VZCZCXYZ0005
PP RUEHWEB

DE RUEHTV #0996/01 1271031
ZNR UUUUU ZZH
P 061031Z MAY 08
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC PRIORITY 6584
RHEHAAA/WHITE HOUSE WASHDC PRIORITY
RHEHNSC/WHITE HOUSE NSC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY
RUEAHQA/HQ USAF WASHINGTON DC PRIORITY
RUEADWD/DA WASHDC PRIORITY
RHMFIUU/CNO WASHINGTON DC PRIORITY
RHEFDIA/DIA WASHINGTON DC PRIORITY
RUEKJCS/JOINT STAFF WASHDC PRIORITY
RUEHAD/AMEMBASSY ABU DHABI PRIORITY 3790
RUEHAS/AMEMBASSY ALGIERS PRIORITY 0429
RUEHAM/AMEMBASSY AMMAN PRIORITY 4070
RUEHAK/AMEMBASSY ANKARA PRIORITY 4595
RUEHLB/AMEMBASSY BEIRUT PRIORITY 3805
RUEHEG/AMEMBASSY CAIRO PRIORITY 2084
RUEHDM/AMEMBASSY DAMASCUS PRIORITY 4554
RUEHLO/AMEMBASSY LONDON PRIORITY 1424
RUEHFR/AMEMBASSY PARIS PRIORITY 1868
RUEHRB/AMEMBASSY RABAT PRIORITY 8416
RUEHRO/AMEMBASSY ROME PRIORITY 5897
RUEHRH/AMEMBASSY RIYADH PRIORITY 0807
RUEHTU/AMEMBASSY TUNIS PRIORITY 4926
RUCNDT/USMISSION USUN NEW YORK PRIORITY 6876
RUEHJM/AMCONSUL JERUSALEM PRIORITY 9661
RHMFISS/CDR USCENTCOM MACDILL AFB FL PRIORITY
RHMFISS/COMSOCEUR VAIHINGEN GE PRIORITY
RHMFIUU/COMSIXTHFLT  PRIORITY

UNCLAS TEL AVIV 000996 
 
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: 
------------------------- 
 
Ha'aretz reported that Israel and the PA are both unhappy over a 
request by Secretary Rice that they publish a memorandum of 
understanding on the progress of final-status negotiations to date 
before President Bush arrives next week.  Ha'aretz quoted a GOI 
source as saying that Rice wants such a document to make it clear to 
the international community that the negotiations are indeed 
progressing.  Prime Minister Ehud Olmert and PA President Mahmoud 
Abbas held another meeting yesterday after which the government 
source said "there has been great progress on the issue of the 
borders of the Palestinian state."  Other leading media quoted 
"sources in Jerusalem" as making similar comments.  Ha'aretz's 
source was quoted as saying that there had also been considerable 
progress on the issue of security arrangements.  However, Ha'aretz 
reported that Rice told Israeli officials during her visit that even 
though both sides had reported progress, "the world doesn't believe 
it."  The fact that no concrete document has yet emerged from the 
negotiations, combined with the lack of dramatic progress in 
improving the daily lives of Palestinian residents of the West Bank, 
encourages disbelief, she argued, and this is liable to undermine 
the process.  She therefore suggested formulating a memorandum of 
understanding that would outline the general principles to which the 
parties have agreed -- mainly on the issue of borders, but also on 
the other core issues. 
 
Ha'aretz reported that both the Israeli and Palestinian officials 
with whom the Secretary met expressed reservations about the idea. 
"The work of drafting such a document will merely halt the progress 
and the momentum," argued one Israeli official.  "Instead of 
negotiating, we will start dealing with commas and periods in the 
draft and try to steal corners from each other," added another. 
"Both Israel and the PA say the talks have made significant 
progress, but both would prefer to keep this progress under the 
media's radar for now.  The main progress has been on the issue of 
borders -- the fate of the settlement blocs, territorial exchanges 
and the 'safe passage between the West Bank and Gaza.  Jerusalem has 
not yet been seriously discussed, and on the refugees, both sides 
have merely presented their initial -- and highly divergent -- 
stances."  Yediot reported that Olmert's bureau deviated from its 
norm yesterday and reported on actual progress in the negotiations 
with the Palestinians on the issue of borders and security 
arrangements.  Ha'aretz quoted Palestinian sources as saying that 
during her recent visit, Rice pressed both parties to finalize an 
agreement on borders quickly, as that is the issue which all sides 
view as easiest to resolve.  According to these sources, Israel 
initially expressed a willingness to cede 90% of the West Bank to 
the Palestinians, while the PA demanded at least 98%.  In 
particular, Israel wants to retain the major settlement blocs and 
the Jordan Valley, but the PA rejects these demands.  Though some 
progress has been made, the Palestinian sources said they saw no 
chance of resolving these disputes in the 10 days remaining before 
Bush's visit.  The Jerusalem Post quoted PA officials as saying on 
Monday that Israel was offering the Palestinians nothing more than a 
"mini-state" of cantons.  Makor Rishon-Hatzofe quoted Israeli 
diplomatic sources as saying that the dialogue with the Palestinians 
is one-sided: whereas the Palestinians voice their claims, Israelis 
"mostly listen."  Makor Rishon-Hatzofe cited the Palestinians' claim 
that they have agreed with Israel on the borders -- the 1967 lines 
with light amendments in the settlement blocs. 
 
Ha'aretz reported that Israeli officials who met with Rice said 
their impression is that she is determined to produce an achievement 
at almost any price, given the political capital that both she and 
Bush have invested in the Palestinian issue over the last year. 
According to several media (like Ha'aretz and Israel Radio) Rice 
also expressed grave concern over the latest police investigation 
against Olmert, fearing that it would negatively affect the 
negotiations.  The media reported that the tight secrecy around 
Olmert's police investigation will continue.  Some media reported 
that a significant development in the case will take place today. 
Yediot reported that a probe by the State Comptroller triggered the 
current investigation.  Maariv and Makor Rishon-Hatzofe reported 
that Shas is not ruling out an alternative government headed by FM 
Tzipi Livni. 
 
At Monday's meeting with Abbas, Olmert also promised to keep him 
informed of the progress of Israel's indirect negotiations with 
Hamas over a cease-fire in Gaza.  Egyptian intelligence chief Omar 
Suleiman is due to come here next week to present the agreement 
Egypt has reached with the Palestinian factions and seek Israel's 
approval.  Ha'aretz reported that afterward, the cabinet will 
apparently hold a special meeting on the subject. 
Makor Rishon-Hatzofe cited the London-based Ash-Sharq Al-Awsat as 
saying that FM Livni has received a new letter from Syria regarding 
progress in negotiations between the two parties.  Makor 
Rishon-Hatzofe quoted Secretary Rice as saying in an interview with 
Ash-Sharq Al-Awsat that the U.S. would not stand in the way of 
Syrian-Israeli negotiations.  Likud leader Benjamin Netanyahu was 
quoted as sayng in an interview with Israel Hayom that the U.S. 
presented him with the cancellation of the "deposit" (the Golan) 
that the late PM Yitzhak Rabin had handed Syria. 
 
The Jerusalem Post quoted the EU's representatives to Israel and the 
PA as saying yesterday that the international community's efforts at 
trying to weaken Israel should be reevaluated.  However, they 
stopped short of recommending engagement with Hamas. 
 
Ha'aretz reported that yesterday Israel transferred 200 liters of 
diesel fuel and 30,000 liters of gasoline to the UN Relief and Works 
Agency (UNRWA) for its work in Gaza.  According to Israeli 
officials, this is enough for about a month.  UNRWA has been 
complaining for days that it lacks fuel for its operations, but 
Israel said it could not transfer more fuel until Hamas emptied the 
depot to which the fuel is delivered and thereby created space for 
new deliveries -- which it finally did yesterday. Hamas had refused 
to empty the depot for days, Israeli officials charged, thereby 
creating an artificial shortage.  However, the fuel transfer was 
interrupted after a few hours by Palestinian mortar fire on the 
depot.  Also on Monday, Israel imposed a complete closure on the 
territories, which will remain in force through Memorial and 
Independence Days (Wednesday and Thursday).  Maariv quoted a defense 
source as saying that the severity of security warnings is 
unprecedented. 
 
All media, except the ultra-Orthodox newspapers, extensively 
reported and commented on events marking Memorial Day, which will be 
commemorated from this evening through tomorrow night.   The nation 
will mourn the 22,437 servicemen and women who have fallen fell 
defending the modern land of Israel.  Over the past year, 132 
soldiers were killed in service to the state.  The Jerusalem Post 
reported that 1,634 civilians have been killed in terrorist attacks 
since 1948. 
Maariv reported that on Sunday the dissident MKs who broke off from 
the Pensioners Party signed an agreement with billionaire politician 
Arkady Gaidamak, according to which he will not be a cabinet 
minister. 
 
The Jerusalem Post reported that Jewish activists are hailing the 
 
decision by the United Methodist Church -- at its General Conference 
in Texas last week -- to abandon efforts to divest from companies 
that allegedly contribute to Israel's occupation of the West Bank. 
 
Ha'aretz reported that the Israel Philharmonic Orchestra is moving 
to organize a free concert in New York City's Central Park in 
September to celebrate Israel's 60th anniversary.  The project will 
cost $3-4 million and will come from donations. 
 
Ha'aretz reported that Robert De Niro will build one of his 
Japanese-themed Nobu hotels in Herzliya. 
 
-------- 
Mideast: 
-------- 
 
Summary: 
-------- 
 
Veteran journalist and anchor Dan Margalit wrote on page one of the 
independent Israel Hayom: "Ehud Olmert.... Please, step into the 
shadows.  The sooner you do so the better." 
 
Former Ambassador to the U.S., former Minister of Foreign Affairs, 
and former Minister of Defense Moshe Arens wrote in the independent, 
left-leaning Ha'aretz: "Some past peace agreements have served as 
invitations to war." 
 
Senior Editor and senior business commentator Nehemia Shtrasler 
wrote in Ha'aretz: "Israel's economic data on the eve of its 60th 
anniversary are quite impressive.... [But] Israel is still a highly 
unstable country, both internally and externally.  It faces major 
security threats and numerous economic and social problems." 
 
Gershon Baskin, Co-Director of the Israel/Palestine Center for 
Research and Information (IPCRI), wrote in the conservative, 
independent Jerusalem Post: " I will be very happy to see the day 
when the Palestinians have their own Independence Day to celebrate. 
That day too will be a celebration for Israel and for Zionism." 
 
Prominent Israeli-Arab journalist and editor Zuhair Andrawus wrote 
in the mass-circulation, pluralist Yediot Aharonot: "We demand that 
Israel become the country of all its citizens.  Otherwise the 
conflict between us will deepen, unfortunately, and take us to 
places that neither the Jews nor the Arabs want to reach." 
The Jerusalem Post editorialized: "No army and no economy can 
function without an adequate, secure and dependable water supply. 
This is something Israel certainly cannot boast about on its 60th 
anniversary." 
 
Block Quotes: 
------------- 
 
¶I.  "Go Forth" 
 
Veteran journalist and anchor Dan Margalit wrote on page one of the 
independent Israel Hayom (5/6): "Ehud Olmert, you have restored the 
word compassion to the public lexicon.  Good.  Be compassionate, 
then, towards your family and relatives and friends, and even 
towards yourself, and resign.  Go forth from the Prime Minister's 
Residence.... Don't make commitments in its name.  Don't commit it 
for your own sake.  It is better to finish misdeeds in private. 
Please, step into the shadows.  The sooner you do so the better." 
 
II.  "Peace at Any Price" 
 
Former Ambassador to the U.S., former Minister of Foreign Affairs, 
and former Minister of Defense Moshe Arens wrote in the independent, 
left-leaning Ha'aretz (5/6): "The Israeli government is engaged in a 
frantic search for peace -- peace with Mahmoud Abbas, even a shelf 
agreement, and peace with Syria.  That seems like the most natural 
thing in the world.... But if we have learned anything from history, 
it is that even that is not always true.  Some past peace agreements 
have served as invitations to war.... The Golan Heights was 
sovereign Syrian territory before Syria attacked Israel in the 
Six-Day War.  Does that not mean that it is only proper to return to 
the Syrians this territory they lost during the war, even if it 
means uprooting 30,000 Israelis who now live there?  But that is not 
the accepted rule of nations that come to peace agreements.  The 
aggressor nation is not entitled to all territory lost in a war. 
That would mean that there is no price for attacking a neighbor.... 
According to newspaper reports, Prime Minister Olmert already has 
informed Bashar Assad that Israel is prepared to cede the Golan 
Heights to Syria. That hasty move needs some further thought, unless 
all of Olmert's thoughts at this time are devoted to saving his 
coalition." 
 
III.  "Still Far from Economic Independence" 
 
Senior Editor and senior business commentator Nehemia Shtrasler 
wrote in Ha'aretz (5/6): "Israel's economic data on the eve of its 
60th anniversary are quite impressive.... [But] Israel is still a 
highly unstable country, both internally and externally.  It faces 
major security threats and numerous economic and social problems.... 
But [our dependence on the world, social gaps, large public sector, 
and poor education] ] are a drop in the bucket compared to the 
enormous security burden. Israel's defense budget is already large 
and oppressive, and it is expected to grow still further in the 
coming years.  No other nation in the world faces a genuine 
existential threat from a country that openly threatens it with 
annihilation.  And if, to this Iranian threat, we add the threats 
from Syria, Hizbullah, and the Palestinians, we are left with too 
many fronts for one small country.  These threats create an 
atmosphere of uncertainty and perpetual fear of the future, which 
results in reduced investment and lower growth.... Until a regional 
peace agreement has been signed, one that includes both Syria and 
the Palestinians, we will not be able to say we have achieved 
independence." 
 
IV.  "Next Year in Palestine" 
 
Gershon Baskin, Co-Director of the Israel/Palestine Center for 
Research and Information (IPCRI), wrote in the conservative, 
independent Jerusalem Post (5/6): "I will be very happy to see the 
day when the Palestinians have their own Independence Day to 
celebrate.  That day too will be a celebration for Israel and for 
Zionism.  Today being pro-Israel by definition must mean that one is 
also pro-Palestinian.  The fate and future of these two peoples are 
linked to find a way to live side-by-side in peace -- in two 
separate states.... This year on Independence Day the papers are 
full of articles about the next 60 years.  I am more concerned with 
the next year or the next two years.  If we do not find a way to 
depart from our control over the Palestinians in the next year or 
two, then in 10 or 20 years from now we will be celebrating the 
independence of the state that will emerge here through bloodshed 
and struggle -- a very different state.  It will not be a Jewish 
state.  It will not be a Zionist state.  It will not be a state 
where the Jewish people are a majority.  So on this Independence Day 
I wish wholeheartedly to all of my Palestinian friends, 'I hope that 
you too will soon be able to celebrate your independence!'" 
 
¶V.  "Between Independence and Nakba" 
 
Prominent Israeli-Arab journalist and editor Zuhair Andrawus wrote 
in the mass-circulation, pluralist Yediot Aharonot (5/6): "I feel 
absolutely no belongingness to Israel, its symbols, flag, and 
anthem.  A feeling of frustration overcomes me when the State of the 
Jews celebrates its independence.  I also believe that most Israelis 
do not wish to grant [Arabs] the feeling of belonging to the state. 
Thus, this is my homeland but Israel is not my country.  Sixty years 
have gone by.  The Israeli narrative says 'independence'; our 
narrative stresses the fact that in 1948 we underwent a catastrophe 
(nakba).  My compatriots were expelled to the neighboring Arab 
countries, where they still live in inadequate conditions.... In 
light of that gloomy situation, we are not going to make 
concessions: We demand that Israel become the country of all its 
citizens.  Otherwise the conflict between us will deepen, 
unfortunately, and take us to places that neither the Jews nor the 
Arabs want to reach." 
 
VI.  "Water Independence" 
 
The Jerusalem Post editorialized (5/6): "On the eve of Israel's 60th 
Independence Day we can take pride in the fact that this nation has 
become an irrigation pioneer and a global superpower in helping 
other countries overcome their water shortages.   Israeli 
water-management systems and desalination plants are hits worldwide. 
 Yet this proverbial shoemaker goes barefoot.  While Israel 
successfully markets desalination plants worldwide and helps other 
countries cope with their increasing thirst for potable water, at 
home all this enviable know-how is barely put to use.  The bottom 
line reason is that our government -- especially the number 
crunchers at the Treasury -- is cent-wise and dollar-foolish. 
Procrastination is the default position.  What can be put off 
needn't be attended to and paid for now. In the short haul, this 
approach spares us valuable outlays which can then be earmarked 
elsewhere.  But this shortsighted focus on the immediate pawns our 
future. It potentially compromises our independence.  No army and no 
economy can function without an adequate, secure and dependable 
water supply.   This is something Israel certainly cannot boast 
about on its 60th anniversary." 
 
JONES