Egypt and Israel, America's two "peace partners" in the Middle East, have come to depend so much on U.S. economic and political support that they have almost become client states. Despite this potential leverage, however, the United States seems unable or unwilling to force either ally to make economic reforms or resolve their political differences.
Egyptian President Hosni Mubarak's visit to Washington last week underscored this paradox.
He came here looking for a big boost in economic assistance and greater American activism in the deadlocked Middle East peace process. He left without a U.S. commitment on either front and with the message that the Arabs must try harder before Washington will reengage itself fully in the search for a settlement of the Palestinian issue.
The Reagan administration believes that, despite new Arab initiatives, it is too early to judge whether the peace process can be revived, according to U.S. officials. As a result, the administration has steered a middle course of continuing the search for common negotiating ground among Israel, Egypt, Jordan and the Palestinians without deciding whether to shift all of its diplomatic weight behind the complicated process.
This caution appears to reflect Washington's bitter experience in brokering the abortive peace treaty between Lebanon and Israel in 1982-83 and its doubts about whether Egypt and Jordan can deliver this time in face of Palestinian divisions, open Syrian opposition and Saudi silence.
"We're not fully engaged," a senior administration official conceded. "It's not clear yet what we can accomplish . . . . Is this the moment? This is the question that hasn't been answered."
Secretary of State George P. Schultz is sending his top Middle East expert, Richard W. Murphy, to the region soon to find out primarily whether more Arab movement is possible before the United States makes a decision.
The feeling seems to be that although the Feb. 11 agreement between King Hussein of Jordan and Palestine Liberation Organization chief Yasser Arafat represents a significant step forward, it may be possible for the Arab side to move further, namely toward acceptance of U.S. conditions for talks.
The primary U.S. condition is an explicit PLO endorsement of U.N. Resolution 242, which incorporates the "land-for-peace" principle of President Reagan's Mideast initiative of September 1982 and which remains the bedrock U.S. requirement for opening a "dialogue" with the Palestinians such as Mubarak is seeking.
"We don't accept that the ball is over the net in our court now," the senior administration official said. "Is that as far as they can go? Are they ready for direct negotiations?"
Shultz, interviewed on ABC-TV's "This Week with David Brinkley," refused yesterday to rule out a U.S. meeting with a Jordanian-Palestinian delegation. He said Murphy's assignment in the Middle East will be to "see if it isn't possible" to construct an acceptable Palestinian delegation within the framework of unchanged U.S. policy toward the PLO.
Meanwhile, there is what one State Department official called "a lot of thinking going on" here. "We are in a mode of consultation. People are searching together for a realistic scenario."
U.S. officials seem to think that it will take at least several more months before it becomes clear whether such a scenario is likely and that much may depend on Mubarak's ability to work out something with Israeli Prime Minister Shimon Perez, a possibility they do not exclude in light of the developing relationship between the two leaders.
In a meeting with Washington Post editors and reporters Wednesday, Mubarak seemed aware of Washington's reluctance to get involved again when he said, "the United States will never move unless the Israelis agree on this peace process. So I have my contacts with the Israelis."
Mubarak's visit last week also pointed up the even more pressing issue of what the United States should do to help the two Mideast nations deal with vast debts and mounting economic woes.
For years, the United States has been struggling, mostly in vain, to nudge one Egyptian government after another toward basic fiscal and economic reforms. Now, it is doing the same thing with Israel, whose economy is in far worse shape. In both countries, Washington is cast in the outside reformer role usually played, with more influence and success, by the International Monetary Fund.
Neither the administration nor Congress has begun to focus seriously on the implications of the two countries' growing dependency on Washington or on the disturbing trend of an increasingly large proportion of U.S. aid being used to help pay their military debts to the United States rather than to deal with underlying economic problems.
Both Egypt and Israel are turning increasingly to Washington for bigger handouts, lower interest rates or outright debt forgiveness. Already, the two consume 40 percent of U.S. foreign aid. But Egypt is requesting about $1.8 billion in additional funds in fiscal 1985 and 1986 and Israel at least $1.5 billion.
Egypt's total foreign debt approaches $30 billion, while Israel's stands at $24 billion. Of these debts, Israel owes about $10 billion to the United States, and Egypt, around $8 billion. Both now spend more than 30 percent of their annual foreign-exchange earnings to service their debts.
Mubarak told editors and writers at The Post that he had told Reagan that Egypt's outstanding $4.5 billion military debt to the United States would drain its coffers.
"I explained it to the president," Mubarak said. "I said, 'Look, the whole interest we are going to pay for the $4.5 billion in foreign military sales is going to reach $10.5 billion, plus the $4.5 billion -- as a whole $15 billion.'
"It's too much, and frankly I can't say that in the media in Egypt. It would be used by the communists. This is a very important point for me."
Agency for International Development officials said Mubarak had miscalculated and that the $10.5 billion he had mentioned as payment on interest was about the total Egypt would end up repaying to the United States by the year 2000.
But they did not quarrel with his other startling figure, that Egypt would have to pay about $560 million to service its military debt to the United States in fiscal 1986 while probably receiving $815 million in U.S. economic aid. Altogether, Egypt will spend $3.7 billion on servicing its debt.
Mubarak said he got a sympathetic hearing from Reagan but no commitments. Egypt's case, he was told, is linked to the larger problem of mounting debts to the United States incurred by Third World countries over the past few years.