non-controversial.

This year's proposal sales are modest, and, we feel, Many sales are for follow-on support items, routine procurement of standard military items, or for modernization packages for systems sold previously.

As in the recent past, a significant portion of the potential sales is for our friends and allies in the Middle East and South Asian regions.

This year's sales directly supports the ongoing U.S. initiatives I've already mentioned to achieve real diplomatic breakthroughs, in the Middle East, the Gulf, and vis-a-vis Afghanistan.

Military sales to moderate, pro-Western Arab states promote the ability of our friends to defend themselves and assist in defending our mutual interests, as is now the case in the volatile Persian Gulf. Helping meet the legitimate security needs of friendly Arab states also fosters the kind of trust needed to move toward an overall Arab-Israeli peace. If we are unwilling to meet the security needs of our moderate Arab friends, others, including the Soviets, have shown themselves to be more than willing to step in.

At the same time, one constant in our Middle East policy over a period which spans eight Administrations and 40 years

has been our fundamental commitment to Israel's security. is inconceivable that this would change. We will not sell weapons in the Middle East that will threaten Israel's

qualitative military edge.

It

Our military sales to Israel

much of it financed by

forgiven FMS credits

play a key role in helping Israel

maintain its qualitative military edge over potential opponents.

I can

Each proposal can be justified in terms of the security posture of the recipient country and our national aims. assure you that these sales individually or in aggregate not represent a threat to Israel's qualitative military edge.

do

I thank you for this opportunity to appear, and would welcome questions.

Mr. HAMILTON. The Chair understands that Mr. Smith of Florida has himself to chair a meeting in a few minutes, so questions will begin with Mr. Smith.

CONGRESSIONAL REVIEW PERIOD FOR POSSIBLE M1-A1 THIRD COUNTRY EXPORTS

Mr. SMITH of Florida. Mr. Chairman, thank you very much for your consideration. I appreciate the consideration of my colleague from California, Mr. Lantos.

Mr. Ambassador, it is good to have you back again. I want to say that many of us share the great hope that Secretary Shultz and you both have that we can achieve some kind of even small breakthrough to start the process and the negotiation moving forward. I think that is everybody's hope.

Secretary Shultz received a letter from the House with about 38 or 39 Members on it that was part of what we believe, an emphasis on how we feel about the process moving forward. Whatever shape it takes it needs to be shaped by the parties in the area, but at the very least, the United States needs to continue to be the advancer of the process, and I think we are performing a very accurate and capable role.

Let me, however, digress from that a little bit if I could because I have something which is of somewhat immediacy, and talk to you about just one issue.

There has been confusion over whether the impending M1-A1 coproduction tank agreement with Egypt provides for a Congressional review period should Egypt desire to export the M1-A1 to a third country, so-called third country transfers. So that the administration is clear on at least my position, and I think many other members of Congress as well, I would refer you to the Arms Export Control Act, Section 3(d)(2)(A) which law explicitly states that "The transfer of defense articles to a third country can take place only if Congress does not enact a law prohibiting such a transfer within 30 days of the notification of the proposed transfers to the Congress." Obviously we have used that many times before.

Mr. Ambassador, I believe this type of agreement is of great importance. The strong relationship between the United States and Egypt is obviously in our mutual interest, in the best interest of this country, and certainly the strengthening of Egypt, the best interest of that country, to try and bring peace to the Middle East. A strong Egypt is obviously an indispensable part of the equation.

For the sake of facilitating approval of this kind of agreement, I respectfully request that your legal counsel would provide for the record the State Department's interpretation of the applicability of the Arms Export Control Act section that I read to you as it relates to the M1-A1 co-production agreement. I might add that if it does not in your estimation apply, I for one, among other Members, would have to try to do something in order to ensure that we could have that apply because I believe that is an important part of the consideration of having this deal struck.

We think it is a good one. We think it obviously has mutual advantages. We want to make sure, however, that American technol

ogy of high capability does not wind up going where it couldn't if this arrangement was not otherwise in place.

I would like your comment, if you have any, with reference to it, and then a letter from the office of your legal counsel, Mr. Sofaer. Ambassador MURPHY. Thank you, Congressman. We have been consulting informally with various Members about the program. We envision informal notification, standard procedures to the Congress hopefully before it recesses for the Easter recess. So I think the answer is straight off, normal procedures will be followed on notification.

We have tried to address in our informal discussions concerns about third country sales. We will be happy to talk further to that issue. Normal restrictions will apply. The program as currently envisioned by the Government of Egypt for that number of tanks is for Egypt's own consumption, own utilization, and of course there would have to be consultations, discussions, should there be any issue of third country sales.

Mr. SMITH of Florida. Will you provide us with a letter with reference to your Office of Legal Affairs as to whether or not they believe that the section of the Arms Export Control Act actually applies to the possibility of third country transfers of tanks that would be manufactured under this co-production agreement inside the territorial boundaries of Egypt.

Ambassador MURPHY. I would be happy to.1

Mr. SMITH of Florida. Thank you very much, and once again, good luck. I know the Prime Minister of Israel and the Secretary of State have a meeting today and I certainly hope you can find some common ground for moving closer to the process.

Thank you very much, and thank you again, Mr. Chairman.

REASONS FOR A MIDDLE EAST INITIATIVE AT THIS TIME

Mr. HAMILTON. Mr. Secretary, we of course want to question you carefully about the proposals that are pending and on the subject of discussion between the Secretary and the Prime Minister, but let me go back just a bit and ask why the administration at this point in time chooses to push a Middle East peace initiative? After all, for the last several years the United States has not chosen to push the peace initiative. I am interested in why you choose to do it

now.

Ambassador MURPHY. I would go back, Mr. Chairman, to a comment made by the Secretary, very commonly expressed by him over the years, that we could not want peace any more ardently than the peoples and the responsibilities in the region. I think there has come together in the region a sense that there is an opportunity to move now and there is a welcome for American involvement to exploit that opportunity. I do not think it is any more complicated than that.

We have tried to move over the past several years. There was not the acceptance of a move. Always the hardest thing to do is to orchestrate readiness to move on the part of all of the parties that have to move.

1 Material requested for the record was not received before publication.

RELATIONSHIP BETWEEN PEACE PROCESS AND EVENTS IN THE WEST BANK AND GAZA

Mr. HAMILTON. Is there any relationship between your decision to move on the peace process now and the situation on the West Bank and Gaza?

Ambassador MURPHY. I would prefer to say that the situation on the West Bank and Gaza has created this sense of opportunity. It has demonstrated very vividly that the status quo as we have said, is not a viable option. The events in the West Bank and Gaza have driven that point home very forcefully.

Mr. HAMILTON. Would it be correct to say that the peace initiative we are now seeing would not have occurred had it not been for the violence in the West Bank and Gaza in the last few weeks?

Ambassador MURPHY. When you put the question that way you are in effect asking me to say that we are driven only by violence and that we would come up with ideas to present a workable proposal or construct a program only to reward violence. That is not the way we are approaching it, but I cannot disassociate in time and place the events on the West Bank and Gaza.

Mr. HAMILTON. There obviously is some linkage between those events.

Ambassador MURPHY. There is some, yes.

SUBSTANCE AND PROCEDURE IN U.S. PEACE PROPOSALS

Mr. HAMILTON. One of the things that has struck me, in the conversations we had with Secretary Shultz before he went to the Middle East-and I think he said it publicly-is his statement that he wanted to skip over a lot of the procedural problems and try to get to the substance of the matter. Yet if you look at the Secretary's letter, for example, and your statement today and all of the public statements, it seems to me you are still focusing on procedure and not substance.

Would you care to comment on that? Is it because you do not want the substantive aspects of your proposal to be public at this time? If that is the reason I personally would understand that. I would like to hear you comment on this apparent discrepancy.

Ambassador MURPHY. I agree that as you look at the proposal, the letter which was handed over in confidence and took at least 36 hours to be published, as I recall. But the fact is the essence of the proposal is out there, has been published in the American media as well as in the region and in Europe. You do see a great stress on procedure. You see a great stress on acceleration on the calendar, moving ahead on the negotiations.

The closest that you come to a substantive statement in that proposal is that negotiations will be based on Security Council Resolution 242 in all its parts. That has been repeated a couple of times in the proposal.

The issues of substance, as we went further in our discussions, were not that novel. There were, after all, several years of discussions after the Egyptian-Israeli Peace Treaty was signed on issues of what we call transitional arrangements for the occupied territories. How the Palestinians would achieve greater political, economic control of their own decision-making, how the military occupa