Israelis reject George Mitchell loan guarantee 'threat'

Believe it when it happens, but won't hold my breath waiting

Source: BBC
Israeli officials have shrugged off a suggestion that the US could withhold loan guarantees to pressure Israel over the Middle East peace process. The finance minister said Israel did not need the guarantees, while the prime minister accused the Palestinians of holding up peace negotiations.

US envoy George Mitchell said this week the US could withhold loan guarantees to extract concessions from Israel. The guarantees allow Israel to raise money cheaply overseas.

Mr Mitchell, who is due to return to the Middle East this month in his latest attempt to restart negotiations, was asked on Wednesday in an interview with America's PBS how the US could bring pressure to bear on Israel. "Under American law, the United States can withhold support on loan guarantees to Israel," he said.

The Israeli comments on the loan guarantees came after US Secretary of State Hillary Clinton signalled a shift in the US approach by saying that agreeing the borders of a future Palestinian state would deal with Palestinian concerns about settlement building. Both sides should resume peace talks as soon as possible and without preconditions, she said.
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