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UNCLAS TEL AVIV 000546 
 
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 
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DA WASHDC FOR SASA 
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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 
 
¶3.  U.S.-Israel Relations 
 
------------------------- 
Key stories in the media: 
------------------------- 
 
Major media (banner in HaQaretz) reported that yesterday the police 
national fraud squad announced that it had enough evidence to 
recommend indicting PM Ehud Olmert for fraud and breach of trust in 
the investment center case.  Investigators said the probe's findings 
reveal Olmert had "deep" conflicts of interest as industry, trade 
and employment minister, because he did not disqualify himself from 
making decisions on projects represented by his associate, attorney 
Uri Messer.  The investigators were also quoted as saying that 
Olmert did not report his conflicts of interest or his relationship 
with Messer before making decisions on these projects.  HaQaretz 
quoted the attorneys of Morris (Moshe) Talansky, an American Jewish 
businessman who testified against Olmert, as saying yesterday that 
Israel did not honor its promises to him.  The attorneys were quoted 
as saying that an investigation of Talansky in the U.S. was being 
conducted based on material provided by the Israeli authorities, 
despite assurances that this would not happen.  Yediot reported that 
Talansky demands that the file against him be closed before he 
returns to Israel. 
 
The Jerusalem Post quoted a Qwell-placed political source 
confirming long-standing speculation that Shas made a deal with 
Likud Chairman Benjamin Netanyahu to prevent Kadima leader Tzipi 
Livni from forming a coalition in October.  In return for forcing 
the February 10 elections, Netanyahu promised Shas Chairman Eli 
Yishai the Interior Ministry and 2 billion shekels (around $550 
million) worth of allowances, according to the source.  The 
Jerusalem Post reported that demands by the five government 
coalition partners now total nearly 10 billion shekels (around $2.5 
billion).  Israel Radio quoted Labor Chairman Ehud Barak as saying 
that Netanyahu has not seriously suggested that he join the 
government. 
 
Pressing socio-economic problems continued to engage the Israeli 
media.  Netanyahu was quoted as saying in an interview with Yediot 
that he will not allow dismissals of workers and that he will rescue 
enterprises. 
 
HaQaretz reported that Avigdor Lieberman, who emerged yesterday as 
the most likely candidate to replace Tzipi Livni as Israel's foreign 
minister, intends to demand that Netanyahu grant him "full autonomy" 
in the new post.  HaQaretz quoted a source involved in talks between 
Yisrael Beiteinu and Likud said that "Lieberman wants to make sure 
that Netanyahu doesn't let another minister receive tasks that 
belong to the Foreign Ministry."  The source was quoted as saying 
that "Lieberman wants to ensure that Netanyahu doesn't let [former 
FM] Silvan Shalom handle negotiations with Syria in order to placate 
Shalom." 
 
The Jerusalem Post reported that yesterday Secretary Clinton 
proposed holding a regional conference on Afghanistan on March 31 
that would likely include Iran.  The newspaper reported that former 
national security advisor Zbigniew Brzezinski maintained, in 
testimony to the Senate Foreign Relations Committee, that the U.S. 
faced more of an existential threat from the Soviet arsenal when he 
was in the White House, in the 1970s, than Israel does now, and that 
deterrence proved effective in that case. 
 
Leading media reported that yesterday Ambassador to the U.S. Sallai 
Meridor tendered his resignation to Netanyahu and FM Tzipi Livni. 
The Jerusalem Post quoted Meridor as saying that he was concerned 
about his influence waning under Netanyahu.  HaQaretz reported that 
in mid-August, during DM Ehud BarakQs visit to Washington, Meridor 
was not invited to Barak's meeting with the U.S. National Security 
Adviser.  In a sharply worded letter to Barak, copies of which were 
sent to Livni and PM Olmert, Meridor said the Defense Minister's 
conduct had "greatly impaired Israel's ability to impact processes 
in the U.S. capital."  This week, during Secretary of State Hillary 
Clinton's visit to Israel, Meridor was asked to leave the room where 
Clinton was meeting with Netanyahu.  HaQaretz reported that one name 
rumored to replace Meridor is Netanyahu's strategic adviser, Ron 
Dermer, who until about a year ago served as Israel's economic 
attache in Washington, and who has accompanied Netanyahu on all his 
trips to the United States in recent years.  For its part, Yediot 
reported that former ambassador to the UN Dore Gold and former 
consul-general in New York Alon Pinkas are candidates for the post. 
All media reported that two police officers were lightly wounded in 
Jerusalem yesterday afternoon when a Palestinian bulldozer driver 
who resided in east Jerusalem overturned their police car and rammed 
it into a bus, before being shot by police and a taxi driver.  He 
later died of his wounds. 
 
Yediot reported that following pressure by Livni, Italian FM Franco 
Frattini canceled a scheduled trip to Iran. 
 
Major media reported that relations between Israel and Turkey have 
thawed, following a meeting between FM Livni and Turkish FM Ali 
Babacan at NATOQs Brussels HQ yesterday. 
 
The media reported that yesterday Palestinians fired an anti-tank 
missile at an IDF patrol in central Gaza.  Leading media reported 
that yesterday Palestinians fired five Qassam rockets and three 
mortar shells at Israeli communities.  A Grad rocket landed in the 
empty courtyard of a Netivot synagogue. 
 
HaQaretz and The Jerusalem Post reported on a new initiative by 
members of the U.S. Congress seeking to condition the transfer of 
the $900 million for the Palestinians on an end to rocket fire on 
Israel from Gaza, and the release of Gilad Shalit.  Leading media 
reported that next week ShalitQs family will erect a protest tent 
outside the PMQs Residence. 
 
The Jerusalem Post reported that Israeli defense officials expressed 
satisfaction yesterday with news that Lt. Gen. Keith Dayton., U.S. 
Security Coordinator in the PA, would be staying on in his position 
for an additional two years. 
 
Maariv reported that a 32-year-old computer programmer from 
Beersheva was arrested yesterday on suspicion of planning, together 
with others to blow up American embassies around the world.  The 
suspect was angry at the U.S. administrationQs support for Israel 
during QOperation Cast Lead. 
 
Maariv reported that HamasQs security apparatus arrested Ahmad 
Salah, a Hizbullah envoy.  The newspaper said that the Hamas regime 
is trying to show Hassan Nasrallah who is the boss in Gaza. 
 
Israel Radio reported that the Council of the Chief Rabbinate has 
decided to allow non-Jewish couples to marry in Israel.  The 
arrangement will not be valid for mixed couples.  If the religious 
partiesQ representatives accept the proposal, the Chief Rabbis and 
the representatives of the Council of the Chief Rabbinate will ask 
to meet with Yisrael Beiteinu Chairman Avigdor Lieberman in order to 
convince him to accept their position. 
 
------------ 
¶1.  Mideast: 
------------ 
 
Summary: 
-------- 
 
The independent, left-leaning Ha'aretz editorialized: QIt was enough 
to hear U.S. Secretary of State Hillary Clinton say that the 
demolition of houses [in east Jerusalem] is clearly Qnot in keeping 
with the obligations entered into under the RoadmapQ to understand 
that the Jerusalem Municipality is pulling Israel onto a collision 
course with the new U.S. administration. 
 
Jewish affairs writer Anshel Pfeffer wrote in HaQaretz: QThe major 
Jewish organizations' policy of supporting Israel's democratically 
elected government while remaining loyal to their home countries 
could be sorely tested in the coming months. 
 
Liberal Hebrew University Professor of Political Science Zeev 
Sternhell wrote in HaQaretz: QThe danger of the break-up of 
democracy lurking behind a Likud-Yisrael Beiteinu-National Union 
government is far greater than the pull to the right that Kadima 
would risk in a Benjamin Netanyahu-Tzipi Livni government. 
 
 
 
Block Quotes: 
------------- 
 
¶I.  "DonQt Demolish Houses" 
 
The independent, left-leaning Ha'aretz editorialized (3/6): 
QYesterday's bulldozer attack shows that the level of tension and 
rage among Palestinians from East Jerusalem and the West Bank has 
not abated.... Ostensibly, the claim that [88] homes [in the village 
of Silwan that the Mayor of Jerusalem has instructed to destroy] are 
illegal seems well-founded.  However, when the city does not grant 
building permits because of the lack of a master plan, or halts the 
construction of new buildings for political reasons, it pushes 
Palestinians, who for decades have owned the land on which they want 
to build, to break the law.... It was enough to hear U.S. Secretary 
of State Hillary Clinton say that the demolition of houses is 
clearly Qnot in keeping with the obligations entered into under the 
RoadmapQ to understand that the Jerusalem Municipality is pulling 
Israel onto a collision course with the new U.S. administration. 
 
II.  "Hillary Is Around" 
 
Shmuel Rosner wrote in the popular, pluralist Maariv (3/6): 
QSecretary ClintonQs visit conveyed mixed messages.  ON one hand, a 
tough approach vis-`-vis Hamas that is not substantially different 
that the outgoing Bush administration.  On the other hand, a promise 
to pour into Gaza huge sums that might help the miserable 
Palestinians but would annoy Israel: Next time it attacks 
[Palestinian] targets, it might have to check twice before it 
destroys projects with the money of the American tax-payer. 
 
III.  QObama-Brown versus Netanyahu-Lieberman 
 
Jewish affairs writer Anshel Pfeffer commented in HaQaretz (3/6): 
QObama and team are going to be bullish about pressing Israel to 
withdraw from the West Bank and the Golan.  This new tune is being 
taken up by other governments that portray themselves as friendly to 
Israel. The major Jewish organizations' policy of supporting 
Israel's democratically elected government while remaining loyal to 
their home countries could be sorely tested in the coming months. 
The problem is likely to be exacerbated by Netanyahu's foreign 
minister -- who is likely to be Avigdor Lieberman. He would be the 
first senior Israeli minister whom most of the American and European 
Jewish leadership will shun -- passively, at least.  If the 
Obama-Clinton team succeeds in preserving its Israel-friendly image 
by getting tough on Iran, while pressuring Israel on the Palestinian 
and Syrian issues, and if the Netanyahu-Lieberman coalition 
steadfastly maintains its current positions, we could see an 
increasing number of Jewish leaders breaking ranks.  Forced to 
choose between an increasingly isolated Israeli leadership and an 
administration aggressively pushing for peace, it will be 
interesting to see which ties are looser. 
 
IV.  QKadima to DemocracyQs Rescue 
 
Liberal Hebrew University Professor of Political Science Zeev 
Sternhell wrote in HaQaretz (3/6): QThe danger of the break-up of 
democracy lurking behind a Likud-Yisrael Beiteinu-National Union 
government is far greater than the pull to the right that Kadima 
would risk in a Benjamin Netanyahu-Tzipi Livni government.... 
[Avigdor] Lieberman, [far-Right Knesset Member Michael] Ben Ari, and 
Shas leader Rabbi Ovadia Yosef at Netanyahu's side are the most 
destructive lineup Israeli politics has ever known.. Israeli 
society must not be allowed to become accustomed to a reality in 
which its face is that of Lieberman and Ben Ari. Instead of relating 
to them and their people as legitimate partners in government, we 
must brand a mark of shame on their forehead. This is not a matter 
of our image abroad and relations with the United States, but rather 
of our children's souls. 
 
--------- 
¶2.  Iran: 
--------- 
 
Summary: 
-------- 
 
The conservative, independent Jerusalem Post editorialized: Qthe 
longer Obama takes to crystallize his policy, the harder it will be 
to stop the Iranian bomb.  No wonder [IranQs Supreme Leader 
Ayatollah Ali] Khamenei feels optimistic. 
 
Block Quotes: 
------------- 
 
"Optimism in Tehran" 
 
The conservative, independent Jerusalem Post editorialized (3/6): 
Q[On Wednesday, in his address to the Fourth International 
Conference for Support of Palestine in Tehran,  IranQs Supreme 
Leader Ayatollah Ali]  Khamenei professed to be in an optimistic 
mood following the Qamazing military and political defeatsQ Israel 
suffered in the Second Lebanon War and more recently in Gaza. 
Still, he was bitter about what the QZionist criminalsQ did - 
Qimpaling of infantsQ for instance.  Fortunately, he noted, 
Qadvances in technologyQ (read Al-Jazeera) have exposed the 
QmagnitudeQ of Israel's atrocities.... This week, Saudi Arabia's 
Foreign Minister Prince Saud al-Faisal urged the Arabs to come 
together in the face of the QIranian challenge.Q   Palestinian 
leader Mahmoud Abbas told Iran to stop interfering in Palestinian 
affairs. While the Arabs fret about the instability wrought by 
Tehran in Gaza, Iraq, Lebanon and Afghanistan they, like Europeans 
and Africans, are hedging their bets.  So the longer Obama takes to 
crystallize his policy, the harder it will be to stop the Iranian 
bomb.  No wonder Khamenei feels optimistic. 
 
-------------------------- 
¶3.  U.S.-Israel Relations: 
-------------------------- 
 
Summary: 
-------- 
 
Senior columnist Nahum Barnea wrote in the mass-circulation, 
pluralist Yediot Aharonot: QIn BushQs time, the burden of proof 
rested completely upon the Arab side.  In ObamaQs period, the burden 
of proof will be placed to a large degree on the shoulders of 
IsraelQs prime minister. 
 
Military correspondent Alex Fishman wrote in Yediot Aharonot: QMs. 
ClintonQs smiles notwithstanding, Israeli officials understand full 
well that we can expect a hard time with the new U.S. 
administration. 
 
Block Quotes: 
------------- 
 
 "A Different Us" 
 
Senior columnist Nahum Barnea wrote in the mass-circulation, 
pluralist Yediot Aharonot (3/6): QSince the elections, [outgoing 
Israeli Ambassador to the U.S. Sallai Meridor] has been explaining 
to his interlocutors in Washington that the government that will be 
formed is not necessarily what they think.... PR is one thing and 
trust another.  Meridor decided to vacate his seat for whomever 
should win the trust of Netanyahu and his new foreign minister, 
whether it is Lieberman or someone else.  There is not a bit of 
protest in his act: he does not think that ambassadors have the 
right to protest against their governments.... Israel will face a 
different Washington.  The talk about the eternal alliance with 
Israel will be as warm as in the past, but something basic will 
change in the order of priorities, the gut feelings, and the public 
atmosphere.  In BushQs time, the burden of proof rested completely 
upon the Arab side.  In ObamaQs period, the burden of proof will be 
placed to a large degree on the shoulders of IsraelQs prime 
minister. 
 
II.  "Echelon and Rank" 
Military correspondent Alex Fishman wrote in Yediot Aharonot (3/6): 
QThe central message that the new U.S. Secretary of State Hillary 
Clinton tried to convey after the Sharm el-Sheikh conference was 
clear: The U.S. would not permit a single dollar to enter the Gaza 
Strip if Salam Fayyad of the PA did not head the unity government 
between Hamas and Fatah and were not in charge of the Gaza 
rehabilitation process.  This is a ridiculous attempt to square the 
circle, but more than this, it is another sign that the Obama 
administration may adopt a naove Middle East policy, to say the 
least.  Israeli officials did not know whether to laugh or cry when 
they read the reports sent by the Americans after the meeting held 
by Acting Assistant Secretary of State Jeffrey Feltman with the 
Syrian ambassador to Washington.  The Americans explained to us that 
this meeting was not intended to embrace the Syrians.... In general, 
Israeli officials have not yet recovered from the messages that 
Democratic Senator John Kerry sent after his visit to Gaza.  He 
wrote there explicitly: with all due sympathy for the State of 
Israel, it is impossible to ignore what you have done in the Gaza 
Strip.  There is no choice, you will have to pay for it.  In Israel, 
for some reason, reports were published that the senator complained 
about pasta shipments to the Gaza Strip that Israel was holding up. 
This was an underhanded attempt to diminish the SenatorQs message, 
in order to make it look as if the relations between us and the 
Americans were being conducted as usual.... Ms. ClintonQs smiles 
notwithstanding, Israeli officials understand full well that we can 
expect a hard time with the new U.S. administration. 
 
CUNNINGHAM