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UNCLAS SECTION 01 OF 07 TEL AVIV 006388 
 
SIPDIS 
 
STATE FOR NEA, NEA/IPA, NEA/PPD 
 
WHITE HOUSE FOR PRESS OFFICE, SIT ROOM 
NSC FOR NEA STAFF 
 
JERUSALEM ALSO FOR ICD 
LONDON ALSO FOR HKANONA AND POL 
PARIS ALSO FOR POL 
ROME FOR MFO 
E.O. 12958: N/A 
TAGS: IS KMDR MEDIA REACTION REPORT
SUBJECT: ISRAEL MEDIA REACTION 
 
 
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SUBJECTS COVERED IN THIS REPORT: 
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Mideast 
 
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Key stories in the media: 
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Echoed by all media, Channel 2-TV last night reported 
that in the wake of U.S. complaints about Israeli 
deviations from weapons purchasing and sales rules and 
about an Israeli report to the U.S. about a weapons 
sale to China, the Pentagon (leading media named U/S of 
Defense Douglas Feith) has demanded that the GOI 
dismiss Defense Ministry D-G Amos Yaron.  Yediot quoted 
senior Israeli sources as saying that Feith has made 
these claims because he feels pressured by FBI 
investigations currently conducted against him and 
other Pentagon officials in the alleged Larry 
Franklin/AIPAC affair.  Channel 2-TV said that Israel 
is now upgrading a sophisticated weapons system for 
China and has not informed the Pentagon about it. 
Quoting Israeli sources, Channel 2-TV reported that the 
system, which was not identified, has been returned to 
Israel for repair and maintenance.  Israel Radio cited 
denials by Defense Minister Shaul Mofaz, Israel's 
Ambassador to the U.S. Danny Ayalon, and a Pentagon 
spokesman, who said this was not a personal issue, but 
a matter of policy that has been discussed between the 
countries.  The station quoted the spokesman as saying 
that nobody in the Pentagon had demanded Yaron's 
dismissal.  Jerusalem Post quoted defense officials as 
saying Wednesday that the U.S. has demanded 
clarification of the matter and that a joint inquiry 
has been launched.  Israel Radio cited Israeli 
officials as saying that the weapons sale took place in 
the early 1990s and that Israel did not sell weapons to 
China after the Phalcon AWACS affair.  Former 
ambassador to China Ora Namir told Israel Radio this 
morning that there is not enough supervision within the 
Defense Ministry. 
 
All media reported that Wednesday at the Herzliya 
Conference, FM Silvan Shalom called for the reconvening 
of last year's Aqaba summit to show support for 
Palestinian moderates and to jump-start negotiations 
with the PA.  He said: "Everyone must do everything 
they can to ensure that this year will be the year of 
the moderates."  He called on the Palestinian 
leadership to "immediately make a decision to defeat 
terror" following the January 9 elections in the PA. 
Shalom also said that rather than trying to negotiate a 
final-status deal with Syrian President Bashar Assad, 
Israel should adopt an evolutionary," step-by-step 
approach similar to what is now being employed with the 
Palestinians.  Shalom conditioned the resumption of 
peace negotiations with Syria upon the cessation of 
Syrian support for terrorism.  Channel 2-TV and Yediot 
cited sources in Sharon's bureau as saying that a 
second Aqaba convention is in opposition to the PM's 
position.  Channel 2-TV also said that Sharon was "less 
than enthusiastic " about confidence-building measures 
on the Syrian track. 
Israel Radio quoted Sharon adviser Dov Weisglass as 
saying this morning at the Herzliya Conference that 
British PM Tony Blair intends to convene Palestinian 
and European officials in London in around two months 
to discuss ways to assist the Palestinians.  Weisglass 
said that Arafat's departure has created an   entirely 
different condition, and that Arafat's heirs are 
"normal people anchored to reality, who understand they 
will have to agree to the rules of the game." 
Weisglass praised the role of the U.S., which he said 
makes sure that the Palestinians "do their homework." 
 
Israel Radio reported that President Bush has written 
Secretary of State Colin Powell regarding the 
 
SIPDIS 
postponement for another six months of any relocation 
of the U.S. Embassy to Israel from Tel Aviv to 
Jerusalem. 
 
Leading media reported that last night five Israelis 
were wounded, two of them moderately, in two shooting 
incidents on the Gaza Strip's Kissufim-Gush Katif road. 
IDF soldiers killed two of the attackers.  Israel Radio 
reported that this morning four mortar shells were 
launched at Israeli targets in the northern Gaza Strip. 
There were no casualties.  Jerusalem Post reported that 
in a concerted effort to boost security against the 
threat of terrorism from the sea, Israel Navy has 
dramatically increased the number of surprise at-sea 
boarding on merchant ships heading to Israeli ports. 
 
Leading media (banner in Jerusalem Post) reported that 
PM Sharon warned the Labor Party that he will initiate 
early elections if his final offer to join the 
coalition is not accepted.  Leading media reported that 
Labor is interested in controlling various ministerial 
portfolios, as well as the Israel Lands Administration 
(ILA) and the Israel Broadcasting Authority (IBA). 
Israel Radio reported that chief Labor negotiator in 
the coalition talks Dalia Itzik has complained about 
Likud's "greed."  The radio reported that this morning 
Labor Party Chairman Shimon Peres will meet with Sharon 
at Peres's request to try to solve the differences 
between the sides. 
 
Jerusalem Post reported that Wednesday PLO Chairman 
Mahmoud Abbas (Abu Mazen) rejected a new Israeli 
initiative to resettle Palestinian refugees in the West 
Bank, Gaza Strip, and neighboring Arab countries. 
Ha'aretz reported that Wednesday Hamas and Islamic 
Jihad strongly criticized remarks made by Abbas that 
the use of weapons in the second Intifada was a mistake 
and that it should end. 
 
Ha'aretz reported that Egypt has postponed until April 
2005 its increased deployment of soldiers along the 
Egyptian side of the Philadelphi route on the Sinai- 
Gaza border in the Rafah area.  Ha'aretz also reported 
that the release of Palestinian prisoners that is to be 
carried out as part of the goodwill gestures aimed at 
the PA and Egypt is likely to take place next week. 
Israel Radio quoted Egyptian President Hosni Mubarak as 
saying that there is an agreement between Egypt and the 
U.S. regarding advancement of the peace process soon. 
 
Ha'aretz reported that Wednesday, the Knesset's Finance 
Committee allocated 90 million shekels (about USD 2 
million) for the paving of a West Bank road linking 
Anatot and Azariya north of Jerusalem.  The newspaper 
notes that this sum represents around 10 percent of the 
overall annual road construction budget, which will 
amount to 1 billion shekels in 2005. 
 
Israel Radio reported that Jerusalem and Diaspora 
Affairs Minister Natan Sharansky has asked UN Secretary- 
General Kofi Annan and National Security Advisor and 
secretary of state-designate Condoleezza Rice to act to 
 
SIPDIS 
put an end to the broadcasting of two anti-Semitic TV 
series sponsored by Iran and Syria, one of which is 
screened on Hizbullah's Al Manar-TV. 
 
Israel Radio reported that World Bank President James 
Wolfensohn will visit the region next week. 
 
Yediot reported that in the next few days a USD 2- 
billion suit against the Arab Bank will be filed in a 
New York federal court in the name of hundreds of 
Israeli victims of terrorist actions carried out by 
Hamas and Islamic Jihad. 
 
Jerusalem Post and Yediot reported that in what Israeli 
officials are calling a first, Israel is sending some 
USD 20,000 in aid to Sudan to help alleviate the 
humanitarian crisis there. 
 
Ha'aretz quoted Shahram Chubin, an expert on Iranian 
foreign policy who attended the Herzliya Conference, as 
saying that the U.S. missed an opportunity to conduct 
negotiations with Iran about terrorism and the nuclear 
issue after the occupation of Baghdad. 
 
Israel Radio reported that New York City businessman 
Leib Kohn admitted Wednesday to participating in an 
arms smuggling ring that shipped missile and fighter 
jet components from the U.S. to Israel and possibly on 
to Iran.  Kohn bought the parts from companies in 
Connecticut and California. 
 
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Mideast: 
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                       Summary: 
                       -------- 
 
Independent, left-leaning Ha'aretz editorialized: 
"Israel, at least based on Abu Mazen's remarks, must 
also adopt a new attitude, based on the existence of a 
serious Palestinian partner with whom to conduct 
negotiations." 
 
Chief Economic Editor and senior columnist Sever 
Plotker editorialized in mass-circulation, pluralist 
Yediot Aharonot: "The strengthening of economic 
connections is not a substitute for peace, but it helps 
to anchor it.  When new winds blow in the Middle East, 
we must not miss out on them." 
 
Middle East affairs commentator Guy Bechor, a lecturer 
at the Interdisciplinary Center, wrote in Yediot 
Aharonot: "Four years after the Oslo process shattered 
in a tremendous crash, a Likud government headed by 
Ariel Sharon has gone back to its fundamental premises, 
as if there has been no Intifada." 
 
Former editor-in-chief Moshe Ishon wrote in 
nationalist, Orthodox Hatzofe: "One doesn't need to 
make many efforts to reach the conclusion that [Abu 
Mazen] is following in Yasser Arafats' footsteps.  In 
fact, this is what he stated on the day he received 
Arafat's scepter." 
 
                     Block Quotes: 
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¶I.  "Beyond Words" 
 
Independent, left-leaning Ha'aretz editorialized 
(December 16): "'The use of weapons in the current 
Intifada is damaging and must cease.'  That was the 
important message that PLO Chairman Mahmoud Abbas 
delivered in his first statement on the subject 
following the death of Yasser Arafat.  It was not the 
first time that Abbas made such a statement, but its 
importance this time is derived from his position, and 
the anticipation that it will be received with 
understanding and acceptance, by a majority of 
Palestinians -- the same majority that in recent public 
opinion polls has expressed the view that the 
negotiations with Israel should be resumed.... Abu 
Mazen's remarks were not meant for Jerusalem and 
Washington's ears, but were spoken to Ash-Sharq Al- 
Awsat, in Arabic -- as Israel has often demanded, to 
the Arab and not only the Palestinian public.  It was 
meant for every Arab and Palestinian movement and 
school of thought, inside and outside the territories, 
including Iran and Hezbollah, so that they know the 
intentions of the person who will be running the PA.... 
Against that background, Israel, too, no less than the 
Palestinian leadership, now faces a test in the eyes of 
its public.  For Israel, at least based on Abu Mazen's 
remarks, must also adopt a new attitude, based on the 
existence of a serious Palestinian partner with whom to 
conduct negotiations.  Israel need not worry that its 
embrace might mark Abu Mazen in Palestinian eyes as a 
collaborator.  The Palestinian public certainly would 
not regard its leader as a traitor if he won freedom 
for Palestinian prisoners directly from Israel, and not 
at the request of the Hezbollah or Egypt, or if Israel 
unfroze Palestinian funds and reduced the military 
operations to the absolute necessary minimum.  Indeed, 
that is what the Palestinian public now expects." 
 
II.  "Economy and Peace" 
 
Chief Economic Editor and senior columnist Sever 
Plotker editorialized in mass-circulation, pluralist 
Yediot Aharonot (December 16): "One cannot exaggerate 
the political and economic importance of the agreement 
to establish a joint Israeli-Egyptian industrial zone 
whose products are intended for the American market and 
which will enjoy far-reaching benefits.  The agreement, 
which was signed in an official ceremony the likes of 
which has not been held in Cairo for years, lays a new 
infrastructure for business cooperation between Israeli 
and Egyptian industrialists on the basis of profits for 
both.  It opens the enormous U.S. markets before them 
on condition that they join hands and funds in 
investments and manufacture.  A joint industrial zone 
of a similar nature operates in Jordan with enormous 
success.  It has survived the entire Intifada.  The 
Egyptian-Israeli peace appeared dead in recent years. 
Now it has revived: another result of disengagement 
from Gaza and the changes in the Palestinian 
leadership.  The strengthening of economic connections 
is not a substitute for peace, but it helps to anchor 
it.  When new winds blow in the Middle East, we must 
not miss out on them." 
 
 
 
 
III.  "Arafat is Dead, Oslo Returns" 
 
Middle East affairs commentator Guy Bechor, a lecturer 
at the Interdisciplinary Center, wrote in Yediot 
Aharonot (December 16): "Four years after the Oslo 
process shattered in a tremendous crash, a Likud 
government headed by Ariel Sharon has gone back to its 
fundamental premises, as if there has been no Intifada, 
as if we haven't suffered more than 1,000 dead, as if 
Israeli society had not matured since.  In other words, 
nothing was learned.... Since [Abbas] remembers his 
last attempt to come out against the Intifada, which 
culminated in his disgraceful ouster from office, he is 
probably the last person who is going to combat 
terrorism.... In the Oslo days, people said we need to 
engage in negotiations with the Palestinian side as if 
there is no terror.... It was Ariel Sharon who said 
that no negotiations would be held until all terrorism 
stopped.  But now the negotiations are being resumed, 
this time using backchannels, there is a sense of a new 
era dawning, but terror is still running rampant, 
mainly in the Gaza Strip.... And finally, the idea of a 
new Middle East is back in the arena: economic 
development will, by necessity, produce positive 
political changes.... More than 90 percent of the fruit 
of [the U.S.-sponsored free trade] agreement will be 
picked by Egypt, which still has not explained why 
three-quarters of the foreign aid it receives from the 
U.S. is used for the acquisition of weaponry and 
military equipment.  That amassment of military might 
is aimed only against Israel.... Sharon has proven 
himself to be Peres's twin when it comes to all the 
eschatological beliefs of the Oslo process about 
Palestinian democracy, a Palestinian war on terror and 
regional economic development.  Perhaps that is the 
logic of having Peres join the government and play a 
key role." 
 
IV.  "Abu Mazen's Double Game" 
 
Former editor-in-chief Moshe Ishon wrote in 
nationalist, Orthodox Hatzofe (December 16): "One day. 
[Abu Mazen] swore he would faithfully continue Yasser 
Arafat's anti-Israeli line.  On another day, he 
promised to follow a balanced policy that would 
supposedly soon lead to peace with Israel.  His fickle 
policy found its expression this week, following the 
murderous attack in Rafah.  In his initial response, he 
justified the terror attack against IDF soldiers.  Abu 
Mazen said this was occupied territory and that Israel 
did not have any right to be there.  He later avoided 
responding.... Judging by the Palestinian Authority's 
current actions, notably the conduct of Abu Mazen, who 
is making inconsistent remarks, it is difficult to 
determine not only where he is heading, but also where 
he will lead the PA after seizing the reins of 
power.... If Abu Mazen outwardly apparently endeavors 
to create the impression that he is confident about 
publicly expressing his thoughts, one doesn't need to 
make many efforts to reach the conclusion that he is 
following in Yasser Arafats' footsteps.  In fact, this 
is what he stated on the day he received Arafat's 
scepter." 
 
KURTZER