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UNCLAS TEL AVIV 002250 
 
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 an international summit is to be held in 
Egypt in November, with representatives from Israel, the PA, and the 
members of the Quartet.  According to a senior official in 
Jerusalem, the Israeli and PA participants will brief the Quartet 
over progress made in the ongoing peace talks.  The gathering is 
said to be the result of a compromise between the U.S., Israel, and 
the Palestinians.  In recent months Secretary of State Condoleezza 
Rice has been urging both sides to draft a document detailing the 
points of agreement in the Israeli-Palestinian negotiations.  She 
suggested they compile an "inventory" detailing progress on each of 
the core issues, such as Jerusalem, borders, refugees' right of 
return, security, settlements, and water rights.  Israel opposed 
Rice's suggestion and argued that it would set the talks back.  "It 
would make each side harden its stance to appear as though it has 
made no concessions," Ha'aretz quoted the Israeli source as saying. 
"Finally, FM Tzipi Livni managed to persuade her Palestinian 
counterpart, the head of the PA negotiating team, Ahmed Qurei, to 
reject the inventory idea."  Instead, the parties agreed on to give 
a detailed briefing to the Quartet that they claim would be less 
binding and would allow issues to be presented more freely. 
 
All media reported that the U.S. administration has announced the 
sale of 25 F-35 fighter jets to Israel, with an option for 50 more 
in coming years, for a deal valued at up to $15.2 billion.  Ha'aretz 
quoted the Pentagon's Defense Security Cooperation Agency (DSCA) as 
saying that the deal is vital to the U.S. national security interest 
in assisting Israel as it develops and maintains "a strong and ready 
self-defense capability."  The Jerusalem Post reported that, fearing 
that the U.S. will sell the plane to Saudi Arabia and other Middle 
Eastern states, the Defense Ministry is seeking American approval to 
install Israeli-made electronic systems on the stealth fighter jets 
it buys.  One reason Israel is asking for the changes is so that if 
the aircraft is sold to other states in the region, the IAF's 
version will be unique and superior.  Unlike other media, Maariv 
wrote that the difficulty in identifying the aircraft might be 
useful in an Israeli attack against distant targets such as Iran. 
In another development, Maariv reported on first-of-its-kind 
cooperation since the Second Lebanon War that will allow commanders 
of ground forces to order IAF fighter planes to attack enemy 
targets. 
 
Ha'aretz reported that Israeli security officials told Reuters on 
Tuesday that the IDF will purchase Israeli-made cluster bombs with a 
self-destruct mechanism.  The M-85 bomblets, manufactured by Israel 
Military Industries, explode shortly after they are dispersed on the 
ground, which can greatly reduce civilian casualties.  During the 
Second Lebanon War, Israel made widespread use of cluster bombs, 
some of which were American-made.  Cluster bombs are outlawed in 
many countries and the U.S. administration has prohibited Israel in 
the past from using them in populated zones.  Maariv reported that 
the U.S. will stop selling cluster bombs to Israel. 
 
The Jerusalem Post reported that Israel had no formal reaction 
yesterday to the Bahraini FM's suggestion that all Middle East 
nations -- including Israel and Iran -- form a regional 
organization.   A senior official in Jerusalem was quoted as saying 
that it was an "interesting idea," but one that would almost 
certainly not get off the ground.   Bahraini FM Sheikh Khalid bin 
Ahmed al-Khalifa said in an interview with the pan-Arab daily 
Al-Hayat that a regional organization should be formed "even if we 
don't recognize each other," and that the purpose would be to try to 
resolve disputes.  In a speech to the UN General Assembly on 
Tuesday, Sheikh Khaled called for such a Middle East organization to 
include countries "without exception."  Asked by Al-Hayat if it 
would include Israel, he replied, "With Israel, Turkey, Iran and 
Arab countries.  Let them all sit together in one group... This is 
the only path to solve our problems.  Why don't we all sit together 
even if we have differences and even if we don't recognize each 
other?  Why not become one organization to overcome this difficult 
phase?"  The source said that no less interesting was the suggestion 
to invite the Islamic Republic, since there was a great deal of fear 
among Persian Gulf states that Teheran is pursuing nuclear weapons 
because it wants hegemony in the region.  While reiterating that the 
regional forum was a "very interesting idea," the source in 
Jerusalem said it was much too early for Israel to jump on the 
"wagon," because "there was no wagon, no wheels, and no horses, just 
one newspaper interview."  The source was also quoted as saying that 
the idea would be more significant were it to be taken up by a 
country with more regional weight than Bahrain. 
Ha'aretz reported that IDF GOC Central Command Maj. Gen. Gadi Shamni 
has leveled harsh criticism against extremist West Bank settlers who 
have attacked Palestinians and IDF soldiers in recent weeks.  In an 
interview with Ha'aretz over the Jewish New Year holiday, Shamni 
said that the radical behavior among rightists has grown in light of 
encouragement they receive from the settler leadership, rabbis, and 
public.  As the officer heading Central Command, Shamni is 
responsible for the entire West Bank. 
 
Under the headline, "The American Weapon that Pressures Hamas," 
Yediot ran a feature on the U.S.-assisted fight against tunnel 
smuggling between Egypt and Gaza. 
 
Ha'aretz reported that yesterday Syrian FM Walid Muallem denied the 
Israeli accusation that his country is arming Hizbullah.  Speaking 
in an interview published by the Ash-Sharq al-Awsat newspaper, 
Muallem said: "It is not correct that Syria is supplying Hizbullah 
with weapons and equipment, as is claimed.  Hizbullah does not need 
this."  He argued that Israel was making the accusations merely as 
an excuse for IAF overflights of Lebanon. 
 
Major media quoted Iran's supreme religious leader Ayatollah Ali 
Khamenei as saying yesterday that his country will stand beside 
Gaza's Hamas rulers and that Israel is on the path to destruction. 
According to Iranian state-run television, Khamenei called Hamas's 
PM in the Gaza Strip, Sheikh Ismail Haniyeh, a "mojahed," or soldier 
of holy war, saying the Iranian nation will "never let you be 
alone."  He was also quoted as saying that Israel's Zionist regime 
is moving toward weakness, destruction, and defeat and that the 
current generation of Palestinians will see "that great day." 
 
Leading media quoted PA President Mahmoud Abbas as saying that PM 
Ehud Olmert's comments in the Jewish New Year interview he granted 
Yediot were a "deposit" to be brought into play by the next 
government.  Yediot quoted Kadima Knesset Member Yoel Hassan as 
saying that the PM's stances are contrary to Kadima's platform. 
Makor Rishon-Hatzofe reported that Shas is wondering whether 
Olmert's remark could mean an intention to divide Jerusalem. 
Various right- and left-leaning commentators noted that Olmert's 
political situation does not allow him to make far-flung 
commitments.   Media reported that the police will interrogate 
Olmert for the eighth time today -- regarding the affairs of the 
"Investments Center" and the "house on Cremieux St." 
 
Ha'aretz reported that before the Jewish New Year, 
prime-minister-designate Tzipi Livni rejected demands from Meretz 
leaders to remove Justice Minister Daniel Friedmann.  The media also 
reported that Livni and her husband hosted Defense Minister Ehud 
Barak and his wife for a holiday dinner.  Maariv reported that 
increasing voices in the Labor Party are calling for the party's 
inclusion in Livni's future government. 
 
The Jerusalem Post quoted Likud Chairman Benjamin Netanyahu as 
saying in a pre-Jewish New Year interview with the Walla web site 
that he will increase construction in existing West Bank settlements 
to keep pace with the population's natural growth if he is elected 
prime minister. 
 
The media reported that on Monday police arrested a 19-year-old 
Palestinian who planned to assault Jews in Jerusalem's Old City on 
the eve of the Jewish New Year. 
 
All media highlighted the U.S. Senate's compromise on a bailout 
bill.  The media reported that the crisis is affecting Israeli 
savers. 
 
Ha'aretz reported that Boris Spiegel, one of the Russian Jewish 
community's most prominent supporters of President Vladimir Putin, 
is set to be appointed head of the country's Keren Hayesod, also 
known as the United Israel Appeal (UIA). The UIA is the central 
fundraising body for Israel around the world, with the exception of 
the United States. 
 
-------- 
Mideast: 
-------- 
 
Summary: 
-------- 
 
Editor-in-Chief Amnon Lord wrote in the editorial of the 
nationalist, Orthodox Makor Rishon-Hatzofe: "Olmert, as a senior 
representative of the leading Israeli elite, fully recognizes the 
Arab demands and concedes that none of the Israeli demands of the 
Arab side have any validity." 
 
Diplomatic correspondent Aluf Benn wrote in the independent, 
left-leaning Ha'aretz: "The West Bank separation fence divides 
Israeli society into two worlds utterly different in their 
perceptions of reality and of the problems that affect them." 
 
Former Mossad director Ephraim Halevy wrote in the mass-circulation, 
pluralist Yediot Aharonot: "Once the decision is made, we must hope 
that the Palestinian troops eradicate the Hamas movement and again 
take control of Gaza and that Israel and the Israel and the U.S. 
will be able to complete the job." 
 
Military correspondent Alex Fishman wrote in the mass-circulation, 
pluralist Yediot Aharonot: "When a fanatical terror organization 
with no inhibitions vows to take revenge on the Hizbullah leadership 
-- the Syrians' collaborators and allies -- Hizbullah officials 
begin to fear for their lives.  Now it isn't only we who issue 
travel advisories.  They do, too.  That is what is known as 
receiving one's just deserts." 
 
Conservative Professor Gabi Avital wrote in the popular, pluralist 
Maariv: "It is not clear who has now decided to violate the 
principle that foreign troops should not be stationed in Israel." 
 
Block Quotes: 
------------- 
 
¶I.  "A Moral and Ideological Collapse" 
 
Editor-in-Chief Amnon Lord wrote in the editorial of the 
nationalist, Orthodox Makor Rishon-Hatzofe (10/2): "The statements 
that were made by the outgoing prime minister, Ehud Olmert, in an 
interview to the media ... clearly signaled to the Palestinians, the 
Arab peoples and all the other ill-wishers for Israel in the 
international community that the long struggle against Israel has 
paid off. The implication from Olmert's statements is that justice 
-- both in terms of international law and from an ethical standpoint 
-- lies entirely with the Arab side. Since this is a struggle that 
has had a decidedly extremist and violent dimension to it, the Arabs 
and their supporters ought to ask themselves: why stop at the 1967 
line?  Olmert, as a senior representative of the leading Israeli 
elite, fully recognizes the Arab demands and concedes that none of 
the Israeli demands of the Arab side have any validity.  We ought to 
take note that Olmert clearly admitted that there could not be peace 
unless Israel gave up (nearly) everything that was conquered in 
¶1967.  What does that tell us about Jerusalem and about any 
territorial compensation to which Israel is going to commit in order 
to absorb the settlement blocs in Judea and Samaria [i.e. the West 
Bank]?....  It seems that Olmert is adding to the crime of personal 
corruption the sin of ethical stately corruption. He has lost any 
faith in Israeli justice, but not his faith in his justice and in 
the rotten elite's support for him. He believes that such a 
far-reaching statement will give him legitimacy to 'fight' for the 
sake of 'peace' in his last days or months in office." 
 
II.  "A Schizophrenic State" 
 
Diplomatic correspondent Aluf Benn wrote in the independent, 
left-leaning Ha'aretz (10/2): "The West Bank separation fence 
divides Israeli society into two worlds utterly different in their 
perceptions of reality and of the problems that affect them.  On one 
side are those disturbed by the crisis on Wall Street, by the lack 
of leadership and the Iranian threat.  Few worry about what is 
happening in the West Bank, and certainly no one visits there.  The 
Palestinians are forgotten when there are no suicide bombings, the 
settlers are viewed as a strange society, and the peace talks 
pursued by Ehud Olmert seem like irrelevant spin.  On the other side 
of the fence, in Settlers' Country, things look quite different. 
There, no one worries about Wall Street or Ahmadinejad, but about 
survival.  The settlers are angry with the state that evacuated the 
Gush Katif settlements in the Gaza Strip, at the army and the 
Supreme Court and the leftist media.  They take seriously Olmert's 
declarations of support for withdrawing from nearly all of the West 
Bank, prepare for the coming withdrawal and make pilgrimages to 
abandoned outposts like Homesh.  This schizophrenia, convenient for 
both sides, has been nurtured by the Olmert government. Despite the 
Prime Minister announcing his backing for the evacuation of 
settlements beyond the fence, he essentially gave the settlers free 
rein after the destruction of the Amona outpost [in February 
2006].... As violence continued across the fence, it raised only 
minimal interest on this side.  Then came the attack on Prof. Zeev 
Sternhell as a reminder that ideological struggle knows no borders 
or barriers.  The remonstrations of Olmert and company were turned 
up a notch, but the government restrained itself, hoping the quiet 
would return or that a catastrophe would come along requiring it to 
act.  In the absence of such a catastrophe, Olmert's successors will 
likely act just as he did, distancing themselves from the goings-on 
in the territories, and nurturing the national schizophrenia on both 
sides of the separation fence." 
 
IV.  "The Decisive Battle" 
 
Former Mossad director Ephraim Halevy wrote in the mass-circulation, 
pluralist Yediot Aharonot (10/2): "It is clear to anyone with eyes 
in his head that the success of the PA is dependent on this or that 
aid from Israel.  The extent of the aid, the kind of aid, and the 
degree of indirect or direct involvement will be the outcome of the 
degree of the success of the Palestinian units.  Since this will be 
an ongoing operation, Israel may have to make some weighty decisions 
in real time, based on developments on the ground.... As said, once 
the decision is made, we must hope that the Palestinian troops 
eradicate the Hamas movement and again take control of Gaza and that 
Israel and the U.S. will be able to complete the job." 
 
¶V.  "Now It's Their Turn to be Afraid" 
 
Military correspondent Alex Fishman wrote in the mass-circulation, 
pluralist Yediot Aharonot (10/2): "The recent terror attacks in 
Damascus and Lebanon are part of the revenge campaign by a fringe 
organization that declared that it would not rest until the Syrians 
and the people who helped assassinate the commander of their 
organization had paid for their actions. It is ironic that the 
Syrians and Hizbullah, who announced a campaign of revenge against 
Israel following the assassination of Imad Mughniyah, are now 
experiencing first-hand what they had planned to dish out to us.... 
This isn't a particularly difficult puzzle to piece together.  The 
organization that swore that it would take revenge was Fatah 
al-Islam.  As odd as this may sound, this is an organization that 
was linked at its inception to Syrian intelligence.... When a 
fanatical terror organization with no inhibitions vows to take 
revenge on the Hizbullah leadership -- the Syrians' collaborators 
and allies -- Hizbullah officials begin to fear for their lives. 
Now it isn't only we who issue travel advisories.  They do, too. 
That is what is known as receiving one's just deserts." 
 
IV.  "The Radar: a Very Dangerous Trap" 
 
Conservative Professor Gabi Avital wrote in the popular, pluralist 
Maariv (10/2): "The positioning of a new radar at the Nevatim base 
in the Negev, with its American crew, was announced loudly this 
week.  We were spared no praise about the brilliant capabilities of 
the radar, which will improved deterrent capability facing missiles 
from the East.... If there was any doubt about Israel being no more 
than the cheapest mercenary in the world, and, unfortunately, in the 
words of [right-wing] Professor Ezra Zohar, a 'concubine in the 
Middle East,' the radar and the American soldiers are the ultimate 
stamp of this.... It is not clear who has now decided to violate the 
principle that foreign troops should not be stationed in Israel. 
Are the dangerous implications of this violation known to the 
decision-makers?" 
 
CUNNINGHAM