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 000390 
 
SIPDIS 
 
E.O. 12958: DECL: 01/27/2016 
TAGS: PGOV PREL KWBG KPAL PINR IS ELECTIONS GOI INTERNAL ISRAELI PALESTINIAN AFFAIRS GOI EXTERNAL SETTLEMENTS
SUBJECT: LABOR'S NUMBER TWO: ELECTIONS WILL BE A FIGHT FOR 
THE CENTER, RUSSIAN VOTE 
 
Classified By: Deputy Chief of Mission Gene A. Cretz for reasons 1.4 (b 
,d). 
 
¶1.  (C) Summary: Labor Party MK Itzhak Herzog told NEA DAS 
Robert Danin January 25 that Kadima, Labor, and Likud will be 
battling over the some 80 Knesset seats that he assesses will 
go to the political center, as well as for the Russian vote. 
Herzog expressed resignation that Labor would not win over 
Kadima, although at times he suggested that the tide could 
still turn in Labor's favor.  He expressed confidence that 
Labor would enter into a coalition with Kadima.  Herzog said 
that Labor Party Chairman Amir Peretz will continue to focus 
the Labor Party's campaign on economic and social policy 
while closely mirroring Kadima's platform on security and 
diplomatic issues.  On the Palestinian elections, Herzog 
expressed concern that if Hamas does well in the elections, 
the Europeans would exert pressure on Israel and the U.S. to 
recognize Hamas.  He claimed that as Housing Minister, 
settlement growth had "dried up."  Justice and Foreign 
Minister Tzipi Livni is confused over definitions of 
settlement growth, according to Herzog, and has therefore not 
advanced the work of the interministerial committee to 
respond to the Talia Sasson report on settlements and 
outposts, which she chairs.  End summary. 
 
-------------------------- 
Herzog Worried About Hamas 
-------------------------- 
 
¶2.  (C) Labor MK Itzhak (Booji) Herzog -- number two on 
Labor's party list -- began a meeting with NEA DAS Danin 
January 25 -- the day of the Palestinian Legislative Council 
elections -- by expressing concern that the Europeans would 
begin to press the GOI and the USG to talk to Hamas if Hamas 
does well in the elections.  Danin stressed that we had taken 
a firm position on Hamas, but noted that the USG and the GOI 
would have to assess the results of the PLC elections. 
Herzog said that Peretz believes that Hamas will moderate 
itself as it becomes caught up in the business of governing 
and "delivering" to the public.  Herzog added, however, that 
his brother, Brig. Gen. Michael Herzog, is more skeptical 
about this prospect.  (Note: Danin meet earlier in the week 
with Michael Herzog.  End note.)  Herzog said he shares 
Danin's concern that Hamas may simultaneously engage in the 
business of governing while at the same time conducting 
terrorist acts.  Herzog assessed that some Hamas candidates 
are not Hamas "cronies," but people who had just rejected 
Fatah.  Herzog highlighted the need to "analyze the 
intricacies between candidates." 
 
--------------------------------- 
Labor Will be Happy with 25 Seats 
--------------------------------- 
 
¶3.  (C) Turning to Israeli domestic politics, Herzog said it 
is a "big mistake" to predict a Kadima win some two months 
before the elections since the tide could still turn.  Herzog 
did, at one point in the meeting, however, acknowledge that 
the next government would likely be led by Kadima in a 
coalition with Labor.  "I would be happy if Labor receives 25 
seats," Herzog said. (Note: This would be a good showing 
since the polls show Labor hovering at 21-22 seats if 
elections were held today.  End note.)  Herzog said that he 
expects Peretz would be offered the finance ministry 
portfolio if Labor joins a Kadima government, describing 
Peretz as "smart" and someone with business sense.  He also 
highlighted Peretz's skills as a negotiator, gained during 
his time as chief of the Histadrut labor union. 
 
¶4.  (C) Giving what he characterized as a "closed door 
analysis" of the politic scene, Herzog assessed that Kadima's 
creation answered the public's need for a centrist party. 
Kadima captured voters from Likud, the Russian sector, 
Shinui, and some one-third from Labor, who left with former 
Labor Party interim chair Shimon Peres to Kadima, Herzog 
said.  He expressed concern that more of the Russian voters 
may shift their support to Avigdor Lieberman's 
anti-disengagement right-wing Yisrael Beiteinu Party, which 
is geared toward the interests of Israel's over one-million 
strong Russian immigrant community.  According to Herzog, 
some one million Kadima supporters are "soft" and could 
potentially shift their loyalty to another party.  Any 
terrorist attacks will help Likud, Herzog assessed. 
 
¶5.  (C) Herzog said that Labor receives its support from 
multiple sources including those people hurt by former 
Finance Minister Likud Chairman Binyamin Netanyahu's economic 
policy, leftists who want to associate with a larger party, 
Israeli Arabs who want to enter mainstream politics, and 
youth.  He acknowledged that Labor's support in the polls had 
gone down after the formation of Kadima, and also due to what 
he described as the public perception of Peretz as 
"inexperienced, aggressive, and Moroccan."  This changed, 
Herzog said, after the January 15 Labor primaries and Labor's 
"great" Knesset list, a "team," Peretz noted, that includes 
Ashkenazi members (those with a European background) to 
balance out Peretz's Sephardi background (those from North 
Africa and the Middle East). 
 
¶6.  (C) Danin noted that in a meeting with Peretz last 
November, Peretz said he would base his campaign on domestic 
issues and asked if this agenda had changed.  Herzog stressed 
that Peretz's focus would remain on domestic issues, 
including on education.  He acknowledged Peretz's weakness in 
addressing security issues, and for this reason, said that 
Peretz surrounds himself with those in Labor who have a 
security background, such as former head of the Israel 
Security Agency (Shin Bet) Ami Ayalon. 
 
------------------ 
Kadima is "Shrewd" 
------------------ 
 
¶7.  (C) Herzog criticized Alternate Prime Minister Ehud 
Olmert's January 24 speech at the Herzliya Conference for not 
adequately addressing the problem of poverty in Israel. 
Olmert's speech, Herzog assessed, was directed at capturing 
Likud voters.  Asked about Likud voters' reaction to Olmert's 
references to removing illegal outposts, Herzog stressed that 
Likud voters respect the rule of law and therefore oppose the 
illegal outposts.  Herzog, with some sarcasm, said that 
Olmert had "played prime minister" when giving his speech and 
had "done brilliantly," adding that "now he's got Tzipi 
(Livni as Foreign Minister)."  Herzog criticized (and 
backhandedly praised) Olmert for praising Netanyahu's 
accomplishments as Finance Minister in his speech, exclaiming 
that the Kadima team is "shrewd."  He characterized as a 
"trick of the trade" any efforts by Kadima to push an Olmert 
visit to the U.S. before the elections.  Danin stressed that 
the USG appreciated the sensitivity of the moment and does 
not want to involve itself in election politics.  (Note: 
Herzog had accused the USG of showing party favoritism when 
reports appeared last week that Olmert was planning a visit 
to the U.S.  End note.) 
 
¶8.  (C) Without naming names, Herzog underlined that Olmert's 
inner circle is different from that of Sharon and predicted 
that "the Sharon courtyard will fade away."  Herzog continued 
that Avraham Hirchson -- one of the 13 MKs who left Likud 
with Sharon to form Kadima -- is a close friend and confidant 
of Olmert's, whom Herzog described as "very nice and modest," 
adding, "I like him a lot." 
 
----------------------------- 
Settlement Growth "Drying Up" 
----------------------------- 
 
¶9.  (C) Danin asked Herzog about the last housing tenders he 
approved as Housing Minister and about settlement growth in 
general.  Herzog asserted that during his tenure as Housing 
Minister, settlement growth has "dried up."  He said that he 
only approved 300 units in neighborhood 07 in Ma'ale Adumim 
and that building there was within the line of construction. 
Herzog claimed that a "false" perception exists that 
settlements are growing, when this growth should be 
attributed to the high birth rate among some of the border 
town religious communities such as Betar Ilit.  He 
underscored that he did not "touch E-1."  He claimed that 
little construction is taking place in the Ariel settlement 
except for a small amount attracted by the new university 
there.  Herzog acknowledged that he had approved construction 
of a town hall there. 
 
¶10.  (C) Herzog said that he does not see much construction 
taking place in the West Bank in general unless it is being 
done "privately."  He claimed that in a meeting with Peace 
Now director Yariv Oppenheimer (Herzog did not specify when), 
Oppenheimer agreed that there had not been major changes in 
West Bank settlement construction.  (Note: Peace Now's 
position is that most of the construction is taking place in 
the seam line, but not in the West Bank.  End Note.)  Herzog 
said that he tried not to bring attention to his having dried 
up settlement growth while Housing Minister so as not to 
"hurt" Sharon, but said he later touted this claim during his 
recent campaign in the Labor Party primaries. 
 
¶11.  (C) In response to Danin's question as to why it had 
been so difficult for the GOI to declare its adherence to 
elements of a settlement freeze, Herzog professed confusion 
as to the definition of natural growth.  He claimed that 
Minister of Justice and Foreign Affairs Tzipi Livni also has 
questions about the "definitions" of growth, and he suggested 
that the USG "talk to her" about this.  Herzog commented that 
Livni still has not completed her interministerial committee 
report to respond to attorney Talia Sasson's report on 
illegal outposts.  Commenting on the problem of illegal 
outposts and defining which outposts are illegal, Herzog said 
that there is a "big dark hole" in the Ministry of Defense 
and "they are now working on how to get out of it." 
 
¶12.  (U) NEA/DAS Danin cleared this message. 
 
********************************************* ******************** 
Visit Embassy Tel Aviv's Classified Website: 
http://www.state.sgov.gov/p/nea/telaviv 
 
You can also access this site through the State Department's 
Classified SIPRNET website. 
********************************************* ******************** 
JONES