Nazir Majally, Asharq Al-Awsat

OCCUPIED JERUSALEM, 17 September 2003 — The United States yesterday said it would penalize Israel for constructing settlements in Palestinian areas as the Jewish state rejected a fresh Palestinian appeal for cease-fire.

The State Department said Washington would deduct the amount Israel had spent on constructing and supporting Jewish settlements in Palestinian areas from promised loan guarantees.

The deductions — the amount of which has not yet been determined — will be made in accordance with US law from a first tranche of $1.6 billion in loan guarantees that the department expects to announce this week, it said.

State Department deputy spokesman Adam Ereli told reporters in Washington: “The precise amount is still being determined but will be an estimate based on a range of Israeli government expenses associated with the settlement activity.”

The law in question — which authorized US President George W. Bush’s administration to provide Israel with $9 billion in loan guarantees over three years — requires that funds Israel receives be spent only in areas under its control before the 1967 war.

The legislation also requires the administration to reduce the guarantees by the amount equal to that Israel spends on activities Bush finds to be “inconsistent” with US efforts to promote Israeli-Palestinian peace.

“We have determined that under the guidance of this legislation we are required to make a reduction,” Ereli said, declining to elaborate on exactly what activity by Israel had prompted the decisions.

White House spokesman Scott McClellan confirmed the State Department move, saying he expected “that there may well be some reductions.”

Notwithstanding its tough stance on settlements, the United States yesterday vetoed a UN Security Council resolution put forward by Arab states demanding that Israel not harm or deport Palestinian President Yasser Arafat.

Eleven Council members voted in favor while Britain, Germany and Bulgaria abstained after hours of consultations. The United States and Syria, sponsor of the resolution, were unable to reach a compromise.

Earlier, Israel dismissed a cease-fire call by Arafat’s security adviser. “This is not the type of cease-fire which may entice us to change our policy,” said Israeli Justice Minister Yosef Lapid. He called instead on the Palestinians to “take up the fight” against groups such as Hamas and Islamic Jihad. Lapid told reporters that if the Palestinian Authority did not confront militants, as mandated by a US-backed peace plan, “we have to do it.”

Arafat’s national security adviser, Jibril Rajoub, had called on Israel to stop assassinations of Palestinians, raids and punitive demolitions of homes. “Given that Israel caused the collapse of the first cease-fire as a result of its continued assassinations, we call for a truce that will be respected by both sides, foremost by Israel, and by the Palestinian factions,” Rajoub said.

Hard-line factions that declared a cease-fire on June 29 canceled the truce seven weeks later after Israel killed a senior Hamas political leader in a missile strike.

To drive home the point, Israel murdered one more Palestinian activist yesterday. Israeli troops killed a member of Islamic Jihad near Hebron. Military sources said forces had sought to arrest the man and gunned him down as he attempted to flee. Local residents named him as Majed Abu Dush, 20, a Jihad activist. They said the army then destroyed the house he was hiding in.

— Additional input from agencies