Moshe Arens, who was Defense Minister in the administration of former Prime Minister Yitzchak Shamir, told Arutz Sheva television that the Netanyahu is in an easy position to ignore the threats by U.S. Middle East envoy George Mitchell to cut loan guarantees. In the following video, Arens speaks with Arutz Sheva TV about the current tensions between Israel and the United States.

Mitchell told an American television interviewer Sunday that holding back loan guarantees is an option to force Israel to make more concessions to the Palestinian Authority in order to lure the PA back into talks for a new PA state.

The envoy (in photo, left) denied that he had made a threat and claimed that he simply was responding to the interviewer’s question concerning what options are open to the United States.

Arens recalled that former U.S. President George Bush (the elder) had made a similar threat to Shamir.

“We asked for loan guarantees that would allow the absorption of immigrants from the former Soviet Union,” recalled Arens. “Bush conditioned the loans on stopping the developmment of Jewish communities in Judea and Samaria, and Shamir refused.

“It became clear that Israel did not need the guarantees, but the Rabin government apparently was prepared to agree to the condition, although it  is not clear to me if it was ever executed.” Arens explained that the Israeli economy is much stronger today than it was two decades ago and that "we are not dependent on American finances; we would be happy to receive the guarantees, but we do not need them. I do not think there is any reason that Israel’s leaders have to be worried about Mitchell’s statements." 

Political, not Economic Threat

Israel could consider President Obama a “paper tiger“ economically if it were not for the political threat, noted Globes analyst Avi Temkin. He said that while Israel can easily manage without the remaining $4 billion in loan guarantees, “The significance of the warnings of the envoy George Mitchell is essentially political. It signals to the Israeli government that the U.S. administration is not thinking of relaxing its effort to reach a settlement."