"We Spent Too Much"

At lunch with the editors of TIME last week, Israeli Prime Minister Shimon Peres talked about his country's problems and the policies of his month-old government. Excerpts:

On Lebanon. We want to leave; we never intended to remain there. The problem is to know whether it is possible for the United Nations to enlarge its present force in southern Lebanon in the wake of our withdrawal. And we must discuss with the Lebanese government the necessary measures to secure the safety of the northern part of Israel.

We would expect the Syrians to agree that, following our withdrawal, they will not extend their presence in Lebanon, that they will discourage terrorist activities against Israel and agree to U.N. forces replacing us. If the Syrians do not understand that it is to their advantage for us to withdraw, we will remain where we are. I do not expect the Syrians to withdraw completely, but perhaps partially, because they are trying to control Lebanon, an uncontrollable country. What they are trying to do in Lebanon is to gain leadership in the Arab world, and to show that they have forced us out.

On the Palestine Liberation Organization. If the P.L.O. tries to return to southern Lebanon, we will not wait a second. We shall go back and destroy them. I say that in very sharp language to make our position clear. But the P.L.O. is so divided that the danger is not imminent.

On the possibility of peace talks. If you are asking me if, in spite of all the declarations, some country in addition to Egypt will come into the peace process, the answer is yes. I am optimistic about Jordan. And I think that Israel should do everything possible to prepare the ground for it.

On the Israeli-occupied West Bank. We should not expect a pro-Israeli tendency in the West Bank. We should not look for quislings. That is nonsense. In our three weeks in office, we have responded to some requests. The Arab West Bankers asked if they could build some industries. We said to go ahead. They asked for an increase in the amount of money they can bring in from abroad, so we raised the limit from $3,500 to $5,000. They asked to bring in investors. We said fine, provided they are not P.L.O. They complained about censorship: they had a long list of books they wanted to publish. We said to go ahead, so long as they are not about how to make a bomb or a Molotov cocktail.

On Israeli settlements in the West Bank. New settlements can be established only if there is a majority in the Cabinet in favor. We have an inner Cabinet equally divided between the two parties: five from Labor [which opposes new settlements], five from Likud. I do not believe that the Labor members of the Cabinet will depart from their convictions.

On the exchange of territory for peace in the West Bank. A territorial compromise is not a purpose in itself; it is a price. I am basically interested in looking for solutions so that Israel remains what it is and should be, a Jewish democratic state. And if we have to pay that price, we should.

On his talks in Washington. I found friends, not negotiators. I do not think anybody tried to twist my arm. I found an extremely friendly, open-minded group of people, both on Capitol Hill and in the Administration.

On Israel's current needs. We [must use more Israeli products.] Even if our girls paint themselves with Israeli-made lipstick our boys will still fall in love with them. I guarantee it. We are not a frivolous or corrupt society, we are a fighting democracy. We spent too much on luxuries, I do not deny it. But your support of Israel is not support for a spoiled child. Back in 1974 we got almost the same $2.6 billion in U.S. aid as in 1984. But over the past decade, the price of a fighter jet has gone from $4 million to as high as $40 million. Basically, we seek two things: to re-equip ourselves with the same number of planes and tanks as before; and to restructure our economy toward science-based, high-technology industries, and on that we would like to ask your help. But the time will come when we will no longer have to depend on American support.