WASHINGTON -- In crisis or an uneasy truce, the United States has opened its arsenal and treasury to Israel -- a flow of arms and aid that is vital to the security and future of the Jewish state.
It is this aid that Arab critics want President Reagan to use as leverage to force the Israeli government to stop its annexation policies in the occupied territories and to stop its military operations there.
But President Reagan is unwilling to restrict aid to support his peace plan for the Middle East. And restrictions on aid to Israel is not a political reality on Capitol Hill.
In fact, in its last session, Congress was more generous than the already generous administration, and Secretary of State George Shultz objected.
'The amount of aid to Israel is enlarged and it squeezes everything out,' he said after a Senate committee voted to boost aid to Jerusalem by $450 million above the administration's request.
Israel is the largest annual recipient of American foreign assistance. Economic and military aid have averaged more than $2 billion a year since the mid-1970s. This amounts to about $600 a year for every Israeli man, woman and child.
Since the modern Jewish nation was born in war in 1948, the United States has provided Israel nearly $15 billion in military assistance - and $5.5 billion in debts has been forgiven. In economic support, Washington has provided Israel $7.16 billion in grants and loans since its founding.
The last term of Congress approved $2.485 billion in economic and military aid for Israel: $750 million in direct foreign military sales credits, or 28 percent of the total U.S. security assistance budget, $950 million in guranteed loans, and $785 million in economic support aid.
The administration proposed that $1.025 billion of the total aid be forgiven in grants, but Congress increased this by $510 million.
The Arab world considers this generosity excessive. This aid supports an Israeli economy in which inflation is built in, and, critics say, permits Jerusalem to gradually assimilate the West Bank and Gaza Strip with virtually giveaway loans for housing.
In his talks at the White House, Jordan's King Hussein sought support from Reagan on restraining Israel's settlements policy. Reagan has called on Menachem Begin to halt the settlements program but the prime minister firmly rejects the idea.
Aid can encourage Israeli actions. To ensure the success of the Camp David Accords, President Carter pledged $800 million to build two new air bases for Israel to replace bases in the Sinai it turned over to Egypt. The United States pledged to supply Israel with oil in the event of emergencies because it surrendered use of Egyptian oil fields.
And to begin rebuilding the weakened Israeli military and economy after the 1973 war, President Nixon proposed a $2 billion grant to Israel. It sped through Congress.
Reagan does not want to use a heavy club of restricting aid to Israel as part of his Middle East policy. It would only rally support for Israel on Capitol Hill and for Begin in Israel. But he recognizes there are shades of influence.
The president placed an embargo on shipments of advanced warplanes to Israel in 1981 because of its bombing of the Iraqi nuclear reactor.
This did not restrain Israel, but bought the United States a littletime to demonstrate to the Arab capitals that it would not respond to a major Israeli military action by permitting the free flow of arms.
Shortly before Reagan prepared to release the planes, Israel struck again, bombing Palestine Liberation Organization targets in Beirut in 1981 in retaliation for attacks on its settlements.
The fighter-bombers eventually made their way to Israel, but now another shipment is planned and Reagan is not prepared to be so generous just yet. He has delayed notifying Congress of his intention to provide Israel with 75 top-of-the-line F-16 fighter-bombers.
Officials believe delaying action on the notification may have more influence on Begin than a heavy-handed aid policy.
