The economic cooperation element of the treaty includes agreements on free trade, investment, banking, industrial cooperation and labor, among various other sectors. Products from these facilities will enter the U.S. market duty-free under U.S. legislation. More QIZs are expected in 1998. Under U.S. sponsorship, Israel and Syria conducted talks aimed at achieving a peace agreement. The talks made some headway in identifying areas of agreement and disagreement, but were suspended in early 1996, following major terrorist attacks in Israel and Prime Minister Peres' call for early elections.
Efforts continue to find a formula to enable resumption of the talks.
Israel has proposed a military withdrawal from southern Lebanon under UN Security Resolution 425 with appropriate security guarantees from the government of Lebanon. Currently there are no direct negotiations with Lebanon on this issue. Progress on outstanding issues with Lebanon, including Hizballah terror and Israel's presence in southern Lebanon, probably depends on success in talks between Israel and Syria. These two considerations have led some foreign businesses to move cautiously on investments in Israel. Historic agreements between Israel and its Arab neighbors provide a sound framework for further progress in achieving a comprehensive Middle East peace and, in turn, a favorable business climate throughout the region.