Washington, Nov 26: The United States will deduct 289.5 million dollars this year from loan guarantees currently available to Israel over disagreements over Israeli activity in Palestinian territories, the Israeli Embassy in Washington has announced. The embassy said in a brief statement yesterday that the amount was "suggested" by Israel.

"Israel accepts that the United States does not view some of the Israeli activities to date in parts of Judea, Samaria and Gaza as being consistent with US policy," the statement reads. Israel therefore suggested that the US deduct the agreed sum of 289.5 million dollars from the 3 billion dollars in loan guarantees currently available.

An Israeli diplomat told media persons the decision was taken yesterday following a meeting in Washington between US National Security Adviser Condoleezza Rice, and Dov Weisglass, Israeli Prime Minister Ariel Sharon's Chief of Staff. Bureau Report