For Arabs:

Attorneys for a group of 14 Americans, Palestinians and Israelis who filed a lawsuit against the IRS last October—calling on it to revoke the tax-exempt status of six Jewish American organizations—say they are now preparing a response to the U.S.'s move to have the suit dismissed.

Linda Huber, who with fellow Washington lawyer Mark Lane is representing the group filing suit, said she will attempt to disprove several arguments put forth last month by the Justice Department, which is defending the IRS. In its motion to dismiss the suit, according to Ms. Huber, the Justice Department argued that none of the 14 plaintiffs have suffered any personal injury as a result of the Jewish group's tax-exempt status; and that third party groups like the group of 14 do not have the right to challenge IRS policies in the courts. Ms. Huber said that she and Mr. Lane expect to have their response to these arguments ready by either late January or early February, and upon completion will submit it to the District Court for the District of Columbia, where the case is being heard. Tax-exempt organizations are allowed a number of important tax benefits, and contributors to them are allowed to deduct the donations from their taxable income.

Among those who filed the suit are four West Bank mayors, including Kareem Khalaf and Bassam Shaka'a, who were both dismissed by the Israeli government; John Davis, a former commissioner-general of UNRWA; Charlie Bitton, a member of the Israeli Knesset; and several landowners from the West Bank.

The six Jewish groups named in the suit are: Americans for a Safe Israel, the Jewish Agency American Section, the Jewish National Fund, the United Israel Appeal, the United Jewish Appeal and the World Zionist Organization-American Section. The suit alleges that a "substantial portion" of the activities of these groups are not religious, charitable, or educational as required by the IRS for tax-exempt eligibility, and that they "contravene the basic and fundamental policies" of the U.S. government by promoting the confiscation of Palestinian-owned land in the West Bank. It also charges that five of the six groups violate eligibility rules by acting as "conduits" for the transfer of contributions they have received to agencies within the Israeli government. These Israeli agencies receive up to $750 million each year from American tax-exempt organizations, according to attorneys Huber and Lane.

Meanwhile, on January 16, a delegation from the National Association of Arab Americans (NAAA) met with President Reagan for the first time since he took office. NAAA's president, Robert Joseph, said the meeting was an indication that Arab Americans "are being heard."

For Israel:

The American Israel Public Affairs Committee (AIPAC) and other pro-Israel groups, apparently uneasy over the favorable press generated in the U.S. by some recent Arab actions, have been actively trying to minimize their importance.

The most noteworthy example was AIPAC's response to the freeing of Lt. Robert Goodman by Syria's President Hafez al-Assad, who had released Goodman after the "humanitarian appeal" of Rev. Jesse Jackson. Although AIPAC said it was happy to see Lt. Goodman freed, it objected to what it called the "outpouring of media good will" toward President al-Assad, arguing that he did not deserve any credit because he had nothing to lose by freeing Goodman. This view, put forth in the latest editorials in AIPAC's newsletter, Near East Report, was accompanied by references to Syria's abysmal" human rights record.

The meeting late last month between Egyptian President Hosni Mubarak and PLO Chairman Yasser Arafat was also doused with cold water by a number of Jewish American organizations. Most of the groups that commented publicly opposed the meeting and continued to portray the PLO chairman as a terrorist who is against any negotiations. These Jewish groups also criticized the Reagan Administration for having described the meeting as "an encouraging development." The umbrella organization which represents over 30 Jewish groups—the Conference of Presidents of Major American Jewish Organizations—said in a letter to President Reagan: "For the United States to pin its hopes on a Mideast settlement on the terrorist who, more than any other, has been responsible for the fear and refusal of Palestinian Arab representatives to come to the negotiating table, is a profoundly disturbing betrayal of the hopes for a just and lasting peace in the Middle East."