Foreign Relations of the United States, 1955–1957, Arab-Israeli Dispute, 1957, Volume XVII

416. Memorandum From the Under Secretary of State’s Special Assistant (Villard) to the Under Secretary of State (Herter)¹

Washington, December 3, 1957.

SUBJECT

• Palestine Refugee Problem

Discussion

In accordance with your request, I have reviewed my memorandum of November 21 (Tab A)² on Palestine refugees in light of the visit of Ambassador Engen on November 25³ and the Secretary’s suggestion that Israel’s application for an Export-Import Bank loan be considered in connection with the refugee problem.⁴ To simplify the situation as much as possible, I am summarizing below the main issues as I see them. Unless otherwise indicated, these views are generally shared by NEA, IO, Mr. Mathews of S/P, and Mr. Harry Labouisse, Director of UNRWA.

1. The Arab standpoint. The Arab governments unanimously insist on the right of repatriation as set forth in the United Nations Resolution of December 11, 1948 (Tab B).⁵ There is no Arab country which at the present time would dare break this stand or in any other way move independently toward a solution of the refugee question. Any plans for a settlement which did not admit the principle of repatriation would be doomed to failure.

2. The position of Israel. Israel takes the public line that the refugee problem is one for the Arab states to solve among themselves. In the General Assembly on November 27 Ambassador Eban emphatically declared that the advocacy of repatriation is a “serious mistake stifling all attempts at a real solution.” However, in private conversations with Department officials, Ambassador Eban and Minister Herzog have indicated that Israel might be more forthcoming. It is believed that advantage should be taken of their apparent flexibility.

3. The question of compensation. Linked as a choice with repatriation in the United Nations Resolution of 1948, compensation to the refugees presents various difficulties. A specialist employed by the Palestine Conciliation Commission, which has been evaluating refugee property in Israel, has come up with an estimated valuation of $460,000,000 for that property. Leaving aside reimbursement to wealthy property owners, any fixed sum paid to refugees who might opt for compensation instead of repatriation runs the risk of being interpreted as a fee for the sale of their birthright. The inflationary aspects of large sums paid for compensation must also be considered. Pressure for repatriation would tend to disappear if the principal agitators were paid off and if, in lieu of compensation, economic aid were provided at so much per head directly to those governments in the area willing to settle Palestine refugees.

4. Economic development. Projects such as the Johnston Plan, which would drain off labor from the refugee camps, cannot be expected to bear fruit unless they are dissociated in the Arab mind from a political settlement of the refugee problem. Mass transfers of refugees to neighboring countries must also be considered impractical. Only Iraq might accommodate a substantial influx, but it must be remembered that Iraq has many social and economic problems of its own that might limit its willingness to serve in this regard.

5. Distribution of the refugees. Jordan, which contains more than half of the 947,000 refugees, constitutes the heart of the problem. In Syria and Lebanon many of the refugees have already been successfully assimilated. Because of the serious political and economic implications in Jordan, it would be advisable to concentrate on providing an economic future for the approximately 100,000 refugee families in that country. It is probable that the next largest number of refugees, in the Gaza Strip, would have to depend primarily on relief operations sponsored by the international community for some time to come.

6. Political solution. Present circumstances do not favor an attempt at a formal settlement of the refugee problem as between Israel and the Arab states. An attempt to break the deadlock between the Arab and Israeli points of view inevitably brings the problem within the context of the over-all Palestine issue. Although the moment is not considered opportune for a solution on a formal basis as one necessitating agreement between Israel and the Arab states, it is believed that encouragement should be given to quiet exploration by the Norwegians or other third parties of the possibility of making progress toward a settlement.

[NEA believes that the IO–NEA recommendations of July 2, 1957 (Tab C), in so far as they relate to a political solution, do not now appear practical because political conditions in the area, stemming from Soviet penetration of Egypt and Syria, make it inadvisable to deal directly with the refugee question at this time. IO believes that while the present time is not propitious, it may be a better time than any in the foreseeable future.]⁶

7. Congressional Considerations. During the past few years the United States contribution to UNRWA has been relatively painless since it involved only the yearly reappropriation of money previously authorized. This year’s contribution to UNRWA effectively uses up the last of this money and any further United States contributions will have to be based on a request for new funds. In view of the growing Congressional feeling that future United States contributions should depend on success in moving toward a solution of the refugee problem, it is obvious that we shall have to offer the Congress something better than indefinite continuance of the status quo.

8. Economic approach. Considering the fact that a direct settlement is not practical at this time, the most suitable method of approach would seem to be along economic lines. A significant change has recently taken place in the attitude of the refugees themselves. Projects for self-support, permanent housing and vocational training have begun to appear more attractive. A large proportion of the refugees are growing up with few personal ties to Palestine and with increasing concern for their economic future. By providing opportunities for employment, and by integrating refugees into the economic life of the communities where they now reside, the mass of refugees can be whittled down over the course of time. Instead of relying on political negotiations or compromise, this indirect method would involve a program of bilateral assistance to friendly host governments, as suggested in the IO–NEA recommendations. At the same time, new and dramatic economic projects in the area, possibly utilizing the new United States Development Loan Fund or some new agency, might help provide a solution. Any such proposals should have as their actual (although obviously unstated) objective the resettlement of Palestine refugees. It may well be that earlier proposals such as the Johnston Plan, while sound, have become impossible because of the political implications which have attached to them over the years. Such programs would involve discussions with Congressional leaders for the purposes of obtaining funds.

[While IO agrees that the indirect approach should be fully explored, it does not believe that it is likely fully to answer the problem and it therefore also favors the adoption of both the broader plan of political action as well as new and dramatic economic development projects in the area. Ambassador Engen does not believe that a political approach is feasible and favors what he terms the “back door” method of solving the problem, by providing economic opportunities for the refugees and resettling them in gainful occupations over a period of time. He believes this might be accomplished through an economic development plan sponsored by the United Nations, aimed at the whole area but applicable to the refugees as well.]⁷

Recommendations

1. In light of all the factors involved, my recommendation remains as stated in the memorandum of November 21, namely that every effort be made to reduce the refugee rolls as rapidly as possible, by bilateral assistance to friendly host governments, new economic development projects in the Middle East, the use of Public Law 480 surpluses as feasible, while continuing support of UNRWA as a maintenance operation. This view appears to be generally consistent with that of Ambassador Engen, as indicated in his letter to the Secretary of November 28, 1957 (Tab D).⁸

2. On the other hand, in view of the need to take some action in the immediate future, I recommend that consideration be given to having a letter sent from the President to Prime Minister Ben-Gurion calling for public acceptance by Israel of the right of repatriation. This communication could be friendly in tone but should firmly take the position that on moral and humanitarian grounds Israel has an obligation to recognize the United Nations Resolution of 1948. Recognition of the principle by Israel should be unconditional, although there would be room for negotiation of the practical details if accepted by the Arabs. Ambassador Engen, in his letter of November 28, agrees that it would be appropriate at this time to suggest to the Israeli Government that it publicly declare its willingness to accept the principle of repatriation.

[NEA does not believe that a letter from Ben-Gurion to the President would be desirable at this time. NEA believes that the Israeli response would be surrounded with conditions which make it unacceptable to the Arabs and would cause its rejection by them; furthermore, that it might not be satisfactory to us and we would therefore have used some of our heaviest ammunition to no avail. NEA recommends that we reserve all our ammunition and seek to formulate at an appropriate moment a general approach to the Palestine issue which would include agreement by Israel to take back some refugees, availing ourselves meanwhile of the views and explorations of Ambassador Engen, Mr. Hammarskjold, Nuri Pasha of Iraq (now in this country) and the British.]⁷

3. I recommend that we hold in abeyance the Israel Export-Import Bank loan application at the present time. If it is decided that the President should make an appeal to Ben-Gurion we could intimate to the Israelis that a favorable determination on this and other economic measures would depend on the outcome of that appeal.⁹

1. Source: Department of State, Central Files, 320.51/7–257. Secret. The memorandum is item No. 23 of “Palestine Refugee Problem, Villard Study, 1957–58”.
2. Document 407. The tabs are not attached to the source text.
3. See Document 410.
4. See Document 411. Howe also sent to Villard on November 26 a memorandum informing him that Herter wished Villard to review and resubmit his memorandum of November 21 in light of the conversation with Engen and Dulles’ suggestion. (Item No. 20 of the Villard Study)
5. Reference is to Resolution 194 (III), printed in Official Records of the General Assembly, Third Session, Part I, Resolutions, 1948, p. 21.
6. Brackets in the source text.
7. Brackets in the source text.
8. In his letter of November 28, Engen reiterated his support for plans to create within host countries “areas of employment” for the refugees. The letter is item No. 21 of the Villard Study.
7. Brackets in the source text.
9. The source text indicates concurrence by Wilcox and Rountree, both of whom elaborated on their views in separate memoranda. Rountree’s memorandum, dated December 5, is item No. 24 of the Villard Study, and contains a more detailed exposition of the views attributed to NEA in this memorandum. Wilcox’s memorandum, dated December 6, is item No. 25 of the Villard Study. In it, Wilcox reiterated the points made in his memorandum of November 22 (Document 409) with greater force. Wilcox’s recommendations remained the same as those in his memorandum of November 22 except for the deletion of the first recommendation relating to the talk with Engen. (Department of State, Central Files, 320.51/7–257)