US embassy cable - 05TELAVIV2427

C O N F I D E N T I A L SECTION 01 OF 03 TEL AVIV 002427 
 
SIPDIS 
 
NSC FOR ABRAMS/DANIN 
 
E.O. 12958: DECL: 04/15/2015 
TAGS: KWBG, PGOV, PREL, EAID, ECON, IS, GAZA DISENGAGEMENT 
SUBJECT: PERES ADVISOR, NSC ADVISOR DISCUSS DAHLAN'S 
POSITIONS, GOI DISENGAGEMENT PLANS 
 
Classified By: Charge d'Affaires Gene A. Cretz for reasons 1.4 (b) and 
(d) 
 
1.  (C) Summary: Einat Wilf, foreign policy advisor to Vice 
PM Shimon Peres, and Gabi Blum, NSC advisor, briefed 
EconCouns on the recent Aspen Institute conference; the 
potential for U.S. involvement in Negev/Galilee development; 
and PA Civil Affairs Minister Muhammad Dahlan's progress on 
negotiating the civil and economic aspects of disengagement. 
On the Aspen conference, Wilf said the Institute revealed its 
plans to fund projects, including water desalinization, joint 
Palestinian-Israeli textile production, and rebuilding the 
Gaza airport.  In side meetings at the conference, Dahlan 
reportedly told NSC director Giora Eiland, Peres advisor 
Amnon Lipkin-Shahak, and Member of Knesset Ephraim Sneh that 
he is ready to coordinate with Israel, although no date has 
been set.  He also presented a series of requests that he 
said will help demonstrate to the Gazan people that 
disengagement is "worthwhile," including the reunification of 
some 10,000 families, an increase in the number of PA 
employee permits granted, and the release of 4,000 political 
prisoners.  On Negev and Galilee development, Wilf reported 
that GOI will request U.S. assistance, mostly likely during 
the autumn, when Congress considers proposals for 
supplemental allocations.  On the GOI's disengagement 
positions, Blum said that Israel will continue to supply 
water to the settlement areas, and will consider maintaining 
the quasi-customs union provided Rafah terminal is moved from 
the Gaza-Egypt border to Keren Shalom inside the Green Line 
on the Israel-Egypt border, close to Gaza.  End summary. 
 
--------------------------------------------- ---- 
Aspen's Assistance Will be Small-Project Oriented 
--------------------------------------------- ---- 
 
2.  (C) Einat Wilf, foreign policy advisor to Vice PM Shimon 
Peres, told EconCouns April 14 that the result of the Aspen 
Institute conference held April 8 in Washington was Aspen's 
announcement of its intention to raise funds for a number of 
development projects in Gaza post-disengagement.  These 
projects include water desalinization, joint 
Palestinian-Israeli textile production, development of Gaza's 
offshore gas fields, a new private hospital, a rebuilt Gaza 
airport, and housing construction in Rafah.  The Institute 
will work to mobilize the Portland Trust, OPIC, and other 
funds to assist with these projects. 
 
-------------------------------------------- 
Dahlan Says He's Ready to Coordinate: 
Still No Date, But PA Expectations Announced 
-------------------------------------------- 
 
3.  (C) Wilf said that both PA Civil Affairs Minister 
Muhammad Dahlan and PA President Mahmud Abbas have gone on 
record with the Palestinian press announcing PA readiness to 
coordinate with the GOI, and Wilf noted that Dahlan is 
increasingly seen as the "point-man" on disengagement issues. 
 Nevertheless, he has not provided the GOI with a specific 
meeting date, which Wilf called a source of significant 
frustration for Vice PM Peres.  She explained that in side 
meetings with NSC director Giora Eiland, Peres Center for 
Peace Chairman Amnon Lipkin-Shahak, and Member of Knesset 
Ephraim Sneh during the Aspen Institute conference, Dahlan 
made clear several of his positions on disengagement (see 
below).  In addition, she said, he has emphasized to the 
international media that the PA will "not be a party" to any 
settlement asset transfer deal that gives de facto 
legitimization to Israeli ownership through the third-party 
purchase of the assets.  In Wilf's view the PA will take a 
"don't ask don't tell" attitude, accepting the assets as long 
as the details of purchase are not advertised. 
 
4.  (C) Dahlan reportedly told Eiland, Shahak, and Sneh that 
the PA believes the GOI can take a number of steps to 
convince the Gazan people that disengagement will benefit 
them, and that coordination with Israel is worthwhile.  The 
first of these requests is reunification inside the Gaza 
Strip for some 10,000 families separated by GOI security 
restrictions during the Intifada.  Dahlan has noted that 
despite GOI agreement to reunite 5,000 families annually, it 
did not follow through with any reunifications in 2003 or 
2004.  Along these same lines, Dahlan has requested the 
legitimization of status of 54,000 Palestinian "visitors" 
that he claimed are currently residing illegally with their 
families inside Gaza.  Significant easing of security 
procedures and increasing of passenger limits at the Erez and 
Rafah terminals, as well as an increase in the number of PA 
employee permits granted, are Dahlan's two additional 
expectations.  Wilf noted that Dahlan emphasized that he 
believes these are "easy for Israel to deliver" -- especially 
inasmuch as the GOI should not care who goes into a Gaza 
slated for disengagement -- but will appear as significant 
confidence-building measures to the Palestinians. 
5.  (C) Mohammed Yazgi, 7-Up CEO and Chairman of the 
Palestinian Business Association (PBA), told EconCouns April 
17 that "Dahlan has been acting like a politician with the 
business community, telling us all the right things."  Yazgi 
noted with satisfaction that Dahlan has already given the PBA 
two lengthy briefings on PA plans for disengagement and his 
negotiations with the GOI, and a third is planned for next 
week.  PBA members are given an opportunity to ask questions 
first, he said, which Dahlan often answers on the spot or 
tasks an assistant to handle.  According to Yazgi, Dahlan's 
message has been consistent -- the private sector is crucial 
to successful disengagement coordination, and he will bolster 
business by working to obtain GOI assurances on increased 
numbers of permits, greater freedom of movement between Gaza 
and the West Bank, and ease of restrictions at the crossings, 
Karni especially.  In return, Yazgi explained, Dahlan has 
requested that the business community "help him" by ensuring 
that business permits remain with the business community and 
are not provided to laborers. 
 
--------------------------- 
Dahlan on Election Timeline 
--------------------------- 
 
6.  (C) NSC advisor Gabi Blum told EconCouns April 9 that 
Dahlan had also discussed the timing of the upcoming PLC 
elections with NSC head Giora Eiland in side meetings at 
Aspen.  According to Blum, Dahlan told Eiland that the PA 
would postpone elections in order to avoid coincidence with 
the Israeli withdrawal and the potential restrictions on 
Palestinian movement that the withdrawal could cause.  Blum 
noted that the GOI is concerned it will be blamed by the PA 
and the international community for "forcing" the PA to 
change its date.  (Comment:  Dahlan,s opinion is not the 
final word on postponement, and this issue is still being 
debated within the PA Cabinet and the Palestinian Legislative 
Council.  End Comment). 
 
--------------------------------------------- -- 
Developing the Negev and Galilee with U.S. Help 
--------------------------------------------- -- 
 
7.  (C) Wilf told EconCouns that U.S. assistance for 
development of the Negev and Galilee regions in tandem with 
disengagement was "put firmly on the agenda" with AIPAC and 
Congress during Vice PM Peres' recent visit to the U.S.  The 
GOI hopes Congress will pass a supplemental assistance 
package during its next opportunity to do so, likely 
September/October.  The development plan, Wilf explained, 
will seek to mobilize funds from the Israeli budget, 
worldwide Jewish communities, and the USG.  The plan is 
broad-spectrum and will address education, business and 
investment opportunities, and overall "quality of life" 
issues.  In the Negev the plan will be anchored in a 
multi-ministry development initiative for the Bedouin 
community, including relocation of some 65,000 Bedouin living 
in unrecognized villages between Beer Sheva and Dimona (see 
septel.)  (Note: A majority of this population opposes 
relocation, arguing instead that the GOI must recognize the 
45 largest Bedouin settlements and provide them with 
government services such as water, schools, and medical 
clinics.  End note.) 
 
------------------------------------------- 
GOI Quietly Reconsidering 2008 Labor Cutoff 
------------------------------------------- 
 
8.  (C) NSC Advisor Gabi Blum told EconCouns April 9 that 
while the GOI still officially intends to halt Palestinian 
labor inflows by 2008, this position is evolving behind 
closed doors.  The proposal for a labor cutoff was not put 
into the October 2004 disengagement legislation, Blum 
emphasized.  "Look at Erez," she said, referring to NIS 10 
million of upgrades including a total of six passenger lanes, 
a design clearly meant to accommodate drastically increased 
numbers.  Wilf confirmed in a previous meeting that the GOI 
is privately reconsidering the cutoff.  Blum also highlighted 
several aspects of the GOI's disengagement planning, 
emphasizing in particular that the GOI "will find water for 
the Palestinians" following withdrawal, although details 
remain to be discussed within the Trilateral Water Working 
Group.  She also noted that the GOI will consider maintaining 
the quasi-customs union even if IDF troops withdraw from the 
Philedelphi corridor, provided that Rafah crossing is moved 
from the Gaza-Egypt border to Keren Shalom inside Green Line 
Israel. 
 
********************************************* ******************** 
Visit Embassy Tel Aviv's Classified Website: 
http://www.state.sgov.gov/p/nea/telaviv 
You can also access this site through the State Department's 
Classified SIPRNET website. 
********************************************* ******************** 
CRETZ