Foreign Relations of the United States, 1964–1968, Volume XVIII, Arab-Israeli Dispute, 1964–1967

305. Memorandum From the President’s Special Assistant (Rostow) to President Johnson¹

Washington, June 25, 1966, 5:30 p.m.

Following our meeting with you on desalting in the Middle East,² we have carefully studied our commitment and drawn up tentative terms of reference for the U.S. coordinator.

On the commitment, I conclude (the full record is attached):³

1. We are publicly and privately committed to help Israel with technical assistance to study and plan a desalting program.

2. We are committed to help “as much as possible” with construction costs if studies prove the project feasible. The engineering study concluded that the project is technologically feasible but that its long-term economic costs and benefits still need to be determined.

3. We are not committed to a nuclear desalting plant, and the option of an oil-fueled plant remains open. However, we have talked enthusiastically about using nuclear energy and now have a study saying it is technically feasible. But we still have room to maneuver if a nuclear plant turns out to be politically or economically undesirable.

4. We are committed to appoint a high-level U.S. representative to discuss with an Israeli counterpart financing and other practical aspects of how to move ahead on the project.

Therefore, I recommend you approve the following steps:⁴

(1) Appoint our representative as soon as we can arrange it, even though we are not yet ready to talk to the Israelis. Our own position is still not firm on important policy issues, including how we might help finance the project if we decided to go ahead. The coordinator can help pin down our position and should share in formulating his final instructions. Any first-rate man would wish to help shape the enterprise from an early stage.

I recommend Douglas Dillion as the man best equipped to handle the difficult economic aspects of this project while still having the necessary diplomatic experience. The Israelis have mentioned Bob Anderson as combining the same qualifications. Averell Harriman and Mac Bundy are also on Secretary Rusk’s list.

Approve now

Wait until

Disapprove

Approve——as coordinator

(2) Tell the Israelis privately now whom you have appointed, but ask them to agree to hold off joint announcement until later in the summer in order to give him time to do his homework.

For both domestic and foreign political reasons, we want to space our Israeli gestures. We announced the aircraft sale 20 May. We now have this year’s AID loan almost ready for announcement but do not want to put it out while Faisal is here. We have $6 million left over from an old loan that you have delayed transferring to a new one. That could move any time. We have President Shazar coming the first week in August. We want to fit announcement of the coordinator into this schedule in order to reap maximum domestic advantage and minimum Arab reaction.

Approve

Announce sooner; give me an appropriate date

(3) Give the coordinator the attached terms of reference.⁵ Briefly, these instruct him to:

• —Take about two months to review all available economic data (perhaps with the help of a good economist or other specialist) to find out whether further study is needed. A clear picture of Israel’s water position in the 1970’s is needed to determine how much concessional or grant financing or continuing subsidy would be involved if we went ahead. Don Hornig argues rightly that we should not pile one study on another, and the Israelis will not stand still for that either. But my understanding is that we still do not have an economic picture of Israel in the 1970’s which gives us a clear picture of what water prices will be acceptable then.
• —Recommend what further study may be needed after he has completed these preliminary reviews. If he feels we need no more study, he should recommend a USG position. If he thinks we should go ahead with the project, he should recommend a way to finance it. He should also recommend the timing and content of his first approach to the Israelis.

Approve terms of reference

See me

(4) Tell the coordinator to look especially closely at the problem of requiring the Israelis to accept IAEA safeguards on this, Dimona and all future reactors.

Our current position is to make this our price for going ahead with a nuclear plant. We know the Israelis will not accept this condition readily, if at all. But we would stick with our position rather than prompting the bureaucracy to begin thinking about fall back positions already. However, our coordinator will have to know this problem inside out to argue our case with the Israelis. Moreover, we must be realistic about Israeli resistance on this point and will have to know whether there are other good ways to achieve our objective.

Approve

I do not want to press Israel too hard on safeguards

(5) Attach the coordinator to the White House.

The Israelis want to feel that he is your man and, from our point of view, that is not a bad idea. Only here will he find enough freedom from bureaucratic lobbying to sort this out. However, this might bring you more directly under fire, and it might be possible for a man of Dillon’s or Harriman’s stature to retain his independence if located in State.

Attach him to White House

Put him in State

Don Hornig’s staff and Charlie Schultze’s have participated in working out this approach.

Walt

1. Source: Johnson Library, National Security File, Subject File, Desalting Projects, Vol. I. Secret. The source text bears Johnson’s handwritten notation, “Walt, See me. L.” It bears no indication of his approval or disapproval.
2. The President met with Rostow, Schultze, Hornig, and other members of his staff on June 15 to discuss the question of appointing a coordinator on desalting projects in Israel and the United Arab Republic. (Ibid., President’s Daily Diary) See Document 299. A memorandum for the record by Saunders, dated August 10, records a 20-minute meeting of Johnson, Rostow, Schultze, Hornig, and other staff members on Israeli and UAR desalting, evidently the June 15 meeting, although Saunders, dates it on June 22. According to the memorandum, Rostow outlined key questions to be answered, Schultze and Hornig stated their views, and Johnson asked Rostow to find out the extent of the U.S. commitment to Israel on the project and then “tell me what I ought to do.” (Johnson Library, National Security File, Files of Harold Saunders, Israel-Nuclear-Dimona, 4/1/66–12/31/66)
3. Not attached.
4. None of the options in this memorandum is checked.
5. The attached “Terms of Reference for U.S. Coodinator on Israeli and UAR Desalting Plants” is dated June 25. A virtually identical document dated August 12 was sent to the President with a memorandum of that date from Rostow outlining plans for Ambassador Ellsworth Bunker to begin his work as coordinator at the end of August and present his recommendations in November, recommending delaying announcement of Bunker’s appointment until mid-September, and recommending the President’s approval of the terms of reference. Johnson approved Rostow’s recommendations. (Johnson Library, National Security File, Country File, Israel, Vol. V)