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

S E C R E T SECTION 01 OF 02 TEL AVIV 000515 
 
SIPDIS 
 
E.O. 12958: DECL: 02/03/2016 
TAGS: PREL PGOV EAID PTER KPAL KWBG IS EG ISRAELI PALESTINIAN AFFAIRS GOI EXTERNAL ISRAEL RELATIONS
SUBJECT: ISRAELI FM ON REVENUE TRANSFERS, MEETINGS IN 
CAIRO, AND OBJECTIVES FOR WASHINGTON VISIT 
 
Classified By: Ambassador Richard H. Jones; Reasons 1.4 (B) and (D). 
 
¶1. (C) Summary: During a February 2 meeting in Tel Aviv, FM 
Tzipi Livni told the Ambassador and DCM that the Israeli 
Cabinet will discuss revenue transfers to the PA on February 
5, adding that she did not expect the issue to still be on 
the agenda when she meets the Secretary next week.  Livni 
said that meetings in Cairo on February 1 left her with the 
impression that the Egyptians agree with Israeli views that 
Hamas must fill certain "preconditions" before forming a 
government.  For her upcoming visit to Washington, she listed 
her three priorities as: 1) a discussion on the PA and Hamas; 
2) consultations on the Iranian and Hizballah threats; and 3) 
obtaining U.S. financial assistance for the Negev and 
Galilee.  She stressed that the assistance is politically 
important and necessary to ensure Israel's security.  The 
Ambassador acknowledged receipt of Israeli concerns about 
Rafah and urged the GOI to revisit AMA issues (including 
operation of the Karni crossing) to review where progress 
might still be possible.  He also discussed the benefits of a 
larger MFA role in Israel's export control system.  MFA 
Director General Ron Prosor and Chief of Staff Yaki Dayan 
accompanied Livni.  End summary. 
 
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Cabinet will Discuss Revenue Transfer on February 5 
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¶2. (S) The Ambassador stressed the significant role that 
Israeli revenue transfers could have in stabilizing the 
interim PA government.  Livni said the issue will be 
addressed by the Israeli Cabinet on February 5.  She asked 
that the USG avoid moves that could be misconstrued as undue 
pressure, because such actions would have repercussions in 
the Knesset electoral campaign.  (Note: News articles in 
several papers the next day claimed that Livni was under 
pressure from the USG to transfer the revenues.  End note). 
She added that her initial inclination had been to avoid any 
steps that could potentially help Hamas; i.e., "there was an 
earthquake and Israel can take its time."  She acknowledged 
that once it became clear that the formation of a new 
government would not happen quickly, she also saw the logic 
of sustaining the PA until Hamas assumes power, provided the 
PA agrees to certain conditions on the use of funds.  She 
refused to predict how the Cabinet would vote, but said she 
did not expect the issue to still be on the agenda when she 
meets the Secretary next week.  (Note: PM Advisor Dov 
Weissglas told the Ambassador separately that there was an 
excellent chance the funds would be transferred to the PA 
early in the week of February 5.  End note). 
 
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Cairo Meetings Focus on Conditions for Hamas 
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¶3. (C) Livni described her meetings in Cairo on February 1 as 
"very positive," saying that on the Hamas issue Israel and 
Egypt "have the same interests."  In her view, EGIS Chief 
Omar Soliman had the strongest message on Hamas; he told the 
GOI that Hamas needs to fill certain "preconditions" before 
forming a government.  FM Aboul Gheit preferred not to use 
that term, but Livni said she left Cairo with the impression 
that the GOE had a unified view on the conditionality issue. 
She described the Egyptians as "optimistic" that Hamas would 
accept such changes, but acknowledged that this may have been 
Cairo's attempt to "calm me down."  When asked by the 
Ambassador whether the Egyptians had mentioned the views of 
other Arab states, Livni replied that "we are hearing 
positive noises from Jordan." 
 
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Livni's Washington Agenda and Request for USG Assistance 
--------------------------------------------- ----------- 
 
¶4. (C) Livni listed three priorities for her February 6-8 
visit to Washington and New York: 1) dealing with the PA and 
Hamas; 2) countering threats from Iran and Hizballah; and 3) 
obtaining U.S. financial assistance for the Negev and 
Galilee.  MFA Director General Prosor claimed that Iran is 
increasing pressure and funding for Hizballah attacks against 
northern Israel.  He told the USG not to be surprised by 
Israeli counter measures, such as increased surveillance 
overflights. 
 
¶5. (C) In Livni's view, the PLC elections had increased both 
the threat against Israel and the urgency of the GOI's 
assistance request.  She maintained that a positive response 
by Washington would be seen in Israel as support for 
disengagement, backing for recent moves against illegal 
outposts, and a message to settlers to re-focus their efforts 
inside the green line.  She also said that USG assistance is 
necessary to stop smuggling of weapons and drugs, trafficking 
in persons, and infiltration by terrorists -- especially 
along the Egyptian border.  Livni claimed that Egypt was not 
actively patrolling the area south of Kerem Shalom in the 
hope that the lack of order will lead to acceptance of an 
expanded Border Guard deployment. 
 
¶6. (C) Livni said she intended to concentrate on proposals 
that would be acceptable to Washington.  She requested advice 
on the level and form of assistance the USG would be willing 
to consider.  Noting that a meeting to discuss the assistance 
proposal had been canceled by the Finance Ministry earlier in 
the week, the Ambassador pledged to pass on any GOI requests 
for review by Washington.  He praised recent GOI moves to 
evacuate illegal outposts.  MFA Director General Prosor said 
that he would ensure that the Finance Ministry contact the 
Embassy with details of the Israeli request.  Chief of Staff 
Dayan expressed concern that the USG's supplemental might be 
sent to Congress in February without the Israeli request. 
The Ambassador urged the GOI not to overlook Bedouin 
interests in its plans for the Negev. 
 
¶7. (C) Livni predicted that the Israeli-Palestinian conflict 
-- and not economic issues -- would determine the winner of 
the March 28 Knesset elections.  She described the uncertain 
security situation as the "weak link" in Kadima's campaign. 
She suggested that Washington's initial response to the PLC 
elections had not reassured Israelis, although she called the 
President's February 1 remarks "wonderful." 
 
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Ambassador Urges Movement on AMA 
-------------------------------- 
 
¶8. (C) The Ambassador noted that the Quartet had insisted 
that any PA government reaffirm previous agreements, 
including the Agreement on Movement and Access, and said the 
USG has received PM Foreign Affairs Advisor Shalom 
Tourgeman's February 2 letter listing GOI concerns with the 
Rafah crossing.  Livni said that "Rafah is not working as it 
should be."  She praised, however, the Egyptian Border Guards 
along the Philadelphi corridor, saying "they are doing their 
job ... we see their effect."  The Ambassador urged the GOI 
to revisit AMA issues and look for areas where progress might 
still be possible, especially Karni. 
 
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Finding a Role for the MFA in Israeli Export Controls 
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¶9. (C) Following up on a topic from the January 11 Joint 
Political-Military Group (JPMG), the Ambassador suggested 
that a greater MFA role in Israel's export controls system 
would increase transparency and help address past concerns. 
Livni agreed and suggested we raise the issue directly with 
Defense Minister Shaul Mofaz and/or Alternate Prime Minister 
Ehud Olmert to avoid the appearance of a power grab by the 
MFA.  She noted that this was one of the first issues Mofaz 
raised with her after she became foreign minister. 
 
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JONES