US embassy cable - 05TELAVIV285

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 000285 
 
SIPDIS 
 
E.O. 12958: DECL: 01/13/2014 
TAGS: KWBG, ECON, PREL, IS, GAZA DISENGAGEMENT, GOI INTERNAL, ECONOMY AND FINANCE 
SUBJECT: NSC'S GABI BLUM ON WORLD BANK PROCESS, PERES, 
POSSIBILITIES FOR A COORDINATED DISENGAGEMENT 
 
 
Classified By: Economic counselor Bill Weinstein for reasons 1.4 (b) an 
d (d) 
 
1.  (C) Summary: NSC strategic advisor Dr. Gabi Blum met with 
EconCouns January 13 to discuss movement on the World Bank 
process, Shimon Peres' projected role in disengagement 
planning, and potential GOI dialogue with the PA on 
settlement assets and other economic aspects of withdrawal. 
On the World Bank process, Blum argued that the GOI-approved 
plan to install two new container scanners at Karni will 
solve the problem of delays at the terminal, rendering moot 
the bank's proposal for a pilot program there.  She also 
indicated that the GOI is considering, but has not committed 
to, an alternative to the back-to-back shipping arrangement. 
Finally, she reiterated that the bank's language on 
"monitoring and benchmarks" is politically charged and unfair 
to Israel, but the GOI accepts such a process in principle. 
On Peres' new role, Blum confirmed that he will be 
responsible for Negev and Galilee development as well as 
economic aspects of disengagement, but that "political 
instability" will keep him from opening any new offices to 
carry out these functions. 
 
2.  (C) Summary continued: On the potential for more direct 
coordination with the Palestinians on disengagement, Blum 
said the GOI has made no strategic decision on this but that 
officials continue to state coordination is preferable to 
unilateral action on many aspects.  For instance, she said, 
GOI officials at the request of the PA are drafting an 
inventory of settlement assets to be used as the basis for 
future discussion.  EconCouns emphasized the need for direct 
GOI-PA dialogue on agribusiness, and urged the GOI to 
facilitate the movement of Palestinians stuck on the Egypt 
side of Rafah crossing.  End Summary. 
 
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GOI Has Own Plan For Fixing Karni 
--------------------------------- 
 
3.  (C) NSC strategic advisor Dr. Gabi Blum told EconCouns 
January 13 that the World Bank's proposed pilot programs at 
Karni and Jalame will "take too long" to plan and implement. 
The GOI will solve "95 percent" of the problem of delays at 
Karni terminal, she argued, by installing two new container 
scanners that will check full as well as empty containers 
leaving the Gaza Strip.  The GOI has reached an agreement 
with PM Finance Minister Salaam Fayad that the PA's MinFin 
will contribute USD 4.5 million and the GOI that same amount 
to finance the scanners.  The GOI's MinFin will determine who 
to charge for the GOI contribution, she said -- most likely 
the Ministry of Defense.  Blum added that she was not aware 
of a GOI request to Congress for U.S. dollars to finance the 
scanner or improvements at the crossings overall. 
 
4.  (C) The Karni scanners will not be ready for installation 
for another 18 months, Blum said, while technological 
improvements at Erez crossing in northern Gaza and Jalame and 
Shaar Ephraim crossings in the West Bank may be complete 
before withdrawal.  Other aspects of the GOI's proposed 
crossings improvements, including construction of a Gaza-West 
Bank rail link, are underway.  In addition, she said, the GOI 
is considering replacing back-to-back shipping with 
"horse-and-cart" -- a free-circulating trailer system -- at 
the crossings.  The GOI has made no commitment to the bank on 
this, however.  (Note: Palestinian militants bombed Karni on 
Thursday, January 13, killing six Israeli civilian staff and 
severely damaging the terminal.  IDF sources stated that the 
terminal will be closed for weeks and possibly months as 
infrastructure is repaired.  End note.) 
 
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GOI Will Accept "Progress Report" Instead of "Monitoring" 
--------------------------------------------- ------------ 
 
5.  (C) Bloom reiterated the GOI position that the World 
Bank's language on "monitoring and benchmarks" is politically 
charged and inappropriate, and unfairly requires Israel to 
take "dozens" of specific steps on crossings and closures 
while the PA is held to a vague directive to "improve" 
security.  In meetings with GOI officials Nigel Roberts 
claimed monitoring will be focused more on the PA than on 
Israel, she said, but added that she was skeptical of this. 
She emphasized, however, that the GOI supports the donor 
community's need to ensure its money is not misspent, and 
"does not object" to the World Bank process overall.  In 
conversations before the visit of Bank president Paul 
Wolfenson, she said, Roberts seemed willing to substitute 
words like "progress report" and "steps" for monitoring and 
benchmarks, a move she thought could quiet GOI objections. 
 
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Peres Won't Create New Bureaucracy 
---------------------------------- 
 
6.  (C) As new Deputy PM, Blum said, Shimon Peres will be in 
charge of Negev and Galilee development as well as the 
economic aspects of disengagement.  Because the political 
situation is unstable, however, Peres will not set up new GOI 
offices to deal with these issues, but will use his own staff 
and influence.  One of his proposals for economic development 
in post-disengagement Gaza is a program whereby EU countries 
"adopt" industrial zones, maintaining their infrastructure 
and giving incentives to European investors.  Blum noted that 
such a program would require close GOI coordination with 
Palestinian as well as European actors. 
 
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Who To Talk To, and When, on Disengagement? 
-------------------------------------- 
 
7.  (C) The GOI has not made any strategic decision to 
coordinate disengagement with Abu Mazen and the new PA 
leadership, Blum said, but GOI officials continue to state 
that coordination on some aspects of withdrawal would be 
better in principal than unilateral Israeli action.  The GOI 
will have to work with the World Bank on certain issues and 
the PA on others, she added.  She gave the example that the 
PA had "convinced" the GOI that Gazans do not have a clear 
idea of what settlements contain -- in response, Israeli 
officials are drawing up a detailed inventory that will serve 
as the basis for future discussions.  The GOI is also 
considering working with third parties like the U.S.-based 
East/West Institute, who offered to serve as a middleman 
through which settlers can more comfortably sell agribusiness 
assets to Palestinians. 
 
8.  (C) Overall, Blum said, the past several weeks have seen 
increased GOI-PA dialogue at the working level, but PM Sharon 
has yet to make clear to the ministries under what criteria 
more robust and open engagement could take place.  (Note: 
Following the Karni bombing, Dov Weissglas reportedly told PA 
Minister of Negotiations Affairs Saeb Erekat that the GOI 
will suspend contact with the PA.  End note.) 
 
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The Rafah Closure 
----------------- 
 
9.  (C) EconCouns encouraged the GOI to consider ad-hoc 
solutions to the ongoing humanitarian situation at the Rafah 
crossing, which has been closed since Palestinian militants 
bombed the terminal December 12.  He pointed out that Israel 
showed its ability to facilitate the exit of large numbers of 
Palestinian hajjis from the Gaza Strip in late December and 
early January.  Blum responded that after Rafah was bombed, 
it became exceptionally difficult to retain civilian staff at 
the terminal or recruit new employees, making it more 
difficult to reopen the crossing.  She pointed out that even 
Egypt, who vociferously objected the last time the GOI closed 
the crossing, has been "remarkably silent" this time since it 
understands that militants "brought this on." 
 
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