US embassy cable - 04NEWDELHI7966

C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 007966 
 
SIPDIS 
 
E.O. 12958: DECL: 12/16/2014 
TAGS: PREL, PGOV, TSPA, PTER, ECON, IN, IS, India-Israel 
SUBJECT: INDO-ISRAEL RELATIONS BACK ON TRACK 
 
REF: A. NEW DELHI 7348 
     B. NEW DELHI 981 
 
Classified By: DCM Robert O. Blake, Jr.  Reasons 1.4 (B,D). 
 
1.  (C) Summary: Israeli Vice Prime Minister Ehud Olmert's 
December 5-10 visit to India was "extremely positive" and 
provided an opportunity to expand the bilateral relationship 
beyond defense, Israel Embassy DCM Yoed Magen told A/PolCouns 
and Poloff on December 16.  The visit, the first high-level 
exchange between India and Israel since the UPA government 
assumed power in May, was a welcome improvement over the poor 
foreign office consultations that took place in November. 
Even FM Natwar Singh emphasized the importance of ties with 
Jerusalem, a reflection of the growing consensus within the 
GOI about the utility of good relations with Israel.  Magen 
said the successful Counter Terrorism Joint Working Group, 
held just prior to Olmert's visit, highlighted the countries' 
mutual concerns and helped recover the momentum lost after 
the foreign office consultations.  Israel raised its concerns 
about Iran, prompting NSA Dixit to acknowledge that India 
faces a "real dilemma," given New Delhi's good relations with 
Iran and Tehran's nuclear ambitions.  If the November 
India-Israel foreign office consultations demonstrated the 
sometimes opposing views at work within the GOI on relations 
with Israel, the Vice PM's visit illustrated solid support 
for them at the Ministerial level.  End Summary. 
 
Many Ministers But No PM 
------------------------ 
 
2.  (C) Offering a readout of the first high-level exchange 
between India and Israel since the UPA government assumed 
power, Israel Embassy DCM Yoed Magen (protect throughout) 
told A/PolCouns and Poloff that the December 5-10 visit of 
Vice Prime Minister Ehud Olmert was a significant improvement 
over the "uncomfortable" foreign office consultations held in 
November (Ref A).  Signaling New Delhi's intent to strengthen 
ties with Israel, Olmert received meetings with seven 
ministers, including FM Natwar Singh, Finance Minister 
Chidambaram, and Minister of Commerce Kamal Nath, as well as 
the Ministers of Agriculture, Science and Technology, and the 
Ministers of State for Communications and Information 
Technology, and the Prime Minister's Office. 
 
3.  (C) PM Manmohan Singh declined to meet with the 
delegation, despite former PM Vajpayee's meeting with Deputy 
PM Silvan Shalom (of lower rank than Olmert) in February (Ref 
B).  Magen opined that a meeting with the PM would have 
publicly signaled a "close degree of intimacy" with Israel, 
something the GOI may prefer to keep private.  Reflecting the 
economic focus of the visit, representatives from over 50 
Israeli companies also participated in the trip and traveled 
to Bangalore, Mumbai, and New Delhi, and held hundreds of 
meetings with Indian business people. 
 
Natwar's Friendly Gesture 
------------------------- 
 
4.  (C) According to Magen, Olmert had an "excellent" 
discussion with FM Natwar Singh, a stark contrast to the 
"disappointing" foreign office consultations held at the 
Secretary level in November.  He speculated that the meeting 
 
SIPDIS 
was the first time Natwar had ever been exposed to Israeli 
policy directly from a senior Israeli official, calling the 
conversation an "extremely important step in building 
confidence between the two countries."  He said that Natwar 
and Olmert "had good chemistry" during the meetings, and the 
FM unexpectedly appeared at a dinner in honor of the Israeli 
delegation, "as a friendly gesture and to reassure Israel of 
the importance India attaches to relations."  Natwar 
emphasized that Israel was important to him, "despite what 
people say," Magen stated, adding that he heard Natwar had 
excused himself from a cabinet meeting in order to attend the 
dinner.  Commenting on the evolution of Natwar's thinking, 
Magen noted that the FM did not mention the Non-Aligned 
Movement once during his November 6 speech at a "Hindustan 
Times" conference or in his recent remarks before Parliament. 
 
5.  (C) As an emerging global power, India does not want to 
be absent from developments in the Middle East, Magen 
observed, noting that New Delhi has been demonstrating a 
greater interest in the region.  In 1991 when the 
Israeli-Palestinian peace process began, India had no role 
because New Delhi did not have diplomatic relations with 
Jerusalem.  The GOI, including NSA Dixit and PM Manmohan 
Singh, now recognize the "ground reality" there, he argued, 
adding that either Defense Minister Mukherjee or FM Natwar 
Singh would likely visit Israel in the coming months. 
 
Counter Terrorism: "On Safe Ground" 
----------------------------------- 
 
6.  (C) Offering a readout of the December 1 India-Israel 
Counter Terrorism Joint Working Group (CTJWG), Magen told us 
the event "helped bring the relationship back on course." 
Led by Israeli Deputy Director for Strategic Affairs Jeremy 
Issacharoff, the CTJWG underlined the two countries similar 
concerns and approach to terrorism and terrorist financing. 
The Israelis felt so comfortable discussing counter terrorism 
with India that "we felt that we were on safe ground," he 
remarked. 
 
Iran 
---- 
 
7.  (C) Issacharoff raised Israeli concerns about Iran "very 
sharply" with New Delhi during the CTJWG, Magen remarked, 
adding that Olmert's delegation also flagged nuclear-related 
concerns and Iran's negative role in the Middle East peace 
process.  The Israelis argued that Iran's influence in the 
occupied territories deters progress, stressing that 
"whatever happens in the Middle East will affect India."  NSA 
Dixit reportedly told Issacharoff that India faces a "real 
dilemma" because "we have good relations with Iran, but the 
nuclear issue is a problem."  Magen said Dixit had said that 
he was blunt during his mid-October visit to Tehran, telling 
the Iranians to honor their international commitments (to the 
Non-Proliferation Treaty) or "pay the consequences." 
 
Beyond Defense 
-------------- 
 
8.  (C) Magen noted that a major objective of Olmert's visit 
had been to diversify relations beyond defense, to include 
cooperation in economic, hi-tech, biotechnology, and 
agricultural areas.  The two countries agreed to establish a 
joint study group to formulate a comprehensive economic 
partnership, and signed an agreement with the Ministry of 
Finance that would set up a mechanism to guarantee Israeli 
investments (comparable to the USG's OPIC).  He commented 
that Israel had raised the issue last year, but the GOI had 
not been interested.  Finance Minister P Chidambaram approved 
the agreement during the visit, a move that surprised Magen. 
 
Comment 
------- 
 
9.  (C) If the November India-Israel foreign office 
consultations demonstrated the sometimes opposing views at 
work within the GOI on relations with Israel, the Vice Prime 
Minister's visit illustrated solid support for them at the 
Ministerial level.  While India may not want to publicize its 
ties with Jerusalem (evidenced by the PM's refusal to meet 
with the delegation), neither does it want to slow the pace 
of bilateral engagement.  India will likely continue to 
enhance its ties to Israel, while maintaining a low public 
profile. 
MULFORD