Peace needs all the chances it can get in the Mideast.
But whether this gambit helps or hurts the prospects for peace is debatable. The question of whether Israel might in fact be better off without the loan guarantees is another matter. It could be argued that an aid cutoff would force Israel to deal more effectively with the problems that derive from its obsolescent political-economic system. The U.S. in effect has been subsidizing Israeli socialism. Government in that tiny country regulates everything, tolerates petty monopolies and other anti-competitive practices and hoards vast land areas that a free market would put to good use.