VZCZCXRO8802
PP RUEHROV
DE RUEHTV #0803/01 0931205
ZNR UUUUU ZZH
P 031205Z APR 09
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC PRIORITY 1314
INFO RUEHXK/ARAB ISRAELI COLLECTIVE

UNCLAS SECTION 01 OF 02 TEL AVIV 000803 
 
SIPDIS 
SENSITIVE 
 
STATE FOR H:PRADEMACHER AND LSHANE; PLEASE PASS TO TOM 
HAWKINS (SEN. MCCONNELL) AND PHILIP SKUTA (USMC) 
 
E.O. 12958: N/A 
TAGS: PREL PGOV KPAL IS
SUBJECT: SCENESETTER FOR CODEL MCCONNELL'S VISIT TO ISRAEL, 
APRIL 7-8 
 
REF: TEL AVIV 764 
 
¶1. (SBU) SUMMARY: Your upcoming visit to the region comes 
during a time of transition in Israeli politics. 
Prime Minister Binyamin Netanyahu took office April 1 after 
assembling the largest government in Israeli history, and 
apparently one of the largest in the world.  The government 
of 30 Ministers, eight deputy ministers, and various 
newly-created posts is a product of political wheeling and 
dealing that began soon after the February election. 
Negotiations with other party leaders had quickly established 
a steep cost to secure their participation, but Netanyahu was 
intent on a broad government that would give him his best 
shot at serving a lengthy term, and succeeded in securing a 
74-seat coalition in the 120-seat Knesset. Interactions 
between Likud and Labor and Yisrael Beitenu and more 
specifically between Netanyahu and Barak and Lieberman, will 
be crucial determinants of the success of the new government 
as it confronts challenges, such as the peace process, the 
global economic crisis, and the threat from Iran.  END 
SUMMARY. 
 
---------------- 
BROAD COALITION 
---------------- 
 
¶2.  (SBU) Although in the February elections former Foreign 
Minister Tzipi Livni's centrist Kadima party won 28 Knesset 
seats to the center-rightist Likud party's 27 seats, 
President Peres deemed Likud leader Binyamin "Bibi" Netanyahu 
more likely to succeed in creating a coalition, and tasked 
him with forming Israel's 32nd government.  Livni refused to 
join the Likud-led coalition, preferring for Kadima to lead 
the Opposition.  The right wing joined the coalition first: 
nationalist Yisrael Beitenu ('Israel is our home') brought 15 
seats and the ultraorthodox SHAS party contributed 11 seats. 
The addition of smaller right-wing or religious parties 
(United Torah Judaism, 5 seats; Jewish Home, 3 seats) had the 
potential to give Netanyahu control over the Knesset, with 61 
seats, but Netanyahu sought a broader coalition. 
 
¶3. (SBU) Securing the 13 seats of Minister of Defense Barak's 
Labor party broadened the base and the resultant 74-seat 
coalition provided a healthy cushion against individual 
defectors. The agreement with Labor gained Netanyahu not only 
a government, but provided him additional international 
legitimacy by having the nominally dovish Labor party on 
board what would otherwise be a solid right-wing government. 
It also gives Netanyahu a Defense Minister in Barak whom the 
public largely trusts as Israel faces tough decisions on how 
to confront Iran's nuclear ambitions, as well as the 
continuing rocket attacks from the Gaza Strip and potential 
threats from Hizballah and Syria. Additionally, Labor's 
inclusion in the government dilutes some of the bargaining 
power of Netanyahu's right-wing partners. 
 
¶4. (SBU) The large and diverse government is the result of 
the high market rate for securing coalition partners.  While 
the two Vice Prime Ministers are Likudniks, the four Deputy 
Prime Minister positions reflect the breadth of the 
coalition: Labor's Ehud Barak remains Minister of Defense; 
Yisrael Beitenu's Avigdor Lieberman is Foreign Minister; 
Likud's Dan Meridor is Minister of Intelligence and Atomic 
Energy; and SHAS Eli Yishai is Minister of Internal Affairs. 
 
¶5. (SBU) The government, though it appears bloated, may 
provide Netanyahu with his best hope for long-term stability. 
 The 74-seat coalition means that any one party, save for 
Yisrael Beitenu could leave Netanyahu's coalition without 
depriving him of a governing majority. It also provides an 
additional buffer should the dissident faction within Labor 
(which opposed joining the coalition) split off from, or 
assume control of, the party. 
 
-------------------------------- 
WHERE ARE THE POINTS OF FRICTION? 
--------------------------------- 
 
¶6. (SBU) A coalition and government this large can promote 
longevity, but it is likely to also be a painful existence. 
Netanyahu has good relations with the party heads in his 
coalition (most notably, his relationship with Defense 
Minister Barak is much better than the relationship between 
former Prime Minister Olmert and Barak in the last year of 
Olmert's term), but Lieberman's stridently secular positions 
could cause significant friction with the ultraorthodox SHAS 
and UTJ parties.  Barak and Lieberman are neither enemies nor 
close friends, but Barak had earlier criticized Netanyahu's 
 
TEL AVIV 00000803  002 OF 002 
 
 
decision to offer Lieberman, who is under criminal 
investigation, control over the Justice Ministry and the 
police.  Lieberman, for his part, was openly critical of 
Barak's execution of Operation Cast Lead, and reportedly 
sought to block Netanyahu's plans to bring Barak and Labor 
into the coalition.  Beyond party disputes, Netanyahu may be 
called on to delineate (either explicitly or implicitly) a 
clear division of responsibilities and pecking order among 
his ministers (some of whose portfolios appear to overlap), 
which could spark resentment among those relegated to the 
second and third-tiers. 
 
¶7. (SBU) The disunity in Labor also could pose a challenge to 
Netanyahu.  Five Labor holdouts did not vote confidence in 
his government (note:  by not voting they technically did not 
break with party discipline, which suggests this is not yet 
an all-out rebellion), and they seem intent on ousting Barak 
in the next party leadership primary.  Netanyahu, though his 
large government means he is not beholden to Labor, will have 
to be careful to avoid making policy decisions or statements 
that further alienate the rebellious faction in that party if 
he seeks to keep their 13 seats.  Lieberman's hard-line 
public statement on assuming control of the Foreign Ministry 
the afternoon of April 1, in which he dismissed the Annapolis 
process and suggested that only strength, not more 
concessions, would bring peace, is likely to add to the 
misgivings within Labor about being in a coalition with 
Lieberman. 
 
------------------------ 
PRAGMATISM OVER IDEOLOGY 
------------------------ 
 
¶8. (SBU) Netanyahu is solidly center-right on the political 
spectrum. He remains more pragmatic than ideological in most 
matters.  On the peace process he is keeping all options open 
regarding a two-state solution, and may be willing to advance 
the process significantly as long as he is not forced to 
publicly acknowledge the extent of such progress.  To succeed 
along such a path we expect him to rely heavily on his 
improved skills at political wheeling-dealing to keep the 
right flank on board while quietly (but perhaps slowly) 
cooperating on the peace process agenda, which he understands 
is critical to Israel's relations with the U.S. In his speech 
to the last Knesset session of the Olmert Government March 
30, Bibi said his government will be willing to offer 
"generous concessions" for peace with the Palestinians, and 
that his government would "do all in its power to reach peace 
with all our neighbors and with the entire Arab world."  We 
note that while largely non-ideological on the peace process, 
Netanyahu does maintain an ideological passion for free 
markets, which suggests to us that his commitment to 
facilitating investment in the West Bank is more than just 
rhetoric and will result in active personal involvement on 
his part. 
 
--------------- 
FOCUSED ON IRAN 
--------------- 
 
¶9. (SBU) Netanyahu holds strong views on the Iranian threat. 
He believes that Iranian President Mahmoud Ahmadinejad should 
be taken at his word when he says Israel should be wiped off 
the map, and that deterrence theory does not apply to a 
nuclear-armed Iran. Netanyahu argues that Hamas in Gaza and 
Hizballah in Lebanon represent Iranian bases surrounding 
Israel.  While some have suggested that Netanyahu may prefer 
to pursue negotiations with Syria rather than deal with the 
Palestinian issue, at least so far Netanyahu has consistently 
expressed great skepticism about Syria's 
willingness to give up its strategic ties to Iran in return 
for Israeli withdrawal from the Golan. 
 
********************************************* ******************** 
Visit Embassy Tel Aviv's Classified Website: 
http://www.state.sgov.gov/p/nea/telaviv 
********************************************* ******************** 
CUNNINGHAM