The Israeli government, in a snub of the United States over increased American pressure on the West Bank issue, yesterday vociferously defended its plans to expand existing Jewish settlements in the occupied territories. For the first time since the Camp David summit, Israel also reasserted its right to build new civilian outposts.
It also revived - apparently for the same purpose - an ambiguous plan to move the offices of the prime minister and foreign minister to East Jerusalem to reassert Israeli sovereignty over that part of the city, captured by Israel in the 1967 war.
Foreign Minister Moshe Dayan said there is nothing in the settlement expansion plans that conflicts with current Israeli policy or with the Camp David agreements, "whether other people like it or not."
Speaking with reporters before leaving for a new round of peace talks in Washington, Dayan said, "Maybe Egypt won't like it, but that's not the point. The [draft] agreement is supposed to express the Israeli interest and the Israeli view about what should take place in the [occupied] area."
Dayan said Israel never agreed not to expand existing West Bank settlements during any time period, and never agreed not to build new settlements "except for the three months during which the negotiations take place.
"So, this is our policy, whether other people like it or not, I think not only are we allowed to go on with it [settlement expansion], but that we should do it," Dayan said.
Prime Minister Menachem Begin, speaking at a rally of his supporters in Tel Aviv, said yesterday that Israel would continue to "implement its right to settle anywhere within the occupied West Bank of the Jordan and the Gaza Strip."
Begin said, "I told President Carter at Camp David that during the next three months we would be adding hundreds of families to our settlements" on the West Bank. "This we will carry out," he said.
Begin touched off the new furor over settlement expansion Wednesday by announcing that Dayan would inform the United States that Israel is planning a 15 million program to add 300 new housing units on the West Bank, plus construction of a water reservoir and a network of roads linking the settlements with Israel.
Simultaneously, the government confirmed that Begin has proposed moving his office and that of Dayan to East Jerusalem, as a way of dramatically demonstrating Israel's determination to hang onto that annexed part of the city.
The United States has consistently rejected Israel's claim to sovereignty over occupied East Jerusalem.
The American view is that East Jerusalem Arabs should be free to take part in all the negotiations over the future of the West Bank.
The office relocation idea was widely interpreted here as not a serious proposal but one intended more as a signal to the United States of Israel's displeaure.
Dayan, possibly intending to put some distance between himself and the scheme, said yesterday that such an idea was "mentioned" but that he had asked Begin to postpone discussion of it until after the Israeli delegation returns from Washington. Dayan said Begin approved the delay.
Of more significance is the question of why the Israeli government decided to revive at this time - on the eve of resumed peace talks - the controversial issue of West Bank settlements.
The plan to which Begin referred is not a new one, having been developed months ago by the land development department of the Jewish Agency and shelved, for the most part, for a lack of funds and a shortage of civilian settlement volunteers.
Israeli officials are well aware that settlement is a trigger word in the United States, only partly because of the Post-Camp David dispute between Begin and President Carter over whether settlements were to be frozen for three months or five years.
The answer to why Dayan and Begin chose to announce the plans now lies in part with the visit here last week by Harold Saunders, U.S. assistant secretary of state for Middle East affairs, and it lies also, in part, in the domestic political dynamics of Israel.
After presenting Jordan's King Hussein with the U.S. answers to Hussein's questions about American policy on the West Bank, Saunders visited here and explained the answers to Begin. Although the answers have not been made public, Begin is known to have rejected many of the U.S. positions, and he reportedly had harsh words with Saunders over promises Saunders is said to have made to Hussein.
Compounding the tension were a series of meetings Saunders then held with West Bank Arab political figures, at which he is reported to ahve stressed that the United States does not agree with the Israeli interpretation of the West Bank autonomy plan.
Also, government sources said that Begin believes that Saunders reminded the West Bank Arabs that Israel for years said it would never abandon Sinai Peninsula settlements, but that it did - the implication being that the Egyptian-Israeli treaty could serve as a model for the West Bank.
Sources close to the prime minister said Begin was infuriated by that report, and decided that an announcement to expand West Bank settlements would spell out to the United States what Israel considers a fundemental difference between the Sinai and the West Bank.
An aide to Begins, referring to the proposed 300 new settlement housing units, yesterday said "You can call them the Saunders houses."
He added "If Saunders hadn't come here there wouldn't be any announcement. It's like physics - for every action there is a reaction."
Begin yesterday was reported by the newspaper Maariv to be planning to notify the State Department that Israel will no longer allow visiting U.S. diplomas to meet with West Bank Arab political figures.
A Foreign Ministry spokesman said he did not know anything about such a ban, but acknowledged that one could be applied through protocol pressure if Israel chose to do it.
The other aspect of the timing of the announcement about settlement expansion lies with domestic politice.
It was learned yesterday that toward the end of the Cabinet debate over the draft treaty, six of the 17 ministers had shown in a procedural ballot that they were prepared to reject the draft, thereby possibly causing a Cabinet crisis. Their opposition was based on the linkage between the Egyptian treaty and the issue of West Bank self-determination.
Well-informed sources said that Begin and Dayan then suggested announcing an expansion of West Bank settlements, to stave off pressure from within the Likud coalition of the parliament.
That promise, coupled with amendments tacked onto the draft to dilute the linkage clause, swayed enough votes to give Begin a 15 to 0 edge, with two abstentions.
By going public with the settlement plans, Begin may have placated his conservative critics in the Likud bloc, but the issue will come up again when the final draft is submitted to the Cabinet and parliament.
Foreign Ministry officials, including Dayan, reiterated Israel's need to be careful to protect its rights on the West Bank - rights not only to expand existing settlements but the right to build new ones.
"Our plan to strengthen settlements doesn't mean in any way that we are abandoning our right to build new ones. Dayan believes, as the government does, that Israel has the right to build new settlements," a ministry official said.