SECRET 4. The Arab States do not recognise Israel. They look on ### as an intrusion and would like to "expel" her if they could. They have declared an economic boycott on her, and the Egyptian Government have severly restricted Suez Canal traffic bound there. 5. In the fighting in 1948 Israel gained more territory than she would have received under the 1947 U.N. partition plan. The Arabs, who rejected the plan at the time, have reluctantly come round to agreeing to use it and the 1948 resolution as a basis for discussion of a settlement.