Despite ongoing settlement activity and the continued construction of Apartheid Wall

Despite indications earlier in the year that the US may
The guarantees, part of a 10-billion-dollar aid package for Israel, will be made through the US Agency for International Development (USAID), according to a notice published in the Federal Register on Monday. According to a recent report by the Congressional Research Service U.S. aid to Israel will surpass a cumulative total of $90 billion this year.

Under law, the guarantees may only support activities in areas held by Israel before the 1967 six day war. As such the US have often threatened to hold back loans as long as settlement construction continues. Over the summer there was much talk of the US reducing the loan guarantees to Israel for this very reason, however although the guarantees have now been made available US officials say no decision has been made on withholding any portion of the guarantees and that any deductions would not be made on the upcoming first installment of $1.6 billion but perhaps from future installments.

The possibility of America penalizing Israel for its settlement activity has been widely reported yet there is little evidence any such penalties will be enforced. President George Bush senior did in 1992 succeed in tying a $10 billion loan guarantee to Israel’s restraint on further settlements in the occupied territories, stalling the loan for a short time only to bequeath even more money at a later date.

Under the law authorizing the loan guarantees, the Bush administration may withhold portions of the money based on Israel's performance in Middle East peace efforts, what many are asking therefore is whether the US will choose to deduct further sums because of the construction of the Israeli apartheid wall which in some places cuts deep into the 1967 Palestinian territories.

Considering President Bush’s remarks of the problems the wall will cause for the latest peace initiative, the “Road Map,