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UNCLAS SECTION 01 OF 09 TEL AVIV 001782 
 
SIPDIS 
 
STATE FOR NEA, NEA/IPA, NEA/PPD 
 
WHITE HOUSE FOR PRESS OFFICE, SIT ROOM 
NSC FOR NEA STAFF 
 
SECDEF WASHDC FOR USDP/ASD-PA/ASD-ISA 
HQ USAF FOR XOXX 
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USCINCCENT MACDILL AFB FL FOR POLAD/USIA ADVISOR 
COMSOCEUR VAIHINGEN GE FOR PAO/POLAD 
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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 
 
-------------------------------- 
SUBJECTS COVERED IN THIS REPORT: 
-------------------------------- 
 
¶1.  Mideast 
 
¶2.  Warren Buffett's Israeli Deal 
 
------------------------- 
Key stories in the media: 
------------------------- 
 
The acquisition by US tycoon Warren Buffett, who is the 
world's second-wealthiest man, of 80 percent of Galilee- 
based Iscar Metalworking for USD 4 billion, which he 
announced on Saturday, dominated the headlines over the 
weekend.  The move is Buffett's first significant deal 
outside the US and the third largest deal he has ever 
made.  On Sunday, Ha'aretz quoted him as saying 
Saturday that he did not rule out investing in 
additional Israeli companies.  The media reported that 
the deal will make Iscar's owners, Stef Wertheimer and 
his son Eitan, the richest family in Israel.  The 
Jerusalem Post and other media reported that PM Olmert 
told Eitan Wertheimer on Saturday that the deal is 
"major news and a great present for Israel" and that it 
"will provide great momentum to the Israeli economy and 
I am certain that it will lead to other economic 
benefits."  The media reported that the deal boosted 
the Tel Aviv Stock Exchange (banner in Maariv). 
 
All media reported that on Sunday, PM Olmert moved into 
the Prime Minister's Office, vowing to redefine 
Israel's borders and crack down on illegal Jewish 
activity in the West Bank.  He was quoted as saying at 
a ceremony marking his move: "In the next few years, we 
will change Israel's character to ensure it will be a 
state with a solid Jewish majority living within 
defensible borders that can provide security to its 
residents and separate us from those who must live 
alongside us and not among us."  Yediot quoted 
associates of Defense Minister Amir Peretz as saying 
that the new government will not last longer than two 
years.  Leading media reported that on Sunday, Peretz 
decided to allow 12,000 Palestinian workers to enter 
Israel. 
 
Ha'aretz quoted GOI sources in Jerusalem as saying that 
high-ranking officials from several government 
ministries have been covertly planning the legal 
framework of the convergence plan for several months. 
The newspaper reported that the members of the 
interministerial plan were appointed by former PM Ariel 
Sharon about six months ago. 
 
On Sunday, all media reported that Amir Peretz's first 
action as defense minister was to approve an IAF strike 
in Gaza on Friday, in which five operatives of the 
Popular Resistance Committees in Gaza were killed. 
Ha'aretz reported that two Palestinians -- one in the 
Gaza Strip and the other in West Bank were also killed 
over the weekend. 
 
Yediot and Israel Radio reported that President Bush 
told the German weekly Bild Am Sonntag that Iran's 
threat to attack Israel must be taken seriously.  Major 
Israeli media cite Iran's threat that should the US 
menace Iran with sanctions, Iran would withdraw from 
the Nuclear Non-Proliferation Treaty.  Maariv quoted 
Tzachi Hanegbi, the incoming chairman of the Knesset's 
Foreign Affairs and Defense Committee, as saying Sunday 
that Iran's nuclear program will be the most important 
item on his committee's agenda. 
 
Israel Radio reported that three Palestinians -- two 
Hamas militants and a Fatah one -- were killed and 
eight were wounded in clashes between members of the 
two factions in the Gaza Strip.  The radio cited the 
London-based Ash-Sharq Al-Awsat as saying that talks 
between PA Chairman [President] Mahmoud Abbas and PA PM 
Ismail Haniyeh were inconclusive.  Major media cited 
the British weekly The Sunday Times as saying that the 
Israeli intelligence services saved Abbas from an 
assassination attempt by Hamas's military wing in his 
Gaza City office.  Abbas reportedly canceled his trip 
to Gaza following an Israeli warning.  Maariv reported 
that Hamas is investing hundreds of thousands of 
dollars in the acquisition of weapons.  The newspaper 
cited the concern of Fatah officials that the weapons 
might be used against their movement.  Major media 
quoted Palestinian FM Mahmoud Zahar as saying that he 
met with several unnamed European foreign ministers and 
other officials. 
 
All media reported that on Sunday morning, police 
evacuated 41 settlers and supporters who had barricaded 
themselves in a Palestinian house in Hebron.  Ha'aretz 
and Israel Radio reported that the Civil Administration 
in the West Bank is in the process of mapping all 
illegal construction by settlers throughout the 
territory, including the work taking place in illegal 
outposts.  Ha'aretz wrote that the operation is 
expected to last four months and is part of a broader 
plan by the authorities in preparation for the 
evacuation of illegal outposts and the razing of 
illegal construction. Ha'aretz reported that the 
mapping operation was announced Sunday at the High 
Court of Justice by the commander of the Civil 
Administration in the West Bank, Brig. Gen. Kamil Abu 
Rukun, in response to a petition by Peace Now, which 
called for the demolition of the outposts of Horsha and 
Hayovel. 
 
On Sunday, major media reported that former Mossad 
deputy chief Ilan Mizrahi is to be named the head of 
the National Security Council, replacing IDF Gen. 
(Res.) Giora Eiland who will be stepping down at the 
end of this month. 
 
The Jerusalem Post reported that despite making an 
official request to have its upcoming Fed Cup tie, 
scheduled to be played in Israel, moved to a neutral 
site, the Indonesian Tennis Federation is making plans 
to play in Israel. 
 
Maariv reported that in an interview broadcast Sunday 
on Al Arabiya-TV, Jordan's King Abdullah II said that 
two years are left to achieve peace.  The King 
reportedly urged Hamas to adopt a realistic attitude, 
but did not explicitly call on it to recognize Israel. 
 
Ha'aretz reported that Likud, the National Union- 
National Religious Party, and Yisrael Beiteinu have 
been holding talks aimed at forming a joint 
parliamentary bloc against Olmert's West Bank 
convergence plan. 
 
Major media reported that Sgt. Hananel Dayan, the 
soldier who was ousted from his unit for refusing to 
shake hands with IDF Chief of Staff Dan Halutz is 
threatening to petition the High Court of Justice 
against the dismissal. 
 
Major media reported that Foreign Ministry DG Ron 
Prosor was leaving his post.  He was appointed Israel's 
Ambassador to Germany.  Leading media reported that FM 
Livni announced Sunday that lawyer Aharon Abromovitch 
will replace Prosor as DG. 
 
Ha'aretz reported that the US has requested from 
Azerbaijan President Ilham Aliyev that his country open 
an official representation in Israel.  The newspaper 
said that the subject was raised last week during 
Aliyev's visit to Washington, where he met with 
President Bush and other senior members of the 
administration.  Ha'aretz wrote that Aliyev did not 
respond to the American request and quoted sources as 
saying that he is unlikely to undertake such a move in 
the near future, and certainly not during the period in 
which Azerbaijan heads the Economic Cooperation 
Organization, a regional group comprising predominantly 
Muslim and Turkic states from Central Asia.   Ha'aretz 
wrote that the US request follows an appeal by Israel 
to the Bush administration, which was made to boost a 
similar demand by Jewish American groups. 
 
Over the weekend, leading media reported on the 
resignation of CIA Director Porter Goss.  The media 
also reported on the reshuffling of the British 
government following the Labour Party's local-election 
defeat on Thursday. 
 
Hatzofe reported that five long-range F16-I Lockheed 
Martin aircraft arrived in Israel on Sunday. 
 
Based on statistics released by the Department of 
Homeland Security, Maariv reported that every year, the 
US Citizenship and Naturalization Services arrest 550 
Israelis staying in the US illegally, and prevent their 
return to the US for at least 10 years. 
 
------------ 
¶1.  Mideast: 
------------ 
 
                       Summary: 
                       -------- 
 
Independent, left-leaning Ha'aretz editorialized: "The 
new defense minister, Amir Peretz, and public security 
minister, Avi Dichter, who is familiar with the 
thuggery of the Hebron settlers from up close, are now 
obligated to prove that the law is not an air bubble 
when it reaches the territories." 
 
Senior columnist Haggai Huberman wrote in the lead 
editorial of nationalist, Orthodox Hatzofe: "Olmert is 
basing his policy on demagoguery.... Uprooting the 
settlements has become the main thing." 
 
Senior Middle East affairs analyst Zvi Bar'el wrote in 
Ha'aretz: "While dialogue with Hamas is likely to 
promote Arab cooperation on the Iran issue, Israel has 
decided that Hamas is the bigger threat." 
 
Yonatan Touval, a researcher at the Economic 
Cooperation Foundation, an NGO founded by the 
architects of the Oslo Agreement, whose objectives are 
to build, maintain and support Israeli-Palestinian and 
Israeli-Arab cooperation in the political, economic, 
and civil society spheres, wrote in Ha'aretz: "Israel's 
unofficial boycott of the Quartet is perhaps the 
biggest diplomatic open secret in current Mideast 
negotiations." 
 
George Conger wrote from London on page one of the 
conservative, independent Jerusalem Post: "Israel may 
have come out the winner following Prime Minister Tony 
Blair's cabinet shuffle on May 5." 
 
 
 
                     Block Quotes: 
                     ------------- 
 
¶I.  "The Routine of Violent Eviction" 
 
Independent, left-leaning Ha'aretz editorialized (5/8): 
"The new defense minister, Amir Peretz, and public 
security minister, Avi Dichter, who is familiar with 
the thuggery of the Hebron settlers from up close, are 
now obligated to prove that the law is not an air 
bubble when it reaches the territories.  Arresting the 
protesters, putting them on trial quickly and issuing 
the army with strict and precise instructions aimed at 
protecting the Palestinians' rights: These actions are 
likely to make it clear that the security forces' 
recent actions are not just a momentary legal spasm, 
but part of a policy that has come to stay." 
 
II.  "Meditations on the 'Lifeline of Zionism'" 
 
Senior columnist Haggai Huberman wrote in the lead 
editorial of nationalist, Orthodox Hatzofe (5/7): 
"Prime Minister Ehud Olmert said as he presented his 
government to the Knesset that 'partitioning the Land 
with the goal of ensuring a Jewish majority is a 
lifeline for Zionism.'  Any intelligent person with 
eyes in his head who correctly analyzes the Prime 
Minister's political plan understands immediately that 
this is not a lifeline but a noose for Zionism, and 
perhaps for Israel.... Olmert is basing his policy on 
demagoguery and the mendacious argument that the 
'continued dispersed settlement throughout Judea and 
Samaria [i.e. the West Bank] creates an inseparable 
mixture of population that will endanger the existence 
of Israel as a Jewish state.'  An utter lie.  Today 
already separation can be created between the Jewish 
settlement blocs and the Palestinian blocs, without 
removing a single settlement.  Those facts, of course, 
are something that no one will ever say, because 
uprooting the settlements has become the main thing." 
 
III.  "Hamas or an Iranian Nuke" 
 
Senior Middle East affairs analyst Zvi Bar'el wrote in 
Ha'aretz (5/7): "It is true that most Arab spokesmen 
have recently stopped conditioning their support for 
the nuclear demilitarization of Iran on having Israel 
denuclearize first, and Iran is perceived more and more 
as a physical threat, while Israel is seen as an 
ideological one -- but there is still a big difference 
between this fine distinction and a direct and explicit 
Arab demand of Iran.  As in the case of Iraq, it seems 
that most Arab leaders are again gathering in the cozy 
corner of vague words and fears of war without taking 
any real action.  It is as if they are saying -- since 
we cannot influence Israel's nuclearization, it would 
be better not to deal with Iran.  [Egyptian President 
Hosni] Mubarak and [Saudi King] Abdullah can change 
this political isolationism.... But how is it possible 
to mobilize Arab support for an Israeli argument when 
Israel is not only an occupier but also refuses to 
engage in conversation with its adversary -- even when 
this adversary closely adheres to a ceasefire?  This is 
something absurd, which is difficult to resolve.  And 
thus, while dialogue with Hamas is likely to promote 
Arab cooperation on the Iran issue, Israel has decided 
that Hamas is the bigger threat.  It is such a big 
threat that Israel easily mobilized a global boycott 
against it. Iran is apparently only child's play." 
 
IV.  "Tough Challenges For the Quartet" 
 
Yonatan Touval, a researcher at the Economic 
Cooperation Foundation, an NGO founded by the 
architects of the Oslo Agreement, whose objectives are 
to build, maintain and support Israeli-Palestinian and 
Israeli-Arab cooperation in the political, economic, 
and civil society spheres, wrote in Ha'aretz (5/8): 
"The Quartet should draft a separate memorandum of 
understanding with Israel.  The exact content of such a 
memorandum may not be that important, although it 
should definitely include an understanding that Israel 
immediately and unconditionally resumes the transfer of 
Palestinian tax money it collects at the borders.  More 
important, however, is the very act of concluding such 
a memorandum if through such a document Israel was 
brought to recognize the Quartet as such. Israeli 
officials have, of course, met over the past four years 
with individual members of the Quartet, but never 
collectively, never together -- never, that is, as a 
Quartet.  Israel's unofficial boycott of the Quartet is 
perhaps the biggest diplomatic open secret in current 
Mideast negotiations.  Clearly, if the U.S., EU, UN and 
Russia can't bring Israel to recognize the Quartet, 
there can be little confidence in the Quartet's ability 
to do much more.  Yet it must achieve much more or else 
refrain from further involvement, for to continue 
playing a counter-productive role is worse than playing 
no role at all." 
 
¶V. "Blair Cabinet Shakeup May Be Good For Jerusalem" 
 
George Conger wrote from London on page one of the 
conservative, independent Jerusalem Post (5/7): "Israel 
may have come out the winner following Prime Minister 
Tony Blair's cabinet shuffle on May 5.  The demotion of 
Foreign Secretary Jack Straw and appointment of Blair 
loyalist Margaret Beckett to his post are likely to 
result in a more unified Anglo-American approach to 
Iran, Hamas, and the Middle East.... Beckett is 
expected to strictly follow Blair's Middle East foreign 
policy strategy, moving away from an EU-centered 
approach to closer partnership with the US.  Beckett's 
experience with climate change negotiations and support 
for the Kyoto Treaty protocols will not mean Britain 
and the US will lockstep however, with the potential 
for conflict arising over this contentious issue 
between the view of Bush and Blair." 
 
---------------------------------- 
¶2.  Warren Buffett's Israeli Deal: 
---------------------------------- 
 
                       Summary: 
                       -------- 
 
Chief Economic Editor Sever Plotker wrote in mass- 
circulation, pluralist Yediot Aharonot: "One of the 
jewels in the crown of ... Israeli industry is now 
moving into foreign, distant, anonymous hands." 
 
The conservative, independent Jerusalem Post 
editorialized: "Investors the world over will not miss 
this event and will be able to reason that if [Warren] 
Buffett considers Israel a land of promise, they might 
do the same." 
 
 
 
 
 
                     Block Quotes: 
                     ------------- 
 
¶I.  "Buffett's Vote of Confidence" 
 
The conservative, independent Jerusalem Post 
editorialized (5/8): "When Israel was founded and 
struggled to stay alive 58 years ago, it would have 
taken a particularly hallucinatory imagination to 
forecast a day in which Israeli industry would thus 
interest the world's greatest movers and shakers. 
Nevertheless, this should not be the culmination of our 
aspirations. It is not too brazen to hope that truly 
successful Israeli firms assume the role of major 
players in the globalized marketplace yet stay fully 
and unequivocally Israeli.  Other small economies have 
done it. Finland's Nokia, for instance, remains 
Finnish.... Investors the world over will not miss this 
event and will be able to reason that if [US tycoon 
Warren] Buffett considers Israel a land of promise, 
they might do the same. Our challenge will be to keep 
that promise viable.  With all his goodwill, Buffett is 
not [Israeli industrialist Stef] Wertheimer [who sold 
him his Iscar firm] and his commitment to the Galilee 
hinges on the bottom line.  Still, while the guiding 
considerations in future for Iscar may become less 
Israeli-oriented, the acquisition, assuming the 
business continues to flourish, will continue to 
benefit this country for many years to come." 
 
II.  "Pride Mixed With Sorrow" 
 
Chief Economic Editor Sever Plotker wrote in mass- 
circulation, pluralist Yediot Aharonot (5/7): "The 
investment of USD 4 billion by the richest private 
investor in the world is ... not only an unusual mark 
of appreciation for Israeli industry and for the 
Israeli industrial sector.  It is also a bad mark for 
Israeli bureaucracy, Israeli regulation and the Israeli 
capital market.  The pride is therefore mixed with 
sorrow.... When [US tycoon Warren] Buffett makes his 
leading investment in Israel, he gives the highest 
possible grade to our industries.  So why the sorrow? 
Over the fact that one of the jewels in the crown of 
that same Israeli industry is now moving into foreign, 
distant, anonymous hands.  Not for control over 
'strategic investment,' but rather to a holding company 
that wants profit, profit and more profit.  The profits 
of Iscar will now be added not to the Israeli gross 
national product but to the product of Warren Buffett 
and of countless joint shareholders in his holding 
firm.  True, the management will remain in the 
Wertheimer family's hands -- that is Buffett's method - 
- but the array of concerns will gradually become less 
and less Israeli and more and more American." 
 
JONES