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 000810 
 
SIPDIS 
 
E.O. 12958: DECL: 02/27/2016 
TAGS: PGOV PREF KWBG KPAL ECON IS EG HUMANITARIAN AID GOI EXTERNAL
SUBJECT: GOI MAPPING OUT CRITICAL HUMANITARIAN PA PROJECTS 
THAT SHOULD RECEIVE AID 
 
Classified By: Deputy Chief of Mission Gene A. Cretz for reasons 1.4 (b 
,d). 
 
¶1.  (C) Foreign Affairs Advisor to the Prime Minister Shalom 
Tourgeman told NEA DAS Elizabeth Dibble February 23 that, 
without causing a humanitarian crisis, the GOI seeks to limit 
assistance to the Palestinian Authority (PA) to show Hamas 
that adherence to its current positions comes at a price. 
Tourgeman said the GOI is now "mapping out" the types of 
assistance it would consider humanitarian in nature and how 
best to channel that assistance.  The international community 
should not go around Hamas to bail the PA out of its economic 
situation, Tourgeman underlined, since the Palestinian people 
will credit Hamas for providing such assistance.  Tourgeman 
indicated that the GOI is also considering whether to cease 
its role as customs collector for the PA.  DAS Dibble agreed 
that the international community cannot conduct business as 
usual with a Hamas-led PA.  She stressed, however, the 
importance of avoiding a Palestinian economic collapse that 
would lead to an economic crisis and that the GOI's chances 
of achieving EU and Quartet unity on assisting the PA would 
be greater if limitations, especially on humanitarian 
assistance, are not too severe.  She noted that by ending its 
role as customs collector, the GOI would, in fact, abrogate 
the Paris Protocol.  End summary. 
 
¶2.  (C) Tourgeman was accompanied by his assistant, Ari 
Varon, and MFA First North American Department Director Dan 
Arbell.  DCM Cretz, Deskoff Logerfo, and Poloff notetaker 
accompanied DAS Dibble. 
 
--------------------------------------------- 
Punishing, but Not Punishing the Palestinians 
--------------------------------------------- 
 
¶3.  (C) Tourgeman began the February 23 meeting with DAS 
Dibble by asserting that some 45% of Palestinians voted for 
Hamas knowing that by doing so they were voting against 
international assistance to the PA and against relations with 
Israel.  He said that Israel does not want to punish the 
Palestinian people, but argued that in order to change a 
Hamas-led PA, the Palestinian public should know that their 
support for Hamas comes at a price.  Tourgeman expressed 
concern that the EU and the Russians are looking for ways to 
bypass Hamas and still assist the PA.  "This is not the way," 
he underlined.  The Palestinian people need to feel there has 
been a negative change, Tourgeman underlined.  "If Hamas sees 
that international assistance is still coming to the PA," 
Tourgeman said, "(Hamas) won't feel responsible (for the 
people)."  "We can't be more responsible to the Palestinian 
people than Hamas," Tourgeman added.  He acknowledged, 
however, that Israel "will be the first to pay the price" if 
there is a humanitarian crisis in the PA.  (Note: In a 
meeting immediately following that with Tourgeman, MFA 
Director of International Organizations Roni Ya'ar told 
Dibble he had just received a read-out from Tourgeman and 
Ya'ar stressed the GOI's interest in meeting the humanitarian 
needs of the Palestinian people.  End note.) 
 
¶4.  (C) Tourgeman expressed concern that the Palestinian 
people will credit Hamas with providing government services 
and salaries, even if the assistance comes from the 
international community.  He stressed the need to draw a firm 
line from the start on what type of assistance to the 
Palestinians the GOI will accept, and expressed concern that 
EU and Quartet unity in dealing with Hamas will deteriorate 
over time as they consider more types of assistance to be 
humanitarian.  DAS Dibble underscored that the USG does not 
want to bail out Hamas, but stressed that no one wants to see 
a humanitarian crisis in the Palestinian territories.  She 
underlined the importance of assessing how to show Hamas that 
it must change, while at the same time preventing an economic 
collapse.  Dibble agreed that international unity in dealing 
with Hamas is wobbly, adding that where the line is drawn on 
assistance will determine the extent and viability of this 
unity. 
 
¶5.  (C) Tourgeman said that the GOI is still discussing these 
issues with the EU and Russia, adding that the GOI is not 
sure how long the latter will "be on board."  He said that on 
February 28, the GOI will discuss "how to deal with Russia" 
on this issue.  Tourgeman said -- but did not elaborate as to 
why -- that the GOI is already worried about the Jordanian 
and Egyptian positions. 
 
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GOI Determining PA's Basic Needs 
-------------------------------- 
 
¶6.  (C) The main task for the GOI now, Tourgeman said, is to 
determine the basic needs of the Palestinian people and how 
best to channel assistance to meet those needs.  At the same 
time, he said, it is necessary to prevent Hamas from taking 
credit for providing for those needs.  Tourgeman divided 
assistance to the PA into direct budget assistance and 
project funding.  The GOI, according to Tourgeman, is in the 
process of "mapping out" and prioritizing which of some 50-55 
Palestinian infrastructure and assistance projects now in the 
pipeline it would consider to be humanitarian -- and 
therefore considered eligible for outside assistance -- and 
which it would not so consider.  (Note: Tourgeman did not 
indicate what types of projects these are or whether they are 
foreign funded.  Also, it is not clear to what extent 
Tourgeman's explanation here represents the official GOI 
position.  End note.)  Tourgeman said that the GOI does not 
recognize most infrastructure projects as humanitarian, 
unless they also serve Israeli interests, such as sewage or 
other environmental projects.  In response to Dibble's query, 
Tourgeman said that civil society projects such as 
institution-building, would not be considered humanitarian. 
Within the PA budget, Tourgeman said that allocations for 
food, medicine, health, and some energy and infrastructure 
needs, such as water, would be considered humanitarian. 
 
¶7.  (C) Education assistance is much more problematic, 
Tourgeman said.  On the one hand, he said, the GOI wants PA 
schools to continue to function, but, on the other hand, he 
noted GOI concern that Hamas will begin using anti-Israeli 
textbooks and curricula.  Tourgeman assessed that Hamas would 
not take over the PA school system for another year, so the 
GOI has some breathing space to address this issue.  He 
speculated that Hamas timed the 10-year cease-fire it has 
advocated to what he termed the graduation of a generation of 
mullahs.  In this case, Tourgeman asked, "do we want to pay 
teachers' salaries?"  Tourgeman expressed strong opposition 
to the use of assistance to pay salaries, arguing that it is 
impossible to pit one group of public employees, such as 
teachers, against others, such as security forces. 
Tourgeman indicated that money to support workers in some 
public sectors could be channeled through NGOs, but he was 
adamant that it should not go through the PA. 
 
¶8.  (C) In response to the DCM's query, Tourgeman said that 
the non-transferred tax revenues should not be used to fund 
public services, as the Palestinian people would perceive 
these benefits as derived from Hamas.  Tourgeman added that 
the same applies to the annual USD 200 million in mainly Arab 
assistance to the PA, reasoning that by using these funds to 
provide public services, other funding would be freed up for 
Hamas to use for other purposes.  Tourgeman said that Iran 
has already promised to provide the PA with assistance, and 
he asserted that these funds could bankroll terrorist 
activities.  Tourgeman claimed that the GOI had blocked the 
tax transfer from the PA for two years in the past, and this 
had not resulted in any financial crisis to the PA.  Dibble 
noted that a crisis was averted then because of USG and other 
assistance to the PA. 
 
¶9.  (C) The DCM questioned whether addressing the needs of 
the Palestinian people could be met by supporting the private 
sector.  Tourgeman said that encouraging the private sector 
could be a positive direction, but added that this is a 
"tricky" area.  He said that Hamas could benefit from various 
tax and other financial arrangements with the business 
sector, including what he said are money-laundering 
scenarios.  He claimed that private sector firms had already 
been implicated in schemes by which Hamas or its benefactors 
abroad paid on behalf of Gaza merchants for foreign-origin 
goods destined for Gaza, then received reimbursement in Gaza 
from the respective merchant. 
 
-------------------------------------- 
GOI Thinking on Customs and Crossings 
-------------------------------------- 
 
¶10.  (C) In response to Dibble's query, Tourgeman said that 
the GOI is now considering whether to move toward "total 
separation" from the PA, including whether to continue 
collecting customs on behalf of the PA.  The result of a 
decision to stop collecting customs, Tourgeman said, would be 
that goods would enter the PA without having been taxed. 
Dibble noted that if the GOI takes this path, it would, in 
fact, be abrogating the Paris Protocol, while at the same 
time demanding from any Hamas-led government adherence to 
prior Israel-PA agreements.  Tourgeman agreed that this is a 
contradiction, but stressed that Hamas's victory in the PA 
elections created a new situation and the GOI cannot continue 
with business as usual.  Responding to the DCM's question as 
to why the PA could not collect the customs, Tourgeman said 
that the PA simply does not have a system in place to do 
this.  Tourgeman also indicated that the GOI is considering 
the issue of keeping the crossings open. 
 
¶11.  (C) Tourgeman argued in response that the USG supports 
the use of pressure on the Iranian population to convince 
them to change their government.  "Why not support the same 
(strategy) with the Palestinians?" Tourgeman asked.  Dibble 
noted that Iran is a sovereign nation with control over its 
own borders and over the daily lives of its people, while the 
PA is not a state and does not have such control.  She added 
that the USG is not trying to punish the Iranian people. 
Tourgeman argued that the PA acts like a state and should be 
treated as such.  He said that most Palestinians want to 
abandon terrorism and voted for Hamas in protest against 
Fatah.  The question, he said, is how to get them to want to 
change their regime. 
 
---------------------- 
Time is of the Essence 
---------------------- 
 
¶12.  (C) Tourgeman stressed that the GOI does not feel that 
it can wait six or even three months to show Hamas that it 
will pay a price for not changing its positions.  He said 
that "the one virtue of Hamas is its sensitivity to public 
opinion, and we should use it."   Tourgeman stressed that 
going around Hamas and using PA President Abbas to channel 
funding is dangerous and will play into Hamas's hands.  Hamas 
would then use Abbas, Tourgeman argued, to deal with 
international assistance.  Tourgeman said that Abbas should 
be strengthened, but in a separate way (note: Tourgeman did 
not elaborate).  Dibble underlined that it is as yet 
uncertain how Hamas will act, but that the USG position is 
against reverting to business as usual with the PA.  She 
stressed the need to show the Palestinian people that 
assistance they receive is coming from the international 
community, not from Hamas. 
 
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Abbas's Speech 
-------------- 
 
¶13.  (C) In closing, Tourgeman expressed dissatisfaction with 
Abbas's recent speech, questioning whether it had any 
positive message.  Tourgeman accused Abbas of ignoring the 
international community's concerns about Hamas in the speech 
and not calling for Hamas's recognition of Israel.  Dibble 
acknowledged a divergence of views between the U.S. and 
Israel on the Abbas speech.  The DCM asked what the GOI would 
consider Hamas recognition of Israel.  Tourgeman said this 
issue "is not debatable," that recognition has to be 
"legislated" and that Hamas has to annul its covenant. 
 
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