US embassy cable - 05TELAVIV4830

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 004830 
 
SIPDIS 
 
E.O. 12958: DECL: 08/04/2015 
TAGS: PREL, PGOV, KWBG, IS, SETTLEMENTS 
SUBJECT: ISRAELI HOUSING MINISTER ISSUES TENDERS FOR NEW 
HOUSING UNITS IN BEITAR ILLIT; LIKUD MINISTER PRESSES FOR 
E-1 EXPANSION 
 
REF: TEL AVIV 04284 
 
Classified By: Ambassador Daniel C. Kurtzer for reasons 1.4 (b) and (d) 
 
This cable has been cleared by Consulate General Jerusalem 
 
1.  (C) Summary:  Israeli press reported today, August 4, 
that the Ministry of Construction and Housing (MOCH) 
published notices for two tenders for the sale of a total of 
72 residential units, plus commercial space, in Beitar Illit, 
a settlement southwest of Jerusalem.  Housing Minister Isaac 
Herzog told the Ambassador that the units meet pressing 
ultra-orthodox demand, are located within the "construction 
lines," and are in a "consensus settlement bloc" adjacent to 
the Green Line.  Peace Now reports that, with these units, 
the GOI has issued tenders for a total of 235 units since the 
beginning of this year.  Separate press reports said that 
Israeli Health Minister Danny Naveh submitted a resolution to 
the Cabinet last night that the GOI approve building a new 
neighborhood in E-1, between Ma'ale Adumim and Jerusalem, in 
Sunday's Cabinet meeting.  Israeli pundits speculate that 
Naveh submitted the proposal in exchange for his vote in 
favor of the resolution to evacuate the first group of 
settlements from the Gaza Strip under the disengagement plan. 
 The Prime Minister's office has reportedly rejected Naveh's 
demands.  End summary. 
 
------------------------------- 
Houses for Sale in Beitar Illit 
------------------------------- 
 
2.  (C) The Ministry of Construction and Housing (MOCH) 
published notices for two tenders today in Ha'aretz for the 
sale of a total of 72 units in the B1 area of Beitar Illit 
settlement, southwest of Jerusalem.  The first tender is for 
the sale of 30 residential units covering 3,200 square meters 
in two plots, and an additional 1,400 square meters for 
commercial building.  The plots can be leased for 98 years, 
with an option to extend for an additional 98 years, and have 
a minimum cost of USD 517,700.  The tender also states that 
the "expenditure for development" is in the amount of USD 
1,972,366.  Dr. Chaim Fialkoff, Senior Deputy Director 
General for Planning and Coordination at the MOCH, told 
Embassy econoff that building contractors will pay the 
development expenditure -- or the infrastructure that the GOI 
has put in place at the neighborhood level -- and then begin 
bidding above the USD 517,700 minimum cost, with the highest 
bidder winning.  According to the notice for this tender, 
interested bidders can pick up informational booklets 
beginning today, and can submit their bids through September 
14.  The building contractors who win the bid will have 36 
months to develop the land.  Fialkoff said these would likely 
be multi-unit dwellings. 
 
3.  (C) The second tender is for 42 residential units 
covering 5,000 square meters also in the B1 area of Beitar 
Illit at an adjacent site, as published in Ha'aretz. 
Fialkoff reported that each unit would average 120 square 
meters.  The minimum cost is USD 871,100 and the development 
expenditure is  USD 2,160,238, but according to Fialkoff, 
this tender differs from the first in that building 
contractors bid at the lowest cost they can offer buyers on a 
per-meter basis when construction is complete.  He said that 
in both cases, however, the builders will be in charge of 
marketing and selling the units to individual buyers. 
 
4.  (C) In response to econoff's question on the lag time 
between the final GOI approval of the projects and the 
publication of the tenders, Fialkoff responded that he does 
not know for sure.  He said, however, that there is 
significant demand in Beitar Illit and he guessed that not 
much time has passed between the final approval and the 
tender publication.  He explained that while in some cases 
plans can sit on shelves for years before they are developed, 
Beitar Illit is not one of those cases and it is likely that 
the project received the final approval "relatively 
recently," in the past few months.  (Note:  This is contrary 
to MOCH public comments that these projects were approved 
"years ago."  End note.)  When econoff asked if there are 
other plans such as these in the pipeline, Fialkoff said, 
"not that I know of." 
 
5.  (C) Housing Minister Isaac Herzog told the Ambassador 
that he approved the projects because Beitar Illit is near 
the Green Line and within the "consensus settlement blocs" 
that will be part of Israel.  Herzog explained that the 
demand from the Haredi community in the area far exceeds the 
number of housing units he approved, and that all of the 
approvals fall within the construction lines of the 
settlement.  Herzog stressed he is approving far fewer 
settlement tenders than his predecessors. 
 
6.  (U) Peace Now, in response to the announcement, said that 
with these 72 units, the GOI has published tenders for a 
total of 235 units since the beginning of this year.  The 
other locations are: 
-- Givat Ze'ev:  63 units, published on January 1, 2005. 
-- Ariel:  10 units, published on March 24, 2005. 
 
-- Elkana:  50 units, published on April 18, 2005. 
 
-- Ma'ale Adumim:  22 units, published on June 2, 2005. 
 
-- Elkana:  18 units, published on July 6, 2005. 
 
------------------------------------- 
E-1 Expansion to Ma'ale Adumim Tabled 
------------------------------------- 
 
7.  (U) Separately, press reported that Health Minister Danny 
Naveh submitted a resolution to the Cabinet last night that 
the GOI approve building a new neighborhood in E-1, between 
Ma'ale Adumim and Jerusalem, in Sunday's Cabinet meeting. 
The press reports say that Naveh submitted the proposal in 
exchange for his vote in favor of the resolution to evacuate 
the first group of settlements -- Netzarim, Kfar Darom, and 
Morag (Cabinet meeting agenda reported septel).  Naveh 
reportedly said that the plan is meant to prevent "a 
Palestinian stranglehold" around Jerusalem and is especially 
necessary to strengthen Jewish settlements and security in 
the West Bank while the GOI is evacuating settlers from the 
Gaza Strip.  The Prime Minister's Office has reportedly 
rejected Naveh's demand. 
 
8.  (C) Danny Seidemann, an Israeli attorney with human 
rights NGO "Ir Amin," told ConGen poloff August 4 that 
Naveh's statement is badly timed and puts the GOI on a 
collision course with the U.S. administration.  "There is 
likely to be much more international pressure against the E-1 
project after Gaza disengagement, so it is in the interest of 
the Israeli 'right' to put Sharon's government under 
pressure," said Seidemann, opining that the future of the 
two-state solution will be decided in and around Jerusalem. 
According to Seidemann, Sharon sees it as politically 
necessary to take inflammatory actions in Jerusalem to 
compensate for evacuating settlements in Gaza.  Seidemann 
said that the next 48 hours are critical in the international 
community's swift reaction and strong condemnation of Naveh's 
statement. 
 
9.  (C) Comment:  Israeli Housing Minister Isaac Herzog told 
a visiting staffdel last month that the GOI intends to 
eventually build 700 new housing units in Ma'ale Adumim and 
Beitar Illit (ref A).  If this is true, we expect to see more 
tenders of this nature in the coming months, and will 
continue to try to obtain a list from the MOCH of projects 
that are in the planning phases.  End comment. 
 
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