Foreign Relations of the United States, 1977–1980, Volume IX, Arab-Israeli Dispute, August 1978–December 1980, Second, Revised Edition

320. 320. Memorandum From Secretary of State Vance to President Carter ¹

Washington, undated

SUBJECT

• Following up on Prince Bandar’s Approach

The Issue

Prince Bandar saw the President secretly on December 5² and made a two-part proposal:

—In return for a U.S. statement of his policy toward the Middle East along lines he specified, The Saudis would be willing to lift the boycott, provide recognition to Israel, engage in a comprehensive regional economic plan (with a figure of up to $20 billion being mentioned) and assure a freeze of oil prices for a couple of years.

—In return, the U.S. would make a statement on its policy (which Bandar apparently had someone draft) in which the U.S. would (a) state its commitment to protect the integrity and security of Israel within [approximately] her [pre-1967] secure³ borders, (b) call for an Israeli end to military occupation with safeguards in the context of Arab recognition of the integrity and security of Israel and agreement to establish normal diplomatic relations, and (c) state its readiness to accept “a Palestinian entity on the West Bank and Gaza provided it and any negotiators on its behalf first agree to accept the existence, security, and integrity of Israel within its 1967 boundaries and to undertake a permanent non-aggression agreement with all of the existing states adjoining it.” In connection with the last point, there is a statement that the United States would prefer that such an entity be confederated with Jordan or Egypt for a period of at least five years, but the U.S. would abide by any reasonable solution acceptable to the states adjacent to such an entity.

It is significant in the Bandar approach that there is no mention of Jerusalem, although that may be subsumed in the commitment to the 1967 borders.

Analysis

[1 line not declassified]

—On the one hand, the idea of close Saudi-U.S. collaboration in some sort of Middle East Marshall Plan has been in Saudi minds for several years, and we have heard it on other occasions. Also, the fact that the Saudis are asking for U.S. support for a Palestinian entity associated with Jordan and Israel’s returns to lines approximating those of 1967 is not surprising.

—On the other hand, the idea that the Saudis would shift to open support of the U.S.-Egyptian-Israeli approach to an Arab-Israeli settlement and acceptance of Israel would be a major and important shift in Saudi policy. Doubts are raised because none of Fahd’s recent communications to you, including one just a few days ago, indicates that the Saudis are ready for such a shift. It is true that the Mecca Mosque takeover⁴ is a new factor in their thinking, and only that would seem to explain such a sharp change in their position, if any, since Hermann Eilts visited Saudi Arabia just a month ago.

[1 paragraph (4½ lines) not declassified]

Nevertheless, the approach is important enough to be investigated. Hermann Eilts’ visit to Saudi Arabia in early January would provide an opportunity to probe [less than 1 line not declassified] (Hermann will leave for Cairo the evening of December 27 to receive an honorary degree at Cairo University and could be in Saudi Arabia at the end of the first week in January.)

Before giving Hermann instructions to do more than probe [less than 1 line not declassified] however, you will want to consider seriously whether you really want to deal with such a Saudi proposal of these dimensions in the next few months.

—Saudi support for the peace process and recognition of Israel would be a major endorsement of the success at Camp David and, through Saudi encouragement of Jordan and the Palestinians, could spell the difference between further delay in the West Bank/Gaza negotiations and Palestinian/Jordanian acceptance of a modest outcome of those negotiations. We have to keep in mind, though, that such a Saudi shift would also arouse fear in Israel because some there would not trust the Saudis and would see such a move as a further tightening of the Arab noose around Israel. Depending on timing, Israelis would also argue that we were “abandoning” Camp David. The autonomy talks would become even more difficult, if not impossible.⁵

—The difficult side of Bandar’s proposition for us is that it would require U.S. endorsement of a Palestinian entity—albeit in association with Jordan—controlling the West Bank virtually up to the 1967 lines. This has been the U.S. position quietly for a number of years, but to take it openly would provoke widespread opposition in Israel and among Israel’s supporters here. The Labor Party in Israel has never accepted the 1967 lines as secure, and the Likud coalition wants to keep open Israel’s right to assert its claim of sovereignty on the West Bank. Moving in this direction would produce a major crisis of confidence with Israel and a political issue in the U.S.

Bandar’s offer to roll back oil prices provides an additional dimension that would be attractive to many in the U.S. if it could be carried out on the Saudi side. Our judgment, however, is that the Saudis do not have the capacity any more to swing the OPEC price levels. Also, an equation of oil for Israeli withdrawal would fuel the domestic charges that we are selling out Israel’s security for oil.

How to Follow Up

It seems to me at least questionable whether we could move as far as Bandar’s approach suggests in our public posture at this point—[less than 1 line not declassified] Therefore, we might want to see whether there would be some intermediate step whereby we might accept this proposition as where we would agree to come out in 1981 but to see whether there might be some intermediate step whereby the Saudis would quietly urge the Palestinians and Jordanians to support the autonomy negotiations.

The intermediate step we have in mind could be to probe the Saudi position by placing the Arab-Israeli issue in a wider context. The Saudi concern is not just to help us deal with the Arab-Israeli conflict, or to help them get off this particular hook with its Arab allies. More important are Saudi concern with its own security and overall position in the region. Since the loss (in Saudi terms) of both Iran and Egypt in a single year, the connection with us has assumed new importance—with new fears and doubts, but also new opportunities if we play it right. The Mecca Mosque takeover may also have sharpened their concern about the internal situation. The posture we strike as we come out of the hostage crisis will have an important and long-lasting impact on the Saudis, and on their willingness to look to us for the long term.

Thus Hermann’s mission could usefully get to the Bandar approach by indirection, by emphasizing the overall context of our policy towards the region. Indeed, if his presentation (and our policy) is credible in terms of overall Saudi interests—centering on security, the Saudi connection with us, and the overall future of the region—then any move on the Arab-Israeli problem would assume its rightful place, and we will be better able to relate what Fahd may have in mind to what Bandar told us.

We recommend therefore, that the Eilts mission to begin with focus on our overall strategic thinking for the region. He would use this to probe Fahd’s thinking about Arab-Israeli questions, without himself raising the particular points (and contentious issues) in the Bandar approach. If Bandar speaks for Fahd [less than 1 line not declassified], then Fahd can speak for himself. Elements of this approach might include:

—Our views on the strategic importance of the region, including the Soviet dimension, Gulf security, nature of regional friendships, the flow of oil, the cooperative international framework on energy and economic issues. Hermann would indicate that the Arab-Israeli dimension (as well as concerns for Egypt and countries as far removed as Turkey, Sudan, and even Morocco) is a vital factor in this overall picture.

—Our attitudes about the importance of some U.S. involvement and the role of power (in its largest sense). The Middle East (as a whole) will be central to our global strategy; our efforts are directed to integrating our policy into an overall strategic conception with our friends.

—We will want to work closely with Saudi Arabia—in ways that make sense to it. We recognize the dangers of stop-and-go policies and approaches, or of trying to impose forms and methods that do not accord with Saudi Arabia’s own conception of regional problems. We must pursue our interests and relationships; but we want to take into account the interests of our friends.

—There are a number of areas in which we would like to continue an active dialogue: some directly U.S. military (recent Murray mission; fleet deployments, Rapid Deployment force); some indirect support (FMS, role of particular countries in military supply support for regional nations—e.g. Sudan, Yemen, Morocco); a political framework for thinking about the region; possibilities (if any) for regional security cooperation (where of course Saudi Arabia’s views will be the most significant); economic cooperation (both within the region and in terms of the Gulf States’ involvement/responsibility for the international economic system).⁶

—Clearly, the Arab-Israeli dimension is important. We recognize the significance and importance of moving forward towards a comprehensive peace on the development of events in the whole region. We are working hard on Camp David and want to find a way to work closely with our friends to build on that.

This approach is reflected in the attached instructions for Hermann.

Recommendation

That you approve Hermann making the exploration with Fahd outlined above.⁷

1. Source: Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 68, Saudi Arabia: 12/79–1/80. Secret; Eyes Only. In the upper right-hand corner of the memorandum, Carter wrote: “Cy. J.”
2. According to the President’s Daily Diary, Carter met with Bandar in the Oval Office from 2:04 p.m. to 2:31 p.m. on December 5. (Carter Library, Presidential Materials) No memorandum of conversation of this meeting has been found. In his personal diary for December 5, Carter provided the following account: “I met with Prince Bandar, who brought a message from Crown Prince Fahd. They were eager to pursue the Mideast peace settlement by establishing a Marshall Plan-type fund of about $20 billion, recognizing and lifting the embargo against Israel, reestablishing ties with Egypt provided Israel would carry out the spirit of the Camp David Accords and pledge to take care of the Palestinians and withdraw from occupied territories. They made it plain they were not talking about all occupied territory.” Commenting on the entry in the published version of the personal diary, Carter wrote “the Saudis were inclined to tell me what I wanted to hear, but this was a profoundly important offer.” (Carter, White House Diary, p. 376)
3. An unknown individual added the handwritten word “secure” here. The words “approximately” and “pre-1967” also bear handwritten brackets.
4. See footnote 7, Document 312.
5. In the left-hand margin next to this paragraph, Carter wrote: “How much can we reveal SA attitude without endorsing it as a US proposal? (Secretly? Publicly?)”
6. For documentation related to U.S.-Saudi bilateral military relations, the Carter administration’s efforts to construct a Persian Gulf security framework, and other bilateral and multilateral political and military issues in U.S. relations with Saudi Arabia and the countries of the Arabian Peninsula, see Foreign Relations, 1977–1980, vol. XVIII, Middle East Region; Arabian Peninsula.
7. Carter neither approved nor disapproved the recommendation.