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UNCLAS TEL AVIV 000641 
 
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: 
-------------------------------- 
 
¶1.  Mideast 
 
¶2.  Israel-Germany Relations 
 
¶3.  Global Stock Exchange 
 
------------------------- 
Key stories in the media: 
------------------------- 
 
Ha'aretz reported that Israel and Egypt are conducting intensive 
negotiations in an effort to reach a long-term cease-fire in the 
Gaza Strip, which would include reopening the Rafah border crossing 
between Gaza and Egypt.  Amos Gilad, head of the Defense Ministry's 
political-security bureau, visited Cairo on Tuesday for the second 
time in a week to meet with senior Egyptian officials, who are 
mediating between Israel and Hamas on this issue.  Ha'aretz reported 
that among others, Gilad apparently met with Egyptian intelligence 
chief Omar Suleiman, who has been postponing a planned visit to 
Israel for the past three weeks.  It could be that he will come only 
after a deal is finalized.  In exchange for a cease-fire, Hamas is 
demanding that the economic siege of Gaza be lifted. Israel 
apparently opposes a full lifting of the siege, but might agree to a 
partial reopening of the Rafah crossing.  Reopening Rafah -- 
something the U.S. has been urging Israel to agree to, at Egypt's 
behest -- would mean bringing back the European monitors who 
abandoned it when Hamas seized control of the Strip last summer. 
Hamas is demanding that its own people be present at the crossing, 
but would apparently settle for a low-profile presence, with primary 
responsibility for the border being given to the security services 
subordinate to PA Prime Minister Salam Fayyad.  Ha'aretz quoted 
defense sources as saying that Israel has presented relatively 
hard-line positions at the talks with Egypt, and that Defense 
Minister Ehud Barak gave Gilad very little negotiating leeway. 
Israel's estimate is that Hamas is currently interested in a 
relatively long-term cease-fire, because it is still recovering from 
the heavy fighting earlier this month, in which dozens of its people 
were killed and its store of rockets depleted.  Ha'aretz reported 
that senior U.S. officials recently told their Israeli counterparts 
that Israel must do everything in its power to ensure that its 
relationship with Egypt is not undermined by the fighting in Gaza 
and the ongoing arms smuggling across the Gaza-Egypt border, which 
 
Israel has accused Egypt of not doing enough to stop.  Ha'aretz 
reported that during a recent visit to Cairo and Jerusalem, 
Assistant Secretary of State David Welch told Gilad that the 
Egyptians are "more willing than ever before to find a joint 
solution to their problem with Israel," and therefore, "Israel must 
accelerate the dialogue with them, in order to end the crisis." 
Ha'aretz reported that in addition to urging Israel to reopen Rafah, 
the U.S. is also urging it to accede to another Egypt demand -- to 
station more military personnel (as opposed to regular policemen) 
along its border with Gaza.  The Jerusalem Post quoted defense 
officials as saying that DM Barak is leaning towards accepting a 
deployment of PA forces at the Gaza crossings. 
 
Visiting U.S., Senator and Republican presidential candidate John 
McCain was quoted as saying on Tuesday in an interview with The 
Jerusalem Post that the success of Hamas and Hizbullah in the region 
is not only a danger for Israel, but also a threat to U.S. national 
interests.  He was quoted as saying that Hamas and Hizbullah want to 
destroy everything that Israel, the U.S., and the West hold dear. 
He was also quoted as saying that the U.S. must not dictate to 
Israel terms for peace.  Ha'aretz quoted him as saying at a meeting 
with President Shimon Peres that he was concerned by Iran's negative 
influence on the region -- namely, the fact that it trains, 
finances, and otherwise assists radical groups -- and that his 
concern had merely been heightened by his current tour of the 
region.  Ha'aretz quoted him as saying in Jordan: "I support 
Jerusalem as the capital of Israel."  Leading media reported that 
McCain will visit Sderot today. 
 
Maariv reported that Attorney-General Menachem Mazuz has approved 
new engagement rules.  According to the new regulations, sniper fire 
at Palestinians who riot or damage the security fence -- including 
in the Jerusalem area -- has been permitted, identical to the rules 
of engagement for the West Bank.  Maariv quoted anti-fence activists 
as sayng that this constitutes apartheid. 
 
In what Yediot called a "tranquilizer injection," all media reported 
that Federal Reserve Chairman Ben Bernanke lowered cut the federal 
funds rate from 3 percent to 2.25 percent.  The media noted a 
subsequent positive trend in the U.S. and around the world.  Media 
reported that Israeli economists advocate cutting interest rates in 
Israel as well.  Israel Radio quoted Manufacturers Association 
Chairman Shraga Brosh as saying that such a move is needed to 
prevent speculation against the shekel.  Ha'aretz quoted Bank of 
Israel Governor Stanley Fischer as saying on Tuesday in an interview 
with Bloomberg that the central bank would not intervene in the 
future in foreign currency markets without announcing it first.  The 
shekel continues to weaken: on Tuesday a U.S. dollar was worth 3.389 
shekels. 
 
All media reported that German Chancellor Angela Merkel told the 
Knesset on Tuesday that her countrymen's hearts were filled with 
shame over the Holocaust and that her government would stand with 
Israel against any threat -- especially a nuclear Iran. 
 
All media reported that on Tuesday Meretz MK Haim (a.k.a. Jumes) 
Oron defeated MKs Ran Cohen and Zahava Gal-On with a wide margin to 
become the new Meretz leader.  Incumbent Meretz Chairman Dr. Yossi 
Beilin endorsed Oron.  Kadima and the Labor Party called on Oron to 
join the government; however, Oron rejected the idea and criticized 
Labor Party Chairman and Defense Minister criticized Barak, saying 
that he cannot pretend to be the leader of the peace camp. 
 
Media reported that at least four members of Islamic Jihad were 
reported injured on Tuesday in an IDF air strike near Beit Lahiya in 
the northern Gaza Strip.  According to Palestinian sources, a dozen 
Palestinians were injured in the incident. 
 
The Jerusalem Post cited assessments in Jerusalem, according to 
which Russian FM Sergei Lavrov may carry a message fro Syrian 
President Bashar Assad when he arrives here on Thursday. 
 
Ha'aretz and other media reported that on Monday Switzerland signed 
a huge deal for the supply of Iranian natural gas to Europe. 
Ha'aretz reported that the American Embassy in Berne published a 
statement on Monday denouncing the deal, saying it sent "precisely 
the wrong message at a time when Iran continues to defy UN Security 
Council resolutions."  Even if the deal does not violate the letter 
of UN sanction, the statement added, it "violates the spirit of the 
sanctions."  Ha'aretz reported that a Swiss journalist who covered 
the deal and spoke on condition of anonymity told the newspaper that 
the U.S. had tried repeatedly to stop it, but that "Switzerland 
feels that it is backed by the EU, and by the real needs of its 
residents." 
 
Israel Radio reported that Hamas is ready to resume talks with Fatah 
on the basis of an initiative from Yemen, according to which Hamas 
would give up control of the Gaza Strip and elections in the 
Palestinian areas would be moved up. 
 
Israel Radio quoted far-Right Rabbi Shalom Dov Wolpe of Chabad as 
saying that Israel is an "enemy state." 
 
Ha'aretz reported that a report on racism on Israel, set to be 
released today, found that Israel's Jewish community increasingly 
supports the delegitimization, discrimination, and even deportation 
of Arabs.  The report was prepared by Mossawa, the Advocacy Center 
for Arab Citizens of Israel.  Mossawa is supported by the Human 
Rights Program of the European Commission and the UN Democracy 
Program.  Maariv reported that today, for the first time, the High 
Court of Justice will debate the issue of ethnic profiling at Ben 
Gurion Airport. 
 
Ha'aretz reported that 70 Arab and Jewish community leaders met last 
weekend to promote a plan to turn the scenic Sakhnin Valley in 
northern Israel into a model of intercommunal cooperation rather 
than strife. 
 
Israel Radio reported that Israeli authorities prevented senior PA 
official Rawhi Fattuh from bringing 2,000 cellular phones into the 
PA from Jordan.  Fattuh holds a VIP permit delivered by the GOI, 
which the Civil Administration is now considering revoking, as well 
as those of other senior Palestinians. 
 
Leading media reported that Tourism Ministry Director-General Shaul 
Zemach announced on Tuesday during the largest tourism fair in 
Russia that an accord due to be signed today will eliminate the 
tourist visa requirement for Russian and Israeli travelers.  The 
agreement, to be signed by Russia and Israel's tourism ministers, 
will come into effect within a few months. 
 
The Jerusalem Post presented the results of Tel Aviv University's 
Peace Index poll conducted on March 3-4, 2008: Although Jewish 
Israelis are divided on how to react to the rocket fire from the 
Gaza Strip, most prefer military means over a cease-fire based on a 
dialogue with Hamas. 
 
------------ 
¶1.  Mideast: 
------------ 
 
Summary: 
-------- 
 
Arab affairs correspondent Smadar Perry wrote in the 
mass-circulation, pluralist Yediot Aharonot: "This is precisely the 
moment when Foreign Minister Livni should take advantage of her good 
ties with the ruler of Qatar and his cousin [the country's Prime 
Minister and Foreign Minister], pick up the phone and demand an 
assurance of balanced coverage [on Aljazeera-TV]." 
 
Block Quotes: 
------------- 
 
"Double Face in the Mirror" 
 
Arab affairs correspondent Smadar Perry wrote in the 
mass-circulation, pluralist Yediot Aharonot (3/19): "Aljazeera-TV, 
like the emirate of Qatar, speaks in two tongues.  On one hand, 
diligent journalists pursue exclusive stories.  On the other hand, 
they are pushed to conduct themselves according to an agenda: Osama 
bin Ladin against the Americans, Saddam Hussein against the 
occupation, Nasrallah against Israel, Khaled Mashal in favor of 
suicide terrorism and terror attacks against Israel.  Qatar gives a 
warm home to the leadership of Hamas and flirts with the ayatollahs 
from Tehran, but it also houses the largest American base in the 
region and an Israeli diplomatic mission.  And so, on the one hand 
Aljazeera-TV made a decision, unprecedented in the Arab media, to 
put Israeli spokesmen on the screen, and on the other hand, they 
harass them with argumentative questions.  Regular viewers of the 
channel cannot fail to reach the sad conclusion that only few people 
on our side can come out of the adventure with dignity.  Either the 
respondents are chosen maliciously, or else vital air time is 
slashed from their statements.  Israel has a long score to settle 
with the station's double tongue.... It is hard to find elation in 
Jerusalem about the decision to boycott Aljazeera-TV (it is in fact 
a semi-boycott).  Both sides have come out of this affair battered. 
While Jerusalem grumbles, the managers of Aljazeera-TV are alarmed: 
It is not simple to shuttle between the scene of the events in the 
territories to the studios in Jerusalem under the shadow of a 
collective punishment.  This is precisely the moment when Foreign 
Minister Livni should take advantage of her good ties with the ruler 
of Qatar and his cousin [the country's Prime Minister and Foreign 
Minister], pick up the phone and demand an assurance of balanced 
coverage.  This is also the moment to conduct quiet talks with the 
crews in the field, and then to seize the opportunity and recruit 
the top PR experts.  We should remember that at the edge of the 
Aljazeera-TV images hangs a revolving mirror: On one side, we are 
seen by the Arab world, and on the other side we are invited to look 
at ourselves." 
 
----------------------------- 
¶2.  Israel-Germany Relations: 
----------------------------- 
 
Summary: 
-------- 
 
The independent, left-leaning Ha'aretz editorialized: "Germany is 
currently Israel's best friend in Europe, and perhaps even in the 
world, excepting the United States.... What to many Israelis looks 
today like a 'normal' relationship remains, in the eyes of Merkel's 
Germany, a 'special' relationship that requires constant investment 
-- 'in words and deeds.'" 
 
Block Quotes: 
------------- 
 
"A Special Normalcy" 
 
The independent, left-leaning Ha'aretz editorialized (3/19): 
"[German Chancellor Angela Merkel's] visit did not generate 
front-page headlines here; in the public discourse, Germany has 
become an almost 'normal' partner of the Jewish state.  How can this 
be explained? In the first place, Merkel's visit was not the first 
visit to Israel by a German chancellor.... Second, and more 
importantly, Germany is currently Israel's best friend in Europe, 
and perhaps even in the world, excepting the United States.  It 
stands out in the European Union for being willing to support Israel 
under difficult circumstances and for working to balance anti-Israel 
resolutions in international forums.... Germany was the first to 
stand beside Israel during the Gulf War, it built submarines for 
Israel at no cost, and it has worked tirelessly to help Israel's 
captives and MIAs.  Third, Merkel herself has a special relationship 
with Israel, different from that of some of her predecessors.  Her 
visit here is her third of the last two years.  She feels a deep 
responsibility toward Israel, both because of the Holocaust and 
because of the actions of East Germany in which she grew up, whose 
hostility toward Israel was exceptional even by Soviet-bloc 
standards.  This 'consistent and loyal friend of Israel,' as Prime 
Minister Ehud Olmert termed her in the Knesset on Tuesday, is the 
'architect of the upgraded relationship' between the two 
countries.... In her speech to the Knesset, which she opened and 
closed in Hebrew, Merkel promised to work to halt Iran's 
nuclearization, to fight anti-Semitism, and to strive for closer 
relations between Israel and the EU.  She also expressed solidarity 
with Israel's efforts to cope with terror attacks and Qassam 
rockets, and above all, she stressed her country's 'everlasting 
responsibility' for the Holocaust.  What to many Israelis looks 
today like a 'normal' relationship remains, in the eyes of Merkel's 
Germany, a 'special' relationship that requires constant investment 
-- 'in words and deeds.'" 
 
-------------------------- 
¶3.  Global Stock Exchange: 
-------------------------- 
 
Summary: 
-------- 
 
Chief Economic Editor Sever Plotker opined in the mass-circulation, 
pluralist Yediot Aharonot: "A one-percent interest cut [in U.S. 
interest rates] would ... have signaled pressure and weakness." 
 
Economic Editor Rafi Rosenfeld wrote in the popular, pluralist 
Maariv: "The Americans have been committing suicide with this mad 
consumption.... But others also pay this price on the way -- they 
really don't deserve it: Israel, for instance." 
 
Block Quotes: 
------------- 
 
¶I.  "On the Right Track" 
 
Chief Economic Editor Sever Plotker opined in the mass-circulation, 
pluralist Yediot Aharonot (3/19): "The financial market had been 
waiting for the first signal from the Federal Reserve.  It 
eventually came: A one-percent interest cut would have achieved an 
opposite result.  It would have signaled pressure and weakness. 
Cutting the interest rate by 0.75% -- less that the pessimistic 
forecast -- was interpreted as a sign that in Bernanke's view, the 
financial crisis is no longer extreme.  What's right for Bernanke is 
correct for Bank of Israel Governor Stanley Fischer, too.  Professor 
Fischer understands that the problem of flossing the market with too 
cheap money.... This is why he refrained from intervening in foreign 
trade on Tuesday.  In his interest-rate moves, [Governor Fischer] 
wishes to achieve an important goal: to prevent the Israeli economy 
from slipping from a slowdown into a recession, and from a recession 
to a depression.  Fischer views economic growth as the key to 
guaranteeing Israel's future.  To him, it is the most important 
thing." 
 
II.  "Uncle Sam's Mortgage Loan" 
 
Economic Editor Rafi Rosenfeld wrote in the popular, pluralist 
Maariv (3/19): "Over the past few months a parade of sales of 
hi-tech companies [to giant U.S. firms] has been going on in 
Israel.... The United States, the largest economy in the world, 
which in the past financed a large part of Israel's activity, is the 
party that's halting Israel's growth with a screech.  This happens 
before of the lifestyle in the States.... The Americans have been 
committing suicide with this mad consumption.... There is poetic 
justice in the current collapse.  Those who have been living a 
spendthrift life over the past few years are now paying the price. 
But others also pay this price on the way -- they really don't 
deserve it: Israel, for instance." 
 
JONES