US embassy cable - 05TELAVIV1730

C O N F I D E N T I A L SECTION 01 OF 04 TEL AVIV 001730 
 
SIPDIS 
 
E.O. 12958: DECL: 03/22/2015 
TAGS: OREP, PGOV, PTER, KWBG, MNUC, IS, IR, SY, ISRAELI-PALESTINIAN AFFAIRS, ECONOMY AND FINANCE, GOI EXTERNAL 
SUBJECT: SHARON CAUTIONS CODEL REID ON PROVIDING DIRECT 
ASSISTANCE TO THE PA 
 
Classified By: Ambassador Daniel C. Kurtzer for reasons 1.4 (b,d). 
 
1.  (C) Summary: Prime Minister Sharon emphasized to Codel 
Reid March 21 that ensuring Israel's security against 
terrorism is his primary objective, although he is optimistic 
about the opportunities created by Arafat's death and the new 
Palestinian leadership.  Codel Reid and Sharon discussed how 
best to assist Palestinian Authority President Abbas; the 
dangers presented by Iran, Syria, and terrorist 
organizations; the Israeli economy; and other issues.  Sharon 
noted that he is willing to cooperate with Abbas and PA 
Finance Minister Fayyad to address Palestinian economic 
development.  Sharon and his office director general, Ilan 
Cohen, advised the senators to target USG assistance to the 
Palestinians toward infrastructure, private industry and 
housing, and urged that the USG require the PA to demonstrate 
accountability for any direct assistance it receives.  End 
Summary. 
 
2.  (U) The delegation, consisting of Senators Harry Reid, 
Richard Durbin, Barbara Boxer, Patty Murray, Robert Bennett, 
Lamar Alexander, and Ken Salazar, and Senate staff, was 
accompanied by Ambassador Kurtzer and poloff notetaker. 
Prime Minister Sharon was joined by Foreign Policy Advisor 
Shalom Tourgeman, Office Director General Ilan Cohen, Press 
Advisor Ra'anan Gissin, MFA Deputy Director General for North 
American Affairs Yoram Ben Ze'ev, and MFA Congressional 
Affairs Advisor in Washington Alon Ushpiz. 
 
--------------------------------- 
No Progress Without End to Terror 
--------------------------------- 
 
3.  (C)  Codel Reid and Prime Minister Sharon stressed the 
strong U.S.-Israel friendship and mutual hopes for security 
and peace in the region.  Senator Reid began the meeting by 
asking for Sharon's views on advancing cooperation with 
Palestinian Authority (PA) President Mahmoud Abbas and 
Sharon's prospects for passing the 2005 budget.  Sharon joked 
that passing the U.S. budget is certainly an easier task than 
passing Israel's budget. 
 
4.  (C) Sharon's main message throughout the meeting was 
that, while he is open to cooperating with, and taking steps 
to support, Palestinian President Abbas, Abbas must combat 
terrorism or such cooperation will fail.  Sharon repeatedly 
stressed that he will not make any compromises on Israel's 
security.  "Israel is a tiny, small, country," Sharon 
emphasized, "with a courageous people... It is the only place 
in the world where Jews have the right to defend themselves." 
 Sharon underlined that the most important thing for him is 
that he is a Jew.  "On the one hand," he underlined, "I am 
willing to compromise, but not when it comes to terror... I 
tell my friends, 'don't pressure us when it comes to our 
security -- only we determine what is necessary.'"  Sharon 
emphasized that "If terrorism continues, we won't move 
forward... that's the situation."  The USG repeats the same 
message "again and again," he commented. 
 
5.  (C) Sharon explained that he initiated a unilateral 
disengagement plan, which he called a "pre-roadmap phase," 
because he believed at the time that a Palestinian partner 
did not exist.  After Arafat's death, he noted, cooperation 
with the Palestinians is more feasible, but he emphasized 
that the PA must honor its commitments to the roadmap.  "I 
believe we can progress," Sharon repeatedly stressed, "if the 
Palestinian Authority fights terror, dismantles terrorist 
organizations, collects weapons, and ceases incitement 
against Israel."  Sharon assessed that incitement has 
decreased, but he asserted that mosques still incite against 
Israel and "in schools (they are) poisoning kids (beginning 
in) kindergarten" against Israel. 
 
---------------------------------- 
Terror Organizations Still Operate 
---------------------------------- 
 
6.  (C) The incidence of terrorism has recently declined, 
Sharon said, but he added that the threat continues.  He 
noted that weapons smuggling across the border from Egypt to 
Gaza continues and that Abbas has not taken steps to 
dismantle Hamas.  Sharon claimed that in the last two weeks, 
five anti-aircraft missiles were found being smuggled in 
tunnels.   Sharon said he spoke with Egyptian President 
Mubarak two days ago and asked Mubarak to take more serious 
steps against smuggling.  He added that the "Palestinian 
military industry works day and night without rest."  Sharon 
stressed that he is willing to give the PA a chance, but he 
has not yet seen "any real improvements" in its fight against 
terror.  Sharon expressed concern that Abbas is negotiating 
with Hamas for a cease-fire, which he noted could end at any 
time.  He worries that if Hamas gains more authority within 
the PA, it will become impossible to dismantle that terrorist 
organization. 
 
----------------- 
Helping Abbas 
----------------- 
 
7.  (C) Emphasizing the positive changes since Arafat's 
death, Senator Durbin expressed concern that Hamas could 
upset this progress by receiving strong support in the July 
Palestinian Legislative Council elections.  He asked Sharon 
how best to rally popular support for Abbas against Hamas, 
especially in the way of economic and developmental support 
to the Palestinian population.  Sharon agreed that helping 
Abbas is important, but cautioned against providing direct 
financial assistance to the PA, charging that such support 
could also reach terrorist organizations since Abbas is 
"trying to buy them."  Instead, Sharon advised, the USG 
should target assistance directly to infrastructure 
improvements, housing for refugees, desalination, and 
economic support for Palestinian private industry.  In this 
respect, Sharon said, "Israel is ready to help."  Sharon 
noted that he asked Vice Prime Minister Shimon Peres, with 
whom the Codel met March 20 (septel), to "mobilize" funds to 
assist the Palestinians with economic development.  Sharon 
also noted that he sent Peres to donor and Arab countries to 
request funding to assist the PA.  Ilan Cohen added that the 
GOI is working with Palestinian Finance Minister Salam Fayyad 
to develop a PA social security system in order to replace 
Hamas assistance. 
 
8.  (C) Senator Durbin pressed Sharon as to how best to help 
Abbas before the July Palestinian Legislative Council 
elections.  Senator Salazar also noted that the current 
window of opportunity could disappear quickly.  Without 
providing a direct response, Sharon asserted that he does not 
believe Hamas will gain a majority in the July elections.  He 
noted that the GOI has a "good relationship" with Abbas, but 
underlined that Abbas "made a major mistake" by "reaching 
out" to Hamas and negotiating with that organization.  He 
asserted that once Abbas signs an agreement with Hamas, 
dismantling the organization will be difficult.  Sharon noted 
that it is not a "normal situation" where you have a "serious 
partner in government" (i.e. Hamas) that is an armed 
organization.  Sharon said that the GOI will not take 
"actions" during the period of quiet, but he expressed 
concern that terrorist groups will be using this period to 
rebuild, thereby placing Israel in a "difficult situation." 
 
9.  (C) Senator Murray asked Sharon to comment on any 
connection between poverty and terrorism and asked how the 
USG could effectively target its assistance to the PA. 
Sharon underlined that he "never found a direct connection 
between terror and poverty."  Israel has examined this issue 
over the years, he said, and has found that suicide bombers 
come from diverse social and economic backgrounds, and are of 
all ages.  On assistance, Sharon elaborated that the GOI is 
helping PA Minister Fayyad develop a social insurance program 
for Palestinians that would provide every poor Palestinian 
family with USD 100 per month.  The mutual goal is to bring 
poorer families out from the influence of Hamas.  Sharon 
advised the Codel to discuss this issue in more detail with 
Minister Fayyad, noting that "we know him well -- he's one of 
the more serious people (in the PA)."  Senator Alexander 
asked Sharon how the USG can help the PA with reforms if it 
should avoid providing the PA with direct financial 
assistance.  Cohen advised that the USG should require the PA 
to employ a "control system" to ensure that the assistance 
reaches its targets.  Cohen urged that the USG make sure it 
is satisfied about this system before it provides assistance. 
 
---------------------------------- 
Sharon: The Dangers of Iran, Syria 
---------------------------------- 
 
10.  (C) Asked for his views on Iran, Sharon stressed that 
"(the GOI) know(s) for sure" that Iran is making "every 
effort" to develop nuclear weapons.  Russia and China helped 
Iran develop ballistic missiles for a 1,300-to-1,500 
kilometer range, and Iran is now developing missiles that 
have a 2,500 kilometer range, he asserted.  "We should not 
compromise on Iran," Sharon underlined, advising that 
preparations should be made to bring the matter of Iran's 
nuclear program before the UNSC.  Sharon characterized 
British, French, and German efforts as inadequate and called 
for political and economic pressure to be mounted against 
Iran.  He expressed concern that the international community 
could become too accepting of Iran's nuclear program. 
 
11. (C) Sharon also underlined the danger that Iran presents 
by calling it "the center of world terror."  Iran provides 
Hizballah with military support, Sharon said, claiming that 
the latter currently has 30,000 rockets based in southern 
Lebanon.  Sharon said that Iranian Revolutionary Guard 
members are in Lebanon and cooperate with the Lebanese army, 
the latter causing "daily friction" on Israel's northern 
border.  Sharon stressed that he wants the Iranian 
Revolutionary Guard expelled from Lebanon and the rocket 
system in southern Lebanon dismantled.  Iran is also trying 
to recruit Israeli Arabs to commit terrorist acts within 
Israel, Sharon said.  While most of Israel's one million Arab 
citizens want to be integrated into Israel society, Sharon 
noted, a "small but growing minority" are active in terrorist 
groups.  Sharon charged that an Israeli Arab transported the 
suicide bomber responsible for the February 25 terrorist 
attack at Tel Aviv's Stage discotheque. 
 
12.  (C) Sharon also underscored that Syria is facilitating 
Iranian support for Hizballah in southern Lebanon.  He noted 
that Syria occupies Lebanon and claimed that some one million 
Syrian citizens are now working there.  Sharon characterized 
Damascus as the "headquarters of terrorism," underlining that 
orders to commit terrorist activities come from Damascus and 
that reports on the results of such activities travel back 
there as well. 
 
13. (C) Senator Boxer noted her "surprise" as one of the 
authors of the Syria Accountability Act that Vice Prime 
Minister Peres downplayed the military threat that Syria 
poses, with Peres noting that Syria has old equipment. 
Sharon responded that with his military background, he 
"always takes the other side seriously," asserting that "you 
can't say that Syria is not a danger."  Sharon underlined 
that Syria is also supporting terrorism in Iraq and that it 
has "serious quantities of chemical weapons."  Sharon added 
that the Syria Accountability Act is "very, very important." 
 
------------------------------- 
Separation Barrier and Security 
------------------------------- 
 
14.  (C) Asked to address the effect of the separation 
barrier, Sharon stressed that the GOI's goal in constructing 
the barrier was to enhance Israel's security.  The fence is 
not a political border, he said, but rather a security 
border, which could be removed if the situation so warranted. 
 Sharon noted that the separation barrier has "sharply 
reduced" the incidence of terrorism in Israel.  The GOI 
considers the humanitarian needs of the Palestinians when 
routing the fence, he said, and has rerouted several areas to 
alleviate hardships.  He made clear, however, that faced with 
the choice of paying with Israeli lives or creating 
difficulties for the Palestinians, he will choose the latter. 
 
----------------------------------- 
Sharon: Will Solve "Budget Problem" 
----------------------------------- 
 
15.  (C) Turning to internal politics, Sharon asserted that 
the Israeli Left could never achieve disengagement, but added 
that he "lost his (coalition) majority" because the Right is 
working against disengagement.  Nonetheless, Sharon 
emphasized, he remains fully committed to the plan as well as 
its timeframe.  "Now the budget is a problem," Sharon said, 
noting that if the budget does not pass (by March 31), 
elections will be mandated within 90 days.  Elections would 
postpone disengagement's implementation, Sharon said, and 
would cause "a complicated, unnecessary situation."  He 
pointed out that because the budget has not yet passed, 
compensation can not yet be provided for thousands of 
evacuees, many of whom, he claimed, would have moved already 
had compensation been available.  Despite the difficulties, 
Sharon opined that he would be able to solve the budget 
problem within the coming week. 
 
----------------- 
Economy Improving 
----------------- 
 
16.  (C) Senator Bennett stressed his interest in the 
continued strengthening of Israel's economy.  He noted that 
he was impressed with Finance Minister Netanyahu's Washington 
presentation showing how Israel's economy continues to 
progress toward a free market system.  (Note: Senator Bennett 
did not indicate when this presentation took place.)  Senator 
Bennett encouraged Sharon to continue in this direction, 
noting that if Israel's economy is not strong, it will be 
harder for Israel to fund critical security measures.  Sharon 
noted that the changes have been difficult, and there 
continues to be poverty and unemployment, but expressed 
confidence that Israel is moving in the right direction. 
Cohen noted that the rate of inflation has been reduced to 
9.9 percent and that the GOI is taking a serious approach to 
reaching targets in public expenditure reductions. 
 
------------------------- 
Threat to Al-Aqsa Mosque 
------------------------- 
 
17.  (C) Senator Boxer noted that when the Codel toured the 
Temple Mount, which includes the al-Aqsa Mosque, the tour 
guide charged that Israel intends to assert authority over 
the area in order to build a Jewish temple in its place.  She 
asked Sharon how widespread this belief is among the 
Israeli-Arab and Palestinian Muslim populations.  Sharon 
stressed the importance of the Temple Mount for Jews as well, 
but underlined that the GOI has no intention "whatsoever" to 
gain control of the Temple Mount area.  Sharon said that only 
since Israel gained jurisdiction over these areas has there 
been free access to all holy places. 
 
18.  (U) Codel Reid cleared this cable. 
 
 
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