The United States and Israel have resumed talks on a reduced aid package that would help fund economic development in Israel’s Negev region after the unilateral withdrawal from the Gaza Strip this summer.
The discussions had been put on hold in light of the damage to the Gulf Coast caused by Hurricanes Katrina and Rita, and now focus on a more modest development package than the one outlined by an Israeli delegation that visited the State Department in July.
The estimated cost of that proposal, never officially confirmed by either side, was $2 billion, and included funds to help pay for the redeployment of Israeli forces from Gaza.
The Israeli business newspaper Globes reported last week that the post-hurricane aid package focuses entirely on economic redevelopment funds for the Negev and Galilee, with a price tag of about $1.2 billion.
The main question, U.S. and Israeli sources said, is to which bill to attach the funding request as it goes through Congress.
The government of Prime Minister Ariel Sharon last week announced a $4 billion, 10-year plan to develop the Negev, which contains more than 60 percent of the country’s land but less than 10 percent of its population. The U.S. package would help defray costs of the overall development plan.
With huge bills due from Katrina and the war on Iraq, the House last week barely approved a measure to cut spending by $50 billion over the next five years. Conservative lawmakers plan to push for an across-the-board spending cut when Congress returns from its recess next month.
David Segal, a spokesman for the Israeli Embassy, denied the Israeli package had been “cut” because neither government had made a formal funding proposal in the negotiations.
“There was never a hard figure, just numbers being speculated in the press,” he said.
Mr. Segal said the development of the Negev, which has the lowest per capita income in the country, remains a priority of the Sharon government, and that the talks with the Bush administration would address how the U.S. could support the effort.
Josh Block, a spokesman for the American Israel Public Affairs Committee, a Washington lobbying group, said the Bush administration and Congress were on record in support of the Negev and Galilee development plan.
“I think the process continues and remains on track,” he said.
House and Senate lawmakers just completed work on a fiscal 2006 foreign aid spending bill that holds funds to Israel steady at $2.52 billion, while doubling the amount targeted to the Palestinians to $150 million.
The Negev aid package was targeted for a supplemental spending bill.