Israeli Prime Minister Shimon Peres has proposed creation of a $20 billion to $30 billion development fund for the Middle East, and the United States has promised to give the idea serious consideration, U.S. officials said last night.
Peres outlined his proposal in talks here Tuesday with senior administration officials. He likened the idea to "a Marshall Plan for the Middle East," a reference to the economic program that rebuilt Western Europe after World War II.
According to the sources, Peres said accelerated regional development, financed by aid from the United States and other industrialized nations, could create a better climate for peace and stability in the Middle East.
The sources added that Secretary of State George P. Shultz and other officials told Peres that the United States would consider his ideas carefully and discuss them with its principal West European allies and Japan, as well as with the major multinational lending institutions. Some sources said the United States might raise the is- sue at the economic summit in Tok- yo.
However, the sources stressed that the administration had made no commitment beyond a promise to consider Peres' plan carefully. They said the Israeli leader had been told that consideration would have to be given to the many problems of finding funds for such a massive undertaking in a time of budgetary austerity in the United States and elsewhere.
According to the officials, the outlines of the Peres proposal have been known for some time. They added that the administration, while unable to commit itself to the plan on short notice, sympathizes with its goals and is interested in exploring its possibilities.
Israeli sources said Peres has revealed details of his plan to Egyptian President Hosni Mubarak, who they said has expressed interest in it.
During his visit, Peres was praised by Shultz for his efforts in imposing an economic austerity program in Israel to reverse the runaway inflation and severe balance-of-payments problems that had been besetting the Jewish state.
In exchange for Israel's commitment to austerity, the United States provided a special infusion of $1.5 billion to help with this effort. Even before this supplementary help, Israel was the largest recipient of U.S. military and economic assistance.
In the talks here, Peres is understood to have expressed gratitude for U.S. help in building his country. Officials said he argued that supporting development through the region on a multinational basis could help Israel's Arab neighbors achieve greater stability and make them more willing to seek peace with Israel.