US embassy cable - 05TELAVIV2925

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 002925 
 
SIPDIS 
 
E.O. 12958: DECL: 05/09/2015 
TAGS: PREL, PGOV, ECON, IS, XF, GAZA DISENGAGEMENT, GOI INTERNAL, GOI EXTERNAL 
SUBJECT: CODEL FRIST'S MEETING WITH VICE PM SHIMON PERES 
 
REF: A. TEL AVIV 2537 
 
     B. TEL AVIV 2540 
 
Classified By: Ambassador Daniel C. Kurtzer for reasons 1.4 (b) and (d) 
 
1. (C)  SUMMARY: On May 1,  CODEL Frist met with Vice PM 
Shimon Peres where discussions surrounded the Syrian 
withdrawal from Lebanon, Jordan's economic growth and its 
contribution to the economy in the Palestinian territories, 
Iran's push to develop nuclear weapons and recent democratic 
elections in Iraq.  Peres's main focus was on the 
disengagement plan and "the day after", however, commenting 
on the Palestinian Authority and the many challenges in the 
security and economic area that lay ahead for the PA, chief 
of which is curbing terror.  Peres also cited demographic 
concerns affecting GOI intentions to develop the Galilee and 
the Negev (reftel).  END SUMMARY. 
 
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Peres: Middle East Overview 
--------------------------- 
 
2. (C) On May 1, Senator Bill Frist, the senator's National 
Security Advisor Mark Esper, Press Advisor Nick Smith, and 
Army Senate Liaison Officer Colonel Michael Barbero met with 
Vice Prime Minister Shimon Peres.  Peres was accompanied by 
Yoram Dori, Head of the DPM's Policy Team and Interagency 
Coordination, and Einat Wilf, his Foreign Policy Advisor. 
The Ambassador and Econoff accompanied CODEL Frist.  Peres 
called the Syrian withdrawal from Lebanon "a major step" in 
regional stabilization, and a part of America's "strong 
voice" in the Middle East.  Syria's "circumstantial" presence 
in Lebanon, he said, had grown into an economic dependence, 
affecting some 20% of the Syrian economy and making it hard 
for Syria to leave Lebanon.  Peres said Syria's future does 
not look good and that "the dictatorship" of Basher al-Assad 
is getting weaker. 
 
3. (C) Israel's neighbor Jordan, on the other hand, is a 
positive story in which foreign investment has strengthened 
the economy.  Corporations such as Intel, Sysco, AOL and 
Motorola have helped the economy grow, allowing the Jordanian 
government to then invest in various markets in the 
Palestinian territories, Peres said.  Foreign businesses can 
follow the Jordanian model, Peres said, stressing his view 
that economic democracy and political democracy must exist 
simultaneously for a nation to have a stable economy. 
Jordan's problems with the Palestinians are due to outside 
influence, Peres said, referring to regional fundamentalist 
groups. 
 
4. (C) Shifting his focus to Egypt, Peres characterized 
President Hosni Mubarak's leadership as "careful" in its 
movement.  He praised Egypt's existing trade agreements and 
healthy agriculture, tourism and transportation sectors, but 
said that Egypt is "weak" in technology.  Commenting on 
another North African nation, Peres said that, despite 
Libya's having "gone out of the terror and arms business," 
the greatest change is in the children of the leadership, who 
are "giving up the desert for modernity."  Peres noted that 
elections in Iraq mark the end of dictatorship there, adding 
that for the "first time in Arab history an Arab voted for an 
Arab president."  He predicted, however, that the U.S. will 
have continued difficulty in the area because of terrorism. 
On Iran, Peres recommended a united economic and political 
front internationally to thwart Iran's desire to develop 
nuclear weapons, adding that it will be difficult for the 
U.S. to do this alone.  If Iran becomes a nuclear power, this 
will create an appetite in other Arab countries to pursue 
such endeavors -- nuclearization of the Middle East is 
"irreversible," Peres said, if Iran obtains nuclear weapons. 
 
----------------------------------------- 
The PA, Disengagement and the "Day After" 
----------------------------------------- 
 
5. (C) In response to Senator Frist's question as to whether 
the PA is ready to act after the disengagement,  Peres said 
that moving from the "glory of terror to husbandry of state" 
is a big change -- the PA must "cut terror" altogether.  If 
Israel performs this PA responsibility it will create 
bitterness, Peres said.  Peres said that the Palestinians are 
"impressive and serious" but do not have experience in 
governance.  Social issues are a problem rooted in high 
unemployment, he said, and the PA must pay attention to these 
problems if it is to gain support.  Peres said "peace must be 
privatized" by direct investment in the territories, adding 
that industrial zones managed by private groups will allow 
the economy to grow in the territories.  "We will be out of 
Gaza in four months," Peres said, "and expectations are high 
and solutions are slow."  Israel is looking at what needs to 
be done to facilitate such a move, and must look at the "day 
after" in order to stage things now. 
 
6. (C) Peres explained that the greatest problem remains the 
movement of goods in and out of Gaza due to security 
environment and constant terror threats.  Products still take 
roughly 21 days to go from Gaza to the West Bank, Peres said, 
adding that he intends to dismantle security impediments in 
time to help movement within Gaza.  Emphasizing that the 
greenhouses in Gaza can reduce unemployment once they are 
turned over for Palestinian use, Peres said that the Peres 
Center for Peace has created a plan for 10,000 more dunams of 
greenhouses to help the Palestinians further ease 
unemployment.  The GOI intends to compensate settlers with 
two-thirds of the cost of each greenhouse he or she owns, 
Peres said, and is seeking financial support to cover the 
remaining third of the cost.  The Dutch have offered to 
cooperate on this matter by providing USD 20 million through 
the World Bank, although the World Bank has refused to be a 
vehicle for the transaction.  Peres also mentioned a GOI plan 
to pay 200,000 Palestinian families each USD 100 per month to 
help the families as the economy slowly stabilizes. 
 
--------------------------------------------- ---- 
Economic Development in the Galilee and the Negev 
--------------------------------------------- ---- 
 
7. (C) Peres indicated that the GOI is focusing on the 
Galilee and the Negev regions for economic development, 
although the demographic issue of an Israeli-Arab population 
that comprises some 20% of the Israeli population needs to be 
addressed in these areas.  Peres said that financial 
assistance for development in these areas would be helpful. 
(Note: The GOI previously has raised with the USG officials 
the idea of the USG being asked to provide assistance to 
these areas of some 250 million USD each year for four years. 
 This assistance would be used to build roads and relocate 
military bases to the Negev, as well as to encourage Jewish 
settlement there.  Reftels provide further details of GOI 
thinking on these plans.  End Note) 
 
8. (U) CODEL Frist did not clear on this cable. 
 
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