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 004284 
 
SIPDIS 
 
E.O. 12958: DECL: 07/10/2015 
TAGS: PREL PGOV KWBG KPAL IS GAZA DISENGAGEMENT SETTLEMENTS
SUBJECT: ISRAELI HOUSING MINISTER DISCUSSES SETTLEMENTS AND 
DISENGAGEMENT WITH STAFFDEL TALWAR 
 
Classified By: DCM Gene A. Cretz for reasons 1.4 (B) and (D). 
 
¶1. (C) Summary: Staffdel Talwar met with Minister of Housing 
Isaac Herzog on July 6 at the Knesset to discuss Israeli 
settlements in the West Bank and the disengagement process. 
Herzog said that he had stopped all new residential 
construction beyond the green line, but intends to eventually 
approve new projects in Ma'ale Adummim and Betar Illit. 
Speculating about the future, Herzog admitted that the 
security barrier "will create the possible final border for 
the State of Israel," and said that he foresees at least part 
of the E-1 area within the fence.  Herzog told staffdel that 
the GOI will have housing available for every Israeli 
evacuated as part of the disengagement process, but he 
expects that some settlers will move to shantytowns and tents 
to make a political point.  Herzog said that disengagement 
has thrown Israeli politics into "total disarray" and 
predicted that some parties in the Knesset will split as a 
result of the process.  He requested U.S. support for 
disengagement and U.S. assistance in cautioning the 
Palestinians that they must end terror attacks against 
Israel.  Herzog also noted that at least one GOI minister is 
trying to prevent participation by Hamas in the upcoming 
Palestinian legislative elections.  End summary. 
 
--------------------------------------------- --- 
Outposts, Settlements, and the Security Barrier: 
Residential Construction Freeze - for now 
--------------------------------------------- --- 
 
¶2. (C) Herzog maintained that he had "frozen all construction 
in the illegal outposts" and had taken steps to stop illegal 
construction in settlements.  Herzog said that he has not 
allowed new construction on one residential unit beyond the 
green line since January 2005.  He admitted that the GOI 
continues to work on a number of infrastructure projects, 
calling them the result of contracts "signed years ago." 
Herzog noted that Sharon cannot tackle the problem of illegal 
outposts and settlements at the present time because the 
Prime Minister cannot afford to "split his forces" during the 
traumatic disengagement process. 
 
¶3. (C) Speculating about the future, Herzog admitted that the 
security barrier "will create the possible final border for 
the State of Israel."  He said the GOI intends to eventually 
build 700 new housing units in Ma'ale Adummim and Betar 
Illit, claiming that Ma'ale Adummim "needs a critical mass to 
sustain itself."  He called this policy an improvement over 
previous GOI plans, contending that it focuses Israeli 
activity on two Israeli settlements and is "accepted all over 
the world," including Geneva.  Herzog said that current plans 
for the E-1 area are on hold while zoning issues are studied 
and maintained that the future of E-1 could be settled 
"later," possibly by dividing the area between the PA and 
Israel.  He listed his two main goals for E-1 as maintaining 
a "lifeline to Ma'ale Adummim" and providing contiguity for 
Palestinians transiting between the northern and southern 
parts of the West Bank.  He noted that once a road for the 
Palestinians (route 80) is complete, Israel intends to "fence 
in the block." 
 
----------------------------------- 
Housing Available for Every Evacuee 
----------------------------------- 
 
¶4. (C) Herzog told staffdel that the GOI will have 1,550 
housing options for evacuated settlers by the start of 
disengagement, enough for every evacuee.  He said the 
evacuated settlers will eventually have three options: 
housing in new villages and towns currently under 
construction; housing in the 350 units planned for settlers 
from Gush Katif in the Nitzana area between Ashkelon and 
Ashdod; or housing in one of 850 apartments leased throughout 
Israel.  Herzog predicted that some settlers will move 
nevertheless to shantytowns and tents in order to make a 
political point in their "psychological battle" against 
disengagement. 
 
--------------------------------------------- --------- 
Disengagement: Israeli Politics, U.S. role, and the PA 
--------------------------------------------- --------- 
 
¶5. (C) Even though he expects that terror attacks will 
continue after disengagement, Herzog said that the Labor 
Party strongly supports the process.  He noted that this 
policy is consistent with Labor's long-held belief that the 
only way to maintain a viable democratic Jewish state is to 
divide the land with the Palestinians.  Herzog said that 
disengagement has thrown Israeli politics into "total 
disarray" and left the political scene "on the verge of an 
earthquake."  The issue has revealed deep internal divisions 
within many of the parties represented in the Knesset, he 
added, and will lead to splits in United Torah Judaism, the 
National Union, and the National Religious Party.  He 
admitted that his own party, Labor, is hampered by the "huge 
price" it paid for supporting Oslo and a vicious leadership 
battle.  In Herzog's view, PM Sharon is not in as much 
political difficulty as reported, because Israeli voters 
"like people who are tough." 
 
¶6. (C) When asked about a U.S. role in disengagement, Herzog 
requested political support.  He also asked the USG to let 
the Palestinians know -- "without threatening them" -- that 
Israel is capable of retaliating many times over for any 
terrorist attacks. 
 
¶7. (C) Herzog said that the GOI fully supports PA President 
Mahmud Abbas, but is concerned that he is not producing 
results.  Herzog does not see the PA as a transitional 
administration for Hamas, because he believes that a large 
silent majority of Palestinians supports the current policy 
of maintaining calm with Israel.  He noted that Justice 
Minister Tzipi Livni is working to exclude Hamas from the 
upcoming legislative elections, arguing that the Oslo accords 
do not permit anti-Israeli parties to compete.  Herzog noted 
that the GOI needs to work with the international community 
in deciding how to handle Hamas.  In a broader discussion on 
democratization in the region, Herzog told staffdel "you have 
to accept extremists if they are elected." 
 
¶8. (U) This cable was cleared by staffdel. 
 
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