HAS THE TIME finally come for the United States to turn the screws on the Israeli government?
This question, which has arisen during other periods of strained U.S.-Israeli relations, is again high in the minds of American policymakers seeking to budge Prime Minister Menachem Begin from his stubborn stance against President Reagan's Mideast peace proposal.
In fact, the Israelis are already getting a hint of how a colder wind from Washington might feel.
Some of the U.S. technology Israel needs to build its next generation of fighter plane, the Lavi, has been held up since the start of the Lebanese war. At issue is a license to transfer "composite materials technology" -- the know-how for making the skins of aircraft from Lightweight fiberglass and plastics instead of metal.
In days of better relations, the license application would have sailed quickly through Washington agencies. But now the "review process is continuing," U.S. officials report.
They are quick to add that the licensing delay is not an attempt to exert leverage on Israel to accept the Reagan peace plan -- yet. To grant the license in the middle of the Lebanese war simply would have sent the wrong signal to Arab countries, they say.
Israeli officials accept this explanation. With some bravado, they also insist that if worse came to worst, they could redesign the plane or obtain the technology elsewhere. Still, they acknowledge they are worried, and for understandable reasons.
The Israeli aerospace industry employs at least 50,000 persons, including much of the country's scientific and technical intelligentsia. IsraeliAircraft Industries, maker of the Lavi, employs 20,000 persons, up from 4,000 in 1967,
The growth of the Israeli aerospace industry, in fact, has depended on easy access to U.S. technology.
In a sense the aerospace industry, with its many coproduction agreements, is a symbol of U.S.-Israeli togetherness. The $1.1 billion Lavi program, intended to provide an Israeli- built successor to the Israeli Kfir fighter by 1990, will rely substantially on U.S. components and designs. For example, a significant portion of the plane's Pratt and Whitney engine eventually will be manufactured in Israel.
While it would create no present danger to Israel, then, a significant delay in the Lavi program resulting from snags in the availability of U.S. technology might well have other consequences. It could hurt Israel's ability to compete in the world fighter-plane market. It could have a more important psychological impact: heightening Israel's sense of aloneness. Finally, it just might raise more questions in the minds of ordinary Israelis about the wisdom of Begin's course.
Why not cut off military aid, some might ask, or just pull the plug on the Israeli economy until Begin hollers "uncle" or is forced out of office?
Because if used as a Goliath's bludgeon, American pressures could make Begin an unscathed David. Any policy that rallies Israelis and American Jews behind the Begin government will be counterproductive. American pressures could work, but only if used as a precision instrument.
History has demonstrated that Israeli govern ments cannot be made to change their ways "by withholding 50 Phantom fighter planes," as former assistant secretary of state for Middle Eastern affairs Harold Saunders put it, "It just doesn't work that way."
In the end, the strongest pressure that can be brought on Begin to support the Reagan plan would be the possibility of long-term peace, Saunders believes. "(Former Egyptian President Anwar) Sadat put more pressure on Israel when he visited Jerusalem than the cutting off of $2 billion in U.S. military aid could ever do," he remarks.
Israeli and American diplomats and statesmen with long experience agree that any U.S. actions taken in a noisy, public, confrontational way would be doomed. "An open confrontation in the press just tucks Begin in Tighter," says one Washington-based Israeli,
But Israeli and U.S. officials say this does not mean American is without means to influence the politics of Israel through direct measures, though this would have to be done with subtlety.
"An iron fist would be counterproductive -- but it doesn't have to be an iron fist," says a member of the Israeli establishment with ties to the opposition Labor Party. "If you use the word sanctions, that would be counterproductive -- but you don't have to use that word. . . The U.S. has many cards to play without making it a blunt, anti-Israel thing. You do it with a smiling face."
Importantly, according to several Begin critics, Israeli as well as American, the United States urgently needs to make clear to the Begin government that it means what it says.
Over the past few years the Reagan administration has turned the other cheek to Begin's bombing of Iraq's nuclear reactor, his formal annexation of the Golan Heights, his invasion of Lebanon, and his use of U.S.- supplied, cluster-type bombs in Lebanon. Given that record, say critics, it is not surprising that Begin and his cabinet do not take American protests seriously.
According to this view, carefully targeted direct pressure, or a combination of pressures, could be useful on several counts.
As it seeks to rally support for its plan, the administration is addressing many audiences besides Begin. As a U.S. expert says: "Begin is one man; he is not Israel."
Already Israel's Labor Party Leader Shimon Peres has expressed qualified support for the Reagan plan, as have some key Jewish Leaders in this country. This suggests that Reagan has outlined a proposal which many Jews and Israelis can live with. These and other Jewish Leaders fear the Long-term consequences of Begin's policies. They fear the economic and financial consequences for Israel of a continued Middle East arms race, and they fear that present expansionist policies in Arab territories will dilute the Jewish state.
And their fear of isolation from the United States provides Washington with a trump card. "If even the United States is becoming unhappy with us, it begins to make people wonder," says an Israeli critical of Begin. "Israelis feel that Jewish communities abroad are putting distance between themselves and Begin's attitudes, and that can accelerate the process of changing attitudes at home."
Small, practical signals that say to ordinary Israelis, "The schism is widening," might just isolate Begin from some of his present supporters.
For example, holding up key pieces of industrial or military technology could send such a signal to Israel's influential "high tech" establishment. Similarly, slowing down the banking transactions that provide Israel with $785 million a year in U.S. economic support could create immediate problems for an Israeli government strained by mountaing debts.
The collective message from a series of such "nuts-and-bolt steps" would be that Begin's policies hurt vested Israeli interests.
Given the web of connections between the two countries, there is no shortage of potential U.S. pressure points. Starting with less extreme ones, they include:
ECONOMIC AID: Israel's budget, which, astonishingly, is about the same size as its gross national product, is heavily dependent on loans and aid from abroad, including U.S. and West German government assistance and contributions from Jewish individuals and organizations.
U.S. assistance is running at $785 million a year. The outside aid and borrowing support an Israeli budget that annually devotes $5.5 million to defense and -- according to the Agency for International Development -- an estimated $200 million to $400 million to expanding Israeli settlements on the West Bank.
"Why not attach strings to this aid?" asks one former Pentagon official. "Why not say it can't be used in the West Bank? Why not say the United States won't import goods manufactured in the West Bank, or made by Israeli workers who live in the West Bank?
DEBT: Israel owes the United States some $700 million a year in interest and principal on old military aid loans. But U.S. taxpayers have, in effect, been paying back much of this debt on behalf of Israel. Congress has waived some $6 billion of Israeli debt in all, and each year waives $500 million of what is coming due. Given the Reagan administration's program of austerity at home, it would be reasonable to reevaluate the waiver policy, perhaps allowing the Begin government to experience the same cut in help as that being felt by American states and cities.
SPECIAL PRIVILEGES: The United States has treated Israel on a par with close European allies in licensing the sale to it of advanced technology. It is one of two countries (along with Egypt) whose military debt to this country is partially forgiven each year. It is one of five countries (along with Egypt, Turkey, Liberia and Zaire) authorized to ignore "Buy America" requirements in U.S. military aid -- a boon to Israel's own defense industry. Also, say some authorities, the U.S. government has tended to overlook questionable Israeli activities in this country, such as lobbying by private Israelis who have not registered as foreign agents according to U.S. law.
ARMS SALES TO ARAB COUNTRIES: The United States is committed to maintaining Israel's "qualitiative edge" militarily. It provided Israel with improved Hawk missile batteries, F15s and other equipment long before any Arab country had comparable weapons.
So Long as the Soviet Union was the primary armorer of Israel's Arab enemies, the ability of those countries to close the lead was limited by inferior Soviet military technology. But as the United States has begun providing both Egypt and Saudi Arabia with modern weaponry, Washington is now in a position to unilaterally determine the extent of Israel's edge through arms-sales decisions. This has created U.S.-Israeli tensions, but it has also provided potential U.S. bargaining power in political negotiations with Israel.
MILITARY AID. Through grants and loans, the United States provides $1.8 billion out of Israel's defense budget of $5.5 billion. Of the 567 combat planes in the Israeli armed forces before the Lebanese ware, 457 were U.S. aircraft paid for with U.S. grants and loans. An additional 80 planes, Israeli Kfirs, use an engine designed by General Electric.
Symbolic of the connection is the Israeli Purchasing Mission at 850 Third Avenue in Manhattan, the nerve center of Israel's military procurement in this country. Using U.S. military aid funds, the mission sends out 70,000 checks a year to 15,000 U.S. contractors and subcontractors. A staff of 240, many of them Israeli students residing in the New York City area, keep tabs on Israeli military orders and U.S. defense developments.
As stated previously, though, many experts question the effectiveness or advisability of sanctions in this area. The backlash possibilities are high, since a cutoff of U.S. military aid would probably be viewed by many Israelis as a direct threat to the nation's survival. If anything, several experts say, this is the time for America to consider increasing its aid commitments to reassure Israel and its friends.
At least for a while, Israel could weather even a complete aid cutoff, a development that seems extremely improbable. Israel's F15s, which helped it achieve an 80-to-1 "kill ratio" over Syria in June, now totally command Mideast air space. Moreover, Israel still has about "two wars" worth of artillery and ammunition stocks even after the Lebanese fighting, according to one informed defense analyst. Its military advantages have also been enhanced by the defeat of the Palestinian forces, by Iraq's war with Iran and feud with Syria, and by Egyptian dependence on U.S. military aid.
From the U.S. point of view, military aid to Israel is a two-way street. For example, Israeli sources maintain that Pentagon officials are anxious for details on the performance of the Israeli-made Scout, a 12-foot-long, pilotless aircraft reported by Aviation Week to have provided up-to-the-minute television pictures of key Syrian positions during the recent war. One U.S. defense expert says that Israel was exaggerating the importance of Scout to rally support for Begin in Pentagon circles. A U.S. intelligence official told Aviation Week in July that "it apears Isreal will use release of information (on the performance of electronic weaponry in the war in Lebanon) to obtain military equipment or political concessions."
Notwithstanding the risks of any kind of direct pressure on Israel, there is support among Middle East experts for a new relationship based on a new U.S. firm ness.
At the least, they say, Washington should turn Begin's personal attacks on President Reagan and members of his cabinet to its own advantage. These outbursts do not serve him well, they believe, because they tend to show him off as the hothead and Reagan as the man of reason. In this situation, direct U.S. pressures might be seen as the result of Begin's behavior, not Reagan's.
Some of Begin's Israeli critics would even welcom that. "You should at least teach some of my leaders some manners," remarks one.
Beyond that, the right kind of American pressure might even put Israel on the road to real security and peace.