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Israel: A Religious Feud Could Damage U.S. Support

International Outlook


From damaging police investigations of alleged influence-peddling to the near-collapse of the Mideast peace process, Israeli Prime Minister Benjamin Netanyahu has faced some tough crises since taking office in May, 1996. But a firestorm over revisions--at the behest of ultra-Orthodox Jews--to Israel's religious Conversion Law is pitting Netanyahu against the American Jewish community, traditionally the backbone of political and economic support for Israel.

A rift between American Jews and Israel could have far-reaching effects. U.S. Jews, who are predominantly Reform or Conservative, are major donors and investors, channeling more than $1 billion a year into Israel's economy. Israel gets an additional $3 billion in official U.S. aid. But financial flows pale compared with the importance of U.S. political support for Israel. Warns Canadian-born billionaire Charles F. Bronfman, a major investor in Israel: "American Jews may disengage completely from Israel if the [Conversion] Law is changed."

IN THE COLD. Netanyahu is risking crucial international support because of intense political pressure at home. Just 23 Orthodox and ultra-Orthodox members of the Knesset account for more than one-third of the 65 who back Netanyahu's coalition. "It's a matter of simple mathematics. Netanyahu can't survive without the support of the Orthodox," says Israel Singer, director general of the New York-based World Jewish Congress.

In return for their support, the Orthodox demanded legal amendments that would deny recognition to conversions performed outside Israel. The only legitimate ones would be those made by Orthodox rabbis. As a result, America's Reform and Conservative Jews would be out in the cold. They would even be denied the automatic Israeli citizenship that has been given to converts abroad for the past 50 years.

With the changes imminent--they could be enacted by November--Israel's embassy in Washington and its consulates throughout the U.S. have been inundated with angry letters. Israeli Ambassador Eliyahu Ben Elissar warned Jerusalem recently that the Knesset did not yet grasp the extent of possible damage to Israel's interests. Adds Avraham Burg, chairman of the quasi-governmental Jewish Agency: "If the [U.S.] Administration perceives the American Jewish support is on the wane, this could lead to a reassessment of Washington's own aid."

Clinton Administration sources say that the controversy hasn't affected policy so far. But some American investors are already worried. Netanyahu supporters such as cosmetics heir Ronald Lauder have expressed concern over growing ultra-Orthodox power. And Los Angeles' Shamrock Investments recently sold off its controlling stake in Koor Industries Ltd., Israel's largest industrial group. "Unlike Jewish financial support, which is based on emotion, investments by businessmen are based on cold analysis," says Shamrock President Stanley Gold.

Searching for a way out of the impasse, Netanyahu formed a committee in June to find a compromise. But no one will bend. The ultra-Orthodox Agudat Yisrael and Shas parties won't budge. And opposition Labor Party leader Ehud Barak, angry at what he sees as Netanyahu's dismantling of the peace process, is in no mood to bail him out by joining a government of national unity.

Netanyahu has only a few weeks to find a solution. If he cannot please both the Orthodox at home and the Conservative and Reform communities abroad, he will propel Israel into uncharted, and potentially dangerous, territory at a tricky moment in its history.EDITED BY JOHN TEMPLEMAN By Neal Sandler in JerusalemReturn to top


Russia should soon find it easier to collect its bills. It is set to join the Paris Club of industrial countries, which negotiates payment schedules with developing countries that fall behind on repaying their debts to other governments. Russia could do with the extra muscle: Developing countries are overdue on payments of about $100 billion to Russia, mainly for arms purchases.

But first, Russia must clean up its own credit record. In November, it is due to sign an agreement with the London Club, made up of bankers and other private lenders, to reschedule $35 billion worth of commercial debt. A settlement, in conjunction with the country's improving economic trends, could prompt the rating agencies to upgrade Russian debt (currently BB- at Standard & Poor's) next year.EDITED BY JOHN TEMPLEMANReturn to top

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