CONFIDENTIAL
Israel
9. On the question of Israel, the TUC's International Committee had adopted the view that if the continued existence of a State of Israel could be guaranteed, a solution for the problems in adjoining areas would be possible. This was the line taken by the TUC in their contacts with Syrians and Egyptians. The TUC had the impression that there was an increasing disposition among the Arab States to move towards accepting the State of Israel, even as a Zionist State. Syria remained hostile to this concept and supported the idea of a secular state in which Arabs and Jews could live in peace. The TUC realised that this would not be acceptable in Israel. The continuing existence of Israel must be respected within guaranteed boundaries but the TUC wondered if a separate Palestinian entity outside the boundaries of Israel could not be recognised. Mr Callaghan commented that HMG's views did not differ materially from those of the TUC. We had opposed the appearance of the PLO at the United Nations and this had evoked criticism from Syria and Egypt. The central question was the position of the Palestinians. This was a hard question for Israel to answer and we must help to invoke a response by quiet and patient diplomacy in our contacts with Israel and the Arab States. It was probably right that the FIO should be required to pay a price for recognition and a bargain needed to be struck. For instance, the right of the PLO to become a participant in peace negotiations might be made dependent upon a guarantee of the borders of Israel. Unfortunately, Israel would not be taking part in the Security Council's discussions on the Middle East in January though we were trying to persuade the Israelis to change their attitude. We must also continue to make clear to the Arab States that the PLO must expect opposition for so long as they do not recognise the State of Israel. Arafat may be moving in the direction of recognition but the doubt is whether George Habash would permit him to take this step. Mr Callaghan would discuss with Dr Kissinger a line of future policy but at this stage the Palestinian situation, rather than the Golan Heights, was the key factor. The fact that 1976 was election year in the United States was an additional complication and indeed the Egyptians were already reconciled to waiting for November before progress could be made. In the interim, a meeting in Geneva might be a way of keeping things moving. An additional point was whether we should take part in giving guarantees. President Sadat was keener on our doing so than was Israel. Sadat also wanted us to take part in any negotiations. These considerations required to be measured against the very dangerous situation which now existed in the Middle East. The Israeli raid last week was a mistake (as he had told Mr Allon) and we could be moving again towards a warlike situation.
10. Mr Plant explained that when the PLO was admitted to the International Labour Conference in June there was widespread disquiet when their representative mounted the rostrum and defined the PLO's policy in terms of determination "to drive Israel into the sea" Another cause for concern within the ILO was that China had not yet taken her seat even though Taiwan had been expelled from the
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CONFIDENTIAL
/Organisation
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