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U.S. to withhold funds over Israeli action

WASHINGTON, Sept. 16 (UPI) -- The United States will withhold part of a $9 billion loan package to Israel because of its actions in the Palestinian territories, a report said Tuesday.

U.S. officials refused to say how much would be withheld from the total approved by Congress to help Israel get through its economic crisis. If the amount proves to be significant, the Bush administration would be taking the first concrete action to express its disapproval of certain actions by Israel, the Financial Times reported.

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The administration has criticized Israel's security cabinet for threatening to "remove" Yasser Arafat, its failure to halt expansion of Jewish settlements in the West Bank and Gaza, and the government's construction of a security wall through the Palestinian territories.

Treasury Secretary John Snow began a 10-day visit to the region in Israel Monday before attending meetings of the World Bank and International Monetary Fund in Dubai.

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