SEC. JAMES BAKER: Good afternoon. Ladies and Gentlemen, let me say it's been a pleasure to have received Ambassador Shoval this afternoon. And we have had the opportunity to discuss the question of absorption aid with Israel.

The Ambassador has presented me with a letter request from Prime Minister Shamir pointing out the need of the State of Israel for assistance in absorbing Soviet Jewish ZmigrZs requesting, in effect, guarantees from the United States in the aggregate amount of ten billion dollars -- two billion dollars per year over five years. I pointed out to the Ambassador that we strongly support the provisions of absorption assistance to Israel, that we had worked very long and hard over the past two and a half years, or so, to encourage Soviet Jewish immigration, (even ?) in the days of the old Soviet Union. We are committed to this.

We are, however, concerned with respect to the exact timing and need a little time to consider a request of this magnitude and to look at the details and the specifics. We have agreed that we will stay in touch. I will have, of course, the opportunity to discuss this -- hopefully -- in some detail with Prime Minister Shamir when I visit -- (inaudible) -- during the course of my next visit.

AMB. ZALMAN SHOVAL: (Inaudible) -- of the government of Israel for the loan guarantees. I have added that at present we are grateful, thankful to the United States and I think -- (inaudible) We certainly have the same aims in mind as the United States government has with regard to the --

Q: Is the delay a problem for Israel?

AMB. SHOVAL: Well, of course delay is a problem because the immigrants are coming in. We have very severe economic problems and it's no secret that we need this money quite urgently. It is a problem.

Q: Will it affect Israeli participation in the peace conference?

AMB. SHOVAL: We have always stated we are against linkage and we are not going to take -- (inaudible) -- anything of any importance. (Inaudible.)

SEC. BAKER: Let me say the same thing for the United States. And when we say we want some time to look at this, and when we request the Congress to consider a delay of no more than 120 days to give peace a chance, we're not linking this. What we're saying -- what we're trying to do is to avoid a controversy, to avoid a conflict, to avoid a debate that we would worry might be very divisive at a time -- as the Ambassador said -- when we share the same objectives with respect to the creation of a viable peace plan.

So, we have had a very, very good meeting. I anticipate you will probably see such beginning (before ?) I get to Israel. Our -- (inaudible) -- again to Soviet Jewish immigration and to absorption aid for Israel is firm.

The question of timing is one that I'm quite certain we will be able to amicably work out and I look forward to having the opportunity to discuss it with Prime Minister Shamir when I get to Jerusalem. And I'm delighted -- (inaudible).

Q: Mr. Secretary, Congressman Schumer said today that your holding a club over Israel's head. Would you respond to that?

SEC. BAKER: Well, I simply do not agree with that. We're not doing anything of the kind. I've just told you that I've had -- that I had two very, very good conversations with Prime Minister Shamir just as my vacation ended. I'm looking forward to seeing him next week.

We're not holding any club at all. We are simply saying that we would like to have time to consider this rather significant request, to consider the issues that surround and to agree on the exact timing. We have not, and will not, mount an effort or a campaign against the principle of absorption aid to Soviet Jewish immigrants.

Q: Mr. Secretary, Senator Mack says that Israel's humanitarian needs should not be held hostage to Arab demands. This is the first full exchange we've gotten -- (inaudible). Is your desire for delaying based on concerns that the Arabs don't want to see Israel housing people, and you'd rather not have to deal with that until you've got the peace conference nailed down?

SEC. BAKER: No, it's not that, Barry. It's because I don't presume to speak for all of the Arab governments with respect to what their views are, or are not, concerning the specific issues.

It's just that if this package is to move at this particular time I think that it would create conflict rather than avoid conflict. Both of us want to avoid conflict.

I know what your job is, and I respect it. It's to drive wedges occasionally and to create good stories and to get some good quotes. And I must say that I have been very, very heartened to see the statements, frankly, that have come from the government of Israel because they must have disappointed you badly.

Q: Well, their -- (inaudible) -- can't get a fair fight --

SEC. BAKER: No, no, no, no, no.

Q: No, when you say --

SEC. BAKER: The statement -- hopefully the statements that have come from the United States government are disappointing to you as well. (Laughs)

Q: We're not -- (inaudible) -- conflict. We're trying to understand how this would undercut your effort. And, so far, the suggestion I get is that there would be turmoil. There would be -- you know -- a distraction. But we're wondering if it's linked to Arab aid in any way.

SEC. BAKER: What we don't want to have happen is to -- for any reason -- lose what might be the best opportunity we've had for peace in a long, long time. And what we've said is: "Let's give peace a chance," even if it's only for 120 days.

Now, we've had some good discussions here today with respect to these issues of our budget -- where does this come from, how much does it actually mean in terms of (hits ?) to the United States budget, timing and a whole host of other things. I hope we're going to continue to have these discussions in the future, and I think we will -- so that we can work this out in a way that meets the needs and the common objectives of Israel and the United States.

Q: Ambassador Shoval, do you agree with that statement that the United States is not holding a club over the head of Israel?

AMB. SHOVAL: I would just certainly like to add that we would definitely not like the Arabs to get the wrong signal from -- (inaudible). But I believe that -- (inaudible) -- we're requesting makes it very clear that there will be no linkage between Arab demands -- if there are any Arab demands -- and America's commitment to the absorption of the immigrants -- immigrants into Israel. And this, I believe, is the Secretary's and our common aim.

SEC. BAKER: That's right. Thank you all very much.

AMB. SHOVAL: Thank you.