VZCZCXRO0881
PP RUEHBC RUEHDE RUEHDIR RUEHKUK
DE RUEHTV #0867/01 0800614
ZNY SSSSS ZZH
P 210614Z MAR 07
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC PRIORITY 0116
INFO RUCNIRA/IRAN COLLECTIVE
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC
RHEHNSC/NSC WASHDC
RHMFISS/HQ USEUCOM VAIHINGEN GE

S E C R E T SECTION 01 OF 03 TEL AVIV 000867

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/16/2017
TAGS: PREL PTER PINR KPAL KWBG SY LE IR IS
SUBJECT: ISRAELI TRANSPORTATION MINISTER MOFAZ ON IRAN AND
NORTH KOREA, LEBANON AND SYRIA, AND THE PALESTINIANS

REF: TEL AVIV 831

Classified By: Ambassador Richard H. Jones. Reasons: 1.4 (b)(d).

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SUMMARY
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¶1. (S) During a March 14 meeting devoted to a variety of
issues, Israeli Transportation Minister Shaul Mofaz praised
the latest session of the U.S.-Israel Strategic Dialogue, and
noted that he would soon begin preparing for the next session
scheduled for May 7-8 in Washington. Mofaz, who has the GOI
lead on the Strategic Dialogue, said he hopes to meet with
Under Secretary Burns when he visits Israel the second half
of April. Mofaz asked about U.S. thinking on the way ahead
on Iran's nuclear program, and said that he will likely
discuss Iran during his visit to China the week of March 18.
Mofaz considered the agreement with North Korea on its
nuclear program encouraging, and expressed his hope that Iran
is watching and will realize the benefits of renouncing its
own nuclear program. Mofaz urged that more work be done by
the international community to address gaps in UNSCR 1701
implementation that are allowing Hizballah to rebuild its
capabilities in Lebanon. He expressed skepticism that a
Palestinian National Unity Government will accept the Quartet
principles, and lamented that Iran's role in Palestinian
affairs has dramatically increased since 2002. Nevertheless,
Mofaz agreed that it is in Israel's interest to keep the
Karni crossing open as much as possible, and noted his
understanding that payment problems that caused recent
Palestinian strikes, which closed the crossing, had been
resolved. Reftel addresses Mofaz's comments about
negotiating an Open Skies agreement. END SUMMARY.

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U.S. - ISRAEL STRATEGIC DIALOGUE AND ASSISTANCE TALKS
--------------------------------------------- --------

¶2. (S) Mofaz, who led the Israeli side in the January 2007
session of the U.S. - Israel Strategic Dialogue,
characterized the session as a very good one and said that he
would begin preparing for the next session (to be held in
Washington May 7-8) in the coming weeks. He asked about the
Ambassador's participation in recent U.S.-Israel discussions
on the future of U.S. assistance to Israel -- specifically
whether the U.S. has plans to increase its support for
Israel's defense. The Ambassador replied that discussions
focused mainly on the Israeli economy and its relationship to
Israel's security needs, and noted that specific assistance
requests were not discussed. The Ambassador noted that it
might be wise to link future defense assistance to other
policies, such as U.S. loan guarantees to Israel had been.
The Ambassador emphasized that the U.S. loan guarantee
program to Israel has been very successful in maintaining
sound fiscal policies even when governments change.
Ambassador Jones stressed that the discussions with the
Israeli side were positive, and that the U.S. side reiterated
America's strong commitment to Israel's security.

¶3. (C) The Ambassador noted that Under Secretary Burns is
planning to visit Israel during the second half of April.
Mofaz said that he will want to meet with the Under Secretary
while he is in Israel to consult on the agenda for the next
Strategic Dialogue.

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IRAN: MOFAZ LIKELY TO DISCUSS IT IN CHINA
-----------------------------------------

¶4. (S) Mofaz said Iran was the main issue during the last
round of the Strategic Dialogue, and expressed his
understanding that U.S. policy is to implement tougher
sanctions against Iran, and pursue a second UNSC resolution.
He wondered if a second resolution would widen the sanctions
called for in UNSCR 1737, or call on UN member states to
implement unilateral sanctions against Iran. The Ambassador
clarified the U.S. is looking at additional sanctions under a
UNSC resolution, and is also encouraging partners to apply
unilateral sanctions against Iran. He noted the Under
Secretary's recent discussions with the P-5 1 Political

SIPDIS
Directors, and U.S. efforts to get the Germans to stop
providing export credits to companies doing business with
Iran.

¶5. (S) The Ambassador noted Under Secretary Joseph and
Assistant Secretary Rood's recent visit to Israel and their
discussions with a GOI interagency team on nonproliferation

TEL AVIV 00000867 002 OF 003

and arms control issues. He stressed that their talks
followed-up on many of the issues that were considered during
the Strategic Dialogue. Mofaz said that he believes that
financial sanctions against Iran are working. The Ambassador
confirmed this, observing that UNSCR 1737 sent a message to
the international business community that doing business with
Iran could become increasingly risky.

¶6. (S) Mofaz asked about China's current position on Iran,
noting that he would be in China the week of March 18 to
discuss transportation issues with Chinese officials. He
said he will spend four days in China, and added that he was
responding to an invitation issued to him while he was
Defense Minister. Mofaz said that he will meet with the head
of a parliamentary committee that deals with Iran, and so
will likely end up discussing Iran while he is there. The
Ambassador observed that if the Chinese want to preclude the
U.S. from taking more energetic action in Iran -- as their
public posture suggests -- it would be in their interest to
be more cooperative with the U.S. diplomatically.

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NORTH KOREA: MOFAZ HOPES IRAN IS WATCHING
-----------------------------------------

¶7. (S) Mofaz asked about the latest agreement with North
Korea. The Ambassador noted that bilateral talks had been
held with the North Koreans, and that the dialogue appeared
to be proceeding well. He stressed that the U.S. is
committed to dismantling North Korea's nuclear reactor, news
which Mofaz welcomed. The Ambassador added that part of the
strategy is to convince the North Koreans that the U.S. has
no hostile intent, and that North Korea could ultimately
benefit from renouncing its nuclear program. Mofaz said that
he hoped that Iran is watching the situation closely and will
decide to follow suit.

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LEBANON AND SYRIA: MOFAZ URGES MORE TO BE DONE
--------------------------------------------- -

¶8. (S) Turning to Lebanon, Syria and UNSCR 1701, Mofaz
claimed that there is no effective embargo on arms going into
Lebanon, and that Syria has moved long-range rockets into
Lebanon. He complained that Hizballah has not been
"dismantled," that neither the Lebanese Armed Forces (LAF)
nor UNIFIL have tried to enter areas that are currently
controlled by Hizballah, and that no timetable for the return
of the kidnapped Israeli soldiers has emerged. Mofaz said
that he told Secretary Rice and Under Secretary Burns during
his visit to Washington in September that Hizballah will
spare no effort to topple the Siniora government in Lebanon.
He pointed to Hizballah's activities over the past few months
as evidence of this effort, and warned that it will continue.
Mofaz urged that more pressure be applied to Syria, Iran and
Hizballah, and cautioned that the international community
will not keep its forces deployed in southern Lebanon for 5-6
more years: "Hostilities will start up again one day. It is
just a matter of time." Mofaz said that as Deputy Prime
Minister, he is privy to daily intelligence reports, and that
he is seeing increasing indications that Al Qaeda and the
Islamic Jihad are active in Lebanon.

¶9. (S) The Ambassador noted that the U.S. wants to provide
military equipment to the LAF, and that equipment lists have
been provided to the Israeli Prime Minister's Office and the
MOD for review. He said that the list includes encrypted
radios, night-vision goggles (NVGs), and anti-tank weapons
that are less capable than those already possessed by the
LAF. The Ambassador urged that Israel agree to allow this
equipment to be turned over to the LAF. Regarding NVGs,
Ambassador Jones stressed that a recent audit determined that
all NVGs previously supplied to the LAF had been accounted
for. He added, "We are confident that the LAF will honor our
restrictions on our equipment, and that we can address any
concerns you may have about specific equipment items." The
Ambassador stressed that the USG wants to strengthen the
GOL's capabilities so that it can stand up to Hizballah and
other militias. Mofaz cautioned that, according to Israel's
information, at least fifty percent of the LAF are Shia. He
warned that this could make it difficult for the LAF to
confront Hizballah.

¶10. (S) The Ambassador noted that Israeli Defense
Intelligence Research Division Chief BGEN Yossi Baidatz's
recent briefings at the UN on Israel's perspective of the
situation in Lebanon were very well received and will help
member states to recognize that arms smuggling continues and

TEL AVIV 00000867 003 OF 003

the situation along the Syrian-Lebanese border remains
problematic. The Ambassador stressed that it would be useful
and greatly appreciated if Baidatz could make the same
presentation to the Germans, as it would demonstrate that
they need to do more on border security. Mofaz said that he
is convinced that such information sharing is very helpful,
and that what is needed is to build "common understanding" of
a problem. Mofaz noted that IDF Planning Division Chief Ido
Nehustan had been in France a month earlier and had shared
the same information with the French, although not in as
great detail.

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MOFAZ DOUBTS PALESTINIAN NUG WILL ACCEPT QUARTET PRINCIPLES
--------------------------------------------- --------------

¶11. (S) Mofaz noted his skepticism that any Palestinian
National Unity Government (NUG) would accept the Quartet
principles and move in directions that Israel wants. He
added that he cannot imagine that Fatah and Hamas will agree
to work with each other -- even over the long run: "Hamas is
much stronger than Fatah in Gaza. They hope to gain power in
the future. I do not see Abu Mazen taking control of Hamas.
Khaled Meshal has incredible power, and he is getting
direction from Iran." Characterizing the last ten years as a
"lost decade" in the Palestinian Authority (PA), Mofaz
complained that Abu Mazen suffers from a weak personality,
while influence from the outside is increasing. He observed
that eight years ago, Iran had no influence in the PA, while
now, its influence is significant. Mofaz recalled that
Iran's role was revealed when the IDF seized the Karine A in
January 2002, and found it loaded with Iranian weapons
destined for the PA.

¶12. (S) The Ambassador stressed that the U.S. is fully
committed to the Quartet principles, and is withholding
judgment on the NUG until it is formed. He stressed that
solving the Israel-Palestinian crisis sooner rather than
later would be in Israel's interests, especially as its own
intelligence suggests that Hamas is urgently seeking weapons
systems of the kind that Hizballah is receiving, and is
sending its operatives to Iran for training. The Ambassador
observed that the Saudi Initiative may be a way to expand the
peace camp in the region and bring moderate Arabs around to
support peace with Israel. Mofaz expressed concern that
there appears to be nobody in Fatah who could serve as a
leader of the PA after Abu Mazen. The Ambassador noted that
Secretary Rice would be in Israel shortly and press for

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progress on peace.

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MOFAZ IN FAVOR OF KEEPING KARNI CROSSING OPEN
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¶13. (S) On the Karni crossing, Mofaz said that his ministry's
only role is to provide funding for the workers in order to
extend the crossing hours as promised by PM Olmert, and that
he is in favor of keeping open the crossing at night. He
said that agreement had recently been reached that extended
hours would start in mid-April. He added that the number of
cargo trucks passing through the crossing in both directions
had steadily increased in recent months. The Ambassador
agreed, noting that the USG was closely monitoring the truck
flow. He stressed that unemployment that results from
shutting down the Karni crossing only helps Hamas in Gaza.
Mofaz agreed.

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