Financial Cost of Mid-East Peace Could Be High

By Lawrence Morahan | July 7, 2008 | 8:25 PM EDT

( - With hopes high in Washington that the groundwork for a peace deal between Israel and Syria could be imminent, the question on everyone's lips is: If a much desired agreement can be reached, who will pay the massive financial cost of implementing it?

The relocation of 18,000 Israeli settlers from the strategic Golan Heights after 32 years of occupation could cost as much as $18 billion, according to estimates, and Israeli officials are hinting that U.S. taxpayers might have to pick up a large chunk of the tab.

"Everyone knows the state of Israel cannot support a process of this type with the kinds of investments involved," Israeli Finance Minister Avraham Shohat recently told Israel radio.

Zalman Shoval, Israel's ambassador to the U.S., said Monday "any Israeli-Syrian peace treaty will require heavy financial outlays." A Syrian-Israeli peace treaty "will make a tremendous contribution to the vital American interest of stability in the Middle East," he added.

The broad outlines the participants envision for an agreement, analysts say, is the deal made between Israel and Egypt at Camp David in 1979. That treaty returned the Israeli-occupied Sinai Peninsula to Egypt, in exchange for peace. American funds paid for the Israeli pullout and compensated Israeli settlers, and U.S. taxpayers have been providing Egypt and Israel $5 billion a year in military and economic assistance ever since.

While such a windfall for Syria is unlikely, the peace dividend obviously is a major motivator for Syria to make a deal.

"The big consideration, before you get to the money, is whether Syria is going to stop supporting terrorism and merit removal from the terrorism list," a senior congressional source familiar with the negotiations told on condition of anonymity.

"If Syria does the right thing - and I wouldn't rule it out - and stops funding the bad guys and makes a genuine effort to be a good citizen of the Middle East, then you're going to have a pretty compelling argument to give them some sort of reward. But that's a long way down the road," the congressional source said.

Congressional leaders, who initially balked at coughing up the $500 million to implement the Israeli-Palestinian Wye River peace agreement earlier this year, are wary of behind-the-scenes promises the Clinton administration might make to Syria and Israel that would have to be paid for by U.S. taxpayers.

"I hope the administration will not make any promises regarding foreign assistance to either of the parties without prior, extensive consultations with Congress," said Rep. Benjamin Gilman (R-NY), chairman of the House International Relations Committee, in a statement to

While a deal would not just benefit the potential Mid-East signatories and the U.S., some analysts indicated the European Union also may bear some of the financial burden incurred in a peace agreement.

"The general view is that if there is a peace agreement, it will include a price tag," Marshall J. Breger, a law professor and Middle-East expert at Catholic University in Washington told "But whether that price tag will be met by the U.S., or by the U.S. and Europe, remains to be seen."

Breger said, however, he did not think Europe should be involved in the talks at this stage: "The more countries, the more cooks," he said. "That's why it's going to start first with the U.S."

Israeli opposition to the resumption of talks with Syria after four years is focused on the Syrian demand that Israel return all of the strategic Golan Heights.

The Washington-based Center for Security Policy said to get both sides to the table, the U.S. must have made exorbitant commitments to lubricate the process by agreeing to re-arm the Syrian military and normalize relations with Damascus by fraudulently removing Syria from the State Department lists of state-sponsors of terrorism and drug-trafficking countries.

"If Israel is not confident that it can provide for its own security without the Golan, it had better not surrender those strategic Heights," the Center for Security Policy said in a press release.

Other analysts said both sides should look at the larger geographic picture and not get stuck in negotiations over one area.

"Only a blind person would say it's not a big thing for Israel to give up the Golan Heights, but it's not the only thing connected to their security," Breger said. "I think giving up the Golan is a major concession by Israel, but I think you have to place that against what other benefits and safeguards they receive in an agreement."

A spokesman for Republican presidential candidate Gary Bauer said Bauer strongly supported any peace process that protects Israel's interest. "We don't think we should be in the position of blackjacking Israel into signing an agreement that isn't in their national security interest," Jeff Bell, a senior consultant with the Bauer campaign, told

Bell said a rational view of Syrian national interests suggests Syria should want to end its hostilities with Israel, but a peace agreement must include Syria getting out of Lebanon. "This should involve free elections in Lebanon and Syria, if we're going to get a permanent settlement. We won't get one if these countries deny their people self-determination," Bell said.