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P 061249Z OCT 08
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UNCLAS TEL AVIV 002271 
 
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: 
------------------------- 
 
All media reported that yesterday the Tel Aviv Stock Exchange fell 
to its lowest level since September 2006.  The blue-chip TA-25 index 
lost 6.3 percent to fall below 800 for the first time in two years, 
while the broader TA-100 lost 7 percent. The Real Estate-15 plunged 
11 percent, completing a loss of more than two-thirds of its value 
since the start of the year.  As for corporate bonds, the blue chip 
TelBond-20 fell 4.3 percent, while the broader TelBond-40 recorded 
an almost unprecedented one-day loss of 7.5 percent.  HaQaretz 
reported that the global economic crisis has thrown a new monkey 
wrench into the ongoing coalition negotiations, with Labor Party 
Chairman Ehud Barak demanding government intervention to shore up 
the financial markets but Kadima chairwoman Tzipi Livni, the prime 
minister-designate, rejecting the idea. 
 
Yesterday French FM Bernard Kouchner was quoted as saying in an 
interview with HaQaretz on Friday that Iran knows that Israel will 
attack it before the Iranian bomb is ready. 
 
The media reported that FM Tzipi Livni told her French counterpart 
Bernard Kouchner that she opposes the agreement in principle that 
Prime Minister Ehud Olmert has offered PA President Mahmoud Abbas. 
"I do not believe in far-reaching proposals and an attempt to 
expedite matters, especially in light of the political situation," 
Livni was quoted as saying.  Leading media quoted her as saying: 
QIsrael wants to arrive at peace with all her neighbors: The 
Palestinians, Syria, Lebanon, and the Arab nations. 
 
The media reported that an interview with GOC Northern Command Maj. 
Gen. Eisenkot in Yediot which was scorned by Hizbullah leader Sheikh 
Hassan Nasrallah as well as articles by two other senior IDF 
officers indicate that the army is likely to resume strengthening 
its capability for maneuvers, represented by the Armored and 
Infantry Corps, at the expense of its firepower, particularly that 
of the Air Force. 
 
Yesterday Makor Rishon-Hatzofe reported that Mahmoud Abbas will 
visit Damascus in October and meet with Syrian President Bashar 
Assad.  The newspaper quoted PA negotiator Saeb Erekat as saying 
that Abbas and Assad would Qcoordinate positions on all of the 
issues on the agenda. 
 
HaQaretz reported that Palestinian sources told the newspaper 
recently that Palestinian security forces thwarted an attempted 
suicide bombing within the Green Line.  The sources were quoted as 
saying that the security service in the West Bank arrested two 
senior wanted members of Hamas's military wing in Hebron, who were 
found in possession of weapons and an explosives belt.  The 
suspects, who were arrested three weeks ago, were also in possession 
of a great deal of cash, which they were thought to be planning to 
use to carry out the attack.  One of the suspects is Wail al-Bitar, 
one of the heads of Izz al-Din al-Qassam in the area.  Neither of 
the Hamas operatives resisted arrest.  Both are said to be part of a 
Hamas network that planned and carried out a suicide bombing in 
Dimona in February that killed an Israeli woman and seriously 
wounded her husband. 
 
Maariv and The Jerusalem Post reported that in a move that could set 
a precedent, Palestinians on whose land the illegal outpost of 
Migron was built are demanding 1.5 million shekels (around $433,000) 
in compensation.  Yesterday Maariv reported that 400 new 
trailer-homes have been added to communities beyond the Green Line. 
 
The Jerusalem Post cited Kadima claims of progress in the government 
coalition talks, while the Labor Party says there is no progress. 
 
The media reported that yesterday the cabinet voted to transfer 
QSergeyQs CourtyardQ in JerusalemQs Russian Compound to Russian 
government.  PM Ehud Olmert will inform Russian President Dmitry 
Medvedev and PM Vladimir Putin of the decision when he arrives in 
Moscow today.  Some media reported that Olmert will ask in exchange 
that Russia refrain from selling missiles to Syria.  A number of 
groups protested the move, including the right-wing Legal Forum for 
the Land of Israel, 
 
Maariv reported that Benjamin Gibli, who headed IDF Intelligence at 
the time of the so-called Lavon Affair -- the scandal over a failed 
Israeli covert operation in Egypt in which Israeli military 
intelligence planted bombs in Egyptian, American, and British-owned 
targets in the summer of 1954 Q told two of his biographers that 
then IDF Chief of Staff Moshe Dayan "gave the order" for the 
operation. 
 
The media reported that the U.S. will ask Canada to extradite 
Israeli computer hacker Ehud Tenenbaum, better known as the 
QAnalyzer,Q so that he can be indicted as one of the masterminds of 
a worldwide ring of hackers that allegedly stole millions of 
dollars.  Ten years ago, Tenenbaum became famous for hacking into 
the Pentagon's computers. 
 
Yesterday HaQaretz reported that as a son is preparing to enlist in 
the IDF, his Palestinian father was refused entry to Israel. 
 
Leading media reported that the Jewish Council for Education and 
Research, a Jewish political action committee that supports Barack 
Obama's bid for the presidency, has "recruited" former senior 
Israeli defense officials to the campaign by collating flattering 
statements about the Democratic Senator from seven such officials 
into a new advertisement that will begin running today.  However, it 
seems that some participants, including Maj. Gen. (res.) Uzi Dayan 
and former Mossad chief Ephraim Halevy, were unaware they were 
aiding an Obama campaign ad.  Media reported that a spokeswoman for 
Obama told Globes yesterday that the Senator has promised not to cut 
foreign aid to Israel if he is elected president in November.  Media 
reported that the Republican Jewish Coalition has released its own 
clip featuring Jewish American comedian Jackie Mason. 
 
HaQaretz reported that a recent report by the State Comptroller 
found that Israel has defense systems for short-range rockets, and 
asked why they are not put to use. 
 
HaQaretz quoted Lockheed Martin as saying that the cost of each F-35 
stealth fighter that the IAF will buy is $78 million. 
 
Yesterday the media reported that on Saturday Israel accused North 
Korea of providing WMD to six countries in the Middle East that 
ignore arms-control commitments. 
 
The Jerusalem Post reported that yesterday a Palestinian was caught 
with two pipe bombs at the Hawara checkpoint south of Nablus. 
 
The Jerusalem Post cited an AP report quoting a UN spokeswoman as 
saying that IDF soldiers have detained a Lebanese citizen near the 
Israeli border. 
 
The Jerusalem Post and HaQaretz cited wire reports that a UN nuclear 
conference of 145 nations has indirectly criticized Israel for 
refusing to put its atomic program under international oversight. 
 
Yesterday HaQaretz reported on serious flaws in the maintenance by a 
private contractor of the IAFQs Skyhawk attack planes. 
 
Leading media reported that the trial of tycoon Arkady Gaidamak 
starts today in Paris on charges of illegal arms trafficking, fraud, 
money laundering, fraudulent receipt, and tax evasion.  The 
indictment also states that Gaidamak and his former partner Pierre 
Falcone gave perks to senior members of the French government to 
promote their business deals.  The charges allege that mainly from 
1993 to 1995, Falcone and Gaidamak used various intermediaries and 
sold weapons and ammunition worth $790 million from Russia and 
Slovakia to Angola, during that country's civil war. 
 
------------ 
¶1.  Mideast: 
------------ 
 
Summary: 
-------- 
 
Veteran journalist and television anchor Yaron London wrote in the 
mass-circulation, pluralist Yediot Aharonot: QI am referring to a 
situation where Arab citizens complain of being punished because of 
their leaders, but are more afraid of their leaders than they are of 
us.   A situation should be brought about where the fear we cast 
upon them is greater. 
 
Block Quotes: 
------------- 
 
"TheyQre All Nasrallah" 
 
Veteran journalist and television anchor Yaron London wrote in the 
mass-circulation, pluralist Yediot Aharonot (10/6): QThe QDahiya 
strategyQ is a term that can be expected to take root in the 
security discourse.  Dahiya is the ShiQite quarter of Beirut, which 
was turned into a heap of rubble by our pilots in the Second Lebanon 
War.  OC Northern Command Maj. Gen. Gadi Eisenkot, in an interview 
to Yediot Aharonot published this past Friday, said clear things, 
which can be summed up as follows: In the next clash with Hizbullah, 
we will not bother to hunt down tens of thousands of rocket 
launchers and will not spill the blood of our soldiers in an attempt 
to take control of nature reserves; instead, we will destroy Lebanon 
and not be deterred by the protests of the Qworld.Q   We will 
demolish the 160 ShiQite villages that have become bases of the 
ShiQite army and will not spare the infrastructure of the state, 
which is effectively controlled by Hizbullah.  This strategy is not 
a threat blurted out by a hotheaded officer, it is an approved plan. 
 Until now, the Dahiya strategy has not been adopted because Israel 
has tried to adhere to the distinction between Qbad LebaneseQ and 
Qgood LebaneseQ. The Dahiya strategy is the regular way of thinking 
of most of the Arabs.  As far as they are concerned, QZionistsQ are 
criminals, but QZionistsQ are all Jews who are citizens of Israel 
and also Jews who do not support Zionism at all.  Only Arab 
propagandists who have been educated in the West distinguish between 
the QZionist governmentQ and the Jewish people, Qwith which we have 
no historical conflict, and with which we have lived in harmony for 
centuries.Q  I do not propose to adopt the ArabsQ way of thinking, 
but only the conclusions that arise from a permanent situation where 
states and political organizations that purport to be representative 
disclaim responsibility for those whom they supposedly represent.  I 
am referring to a situation where Arab citizens complain of being 
punished because of their leaders, but are more afraid of their 
leaders than they are of us.   A situation should be brought about 
where the fear we cast upon them is greater. 
 
--------- 
¶2.  Iran: 
--------- 
 
Summary: 
-------- 
 
The independent, left-leaning Ha'aretz editorialized: QLivni's test 
will not be her ability to order the Israel Air Force to attack, but 
the discretion she demonstrates in the face of the Iranian threat 
and the calls for the use of force against it. 
 
The conservative, independent Jerusalem Post editorialized: 
QCapitulation to Moscow in [the] matter [of returning Russian 
property in Jerusalem], apart from being unlikely to purchase 
Russian goodwill on the critical Iranian issue, could well open up a 
Pandora's Box of other territorial demands. 
 
Defense commentator Amir Oren wrote in Ha'aretz: QThe nuclear 
deterrence attributed to Israel is not completely superfluous -- it 
dissuaded Saddam from using chemical and biological weapons in 1991 
-- but if embraced without earnestly and continuously striving for 
peace, that deterrence is a costly illusion. 
 
Block Quotes: 
------------- 
 
¶I.  "Aggression DoesnQt Prove Suitability" 
 
The independent, left-leaning Ha'aretz editorialized (10/6): QOver 
the past few weeks, politicians and the media have increasingly been 
discussing the possibility that Israel will attack Iran's nuclear 
facilities, against the backdrop of the apparent failure of 
diplomatic efforts and sanctions aimed at halting Iran's nuclear 
plans.  French Foreign Minister Bernard Kouchner told HaQaretz that 
Israel is already preparing such an attack and will hit Iran before 
the latter acquires a nuclear bomb.  "Israel has always said that it 
will not wait for the bomb to be ready," Kouchner said.  "I think 
that they [the Iranians] know.  Everybody knows."  Kouchner is no 
exception.  Columnists and analysts in Israel have been challenging 
prime-minister designate Tzipi Livni over the past few weeks with 
the question of whether she will be courageous and determined enough 
to make "crucial decisions" about Iran -- a transparent euphemism 
meant to refer to a decision about military action.... Decisions 
about Iran must be made with the maximum discretion possible, and 
only on the basis of the strategic situation assessment, the gist of 
which is: Is Israel capable of thwarting or disrupting, for an 
extended period, the Iranian nuclear plan on its own?  And is the 
expected price of such an operation - rocket attacks on the home 
front, terror attacks, and a long cycle of violence -- worth the 
risk, even if Israel wins a tactical victory?  Considerations of 
prestige, public popularity, or ratings should not play a role in 
such a crucial decision.  Livni's test will not be her ability to 
order the Israel Air Force to attack, but the discretion she 
demonstrates in the face of the Iranian threat and the calls for the 
use of force against it. 
 
II.  QSergeyQs Courtyard 
 
The conservative, independent Jerusalem Post editorialized (10/6): 
QEhud Olmert is off to Moscow today in what may well be his last 
overseas visit as prime minister.  He will arrive at the Kremlin 
bearing a valuable gift -- or more accurately, a concession -- one 
the Russians have been adamantly demanding as their due.   Olmert 
will turn over to the Russians nine acres, known as Sergey's 
Courtyard, inside the Russian Compound in the heart of downtown 
Jerusalem. There is no reason the Jewish state should regard 
Sergey's Courtyard as sacrosanct and turn it into what could 
possibly amount to a de facto extraterritorial Russian toehold in 
our capital.  And capitulation to Moscow in this matter, apart from 
being unlikely to purchase Russian goodwill on the critical Iranian 
issue, could well open up a Pandora's Box of other territorial 
demands.  Those who oppose the gesture are now expected to turn to 
the High Court of Justice to try and stop it.  They will argue, in 
part, that such a significant concession should not be made by a 
premier who has already tendered his resignation.  Regardless of 
Olmert's caretaker status, our view is that the premier has failed 
to make a compelling case that handing over Sergey's Courtyard is in 
Israel's interest. 
 
 
 
III.  "Nuclear Deterrence, with a Grain of Salt" 
 
Defense commentator Amir Oren wrote in Ha'aretz (10/6): QEvery known 
nuclear site in the world can be pinpointed with precision and 
targeted for demolition.  The international literature is full of 
guesses about Israeli nuclear sites.  The Iranians, Syrians, and 
fundamentalist Islamic organizations are liable to believe that 
barrages of missiles and rockets on these sites will damage Israel's 
strategic alignment, or will at least disrupt or paralyze it, 
without giving Israel a reason to use other, well-hidden means 
against them from that same alignment.  The sad conclusion, on the 
35th anniversary of the Yom Kippur War, is not that the nuclear 
deterrence attributed to Israel is completely superfluous -- it 
dissuaded Saddam from using chemical and biological weapons in 1991 
-- but that if embraced without earnestly and continuously striving 
for peace, that deterrence is a costly illusion. 
 
CUNNINGHAM