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UNCLAS TEL AVIV 000957 
 
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 
DA WASHDC FOR SASA 
JOINT STAFF WASHDC FOR PA 
CDR USCENTCOM MACDILL AFB FL FOR POLAD/USIA ADVISOR 
COMSOCEUR VAIHINGEN GE FOR PAO/POLAD 
COMSIXTHFLT FOR 019 
 
JERUSALEM ALSO ICD 
LONDON ALSO FOR HKANONA AND POL 
PARIS ALSO FOR POL 
ROME FOR MFO 
 
SIPDIS 
E.O. 12958: N/A 
TAGS: OPRC KMDR IS
 
SUBJECT: ISRAEL MEDIA REACTION 
 
 
-------------------------------- 
SUBJECTS COVERED IN THIS REPORT: 
-------------------------------- 
 
Mideast 
 
------------------------- 
Key stories in the media: 
------------------------- 
 
The media cited Secretary of State Condoleezza Rice's announcement 
at a Jerusalem press conference on Tuesday that PM Ehud Olmert and 
PA Chairman [President] Mahmoud Abbas had agreed to hold biweekly 
meetings. Rice also sent a strong signal to Arab leaders convening 
in Riyadh for Wednesday and Thursday's Arab League summit to do 
their part to move the diplomatic process forward.  Rice was quoted 
as saying that she would meet periodically with Olmert and Abbas, 
"sometimes separately, sometimes together."   The Jerusalem Post 
quoted US officials as saying that she was expected to come to the 
region about once a month.  The media quoted the Secretary as saying 
that the Israeli-Palestinian meetings would "focus on two sets of 
issues.  First, they will discuss immediate concerns, like movement 
and access, management of the passages, and preventing arms 
smuggling and rocket fire by terrorists in Gaza."  And secondly, she 
said, "The parties will also begin to discuss the development of a 
'political horizon,' consistent with the establishment of a 
Palestinian state in accordance with the Roadmap.  As I have noted 
before, we are not yet at final status negotiations.  These are 
initial discussions to build confidence between the parties."  The 
media also quoted Secretary Rice as saying: "New thinking and new 
action will also be necessary on the part of Israel's neighbors," 
giving Saudi King Abdullah special mention.  She was quoted as 
saying that his initiative from 2002 was an example of "such new 
thinking."  Yediot said that Rice's diplomatic initiative has 
remained "on paper only."  Media reported that, before leaving 
Israel, the Secretary met in her hotel for 15 minutes with the 
families of kidnapped soldiers Ehud Goldwasser and Eldad Regev, and 
also with Defense Minister Amir Peretz. 
 
The Jerusalem Post's web site quoted Foreign Minister Tzipi Livni as 
saying on Tuesday night before a Kadima Party forum: "In the current 
situation it is impossible to reach a political settlement with the 
Palestinians."   Livni was quoted as saying that the new PA unity 
government was not abiding by the conditions set by the Quartet and 
that Abbas was "disappointing, especially because he failed to 
condition the formation of the new Fatah-Hamas coalition on the 
release of captured IDF soldier Cpl. Gilad Shalit."  Livni noted 
that Israel had emphasized to the Palestinians that they still 
needed to implement the first stage of the Roadmap, which was the 
abandonment of terror. 
The Jerusalem Post quoted a senior Israeli diplomatic official as 
saying earlier that for the first time since 2000, Israel and the 
Palestinians will begin regular discussions on all aspects of a 
future Palestinian state except for borders, Jerusalem and refugees. 
  The official was quoted as saying that the talks Rice set into 
motion would not focus on humanitarian and security issues, a 
reversal of the cabinet's decision on March 18 that the 
establishment of the new Hamas-Fatah unity government meant Israel 
would be limited in what it could talk about with Abbas, and those 
talks would continue "to advance security and humanitarian" issues. 
The "most important thing to come out of Rice's visit," the official 
was quoted as saying, "was that the Israelis and Palestinians 
decided to resume talks on the parameters of future Palestinian 
statehood, on the characteristics of this statehood."  Israel's 
position, however, is that talking about Jerusalem, refugees, and 
boundaries now would only be a recipe for failure and another round 
of violence. But, the official said, "the idea is to talk about 
everything else," and when there is progress on those issues, to go 
back and tackle the tough-nut core issues.  The talks will be 
carried out with Abbas, and not with the Hamas-led PA government. 
The official was quoted as saying that despite Abbas's weakness and 
"inability to deliver," there was need to talk to someone, and Abbas 
was the natural candidate.  The official was quoted as saying that 
detailed work on "realignment," a proposed unilateral withdrawal 
from much of the West Bank, prepared in 2006 by a Justice Ministry 
team headed by Aharon Abramovitch, who is currently the 
Director-General of the Foreign Ministry, will be dusted off and 
serve as a basis for discussions with the Palestinians.  Justice 
Ministry team, established when realignment was Olmert's game-plan, 
mapped out the ramifications of this move on a wide range of issues, 
from water to archeological sites, from economic issues to 
incitement.  The only thing this committee did not deal with was 
where the new border would run -- but it looked at all the issues 
that would need to be dealt with when a new border was established. 
It was precisely these issues, the official was quoted as saying, 
that would now be discussed with the Palestinians. 
 
Israel Radio quoted Saudi FM Prince Saud al-Faisal as saying on 
Tuesday, in an interview published today in the British newspaper 
The Daily Telegraph, that the "lords of war" will decide Israel's 
future if it rejects a blueprint for peace crafted by the entire 
Arab world.  The Saudi FM was quoted as saying that the Middle East 
 
risks perpetual conflict if the peace plan fails.  Yediot Washington 
correspondent Orly Azolai reported from an official visit to Saudi 
Arabia that, at today's opening of the Arab League in Riyadh, Saudi 
King Abdullah will call for the initiation of a peace process 
between the Arab countries and Israel.  Yediot said that, for the 
first time, the Saudis are suggesting the creation of committees in 
which Israeli and Saudi teams would participate -- in Azolai's 
words, "kinds of joint peace teams."  Yediot wrote that the teams 
would discuss progress on the diplomatic track, establish 
facilitative mechanisms.  Yediot reported that, following the Arab 
summit, UN Secretary-General Ban Ki-moon intends, in cooperation 
with the other Quartet members, to initiate an international 
diplomatic conference, to be attended by Israeli and Palestinian 
representatives, as well as delegates from the moderate Arab states 
-- Saudi Arabia, Egypt, Jordan, and the UAE.  The newspaper reported 
that Olmert has not yet expressed his agreement to participate in 
the conference.  Yediot (Smadar Perry) also reported that the US, 
Saudi Arabia, and Israel have secretly formulated a 
multibillion-dollar plan for a solution of the Palestinian refugee 
issue.  Palestinians who would remain in the host countries would 
receive generous compensation, and protect to improve their lives 
would be funded. 
 
Ha'aretz reported that Hamas will refrain from expressing its views 
on the Arab Peace Initiative that members of the Arab League, 
including the PA, are expected to support during today's Riyadh 
summit.  Ha'aretz reported that on Tuesday a number of leading Hamas 
figures in the Gaza Strip revealed that the organization will adopt 
a policy of ambiguity on its stance vis-a-vis the peace initiative. 
However, Ha'aretz wrote that senior Hamas officials admitted that 
they are opposed to parts of the initiative relating to a peace 
agreement with Israel or its recognition.  The daily quoted 
Palestinian sources as saying on Tuesday that Hamas political bureau 
chief Khaled Mashal has promised Saudi Arabia's King Abdullah not to 
disrupt the decisions of the summit. The same sources were quoted as 
saying that the policy of ambiguity stems from concerns that open 
opposition to the initiative, which is a revived version of the 
Saudi initiative approved at the 2002 Arab League summit in Beirut, 
will cause friction between Hamas and the Saudis. 
 
Electronic media reported that this morning security forces are 
completing the evacuation of protesters from the site of the 
destroyed northern West Bank settlement of Homesh. 
 
Former US Permanent Representative to the UN John Bolton was quoted 
as saying in an interview with Yediot that the IDF's ground 
operation at the end of the Lebanon War, in which 33 Israeli 
soldiers were killed, did not change the UN Security Council's 
resolution in Israel's favor but rather in the Arab side's.   Yediot 
noted that Bolton's comments contradict declarations made by Olmert 
at the end of the war. 
 
Israel Radio reported that this morning several Qassam rockets were 
fired at the western Negev.  The radio also said that an Al-Aqsa 
Martyrs Brigades militant was killed in Jenin in clashes with IDF 
forces. 
 
All media quoted Defense Minister Peretz as saying last night before 
a Labor Party audience that he intends to lay claim to the Finance 
Ministry following the elections for the Labor party leadership 
scheduled in late May.  The declaration is meant to boost the Peretz 
campaign by suggesting he is stressing the social agenda that he 
traditionally espouses.   Peretz announced that by the time the 
primaries are held on May 28, he intends to complete the tasks he 
has undertaken at the Defense Ministry.  Several commentators said 
that Peretz's came too late, since he should have made it 
immediately after the Second Lebanon War. 
 
Yediot reported that New York State's chief prosecutor might open a 
criminal investigation against American non-profit organizations 
created by Finance Minister Abraham Hirchson. 
 
All media reported that on Tuesday five Palestinians were killed as 
a sewage reservoir collapsed in the village of Um Nasser north of 
Gaza, 300 meters from the border with Israel.  Israel Radio reported 
that Israel's national water company Mekorot will help repair the 
refuse-disposal system.  The radio said that the move was 
coordinated between Israeli and Palestinian authorities. 
 
Maariv reported that the festivities marking the 40th anniversary of 
the reunification of Jerusalem will last for an entire year. 
 
Ha'aretz reported that he new head of the Defense Ministry's 
delegation in New York next summer is expected to be Victor Bargil, 
the current chief of logistical support at the ministry and one of 
the most senior and influential officials there.  One of the main 
obstacles to his appointment is his lack of adequate English.  The 
newspaper wrote that there seems to be a decision at the ministry to 
send Bargil abroad for a few months of language training. 
 
Yediot reported that underworld kingpin Zeev Rosenstein was returned 
from Miami to Israel to serve the rest of his sentence. 
 
Ha'aretz reported that on Tuesday Chinese and Israeli officials 
agreed to pave the way for the first Chinese airline, most likely 
Air China, to run scheduled flights between the two countries.  The 
newspaper also wrote that big opportunities in China continue to 
attract Israeli investors despite difficulties in generating 
significant profits. 
 
Ha'aretz and other media reported that Bank Leumi, Israel's second 
largest bank, is selling its US operations.  Ha'aretz said that the 
reason for the move is that the Cerberus-Gabriel hedge fund has no 
choice in the matter if it wants to become the bank's new 
controlling shareholder: US regulatory law forbids a hedge fund from 
owning the controlling stake in an American bank. 
 
Hatzofe reported that the Jewish American Charles Simonyi, a 
developer of Microsoft's Word and Excel software, will be the next 
"space tourist" on a Russian spacecraft. 
 
Ha'aretz and Yediot cited the results of a Geocartographia poll, 
which found that 50.9 percent of the Jewish Israeli public believes 
that the state should encourage emigration of Israeli Arabs from the 
country.  This represents a 28-percent increase from last year.  The 
survey also found that 40 percent of respondents believe that the 
right to vote should be taken away from Israeli Arabs -- a 
55-percent increase from last year. 
 
-------- 
Mideast: 
-------- 
 
Summary: 
-------- 
 
The independent, left-leaning Ha'aretz editorialized: "President 
George Bush has finally joined the effort to salvage the faltering 
Arab-Israeli peace process.... [But] without energetic diplomatic 
activity from Washington, Bush, Olmert and Abbas will end their 
tenure in office without benefiting the peoples of the region." 
 
Senior columnist Rami Tal wrote in an editorial in the 
mass-circulation, pluralist Yediot Aharonot: " It is difficult to 
see why official Israel does not declare that it welcomes the Arab 
initiative and is willing to launch negotiations, and at the same 
time announces that it has fundamental reservations regarding parts 
of this initiative, but it will clarify these during the 
discussions." 
 
Diplomatic correspondent Aluf Benn wrote in Ha'aretz: "The 
assumption that nothing will come of the Olmert-Abbas bi-weekly 
meetings has brought convergence [a.k.a. realignment] back into the 
picture." 
 
Conservative columnist Yosef Harif wrote in the popular, pluralist 
Maariv: "The prevalent spirit in the Arab counties is that the 
Israeli Prime Minister is weak and that he can therefore be 
pressured.  Olmert will be able to earn esteem if he proves that he 
is not weak, and if he strongly rejects the plan." 
 
Senior Middle East affairs analyst Zvi Bar'el wrote in Ha'aretz: 
"Rice, and anyone else waiting for the outcome of the Riyadh summit, 
will apparently have to make do with the 'ratification of the Saudi 
initiative.'" 
 
Former Israeli negotiator Gilad Sher wrote in Ha'aretz: "In a 
controlled, continuous, and real dialogue process with the moderate 
Palestinians, headed by Abu Mazen, one can and must advance toward a 
permanent solution." 
 
 
 
Block Quotes: 
------------- 
 
¶I.  "A Welcome Summit in Riyadh" 
 
The independent, left-leaning Ha'aretz editorialized (3/28): "On 
Tuesday United States Secretary of State Condoleezza Rice completed 
another visit to Israel and the Palestinian Authority, as part of 
her regional diplomatic tour.  With less than two years left in 
office, President George Bush has finally joined the effort to 
salvage the faltering Arab-Israeli peace process.  This effort is a 
positive step forward and better than nothing, but courtesy calls 
are not enough if ultimately Ehud Olmert merely agrees to regular 
meetings with Mahmoud Abbas.  Even though Israel is not invited to 
the Arab League summit that opens in Riyadh today, it should support 
the summit and be glad that Arab states, under international 
auspices, are initiating a process of reconciliation with Israel.... 
However, the Olmert government has been derelict in its duty to its 
voters and is offering arguments and excuses to avoid taking the 
diplomatic bull by the horns.... Olmert, who is fighting for his 
political future, is apparently more concerned about progress that 
requires a withdrawal than an impasse that will mean escalation. 
Rice was deterred from bringing American pressure to bear on Israel. 
 She established the frequency of meetings between Olmert and Abbas, 
but not the content.  The declared movement toward a democratic, 
moderate Palestinian state, whose creation would bolster Israeli 
security, was mentioned in a feeble voice.  Without energetic 
diplomatic activity from Washington, Bush, Olmert and Abbas will end 
their tenure in office without benefiting the peoples of the 
region." 
 
II.  "Why Reject?" 
 
Senior columnist Rami Tal wrote in an editorial in the 
mass-circulation, pluralist Yediot Aharonot (3/28): "In his 
conversation with the UN Secretary-General, opposition chairman 
Binyamin Netanyahu rejected the Saudi initiative (this is actually 
an initiative of all the Arab League members) for peace with Israel, 
because it mentions the right of return of the refugees and demands 
a return to the 1967 borders.  In any negotiations that will ever be 
conducted, these will be the opening demands of the Arabs, and 
Israel will reject them.  There is almost no debate about this.  The 
question is whether the Arabs can be persuaded to reduce their 
demands even before sitting down at the negotiating table, and 
unfortunately it would appear that the answer to this is negative. 
It is difficult to see why official Israel does not declare that it 
welcomes the Arab initiative and is willing to launch negotiations, 
and at the same time announces that it has fundamental reservations 
regarding parts of this initiative, but it will clarify these during 
the discussions.  What harm could come of this?" 
 
III.  "Creeping Back to the Unilateral" 
 
Diplomatic correspondent Aluf Benn wrote in Ha'aretz (3/28): "On 
Tuesday Condoleezza Rice ended another disappointing trip into the 
diplomatic minefield of the Middle East.... Olmert's flexibility 
could be measured in millimeters.... Olmert is not afraid of Rice. 
He perceives that President George W. Bush, concerned with domestic 
affairs, is willing to let Rice venture on her shuttle diplomacy; if 
she solves the conflict and a Palestinian state is established, he 
will cut the ribbon and host the ceremonies.  But Rice's freedom has 
its limitations.  Bush is not allowing her to pressure Israel's 
Prime Minister.  The assumption that nothing will come of the 
Olmert-Abbas bi-weekly meetings has brought convergence [a.k.a. 
realignment] back into the picture.... How can Rice pay Olmert back 
for his intransigence?  Israeli experts see one weakness: talks on 
increasing U.S. military assistance to Israel.  Rice and her people 
can stall the process bureaucratically to signal her displeasure. 
It will be interesting to see whether they will do this, or respect 
the presidential prohibition on pressuring Israel." 
 
IV.  "Strong Hand Needed" 
 
Conservative columnist Yosef Harif wrote in the popular, pluralist 
Maariv (3/28): "The Bush adinistration, which has so far adhered to 
the Roadmap, does not entriely rule out the Saudi/Arab initiative 
out of regional American interests.  Some members of the 
administration see it as a basis for negotiations between Israel and 
the Arabs.  Even some Israelis called to demonstrate a positive 
approach toward that initiative.  A scrutiny clarifies that only the 
Palestinians tend to benefit from it and that the plan is entirely 
bad for Israel.  No Israeli government would have accepted the tough 
demands included in the Saudi imitative.  The prevalent spirit in 
the Arab counties is that the Israeli Prime Minister is weak and 
that he can therefore be pressured.  Olmert will be able to earn 
esteem if he proves that he is not weak, and if he strongly rejects 
the plan." 
 
¶V.  "Family Feud" 
 
Senior Middle East affairs analyst Zvi Bar'el wrote in Ha'aretz 
(3/28): "[Due to disputes between Arab states], one could list all 
the member countries [of the Arab League] and explain why, given 
each option, Rice could meet with only ... four [in Aswan on 
Saturday].  As a result, Rice, and anyone else waiting for the 
outcome of the Riyadh summit, will apparently have to make do with 
the 'ratification of the Saudi initiative.'  No innovations, no 
corrections, no updating.... But Saudi Arabia has another account to 
settle with Israel and Washington, in the wake of February's Mecca 
agreement.  This led to the establishment of the Palestinian unity 
government, which Israel does not recognize.  The agreement was the 
result of a Saudi effort, and now the Arab citizen is waiting to see 
how Saudi Arabia will treat the agreement it birthed.  Will it 
succeed in breaking the siege against Palestine and thus in 
annulling the Quartet's decisions?  Or will it propose an alternate 
deal: cooperation with the Palestinian government in return for a 
resolute Arab stance on Iran and cooperation over Iraq?" 
 
VI.  "We Have Not Yet Said the Last Word" 
 
Former Israeli negotiator Gilad Sher wrote in Ha'aretz (3/28): "The 
[Israeli] government's position is right: The Palestinian government 
is required to recognize Israel, respected signed agreements, and 
cease terror.  But that stance should not prevent dialogue.... In a 
controlled, continuous, and real dialogue process with the moderate 
Palestinians, headed by Abu Mazen, one can and must advance toward a 
permanent solution -- two states for two nations.... At this time, 
there is no logic in a total boycott stifling the Palestinians 
because of Hamas's stance.... Only if those negotiations fail after 
sincere, continuous efforts, the government of Israel will have to 
protect its Jewish, Zionist, and democratic identity -- in 
accordance with its own judgment." 
 
JONES