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P 291052Z MAY 08
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UNCLAS TEL AVIV 001133 
 
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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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.  PM Olmert's Alleged Corruption Affair 
 
¶2.  Mideast 
 
------------------------- 
Key stories in the media: 
------------------------- 
 
All media led with Defense Minister Barak's call for PM Olmert to 
"detach himself from the day-to-day leadership of the country." 
Media reported that Barak made the announcement after consulting 
with a small group of advisors while leaving others in his Labor 
party surprised and angry.    Ha'aretz reported that Olmert urged 
Kadima ministers to give him time to prove his innocence.  Yediot 
quoted him as saying that he is being lynched.  Maariv reported that 
in private conversations with Kadima members Olmert requested an 
honorable exit.  The media reported that FM Tzipi Livni refrained 
from relating directly to this week's events (Talansky's testimony 
and Barak's statements).  However, she was quoted as saying 
yesterday: "The state has a vision and values that obligate its 
citizens and also its leaders."  She added: "Before we can be a 
light unto the nations, it is appropriate that we act within our own 
house to show the light."  Yediot reported that she told associates 
in private that "Olmert has lost his moral authority."  While a few 
Kadima MKs, such as Zeev Elkin and Marina Solodkin, demanded 
Olmert's ouster, most, including all senior ministers have taken a 
wait and see approach.  Associates to Olmert were quoted in Ha'aretz 
as saying that Barak learned nothing from Livni (referring to her 
call for Olmert to resign after the Winograd report) and that nobody 
in Kadima would taken any action against him. .  The media cited 
various senior politicians from different factions as saying that 
the affair will end in early elections being held between November 
2008 and January 2009.  Maariv noted that an overthrow of Olmert is 
almost impossible under Kadima's rules. 
 
All media reported that today Attorney General Menachem Mazuz is 
likely to urge the police and senior Justice Ministry officials to 
step up the corruption investigation against Olmert.  Ha'aretz 
quoted sources close to the probe as saying that money laundering -- 
an offense that carries a maximum sentence of 10 years in prison -- 
appears to be the primary focus of the investigation..  The sources 
were quoted as saying that an indictment on this charge would also 
lead to indictments on fraud and breach of trust because of Olmert's 
status as a public official.  Ha'aretz wrote that the police are 
also seeking to establish a basis for a bribery charge based on the 
timing of money Morris Talansky said he gave Olmert and alleged 
steps Olmert took to further Talansky's business interests. 
Ha'aretz reported that the police and the State Prosecutor's Office 
have said over the past few days that they have significant evidence 
against Olmert that has not yet been made public. 
 
Speaking on IDF Radio yesterday, Olmert adviser Tal Zilberstein -- 
previously Barak's assistant -- said that Barak was not entitled to 
make his remarks, to which Barak replied during his press conference 
that he was recommending that Zilberstein turn to the police with 
relevant files.   Like other media, Maariv reported that former 
prime ministers Barak, Sharon, and Netanyahu used the same "cash 
machine" (gift practice) as Olmert. 
 
Israel Radio quoted Palestinian officials as saying last night that 
they intend to continue negotiations with Prime Minister Olmert's 
government at least until Olmert's political fate is decided.  They 
also expressed fears that new elections in Israel would lead to a 
freeze in the talks.  The Jerusalem Post reported that senior Hamas 
leader Mahmoud Zahar told a Post reporter and other Israeli 
journalists in Qatar that Israel is now responsible for holding up 
deals for a Gaza cease-fire, Gilad Shalit's release, and an 
arrangement to open the Rafah crossing. 
 
Ha'aretz cited a report yesterday by Cham-Press, an independent 
Syrian news agency affiliated with the Damascus regime, according to 
which Israel and Syria are expected to resume the Turkish-brokered 
talks within a few days.  Citing Syrian sources, Cham-Press said 
Damascus is examining the results of the first round of indirect 
talks in Istanbul last week.  Damascus assumes that the talks will 
be in the same format as before, with Turkish mediation.  Israel 
Radio cited the London-based Al Hayat quoting Syrian sources as 
saying that if Olmert overcomes his problems, the talks will resume 
next week. 
 
Ha'aretz reported that Nobel Peace Prizewinner Archbishop Desmond 
Tutu criticized Israel's refusal to allow him entry to the country, 
in his role as head of the UN special committee to investigate the 
November 2006 incident in Beit Hanun where 19 Palestinians were 
killed by Israeli fire.  In a telephone interview with Ha'aretz 
after he met with Hamas PM Ismail Haniyeh in Gaza, Tutu was quoted 
as saying that he was disappointed that he was not allowed to visit 
Sderot and meet the victims of the Qassam rocket attacks there. 
 
The Jerusalem Post reported that tapes of former U.S. President 
Lyndon Johnson's Oval Office conversations, released to the public 
for the fist time yesterday, reveal that LBJ had a "personal and 
often emotional connection to Israel." 
 
The media reported that yesterday the Knesset's House Committee 
nixed the agreement between tycoon politician Arkady Gaidamak and 
the Knesset members who split from the Pensioners' Party. 
 
Ha'aretz reported that unemployment in Q1 was at its lowest since 
1995 -- 6.3%. 
 
Ha'aretz and The Jerusalem Post reported that Israel has dispatched 
a third disaster relief team to areas of Myanmar devastated by 
Cyclone Nargis earlier this month. 
 
Israel Hayom printed the results of a New Wave Research poll 
conducted last night among 500 members of the Hebrew-speaking Jewish 
population: 
 
Q: On the assumption that Ehud Olmert resigns his post, what would 
you preferQforming a new government in the current Knesset without 
elections, or going to new elections? 
New elections: 62%; new government: 25%; undecided: 13%. 
Q: In your opinion, should Prime Minister Ehud Olmert resign his 
post? 
Yes: 70%; no: 17%; undecided: 13%. 
 
------------------------------------------ 
¶1.  PM Olmert's Alleged Corruption Affair: 
------------------------------------------ 
 
Summary: 
-------- 
 
Political and parties columnist Sima Kadmon wrote in the 
mass-circulation, pluralist Yediot Aharonot: "This time, it would 
appear, nothing will help.  Even if Olmert brings comprehensive 
peace with Syria and Iran together, itQs a done deal.  We are going 
to elections." 
 
The independent, left-leaning Ha'aretz editorialized: "Narrow 
partisanship and personal considerations about who will gain and who 
will lose from Livni (or any other Kadima representative) becoming 
prime minister until the elections must be pushed aside in favor of 
what is best for the state." 
 
The conservative, independent Jerusalem Post editorialized: "This 
newspaper stands by its oft-stated belief that Olmert should have 
vacated the Prime Minister's Office in the wake of the Second 
Lebanon War.... The fact that he is now deeply implicated in an ugly 
corruption scandal ... only further disqualifies him from that most 
critical of offices." 
 
Editor-in-Chief Amnon Lord wrote in the editorial of the 
nationalist, Orthodox Makor Rishon-Hatzofe: "[Ehud] Barak [may have] 
made a small step that could herald a giant stride for Israel." 
 
Block Quotes: 
------------- 
 
¶I.  "A Done Deal" 
 
Political and parties columnist Sima Kadmon wrote in the 
mass-circulation, pluralist Yediot Aharonot (5/29): "Barak refrained 
from saying even a single word about the severe things revealed in 
TalanskyQs testimony, and did not comment at all on the public and 
moral aspects barring the prime minister from continuing in his 
post.... Barak also failed to set a timetable....  But he knows full 
well that he will not be given any rest.... To Barak's credit, it 
can be said that elections are the last thing he needs now....  When 
he says that he will not stand with a stopwatch, he means that he 
will give the members of Kadima time to choose their leadership and 
present an alternative government.... [But] not everyone in the 
Labor Party agrees that replacing Olmert with Livni is the right 
move.  Why enthrone Livni and give her eternal life, people there 
argue.  After all, these are two rival parties.  Besides, everyone 
realizes that there is no real peace process on the table.  This is 
not an opportunity for a peace agreement that the Labor Party would 
be accused of missing.  And if so, there is no reason not to go for 
elections now.   What does all this mean?  Very simple: elections in 
November.  Why?  Because the Prime Minister does not intend to take 
leave, resign or declare incapacitation.... This time, it would 
appear, nothing will help.  Even if Olmert brings comprehensive 
peace with Syria and Iran together, itQs a done deal.  We are going 
to elections." 
 
II.  "After Olmert" 
 
The independent, left-leaning Ha'aretz editorialized (5/29): "Ehud 
Olmert's term as prime minister, which began with Ariel Sharon's 
coma, is about to end with Morris Talansky's testimony.... Olmert 
can no longer stand at the helm of Israel's government.  The 
practical question that must now be asked is: What will come after 
Olmert?.... Yesterday the chairman of the Labor Party, Ehud Barak, 
gave political validity to the discussion of alternatives to Olmert, 
by saying that the ball is now in Kadima's court.  The alternatives 
include setting up another government with the participation of 
Labor but with another Kadima representative at its head, or holding 
early elections.  A third alternative, setting up a completely 
different government in the current Knesset, is not realistic 
because 61 Knesset members will not vote for it.  Barak is right to 
prefer the first alternative.  Political and governmental stability 
benefit Israel more than premature elections.... [An] orderly move 
would be a transfer of the premiership to Livni [she is noext in 
line] as Kadima prepares to elect a permanent leader, especially 
because a temporary incapacitation and an interim prime minister are 
effective only for three months.... Narrow partisanship and personal 
considerations about who will gain and who will lose from Livni (or 
any other Kadima representative) becoming prime minister until the 
elections must be pushed aside in favor of what is best for the 
state." 
 
III.  "Further Disqualification" 
 
The conservative, independent Jerusalem Post editorialized (5/29): 
"Having survived the Winograd Commission report, which exposed his 
government's mishandling of the Second Lebanon War, and having held 
on as one perturbing investigation after another raised questions 
about his personal and professional probity, that our tenacious 
prime minister will hang on a while longer is a possibility which 
cannot be discounted.... A prime minister whose flaws were bitterly 
exposed by the stewardship of the Second Lebanon War ought to have 
stepped down in the wake of that war's failures.  That he has 
subsequently become embroiled in an accumulation of corruption 
investigations only further depletes his ability to safeguard the 
nation in this most demanding of jobs.... This newspaper stands by 
its oft-stated belief that Olmert should have vacated the Prime 
Minister's Office in the wake of the Second Lebanon War.  Needless 
to say, therefore, the fact that he is now deeply implicated in an 
ugly corruption scandal, and is not doing everything he can to 
ensure all evidence is made available as rapidly as possible to 
clear his name, only further disqualifies him from that most 
critical of offices." 
 
IV.  "Whatever May Be, Barak Is No Leader" 
Editor-in-Chief Amnon Lord wrote in the editorial of the 
nationalist, Orthodox Makor Rishon-Hatzofe (5/29): "It is likely 
that in spite of everything, [Ehud] Barak made a small step that 
could herald a giant stride for Israel.... Those who believe in the 
response of Israel's body politic to Barak's announcement yesterday 
must understand that there still is hesitation to explicitly say 
that Olmert must go home.  Instead words such as 'leave,' 
'incapacitation' or 'suspension' are used.... At the end of the day 
there will be no choice for Israeli politics other than early 
elections at the soonest possible moment." 
 
------------ 
¶2.  Mideast: 
------------ 
 
Summary: 
-------- 
 
Maj. Gen, Danny Rothschild, President of the Council for Peace and 
Security, wrote in the conservative, independent Jerusalem Post: "A 
peace accord is our most important strategic asset... We need peace 
with security and for that we also need statesmen who can think 
strategically." 
 
Very liberal columnist Meron Benvenisti, deputy mayor of Jerusalem 
from 1971 to 1978, wrote in the independent, left-leaning Ha'aretz: 
"The system of divide and conquer ... will enable Israeli control 
over the long term.  Its cornerstone is the isolation of Gaza.  This 
is the way to view the cease-fire in Gaza, and then we will see who 
is the true right or left." 
 
Block Quotes: 
------------- 
 
¶I.  "Peace Could Be Our Strategic Asset" 
 
Maj. Gen, Danny Rothschild, President of the Council for Peace and 
Security, wrote in the conservative, independent Jerusalem Post 
(5/29): "A government with a vision would understand that there is 
no future for separate bilateral negotiations and would publicly 
suggest entering an all-inclusive peace process based on the Arab 
League's peace initiative, one of whose principles is to involve 
those in the secular Arab world who are concerned about the 
strengthening of radical Islam.  It is high time that we stopped 
getting dragged in and start initiating.... Whatever we fail to do 
today we will regret in just a few years from now. Just as we 
understand today that the gratuitous obstinacy we displayed with 
Hafez Assad during the final years of his rule and with Mahmoud 
Abbas four years ago have brought about less than desirable terms 
for negotiations today, in three or five years from now we will 
regret missing the window of opportunity that presented itself in 
¶2008.  A peace accord is our most important strategic asset, and the 
strong peace with Egypt and Jordan proves this.  But instead of 
promoting that trend, it appears the current decade will be the 
first in three where the Israeli public will not even be able to 
dream of peace, and this period will be remembered as a missed 
opportunity to live at peace with our neighbors.  We need peace with 
security and for that we also need statesmen who can think 
strategically." 
 
II.  "A Lull of No Return" 
 
Very liberal columnist Meron Benvenisti, deputy mayor of Jerusalem 
from 1971 to 1978, wrote in the independent, left-leaning Ha'aretz 
(5/29): "[Gaza's] accessibility to the outside world, by land and 
sea, and an efficient and uncorrupt government are likely to turn 
that piece of land into the Palestinian state.  The other 
Palestinian canton, whose area is getting smaller and smaller due to 
the spread of the settlements, now has 2 million people and is 
considered the heartland of the Palestinian people.  But it is 
quickly turning into an adjunct of Israel for all practical 
purposes, and it is experiencing political processes similar to 
those experienced by Israeli Arabs since 1948.  These processes will 
be exposed when the Palestinian Authority falls apart on its own, 
once the Gaza cease-fire gives it a fatal blow.  This is the system 
of divide and conquer that will enable Israeli control over the long 
term.  Its cornerstone is the isolation of Gaza.  This is the way to 
view the cease-fire in Gaza, and then we will see who is the true 
right or left." 
 
JONES