1
NATIONAL INTELLIGENCE ESTIMATE
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THE OUTLOOK FOR ISRAEL
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APPPOKO FOPREIUSE
THE OUTLOOK FOR ISRAEL
THE PROBLEM
To assess the outlook for Israsl over the next two or three years.
CONCLUSIONS
recent elections In Israel didany significant change Insituation While thepal party, dominated by Bena .'ew seats In the parliament. Itthe key political element overfew years. We foreseeern of Itsarties to govern thedo we foresee any significantof Ben Ourlon's power so long ssactive. His death woulda contest for power hi the Mebut we believe the main linesdomestic and foreign policyessentially unchanged. (Paras,
Ml)
economy continues to growImpressive rate, but its substantialtrade balance will continue toheavily dependent on privateaid from abroad.diminution of Westand restitutionthe next few years willtome cutback In investmentin spite of Israeli efforts to
Increase the contributions of world Jewry and to attract foreign Industrial )
here has been no Improvement In Arab-Israeli relations. Sporadic border Incidents are likely. Israel'! plans tosubstantial amounts of Jordan waters to the Negev and the Israeliprogram will continue to cause much apprehension among Arab leaders, and could lead to forceful action If the breakup of the UAR followingevolution In Syria does not lead to turmoil on Israel's borders, we foresee no significant Immediate Impact on Israel. We believe, however, that Israel will be able to maintain Its mllltttry superiority over Its Arabsuperiority which the Arabs recognize and whichdeliberate attack on Israelreluctance to provoke great powerInhibits Israel's undertakingwar. Primarily for these reasons, we consider the chanceshird round of major hostilities to be less than even.) WFRBVTOAH
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DISCUSSION
INTRODUCTION
A. In Itsean of Independence Israel has accomplished much. It hastable democratic system of government; it has made tremendous strides in economicit haset Inflow ofersons, more than doubtingewish population. On the other hand the surrounding Arab states continue hostile. Israel remains heavily dependenton contributions from world Jewry as well as on foreign Investment andaid. Diversity of background among its citizens Is increasingly giving rise topolitical and social problems, although the Jewish majority remains firmly united against the Arab states.
erhaps foremost among these Is theof the dominant political and social philosophy in the state. Jewish settlement in Palestine through theasundertaken byuropeanwho believed that Jewish regeneration could come about only when Jews wereas an agricultural society In Palestine. Later Immigrants, uprooted from Europe by Worldr from the Arab Statesostly came to Palestine for lack of any other place to go and did not share theideal. The earlier group has providedall the state's leaders and Its socialist ideals have set the lone for Israel.these Ideals are being successfullyby the newer elements. The modest success of the Liberal Party inrobably reflects this trend. It is likely that agriculture-oriented socialism willto decline In favor of more free enterprise and industrialization. Sweeping changes In the country's leadership, however, will probably not occur during, the period of this estimate.
here are other sharp cleavages In Israeli society. The politically organized orthodox minority has, through Its participation in coalition governments, succeeded insabbath and dietary laws which theority of Israelis regard as an-halcs also considerable communal frictionEuropean and oriental Jews.
icre is little Intermarriage tween European and oriental Jews, and the latter, like the Arabs remaining In Israel, feel they are discriminated againstpolitically, and socially. European Jews are continuingcelve material and moral support from the West which will lur-
oriental element. |
3
POLITICAL
toe achievement of independenceIsrael has been dominated politically(the Israel Laboreadingof coalition governments. Overthe principal parties havethe same percentages of thea growth in population fromover two million. No party hasclearll these parties havefrom groups active in Mandatemost of them hav- roots inand cultural movements in thepast Israelis play the political gameand zest and are remarkablyholding to political ideologies.
coalition governments headedhave, at one time or another,other major parties except theHerat and the Communists.Mapal has always held the Primeand the Ministries of ForeignDefense, and Finance. Mapal'sin large measure from Its control(the Israeli labor federation),proportionately large share offunds atisposal, and fromIn the public mind asthe security of the state. WI.Ua agovernment excluding Mapal Ispossible, the diversity of the otherIs so great as to make It highly unlikely.
We believe ti at no significant shift in party strengthslkel, in the next severcl years and that Mapal wUI continue to be thepartner in multiparty coalition
' Plnhsis Lavon. Minister of Defense, was foreed lo resign la February IMSaboUi* Operation directed by Israeli military Intelllaente and aimed at exacerbating US-EsypUao relations was exposed by Uw Cairo aathortuesew evidencethat Lawn's alleged authorisation of the operationorgery and her anA committee of seven er.binei members cleared him of responsibilityorrent of ehartes between Laroo and Ben Ourion and the litter's supporters In Uw Ministry of Defeiue Ben Ourion. Irked at La roe's correct implication that
Ben Ourtona ^rtftMmmWOkiVM;
Bety. refused toAlifdreiiton and
resltned. thus forcing
Mapal's perennial Prime Minister. Ben Ourion.ersonal charismaough and skillful wielding of political power. His highly autocratic manner ofthe state has brought him Into numerous conflicts within and without the party. His refusal to accept the Judgment of hiscolleagues In the "La von Affair"this year's elections andwith his stand on it contributed to Mapal's loss of five seats.
We believe that Ben Ourion will exercise decisive Influence on Israeli Oovernmentas long as he remains mentally alert. Ha wtU probably remain Prime Minister, although he might find It expedient to engageemporary tactical retirement as he did. Whenyear old Ben Ourion dies, important governmental changes are virtually inevitable. The rivalry between young lead-era whom Ben Ourion has made his proteges and the old timers in Mapal is likely to be sharpened. We believe, however, that the old guard will maintain its ascendency over the next few years. Any Prime Ministerwould be recruited from less domineering Mapal stalwarts such as Levi Eshkol, Pin has Sspir. or Moshe Sharett.
The Israeli system of democratically elected responsible government is sufficiently well established for us to estimate with
fldence that It will remain ao. Although the military establishment, under Ben Ourion's aegis. Is accustomed to autonomy in thefield, It generully accepts the principle ol civilian control. The military leaders would be likely to attempt to seise power only if they thought it necessary to coperitical threat to the existence of the state.
he quarter-million Arabs in Israelto be treated as second-class citisens, They do not consider themselves, nor are they considered by the Jewish population, to be really part of the nation. Moat of them live under military administration In designated areas with limited trade and workand restrictions on their politicalMuch of the electoral support for the Israel Communist Party is an Arab protest vote against this situation. The Arabwill continue to be an unasslmllated and un assimilable element In Israel for thefuture, but It scarcelyhreat to the security of the state.
III. ECONOMIC
he Israeli economy is developing andrapidly. Oross national product (OUT) doubled4he current annual Increase In QNP Is on the order of eight percent. The causes behind this progress are the character and competence of the people, effective planning, strongfor foreign Investment, and massive aid from abroad. Israel can count uponprivate contributions from world Jewryillion yearly. plus the proceeds of State bond sales, chiefly from the US. In recent years It has also received an averageillion in aid from the US Government. Finally, the West Oerman Qovemment pays reparations to the State as well as restitution to individuals. These5 million annually. These resources have given Israel the wherewithal to accomplish the economic miracle In Palestine.
he Inflow of foreign funds has enabled Israel to compensateersistent adverse trade balance of0 million annually. Isnvl has made strenuous efforts to reduce this trade Imbalance It hasIn increasing exportsoint where they cover overercent of commercialalthough Inflation has made this dim-cult. However. It has not found It possible to reduce Its Imports because ol the need for bringing in substantial quantities of capital goods and Industrial raw materials.there haa been elsable3 million yearlyevertheless, in the past three years, external aid and foreign investment have been more than adequate to cover the trade deficit and the government's foreignholdings have risen sharply.
est Oerman icparatlons payments will virtually ceaserivate restitution payments, which amountedillionill drop off sharply and it isthat the total of reparailona andpayments will have fallen toillionsrael will be faced with the necessity of compensating for the loss of these funds. Its requirements for imports ofequipment and capital goods will remain high. Public opinion Is liable to reactto sweeping restrictions on Imports ofgoods. Israel will have to relyariety of methods to cover the trade gap. These will Include efforts to Increase foreign private Investment. Israel has created afavorable climate for foreignand haa had considerable success In attracting US Arms. There will also be some restrictions on Imports of consumer goods, expanded drives for more exports, and greatly increased pressure through the Zionistfor larger contributions from world Jewry. While these measures will have some success, Israel will probably be forced to cut back onf capitalhus slowing the rate of investment ana ofdevelopment.
he Arab boycott hasource of harassment to Israel in Its efforts to find markets abroad. The boycott and the denial of the Sues Canal to Israeli goods andhave forced Israel to make Investments in transportation facilities, particularly for oil. On balance, iMrffma lisnmftsforrign trade has not been sar^ttfl^yaafected.
The Israeli economy is eharactTlzed by an Increasing emphasis on Industrialisation. Industrial enterprises Include prouu-*tlon of building materials and phosphates, diamond cutting, and other light manufacturing. Even the Kibbutzim (the Zionist agricultural collectives) are turning to Industry to Increase income. This trend is perhaps typified by the plans for the large-scale settlement and development of the Negev, Israel's arid,southern portion, Theae plans hinge on the completion of the diversionortion of the Jordan River waters to the Negev. While about half the water will be used for Irrigating new farmland,0 population will be employed on the land. The vast majority will work Inmining, and services.
The Kibbutz-oriented socialism of earlier years Is giving wayreater emphasis on private enterprise in many fields. The harsh realities of trade deficits and the need for foreign capital are taking precedence In the minds of Israel's leaders over theories ofegalitarian ism. Old klbbutxnlk though he Is, Ben Ourlon Is pushing for more private investment, local and foreign, to stimulate production for export. In the past, thehas provided virtually equal wages to all workers, regardless of occupation. Pressures for wage incentives and higher pay for the skilled and professional classes are now steadily Increasing.
The General Federation of Labor, Hlstad-rut. Is at once the trade union organization for moat Iaraell workers, and through itsenterprises, the largest singleof labor In the country. It isajor source of Mapal's political strength. This multiple role creates dilemmas bothanda tad rut asfinds itself opposing demands of its trade union sector. Ittrong source of inflationary wage pressures, although Mapal's government leaders are trying to maintain wage stability. Mapal leaders recognize thete contradictions but. for the next few years at least, Mapal will be able to reconcile them on an ad hoe basts.
IV. MILITARY
The Israel Defense Force (IDF)pecial position In the country. Into Its defense role, the IDF serves, through compulsory military training, as the means of teaching Hebrew and the social Ideals of the state to thousands of Immigrants from dozens of cultural and linguistic backgrounds.it Is the agency throughumber of scientific and technologicalnuclear energy anddeveloped.
The Iaraell defense establishment Isresponsible to the Cabinethole. In practice, however. Ben Ourlon. as Prime Minister and Defense Minister, exercisescontrol over tho IDF. In matters which he considers seriously affect the nationalthe Defense Ministry commonly takes action on his authority and justifies Itself to the Cabinet afterward. (The militarywith Franced was effected between the respective defense ministries without the participation of the ForeignEven if he leaves public office. Ben Ourlon wUl continue to exercise effectivein the IDF through his proteges in the armed forces and In the Defense Ministry itself.
Israel relieselatively small cadre of professional officers and noncoms backedeady reserve system able to expand theground forces strength of0, organised in units, inimilar system is used for the air force and the navy, although these services maintain proportionally larger numbers of personnel on active duly than does the army.
In order to be self-sufficient aa far as possible, Israel manufactures virtually allweapons, ammunition, and spare parts domestically. It relies on foreign sources, principally France, for artillery, armoredaircraft, *nd electronic equipment. The UK has supplied Israel with destroyers andrance has furnished Israel with successive types of Jetanditself to sup^.
j!
aircraft nave been supplied In quantitiesto match UAR acquisitions ofSoviet models.
M. Israeli military do-Ortne emphasises selslnf and holding strategical and tactical initiauve, and destroying enemy forces before they can penetrate Israel. The main emphaslj is on mobile, hard-hitting strikingmechanised Infantry, paratroops, and strong sir support. Israeli Intentions are to main-Lain military superiority over any and all Arab forces which may beft the state. In meaningful terms, this hasmain talnliig superiority over the UAR, Israeli plans callrogram of re-equipment In the, which would Involve an average yearly foreign exchange expenditure of about JIM million.
e estimate that Isruel Is presently capable of defeating the military forces of any combination of its Arab neighbors should they attack- The Israeli forces are capable ofthe Oeaa strip and Slnal. or the western half of Jordan or the southwest comer of Syria Including Damascus, while defending all other fronts. We believe that Israel willthis capability for the period of thisThe principal danger to Israel would be an Egyptian surprise attack by Jet bombers. Becauas of the short distances involved,warning of an attack would be or little value. However. Israeli Intelligence would be likely to supply some early warning.advantages of numerical superiority are offset by Israeli defensive ca pa bill ties,superior air combat ability, to suchurprise air attack would almost certainly not be decisive.
Fimni
FIMI3I
FOREIGN AFFAIRS A. Tht Arab Starts
he Arabs considertate of war still exists between them and Israel. The situation will remain tense Indefinitely, with the constant possibility of localised military action. Nonetheless, we believe the chanceshird round of major hostilities in the period of this estimate are less than even. Israel has been concerned by the buildup of Arab, particularly UAR, military strength in recent years and haa devoted considerable effort and money to keeping its military superiority. We believe the Israelis are basically confident of their ability toilitary superiority for the foreseeableand that the chances of Israel'spreventive war arc slight in them years. Also, Israel will continue to beby the prospects of adverse great-power reaction to any Israeli aggressiveDisunity among the Arabs will Inhibit any combined initiative by them and wethat they consider thatld not defeat Israel militarily. In thesethe Arabs will probably consider that the Palestine problem will be solved by time and Inexorable Arab economic and political pressure rathei than by military force.
If the breakup of the UAR following theeptember Revolut'on in Syria does not lead to turmoil on Israel's borders, weo significant Immediate impact onealignment of Arab states would not affect their hostility to Israel and might Increase border tensions as Arab leaders feel the nted to strengthen themselves by making anti-Israel gestures. However, Increased disunity among the Arabs, particularly the dissolution of the UAR, decrease* the threat tc Israel of simultaneous hostilities on two fronts, thus enhancing Israel's security position.
Nonetheless, there are two emergingwhich give particular promise of raising Arab-Israeli tensionswaters and Israeli nuclear developments. Israel plans toizable portion of the waters of the Jordan River to the Negevhe Arabs have expressed an intention to blocky diverting the waters of Jordan tributaries. In this situation, actions and counteractions could lead to hostilities. With respect to the Israeli nuclear program, if, at any time andof the true facts, Nasser came to believe that Israel was on the verge ofuclear weapon, he might be tempted toreventive surprise attack. However, this would involve him in hostilities which he would almost certainly lose and we believe he recognizes this.
nother point of possible friction Is the Arab claim to the right to exclude Israeli traffic from the Oulf of Aqaba cn the ground that Its waters arePWfrMFQerrMI^rltorial limits. The EgyptrW^rlOlfcsltions com-
minding the straits have been controlled by the UN Emergency Force alnco tho Bumof IBM. Should Egypt regain these positions and threaten Iaraell shipping, Israel would almost certainly react vigorously.
the roost Intractablefrom Iaraell-Arab tensions la thatone million Palestine refugees,supported by UNRWA. Thea political point of view, of anyofficially recognising the existenceeven prevents open negotiations forFurthermore, any solutioncertainly require theortion of the refugees andand resettlement for others.appear to 'Jew the solution largelyof repatriation with or withoutwhile the israelii see it mainlyof resettlement with or withoutIn these circumstances, therelikelihood of anignificant Improvemen* onsituation.
B. Other Powers
principal concern In itsis to attract and keep outsideto maintain ita own existence inof Intransigent Arab hostility. Overseveral years, Israel haa sought toconflict with Nasser to theand the Westthe US and France) versusthe Soviet Bloc.
srael's leaders regard their country as essentially Western. They will continue to use every effort to promote existing ties with the West and to develop new ones. Israel Is trying to Join the Organisation for European Cooperation and Development (OECD) and has Indicated interest in association with the Common Market, fearing possible damage to its foreign trade If left outside itf Israel exports are to Western Europe. Militarily. Israel has made some efforts to establish Informal ties with NATO and would probably welcome the opportunityore formal association. Israel carrieslde-ani^id program of technical aid tocountries In Africa and Asia, and It would like Western support in countering Arab attempts to freese Israel out of the underdeveloped world.
Israel's strongest western ties are with the US and France. The Israelis believe theypecial ability to influence US policy. They harbored high hopes of specialby the pres :it administration and have shown resentment and annoyance at being considered as an equalumber of small friendly countries. Israel realises,esult of US opposition to the Sues venturehat It cannot count on US support for or acquiescence in preventive military action against the Arabs.
Franco and Israel have developed what amounts In practiceilitary alliance. We believe that relations will continue toclose as long as both parties feel they areommon enemy in the Arabs. Satisfactory settlement of the Algerianwould reduce French incentives for close association with Israel.
Tho UK has sold Israel militaryand naval ships over the years and British Jewry contributes regularly to Zionist causes. There Isegment of political life which is sympathetic to Israel, but this has little effect on traditional British policy toward the Arab states, which areand militarily Important to the UK.
Israel's relations with the Soviet Bloc are coolly correct. Despite the Bloc's massive aid to some Arab states, Israel has taken care not to offend the USSR unnecessarily out offor the fate of ktj two and one-half million Jews living there. Rumania IsIts Jewish population to go to Israelate ofonth and Israel does not wish the now to be disnspted. We foresee no change In Soviet-Israeli relations In the next few years. un!WMlfpiW, ffl(jlbfof the USSR. pATt_ Sir 1BSI
Original document.
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