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UNCLAS TEL AVIV 001170 
 
STATE FOR NEA, NEA/IPA, NEA/PPD 
 
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JERUSALEM ALSO ICD 
LONDON ALSO FOR HKANONA AND POL 
PARIS ALSO FOR POL 
ROME FOR MFO 
 
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E.O. 12958: N/A 
TAGS: OPRC KMDR IS
 
SUBJECT: ISRAEL MEDIA REACTION 
 
-------------------------------- 
SUBJECTS COVERED IN THIS REPORT: 
-------------------------------- 
 
¶1.  Mideast 
 
¶2.  U.S.-Israel Relations 
 
------------------------- 
Key stories in the media: 
------------------------- 
 
Ha'aretz quoted associates of PM Ehud Olmert as justifying his trip 
to Washington in spite of the political crisis, by saying that the 
security dialogue began by President Bush in January requires 
attention.  At the cabinet meeting on Sunday, Olmert said that these 
security-related issues address the "essence of Israel's existence." 
 Media reported that Olmert will focus on Iran and emphasize 
Israel's belief that Iran is developing military nuclear 
capabilities.  "There is progress in the dialogue with the 
Americans, but no decisions are expected [to be made]," a political 
source said.    Olmert is also interested in reaching an agreement 
on a series of joint defense projects that will begin under the 
current administration, and it is hoped by Israel, bind the next 
U.S. administration.  A political source said that the projects in 
question are very sensitive and have to do with missile defense 
systems and advanced warfare capabilities that Israel would like to 
acquire in the coming years.  The Jerusalem Post, quoted officials 
assaying yesterday that Olmert is expected to use the trip to "tie 
up some loose ends on several requests by the IDF for new military 
platforms as well as funding for defense-related projects, such as 
the Arrow 3 anti-missile system.   Yediot reported that Olmert will 
purchase missile defenses and request F-22 stealth fighters. 
 
The Jerusalem Post reported that a senior State Department official 
told the daily yesterday that Israel's continued blockade of Gaza is 
misguided and has helped rather than harmed Hamas.  The newspaper 
reported that the State Department is likely to convey its 
displeasure over Israel's Gaza policy to Olmert during his visit. 
The Jerusalem Post quoted Olmert as saying that the "hour of 
decision" was approaching regarding continued Palestinian rocket 
fire from Gaza, pledging that the attacks, which have continued 
unabated for seven years, will be stopped "one way or another." 
Olmert was speaking at a commemorative ceremony for the Six-Day War. 
 Maariv bannered Egypt's insistence that Gilad Shalit will not be 
released without a truce agreement with Hamas.  The newspaper 
reported that Cairo intends to start negotiations for Shalit's 
release on the day after the beginning of the truce. 
 
Leading media reported that Shas is attempting to extort the 
government into increasing child welfare payments (a large 
percentage of which go to Shas ultra-orthodox base) by threatening 
to support Likud's effort to dissolve the Knesset.    Speaking on 
Israel Radio this morning, Finance Minister Roni Bar-On declared 
that the government was prepared to invest in social services, but 
not in child allowances.  Ha'aretz reported that Transportation 
Minister, and apparently Livni's chief rival in Kadima to supplant 
Olmert, Shaul Mofaz has been forging closer links with Shas to head 
off early elections and lay the groundwork for an alternative 
government headed by him in the current Knesset.  Ha'aretz reported 
that the Shas leaders told him that they would support him if he 
promised to increase child allowances.  Ha'aretz quoted Shas sources 
as saying that party leaders have already reached agreements with 
Mofaz on this issue.  According to Ha'aretz, Mofaz believes he can 
prevent early elections and is acting to secure Shas's support 
before the Kadima leadership primary. 
 
Ha'aretz reported that Egypt has recently been attempting to thwart 
a proposed agreement to improve Israel's access to  the European 
Union market.   Egyptian ambassadors in key European capitals have 
been instructed to approach host governments and ask them to 
reconsider the trade agreement in light of Israel's ongoing 
construction in West Bank settlements and its blockade of Gaza. 
Senior Israeli Foreign Ministry officials have warned their Egyptian 
counterparts that Israel views this effort very gravely and wants it 
stopped. According to an Israeli assessment,  the Egyptian campaign 
is actually in retaliation for a U.S. Congressional decision to 
freeze up to $200 million in U.S. military aid to Egypt.  Cairo 
blames Israel for this freeze, because Israel has frequently 
complained to Washington about Egypt's failure to combat arms 
smuggling into Gaza.  Cairo is also upset because the EU has refused 
to grant Egypt a similarly favorable agreement.   Major media 
reported that Israel also sent a formal protest to the PA yesterday 
over a letter sent by PA Prime Minister Salam Fayyad to the OECD, in 
which he asked the organization to reconsider its invitation to 
Israel to join.  Fayyad based this request on Israel's military 
operations in the territories, and construction in the settlements. 
Ha'aretz reported that PM Ehud Olmert told President Mahmoud Abbas 
yesterday Israel deems the letter completely unacceptable. 
 
Israel Radio reported that White House Press Secretary Dana Perino 
condemned the latest announcement of construction in East Jerusalem, 
 
"Our position on the settlements is that we don't believe that any 
more settlements should be built, and we know that it exacerbates 
the tension when it comes to the negotiations with the 
Palestinians."  The radio also cited UN Secretary-General Ban 
Ki-moon's criticism of Israel's action.  Israel Radio quoted 
Construction and Housing Minister Zeev Boim as saying the PM Ehud 
Olmert concurs with the decision.  The Jerusalem Post quoted Olmert 
as saying yesterday: "I believe there is no contradiction between 
the people of Israel's total allegiance to Jerusalem and its unity 
and our ambitions to create peace within it." 
 
Israel Radio reported that the only positive result of PM Olmert's 
talks with PA President Mahmoud Abbas yesterday was related to the 
issue of the right of return.  The radio did not elaborate. 
 
Major media quoted the Shin Bet as saying yesterday that three Arab 
citizens from Lod were indicted in Central District Court on Monday 
for allegedly planning to kidnap and murder an Israeli soldier and 
later use his body as a bargaining chip for the release of 
Palestinian security prisoners. 
 
Israel Hayom and The Jerusalem Post reported that, speaking before 
the American Israel Public Affairs Committee yesterday, - Senator 
John McCain attacked Democratic candidate Senator Barack Obama's 
willingness to engage in dialogue with Iran.  McCain presented 
himself as the best candidate for Israel.  Israel Hayom bannered: 
"McCain: Obama Is Dangerous for Israel." 
 
Yediot reported that Syrian President Bashar Assad admitted 
yesterday that an agreement has not been reached for a full, 
absolute Israeli withdrawal from the Golan.  However, he stressed 
that he is demanding a full withdrawal and that he is preparing 
plans to populate the areas that Israel will vacate.  Maariv quoted 
Defense Minister Ehud Barak as saying yesterday before the Knesset's 
Defense and Foreign Affairs Committee that there are scant chances 
of achieving peace with Syria this year.  The Jerusalem Post and 
Makor Rishon-Hatzofe quoted Barak as saying that only the U.S. can 
sponsor negotiations with Syria.  The Jerusalem Post quoted Barak as 
saying that the Golan is not Syria's top priority. 
 
Yediot reported that the leaders of the Jewish community in Hebron 
intend to demand  that vacant Jewish real estate (from before 1929) 
be returned to them, in accordance with a military committee 
decision last week.   Israel Radio reported that last night security 
forces demolished the synagogue "Hazon David" (David's Vision) in 
the city, but that settlers immediately rebuilt it. 
 
The Jerusalem Post reported that the state informed the High Court 
of Justice yesterday that it might reconsider its blanket refusal to 
allow Gaza students to leave the area.  The decision comes after 
heavy U.S. pressure to allow seven Fulbright scholars from Gaza to 
study abroad. 
 
The media reported that the Knesset's House Committee has approved 
the creation of a new Knesset faction: "Justice for the Elderly," 
which split from the Pensioners' Party.  The decision was made 
possible after the cancellation of a deal with billionaire 
politician Arkady Gaidamak. 
 
Ha'aretz reported that the Shin Bet has recently questioned Malah 
Haj Yihia, an Israeli citizen and a senior member of the 
organization "Physicians without Borders - Israel," over alleged 
hostile activity in Gaza. 
 
The Jerusalem Post quoted Prof. Jeffery Sachs, director of the Earth 
Institute at Columbia University and Special Advisor to UN 
Secretary-General Ban Ki-moon on the Millennium Development Goals 
that Israel has key knowledge and technology in several specific 
areas that are hugely important in Africa right now, Sachs was the 
keynote speaker on Sunday at the 50th conference of MASHAV, the 
Foreign Ministry's Center for International Cooperation. 
 
The Jerusalem Post reported that Indonesian doctors receive casualty 
training in Israel.  The Indonesian team gave a workshop on 
earthquake response and preparedness. 
 
Ha'aretz reported that the recent invalidation of thousands of 
conversions is making some Russian-speaking immigrants wonder why 
they came to Israel. 
 
------------ 
¶1.  Mideast: 
------------ 
 
Summary: 
-------- 
 
Senior columnist and longtime dove Yoel Marcus wrote in the 
independent, left-leaning Ha'aretz (6/3): "If Kadima wants to prove 
it is a party with a backbone, it must respond to [Ehud] Barak's 
suggestion and solve the problem of Olmert without general 
elections." 
 
The conservative, independent Jerusalem Post editorialized: "Israeli 
policymakers need to revaluate their willingness to engage in 
lopsided prisoner exchanges." 
 
Block Quotes: 
------------- 
 
¶I.  "Anything but Elections" 
 
Senior columnist and longtime dove Yoel Marcus wrote in the 
independent, left-leaning Ha'aretz (6/3): "If Kadima wants to prove 
it is a party with a backbone, it must respond to [Ehud] Barak's 
suggestion and solve the problem of Olmert without general 
elections.... [Tzipi] Livni, a graduate of Herut, the major 
predecessor of Likud, has evinced more courage than [Shaul] Mofaz in 
pointing out Olmert's defense errors, and she had the guts to demand 
outright that Olmert resign.  It is no accident that in most of the 
public opinion polls she is in the lead as the candidate to become 
prime minister, and she is worthy of being chosen in primaries to 
head Kadima so she can continue the current peace coalition. 
General elections at this time are, above all, a waste of money.... 
With no hope that premature elections will give rise to some meteor, 
that which has been is that which shall be after the elections 
except for the replacement of Olmert by Livni.  In a game that has 
failed, you replace the coach -- not the team." 
 
II.  "Another Bad Deal" 
 
The conservative, independent Jerusalem Post editorialized (6/3): 
"How astute is it to trade an unreconstructed killer for what, it is 
now increasingly feared, are the remains of two IDF fallen?  When 
that killer continues to swear loyalty to the blood-soaked path of 
jihad?  And when the exchange would further bolster Hassan 
Nasrallah's stranglehold on Lebanon?  This is the dilemma facing 
Israeli policymakers: whether to trade Samir Kuntar for Eldad Regev 
and Ehud Goldwasser.  Hizbullah has provided no sign of life from 
the soldiers since they were abducted on June 26, 2006, in the 
cross-border aggression that ignited the Second Lebanon War.... 
Kuntar, a Lebanese Druze, is serving four life sentences for the 
1979 deaths of Danny Haran, 28, his two daughters, four-year old 
Einat and two-year-old Yael, and the killing of police officer 
Eliahu Shahar in Nahariya.... Israeli policymakers need to revaluate 
their willingness to engage in lopsided prisoner exchanges.... 
Israel's enemies know that Judaism attaches the highest priority to 
freeing captives and bringing closure to the families of fallen 
fighters.  Isn't it time they also learned that Jews understand a 
thing or two about bargaining?" 
 
-------------------------- 
¶2.  U.S.-Israel Relations: 
-------------------------- 
 
Summary: 
-------- 
 
Columnist Calev Ben-David wrote in the conservative, independent 
Jerusalem Post: "The question is whether AIPAC ... is ready to 
listen up and, if necessary come autumn, move on and adjust itself 
to a new day in Washington." 
 
Block Quotes: 
------------- 
 
"AIPAC Is Celebrating... But Is It Faltering?" 
 
Columnist Calev Ben-David wrote in the conservative, independent 
Jerusalem Post (6/3): "The agenda of [the annual policy conference 
of the American Israel Public Affairs Committee (AIPAC)] will focus 
on such pressing issues as the Iranian nuclear program, the current 
Israeli-Palestinian negotiations, and strengthening U.S.-Israeli 
ties at every level.  Not on the schedule, though, are some pressing 
matters for AIPAC that bring with them unsettling undercurrents for 
the organization -- developments that pose serious challenges both 
internally and externally for an organization still regarded as the 
very model of a modern political lobby.  Foremost among them is the 
still looming and oft-delayed 'AIPAC trial'.... Attacks from outside 
the Jewish community, such as the Walt-Mearsheimer report, only 
serve to strengthen AIPAC's position within it.  But an internal 
ideological backlash is evident in the recent forming of J Street, 
the new Israel lobbying group that recently sprung up poising itself 
as a left-leaning alternative to AIPAC.... The real challenge for 
AIPAC is more in the winds of general ideological change sweeping 
the U.S.... This year, it will undoubtedly be Obama's scheduled 
appearance on Wednesday that will draw the most media attention. 
The question is whether AIPAC -- from its grass roots to its highest 
leadership levels -- is ready to listen up and, if necessary come 
autumn, move on and adjust itself to a new day in Washington." 
 
JONES