* ECONOMIC CRISIS CUTS ISRAELI BUDGET. Drastic cuts in Government services, discontinuing of construction projects, and dismissals of civil servants are provided for in Israel’s budget for the year starting April which was presented to the Cabinet on December 22nd, and which amounted to £4,250 million. No less than 40 per cent will be spent on security, and the Treasury, while anxious to cut on security at home in view of the economic crisis, is not willing to reduce on the teeming millions of dollars spent on importing armaments. Construction of new roads, hospitals, schools and telephone exchanges as well as subsidised housing is budgeted to be discontinued. Shift study is suggested for students and free tuition for the two top grades is to be cancelled.

* MIDDLE-EAST TENSION BUILD-UP. According to a leader in The Daily Telegraph for December 16th, "Fresh reports from Washington state that the Pentagon has plans to seize oilfields in the Gulf if a new war in the Middle East should lead to an oil boycott . . . It is generally believed that the Arabs will start another war in the spring, backed by another oil boycott against ‘unfriendly States’. Everything depends on Mr. Brezhnev’s visit (this month) to President Sadat, who is losing faith in Dr. Kissinger. If Russia once again sets the stage for war, then either the impetuous Arabs would begin prematurely and be defeated; or Israel, rather than sit and wait destruction, might strike first . . . All the same, if the Arabs and Russia say to the West: ‘Allow us to destroy Israel, or we shall drive you back to the Stone Age’, the firmament would crack in unforeseen ways and places. Is this what the anti-Communist hyper-capitalist oil-rich Arabs want ? Is this what Russia wants, with detente already prospering?".

* ISRAEL FACES NEW THREAT. The Israeli Defence Minister, Mr. Shimon Peres, has revealed to the Knesset that the Soviet Union has poured a flood of jet fighters, missiles, tanks, guns and other weapons into Syria in the 14 months since the Yom Kippur War, far in excess of the need to make up their war losses. Some of the details included more than 300 jets including MiG 23fs, more than 1,000 T-62 tanks, Scud surface-to-surface missiles, surface-to-air missiles, and hundreds of armoured troop carriers. Mr. Peres added that there were now 3,000 Soviet military personnel in Syria.

* GERMAN SUPPORT FOR ISRAEL. In the Bundestag Mr. Herbert Wehner, the Chairman of the governing Social Democratic Party, condemned the recent United Nations resolutions on Palestine as a "frightening demonstration". He declared that it was unbearable that a Middle-East resolution should stress the rights of the Palestinians while failing even to mention the right of existence of Israel. He demanded that West Germany’s political representatives should always emphasise Israel’s legitimate rights. The Foreign Minister, Mr. Hans-Dietrich Genscher, reaffirmed West Germany’s support for Israel’s right to live within secure borders. It has been reported that at a Cabinet meeting Mr. Helmut Schmidt the Chancellor and Mr. Genscher underlined their support for Israel and said that West Germany could not be neutral in a future Middle-East War.

* SUEZ HERO LEAVES KNESSET FOR ARMY. On Sunday, December 15th, the 46-year-old General Ariel Sharon, Israel’s hero of the Yom Kippur War who led the Israeli forces across the Suez Canal into Egypt and surrounded Port Suez virtually cutting off the Egyptian Third Army before the cease-fire came into force, resigned from the Knesset. It was after the cease-fire that he began his career in the Knesset as an M.P. of the Right-wing Likud-Alliance. He has been an outspoken critic of Government policies, particularly on anti-terrorist warfare. Although he retained his rank in the reserves, a Government ruling a fortnight earlier that no reserve officers could serve as M.P.’s was described by Mr. Sharon as "an unconstitutional measure to get me out of the Knesset".

* PRESENT SERIOUS PLIGHT. Informing the party of his decision Mr. Sharon said he had accepted the senior emergency command position because Israel was now "Facing the prospect of a harsh war which could well be decisive in determining the survival and future of the State, and perhaps of the whole Jewish People" adding that there could be a new war which would be due "in no small measure because of the present Government’s weak policies". Unnecessary concessions would endanger Israel’s security. Mr. Sharon has stressed that although he has left the Knesset he has not left politics, and will continue to state his views on the political directions the Government ought to take. Also appointed to a similar post in the reserves is 50-year-old Mr. Israel Tal, the former Deputy Chief of Staff, who has stated that Israel’s future strategy should be based on an offensive rather than a defensive war. The country could not afford the latter in spite of the strategic depth provided by the present lines.

* ISRAEL’S FATE IN BALANCE ? Speaking to an audience of 3,000 at the Convention of the United Jewish Appeal in New York, the former Israeli Prime Minister, Mrs. Golda Meir, declared that Israel "would not jeopardise its existence so that the Western World could be warmed by Mid-East oil this winter". Warning her audience that Israel’s fate was in the balance in an impending showdown between the Arabs and the West over oil, she commented that "Israel has no oil, no billions of dollars, all we have is our spirit, and I will not go home and break that spirit". She condemned the recent United Nations acceptance of the Palestine Liberation Organisation as "bowing and crouching before a killer of men, women and babies".

* OIL IN ISRAEL ? According to Professor Yehoshua Schacter, a petroleum specialist at the Bar Ilan University, recently discovered shale oil deposits near Arad in the Negev could supply nearly two-thirds of Israel’s energy needs. The shale deposits amounted to some 700 million tons. Soaring oil costs had now made it worthwhile to burn shale directly rather than expensively extracting the oil from the rock. Studies have shown that a ton of shale would produce an energy equivalent of 31.5 gallons of oil; the shale-based energy costing 67p, while the oil-based equivalent would be £3.50. The discovery would be equal to approximately 18 years fuel supply at the present Israel generating capacity of 1,600 megawatts.