U.S. to provide 3 billion dollar loan guarantees to Israel

4/20/2005 1:30:00 PM GMT

The United States will provide loan guarantees totaling three billion dollars to Israel for 2005-2008, the U.S. State Department said in a statement.

The U.S.-Israel Joint Economic Development Group held a meeting on Monday and it was agreed that the guarantees be authorized in annual, one-billion-dollar tranches, the statement said.

"Pursuant to Congressional decision to extend the period of the Loan Guarantee Program for two additional years to 2008, the delegations agreed on a mechanism for implementing that decision,"

"The delegations agreed on the broad terms” to release the 2005 tranche of one billion dollars, the statement said, adding that the remaining 2 million dollars will be released based on economic reform and fiscal restraint by Israel.

At Monday’s meeting, the U.S. “underscored the importance to Israel's economy of fiscal discipline, particularly limiting the growth of government expenditures and continued economic reform”, the statement said.

"The Israeli delegation expressed its deep gratitude for the economic support it has received from the United States,"

The statement also said that the Israeli delegation reaffirmed “its commitment to maintaining its reform program in the years ahead”.

Capital market reform, monetary policy and labor market developments were also discussed at the meeting.

The Israeli delegation was led by Joseph Bachar, director general of the Israeli Finance Ministry, while the U.S. delegation was chaired by Anthony Wayne, assistant secretary of state for economic and business affairs, who was joined by Randal Quarles, assistant secretary of treasury for international affairs.

In another development, the Israeli military started moving its equipment out of the Gaza Strip.

An army spokesman said that it was a "first step" towards the disengagement plan.

He added that 30 containers loaded with office furniture, computers and uniforms were being moved from a military base in Gaza to Israel.

Under the withdrawal plan, all 21 Jewish settlements in Gaza will be evacuated, as well as four other enclaves in the West Bank.