US embassy cable - 05TELAVIV2999

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 002999 
 
SIPDIS 
 
E.O. 12958: DECL: 05/16/2015 
TAGS: PREL, KWBG, ECON, IS, GAZA DISENGAGEMENT 
SUBJECT: PERES ADVISOR AND NSC ADVISOR CITE "SLOWDOWN" IN 
DISENGAGEMENT TALKS WITH PA 
 
Classified By: Ambassador Daniel C. Kurtzer for reasons 1.4 (b) and (d) 
 
1.  (C) Vice PM Peres advisor Einat Wilf and NSC advisor Gabi 
Blum told EconCouns in separate meetings that a "slowdown" is 
taking place in joint GOI-PA technical negotiations, in part 
because of a proposed 70-point agenda the PA orally presented 
to the GOI that touches on "final status" issues such as safe 
passage, and raises legal questions such as the location of 
Gaza borders following withdrawal.  It will take at least 
three weeks, Wilf said, for the GOI to determine its 
positions and respond to the PA on these issues.  Wilf also 
emphasized that while the PM will continue publicly 
disavowing Israeli responsibility for Gaza 
post-disengagement, Wilf said, the GOI will not seek 
international recognition that occupation has ended.  Both 
Wilf and Blum noted several areas of continued disagreement 
between the GOI and the PA, including the GOI,s planned West 
Bank-Gaza rail link; the PA,s continued requests for an 
airport despite their Sharm el-Sheikh agreement to a seaport 
instead; and "mixed messages" from PA leadership on whether 
the GOI should demolish settlement houses or transfer them 
intact.  Wilf said PA Civil Affairs Minister Dahlan is 
unwilling to allow his technical staff to meet with their 
Israeli counterparts until he has come to agreements on 
principles and guidance for the negotiations.  End summary. 
 
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PA's List Requires Internal GOI Talks 
------------------------------------- 
 
2.  (C) Einat Wilf, foreign policy advisor to Vice PM Shimon 
Peres, told EconCouns May 10 that the GOI must meet 
internally to determine its position on several questions the 
PA raised in early May as part of an orally-presented 70-item 
agenda for negotiations.  It will take at least three weeks, 
she said, for the GOI to prepare its response to the PA. 
These "sticky issues" include the legal status and accepted 
borders of the Gaza Strip following disengagement, details of 
the potential continuation of the customs union, the status 
of settlements in the northern West Bank, and "safe passage" 
for goods and people between Gaza and the West Bank.  On the 
Gaza Strip, Wilf asserted that the GOI will not seek 
international recognition of "the end of occupation" once 
troops and settlers have withdrawn, although PM Sharon will 
continue to state publicly that Israel will not be 
responsible for what happens in Gaza post-disengagement.  On 
the customs union, she said the GOI must determine its 
response to the PA,s preference to maintain it and be 
permitted to carry out customs duties itself.  There is a 
lingering internal dispute over the value of a third party to 
carry out customs duties within the Israeli envelope, she 
added, with the Ministry of Industry, Trade, and Labor and 
the Ministry of Finance reluctant to concede this authority 
and most other ministries prepared to do so.  On the northern 
West Bank settlements, Wilf explained that the GOI is 
reluctant to adhere to conventional area demarcations of A, 
B, or C following withdrawal. 
 
3.  (C) On "safe passage," NSC advisor Gabi Blum said she 
expects that PA President Mahmud Abbas will raise the GOI,s 
planned West Bank-Gaza rail link during his upcoming visit to 
Washington, and will likely express his concern that a rail 
link will prejudice final status discussions of safe passage. 
 Wilf emphasized that the GOI is currently not considering 
alternatives to the back-to-back method of shipping, but 
intends to increase capacity at the border crossings via new 
container scanners.  Wilf questioned whether any of the USD 
50 million earmarked for GOI crossings improvements could go 
towards the purchase of these scanners, noting that the 
timing of the supplemental may make this idea unfeasible. 
 
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PA Renews Request for Seaport 
----------------------------- 
 
4.  (C) Blum said that PA Civil Affairs Minister Muhammed 
Dahlan had recently told NSC director Giora Eiland that GOI 
flexibility on "safe passage" and a fixed-wing airport in 
Gaza are pre-conditions to beginning more intensive technical 
coordination.  In discussions last week, Blum said, Dahlan 
had expressed PA concurrence with Eiland's assertion that 
questions of safe passage cannot be discussed at this time, 
and that discussions must focus on technical solutions to the 
need to move goods and people.  Dahlan's apparent change of 
tune, she said, was most likely due to opposition from PM Abu 
Ala'a, who wishes to keep "safe passage" on the table for 
President Abbas' Washington trip.  In the GOI's view the 
airport issue in particular remains a non-starter, she said, 
on which any forward movement would have to come from the 
PM,s level.  Wilf said that the PA "does not see the 
difference" between building a seaport and an airport, and 
has revitalized the push for fixed-wing service despite 
reportedly accepting the PM,s Sharm el-Sheikh refusal to 
bring this issue forward. 
 
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PA Position on Assets Unclear 
----------------------------- 
 
5.  (C) Wilf and Blum emphasized what they termed recent 
inconsistencies in the PA,s public position on the transfer 
of settlement assets.  Wilf said that while "PA officials at 
all levels" had assured Vice PM Peres that the PA would 
"accept whatever the GOI decides to do" regarding the 
disposition of settlement houses in tandem with the pullout, 
Negotiations Affairs Minister Saeb Erekat has recently 
contradicted this by stating publicly that the PA would 
prefer demolition and removal of rubble to intact transfer. 
His statements, Blum said, make it difficult for PM Sharon to 
make any changes on the planned transfer of assets.  Blum 
noted that the PA made a formal request to the GOI for the 
settlement asset inventory that included things the GOI 
cannot deliver for legal and policy reasons, such as the 
accounting for profits Israeli companies had made in Gaza, 
but both Blum and Wilf emphasized that the GOI will provide 
as much information it can in the near future. 
 
6.  (C) Comment: While Peres advisor Wilf expressed somewhat 
more optimism than NSC advisor Blum regarding the potential 
for progress on GOI-PA negotiations, it seems clear there 
will be no talks for at least three weeks.  Even then, 
according to Wilf and Blum, Dahlan has stated to the GOI that 
he wishes to keep discussions centered on the PA's agenda, 
thus it will likely take additional time for the parties to 
address the complex but key technical issues surrounding 
passages and assets. 
 
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