US embassy cable - 04TELAVIV2335

C O N F I D E N T I A L SECTION 01 OF 03 TEL AVIV 002335 
 
SIPDIS 
 
E.O. 12958: DECL: 04/21/2014 
TAGS: PGOV, PREL, KWBG, IS, GAZA DISENGAGEMENT, GOI INTERNAL, ISRAELI-PALESTINIAN AFFAIRS 
SUBJECT: KEY MINISTERS AND WEISSGLAS REVIEW POTUS-SHARON 
UNDERSTANDINGS, DISENGAGEMENT POLITICS, IMPLEMENTATION AND 
AFTERMATH 
 
 
Classified By: Ambassador Daniel C. Kurtzer for Reasons 1.4 (B) and (D) 
. 
 
1. (C) SUMMARY: In April 20 meetings with U/S Bolton and the 
Ambassador, Olmert and Weissglas said there is still a chance 
to keep the GOI coalition together, even if disengagement 
moves forward.  However, Minister Lieberman, leader of one of 
the right-wing parties that is expected to bolt, told the 
Ambassador that there was no chance he would stay once the 
Cabinet approves disengagement.  Sharansky, a Likud opponent 
of disengagement, hinted that he probably would not resign. 
Weissglas described the President's April 14 statements with 
Sharon as a shock to the Palestinian Authority, and thereby a 
potential spur to PA reform.  He asserted that success in 
maintaining order in Gaza after Israeli withdrawal would have 
a major impact on Israeli public views about West Bank 
disengagement.  Disengagement opponent Sharansky lauded the 
President's letter to Sharon, and asserted that the GOI would 
introduce it, along with a similarly favorable 1976 letter 
from President Ford, in final status talks.  Olmert claimed 
that Sharon's April 18 statement tying Gaza withdrawal to 
completion of the West Bank fence was carefully worded to 
allow wiggle room.  Weissglas said the withdrawal process 
could take up to 18 months if the settlers resisted, but 
recent settler expressions of interest in compensation 
indicated that withdrawal would move more quickly.  He said 
Sharon is examining whether the settlers can receive advance 
payments; this would allow departures to begin within "a few 
months."  Weissglas lauded Egyptian cooperation, and Olmert 
lauded PM Blair, although he said he shared Sharon's dim view 
of a UK security role with the Palestinians.  Netanyahu 
emphasized the importance of Gaza economic development, his 
best ideas for which were the planned Aqaba to Ashdod "land 
bridge" and the employment of Gazans in "huge entertainment 
centers" outside Gaza.  He said he had not yet given thought 
to integrating Gaza settlers into the Israeli economy, but 
thought it would "probably" be a problem. END SUMMARY. 
 
2. (C) Visting Under Secretary John Bolton and the Ambassador 
discussed Gaza disengagement in April 20 meetings with Likud 
ministers Olmert, Netanyahu, and Sharansky, and with PM Chief 
of Staff Weissglas.  The Ambassador discussed the same topic 
in a separate April 20 meeting with Transportation Minister 
Lieberman of the National Union (NU). 
 
---------------- 
Coalition Future 
---------------- 
 
3. (C) Rejecting the conventional wisdom that the GOI's two 
right-wing coalition members, the National Religious Party 
(NRP) and NU, will inevitably quit the government over Prime 
Minister Sharon's Gaza withdrawal plan if it goes forward, 
Olmert, the leading proponent of disengagement within Likud, 
said he hoped the coalition would stay together, and believed 
it could.  The coalition, he said, would need the two 
pro-settler parties to help manage national emotions once the 
wrenching process of settlement dismantlement begins.  Their 
departure from the coalition would also create a potentially 
difficult interim period between coalitions because Sharon 
would not have a majority behind him in the Knesset.  Olmert 
believed NRP and NU could stay in the coalition and save face 
by arguing that their departure would not stop Gaza 
disengagement in any case, but that it would lead to a new 
coalition featuring both Shimon Peres and Shinui. 
 
4. (C) Weissglas likewise held out hope that NRP and NU could 
choose to stay in the coalition, claiming that the two 
parties' determination had been wavering in recent days. 
Their "red lines," he commented, had not stayed fixed, moving 
from the PM's commitment to the disengagement policy, to a 
Cabinet vote in favor, to actual steps on the ground. 
Netanyahu, while also expressing the hope that NRP and NU 
would remain in the coalition, thought it unlikely.  He 
lamented the impact of a possible change of coalition on his 
economic program, commenting that "Likud, Shinui and 
Lieberman" had an agreement to move quickly on free-market 
reforms. 
 
5. (C) Lieberman categorically rejected any possibility that 
he would stay in the coalition after the Cabinet approves the 
disengagement plan.  The Ambassador pressed Lieberman on 
whether he did not see any advantages to staying in the 
coalition.  Lieberman replied that one does not have a choice 
in certain decisions.  Asking him to stay in the coalition 
after it approves settlement removals would, he said, be like 
"asking a religious man to eat pork."  Sharansky, another 
disengagement opponent, said he could not imagine how the 
coalition would hold together after Sharon's plan moves 
forward.  The Ambassador asked Sharansky whether he, 
personally, would stay in the coalition if disengagement 
prevails.  Sharansky hinted that he would probably stay in, 
calling resignation a "more symbolic than practical" gesture, 
and commenting that his decision would hinge on whether he 
would have more influence inside or outside the Cabinet. 
----------------------------- 
Impact of Bush-Sharon Meeting 
----------------------------- 
 
6. (C) Weissglas described the results of the April 14 
Bush-Sharon summit as an important source of much-needed 
leverage with the Palestinians.  Experience over the past two 
years, he argued, has demonstrated that few means of pressure 
are available to use on the Palestinians.  Economic pressure 
has little value on a population that is already very poor. 
Changes that one might be able to help shape in Palestinian 
public opinion yield little, if any, political action by the 
leadership.  Israel's ability to apply military pressure is 
constrained by diplomatic and humanitarian concerns. 
 
7. (C) The April 14 message out of Washington, however, very 
much shook Palestinian leaders, in Weissglas' view.  For the 
first time, these leaders confronted the possibility that 
outsiders would make decisions for them.  This new source of 
pressure might lead to internal change in the PA.  If all 
goes according to plan, Palestinians will find themselves in 
control of Gaza sometime next year.  How they handle this 
responsibility could prove to be an "extremely constructive 
pilot" project, with ramifications for the future of the West 
Bank.  The maintenance of peace and order in Gaza would have 
a big impact on Israeli public opinion.  Weissglas, however, 
was uncertain whether the Palestinians were up to the 
challege, commenting that an "outdated Palestinian mentality" 
left the Palestinians inclined to complain, rather than take 
charge of their own problems. 
 
8. (C) Sharansky, while reaffirming his opposition to 
disengagement, lauded Sharon for the letter he received from 
President Bush.  He noted that President Ford had written a 
letter in 1976 that was similarly positive to Israeli 
positions.  Saying he did not want to sound too cynical, 
Sharansky said that the GOI would try to use both letters to 
its benefit in final status negotiations.  In any event, 
Sharansky said, he did not see that the "dramatic and 
difficult" steps involved in disengagement would advance the 
peace process, although he said he hoped that he was wrong. 
 
---------------------------------------- 
Understandings with Bibi about the Fence 
---------------------------------------- 
 
9. (C) Netanyahu's decision after the Washington summit to 
endorse Sharon's disengagement plan came up in the meeting 
with Olmert, although not in the meeting with Netanyahu, 
himself.  Olmert asserted that Netanyahu had not wanted to 
find himself isolated in opposition to the plan after the 
April 17 Rantisi assassination.  The PM made Netanyahu's 
support possible by appearing to accede to Netanyahu's demand 
for completion of the West Bank separation barrier to precede 
disengagement, and for the fence to take in Ariel.  In fact, 
Olmert stressed, the PM's statement linking fence issues to 
disengagement had been carefully worded.  Sharon, according 
to Olmert, said that "we'll make an effort" to complete the 
fence before disengagement begins, and that the route of the 
fence would be "in accord with the GOI decision" about the 
route, i.e, that there is no change in status quo plans for 
the route. 
 
----------------------- 
Disengagement Timetable 
----------------------- 
 
10. (C) Weissglas said Sharon's disengagement plan originated 
with the realization that the near future held no prospects 
for a final status agreement.  The plan seeks to "rearrange 
space" and security provisions, and undo the deadlock between 
the parties.  The plan might not follow the terms of the 
roadmap, but it makes progress in the right direction. 
Disengagement also dispels Palestinian doubts about the 
willingness of Israel ever to make territorial concessions. 
 
11. (C) Asked about the timeline for withdrawal from Gaza, 
Weissglas described two scenarios.  If the settlers resist 
leaving their homes, the process could take 18 months. 
(Comment: Weissglas apparently meant 18 months from the 
beginning of actual departure/removal of settlers.)  The 
process would go much more quickly, he said, if a significant 
number of settlers cooperate.  Signs so far indicate that 
cooperation is likely.  A number of attorneys, some of whom 
represent entire settlements, have already inquired about 
compensation.  Weissglas said Sharon had asked the Ministry 
of Justice on April 19 to advise whether advance payments to 
settlers would be possible.  If so, some settlers could begin 
moving out of Gaza within "the next few months." 
 
----------------- 
Role of Outsiders 
----------------- 
 
12. (C) Weissglas presented a potentially rosy portrait of 
Gaza after Israeli withdrawal.  The agro-industrial 
facilities that settlers will leave behind could produce 
three times the food requirements of Gaza City.  Egyptian 
intelligence chief Omar Suleyman had claimed that Egyptian 
assistance could help turn Gaza into a new Singapore. 
Weissglas lauded Egyptian cooperation overall on 
disengagement, commenting that the prospect of Israeli 
withdrawal from Gaza had forced the GOE "to leave its 
armchair."  He hoped that Jordan would be similarly helpful 
on West Bank disengagement.  While West Bank settlement 
removals envisaged in current plans are only "symbolic," the 
GOI, he claimed, has plans for "deeper" removals in 
subsequent stages. 
 
13. (C) In response to Bolton's question about European 
reaction to the President's statements of April 14, Olmert 
said that PM Blair had been very helpful.  The reactions of 
other Europeans would depend on the evolution of events, 
although they wanted to be helpful.  Olmert thought that the 
Europeans could help foster a "less loaded atmosphere" in 
Gaza, and pointed to the work the UK is doing with Dahlan. 
The Ambassador pointed out that Sharon had told the President 
that he objected to the UK role.  The Ambassador urged the 
GOI to "think strategically" by leaving room for a 
constructive European role in Gaza that goes beyond economic 
development.  Olmert commented that he does not see things 
exactly as Sharon does and would like to give the Europeans a 
greater role, although he said that he, too, disapproved of 
the UK role in security. 
 
14. (C) Olmert asked the Ambassador for his vision of 
European involvement, noting that he had difficulty 
envisaging a meaningful role for France or the Scandinavians. 
 Some German officials, such as FM Fischer, are, on the other 
hand, friendlier to Israel.  The Ambassador responded by 
pointing to the message the President delivered to Sharon the 
previous week.  The President indicated that he saw 
disengagement leading to his two-state vision, and that he 
hoped to see the Palestinian economy develop.  Assisting on 
this side could be a good role for the Europeans.  The 
Ambassador commented that the U.S. and Israel need to do some 
strategic thinking together about this question. 
 
----------------------------------- 
Economic Future after Disengagement 
----------------------------------- 
 
15. (C) Netanyahu predicted that the actual process of 
withdrawal from settlements would be a "convulsion," the 
impact of which is unclear.  The process should thus not go 
too fast.  The GOI is already taking important steps to 
create a better post-disengagement reality in Gaza by 
"cutting Hamas down to size."  He underlined the need to 
begin economic projects in Gaza.  The Ambassador asked 
whether the GOI had formed any kind of working group to 
examine the question.  Without answering directly, Netanyahu 
said the greatest contribution would come from a "land 
bridge" project linking the ports of Aqaba and Ashdod.  The 
Palestinians would get docks at Ashdod and thereby be able to 
exploit export opportunities to Europe. 
 
16. (C) The Ambassador pressed Netanyahu about plans that 
would lead to job creation in Gaza.  Positing that Gaza's 
comparative economic advantages lie in low labor costs and 
agriculture, Netanyahu said consideration should be given to 
new labor-intensive industries, notably tourism.  The 
creation of "huge entertainment centers" would create many 
jobs.  These centers could be "next door" to Gaza, as 
security considerations and the absence of rule of law would 
deter outsiders from investing in Gaza, itself.  Bolton asked 
whether the GOI foresaw problems integrating Gaza settlers 
into the national economy.  Netanyahu replied that he had not 
yet given the question any thought, but thought it would 
"probably" be a problem. 
 
17. (U) U/S Bolton did not have an opportunity to review this 
message. 
 
********************************************* ******************** 
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. 
********************************************* ******************** 
KURTZER