This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 03 TEL AVIV 006357 
 
SIPDIS 
 
E.O. 12958: DECL: 11/04/2015 
TAGS: PREL PGOV KWBG IS ELECTIONS GOI INTERNAL GOI EXTERNAL GAZA DISENGAGEMENT ISRAELI PALESTINIAN AFFAIRS
SUBJECT: LIVNI DISCUSSES THIRD PARTY, HAMAS, OUTPOSTS, AND 
WEST BANK-GAZA LINK WITH AMBASSADOR 
 
REF: A. TEL AVIV 06247 
 
     ¶B. TEL AVIV 01524 
 
Classified By: Ambassador Richard H. Jones for reasons 1.4 (b) and (d) 
 
¶1. (C) Summary:  Minister of Justice Tzipi Livni told the 
Ambassador on November 3 that, although "the numbers do not 
show it yet," Sharon will find a majority for his ministerial 
nominations because most Likud members do not want new 
elections.  She said that it is significant that Israel has 
accepted a third-party observer at Rafah, and that the third 
party should be effective and have the authority necessary to 
maintain security.  She added that a successful third-party 
solution could lead to cooperation on the Gaza airport and 
seaport.  Livni opined that Hamas should not be allowed to 
participate in Palestinian elections because Palestinian 
Authority President Mahmud Abbas would be even weaker once 
Hamas "is 30-40 percent of the parliament."  She claimed that 
releasing prisoners or allowing more Palestinian travel 
between the West Bank and Gaza would not be enough to 
strengthen Abbas against Hamas, and that the international 
community should force him to ban Hamas's participation in 
the elections.  Livni blamed the Ministry of Defense (MOD) 
for the lack of movement on dismantling outposts, defending 
her inter-ministerial committee on the Sasson report as being 
charged with strengthening the legislation on outposts for 
"the future" while the MOD is responsible for dealing with 
outposts now.  She voiced a strong preference for an 
underground tunnel for a West Bank-Gaza link, arguing that a 
rail or vehicle convoy would cut Israel "in half."  With 
respect to Patent Term Extension legislation, Livni claimed 
that Israel's pharmaceutical industry is "the underdog," so 
the U.S. should understand the GOI's position.  End summary. 
 
-------------------------------- 
Sharon's Ministerial Nominations 
-------------------------------- 
 
¶2.  (C) Minister of Justice Tzipi Livni told the Ambassador 
on November 3 that she did not know what would happen next 
week with respect to Prime Minister Ariel Sharon's 
nominations of Ronni Bar-On, Ze'ev Boim, and Ehud Olmert as 
Ministers of Industry and Trade, Immigration Absorption, and 
Finance, respectively.  She said it is not the "most 
important issue in the world," but that Sharon sees it as a 
test of his ability to govern, so for him it is a dramatic 
vote.  She explained that some Likud members will find a way 
to compromise on the nominations, but that there are five or 
six who, despite "talking ideology," are against Sharon 
personally, and are willing to let the government fall.  In 
response to the Ambassador's question on whether the PM would 
split up the nomination packages, Livni responded that for 
now Sharon is trying to find a majority and will not split 
the nominations the day before the vote because he will be 
seen as backing down.  She continued that, after the Likud 
Central Committee vote in September (ref A), most of its 
members do not want early elections.  At the end of the day, 
she added, the nominations will pass, but noted that for now 
"the numbers do not show it yet" and "no one is blinking." 
 
------------------ 
Third Party Issues 
------------------ 
 
¶3.  (C) Livni underlined the fact that it is significant that 
Israel has accepted a third-party observer at Rafah, and even 
more significant that the third party will be the European 
Union and not the U.S.  She acknowledged that there are many 
unresolved security issues, but emphasized that it is 
important that the EU team be effective and have the 
authority it needs to maintain security, because otherwise 
Israel "will say no."  She asked for advice on how to deal 
with the fact that different countries in the EU have 
different "rules of engagement," and the Ambassador suggested 
that Israel work out ROEs as much as possible with the 
country or countries actually involved.  Livni again 
emphasized the need to have an effective third party because 
it could lead to cooperation on the airport and seaport.  She 
also mentioned that Defense Minister Shaul Mofaz in Cabinet 
meetings has been against the idea of a transportation link 
between the West Bank and Gaza Strip because terrorists can 
transfer expertise.  If the third-party solution is 
effective, she said, she can argue that "it works" and 
perhaps apply it to the West Bank-Gaza link.  With respect to 
having a live video feed between the Palestinian-EU side of 
the crossing and the GOI's security establishment, Livni 
explained that the rationale behind this idea is not mistrust 
of the Palestinians or a need to monitor Palestinian security 
effectiveness.  From the GOI's perspective, sharing all live 
video feed is a confidence-building measure that also helps 
both sides stop any potential terrorist attacks much more 
effectively than passing day-old tapes. 
 
---------------------- 
Hamas in the Elections 
---------------------- 
¶4.  (C) Livni commented that having Hamas participate in 
Palestinian elections is a "big issue."  The Ambassador asked 
whether the GOI is going to publicly comment any more than it 
already has on Hamas' participation.  Livni said "no," but 
added that the international community, including the U.S., 
should provide Palestinian Authority President Mahmud Abbas 
political cover by making statements against Hamas's 
inclusion in the elections.  She rejected Abbas's claim that 
he is too weak to take on Hamas now, asking "what happens 
when Hamas is 30-40 percent of the parliament and they are 
still terrorists?"  Livni opined that Hamas would not become 
more moderate if it joins a Palestinian government because 
"it wants to destroy Israel and does not accept a two-state 
solution."  She added that "we'll be stuck" because the 
Israeli right wing can use that as a reason to not engage 
with the Palestinians.  She remarked that having terrorist 
organizations participate in elections is incompatible with 
democracy, and cited the example of Spain excluding Batasuna, 
the Basque party associated with the terrorist organization 
ETA, from elections.  Livni commented that one possible 
solution would be to have Hamas publicly declare that it is 
giving up its terrorist activities. 
 
¶5.  (C) The DCM asked whether it is possible to strengthen 
Abbas in the next few months before elections, and Livni 
responded there is no way at this late stage to make a 
dramatic impact on the attitudes of the Palestinian people. 
She recounted that she was involved with the Zinni, Tenet, 
and Wolf missions, and all wanted a release of Palestinian 
prisoners to help the PA leadership, but asked rhetorically, 
"If I release Hamas prisoners, is this a victory for the PA 
or for Hamas?"  She continued that increasing the number of 
cars that can travel from Gaza to the West Bank from 35 to 
100 would not make a dramatic difference either, but despite 
this, Israel will continue to do what it can to help Abbas -- 
as long as there is no security threat. 
 
-------------------------- 
Outposts and Sasson Report 
-------------------------- 
 
¶6.  (C) The Ambassador referred to removal of illegal 
outposts as a possible way to help Abbas.  Livni professed 
surprise that he raised the issue, but mentioned that the GOI 
is working on it.  She claimed that she believes the outposts 
are illegal, but minimized the importance of her 
inter-ministerial committee's inaction, saying that the 
Ministry of Defense (MOD) need not wait for the committee's 
recommendations to dismantle outposts which are illegal. 
(Note:  Livni chairs the inter-ministerial committee tasked 
with determining how to implement the recommendations in 
Talia Sasson's report on illegal outpost activity.  The 
committee was supposed to have issued its recommendations in 
late June, but it received a 60-day extension, and is now 
over two months beyond the extension.  End note.)  She 
characterized her committee as being charged with 
strengthening the legislation on outposts "for the future," 
and the MOD as responsible for dismantling outposts now. 
Livni said that the GOI has made some progress on controlling 
outposts, however, and cited a few examples: 
 
-- Attorney General Menachem Mazuz issued a statement that no 
money is to go to outposts from any ministry. 
 
-- The Defense Minister has not signed permission forms for 
any new buildings or trailers to be set up in outposts. 
 
-- Construction and Housing Minister Yitzhak Herzog is not 
approving any investments in outposts. 
 
-- The Cabinet adopted the Sasson report in full.  (Note: 
Per ref B, the GOI adopted "only the principle that the rule 
of law should be obeyed," and not the report itself.  Mazuz 
allegedly said that the Cabinet could not adopt the report in 
its entirety until its conclusions are examined more closely. 
 End note.) 
 
¶7.  (C) When the Ambassador asked whether dismantling some 
illegal outposts could help Abbas, Livni replied that the GOI 
had already done this with Gaza disengagement, "and they were 
legal," referring to the settlements.  She said Israel 
evacuated homes built legally with the support of both Likud 
and Labor governments, and yet the Palestinians are still 
firing Qassams into Sderot.  She added that the GOI also has 
to convince the Israeli public that disengagement was 
worthwhile, and said that a statement from Hamas renouncing 
terrorism would demonstrate for Israelis the benefits of 
disengagement.  Livni said that the way to help Abbas is to 
get rid of Hamas and force him to prevent Hamas's inclusion 
in Palestinian elections. 
 
------------------- 
Gaza-West Bank Link 
------------------- 
 
¶8.  (C) With respect to a Gaza-West Bank link, Livni claimed 
that a passage for Palestinians would create Palestinian 
contiguity, but would destroy Israeli contiguity and cut the 
country "in half."  She preferred that a tunnel be built 
between the West Bank and Gaza instead, so that Palestinians 
could still move between the two, but out of view from 
Israelis.  She acknowledged that it would take a long time 
and a lot of money to build a tunnel, despite the fact that 
it would be what she termed "only 34 kilometers" long, but 
added that it would change Sharon's mind positively on the 
link issue.  The Ambassador pointed out that the USG has 
offered to do feasibility studies on a number of alternatives 
for the link, and was waiting for a GOI response on terms of 
reference, including options.  Certainly a mixture of a 
sunken road or railroad combined with a tunnel was a 
possibility.  Livni responded that she does not want to be 
able to see the link at all and would prefer that it be 
entirely underground. 
 
--------------- 
PTE Legislation 
--------------- 
 
¶9.  (C) The Ambassador told Livni that the U.S. is concerned 
about the effect that the Patent Term Extension (PTE) 
legislation drafted by the MOJ will have on the commercial 
rights of research-based pharmaceutical firms in Israel.  He 
explained that the USG is concerned about retroactive 
implementation of the legislation and the hurdles applicants 
would have to go through to fill out patent extension 
applications.  The Ambassador asked whether the legislation 
could be put on hold in the Knesset until the USG and GOI 
have had an opportunity to discuss the issue further.  Livni 
responded that Israel put the legislation on hold earlier 
while waiting for a response from the U.S. but did not 
receive one.  She added that she was not that familiar with 
the issue overall, but commented that Israel and the U.S. 
have competing pharmaceutical interests.  She said that 
Israel is "the underdog," so the U.S. should understand its 
position.  Livni mentioned, however, that the MOJ is willing 
to continue discussions on the legislation, and the 
Ambassador offered to provide specific views.  He added that 
Israel's steps on intellectual property rights were taking it 
away from OECD standards which was not in its best interest. 
 
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