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EDITIONS
 Sunday, 5 January, 2003, 02:23 GMT
Israel seeks US aid package
Israeli soldiers in tank
A third of the money is earmarked for the military

An Israeli delegation is due to arrive in Washington to try to secure an emergency aid package worth $12bn.

Israel's economy is suffering from one of the worst crises in the country's history.

The conflict with the Palestinians, together with the world economic downturn, has led to rising unemployment and falling investment.

Israel submitted the request several months ago and is now sending a senior delegation to follow it up.

It includes the head of the prime minister's office, Dov Weisglass, as well as the directors general of the finance and defence ministries.

A third of the aid package would be for military and security spending, to help Israel fight the Palestinian uprising and boost its defence preparations for a possible US-led war against Iraq.

The rest of the money would be in the form of loan guarantees.

Obvious choice

The United States is an obvious place to turn for help; it already gives its close ally $3.2bn in aid every year.

Israeli Prime Minister Ariel Sharon
Sharon's ratings have not been hit by Israel's economic woes
Mr Weisglass called the request part of "very deep and involved strategic relations" and said Washington was regarding it favourably.

Israeli commentators have said that even if Israel gets the money, it will not have an immediate impact on the economy.

That suggests the authorities are looking more for improved confidence and boosted credit ratings than immediate rescue.

The Israeli Prime Minister, Ariel Sharon, does seem eager to get this vote of confidence, even though the dire economic situation has not had an impact on his poll standings ahead of general elections.

Israelis are much more focused on security, although a vote-buying scandal in Mr Sharon's Likud Party has cut into its once commanding lead.


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