US embassy cable - 05TELAVIV891

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 000891 
 
SIPDIS 
 
E.O. 12958: DECL: 02/13/2015 
TAGS: PREL, EFIN, KWBG, IS, ISRAELI-PALESTINIAN AFFAIRS, ECONOMY AND FINANCE, ENVIRONMENT, SCIENCE AND TECHNOLOGY 
SUBJECT: SENATOR ALLEN'S FEBRUARY 13 MEETING WITH SHIMON 
PERES 
 
Classified By: Ambassador Daniel C. Kurtzer for Reasons 1.4 (b,d) 
 
1. (C) Summary.  Senator Allen and Israeli Deputy Prime 
Minister (DPM) Shimon Peres discussed their mutual interest 
in nanotechnology as well as ways to bolster the Palestinian 
economy.  Peres stressed the importance of moving quickly on 
improving freedom of movement within Palestinian areas and 
between those areas and Israel.  He said a concerted effort 
had to be made to create job opportunities for Palestinians. 
He urged the USG to help in many ways, including helping to 
pay for a new Palestinian social security program.  He said 
he had been "pleasantly surprised" by Abu Mazen.  Senator 
Allen said the USG hoped the Israelis and Palestinians would 
achieve success in their quest for peace.  He noted that the 
USG would not assist the Palestinians with social security 
initiatives.  End Summary. 
 
2. (C) Participants: 
 
U.S. 
Senator Allen 
Ambassador Kurtzer 
Paul Unger, Legislative Director, Office of Senator Allen 
Capt. Jim Stein, USN, Deputy Director, Navy Senate Liaison 
Office 
Deputy Economic Counselor Price (Notetaker) 
 
Israel 
Deputy Prime Minister Shimon Peres 
International Policy Advisor Einat Wilf 
MFA Congressional Liaison Eyal Sela 
 
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Nanotechnology 
-------------- 
 
3.  (C) Senator Allen, who is Founding Chair of the 
Congressional Nanotechnology Caucus, began the meeting by 
praising DPM (DPM) Peres' active work on behalf of nanotech. 
Senator Allen noted that the U.S. Nanotechnology Initiative 
was the biggest multi-agency scientific program since the 
Apollo program.  He saw nanotechnology as a unique, 
cost-efficient way to tackle such key problems as cancer, and 
key to new manufacturing techniques.  DPM Peres focused more 
on the military applications of nanotech, noting it would 
pave the way for much more deadly weapons for the individual 
soldier in the battlefield.  Both agreed on nanotech's 
promise in areas relevant to the Middle East such as 
desalinization. 
 
--------------------------------------- 
Peres: The Two-Sided Peace Negotiations 
--------------------------------------- 
 
4. (C) Peres underlined his belief that Israel and the 
Palestinians found themselves at a uniquely hopeful moment in 
time.  Yet, in order to take advantage of this, Israeli 
leaders found themselves having to negotiate not only with 
the Palestinians, but also with their fellow Israelis. 
"Israelis are very skeptical, and this skepticism is hard to 
overcome."  He praised PM Sharon for having helped to change 
this attitude through determination to make disengagement 
happen. 
 
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Disengagement Not Enough: Gazans Need Jobs 
------------------------------------------ 
 
5.  (C) Peres noted that it was essential that the political 
success of disengagement not turn into an economic 
disappointment.  He stressed that jobs were the key to a 
viable Gaza economy.  The Gazans were well-educated, and 
countries such as Turkey showed that moderate Islam was not 
only a viable path for Muslims, but a more economically 
successful one. The agricultural sector was key to Gazan 
economic viability.  The handover and efficient utilization 
of Israeli settler agricultural facilities by Palestinians 
could alone generate 10,000 - 20,000 jobs.  To make this 
happen, it was essential to find an intermediary who could 
receive the assets and then provide them to the Palestinians. 
 
 
6.  (C) Peres urged Allen to get U.S. corporations involved 
in the Gaza economy, particularly vis-a-vis tourism.  Peres 
had already spoken with four U.S. corporations, including the 
owner of Radisson hotels, about developing Gaza tourism.  The 
U.S. could also help Israel by moving forward on developing 
the Negev and the Galilee.  Finally, Peres stressed the 
importance of freeing Palestinian movement inside Gaza and 
the West Bank, and between both areas and Arab states.  In 
this regard, it was key that Israel was not just turning over 
security control of five cities to the Palestinian forces, 
but also control of the roads going into those cities. 
Lastly, Peres plumped for the establishment of new Qualified 
Industrial Zones in Palestinian areas, noting the tremendous 
success of the Israel-Jordanian QIZ arrangement. 
 
--------------------------------------------- ------- 
Peres: Abu Mazen a "Pleasant Surprise," 
but Needs Social Security Program 
--------------------------------------------- ------- 
 
7.  (C) Peres noted that Israel had been "pleasantly 
surprised by Abu Mazen."  He noted the key to helping Abu 
Mazen was giving Palestinians a stake in his success.  One 
way to do so was to create a social security fund for the 
Palestinian populace.  The cost, $120 million per year, 
should be divided between the USG and the EU.  The other 
essential element for long-term 
 
---------------------- 
Senator Allen Responds 
---------------------- 
 
8.  (C) Senator Allen said the USG wanted very much to see 
Israel and the Palestinians establish a stable peace that 
guaranteed Israeli security and praised Peres for his hopeful 
attitude.  Although he hoped the current atmosphere would 
bear fruit, he expressed serious concern about the role of 
Hamas and its ability to undermine current efforts to 
establish confidence between Israel and the Palestinians. 
It was central that this group be brought under control. 
Tourists would hesitate to visit an area in which such a 
group could continue terror attacks unabated.  Moreover, such 
groups could easily undermine any moves towards peace.  DPM 
Peres said even Hamas operated under political constraints. 
Once it saw Abu Mazen gaining popularity among a populace 
that believed in the possibility of peace, Hamas would begin 
to change its tune.  Moreover, numbers were in the PA's favor 
-- the PA had 40,000 police, versus just 3,000 Hamas members. 
 Properly led and deployed, the former could easily control 
Hamas. 
 
9.  (C) The Senator also counseled the DPM that the USG would 
not support a Palestinian social security fund.  This was 
probably an area in which the Europeans would be most 
usefully engaged.  Although U.S. corporations with an 
international presence would be well-placed to investigate 
the possibility of investing in Palestinian areas, he noted 
that attempting to get purely domestic U.S. firms to do so 
could be viewed negatively in the U.S. as supporting 
outsourcing.  He also noted that many firms potentially 
interested in investing in the area would be drawn more to 
Iraq, which possessed greater natural resources. 
 
10. (U) Senator Allen did not have a chance to review this 
cable. 
 
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