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The effort was to get it in the life of this administration to the stage of having started the second set of talks on the most complex of all aspects of the negotiation, the future of the territories, the future of the Palestinians, and to get that done under leadership which has given great study to the problem and has some good credentials in the region. Obviously any new administration is going to restudy, but if it is going, if it is a success story, no one is going to want to tamper with it. That is an indirect answer. I don't think I can do better than that.

Mr. LEVINE. That's helpful. I appreciate it. Thank you.
Mr. HAMILTON. Mr. Gilman?

DISCUSSIONS WITH THE SOVIETS ON THE MIDDLE EAST

Mr. GILMAN. Thank you, Mr. Chairman. We welcome Mr. Murphy back before our committee once again.

Mr. Murphy, I am interested in some of the Soviet approaches in the Middle East, and it would appear that over the last year the Soviet Union has been decidedly more active on a range of Middle East issues than it has been in the past.

First of all, can you tell us what their response was to your discussions with them with regard to their disassociating themselves from terrorism, expanding opportunities for Jewish emigration, and full diplomatic relations with Israel? You mentioned those as some conditions for Soviet involvement. What was their response to those conditions you had set forth?

Ambassador MURPHY. What I had in mind particularly in the phrase, and I think it was a little clumsily drafted in the formal statement on disassociating from terrorism. I was not suggesting a Soviet involvement in that terrorism, but had in mind the incident of the bus in the Negev, I think it was an area, where terrorists seized the bus and several civilians were killed as a result.

I am aware of no adverse reaction from Moscow, from any of its media to that action. This is the same Moscow that has spoken so proudly of its association with the PLO, proudly of its efforts to unify the different wings of the PLO last year at the Algiers Conference. So some of these activities inevitably rub off unless one disassociates. They rub off on your own image.

We talked about Jewish emigration, Soviet Jewry and the problem of emigration, and we talked about diplomatic relations. Neither of those, of course, were new subjects in our discussions. The Secretary has raised them as the President has at the Summit. I think they will be more fully explored in the context of Foreign Minister Shevardnadze's visit here next week to Washington. They do not see the question of Jewish emigration as integral to the peace process. As the Secretary said, you are just not going to get considered as serious players in the Middle East unless you take into account some of these major Israeli concerns. It is a fact of life.

They have been much more active in the past year or so. Their diplomacy has been skillful in terms of working with the Palestinians, establishing relations with some of the Gulf states, settling some old debts with Egypt, financial debts, and I think they are very interested in participating in the peace process. But the question remains, how seriously are you going to be taken and how do you really expect to get accepted as a major participant?

SOVIET VIEWS ON RELATIONS WITH ISRAEL Mr. GILMAN. You also raised the issue of diplomatic relations with Israel. What was their response to that?

Ambassador MURPHY. They have said that, and this wasn't the first occasion. They have said on various occasions that this would be worked in the context of a conference. Now that is not precise. I don't know exactly what that means. That diplomatic relations would be restored, presumably, in the context of the convening of an international conference.

SOVIET MIDDLE EAST OBJECTIVES

Mr. GILMAN. What do you see as Moscow's major objective in the Middle East at the present time?

Ambassador MURPHY. Stated objectives are very similar to our own. Stability, avoiding growth of fundamentalism and extremism in the area. They would like to maximize the Soviet role, increase Soviet influence in the area. They are in the area. That's no new event. They have been in the area and in varying degrees of close relationships with several of those governments. They even had a senior diplomatic official visiting Saudi Arabia, the first such contact in the last half century, just this past couple of weeks.

Mr. GILMAN. Do you see them as a major player or as a competitor to the United States role in the Middle East?

Ambassador MURPHY. They themselves see the prospect of competition with us, there is competition today. They would like it to be peaceful competition, to quote their own words. But they are there and we have to find a way to deal with them there.

FUNDAMENTALISM IN THE WEST BANK AND GAZA Mr. GILMAN. In your examination of the present situation in the Middle East, do you see any role of Islamic fundamentalism and the fundamentalist groups in stimulating the West Bank and Gaza movements?

Ambassador MURPHY. I don't think the intelligence reports support much of any outside stimulation of the uprising. I have talked, when I was in Israel, with some of the senior security and military officials there. They don't see it. The word spontaneous comes out. What has happened is fundamentalism has grown in the number of its adherents, particularly in Gaza. It doesn't dominate it, but it has measurably grown over the past several months. Mr. Gilman. Has Iran played any role directly or indirectly?

Ambassador MURPHY. Not direct, as far as we understand it, not direct. The efforts they have made in Lebanon have probably had an indirect influence on the attitudes among some of the Palestinians in Gaza, yes.

U.S. COMMITMENT TO JORDAN ON PROJECTS IN THE TERRITORIES

Mr. GILMAN. Mr. Secretary, some 15 months ago you made a commitment to Jordan to come up with some $30

million to help Jordan carry out development projects in the West Bank and Gaza.

Some $23 million of that total was to be transferred from Defense Department funds. This, I understand, has not occurred to date. Can you tell us what problems have occurred and why it's taking so long?

Ambassador MURPHY. I wish I could criticize the bureaucracy, but I'd feel personally involved if I did it. We have been working with DoD and the Congress to identify the additional $23 million. The report that the Senate Appropriations Committee made in December indicated strong support for this. The continuing resolution provided for $42.3 million deducted from the Navy account for research, development, testing, and evaluation, but what we had anticipated was there would be a concurrent increase of $23 million to come into economic supporting funds for Jordan in the continuing resolution, and that did not happen.

We have been assured on the Senate side that the Committee was committed to finding additional funds for Jordan and they are looking at the mechanics for doing it. The question is can it be done through technical adjustments up here on the Hill, or do we have to restart the whole effort to generate the funds that were committed by Defense on a transfer last year.

So that is the best answer I have today, that we have had assurances that the Senate Appropriations at least is committed to supporting it, would like to move ahead in the course of this spring as what's called a technical adjustment, and I very rapidly get beyond my knowledge of how the mechanics would work. But a technical adjustment on the Hill without further recourse to the executive. We very much hope that can be done.

Mr. GILMAN. So at this point the funds have not been committed then?

Ambassador MURPHY. No.

Mr. GILMAN. Despite our commitment that we made some 15 or 20 months ago?

Ambassador MURPHY. It was about January of 1987, yes.
Mr. GILMAN. But you will be pursuing that?

Ambassador MURPHY. We will be pursuing it. We feel that we have an obligation to deliver and we think that money could be very well used by the government of Jordan in development efforts in the West Bank and Gaza.

Mr. GILMAN. To improve the quality of life in the West Bank? Ambassador MURPHY. Yes. Mr. GILMAN. Probably some of those funds could have helped to allay some of the problems at the present time.

Ambassador MURPHY. I don't think you ought to conceive of buying off the problems. The problems have come up for a variety of reasons and they have been longstanding, festering relationships out there. But the quality of life program has had some success stories, and we have had good support from the government of Israel, from American private volunteer organizations that have worked on it, and from the government of Jordan. So it's a good program and we will continue to advocate it.

Mr. GILMAN. I would hope we could find a way to expedite it.
Thank you, Mr. Chairman.
Mr. HAMILTON. Mr. Torricelli?

ISRAEL AND A “GAZA FIRST" STRATEGY Mr. TORRICELLI. Thank you, Mr. Chairman.

Mr. Secretary, let me offer my own compliments for what I think was a bold and imaginative plan that Secretary Shultz brought to the region, and to offer you my congratulations on it as well.

At the same time, however, I want to note that as we look at the parties who bear some responsibility for the unrest today in the West Bank, which I would regard as an inevitable response from people in the region, some of that responsibility_must, in my judgment, come back to the administration as well. For as good and as bold as this plan might be, it has been six years of relative inactivity that has heightened frustrations and led, I think, to some of the events of these last few months. So my compliments are genuine, but I think it is a lesson to us as well, that the crisis of the Middle East is not one that is going to solve itself and we can never again afford for so much time to pass without activity and without a constant diplomatic pursuit of a peaceful settlement.

If I could, having said that, let me just ask a few specific ques tions. First, there have been suggestions from various Israeli officials in the past about a “Gaza First” strategy, a change in the status of Gaza initially while we pursue other options and discuss other areas. Do you consider that to be an option?

Ambassador MURPHY. No. It's been turned down very firmly by Jordan. It's been turned down by Egypt. I don't think it has much prospect as it was spoken of over the last several years. I know to make it more palatable it was described at one stage as First Gaza rather than Gaza First, because the idea was that somehow if you could take that mass of densely populated strip of territory and somehow get that out of the equation, it would clear the air for handling some of the remaining, very difficult problems. But I don't think it's going to happen.

Mr. TORRICELLI. Wouldn't you encourage the Israelis on the basis that it does demonstrate the fact that Israel can offer Palestinians in Gaza a way out of Israeli occupation and would demonstrate the fact that the Jordanians, Egyptians, and others are not prepared to take that invitation?

Ambassador MURPHY. Would a Gaza First policy--
Mr. TORRICELLI. Demonstrate that reality.

Ambassador MURPHY. That Israel was prepared to get out. But then what? That is the problem.

Mr. TORRICELLI. It would lead one to conclude that the Jordanians, Egyptians, and others are more interested in talking about an end to occupation of the Palestinians in the abstract than they are in fact, if limited withdrawal and some form of autonomy for the Palestinians had been offered and there were no Arab suitor prepared to take the challenge.

Ambassador MURPHY. That argument is very much in the abstract. The reality for Jordan and Egypt is neither of them wants what they see as the enormous burden dumped on their door step of the Gazans, which I know people have indulged in ideas of this is the Hong Kong of the Middle East, potentially a marvelous productive area. I think it's just going to be a very difficult problem to solve.

Mr. TORRICELLI. So it is not an option.
Ambassador MURPHY. I don't think it's a real option today.

ROLE OF JERUSALEM IN THE PEACE PROCESS

Mr. TORRICELLI. On the question of any interim agreement under the plan the Secretary has outlined, is Jerusalem specifically excluded from a change in status or discussions in an interim stage, and left exclusively to the latter stages of a final settlement?

Ambassador MURPHY. We have not gotten to that point of detail in our discussions. Our policy on Jerusalem remains unchanged. It should stay an undivided city with its future status open to discussion and negotiations. We haven't gone into any greater detail at this point.

RELATIONSHIP OF TRANSITIONAL AND FINAL ARRANGEMENTS

Mr. TORRICELLI. Is the fear not real that in fact if an interim solution is agreed upon, and considerable time passes, that the interim solution could practically become the final solution and the nations in the region will live with an interim solution for a long, long time? Is that not a well founded fear?

Ambassador MURPHY. That is the fear that has made Jordan in particular so hesitant about getting negotiations started, because they did see them freezing. Their view of Israel is that Israel would be very happy to have a simple cut off of negotiations at the end of a transitional phase, something like the old autonomy talks foresaw. That is why you have spelled out, why you find in the proposal the concept of interlock. That the transitional arrangement negotiations would be completed. We think they could be completed in six months.

The next stage, the final stage of negotiations, and here we're talking just about West Bank/Gaza, we're not trying to exclude consideration of Syria or of Lebanon's situation, but as far as West Bank/Gaza is concerned, the final status talks start in say the seventh month, but you do not implement the transitional arrangement agreements until the equivalent of the ninth month. That is an effort to give some sense of guarantee and continuity to the Jordanians that these will not freeze.

Mr. 'TORRICELLI. But in fact all it's a guarantee of is that there will be progress into the ninth month before it is implemented, not of course any certainty of an outcome, which is impossible to achieve.

Ambassador MURPHY. We were bedeviled by "what if" questions during the Secretary's trip, and the "what if's” are endless. What if it breaks down? What if it freezes? If we approach it in that spirit it's a sure guarantee that it will break down and freeze up. It does not have to. There has been a lot of work done on transitional arrangements back six and seven years ago. There is an infrastructure, at least as far as West Bank is concerned, that the Jordanian government left behind and has continued to finance ever since 1967. The salaries of the civil service, the teachers.

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