VZCZCXRO0066
PP RUEHROV
DE RUEHTV #1180/01 1551505
ZNR UUUUU ZZH
P 031505Z JUN 08
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC PRIORITY 6963
INFO RUEHXK/ARAB ISRAELI COLLECTIVE

UNCLAS SECTION 01 OF 02 TEL AVIV 001180 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV PINR IS
SUBJECT:  KADIMA PARTY PRIMARIES AND/OR EARLY ELECTIONS 
 
REF:  TEL AVIV 1021 
 
------------------------ 
SUMMARY AND INTRODUCTION 
------------------------ 
 
¶1.  (SBU) Less than a week after Morris Talansky testified that he 
gave numerous envelopes of cash to the Prime Minister (reftel), 
Olmert has given no indication he intends to step down.  Assailed by 
the media, and by members of his own party, the Prime Minister is 
trying to maintain a business-as-usual outlook, and he has not 
changed his schedule or his June 2-6 travel to Washington.  Olmert 
has asserted his right to state his case in the Talansky affair, and 
lashed out at his principal coalition partner, Minister of Defense 
Ehud Barak of the Labor Party, for jumping the gun before Olmert's 
lawyers have had an opportunity to cross examine Talansky (either in 
mid-June or mid-July).  Even so, Barak's May 28 ultimatum to Olmert 
was taken up by Kadima's front-runner in the developing succession 
battle, Tzipi Livni, who, on May 29 criticized the PM's attempts to 
characterize his actions as within "the norms which everyone who 
enters the political arena is obliged to adopt." 
 
¶2.  (SBU) Summary continued: On May 29, Livni publicly stated her 
belief in the importance of party primaries and called on the Kadima 
Party to prepare for all possible scenarios, including elections. 
Olmert has indicated that he will not openly obstruct Kadima 
primaries, but has insisted on his role in controlling the timing of 
those primaries.  Kadima MK Tzachi Hanegbi has been canvassing the 
contenders and will meet with Olmert in mid-June to discuss possible 
primary dates.  Meanwhile, the opposition, led by Likud, is 
preparing the first Knesset showdown with Kadima on June 18 when it 
may call for the first of three votes required to pass a law to 
dissolve the Knesset and hold early elections. 
 
---------------------- 
OLMERT VERSUS TALANSKY 
---------------------- 
 
¶3. (SBU) One of the most urgent decisions facing PM Olmert is 
whether to advance the current July 17 date for cross-examination of 
Morris Talansky in light of the severe damage caused to Olmert's 
public image by Talansky's May 27 deposition.  Olmert and his 
lawyers met last week to discuss next steps, according to press 
reports. "We understand the law, but he understands the politics" 
was how one of Olmert's attorneys, Ron Shapira, reportedly put it. 
If Talansky agrees to an earlier date, the earliest it could take 
place is mid-June when Talansky returns to Israel for a one-day 
family event.  Olmert's attorneys have already noted that they will 
require two days to complete the cross-examination. 
 
--------------------------------------------- - 
DISSOLVING THE KNESSET REQUIRES THREE READINGS 
--------------------------------------------- - 
 
¶4.  (U) Likud MK Sylvan Shalom has drafted a Knesset dissolution 
bill (that's reportedly been in his pocket since the aftermath of 
the Second Lebanon War) that would launch the political system into 
an early-elections-orbit, but he has held back from pushing it to a 
vote.  A dissolution attempt that does not win the support of 61 
MK's carries a sting in its tail: the draft may not be submitted 
again for another six months.  Shalom is now planning to bring this 
"private member's bill" to a preliminary reading on June 18 -- 
subject to rounding up the requisite majority, which he would need 
to maintain over the ensuing three formal readings before the bill 
would become law.  The 12 Likud MK's together with support from 
Yisrael Beiteinu (11) and the National Religious Party (9) could be 
enough if the 19 Labor MK's and 12 Shas MK's decide to support early 
elections (and do not object to Likud taking the lead on the 
dissolution bill).  This tally, reported by Yediot Ahronoth on June 
3,  does not take into account at least four likely defections from 
Kadima, or any support for early elections from Meretz, the Arab 
parties, the newly-split Pensioners parties, or United Torah 
Judaism. 
 
----------------------------------- 
MOFAZ VERSUS LIVNI AS HEIR APPARENT 
----------------------------------- 
 
¶5.  (SBU) According to all recent public opinion polls, Kadima will 
fare better in elections with Tzipi Livni at its head than any of 
the three likely contenders (Ministers Mofaz, Sheetrit, Dichter); 
however, a Livni-led Kadima is generally still in second place to 
Netanyahu's Likud Party.  Nonetheless, the potential Livni offers to 
salvage Kadima as a weighty political party means that many Kadima 
Knesset members as well as general party members will work for her 
to succeed Olmert.  Mofaz, for his part, has cultivated the 
municipal grass roots - visiting 150 mayors over the past two years 
-- and may be able to benefit from Olmert's control of the party 
apparatus and his animus towards Livni.  Mofaz can also claim 
Sephardic support: the word on the "street" is that there are many 
in Likud who wish to see their one-time party member in a position 
 
TEL AVIV 00001180  002 OF 002 
 
 
of real political power -- specifically as defense minister in a 
Likud-led government.  One recent report even alleged that Likud 
vote contractors were engaged in recruiting voters to turn out for 
Mofaz in future Kadima primaries.  Likud connections aside, Mofaz is 
attempting to woo Shas in an effort to outflank the more popular 
contender, Livni. 
 
----------------------- 
SHAS WEIGHS ITS OPTIONS 
----------------------- 
 
¶6.  (SBU) Ever since the Annapolis conference in November 2007, 
Olmert's coalition has been routinely threatened by the Shas Party 
with resignation over the Palestinian track and more recently Syrian 
track negotiations, as well as Kadima's refusal to roll back 
financial reforms initiated by then-Finance Minister Netanyahu. 
Much of Shas rhetoric is just that: Shas maintaining the pressure 
for economic policy concessions -- always of a budgetary nature, on 
the issues of social welfare allowances - specifically the 
restoration of child allowances to their pre-Netanyahu levels -- so 
close to its electoral heart (septel).  Since the Talansky 
deposition, Shas threats have assumed a new dimension as speculation 
increases as to the willingness of Shas to vote in support of early 
elections.  No one in Kadima is better placed to coax Shas away from 
this option than Shaul Mofaz.  In media appearances, Mofaz is making 
it clear that he feels a real kinship with Shas not only on account 
of his Sephardic origin but in terms of his political perspective 
which is well to the right of Olmert's -- or as one media 
commentator put it -- "on the right flank of Likud whence he hails." 
 
 
¶7.  (U) On June 3, however, Shas Minister of Communications, Ariel 
Attias, told Israel Radio that "Shas is not seeking elections or a 
pretext to hold them nor will it resign over the issue of child 
allowances."  Attias noted that "Shas still believes there's a 
chance of forming an alternative government during the current 
Knesset session."  Kadima MK Tzachi Hanegbi has been canvassing the 
contenders and will meet with Olmert in mid-June to discuss possible 
primary dates. 
 
¶8. (SBU) COMMENT:  With Shas on the fence regarding its preference 
between early elections (and a new government likely led by 
Netanyahu) or new Kadima leadership (and preservation of the current 
coalition), much will depend on issues of timing.  If PM Olmert 
attempts to delay Kadima primaries for too long, the opposition may 
attract support from coalition parties for Likud's bid to dissolve 
the Knesset.  Labor can signal its unhappiness with Olmert's 
intransigence with a move in this direction by voting for the Likud 
legislation in its preliminary reading.  Brinkmanship will 
characterize the subsequent readings, which could take several weeks 
of Knesset politicking to play out.  Despite media speculation about 
the possibility of early elections coincident with November 11 
municipal elections, we cannot predict the likelihood of such a 
scenario at this juncture.  We do anticipate that all parties - in 
the coalition and the opposition -- will come under great pressure 
to accede to Shas demands.  Judging from Atias' statement, Shas has 
not given up on the current coalition and may not want to hasten a 
return to a government with Netanyahu, who cost them their 
allowances in the first place.  END COMMENT. 
 
------------------------------------------ 
POSTSCRIPT ON THE EARLY ELECTIONS SCENARIO 
------------------------------------------ 
 
¶9.  (U) In the event the Likud draft dissolution bill wins a 
61-member majority in three readings, the Knesset must disperse 
within a maximum timeframe of five months.  If all three readings 
and votes on dissolution were to take place on June 18 this would 
place the latest possible date for dissolution at mid-November. 
Media reports have mentioned Tuesday, November 11 as a likely date 
as it happens to be the date already set for the local authority 
elections.  The rationale for holding elections on a Tuesday as 
explained by the Knesset administration is as follows: Friday, 
Saturday and Sunday are rest-days in Israel for the three major 
faiths.  Thursday and Monday are too close to the rest days and do 
not permit sufficient time to organize a nation-wide ballot. 
Tuesday is therefore the first day of the week in which voting on a 
national scale can be fully implemented and which also allows for 
two full days of vote-counting and clarifications prior to the onset 
of the ensuing rest-days. (NB:  There is a 1988 precedent for 
postponing municipal elections if general elections fall on the same 
date, but general and municipal elections reportedly have been held 
on the same date once before and some now argue that it would be 
both cost-effective and help get out the vote.) 
JONES