102418396 Approved for Release 2015 02 13 a I I a ssgner A if 3 5 M61 Supersedes 35 58 THE OUTLOOK FOR ISRAEL Submitted by the DIRECTOR OF CENTRAL INTELLIGENCE The jollowing 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 Sta and 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 C hiejF of Staff for Intelligence Department of the Army the Assist- ant Chief of Naval Operations Intelligence Department of the Navy the Assistant Chief of Sta Intelligence the Director for Intelligence Joint Sta the Atomic Energy Commission Representative to the 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 Sm Approved for Release 2015 02 13 C02418396 35 61 50c rober196 NATIONAL FINTELLIGENCE ESTIMATE 302418396 Approved for Release 2015 02 13 002418396 m CENTRAL INTELLIGENCE AGENCY DISSEMINATION NOTICE 1 This estimate was disseminated by the Central Intelligence Agency This copy isafor the information and use of the recipient and of persons under his jurisdiction on a need to know basis Additional essential dissemination In - be authorised by the following of cials within their respective departments a b C f'hm a 13 at Ll i l- 1 1 Director of Intelligence and Research for the Department of State Assistant Chief of Staff for Intelligence Department of the Army Assistant Chief of Naval Operations Intelligence for the Department of the Navy Director of Intelligence USAF for the Department of the air Force Director for Intelligence Joint Staff for The Joint Staff Director of Intelligence AEC for the Atomic Energy Commission Assistant Director FBI for the Federal Bureau of Investigation Assistant to the Secretary of Defense Special Operations for the Department of Defense Director of NSA for the National Security Agency 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 Of ce 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 22 une 1953 a The title of this estimate when used separater from the text should be classi ed Flint USE UNLY WARNING This material contains information affecting the national defense of the United States Within the meaning of the espionage laws Title 18 USC Secs 1 93 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 Approved for Release 2015 02 13 002418396 302418396 Approved for Release 2015 02 13 002418396 wry 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 signi cant 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 signi cant 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 heavrly 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 SEC increase the contributions of world Jewry and to attract foreign industrial invest- ment Paras 15 17 3 There has been no improvement in Arabjsraeli 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 signi cant immediate impact on Israel We believe however that Israel will be able to maintain its milthy o_ver 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 1 Approved for Release 2015 02 13 002418396 302418396 Fl Approved for Release 2015 02 13 002418396 SE 4 Israel may have decided to undertake a nuclear weapons program At a mini- mum we believe it has decided to develop 'ts nuclear facilities in such a way as to ut it into a position to develop nuclear eapons should it decide to do So With an increase in the present small plutonium separation facilities and with a continuation of the estimated present level of French technical aid we believe Israel could have a very few crude weapons deliverable by aircraft in about ve years Paras 28 30 32 ETV 2 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 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 eld 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 in ow 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 rmly 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 re ects this trend It is likely that agriculture-oriented socialism 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 NET Approved for Release 2015 02 13 002418396 Approved for Release 2015 02 13 002418396 a SE ll 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 ve 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 1 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 ew- 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 identi cation 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 0F PARTIES IN ISRAELI KNESSET 120 Seats 1949 1951 1955 1959 1961 Mapai 46 45 49 47 42 Arab a iliates Herut 14 8 15 17 17 Nat l Relig PtyAgudat Yisra el 13 5 6 6 Progressives 5 4 5 6 Liber- Gen l Zionists '7 20 13 8 al 17 Mapam 9 9 9 Achdut Ha avoda 19 15 10 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 SE 3 We believe that no signi cant shift in party - is likely in the next several years and that Mapai will continue to be the prin cipal partner in- multiparty coalition govern- ments 11 Mapaijs 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 con icts 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 ve seats 12 We believe that Ben Gurion will exercise decisive in uence on Israeli Government poli- cies as long as he remains mentally alert He will probably remain Prime Minister although he might nd 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 suf ciently 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 Iatter 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 ET Approved for Release 2015 02 13 302418396 C02418396 SE dence that it will remain so Although the military establishment under Ben Gurion s aegis is accustomed to autonomy in the se- curity eld it generally accepts the principle of civilian control The m itary 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 er 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- de nite future but it scarcely presents a threat to the security of the state Ill 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 ght 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 310 million yearly since 1948 plus the proceeds of State bond sales chie y 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 in ow of foreign funds has enabled Israel to compensate for a persistent adverse trade balance of approximately $300 million annually Israel has made strenuous efforts Approved for Release 2011 5102 1 3' 002418396 ETV 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 in ation has made this di i 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 de cit and the government s foreign change holdings have risen sharply 1'7 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 rms 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 I 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 e orts to nd 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 Approved for Release 2015 02 13 002418396 302418396 Approved for Release 2015 02 13 002418396 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 typi ed 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 elds The harsh realities of trade de cits 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 nds itself opposing demands of its trade union sector It is a strong source of in ationary 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 SE 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 scienti c and technological programs par- ticularly nuclear energy and rocketry are developed 23 The Israeli defense establishment is of 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 justi es 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 of ce Ben Gurion will continue to exercise effective in- uence 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 of cers 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-suf cient 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 1115 These ET Approved for Release 2015 02 13 002418396 302418396 I Approved for Release 2015 02 13 C02418396 6 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 V NUCLEAR ENERGY 28 Israel s technical abilities in the nuclear eld are of a high order Israel is engaged in the construction of a 26 MW heavy water re- actor and supporting facilities in the Negev near Dimona The of cial Israeli position is that this installation is a necessary fore runner to the future construction of nuclear power stations However the Dimona site will also provide the necessary experience to SE develop a plutonium production capability be- ginning with the processing of ore and pro- ceeding through the separation of plutonium There is also extensive evidence that France has supplied plans materials equipment and technical assistance to the Israelis and is training personnel Israel has also attempted to purchase ore from sources not requiring limitations on the use and disposition of the ssionable material produced 29 Israel s potential targets for nuclear weap- ons are close at hand the Arab countries and the defensive capabilities of its enemies are not great For this reason its delivery system needs neither great range nor a high degree of sophistication At present the Israelis have the French Vautour a sub- sonic jet light bomber capable of carrying a nuclear weapon weighing up to 5 000 pounds to a radius of 550 n m In view of past politi cal and technical cooperation with France it is probable that Israel expects to acquire more modern French aircraft suitable for delivery of any future Israeli weapons The firing on 5 July 1961 of a meteorological rocket Shavit II of Israeli construction and design lends creditability to reports of Israeli efforts to de velop an independent missile capability Shavit II appeared to bee multistage solid fuel propelled unguided rocket which reached an altitude of approximately 50 n m 30 We estimate that the Dirnona reactor operating at maximum power could produce suf cient weapon grade plutonium for one or two crude weapons a year by 1965 1966 pro vided separation facilities with a capacity larger than that of the pilot plant now under construction are available By 1968 the Israelis could also have a few 200 300 n m missiles but it would probably take longer to develop compatible nuclear warheads The costs of both a weapons and missile program would require annual outlays which would considerably increase military expenditures over the current level $232 million in 1960 A more serious impediment to the acquisition of an operational nuclear capability is the lack of space in Israel for conducting adequate tests for nuclear weapons or medium-range missiles Further the estimated rate Cir-pro ET Approved for Release 2015 02 13 002418396 302418396 SE duction of weapons grade material is So low that a test program might consume the mate- rial as fast as it was produced 31 Nonetheless Israel surrounded as it is by hostile Arab states has strong incentives to have an operational nuclear capability While the Israeli program may not now be directed speci cally toward such a capability 'we believe that the Israelis intend at least to put themselves in the position of being able to produce nuclear weapons fairly soon after a decision to do so It is unlikely however that even a very limited operational capability using aircraft could be achieved until two or three years after weapon grade plutonium rst became available unless Israel obtained major assistance from France or another source weapons designs which would obviate the need for tests 32 In the absence of major French or other external support we believe that the Israelis would probably still continue to work toward an operational nuclear capability setting their sights initially on a very few nuclear weapons deliverable by aircraft which they could probably achieve by 1967 1968 and work diligently toward an operational missile capability at a later date probably after 1970 It is possible that Israel might go directly to producing crude ssion weapons without any testing Even in that case we do not believe Israel could have a weapon before 1966 1967 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 inde nitely 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 con dent of their ability to maintain a military superiority for the foreseeable fu- Approved for Release 2015 02 13 002418396 ET IV 7 '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 signi cant 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 by diverting the waters of Jordan tributaries In this situation actions and counteracticns 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 traf c from the Gulf of Aqaba on the ground that its waters are within Arabiterritorial limits The Egyptian gun positions ET Approved for Release 2015 02 13 C02418396 002418396 Approved for Release 2015 02 13 002418396 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 of cially 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 signi cant 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 con ict 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 RET 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 in uence 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 as 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 eifect 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 o end 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 ow 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 WT Approved for Release 2015 02 13 302418396 302418396 4 Approved for Release 2015 02 13 C02418396 SE 44 Israel has worked diligently to develop close ties with many Asian and African states It has established diplomatic relations with manylof the newstates 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 Eli s-r 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 SENT Approved for Release 2015 02 13 302418396 002418396 Approved for Release 2015 02 13 0024183963 MET Egg Approved for Release 2015 02 13 602418396