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UNCLAS SECTION 01 OF 04 STATE 122214 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: IS KPAL PREL KWBG
SUBJECT: GUIDANCE AND ACTION REQUEST: ISRAEL'S SETTLEMENT 
MORATORIUM 
 
¶1. (U) This is an action request.  See paragraphs 3 and 4. 
 
¶2. (U) On November 25, the Government of Israel (GOI) 
announced a 10-month moratorium on new settlement 
construction and new approvals in the West Bank.  Following 
the announcement by the GOI, Secretary Clinton released a 
written statement and Special Envoy (S/E) for Middle East 
Peace George Mitchell gave a public statement and press 
briefing.  Transcripts of both are available on the state 
department website and are in both Hebrew and Arabic. 
 
¶3. (SBU) Post should engage with the host government on the 
moratorium and stress the U.S. commitment to the resumption 
of negotiations that lead to the two-state solution and 
report back host government's reaction front channel by 
December 3, 2009. 
 
¶4. (SBU) Talking points: 
 
General: 
 
-     We believe that a two-state solution to the conflict is 
the best way to realize the shared goal of Israelis and 
Palestinians to live in peace and security. 
-     The President, Secretary, and S/E Mitchell know that 
achieving this goal will be difficult, but also have said 
that they will not waiver in their persistent pursuit of a 
comprehensive peace in the Middle East. 
-     For that reason, the President has dedicated himself 
and his Administration to the resumption of 
Israeli-Palestinian negotiations and to the creation of an 
atmosphere that maximizes the prospects for success. 
-     It is our hope to resume negotiations without 
preconditions as soon as possible.  The United States will 
play an active role in those negotiations once they resume. 
 
Israel's West Bank Moratorium: 
 
-     The moratorium is a unilateral decision by the 
Government of Israel. 
-     To be clear: this is neither an agreement between the 
U.S. and Israel on settlements, nor is it an agreement 
between Israel and the Palestinians. 
-     For the first time ever, an Israeli government will 
stop housing approvals and all new construction of housing 
units and related infrastructure in West Bank settlements. 
The moratorium includes construction on projects that have 
full approvals and are not yet started. 
-     This is a positive development. 
-     The Israelis have said that the only exception will be 
a small number of public buildings (28 total), such as 
schools and synagogues, within existing settlements. 
-     Under the moratorium, those buildings already under 
construction will be completed (roughly 700 buildings or 2500 
units). But the number of buildings under construction will 
decline, since as each new building is completed, there will 
not be a new building started. 
-     So implementation of the moratorium could mean much 
less settlement construction than would occur if there is no 
moratorium. 
-     While this announcement falls short of a full freeze, 
we believe the steps announced by the Prime Minister are 
 
STATE 00122214  002 OF 004 
 
 
significant and could have substantial impact on the ground. 
-     United States policy on settlements remains unaffected 
and unchanged.  As the President has said: "America does not 
accept the legitimacy of continued Israeli settlements." 
-     To be clear, the steps we have suggested to all parties 
- Israel, the Palestinians, and the Arab states - to improve 
the atmosphere for negotiations are not ends in themselves 
and they certainly are not preconditions to negotiations. 
-     But they can make a valuable contribution toward 
achieving our goal of successful negotiations that result in 
a two-state solution. 
-     That's why we've urged the Palestinians to expand and 
improve their security efforts and to take strong and 
meaningful action on incitement. It's why we've urged the 
Arab states to take steps toward normalization of relations 
with Israel.  And it's why we've urged Israel to stop 
settlement activity. 
-     (IF ASKED) According to data provided by the GOI, there 
are an estimated 700 buildings currently under construction 
(this translates to roughly 2500 housing units.  This is less 
than the average number of units under construction over the 
past 10 years. In absolute numbers, the number of housing 
units under construction is the lowest it has been since 
1995.) 
 
Jerusalem: 
 
-     We recognize that the Palestinians and other Arab 
governments are concerned because Israel's moratorium permits 
the completion of buildings already started and limits the 
effect of the moratorium to the West Bank. 
-     We share those concerns. 
-     As to Jerusalem, United States policy remains 
unaffected and unchanged:  As has been stated by every 
previous administration which addressed this issue, the 
status of Jerusalem, and all other permanent status issues, 
must be resolved by the parties through negotiations. 
-     The United States also disagrees with some Israeli 
actions in Jerusalem affecting Palestinians in areas such as 
housing, including the continuing pattern of evictions and 
demolitions of Palestinian homes. 
-     The United States has not accepted and disagrees with 
any unilateral action by either party which could have the 
effect of pre-empting negotiations. 
 
Re-launching negotiations: 
 
-     It is our goal to re-launch negotiations between the 
parties as soon as possible. 
-     We believe that further delay is not in the interests 
of Palestinians, of Israelis, or of the U.S.  There never has 
been and there likely will never be a perfect time. 
-     We recognize of course that there are problems and 
difficulties.  But waiting will only make things worse.  So 
our goal is to enter negotiations as soon as possible. 
-     As the Secretary said: "We believe that through good 
faith negotiations the parties can mutually agree on an 
outcome which ends the conflict and reconciles the 
Palestinian goal of an independent and viable state based on 
the 1967 lines, with agreed swaps, and the Israeli goal of a 
Jewish state with secure and recognized borders that reflect 
subsequent developments and meet Israeli security 
requirements." 
-     It is important to emphasize that in her remarks, the 
Secretary said that both sides should be able to reconcile 
their goals, and specifically referred to the "Palestinian 
goal of an independent and viable state based on the 1967 
 
STATE 00122214  003 OF 004 
 
 
lines, with agreed swaps." 
-     Her statement of U.S. policy on negotiations goes 
further than the President's UNGA speech.  It also goes 
further in referencing the 1967 line as part of U.S. policy 
than any pervious administration has officially done.   This 
is significant. 
-     The U.S. will play an active role in those negotiations 
and we envision them to be time limited. 
 
Supporting the PA (for all action addressees except Abu 
Dhabi): 
 
-     We must show tangible support for Abu Mazen and the 
Palestinian Authority now; their budget is facing a critical 
point. 
-     The PA,s need for immediate budgetary assistance is 
acute.  The PA will not be able to meet the education, 
health, and security needs of its people ) let alone fund 
its plan for Gaza recovery or its two-year plan to build the 
institutions of statehood ) without your assistance. 
-     Sustaining the viability of the PA now is central to 
keeping us on the path toward the two-state goal. 
-     We cannot allow controversies and uncertainties about 
Abbas, leadership, or other political issues of the day to 
move us from that objective.  And President Abbas and the PA 
need your support now to get through this period. 
-     The U.S. already transferred $200 million to the PA in 
July, part of $350 million in budget support we provided the 
PA during our last fiscal year.  We are also looking for 
additional ways to get them even more help now.  Saudi Arabia 
also transferred $200 million to the PA in August.  Even with 
this level of assistance, we understand that the PA faces up 
to a $177 million end-of-year deficit.  We need you to come 
forward with assistance now to ensure that the PA remains a 
strong partner for peace. 
-     If we are serious about peace, we cannot let the 
institutions of responsible Palestinian government fail.  The 
PA, led by President Abbas and Prime Minister Salam Fayyad, 
is the most transparent and effective government that 
Palestinians have ever seen.  Donor support is helping to 
drive reforms that are translating into a better quality of 
life for Palestinians now, and which will make donor support 
less needed in the future. 
-     We are fully confident in the measures that the PA has 
put in place to ensure financial accountability and 
transparency.  We would not have transferred one half billion 
dollars over the past two years in U.S. assistance to the PA 
as budget support if we had doubts. 
-     In Gaza, the PA effectively is a lifeline to more than 
half a million people (PA employees and their families) ) 
keeping them out of absolute misery by making sure that 
salaries and social welfare payments are paid on time.  Hamas 
and other extremist groups are the immediate beneficiaries if 
the PA cannot meet the needs of its people. 
 
For Egypt, Jordan, Saudi Arabia, UAE, only: 
-     We need your help in urging the Palestinians to resume 
negotiations as soon as possible.  These steps by Israel are 
significant, even though they fall short of a full freeze. 
-     We understand that you are concerned about the 
moratorium, especially the fact that it excludes Jerusalem. 
-     S/E Mitchell mentioned our own concerns about Jerusalem 
- including about demolitions and evictions - in his remarks 
after the Israeli announcement of the moratorium. 
-     Our policy has not changed and Jerusalem will be an 
issue on the table for negotiations. 
-     We believe that the best way to resolve the issue of 
 
STATE 00122214  004 OF 004 
 
 
Jerusalem and to have more leverage on divisive actions is to 
re-launch negotiations. 
-     Secretary Clinton,s statement of U.S. policy on 
negotiations goes further than the President's UNGA speech. 
It also goes further in referencing the 1967 line as part of 
U.S. policy than any pervious administration has officially 
done. 
-     This is noteworthy and significant; it is what the 
Palestinians said was needed in order to resume negotiations. 
-     Now we need your help to bring them to the table and to 
support them in this process. 
-     Let me assure you that the U.S. will play an active 
role in the negotiations and help move the Israelis, but your 
support of the PA and the resumption of negotiations is 
critical. 
 
¶5. (SBU) Please contact Alon Sachar for questions about 
Israel's settlement moratorium (office: 202-647-2267, 
blackberry: 202-664-7214).  Please email Alon Sachar 
(SacharAX@state.sgov.gov) and Payton Knopf 
(KnopfPL@state.sgov.gov) with post's reply cables. 
CLINTON