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### Viewing cable 07TELAVIV64, SCENESETTER FOR THE SECRETARY'S JANUARY 13-15

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Reference ID | Date | Classification | Origin
--- | --- | --- | ---
07TELAVIV64 | 2007-01-08 16:04 | SECRET | Embassy Tel Aviv

`

    VZCZCXRO2156
    OO RUEHROV
    DE RUEHTV #0064/01 0081638
    ZNY SSSSS ZZH
    O 081638Z JAN 07
    FM AMEMBASSY TEL AVIV
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 8615
    INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY
    RHEHNSC/NSC WASHDC PRIORITY

` `

    S E C R E T SECTION 01 OF 03 TEL AVIV 000064

    SIPDIS

    SIPDIS

    E.O. 12958: DECL: 01/05/2017
    TAGS: PREL PTER PGOV IS KWBG
    SUBJECT: SCENESETTER FOR THE SECRETARY'S JANUARY 13-15
    VISIT TO ISRAEL

    Classified By: Ambassador Richard H. Jones, Reason 1.4 (b) (d)

    ¶1.  (S) Madam Secretary, internal tensions among GOI leaders
    have intensified since your last visit and have reached the
    point that there appears to be little coordination or even
    dialogue among the key decision makers.  Therefore, we will
    need to be sensitive to perceptions that we are favoring one
    faction over another.  The divisions at the top here are part
    of an increasingly gloomy public mood, with a new corruption
    allegations making headlines virtually daily, and a growing
    sense of political failure despite Israel's strong economy
    and a sustained success rate in thwarting suicide attacks.
    Prime Minister Olmert's approval ratings were only 23 percent
    in the latest poll, and Israeli interlocutors across the
    political spectrum are speaking openly of a crisis of public
    confidence in the country's leadership at a time when
    Israelis feel an urgent need for strong leadership to face
    the threats from Iran, Syria, Hamas and Hizballah.

    OPTIMISM ERODING
    ----------------

    ¶2.  (S) The year 2007 has started off badly for Israelis.
    The good feeling generated by PM Olmert's long-delayed
    December 23 summit meeting with Abu Mazen quickly dissipated
    under the weight of reports of a new settlement in the Jordan
    Valley (now suspended by Peretz), continued Qassam rocket
    attacks on Sderot and neighboring kibbutzim, foot-dragging on
    both sides in implementing the transfer of tax revenues, lack
    of progress on the release of Cpl. Gilad Shalit, and the
    unpleasant atmospherics of the January 4 Olmert-Mubarak
    summit, which was overshadowed by a botched IDF daylight raid
    in the center of Ramallah in which four Palestinians were
    killed.

    ¶3.  (S) The Ramallah operation, which was authorized by the
    IDF's West Bank commander without informing the Minister of
    Defense, served as a stark reminder of the lack of
    coordination between Israel's military and its civilian
    leadership.  When it comes to Israel's strategy for dealing
    with Palestinians, it increasingly seems that military is
    military, civilian is civilian and never the twain shall
    meet!  Despite Olmert's belated embrace of Abu Mazen as a
    peace partner, there is growing concern that moderate Arab
    willingness to maintain the embargo on Hamas may be eroding,
    and that Fatah may fail to muster the popular support it will
    need to depose Hamas, whether at the ballot box or in the
    streets.  Meanwhile, the upcoming release of the results of
    the Winograd Commission's investigation of the Lebanon war
    hangs like a sword of Damocles over the heads of Olmert,
    Defense Minister Peretz, and IDF Chief of General Staff
    Halutz.  Peretz and Halutz have both publicly stated that
    they will resign if the Commission holds them responsible for
    serious errors in the conduct of the war, but Olmert has
    refrained from public comments.  Olmert is also awaiting the
    results of several separate investigations involving
    corruption allegations, any one of which could further damage
    him severely, if not force his resignation.

    ¶4.  (S) While Israeli anxiety over a possible dramatic shift
    of U.S. policy as a result of the Iraq Study Group's report
    has been allayed by statements by you and the President,
    there continues to be deep uneasiness here that the
    Baker-Hamilton recommendations reflect the shape of things to
    come in U.S. policy.  Israelis recognize that U.S. public
    support for the Iraq war is eroding and are following with
    interest the President's upcoming articulation of the
    revamped policy, but they are deeply concerned that
    Israeli-Palestinian issues not become linked in American
    minds to creating a more propitious regional environment for
    whatever steps we decide to take to address the deteriorating
    situation in Iraq.

    ¶5.  (S) Iran's nuclear program continues to cause great
    anxiety in Israel.  Given their history, Israelis across the
    political spectrum take very seriously Ahmadinejad's threats
    to wipe Israel off the map.  Olmert has been quite clear in
    his public comments that Israel cannot tolerate a
    nuclear-armed Iran, a position stated even more emphatically
    by opposition leader Netanyahu, who compares today's Iran to
    Nazi Germany in 1938.  Despite the worst-case assessments of
    Israeli intelligence, however, there is a range of views
    about what action Israel should take.  The MFA and some of
    the think tank Iran experts appear increasingly inclined to
    state that military action must be a last resort and are
    taking a new interests in other forms of pressure, including
    but not limited to sanctions, that could force Iran to
    abandon its military nuclear program.  The IDF, however,
    srikes us as more inclined than ever to look toward a
    military strike, whether launched by Israel or by us, as the
    only way to destroy or even delay Iran's plans.  Thoughtful

    TEL AVIV 00000064  002 OF 003

    Israeli analysts point out that even if a nuclear-armed Iran
    did not immediately launch a strike on the Israeli heartland,
    the very fact that Iran possesses nuclear weapons would
    completely transform the Middle East strategic environment in
    ways that would make Israel's long-term survival as a
    democratic Jewish state increasingly problematic.  That
    concern is most intensively reflected in open talk by those
    who say they do not want their children and grandchildren
    growing up in an Israel threatened by a nuclear-armed Iran.

    LIVNI RISING
    ------------

    ¶6.  (C) FM Tzipi Livni is frustrated by Olmert's continued
    refusal to coordinate closely, and -- perhaps with an eye on
    polls showing her popularity at over double the level of the
    Prime Minister -- suggested to a Ha'aretz interviewer in late
    December that she would challenge Olmert for the prime
    ministership if he continued not to give her his full
    backing.  In the same interview, Livni provided an outline of
    her thinking, but not a detailed plan, on the way ahead with
    the Arabs, including negotiating an interim agreement with
    the Palestinians in which the separation barrier would serve
    as the border, and refusing to engage with Syria unless Asad
    takes steps to end support for terrorism and distances
    himself from Iran.  Livni's policy adviser has confirmed to
    us that she has engaged in her own discrete discussions with
    Palestinians, but very much in an exploratory mode.  Livni
    told Senators Kerry and Dodd that she doubted that a final
    status agreement could be reached with Abu Mazen, and
    therefore the emphasis should be on reforming Fatah so that
    it could beat Hamas at the polls.  MFA officials tell us that
    Livni is also focused on the need to keep Hamas isolated.
    She and her senior staff have repeatedly expressed concern
    that some EU member-states are wobbly on this point.
    Meanwhile, Livni is keenly aware that unlike Olmert, she has
    little to fear from the Winograd Commission report (nor is
    she tainted by the corruption allegations that dog Olmert).
    Her incipient bid to take Olmert's place could become more
    serious once the report's preliminary conclusions are
    released next month.

    SHIFTING VIEWS ON SYRIA
    -----------------------

    ¶7.  (S) Olmert and Livni agree that negotiations with Syria
    would be a trap that Damascus would use to end the
    international pressure on it and to gain a freer hand in
    Lebanon.  While they see public relations downsides to
    dismissing Syrian peace overtures out of hand, they continue
    to insist that no negotiations will be possible until Syria
    reduces its support for terrorism and/or takes direct steps
    to secure the release of Israeli prisoners held by Hamas and
    Hizballah.  Olmert and Livni are supported in that view by
    Mossad chief Dagan, who takes a dim view of Syrian
    intentions.  A significant part of the security
    establishment, however, appears to be reaching the conclusion
    that it is in Israel's interest to test Asad's intentions --
    possibly through the use of a back channel contact -- and to
    seek to wean him away from Tehran.  They are joined in that
    view by Defense Minister Peretz, much of the Labor Party and
    the Israeli left, who argue that Israel cannot afford to
    refuse to at least explore Asad's offer to negotiate, often
    comparing that stance to Golda Meir's much-criticized
    decision to spurn Sadat's offer to negotiate, which then led
    to the 1973 Yom Kippur War.  Press reports January 5 stated
    that the defense establishment had recommended to Olmert that
    he open an exploratory channel to Damascus in two months, a
    timeline reportedly linked to the completion of reviews of
    U.S. policy toward Iraq and the Middle East, as well as to
    clearer indications of Abu Mazen's intentions and
    capabilities vis a vis Hamas.

    PERETZ-OLMERT TENSIONS
    ----------------------

    ¶8.  (C) According to leaks from a recent Labor Party
    leadership meeting, Amir Peretz said that he feels completely
    disconnected from Olmert.  Ever since Peretz' telephone
    conversation with Abu Mazen which infuriated Olmert, the two
    reportedly barely speak to each other.  Television news
    reports on January 4 trumpeted rumors that Olmert had decided
    to remove Peretz as Defense Minister and replace him with
    former Prime Minister Ehud Barak, who has already announced
    plans to challenge Peretz for the Labor Party's leadership in
    late May primaries.  Even though the Prime Minister's Office
    almost immediately denied the reports, there is little doubt
    here that someone in the PMO was behind them.  While much of
    the Labor Party feels that Peretz has been a failure, both as
    Defense Minister and as Party Secretary General, and Peretz'
    popularity with the general public has hit rock bottom, Labor

    TEL AVIV 00000064  003 OF 003

    members widely condemned the media trial balloon, which they
    saw as an unacceptable attempt by Olmert's advisers to
    intervene in their party's leadership contest.  In any event,
    the incident is yet another indication of the intense degree
    of personal rancor and dysfunction prevailing at the top of
    the GOI.

    PERETZ AND SNEH OUR AMA PARTNERS
    --------------------------------

    ¶9.  (C) Notwithstanding the GOI's internal discord, there is
    some good news in our efforts to nudge the GOI toward
    improvements in Palestinian quality of life issues.  Despite
    his political woes, Peretz has proven himself a serious
    partner in our efforts to implement the Agreement on Movement
    and Access (AMA) and more generally in a slow but steady push
    by the MOD to force a reluctant IDF to accept steps to reduce
    barriers to Palestinian movement and to revive the
    Palestinian economy.  Deputy Defense Minister Efraim Sneh,
    who will likely accompany Peretz to your meeting, has emerged
    as the point man for these efforts.  Sneh shares Peretz'
    conviction that Israel's security stranglehold on the
    Palestinians is "winning the battle but losing the war," but
    Sneh, who in a decades-long career served as a military
    governor of the West Bank, commanded an elite combat unit,
    and took part in the famed Entebbe raid, also has both an
    intimate knowledge of the Palestinians and a combat
    commander's credibility with the IDF that Peretz sorely
    lacks.  Your meeting with Peretz provides an opportunity to
    express appreciation for his and Sneh's efforts and to
    encourage them in their struggle to bring recalcitrant
    elements in the IDF to heel.  The more progress we can
    achieve with them on AMA implementation now, the easier it
    will be to achieve meaningful results with both parties in
    the coming year.

    ********************************************* ********************
    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.
    ********************************************* ********************
    JONES

`