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### Viewing cable 09TELAVIV2473, SCENESETTER FOR THE VISIT OF DEPUTY SECRETARY

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
09TELAVIV2473 | 2009-11-12 15:03 | 2010-12-19 21:09 | SECRET | Embassy Tel Aviv

`

    VZCZCXRO6141
    OO RUEHROV
    DE RUEHTV #2473/01 3161551
    ZNY SSSSS ZZH
    O 121551Z NOV 09
    FM AMEMBASSY TEL AVIV
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 4192
    INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY
    RHEHNSC/NSC WASHDC PRIORITY

` `

    S E C R E T SECTION 01 OF 04 TEL AVIV 002473

    SIPDIS

    DEPARTMENT FOR DEPUTY SECRETARY STEINBERG

    E.O. 12958: DECL: 11/12/2019
    TAGS: PREL PGOV PTER MOPS KWBG IS IR
    SUBJECT: SCENESETTER FOR THE VISIT OF DEPUTY SECRETARY
    JAMES STEINBERG

    Classified By: Deputy Chief of Mission Luis G. Moreno, Reason 1.4 (b) (
    d)

    ¶1. (S) Summary. Israel is deceptively calm and prosperous.
    The security situation inside Israel is the best since the
    outbreak of the Second Intifada, the economy has weathered
    the storms of the international economic crisis, and
    Netanyahu's governing coalition is stable, for the time being
    at least. Yet outside the storm is gathering and Israelis of
    many different political outlooks agree on the need to seize
    the initiative, even while they disagree about what exactly
    should be done. Israelis see Iran as the primary regional
    threat, both due to its nuclear program and its projection of
    power directly into Gaza and southern Lebanon. The Israeli
    navy's seizure of a ship loaded with a huge shipment of
    Iranian arms November 3 has provided tangible proof of
    Iran's involvement in arming Hamas and Hizballah. Syrian
    intentions are also a source of concern, as Israeli analysts
    see Asad moving closer to Iran and Hizballah even as Syria
    improves its relations with the West. The sharp decline in
    Israel's long-
    standing strategic relationship with Turkey is adding a new
    element of instability into the picture. Prime Minister
    Erdogan's rhetorical support for Ahmedinejad and his
    dismissal of the threat posed by Iran's nuclear program is
    feeding the sense here of impending crisis, although the
    robust U.S.-Israeli security relationship is profoundly
    reassuring to Israeli security officials and the general
    public alike. Finally, the failure to re-launch
    Israeli-Palestinian negotiations and the political crisis in
    the Palestinian Authority is deeply disturbing to Israelis
    who still believe in a two-state solution. Even GOI skeptics
    are worried that the lack of a political dialogue and talk of
    a collapse of the PA are undermining the bottom-up approach
    they advocate as the alternative to a final-status agreement.
    Netanyahu insists that he is ready to start negotiations
    immediately without preconditions, but he will not negotiate
    on the basis of former PM Olmert's offer of a year ago. The
    opposition Kadima Party's number two, former IDF Chief of
    Staff and former Minister of Defense Shaul Mofaz, has
    generated considerable attention with a new peace plan that
    is based on offering the Palestinians a state with temporary
    borders in the next year or two, to be followed by intensive
    final status negotiations. Few here believe the Palestinians
    will accept this idea, but it may serve to push Netanyahu
    toward offering a peace initiative of his own. End Summary.

    Calm Before the Storm?
    ----------------------

    ¶2. (S) Israel in the fall of 2009 is deceptively calm on the
    surface. Israelis are enjoying the best security situation
    since the outbreak of the Second Intifada, the result of
    Israeli intelligence successes in destroying the suicide
    bombing network in the West Bank as well as good security
    cooperation with the Palestinian Authority's security forces.
    The Israeli economy has successfully weathered the world
    economic crisis, with only a slight uptick in unemployment
    and no major impact on the financial system. PM Netanyahu's
    center-right coalition is stable, and faces no significant
    challenge from the opposition Kadima Party. Netanyahu
    personally enjoys approval ratings over sixty percent, and
    appears to have benefited politically from the media
    obsession with reports of frictions with the U.S.
    Administration. Netanyahu so far has managed the more right
    wing elements of Likud and other rightist elements in the
    coalition, although tensions with the far right are likely to
    reemerge over peace process issues, including a temporary
    settlement freeze or a decision to make good on Barak's
    pledges to evacuate illegal outposts. There are signs of a
    growing split within the Labor Party, and Foreign Minister
    Lieberman continues to face the strong possibility of several
    criminal indictments for money laundering and obstruction of
    justice, but none of this threatens the stability of the
    coalition, at least not yet. The latest polls indicate that
    Likud would gain three seats if elections were held now.

    And Looming Threats
    -------------------

    ¶3. (S) Despite this good news for the government, Israelis
    are even more anxious than normal these days. Sixty-one
    years after the establishment of the State of Israel,
    Israelis sense a growing tide in the world challenging not
    just the occupation of territory seized in 1967, but even
    against the existence of the Jewish state within any borders.
    The GOI's alarm and outrage over the Goldstone Report was
    based on their view that the report represented an attempt to
    deny Israel the right to react military to terrorist threats.

    TEL AVIV 00002473 002 OF 004

    Security is indeed good and Israel's borders are generally
    the quietest they have been in years, but it is common
    knowledge that Hamas in Gaza and Hizballah in Lebanon both
    now possess rockets capable of hitting the greater Tel Aviv
    area, Israel's main population and economic center. When
    discussing Iran's nuclear program, sophisticated Israeli
    interlocutors note that the issue is not just whether a
    nuclear-armed Iran would launch nuclear-tipped missiles at
    Israel - although that possibility cannot be dismissed - but
    rather the regional nuclear arms race that would ensue and
    the impact of the resulting uncertainty on Israeli elites and
    foreign investors alike. Israel's remarkable high-tech
    economy is a great achievement, but it also makes Israel
    exceptionally vulnerable to a host of private decisions to
    live and invest elsewhere. Growing alienation among Israel's
    twenty-percent Arab minority and the increasing domination of
    Israeli Arab politics by an elite that identifies with
    Palestinian nationalism further complicates Israel's internal
    scene.

    ¶4. (S) Painstakingly constructed relations with Israel's
    neighbors are also fraying. Even optimists about relations
    with Egypt and Jordan admit that Israel enjoys peace with
    both regimes, but not with their people. The transformation
    of Michel Aoun into Hizballah's primary Lebanese ally may be
    the final nail in the coffin of Israel's decades-old
    relations with Lebanon's Maronite Christians. Finally,
    Israelis are deeply alarmed by the direction of Turkish
    foreign policy, and see Erdogan and Davutoglu as punishing
    Israel for the EU's rejection of Turkey while driving
    Israel's erstwhile strategic ally into an alternative
    strategic partnership with Syria and Iran.

    Gaza Dilemmas
    -------------

    ¶5. (S) Gaza poses its own set of dilemmas. The IDF general
    responsible for Gaza and southern Israel, Major General Yoav
    Galant, recently commented to us that Israel's political
    leadership has not yet made the necessary policy choices
    among competing priorities: a short-term priority of wanting
    Hamas to be strong enough to enforce the de facto ceasefire
    and prevent the firing of rockets and mortars into Israel; a
    medium-priority of preventing Hamas from consolidating its
    hold on Gaza; and a longer-term priority of avoiding a return
    of Israeli control of Gaza and full responsibility for the
    well-being of Gaza's civilian population. Israel appears
    determined to maintain its current policy of allowing only
    humanitarian supplies and limited commercial goods into Gaza,
    while sealing the borders into Israel. There are indications
    of progress in the indirect negotiations with Hamas over the
    release of Gilad Shalit in return for the release of hundreds
    of Palestinian prisoners, many of them hardened
    terrorists,but it is difficult to predict the timing of such
    a deal. Shalit's release would likely result in a more
    lenient Israeli policy toward the Gaza crossings, but a large
    prisoner exchange would be played by Hamas as a major
    political achievement and thus further damage the standing of
    Abu Mazen among Palestinians.

    Security Cooperation with the U.S. Reassuring
    ---------------------------------------------

    ¶6. (S) Especially given the sense of growing threats from
    all directions, Israelis from the Prime Minister on down to
    the average citizen are deeply appreciative of the strong
    security and mil-mil cooperation with the U.S. The
    U.S.-Israeli security relationship remains strong, as
    indicated by the joint U.S.-Israeli missile defense exercise
    Juniper Cobra 10 in which over 1,400 American personnel
    tested Israel's defense - and U.S. support thereof - against
    ballistic missile threats in the region . The United States
    remains committed to Israel's Qualitative Military Edge
    (QME), and has taken a number of steps to alleviate Israeli
    concerns over some potential U.S arms sales to the region,
    including the creation of four new QME working groups to
    further discuss these arms transfers. These working groups
    will soon begin deliberations, focusing on previous arms
    transfer agreements, mitigation measures for the planned U.S.
    F-15 sale to Saudi Arabia, technical mitigation issues, and
    intelligence policy.

    ¶7. (S) While the United States and Israel may not agree on
    some U.S. arms transfers to the region, these QME working
    groups will ensure a transparent process so that Israel is
    not surprised by any U.S. potential transfer. As it does in
    assessing all threats, Israel approaches potential U.S. arms
    sales from a "worst case scenario" perspective in which
    current moderate Arab nations (Egypt, Saudi Arabia, and

    TEL AVIV 00002473 003 OF 004

    Jordan) in the region could potentially fall victim to regime
    change and resume hostilities against Israel. It is
    primarily for this reason that Israel continues to raise
    concerns regarding the F-15 sale to Saudi Arabia, especially
    if the aircraft are based at Tabuk airfield near the Israeli
    border. We have deflected Israeli requests for additional
    information regarding the F-15 sale until we receive an
    official Letter of Request (LOR) from Saudi Arabia.

    ¶8. (S) Finally, an argument can be made that Israel has
    continued to raise concerns over the F-15 sale as leverage in
    its attempts to modify its purchase of the F-35 Joint Strike
    Fighter (JSF). Israel remains highly committed to the JSF as
    a successor to its aging F-16 fleet, although budgetary
    considerations have raised some doubts how Israel will be
    able to afford it. Nevertheless, Israel continues to press
    for the inclusion of an Israeli-made electronic warfare (EW)
    suite, indigenous maintenance capacity, and a lower cost per
    aircraft into its JSF purchase plans, and has repeatedly
    raised these issues with SecDef.

    Impasse with the Palestinians
    -----------------------------

    ¶9. (C) Polls show that close to seventy percent of Israeli
    Jews support a two-state solution, but a similar percentage
    do not believe that a final status agreement can be reached
    with the Palestinian leadership. Expressed another way,
    Israelis of varying political views tell us that after Abu
    Mazen spurned Ehud Olmert's peace offer one year ago, it
    became clearer than ever that there is too wide a gap between
    the maximum offer any Israeli prime minister could make and
    the minimum terms any Palestinian leader could accept and
    survive. Sixteen years after Oslo and the Declaration of
    Principles, there is a widespread conviction here that
    neither final status negotiations nor unilateral
    disengagements have worked. While some on the left conclude
    that the only hope is a U.S.-imposed settlement, a more
    widely held narrative holds that the Oslo arrangements
    collapsed in the violence of the Second Intifada after Arafat
    rejected Barak's offer at Camp David, while Sharon's
    unilateral disengagement from Gaza resulted in the Hamas
    takeover and a rain of rockets on southern Israel. Netanyahu
    effectively captured the public mood with his Bar Ilan
    University speech last June, in which he expressed support
    for a two-state solution, but only if the Plestinian
    leadership would accept Israel as the ation-state of the
    Jewish people and the Palestiian state would be
    demilitarized (and subject toa number of other
    security-related restrictions o its sovereignty that he did
    not spell out in deail in the speech but which are well
    known in Wahington). Palestinian PM Fayyad has recently
    temed Netanyahu's goal a "Mickey Mouse state" due to all the
    limitations on Palestinian sovereignty that it would appear
    to entail.

    ¶10. (S) Abu Mazen's stated intent not to seek another term is
    widely seen here as an effort to put pressure on Washington
    to put pressure on Israel to meet Palestinian terms for
    starting negotiations. Abu Mazen's statements have likely
    reinforced his image among Israelis as a decent man, and
    certainly a different breed from Arafat, but a weak and
    unreliable leader. Yet even some of the Israeli officials,
    including Avigdor Lieberman and Sylvan Shalom, who have been
    most skeptical about the prospects for a final status
    agreement in the near term, are now expressing concern at the
    lack of engagement with the PA and the prospects of the PA
    collapsing. Advocates of a bottom-up approach are finally
    realizing that without a political process, the security
    cooperation and economic development approach will become
    unsustainable. Netanyahu has told us that he considers Abu
    Mazen to be his negotiating partner, and in his latest public
    statements has stressed that he is not interested in
    negotiations for their own sake, but rather seeks a
    far-reaching agreement with the Palestinians, but it remains
    unclear to us how far Netanyahu is prepared to go. Netanyahu
    is interested in taking steps to strengthen Abu Mazen, but he
    will not agree to the total freeze on Israeli construction in
    the West Bank and East Jerusalem that Abu Mazen insists is a
    requirement for engaging with Netanyahu.

    Israeli Choices
    ---------------

    ¶11. (C) Former Defense Minister and former IDF Chief of Staff
    Shaul Mofaz generated a lot of media attention this week when
    he announced a peace plan that calls for establishing a
    Palestinian state with temporary borders on sixty percent of
    the West Bank, then entering final status negotiations.

    TEL AVIV 00002473 004 OF 004

    Mofaz' approach is similar to ideas that have been floated
    quietly over the past few months by Defense Minister Barak
    and President Peres, and Mofaz claims that both Barak and
    Peres support his plan. Mofaz' plan is in part an effort to
    undermine the political position of his rival for Kadima
    party leadership, former Foreign Minister Tzipi Livni.
    Livni, presumably drawing on her experience negotiating with
    the Palestinians during the Olmert government, says she
    opposes the idea of an interim solution, but instead supports
    intensive final status negotiations, perhaps this time with
    direct U.S. involvement. Livni and Mofaz both stress that
    they are motivated by a sense of urgency and that time is not
    on Israel's side.

    ¶12. (C) Netanyahu still holds the political cards here,
    however, and we see no scenarios in which Livni or Mofaz
    become prime minister in the near future. As Mofaz told the
    Ambassador earlier this week, Netanyahu may wait until the
    Palestinian elections, if they are in fact held in January,
    but the initiative is in his hands. If the Palestinians
    continue to refuse to engage on terms that Netanyahu can
    accept, it is possible that Netanyahu could turn his
    attention to Syria. Media reports that Netanyahu asked
    President Sarkozy to deliver a message to Asad may turn out
    to be accurate, but as with the Palestinians, Netanyahu will
    not resume talks with Syria where they left off under Olmert,
    but will insist on negotiations without preconditions.
    CUNNINGHAM

`