the war exposed some serious differences between Israeli and US policies, such as Israel's rejection of the Reagan peace plan of September 1, 1982, it did not alter the Administration's favoritism for Israel and the emphasis it placed on Israel's importance to the United States. Although critical of Israeli actions, the United States vetoed a Soviet-proposed United Nations Security Council resolution to impose an arms embargo on Israel. In 1985, the US supported Israel's economic stabilization through roughly $1.5 billion in two-year loan guarantees the creation of a US–Israel bilateral economic forum called the U.S.–Israel Joint Economic Development Group (JEDG). The second Reagan term ended on what many Israelis considered to be a sour note when the United States opened a dialogue with the Palestine Liberation Organization (PLO) in December 1988. But, despite the US–PLO dialogue, the Pollard spy case, and the Israeli rejection of the Shultz peace initiative in the spring of 1988, pro-Israeli organizations in the United States characterized the Reagan Administration (and the 100th Congress) as the "most pro-Israel ever", and praised the positive overall tone of bilateral relations. George H. W. Bush administration (1989–1993) In the midst of the first Intifada, Secretary of State James Baker told an American Israel Public Affairs Committee (AIPAC, a pro-Israel lobby group) audience on May 22, 1989, that Israel should abandon its "expansionist policies". President Bush raised the ire of the Likud government when he told a press conference on March 3, 1991, that East Jerusalem was occupied territory and not a sovereign part of Israel as Israel says. Israel had annexed East Jerusalem in 1980, an action which did not gain international recognition. The United States and Israel disagreed over the Israeli interpretation of the Israeli plan to hold elections for a Palestinian peace conference delegation in the summer of 1989, and also disagreed over the need for an investigation of the Jerusalem incident of October 8, 1990, in which Israeli police killed 17 Palestinians. Amid the Iraq-Kuwait crisis and Iraqi threats against Israel generated by it, former President Bush repeated the US commitment to Israel's security. Israeli–US tension eased after the start of the Persian Gulf war on January 16, 1991, when Israel became a target of Iraqi Scud missiles, suffering over 30 strikes during the war. The United States urged Israel not to retaliate against Iraq for the attacks because it was believed that Iraq wanted to