The Government of Israel has always upheld the necessity of a settlement with the neighboring Arab States.
2. It notes that the Secretary of State, in his Aide-Mémoire of November 21, advocates an "approach which involves concessions by Arab states as well as Israel". While the Israel Government believes that the legitimate interests of Israel and the Arab States are reconcilable as they stand, it holds that if concessions are to be made they must be based on equality and reciprocity. The Aide-Mémoire of November 21, however, discusses a territorial concession by Israel, without indicating the need for any specific territorial concession to be made by any Arab State.
3. If the Arab States prevent violence from their side of the demarcation line, Israel will maintain complete calm on its side. Israel's policy is, also, to avoid reaction to provocation, except when such abstention imperils the security of its population or the integrity of its territory. The assistance of the United States would be welcomed in securing the cessation of "commando" raids and other violent actions now being carried out against Israel on various fronts, principally on Egypt's responsibility.
4. Israel's only intentions in the Gulf of Aqaba are those of free passage in conformity with its elementary rights under international law. If Egypt does not use force to impede passage in the Gulf, there is no reason to anticipate the use of force by Israel to ensure it. Moreover, if negotiations with Egypt prove feasible, Israel will abstain from any action in the Gulf likely to prejudice them.
5. The Government of Israel was interested to hear the view expressed by the Secretary of State on November 21, that there is now a chance of a settlement. Unfortunately, this impression is not borne out by the current acts and statements of Arab Governments. Encroachments continue into Israel, on the Egyptian, Syrian and Jordanian fronts. There is still no certainty of Arab acceptance of Ambassador Johnston's plan, which may well serve as a test of Arab sincerity. Arms from Soviet sources continue to flow into Egypt. In these circumstances, it is likely that the Egyptian regime is merely attempting to give an illusory impression of peaceful intent, in order to gain time for strengthening its forces in preparation for intimidation or aggression when the time is ripe. At any rate, the Government of Israel is unaware of any concrete evidence which would disprove this analysis of Egyptian intentions.
6. Nevertheless, in order to assist the Secretary in his exploration, the Government of Israel submits its confidential views on the contribution which Israel might make in the context of a peace settlement. The settlement to which Israel aspires is one which would benefit both parties, by inaugurating an era of development and social progress; by enabling a reduction of defence expenditures; and by initiating processes of political, economic and cultural cooperation. Israel does not advance a claim to any of the territory held by Arab States under the General Armistice Agreements. On the other hand, Israel sees no reason for ceding any of its territory to any of the neighboring Arab States, and cannot see its way to discussing a settlement on such a prejudicial basis.
7. The following is the general outline of a settlement which Israel would envisage:
(i) The Government of Israel is ready to authorize a meeting at any appropriate level between its representatives and those of the Government of Egypt, to discuss progress towards a settlement, it being clearly understood that the basis for such a meeting would not include the cession of any part of Israel[‘s] territory to a neighboring state.
(ii) Israel is prepared to discuss mutual adjustments of the armistice frontier for the benefit of both parties, on the understanding that the integrity and continuity of Israel's territory is not impaired.
(iii) Israel would be willing, in the context of a peace settlement, to contribute substantially to the opening of freer communications between all the States of the Near East, so as to enhance the economic strength and commercial enterprise of the region, and promote political and cultural understanding. These measures, which would in each case be effected without change of the existing territorial jurisdiction. might include on Israel's part:
(a) Provision for communication by air and railway between Egypt and Lebanon;
(b) Port facilities in Haifa for the Kingdom of Jordan, including transit rights by road to and from the Port;
(c) A transit arrangement to be agreed to by Israel for communication between Egypt and the Kingdom of Jordan, it being clearly understood that Israel will not cede territory, whether populated or unpopulated, in the Negev.
(iv) The Government of Israel recalls that it had already conveyed its affirmative attitude, subject to certain reservations, to the proposal on refugee compensation contained in Secretary Dulles' speech of August 26, 1955.
(v) The United States is also aware of Israel's readiness to cooperate in an agreed plan for the coordinated use of the Jordan and Yarmuk Rivers, as elaborated by Ambassador Johnston. The Government of Israel would welcome information on the attitude of the Arab Governments to this project.
8. The subjects proposed above for discussion and action represent a significant contribution by Israel to the establishment of peace with the Arab States. These States would, of course, have to make a corresponding contribution in order to ensure fair conditions for a peaceful settlement on the basis of mutuality. Thus, freedom of transit for Arab traffic between Egypt and Lebanon would entail corresponding freedom for Israeli traffic northwards over Lebanon and southward over Egypt. Similarly, if the Kingdom of Jordan is to have free access to and from Haifa and port facilities therein, it should agree to restore free access to the Wailing Wall, the Mount of Olives and Mount Scopus. Similarly, there should be a broad element of mutuality in any territorial adjustments agreed upon in accordance with Paragraph 2. Egypt should abstain from blockades and practices of maritime interception. Indeed, this duty is incumbent upon her under the Armistice Agreement, whether or not a settlement is achieved. In the context of a settlement such as that discussed here, all Governments should undertake to abstain from pressure and intimidation against governments or agencies wishing to trade with any state in the Middle East.
9. In discussing the prospect of a peaceful settlement, the Government of Israel cannot ignore the prejudicial effects of the increasing preponderance of the Arab States, and especially of Egypt, in armed strength. Unless prompt steps are taken to reduce this perilous disparity, by providing Israel with additional arms for self-defence, such as would be matched in quality and effectiveness to the arms now obtained in Egypt, there will be an inevitable aggravation of Arab intransigeance and of Israel's apprehensions. In such circumstances the Israel Government finds it difficult to conceive any hopeful discussion of progress towards peace.
Source: FRUS 1955-1957 XIV, doc.436.