YNet News (Link) - AP & AFP (January 8, 2010)
On the eve of his visit to the Middle East, US special envoy George Mitchell threatened that his country would freeze its aid to Israel if the Jewish state failed to advance peace talks with the Palestinians and a two-state solution.
Mitchell clarified in an interview to the PBS network that the United States would use incentives or sanctions against both sides.
According to American law, Mitchell said, the US can freeze its support for aid to Israel. He added that all options must remain open and that the sides must be convinced about what their important interests are.
The US envoy noted that some progress had been made and that his country would continue its efforts to resume the negotiations.
The American guarantees allow Israel to raise funds at low interest rates and improve the Jewish state’s credit rating. The last time the US threatened to freeze the guarantees was during the term of President George Bush Sr. and former Prime Minister Yitzhak Shamir.