one billion dollarsin military aid to Israel, according to officials.

They said the cut in loan guarantees was being considered in response to a campaign by Palestinian leaders, who say the barrierhas cut Palestinians off from farms, homes, schools and workplaces.

The Palestinians also contend that it is aimed at establishing a de facto border for Israel in the West Bank and the Gaza Strip. The future boundary of Israel and a Palestinian state is supposed to be negotiated in talks between the two sides.

An Israeli official said on Monday night that word of the Bush administration's move, which was first disclosed in the Israeli newspaper Haaretz, had not been transmitted to the government of Prime Minister Ariel Sharon. "This takes us by surprise," he added.

Any such punitive step by the United States toward Israel wouldmark a change in the Bush administration's long-standing efforts to avoid any kind of confrontation with Sharon's government, the Times said.

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