US suggestion of sanctions causes stir in Israel

A US peace envoy's suggestion that Washington could impose sanctions on Israel to force it to make concessions to the Palestinians has drawn a sharp response from Israeli Prime Minister Benjamin Netanyahu and his cabinet ministers on Sunday.George Mitchell had on Wednesday said on American television that the US could potentially withhold support on loan guarantees to Israel. Israel has received billions of dollars in US guarantees. Although such guarantees have slipped in importance in recent years and Mitchell made clear that no sanctions were imminent, the remarks were another sign of discord in Israel's ties with the Obama administration. In a written statement late on Saturday Netanyahu's office blamed the Palestinians for a peacemaking impasse which the envoy, due back in the region later this month, has failed to break. Arriving for the weekly cabinet meeting, Israel's finance minister, Yuval Steinitz told reporters: We have no indication that somebody is going to use guarantees in order to pressure Israel. I think it is very clear in Washington that those who are problematic here, those who are reluctant to resume peace talks are the Palestinians, not the Israelis, he said. In any case, just few months ago it was agreed with the Americans between my delegates and the administration to prolong the guarantees so they will be available also in 2010 and 2011. This was a token of friendship to Israel, Steinitz said. Israel's science minister, Daniel Hershkowitz said the US has no reason to put pressure on Israel. Israel has taken several steps, some of them are very painful steps, while the Palestinians did not show any readiness to join the negotiations. I think that the side that should be pressed is the Palestinians, Hershkowitz said. Under pressure from President Barack Obama, Netanyahu imposed a 10-month moratorium on Nov 25 on housing starts in West Bank settlements. He excluded East Jerusalem and nearby annexed areas of the West Bank, territory Israel captured in a 1967 war. Talks were halted a year ago over the war in the Gaza Strip and have not resumed, due largely to a Palestinian demand that Israel first impose a complete freeze on building in the West Bank and East Jerusalem and Israel's refusal to do so. At this week's cabinet meeting, Netanyahu mentioned examples of what he described as Palestinian incitement against Israel, including the naming of a square in Ramallah after a female Palestinian attacker who was involved in the killing of 37 Israelis in 1978. I call on the leaders of the Palestinian Authority: 'Stop the incitement'. This is not the way to make peace. Peace is made by educating for reconciliation, by encouraging good relations among neighbours and by the cultivation of mutual respect, Netanyahu told his ministers. The Israeli prime minister also mentioned a recent surge in rocket and mortar attacks launched from the Gaza Strip in the past week, stressing the Israeli policy is an immediate and powerful response.