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UNCLAS TEL AVIV 001560 
 
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.  Iran 
 
------------------------- 
Key stories in the media: 
------------------------- 
 
Ha'aretz reported that Israel and Hamas have not yet agreed to renew 
negotiations over Gilad Shalit's release, despite the completion of 
the Hizbullah prisoner swap and the relative quiet on the southern 
front that were supposed to advance talks on a swap with Hamas. 
Hamas seems now to be refusing to back down from the list of 
hundreds of prisoners whose release it demands. However, Israel has 
only approved 71 names on the list.  Ha'aretz quoted a senior 
official saying on Thursday that Israel believes that Hamas wants to 
continue to hold Shalit as an asset securing their rule in Gaza. 
Israel Radio quoted senior sources in Jerusalem as saying that the 
squabble between Israel and Hizbullah is not about the number of 
Palestinian prisoners to be released, but about their identity.  The 
Jerusalem Post reported that in the aftermath of the 
Israel-Hizbullah swap, there are increasing calls in Hamas to 
replace the Egyptian mediators with German intermediaries in the 
talks on Shalit. 
 
Yediot reported that Secretary of State Condoleezza Rice conveyed a 
reassuring message to Israel regarding the shift in the United 
States' Iran policy, saying that the U.S. will not abandon its 
allies.  Ha'aretz reported that this week John Rood, Under Secretary 
of State for Arms Control and International Security, met senior 
security and Foreign Ministry officials in Jerusalem.  Ha'aretz 
quoted Rood as saying during talks in Israel that the U.S. will not 
give up on the demand that Iran cease the uranium enrichment 
process, and that the U.S. will not negotiate directly with Iran. 
Rood was quoted as saying that what is perceived in Israel as a U.S. 
policy change is a one-off move that can be useful when the U.S. 
wants to enlist the international community for sanctions against 
Iran.  Ha'aretz also reported that this week the Chinese government 
dispatched its Deputy FM to Israel to hold talks about the Iranian 
nuclear project.  The newspaper quoted a senior diplomatic source in 
Jerusalem as saying yesterday that the move resulted from Beijing's 
concern that Israel is about to move militarily against Iran.  In an 
 
 
interview he granted to The Jerusalem Post this week, Transportation 
Minister Shaul Mofaz defended his hawkish statements about a 
prospective attack on Iran.  He was quoted as saying: "We cannot let 
a dangerous regime threaten the entire world." 
 
Israel Radio reported that over the past few weeks the Shin Bet and 
police have arrested in the Jerusalem area six Israeli Arabs -- two 
of them students at the Hebrew University --  suspected of belonging 
to Al-Qaida.  The radio reported that they intended to attack 
President Bush during his visit to Israel. 
 
All major media extensively reported and commented on the funerals 
of IDF soldiers Ehud (Udi) Goldwasser and Eldad Regev. 
 
The Jerusalem Post reported that Hizbullah is bolstering its 
presence in south Lebanon villages with non-Shi'ite majorities by 
buying land and using it to build military positions and store 
missiles and launchers.  The Jerusalem Post reported that media in 
Lebanon and the Arab world cast doubt on Sheikh Hassan Nasrallah's 
victory claims. 
 
The media reported that yesterday PM Ehud Olmert's lawyer, Eli 
Zohar, accused the state of cutting a deal with Morris Talansky by 
making it clear to the U.S. businessman that he would not be 
considered a corruption suspect in return for his giving the state 
the answers it wanted.   Talansky denied the allegation and said he 
had told the truth without any strings attached. The media reported 
that Olmert's lawyers did not succeed in "crushing" Talansky. 
 
Channel 2-TV reported last night that opposition leader Benjamin 
Netanyahu has been accumulating El Al frequent flyer miles and using 
them for his wife's benefit.  If true, this would stand in flagrant 
violation of the Knesset Ethics Committee guidelines. 
 
Ha'aretz reported that during an interfaith conference in Spain, in 
an apparent easing of traditional Saudi hostility toward Israel, 
King Abdullah has urged followers of all the world's leading 
religions to embrace reconciliation.  Ha'aretz quoted Jerusalem 
sources as saying that Israel and Saudi Arabia have been holding 
meetings to discuss regional issues. 
 
Ha'aretz reported that on Wednesday ambassadors from Arab countries 
and the Persian Gulf attended the farewell reception for outgoing 
Israeli Ambassador to the UN Dan Gillerman in his Manhattan 
apartment.  Ha'aretz quoted a senior UN affairs reporter for a U.S. 
television network as saying he does not remember such an impressive 
Arab presence at a diplomatic event in New York for a senior 
Israeli.  The newspaper reported that among the guests were the 
ambassadors of Egypt, Jordan, Qatar, and Oman.  Gillerman gave a 
particular mention to the Palestinian observer at the UN, Riyad 
Mansour, who attended the event.  Yediot filed a similar story. 
 
The Jerusalem Post reported that PA-Hamas reconciliation efforts 
suffered a setback yesterday as PA President Mahmoud Abbas called 
Hamas leader Khaled Mashal a liar. 
 
The Jerusalem Post reported that yesterday Meretz Knesset Member 
Yossi Beilin called on European countries to declare how many 
Palestinian refugees and their descendants they would be willing to 
absorb as part of any future peace agreement between Israel and the 
Palestinians. 
 
The Jerusalem Post reported that British PM Gordon Brown will 
address the Knesset plenum on Monday. 
 
Ha'aretz reported that the investigation into the police use of 
wiretapping during the criminal probe of Vice PM Haim Ramon will 
enter the evidentiary phase next week. 
 
The Jerusalem Post quoted Turkish Energy Minister Hilmi Guler as 
saying Thursday after talks with Israeli National Infrastructure 
Minister Benjamin Ben-Eliezer that Turkey and Israel will begin 
building a five-billion Euro pipeline next year to transport Caspian 
natural gas and oil to the east Mediterranean.  The project will 
also transport water, electricity, and fiber-optic cables under the 
sea. 
 
The Jerusalem Post reported that Israel's Bank Hapoalim has signed 
an agreement to purchase approximately 78% of Moscow-based SDM Bank, 
becoming the first Israeli bank to acquire a Russian bank.  Bank 
Hapoalim announced yesterday that the deal is based on a company 
evaluation of $142.5 million. 
 
------------ 
¶1.  Mideast: 
------------ 
 
Summary: 
-------- 
 
Former Editor-in-Chief David Landau wrote in the independent, 
left-leaning Ha'aretz: "The moment he agreed to negotiate for the 
return of Regev and Goldwasser without demanding proof that they 
were alive, Olmert turned himself and the state into a doormat for 
terrorists." 
 
The conservative, independent Jerusalem Post editorialized: "Now 
that Lebanon and Hizbullah have apparently melded, the 
self-defeating legacy of IDF inhibition must end." 
 
Senior op-ed writer Akiva Eldar commented in Ha'aretz: "What price 
has Syria paid recently in return for the entry ticket to the 
West?.... Now is not the time for Olmert to do business with the 
Syrians." 
 
Block Quotes: 
------------- 
 
¶I.  "False Pretenses" 
 
Former Editor-in-Chief David Landau wrote in the independent, 
left-leaning Ha'aretz (7/18): "Israel's conduct in the Regev and 
Goldwasser case is not just a continuation of its weakening stance 
or a sharp turn for the worse.  It is a total break.  Walking 
straight into the trap that Nasrallah set for him, with his eyes 
wide open, Olmert has scrambled together, and thereby trampled 
underfoot, the most basic tenets of human ethics and Jewish 
tradition -- the sanctity of human life, which comes before all, and 
the principles of 'respect for the dead' and 'Jewish burial,' which 
are certainly important, but on a totally different level of 
importance.  The moment he agreed to negotiate for the return of 
Regev and Goldwasser without demanding proof that they were alive, 
Olmert turned himself and the state into a doormat for terrorists. 
He has turned the sacrifice of those who died in the Second Lebanon 
War into a sacrifice in vain." 
 
II.  "The New Lebanon" 
 
The conservative, independent Jerusalem Post editorialized (7/18): 
"Now that Lebanon and Hizbullah have apparently melded, the 
self-defeating legacy of IDF inhibition must end.  At the start of 
the Second Lebanon War, former IDF chief of staff Dan Halutz warned 
bombastically that Israel would '[turn back the clock in Lebanon by 
20 years' if Ehud Goldwasser and Eldad Regev were not returned.  No 
one took him seriously -- Israel would never punish 'good Lebanon' 
for the crimes of 'bad Hizbullah.'  The IAF limited itself to mostly 
targeting Islamic strongholds.  But if Lebanon and Hizbullah are now 
one, Israel needs a radically revised strategy for winning a war on 
Lebanese soil.  Artificial distinctions between 'Lebanese' and 
Hizbullah' targets were swept away by Wednesday's display of 
barbaric unity.  Lebanon was revealed in its hostile unanimity.  If 
new conflict comes, Israel must internalize that unanimity of 
hate-filled purpose, and defeat it decisively." 
 
III.  "Wake Up and Smell the Coffee" 
 
Senior op-ed writer Akiva Eldar commented in Ha'aretz (7/18): 
"Sarkozy's predecessor, Jacques Chirac, who vowed to exact justice 
from Assad over the murder of his Lebanese friend, Rafiq Hariri, 
must have turned over in his armchair [during the Bastille Day 
celebrations].  And why does the Syrian President deserve all this 
beneficence?  What price has Syria paid recently in return for the 
entry ticket to the West?  Nuclear cooperation with North Korea? 
Supplying missiles to Hizbullah?  The media are reporting on the 
'smuggling' of arms from Syria to Hizbullah.  Even the United 
Nations, which is not considered a fan of Israel in these parts, 
determined that there is a regular supply of weapons with the 
blessing of the Damascus government.... Would Olmert ask for the 
hand of Palestinian President Mahmoud Abbas if IDF Intelligence were 
to place photographs of Russian-made missiles that the PA supplied 
to Hamas on the Prime Minister's desk?  Israel is showing restraint 
and even being good to Syria -- why shouldn't Syria continue to make 
the most of all worlds?  Now is not the time for Olmert to do 
business with the Syrians." 
 
--------- 
¶2.  Iran: 
--------- 
 
Summary: 
-------- 
 
Washington correspondent Orly Azolai wrote in the mass-circulation, 
pluralist Yediot Aharonot: "The Bush administration now intends to 
do exactly what Obama has proposed -- talk with the enemy.... It is 
hard to assume that [Bush] will be able to do in six months what he 
has not done in eight years." 
 
Deputy Managing Editor and right-wing columnist Caroline B. Glick 
wrote in the conservative, independent Jerusalem Post: "President 
George W. Bush's decision to leave the door wide open for an Israeli 
preemptive strike on Iran is a positive development.  But an open 
door is only significant if someone is willing to walk through it." 
Block Quotes: 
------------- 
 
¶I.  "Last Zigzag for a Farewell" 
 
Washington correspondent Orly Azolai wrote in the mass-circulation, 
pluralist Yediot Aharonot (7/18): "As Bush is slated to go home as 
[a president] who has brought an economic catastrophe to his 
country, he is trying toward the end of his term to score at least 
one achievement.  And what does a desperate president do?  He gives 
a green light to a group of State Department officials who proposed 
to open an interests section in Iran.  This won't happen fast, but 
such a bureau is now Bush's distinct interest.... The Bush 
administration now intends to do exactly what Obama has proposed -- 
talk with the enemy.  The only problem in Bush's revolutionary 
makeover is that he doesn't exactly believe in it but that he is 
being dragged into it.  Even this dragging is too late.  It is hard 
to assume that he will be able to do in six months what he has not 
done in eight years." 
 
II.  "Israel's Unwanted Open Door" 
 
Deputy Managing Editor and right-wing columnist Caroline B. Glick 
wrote in the conservative, independent Jerusalem Post (7/18): 
"Mindful of the [1991 Gulf War] precedent set by his father, 
President George W. Bush's decision to leave the door wide open for 
an Israeli preemptive strike on Iran is a positive development.  But 
an open door is only significant if someone is willing to walk 
through it.  And it is far from clear that the 
Olmert-Livni-Barak-Yishai government has any intention of doing so. 
For an Israeli government to walk through that door, its leaders 
would have to be vested with a sense of national destiny and a 
modicum of responsibility and competence.  But as Wednesday's 
bodies-for-murderers deal with Hizbullah demonstrated, the 
Olmert-Livni-Barak-Yishai government has no sense of national 
destiny and no competence to lead the country." 
 
MORENO