1. Mr. Sharett called today and I had a conversation lasting almost an hour and a half with him during which time we thoroughly reviewed the problems of the Middle East. He presented his case forcibly and clearly but with not even the slightest indication of a readiness to compromise on any of the major issues at dispute with the Arab States.

2. I started out be explaining the reasons why I was unable to go to Israel on my way back from the Far East which he seemed thoroughly to understand, and reiterated his invitation to visit Israel if another occasion should present itself. He said he was grateful for the invitation to come to Canada and particularly for our courtesy in making an aircraft available.

3. Mr. Sharett then asked me if there was anything I could tell him about the conversations I had had with the Egyptian Prime Minister in Cairo.³⁴ I gave him a fairly detailed account, telling him of the good and indeed charming impression which Nasser made on one. I said that Dr. Fawzi had spoken well of Mr. Sharett, with whom he is an old acquaintance. (Fawzi was before the war Egyptian Consul General in Jerusalem). But when it came to the political discussions Nasser advanced the usual intractable Egyptian case - that is, territorial concessions on the basis of the 1947 resolution and the repatriation of refugees. When I pointed out to him that this was clearly out of the domain of the possible, he said he meant the 1948 Bernadotte proposals. I then told him that unless they are prepared to recognize the existence of the State of Israel the only logical alternative seemed to be war, and Nasser answered that he would not launch an aggressive war. He had told me that one of the reasons why the refugees were hesitant about the repatriation to Israel was because of the bad treatment those Arabs who remained there received, to the extent that many of them were still escaping.

4. Mr. Sharett was obviously nettled by the reference to the situation of the Arabs in Israel and hastened to assure me that materially the position of the Arabs was better now than during the Mandate. He said that they had their own schools and mosques paid for by the government, that illiteracy had almost been stamped out and that there were 8 Arabs in the Knesset where the Arabic language was permitted and indeed simultaneous translations were arranged. He added that proportionately they paid lower taxes than the Jewish members of the Community but said that he realized that nevertheless their position psychologically was unhappy because they were a minority in a land to which they had no loyalty. From this he went on to point out how impossible it would be for Israel to take back a large number of refugees and, apart from the security problem, there was simply no place where they could be resettled. He said however that Israel was ready to pay compensation for their lands and to help in their resettlement in the Arab countries as part of a general settlement.

5. Mr. Sharett then turned to the question of Prime Minister Nasser and his attitude. He said that Nasser talked in a reasonable way to Western statesmen but that he and his government and the Arab press were constantly ranting against Israel and stirring up opinion for the obliteration of the new state. He said he thought that Nasser would like to see Israel cease to exist and I agreed that was probably his ultimate desideratum, but I thought this was simply the highest bargaining point, and that he would be prepared to negotiate. When Nasser talked of territorial concessions what he meant in fact was the Negev, and that also seemed to be what Sir Anthony Eden had in mind when he made his Mansion House speech.³⁵ Israel could not understand why we should entertain any consideration for the Arab desire to link up Egypt and Jordan through the Negev. The two countries were not joined geographically during the British Mandate and there was no particular reason why there should be geographical continuity. There were no lines of transportation through the Negev and even if there were they were hardly likely to be used. One could just as well claim that Israel interrupted the geographical contiguity between Egypt and the Lebanon. The Negev therefore is of no real use to Egypt.

6. It is however of desperate importance for Israel. In it there may well be important mineral deposits, oil and other resources badly needed by the small state. But most of all it contains the Red Sea port of Elath which the Israelis hope to develop in order to build up their commerce with Southeast Asia. It is not only a great deal quicker to ship from Israel via Elath but they also in this way hope to avoid paying tolls in the Suez Canal, not to mention the Egyptian blockade. In addition it seemed to the Israelis absurd that anyone should think of detaching the Negev from them when this was the only part of Israel which was firmly given to them in the 1947 resolution. Incidentally, he added, were we sure what the Jordanian reaction would be if Galilee were to be taken from Jordan and turned over to Israel as would be the case if the Bernadotte proposals were implemented.

7. Mr. Sharett then returned to Sir Anthony Eden's proposals and said that, as I knew, they had not been well received in Israel. The reason was, first, because it implied that big territorial concessions would have to be made by Israel, and because he put himself forward as a mediator, though this was a minor point. The Israelis knew that the Foreign Office was by tradition pro-Arab and they suspected that this proposal was made in order to retain some British prestige among the Arabs. The Americans, he said, were much more understanding of the position of Israel.

8. I then asked Mr. Sharett what would be the concessions which Israel would be prepared to make in order to get an overall settlement. He said they would be prepared to consider territorial adjustments - that is, the correction of injustices in the frontier -, the payment of compensation for refugees and an increase in the repatriation of divided families, and the grant of transit rights to the Arabs - to Jordan for free access to the port of Haifa, and to Egypt and Lebanon, the passage of trains and aircraft through Israeli territory, though they would want reciprocity.

9. I asked him if it was not possible for Israel to consider giving some satisfaction to the Egyptians about the Negev even if it only took the form of free transit rights, which might be maintained by an international force. He at once poured scorn on this proposal saying, what kind of a corridor? a tunnel? or a viaduct? This he added, might be put forward as a Canadian proposal! I argued a little bit with him on this point but found him so completely unbending that I decided there was no point in pursuing this, particularly as Mr. Dulles had already pushed him pretty hard when he was in Washington.³⁶

10. Mr. Sharett then turned to the question of the Czech-Egyptian arms deal.³⁷ He said that this had completely altered the situation, that Egypt, which already had had a clear superiority over Israel in arms, would now have an overwhelming superiority and in the most up to date equipment. It was imperative that Israel get the means to defend itself. He did not mean that they want to have an absolutely equal number of tanks and aeroplanes but that they must be able to match the Egyptians in the modernity of their weapons. He said that so long as the proclaimed Egyptian aim was to drive the Israelis into the sea, they could not possibly consider their country secure unless they received adequate arms, and this was a question he had raised with Mr. Dulles. He then went on to refer to the fact that Canada, though not a major supplier of arms for Israel, nevertheless had sold them an important quantity of matériel, and he hoped we would be able to approve the requests which had been outstanding with us for some little time. He referred particularly to the stepping-up in the delivery period of the Browning machine guns and the authorization for the purchase of anti-aircraft guns and anti-tank guns. I told him that we would look into this immediately and thought we should be able to give him some satisfaction.³⁸ He did not ask for any additional weapons but he has laid the arguments before us in the event that they do wish to ask us later for more modern matériel.

11. Mr. Sharett said he was sorry he had not been able to talk to me before I saw Nasser, because he would have asked me to tell the Egyptian Prime Minister that if he did not stop the infiltrations and raids into Israel, they would have to react strongly and there might be serious trouble. I said that, in fact, Nasser had told me almost exactly the same thing. He had said: "Tell your Israeli friends that if they don't stop making provocative raids on Egyptian territory, we will have to take strong measures." I asked him if a wider neutral zone would not help, and he answered in the negative. The real menace was the Egyptian "commando" who stuck deep into Israeli territory, operating often from Syrian or Lebanese bases. He also said that many of their new settlements were near the border and could not be sacrificed.

12. As regards his estimate of the relative position of the two countries in arms, I said Nasser had told me just the opposite - that his country was weak and felt itself menaced by Israel's superiority. Mr. Sharett's answer implied that the Egyptians were trying to mislead us.

13. We then got on to a discussion of Russian affairs and intentions during which I gave him some of my impressions from the trip to the U.S.S.R. Mr. Sharett said that he agreed entirely with my impression that the Soviet leaders did not wish to launch an aggressive war, but at least in part because of their psychological makeup and their isolation from the outside world, they might react in unforeseen ways to Western actions. He was skeptical of Nasser's assurance that he was able to handle the Russians if they attempted to infiltrate into Egypt and I told him that this intrusion of the U.S.S.R. into the Middle East was also one of the disturbing recent developments. It was clearly part of the traditional Russian drive to get into that part of the world, and was only partly Communist in origin.

14. We parted with his sincere thanks for all Canada had done for the State of Israel, with particularly warm remarks about your sympathetic attitude and the role of General Burns in attempting to maintain the Armistice.

L.B. P[EARSON]