Crown Prince Fahd of Saudi Arabia called on Israel yesterday not to close the door to a Middle East peace settlement, but said his country will not use oil as a weapon to force an agreement.
President Carter, speaking to reporters after two days of talks with the Saudi leader, said Fahd also sought to reassure Israel about protection of its security in the context of a peace agreement.
Fahd's statements appeared to be part of an effort to show continuing moderation in the face of last week's victory of the rightist Likud Party in the Isareli election. U.S. officials believe the Arabs are determined not to be blamed for torpedoing a potential peace in the troubled and strategic region.
"Will you use oil as a weapon to solve the Middle East problem?" Fahd was asked in Arabic as he walked to his limousine with Carter after the last of their White House meetings.
"No," was his reply.
Turning to the press after the visitor's pulled away, Carter said "there is no threatened embargo at all" and quoted Fahd as saying that news reports suggesting such an oil embargo by Arab states are "completely false."
While reporting that he and Fahd discussed future oil prices and prospects, Carter declined to state the Saudi view. However, presidential energy adviser James R. Schlesinger said Saudi Arabia will maintain its policy of allowing only "moderate" price adjustments.
Concerning financing for deficit-ridden nations, a subject also discussed at the White House meetings, informed sources said Saudi Arabia has agreed to supply about $2.9 billion to a new international loan kitty being organized by the International Monetary Fund. This is considerably less than the $4 billion that industrial nations had hoped the Saudis would supply, and means that the total raised from all countries is likely to be less than $10 billion.
In order to augment this fund - originally proposed at $16 billion - the IMF is planning to seek commercial bank participation, according to the sources. This would be unprecedented for a fund of this type and the attempt is reported to be the subject of controversy in international financial circles.
Among other topics he discussed with Fahd, according to Carter, were the relationship between the Organization of Petroleum Exporting Countries and African nations, the unsettled political and military situation surrounding the strategic Horn of Africa and ways to keep the Red Sea region peaceful.
Saying that he and Fahd spoke at length about Middle East peace prospects and the U.S. role, Carter declared that "so far as I know, between ourselves and Saudi Arabia there are no disturbing differences at all."
A written statement released by the White House said Carter congratulated Saudi Arabia, the world's largest oil exporter, on its petroleum production and pricing policies. The statement said Carter and Fahd discussed "the continuing U.S. role in helping Saudi Arabia to meet its ligitimate defense needs."
Carter declared, at a White House dinner for Fahd Tuesday night, that "the future of Saudi Arabia and the Future of the United States are tied together very closely in a nirrevocable way."
"What did he ask you to say to Israel?" a reporter asked.
"To continue to search for peace, to keep the process alive, to make sure that no one closed the door to a settlement that would provide a just and lasting peace," Carter replied. he added that Fahd "also expressed his strong hope that Israel would be reassured about the inclinations of his country toward the protection of their security."
Carter said he did not believe that Fahd expects the United States to pressure Israel to agree to a peace settlement. "I think it's obvious we have some influence in Israel and also the Arab countries, but we obviously don't have control," the President said.
Carter continued to be cautious about the impact on the peace process of last week's Israeli election, saying that it is "much more difficult to predict" the course of events than it was before.
On the substance of a peace agreement. Carter told reporters that while his views are not firm on the details of a Palestinian homeland, "this is obviously something that will have to be accommodated" in an Arab-Israeli settlement.
Presidential press secretary Jody Powell said Carter has not changed his belief that an Israeli withdrawal "to substantially the 1967 boundaries" should be part of the settlement.
Menachem begin, the leader of Israel's Likud Party and the probable next Israeli prime minister, has flatly declared that much of the area taken in the 1967 war is "our land" and should not be given back.