President George W. Bush came to office promising to keep his distance from the Israeli-Palestinian conflict in which his predecessor, Bill Clinton, was so visibly engaged. So far, the administration has kept this promise and focused on the region as a whole. Its main concern has been securing Middle East oil at stable prices for the energy-starved, high-tech U.S. economy.

President Bush’s instinctive desire to keep distance between the White House and the search for peace may be a sound one. Camp David II failed, in part, because the Palestinians viewed President Clinton, justifiably or not, as a mouthpiece for Israeli negotiators. Renewed distance from both sides on the part of the Bush administration—especially after the election of Prime Minister Ariel Sharon—could be the first step in achieving a credible U.S. role in a renewed search for peace.

The most visible way for the administration to demonstrate a new stance toward peace will be to develop a new policy on aid to Israel. Although a recent memorandum of understanding signed by Israeli Ambassador David Ivry and U.S. Assistant Secretary of State Edward Walker will gradually end economic assistance by the year 2008, half of the savings will be converted into increased military aid to Israel. This transformation of economic aid into military aid under the guise of reducing assistance—a Clinton program to which the Bush administration seems to have given its blessings—illustrates how difficult it can be to track U.S. aid to Israel. The aid package is squirreled away in numerous government accounts, especially in the Department of Defense. There are, for example, supposedly “joint” military development projects, like the canceled Lavi attack fighter, the Arrow anti-missile project or the Merkava tank, which the U.S. military has no plans to adopt for its own use.

Estimates of the size of the entire Israeli aid package range as high as $5.5 billion annually. The total is obscured by accounting gimmicks and special arrangements. There are loan guarantees that effectively amount to grants. (Between 1994 and 1998, according to the Congressional Research Service, repayment of $29 billion in U.S. loans to Israel was waived.) There are subsidies for “refugee resettlement.” Moreover, Israel receives early and full disbursement of its aid, on which it can then earn interest, instead of receiving it in installments as other countries do. Finally, unlike all other recipient countries, Israel does not have to account for how it uses aid money.

In the seven years that have passed since Oslo, whenever there were new developments in the peace process—whether a step forward or a step backward—the Israeli government, abetted by members of Congress, sought to increase aid. (At the same time, Congress repeatedly found reasons to hold back aid designated for the Palestinians.) The first lesson of the failed Oslo process should be, “Just say no” to the pleas of Israel and her friends for more and more aid.

It is time for the U.S. to stop funding the Israeli war against the Palestinians. No one can condone terrorist attacks against Israelis. But neither should we condone or fund the Israeli war on the Palestinians. The helicopter gun ships used to fire on Palestinian civilians and their neighborhoods are part of the arsenal provided Israel by U.S. aid. Merkava tanks were used to shell Palestinian towns, including the Christian centers of Beit Jala and Beit Sahour (see America, 2/12). U.S.-made ammunition also rained down on Palestinian neighborhoods. A reasonable place to begin would be the suspension of the sale of Apache and Blackhawk helicopters announced last October.

Taking a new look at the problem of peace means seeing it once again as a regional question. The Middle East is marked by growing populations, stagnant economies and authoritarian regimes. Regional investment will be insurance against an expensive, potentially destructive and counterproductive strategy of military containment. Any settlement of the refugee question, for example, whether it be return, resettlement or compensation, will require hefty financial support from the international community and especially the U.S. Undoubtedly water will be the most contentious problem in this arid region in the future. International investment and assistance, as envisaged by the Madrid conference, will be required to meet the needs of thirsty populations.

Finally, once corruption can be uprooted and accountable governance insured by the Palestinian Authority—no mean task, to be sure—socioeconomic development for the Palestinians will be a far more reliable source of security for Israelis than more weapons for their already overflowing arsenals. Refugees, water and development: these are the places where U.S. aid will produce real dividends for peace.

This article appears in March 5 2001.