The Jewish National Fund and the Finance Ministry are currently trying to draft a new agreement that would separate the JNF from the state, thereby allowing it to continue selling land to Jews only.

The negotiations - which are being backed by Prime Minister Ariel Sharon, Finance Minister Benjamin Netanyahu and Vice Premier Ehud Olmert, who is responsible for the Israel Lands Administration - have made considerable progress, and the agreement is likely to be signed in the coming months, according to sources involved in the talks.

In 1961, the JNF signed an agreement with the state under which the ILA assumed responsibility for managing and marketing all JNF lands. However, since the JNF is a private organization that was explicitly founded to serve the interests of the Jewish people, the ILA refused to sell these lands to non-Jews, at the JNF´s insistence.

This policy was recently challenged in the High Court of Justice, on the grounds that the ILA, as a state organization, is not allowed to discriminate between Jews and non-Jews. On Wednesday, Attorney General Menachem Mazuz decided that the petitioners are right. From now on, JNF lands will be available to Jews and non-Jews alike - though the ILA will compensate the JNF with substitute land for any plot purchased by a non-Jew.

Senior JNF officials stressed that the current talks began several years ago, long before human rights organizations petitioned the court against the "Jews only" policy six months ago. The original decision to "separate the JNF from the state" had nothing to do with Mazuz´s decision on Wednesday, they said, but his decision does lend new urgency to the talks.

Currently, the JNF owns some 13 percent of all public lands in Israel. The new agreement, if finalized, would return these lands to the JNF and return the JNF to being a strictly private body that manages and markets its own lands. In exchange, the JNF would give up its 13 seats on the ILA´s 27-member board of directors. However, the state is considering allowing the JNF to retain seven to nine representatives on the board.

The emerging agreement also calls for a land swap between the state and the JNF. The latter owns tens of thousands of dunams of developed land in major urban centers; these lands, though very valuable, no longer provide any income to the JNF and have no real potential for profit. In exchange for these tracts, the state will give the JNF the same amount of dunams in outlying areas - primarily in the Negev, where the JNF currently has almost no land. That will enable the JNF to continue fulfilling its original purpose of "redeeming and developing" land, for instance, by initiating construction projects in development towns.

The state will also guarantee the JNF an income of at least NIS 500 million a year, meaning that if the organization fails to earn that much by marketing its lands in a given year, the state will make up the difference.

In addition, the state is considering assuming the JNF´s pension obligations to its retirees. If it does so, however, the amount it spends on pensions will be deducted from the JNF´s guaranteed income, senior JNF officials said.

The officials said that the rationale for the agreement is partially economic, but its main goal is to enable the organization to fulfill its role as "a trustee for the Jewish people."

JNF Chairman Yehiel Leket confirmed the existence of the talks, but declined to discuss details, saying nothing has been finalized. The treasury declined to comment, while the ILA said it is not involved in the negotiations. (© Copyright 2005 Haaretz. 01/28/05)