JERUSALEM -- The prospect of receiving a long-delayed $10 billion in loans guaranteed by the United States brought relief to Soviet immigrants and Israeli officials Tuesday, but left Palestinians decidedly uncomfortable.
Some Israeli analysts, however, warned the unprecedented loan package to resettle the recent flood of Soviet and Ethiopian newcomers would saddle Israel with a burden of debt impossible to repay and further damage the struggling economy.
For the most part, Israelis were generally upbeat about U.S. President George Bush's promise to recommend congressional approval of the loan guarantees after meeting at his Kennebunkport, Maine, summer home with Israeli Prime Minister Yitzhak Rabin.
Finance Minister Avraham Shohat credited Rabin's quick moves to reverse the settlement drive in the occupied West Bank and Gaza Strip of his predecessor, Yitzhak Shamir, with winning the loan guarantees just a month after he took office.
'When we took over the government, the guarantees were in the refrigerator, in the freezer of the refrigerator,' Shohat said.
'I'm very happy about it. I think few people thought that things would be worked out in four weeks.'
For nearly two years, Bush withheld the loan guarantees from Shamir, suggesting that the money would be used to help fund Jewish settlement in the occupied territories, home to 1.75 million Palestinians.
Palestinian spokeswoman Hanan Ashrawi said the granting of the loan guarantees was indicative of 'a new honeymoon between Israel and the United States' and she said Palestinians were mostly concerned that the money does not fund settlement activity.
'We hope that the peace process will continue and will be treated impartially and that mending fences between Israel and the United States will not be at the cost of the peace process,' she said.
Ashrawi said the conditions of the loan guarantees, which Bush did not discuss in detail, would be studied by the Palestinians to determine whether it is tied to a freeze in Jewish settlement.
'If settlement activities are stopped entirely, there will be no problem,' she said.
Rabin's administration has already stopped new construction of settlements and has frozen work on about half the housing units planned under Shamir in the occupied territories. He said he will allow building of any settlements he considers necessary for security, but will freeze those he terms 'political settlements.'
Advocates for immigrants from the former Soviet Union, about 400,000 of whom have come to Israel since 1989, expressed relief that the loans were granted but said they would have to fight for the money to be used properly.
'We are happy about anything that will lead to better absorbtion of the immigration,' said Deborah Lipson, spokeswoman for the Soviet Jewry Zionist Forum.
The once-huge flow of Soviet immigrants to Israel has slowed to a trickle since reports filtered back to the former Soviet republics that jobs and housing are scarce in Israel.
'The No. 1 priority screaming out for attention is job creation,' she said.
But economists at a leading Jerusalem think tank were skeptical that the loan guarantees would bail out the Russians and said they were more likely to ruin the economy.
'The loan guarantees are not necessary, at best,' said Robert Mullenberg, an economic policy expert at the Institute for Advanced Strategic and Political Studies.
'At worst, they will make the job of (economic) reform that much harder or impossible,' he said.
'Israel is the only country in the world that we know about that believes that if you increase debt it will stimulate growth.'