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DE RUEHTV #2617/01 3291439
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O 241439Z NOV 08
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9297
INFO RHEHNSC/NSC WASHDC IMMEDIATE
RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY

"S E C R E T SECTION 01 OF 02 TEL AVIV 002618 
 
SIPDIS 
 
E.O. 12958: DECL: 11/25/2018 
TAGS: PREL PGOV PINR IS
SUBJECT: NETANYAHU OUTLINES FOR AMBASSADOR LIKUD'S WAY 
FORWARD WITH THE PALESTINIANS 
 
REF: TEL AVIV 2617 
 
Classified By: Charge d'Affaires Luis G. Moreno, reasons 1.4 (b),(d) 
 
¶1. (S) SUMMARY: In a private meeting with the Ambassador on 
November 20, Likud Party leader Benjamin Netanyahu 
confidently described his prospects to become the next 
Israeli prime minister and outlined his intent to form a 
broad, center-right coalition if his party prevails in 
February.  Netanyahu assured the Ambassador that he intended 
to continue negotiations with the Palestinians, but his 
strategy would be to avoid discussing final status issues, 
which foiled all previous negotiations, and instead focus on 
an ""economic peace plan.""  Netanyahu's vision would have 
Israel working with Jordan and foreign donors to inject 
large-scale investment in the West Bank to improve the daily 
lives of Palestinians.  He added that he is not interested in 
Israel controlling the Palestinians, and that he would give 
them all sovereign powers except those that could endanger 
Israel.  END SUMMARY. 
 
-------------------------------------- 
NETANYAHU OPTIMISTIC ABOUT ELECTIONS, 
PROJECTS BROAD, CENTER-RIGHT COALITION 
-------------------------------------- 
 
¶2.  (S) The Ambassador met with Likud Chairman Benjamin 
Netanyahu privately on November 20.  Netanyahu was in an 
ebullient mood, the latest polls showing him with a growing 
Likud lead over Kadima (reftel).  While cautioning that it is 
early to draw conclusions, he raised the possibility that the 
elections might turn out to be ""a rout"" as the tide of the 
political battle may be turning strongly in Likud's favor and 
away from Tzipi Livni's Kadima Party.  He credited this to 
his own work over the past few years in broadening his 
support and attracting the return of major Likud Party 
figures such as Benny Begin and Dan Meridor (""they balance 
each other""), to Kadima,s failure to lead, and to Ehud 
Barak,s inability to prevent Labor,s collapse.  As a 
result, Netanyahu feels that he is in a strong position to 
lead from the center right.  While projecting that the 
February elections might re-draw Israel,s political map, he 
said he would not repeat his ""mistake"" in 1996 when he 
rejected a national unity government.  This time, Netanyahu 
said he will seek a broad coalition given the gravity of the 
economic and security issues he will face (and which will 
presumably give him greater room to maneuver between left and 
right). 
 
--------------------------------------------- 
""ECONOMIC PEACE PLAN,"" NOT FINAL STATUS TALKS 
--------------------------------------------- 
 
¶3. (C) Netanyahu tried to assure the Ambassador that he did 
not intend to abandon negotiations with the Palestinians, and 
pointed to his speech closing the United Jewish Communities 
General Assembly as the latest expression of his thinking on 
an ""economic peace plan.""  His overall plan calls for 
continuing diplomatic negotiations with the Palestinians, 
regional cooperation with Jordan, and massive investment in 
the Palestinian Authority (PA) in order to give the 
Palestinians an incentive to seek peace - and the ability 
eventually to implement a peace agreement. 
 
¶4. (C) Netanyahu said that negotiations between Israel and 
the Palestinians have not progressed because they focused on 
final status issues like Jerusalem and refugees - deeply 
contentious matters on both sides - rather than on the 
economy and improving the lives of Palestinian citizens. 
Attempts to ""reach a deal on Jerusalem or bust"" would again 
end in failure; ""I will negotiate, and I,ve shown in the 
past I can compromise.  But even if I were to negotiate on 
Jerusalem, nothing would happen, as it never has.""  He 
believes the Annapolis approach, which he was careful not to 
address directly, will not work because the development of 
the PA/West Bank will be too slow to support a final status 
agreement.  Netanyahu,s alternative vision would have 
negotiations and perhaps interim agreements as in the past, 
alongside intensive economic development in parts of the West 
Bank that would offer Palestinians tangible and significant 
improvements to their lives.  ""I know how to do this, and I 
can change the dynamic on the ground in a year.  I will lead 
this effort myself, not delegate it.""  He explained that he 
has firm ideas he would seek to implement - some immediately 
upon taking office - including tourism projects in Jericho 
and factories in West Bank urban areas.  When I asked about 
security, he said the IDF would continue to work with PA 
security forces, but that he would create economic projects 
in areas where access and security could be guaranteed.  He 
anticipates that his plan would result in an increase in 
growth in Palestinian areas by 10 percent each year, with 
clear results achieved within the first six months. 
 
TEL AVIV 00002618  002 OF 002 
 
 
 
¶5.  (C) Netanyahu would seek economic cooperation with Jordan 
in the West Bank, and he has met with Quartet envoy Tony 
Blair to discuss ways in which the former British premier 
could help. He explained that he is not interested in Israel 
controlling the Palestinians, and that he would give them all 
sovereign powers except those that could endanger Israel, 
such as control over borders and water, or entering into 
treaties, or maintaining defense forces. 
 
--------------------------------------------- - 
TOUTS ABILITY TO DELIVER MOST OF THE RIGHTWING 
ON AGREEMENTS WITH PA; WARNS THAT IRAN COULD 
DERAIL ANY MOMENTUM 
--------------------------------------------- - 
 
¶6. (S) ""I can deliver two thirds of the Israeli right-wing on 
anything we agree with the Palestinians,"" whether on process 
or interim agreements.  He allowed that one-third would 
continue to reject any deals with the PA, but he has been 
clear with his new recruits/returnees to Likud and potential 
coalition partners about his goals.  He said he favors the 
two-state model, but it is not possible now.  ""If President 
Obama will work with me, we can make real progress."" 
Netanyahu is aware that if Likud wins, his election and 
program will be greeted with suspicion, and the Ambassador 
noted that depending on how things evolved, Netanyahu might 
never get a chance to get into negotiations if he is not 
viewed as serious.  He seemed confident he could manage the 
re-balancing he has in mind, saying, ""I know how to 
compromise, but I also know how to produce results.""  The 
thing which could derail everything, he said, is Iran.  If 
Iran crosses the nuclear line, the peace process will be 
impossible with Syria or the Palestinians and the entire 
regional dynamic will change.  This has to be prevented.  The 
Ambassador replied that one could argue as well that the 
demise of a credible negotiation with the Palestinians could 
also alter the regional dynamic and make it much more 
difficult, if not impossible, to shore up stability in the 
region and to successfully confront Iran, which is the major 
threat. 
 
********************************************* ******************** 
Visit Embassy Tel Aviv's Classified Website: 
http://www.state.sgov.gov/p/nea/telaviv 
 
You can also access this site through the State Department's 
Classified SIPRNET website. 
********************************************* ******************** 
MORENO 
"