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 02 TEL AVIV 006384 
 
SIPDIS 
 
E.O. 12958: DECL: 12/02/2014 
TAGS: OVIP PREF PGOV ECON KWBG IS GAZA DISENGAGEMENT ISRAELI PALESTINIAN AFFAIRS GOI INTERNAL
SUBJECT: PERES TO CODEL HAGEL/BIDEN: DISENGAGEMENT IS 
PRIORITY AS FIRST STEP TO PEACE 
 
REF: TEL AVIV 6045 
 
Classified By: DCM Gene A. Cretz for reasons 1.4 (b,d). 
 
¶1.  (C) Summary: Labor Party leader Shimon Peres told a 
visiting congressional delegation led by Senators Chuck Hagel 
and Joseph Biden December 1 that he supports joining the 
ruling coalition in the interest of advancing disengagement. 
He predicted (correctly) the likely failure of the 2005 
budget in a Knesset vote scheduled for that evening and the 
resulting collapse of Prime Minister Sharon's Likud-Shinui 
coalition brought on by Sharon's dismissal of Shinui 
ministers for voting against the budget.  Peres also 
expressed his views on Likud party divisions over 
disengagement, the Palestinian leadership, and on possible 
final status scenarios for Jerusalem and the Palestinian 
refugees' right of return.  Peres emphasized the need for 
both Israel and the United States to assist the Palestinian 
leadership that is emerging after the death of Arafat. 
 
¶2.  (SBU) The delegation was comprised of senators Chuck 
Hagel, Joseph Biden, Dianne Feinstein, and Lincoln Chafee. 
The senators were accompanied by professional staff members 
Dr. Andrew Parasiliti, Tony Blinken, Puneet Talwar, Deborah 
Brayton, and Peter Cleveland.  Charge Cretz and poloff joined 
the meeting.  End summary. 
 
------------------------------- 
Peres: Coalitions are Expensive 
------------------------------- 
 
¶3.  (C) Labor Party leader Shimon Peres correctly forecast to 
Codel Hagel/Biden December 1 that Prime Minister Sharon would 
not have the votes to pass his 2005 budget that evening 
(reftel), that the secular Shinui party would oppose the 
budget, and that, in response, Sharon would make good on his 
threat and dismiss Shinui from the government.  Referring to 
Sharon's NIS 290 million budget deal with the United Torah 
Judaism (UTJ) party, Peres noted that "it is expensive to pay 
for a coalition," and that Shinui had decided to vote against 
the budget not for economic reasons, but to oppose the GOI's 
support for a religious party.  Peres explained that the 
failure to pass the budget that evening would not cause the 
government to fall.  He added that even no-confidence motions 
that achieve the requisite 61-vote absolute majority would 
still need to include a proposed alternate prime minister, 
something the varying opposition parties could never agree 
upon. 
 
¶4.  (C) Peres stressed that if Sharon asks Labor to join the 
coalition in the event Shinui departs, Labor will join to 
ensure that "the first move toward peace -- disengagement" 
goes forward.  "Better to have a mediocre peace plan with a 
majority (of support)," Peres said, "than a brilliant plan 
with a minority."   Peres noted he does not support moving to 
early elections now, since this would mean postponing 
implementation of disengagement. 
In response to Senator Biden's question as to whether Sharon 
shares the view that implementing disengagement is of 
paramount importance, Peres said that he believes Sharon is 
"convinced about (the need for) disengagement."  In Peres' 
view, Sharon introduced his disengagement plan because he did 
not want to negotiate with Yasser Arafat or be "dragged" into 
accepting a third party's peace proposal. 
 
--------------------- 
Sharon Sees Realities 
--------------------- 
 
¶5.  (C) Senator Biden sought Peres' view on Sharon's approach 
to the territories.  Peres opined that Sharon has "turned 
from" his earlier ideological approach, but that he has not 
yet made a "U-turn."   Peres noted that Sharon knows that 
there must be a two-state solution, but what is not clear is 
where the borders of those two states would be.  "(Sharon) is 
not convinced he needs to give back everything," Peres 
explained, "but he appreciates the U.S. position."  In 
response to Peres' observation that the settlers represent 
the greatest challenge now to Sharon, Senator Feinstein 
questioned why Sharon then continues to add to the 
settlements.  Peres said he could not explain "mistakes," but 
added that it might be to soften the position of settlers 
with regard to disengagement. 
 
¶6.  (C) In response to Senator Biden's query about Likud's 
position on disengagement, Peres said that Likud generally 
supports Sharon on personal but not ideological grounds. 
Peres predicted that if Likud elections were to be held now, 
the party might choose a leader more to the right than 
Sharon.  It is because of his disengagement plan, Peres 
noted, that Sharon lost his traditional allies, the religious 
parties.  "I'm against religious parties," Peres underlined, 
and, making an inference to Shinui, said "but I'm also 
against anti-religious parties."  Peres stressed that Labor 
can help Sharon to achieve what he would like since relations 
between himself and Sharon "are not poisoned."  "I'm aware of 
Sharon's problems," Peres added.  Biden queried whether 
National Security Chief Giora Eiland, who had briefed the 
Codel immediately before their meeting with Peres, 
represented Sharon's views.  Peres opined that Eiland "is 
very serious," and, while not a spokesman for Sharon, does 
understand Sharon, although Eiland's thinking "is a little 
more advanced." 
 
----------------------------- 
Peres Sees "Great Opportunity" 
----------------------------- 
 
¶7.  (C) Regarding the Palestinian political climate after 
Arafat's death, Peres stressed that he has a "high opinion" 
of the present Palestinian leadership, noting that it is 
"patriotic" and savvy and "cannot be sold a bill of goods." 
Peres underlined that the leadership really believes that 
terrorism is counterproductive to its goals.  While not 
discussing the details, Peres advocated that the U.S. and 
Israel support the Palestinian leadership in its efforts to 
bring the various factions under its control since it will 
need a "competent force" behind it.  Peres said that there 
are "common denominators" between what the Palestinians and 
the GOI see as a solution to the conflict.  The Israeli and 
Palestinian leaderships are "more or less" in agreement on 
borders, and land swaps could solve the differences, he said. 
 
---------------------------- 
Peres on Jerusalem, Refugees 
---------------------------- 
 
¶8.  (C) Peres underlined that he would support reaching a 
solution to the conflict with the Palestinians one step at a 
time.  Peres said he would support giving back 50 percent of 
the occupied territories, and then working on giving back 
more.  Peres said there is "no hurry" to solve the issue of 
Jerusalem since Jews and Palestinians continue to live 
together.  He explained that Jerusalem is composed of the 
Holy Basin (or city) and the new city comprised of 18 suburbs 
-- 10 Jewish and eight Palestinian.  "(Everyone) 
understands," Peres underlined, "that all eight (Palestinian 
suburbs) would go to the Palestinian Authority...and that 
this will improve (Israel's) demography."  Peres advocated 
that Jerusalem's Holy Basin be an "open city," dividing it up 
according to religious function, with Jews, Muslims and 
Christians wielding authority over their respective holy 
sites.  Joking that "the Messiah is the best diplomat we ever 
had," Peres noted that Jews are forbidden to build on the 
Temple Mount "until the Messiah arrives."  The UN Secretary 
General could serve as mayor of Jerusalem, Peres said, and 
the Israeli and Palestinian prime ministers would serve as 
the deputy mayors.  Peres said that he presented this idea to 
Arafat, who agreed with it but who noted that it would need 
the agreement of Muslim authorities. 
 
¶9.  (C) Peres stressed that the more urgent matter than 
Jerusalem is that of the Palestinian refugees' right of 
return.  He noted that the Palestinians "insist on the right 
of return" and Israel wants the Arabs to stop raising this 
issue and to agree that all refugees will be settled in a 
future Palestinian state.  Senator Feinstein raised the 
prospect of the Geneva Initiative solution of Israel agreeing 
to a negotiated number of refugees returning to Israel. 
"This won't fly," Peres responsed. 
 
¶10. (SBU) Codel staff cleared this message. 
 
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