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P 071011Z OCT 08
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STATE FOR NEA, NEA/IPA, NEA/PPD 
 
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E.O. 12958: N/A 
TAGS: OPRC KMDR IS
 
SUBJECT: ISRAEL MEDIA REACTION 
 
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SUBJECTS COVERED IN THIS REPORT: 
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Mideast 
 
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Key stories in the media: 
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All media continued to banner the global financial crisis and its 
repercussions in Israel.  Maariv reported that if the banks' cash 
flow continues to deteriorate and stock exchange collapses go on, 
the Bank of Israel intends to inject billions of shekels into banks 
and to create a protection net for pension savings. 
 
Ha'aretz reported that fallout from the mounting market panic was 
palpable in Israeli politics too, helping Labor Party chair and DM 
Ehud Barak to draw closer to forming a government with FM and prime 
minister-designate Tzipi Livni.  Barak stated Monday that during a 
financial crisis, the most urgent priority is to deal with the 
situation. In this way Barak was seen as lowering Labor's demands 
for increased social spending in next year's budget.  However, at 
the end of a meeting he held with Histadrut labor federation chair 
Ofer Eini and the president of the Manufacturers Association, Shraga 
Brosh, Barak said he still thinks the budget can be expanded to 
increase old-age pensions, spending on higher education, and certain 
security priorities.  Ha'aretz reported that there has been no real 
change in Labor's demands from Kadima.  Yesterday Likud Chairman 
Benjamin Netanyahu, a free-market proponent, called for state 
intervention in the financial market, adding that the only solution 
at this time is holding new elections. 
 
The Jerusalem Post reported that yesterday outgoing PM Ehud Olmert 
clarified that the views he expressed in his interview with Yediot 
last week were his own, and were not binding on prime 
minister-designate Tzipi Livni. 
 
Ha'aretz reported that security officials have warned that the time 
for making a deal for the release of Gilad Shalit is running out. 
The officials told Ha'aretz that the more time passes, the more 
things can go wrong and the greater the danger that an opportunity 
will be missed to bring Shalit home.  The media reported on a rally 
in Tel Aviv's Rabin Square last night that begged Shalit to 
"forgive" the thousands of participants in the spirit of Yom Kippur. 
 Ha'aretz quoted Hamas leader Khaled Mashal as saying yesterday that 
the negotiations for Shalit's release are stalled because of Israel, 
which he said constantly reneges on its commitment. 
 
Leading media quoted NATO Secretary-General Jaap de Hoop Scheffer as 
saying yesterday that he was not certain that the world can stop 
Iran from building a nuclear bomb.  Scheffer was also quoted as 
saying that he would never expect Israel to abandon its own, 
"supposed nuclear arsenal."  The Jerusalem Post quoted senior 
Israeli defense officials as saying that Scheffer's remarks 
regarding Israel's right to maintain a nuclear capability set a 
"precedent" and sent a message to Iran that NATO stands by Israel. 
 
The Jerusalem Post reported that Israel is in advanced talks with 
the UN over a potential withdrawal of IDF troops from the northern 
section of the split town of Ghajar, which Israel has occupied since 
the end of the Second Lebanon War in 2006. 
 
Ha'aretz reported that the historic Deir al-Sultan monastery on the 
roof of the Church of the Holy Sepulcher in Jerusalem is in danger 
of collapse.  The newspaper reported that a long-standing dispute 
between the Ethiopian and Coptic Churches is halting renovation 
efforts. 
 
Ha'aretz quoted diplomatic sources as saying that Olmert will seek 
today to persuade Russian President Dmitry Medvedev not to sell 
weapons to Iran and Syria, but with little chance of success. 
Jerusalem is particularly concerned that sales of Russia's S-300 
anti-aircraft missile system could threaten Israel's air superiority 
over both states.  And if Iran were to receive these missiles, it 
would be able to protect its nuclear sites more effectively, making 
an aerial strike on these sites more difficult.  However, citing an 
Interfax news agency wire report yesterday, Ha'aretz cited a denial 
by Rosoboronexport, Russia's arms export monopoly, that it plans to 
deliver the S-300 missiles to either Iran or Syria.  Yediot reported 
that if Israel fails to prevent the sale of missiles to Iran, Turkey 
will open its territory to exercises in which Israeli forces will 
practice operating a similar system. 
 
Ha'aretz reported that the Labor Party refuses to make construction 
in settlements an issue in its coalition agreement with Kadima. 
 
Makor Rishon-Hatzofe reported that yesterday Tzipi Livni asked 
Quartet envoy Tony Blair to stabilize financial conditions in the 
PA. 
 
Yediot reported on IDF anger over the participation of private 
advisers in the defense establishment's debates over assessments of 
the security situation. 
 
Israel Radio reported on the illegal transfer of goods from Israel 
to the PA - a potential source of terrorism.  Ha'aretz quoted Talal 
al-Karnawi, the Mayor of the Negev Bedouin town of Rahat, as saying 
this week that the Bedouin living in his community are worried by 
the influx of 4,000 Palestinians from the West Bank and Gaza Strip 
who are living there illegally and could plan a terror attack. 
 
Major media reported that yesterday Yemeni President Ali Abdullah 
Saleh announced the dismantling of a "terrorist cell" with alleged 
links to Israeli intelligence. 
 
Yediot reported that the arrest of cabinet minister and former Shin 
Bet head Ami Ayalon in the Netherlands in May at the request of an 
anarchist group was averted by Israel's appeal to the Dutch 
government. 
 
The media reported that yesterday former Shas leader Aryeh Deri 
dropped out of the race for Jerusalem mayor, deciding not to appeal 
Thursday's court decision rejecting his request to run.  Deri had 
hoped the court would overlook the moral turpitude involved in his 
bribery conviction in 2000.  Ha'aretz reported that Knesset Member 
and candidate for mayor of Jerusalem Meir Porush will try to close 
deals with the people supposed to be his ultra-Orthodox partners: 
Shas, Degel Hatorah, and Agudat Yisrael -- the latter two currently 
forming the United Torah Judaism party. 
 
-------- 
Mideast: 
-------- 
 
Summary: 
-------- 
 
Gershon Baskin, co-CEO of the Israel/Palestine Center for Research 
and Information, wrote in the conservative, independent Jerusalem 
Post: "If we will not find the way to allow the Palestinians to gain 
their freedom and to end our occupation over them, in the not too 
distant future, we will be atoning for our loss of our own freedom 
in our own state and wondering how we missed the opportunity for 
peace." 
 
Block Quotes: 
------------- 
 
"Between the Jewish New Year and Yom Kippur" 
 
Gershon Baskin, co-CEO of the Israel/Palestine Center for Research 
and Information, wrote in the conservative, independent Jerusalem 
Post (10/7): "After 20 years of failing to convince Israeli 
governments to accept the two-state solution, the Palestinian 
national movement is in the process of reviewing and renewing its 
political agenda.... The more simplistic version or 'sound bite' of 
the new vision is the 'one-state solution'.... What the supporters 
of this plan fail to understand is that the only hope for peace in 
this land has always been based on the concept of partition.  This 
is the only way to move beyond an existential conflict of either 'us 
or them'.... If the Israeli-Palestinian conflict moves back into 
existential terms, then Israel/Palestine turns into Bosnia of the 
1990s.... Israelis and Palestinians are not ready now or at any time 
in the foreseeable future to share the same national home.  We both 
need a physical territory in which we can claim sovereignty and 
express our own national identity.   Olmert's soul searching of the 
[Jewish] new year should be a collective soul searching in which we 
all reach the same conclusions.  If we will not find the way to 
allow the Palestinians to gain their freedom and to end our 
occupation over them, in the not too distant future, we will be 
atoning for our loss of our own freedom in our own state and 
wondering how we missed the opportunity for peace." 
 
 
CUNNINGHAM