US embassy cable - 04TELAVIV6669

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 006669 
 
SIPDIS 
 
CODEL 
 
DEPT FOR H AND NEA/IPA 
 
E.O. 12958: DECL: 12/29/2014 
TAGS: PREL, KPAL, KWBG, IS, IR, ISRAELI-PALESTINIAN AFFAIRS 
SUBJECT: SHIMON PERES SAYS ECONOMIC AID NEEDED TO STABILIZE 
NEW "IMPROVED" PALESTINIAN LEADERSHIP 
 
 
Classified By: Ambassador Daniel C. Kurtzer for reasons 1.4 (b) and (d) 
. 
 
1.  (C) Summary: Labor Party Leader Shimon Peres told Codel 
Lieberman and the Ambassador December 27 that the Palestinian 
humanitarian situation is "quite serious," and acknowledged 
that Israel has a "window of opportunity" to advance the 
Israeli-Palestinian peace process.  Calling the Palestinian 
political system "broken," Peres said that internal divisions 
among Palestinian leaders are complicating their efforts to 
gain legitimacy and stabilize a new government.  He told 
Senator Lieberman that the U.S. should provide assistance to 
the Palestinians through corporate investments and the World 
Bank, rather than via direct aid.  Senate staff members, 
military escort and poloff also accompanied Senator 
Lieberman.  End Summary. 
 
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PALESTINIAN ECONOMIC NEEDS/NEW LEADERSHIP 
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2.  (C) Peres told Senator Lieberman that the humanitarian 
situation in Gaza is "heartbreaking" and that Israel and the 
U.S. should "act in a hurry."   He praised Acting PLO 
Chairman Abu Mazen as a well-intentioned, serious leader, 
adding that Israel could not find a better partner. 
Referring to Palestinian Prime Minister Abu Ala'a, Peres said 
"we hope that we will work well together." 
 
3.  (C) Senator Lieberman told Peres that the Palestinian 
Minister of Negotiation Affairs, Sa'eb Erekat said in an 
earlier meeting (Congen Jerusalem septel) that he will be 
very focused on economic changes within the Palestinian 
territories, especially following the January 9 elections. 
Peres replied that the Palestinians need "immediate economic 
assistance" and that a concentrated effort by the U.S. and 
European donors to mobilize the economy is necessary.  He 
suggested that instead of giving the Palestinians money 
directly, the U.S. should encourage its 50 largest 
corporations, each of which Peres described as having larger 
budgets than most countries, to invest in the Palestinian 
territories.  He specifically noted that Motorola and 
Hewlett-Packard had positively impacted Jordan's economy by 
opening offices there.  Peres said that the GOI will not 
increase the number of Palestinians working in Israel in the 
future.  Peres opined that the World Bank could manage 
economic development in the Palestinian territories and that 
the U.S. should empower the World Bank to provide immediate 
help to the Palestinians.  He added, however, that the 
Palestinians should not receive special treatment. 
 
4.  (C) Ambassador Kurtzer noted that the U.S. is currently 
withholding some of its financial assistance to the 
Palestinian Authority because of continuing safety concerns 
in Gaza and the failure of the PA to undertake security 
measures, as demonstrated by the lack of investigative 
cooperation following the October 2003 attack on a U.S. 
convoy in Gaza. 
 
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GAZA DISENGAGEMENT 
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5.  (C) Turning to the Gaza disengagement plan, Peres 
predicted that Israeli troops will withdraw on time, in 
mid-2005, and said that Israel will implement unspecified 
"more permanent solutions" during and immediately following 
this withdrawal.  Peres also suggested an "interim solution," 
in which Israel would withdraw from the Philadelphi strip and 
thus allow Palestinians to move to and from Egypt.  Peres 
suggested that a fleet of helicopters to patrol the area 
could assuage Israeli security concerns.  Peres also said 
that the full impact of the Gaza disengagement would not be 
known for at least one year after completion and told Senator 
Lieberman that the 2006 Israeli general elections could 
influence the Israeli political landscape and future 
disengagement plans.  Peres predicted that the pace of 
negotiations with the Palestinians will increase following 
Gaza disengagement in 2005. 
 
6.  (C) Commenting on former PA Gaza security chief Mohammad 
Dahlan and former West Bank security chief Jibril Rijoub, 
Peres said "we are trying to ensure that they are not accused 
of being agents or semi-agents of Israel."  He said that 
Israel is considering another release of Palestinian 
prisoners in the near future.  Peres said "there is not much 
Israel can do with or without Dahlan." 
 
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THE U.S. ROLE 
------------- 
 
7.  (C) Peres emphasized that any international financial 
assistance to the Palestinians, especially by the U.S., 
should be contingent on the Palestinian Authority "putting 
its house in order."  Peres said that the Palestinians must 
be helped and that Israel should begin dialogue with Hamas 
and Islamic Jihad.  He said that "Sharon is at the center" of 
this process, but that any policy of not talking with the 
Palestinians until Israel leaves Gaza is "too long a period 
of time."  Peres said that Abu Mazen cannot completely stop 
the violence, but that he can "start fighting terror any 
time."  Peres concluded by saying that while he is "not blind 
to the difficulties ahead" there is a window of opportunity 
for peace and that Abu Mazen is a good choice of partners. 
 
8.  (U) Codel Lieberman did not clear this message. 
 
 
 
 
 
 
 
 
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KURTZER