Israeli Prime Minister Shimon Peres yesterday gently rejected U.S. suggestions that his country is not reforming its economy fast enough to justify large increases in U.S. economic aid.
Peres said he "welcomes the advice" of Secretary of State George P. Shultz, who recently wrote Peres that more urgent action is needed to salvage Israel's deteriorating economy. But Peres also said that his coalition government already has made "rather impressive" gains and is on course for more.
"He thinks that we're a little bit too optimistic on the issue of the timetable and that the steps should be more drastic," Peres said. "Well, that may be his view, and I respect it. I feel that we have to go through a very complicated democratic process.
"We shall put our house in order," Peres added during an interview on NBC-TV. "Israel is not a corrupted society. It is full of vitality, and I feel we have the inner strength to meet the challenges."
Peres also said that Israel is considering a request from President Reagan to allow the Voice of America to install a transmitter in Israel to send radio programs into the Soviet Union. He said one factor in Israel's deliberations is what effect, if any, such cooperation would have on Soviet treatment of Jews inside the Soviet Union.
The prime minister also said that there has been "a little bit of diplomatic movement" this weekend in Lebanon that could help produce an agreement leading to withdrawal of Israeli troops from that country. But Peres was less optimistic than he has been in the past on prospects for rapid disengagement.
Israel invaded Lebanon in 1982 and its troops still occupy southern Lebanon. The Peres government has been negotiating with Lebanon on security arrangements that would follow a troop withdrawal, but Israel recently threatened to abandon those talks if more progress is not made.
That announcement "apparently affected the Lebanese, who all of a sudden became more worried about our position," Peres said. That in turn has "enhanced the chances of the negotiations," he said, which he said are aimed not only at protecting Israel but at preserving peace in southern Lebanon as troops withdraw.
"We would like to leave Lebanon in an orderly way so no bloodshed will come in the wake of our withdrawal," Peres said.
The prime minister, who before his election pledged to press for a withdrawal within six months, refused yesterday to predict any specific timetable. He said that Syria, which strongly influences the Lebanese government, has become "more militant" but that he still hopes troops can be withdrawn "within the coming months."
Israel's occupation costs between $500,000 and $750,000 each day, Peres said, which contributes to its balance of payments deficit and other economic problems. Israel has asked the United States for a record amount of military and economic aid totaling almost $5 billion over the next 18 months.
The two countries are close to agreement on about $2.2 billion in military aid for fiscal 1986, according to Peres and U.S. officials, up from about $1.4 billion in the current fiscal year. But the Reagan administration rejected Israel's request for an extra $800 million in economic aid this year and has deferred action on its economic aid request for fiscal 1986.
Peres disclosed in a speech on Christmas day that he had received a letter from Shultz warning that substantial aid increases depend on Israel instituting more austerity measures. Inflation in Israel reached an annual level of 1,260 percent in October.
The Peres government, a fragile unity coalition between his Labor Party and the more conservative Likud bloc, pledged last fall to cut the budget by about $1.3 billion. So far it has cut only about $300 million, however, according to the best available estimates.