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 002571 
 
SIPDIS 
 
E.O. 12958: DECL: 06/27/2016 
TAGS: ECON ETRD PREL PGOV PTER KWBG JO AF IS GOI EXTERNAL ECONOMY AND FINANCE
SUBJECT: (S) SHIMON PERES ON HAMAS, JORDAN, NEGEV-GALILEE 
DEVELOPMENT, AND AFGHANISTAN 
 
REF: TEL AVIV 02451 
 
Classified By: Ambassador Richard H. Jones for reasons 1.4 (b) and (d) 
 
¶1. (S) Summary: In a June 26 meeting with Ambassador Jones, 
Minister for Negev and Galilee Development Shimon Peres said 
the kidnapping of an Israeli soldier at Kerem Shalom by 
militants, without the knowledge of Hamas Prime Minister 
Haniyeh proves that Haniyeh is as weak as President Abbas, at 
least in terms of controlling Hamas' military wing.  Peres 
urged the international community to pressure the Hamas 
leadership in Damascus, and claimed that orders to carry out 
the attack on Kerem Shalom came from Khalid Misha'al.  Peres 
discussed his meeting with Jordan's King Abdullah and shared 
Abdullah's thoughts on joint development projects.  He 
outlined his vision for joint industrial zones, to provide 
employment for Palestinians in the West Bank, and claimed to 
have already secured the support of influential investors for 
the project.  He also described how financing for Negev and 
Galilee development projects will be carried out -- by 
earmarking funds from the budgets of other ministries. 
Finally, Peres described his meeting with Afghan president 
Hamid Kharzai and his vision for an Israeli Arab role in the 
agricultural development of Afghanistan.  End summary. 
 
------------------- 
Kerem Shalom attack 
------------------- 
 
¶2. (C) Peres claimed that the kidnapping of an Israeli 
soldier at Kerem Shalom by Palestinian militants affiliated 
with Hamas proves that Hamas Prime Minister Haniyeh is as 
weak as President Abbas, at least in terms of controlling 
Hamas' military wing.  Peres urged the U.S. to pressure the 
Hamas leadership in Damascus and their sponsors, and claimed 
that orders to carry out the attack on Kerem Shalom came from 
Khalid Misha'al.  The Ambassador asked Peres what support 
Israel would seek from the international community.  Peres 
said that public pressure will be enough, but he added, 
"Europe needs to send the message to the PA that they will 
not see a penny until the prisoner is released." 
--------------------- 
Meeting with the King 
--------------------- 
 
¶3. (C) Peres said that the atmospherics at the recent Nobel 
Laureates' meetings in Petra, Jordan were good.  He said that 
the King did not respond favorably to his suggestion that 
Israel and Jordan jointly develop the 80 km strip of border 
between the West Bank and Jordan (along the Jordan Valley) 
into industrial zones to provide employment for Palestinians, 
out of concern that it would attract large numbers of 
Palestinian workers to Jordan's doorstep.  However, the King 
strongly supported plans for the development of a regional 
airport for Aqaba and Eilat, according to Peres.  Peres said 
that the breakfast between the King, Prime Minister Olmert, 
President Abbas, and himself also "went well," but had no 
tangible results. 
 
-------------- 
Joint Projects 
-------------- 
 
¶4. (C)  Peres described three possible joint development 
projects with Jordan. 
 
--Aqaba Airport: Israel currently maintains an airport in 
Eilat to service international charters and domestic air 
travel.  Peres said that the King is interested in moving 
forward with the proposal for the development of a "regional 
runway" with two terminals, one in Aqaba and the other in 
Eilat.  The Ambassador asked if the Ministry of 
Transportation has specific security concerns with the 
proposal to share the runway but maintain separate terminals. 
 Peres said that there are security concerns.  But he added 
that there are also the vested commercial interests of the 
city of Eilat and the Ministry of Transportation - both of 
which view the existing but inadequate Eilat airport as a 
source of revenue - which must be resolved before such a 
project can move forward.  The Ambassador asked Peres whether 
he had considered making the airport a true regional project, 
e.g. by including a light rail connection to Sharm El-Sheik 
in Egypt. 
 
--Mining of Copper Ore: Peres said that Israel has already 
engaged a Mexican company to exploit the copper vein that 
runs underneath the Israel-Jordan border in the Timna mines, 
and hopes that this can also become a joint development 
project. 
 
--Red-Dead Conduit: Peres expressed frustration with the pace 
of World Bank preparations for a feasibility study of 
transferring water from the Red Sea to the Dead Sea.  He said 
that the World Bank has only raised about USD 10 million out 
of USD 15 million needed to carry out the study.  He added 
that he has sent letters to the Secretary and World Bank 
President Wolfowitz, asking for assistance in moving the 
project forward.  Peres claims that the private sector could 
carry out the feasibility study in three months, while the 
World Bank would take at least two years.  He also said that 
the total cost estimate for the Red-Dead project of USD five 
billion is exaggerated, and that a more modest Red-Dead 
project (without hydroelectric power plants and with a 
smaller amount of water transferred) will cost only between 
USD 1.2-2 billion.  Peres claimed that two local billionaires 
are interested in helping to finance the project, but did not 
provide their names. 
 
---------------- 
Industrial Zones 
---------------- 
 
¶5. (C) Peres said that King Abdullah did not support the idea 
of establishing qualifying industrial zones (QIZs) along the 
80 km border between the West Bank and Jordan.  Peres noted 
that he was therefore considering locating it in the 
industrial zone in the center of Jenin instead.  The 
Ambassador reminded Peres that Palestinian exports currently 
qualify for duty-free export to the United States, and asked 
what benefit there would be, from a trade perspective, to 
establishing such a QIZ.  Peres responded that the QIZ would 
qualify for duty-free export to Europe and provide jobs for 
Palestinians.  He also argued that in the current poor 
political climate the only possible avenue for progress was 
to improve economic conditions.  He claimed that the 
Wertheimer family is willing to finance the initiative, but 
that Israel needs to find anchor companies to attract other 
investors to the zone.  In the long-term, he predicts an 
economic confederation between Jordan and the West Bank, but 
the maintenance of strict political separation. 
 
----------------------------- 
Negev and Galilee Development 
----------------------------- 
 
¶6. (C) The Ambassador asked how plans for Negev and Galilee 
development are progressing in light of the lack of a current 
budget for many of the Ministries' activities (Reftel). 
Peres explained that over the next few weeks his ministry 
will be placing earmarks within the budgets of other 
ministries for Negev and Galilee development -- for example 
the construction of railroads will be funded from the 
Ministry of Transportation budget.  Peres also highlighted 
his success is enlisting private investors, such as Carlson 
Wagonlit Travel, to invest in the development of tourism 
around the Kinneret and Akko areas.  Peres said that now 
Israel needs to attract private investment to the Negev, "to 
prepare for the future (West Bank settlement) evacuees."  In 
addition to that, he added that such development will make it 
easier for the fifty-thousand Israeli-Arabs who graduate from 
college each year to find jobs. 
------------------ 
Talks with Kharzai 
------------------ 
 
¶7. (S) Peres said that during his recent meetings in Almaty, 
Kazakhstan on the margins of the CICA conference, he spoke 
with Afghan President Hamid Kharzai and offered Israeli 
assistance in agriculture development.  He suggested using 
Israeli-Arab farmers to assist in developing a training 
program for Afghan farmers.  Peres highlighted the advantages 
of working through Israeli-Arabs farmers since they possess 
the sophisticated agricultural development experience of 
Israeli farmers, and are much more likely to be able to work 
effectively in predominantly Muslim Afghanistan.  The 
Ambassador agreed that Israeli Arabs were a potential 
untapped asset which could greatly assist Israel's efforts to 
build bridges to Muslim countries. 
 
********************************************* ******************** 
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