US embassy cable - 05TELAVIV5138

C O N F I D E N T I A L SECTION 01 OF 03 TEL AVIV 005138 
 
SIPDIS 
 
E.O. 12958: DECL: 08/16/2015 
TAGS: PREL, KPAL, KWBG, PGOV, IS, EG, GAZA DISENGAGEMENT, GOI EXTERNAL, GOI INTERNAL 
SUBJECT: NEA A/S WELCH'S AUGUST 16, 2005 MEETING WITH 
ISRAELI MOD DG AMOS YARON REVIEWS POST-DISENGAGEMENT ISSUES 
 
 
Classified By: Ambassador Daniel C. Kurtzer.  Reasons: 1.4 (b, d). 
 
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SUMMARY 
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1. (C) Israeli MOD Director General Amos Yaron updated NEA 
A/S Welch, Ambassador Kurtzer and General Ward August 16 on 
the status of post-Gaza disengagement issues.  On the 
disposition of settler housing, Yaron asked the USG to 
continue its efforts to identify a program manager to oversee 
removal of rubble from the Gaza Strip to the Sinai.  A/S 
Welch said the USG would try to get the Europeans to identify 
as soon as possible a company that could serve as project 
manager, or allow pursuit of alternatives.  On Gaza-West Bank 
passage improvements, Yaron suggested Dahlan was blocking 
progress on the issue by focusing on the northern Gaza-Israel 
border, thereby making it impossible for USAID to release USD 
50 million to Israel for passage improvement.  Yaron stressed 
that Israel would continue to fund its own efforts to move 
forward on passages, but requested A/S Welch's assistance in 
getting USAID to turn over the USD 50 million to the GOI so 
that Israel could directly procure relevant U.S. technologies 
and cover related operational and infrastructure expenses. 
Yaron clarified that Israel's fulfillment of Palestinian 
demands for "door-to-door" service are contingent on the 
maintenance of security after disengagement, and this would 
take time. 
 
2. (C) On Philadelphi and Rafah, Yaron reviewed the Israeli 
and Palestinian positions, and offered Israel's willingness 
to explore an alternative to Palestinian control and 
operation of the Rafah crossing for goods and people by 
opening a temporary terminal in Kerem Shalom.  Yaron made it 
clear that Israel could not accept a third party, such as 
Egypt, clearing off on goods and persons crossing the 
Egypt-Gaza border.  A/S Welch and Ambassador Kurtzer urged 
Yaron to explore creative solutions to the Rafah impasse, 
including a third party role, that would satisfy Israeli and 
Egyptian security interests and tangibly demonstrate to the 
Palestinians that their situation has changed as a result of 
disengagement.  END SUMMARY. 
 
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HOUSING: PROJECT MANAGER, AGREED SECURITY REGIME NEEDED 
============================================= ========== 
 
3. (C) Yaron said the GOI hopes to reach agreement in the 
near future with Palestinian Authority (PA) Civil Affairs 
Minister Mohammed Dahlan about how to securely remove the 
remains of dismantled setter housing from Gaza.  All sides 
agree that the Egyptians are to take the unusable and 
non-hazardous rubble.  For the GOI, the remaining issue is 
ensuring that that rubble removal process conforms with 
Israel's security requirements.  The trucks exiting Gaza must 
haul rubble, and, when they return, they must be empty or 
only contain sand for Gaza's beaches. 
 
4. (C) Yaron also stressed that the GOI hopes to learn as 
soon as possible who will be the program manager for the 
settler housing dismantlement project.  He understood that 
the USG had approached the World Bank and European Union. 
A/S Welch said that the USG had been working hard over the 
last few days to resolve the matter.  Secretary Rice had 
raised it with her Quartet counterparts on August 12, and A/S 
Welch had discussed it with his Quartet counterpart, Mark 
Otte, on August 15.  Yaron wondered aloud whether an American 
company could provide the services.  A/S Welch said it would 
be more efficient to have a company involved that has 
experience working in Gaza.  (NOTE:  A/S Welch mentioned IMG, 
and Yaron indicated familiarity with the company.  END NOTE.) 
 A/S Welch promised to get the Europeans to reach agreement 
or have them decide that an alternative should be pursued. 
 
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YARON SAYS DAHLAN, USAID STALLING PASSAGE IMPROVEMENTS 
============================================= ========= 
 
5. (C) Yaron stressed that the GOI knows how important it is 
to help the Palestinians see that the Gaza-West Bank passage 
issue has improved for them as a result of disengagement: 
"We are ready to make a 180-degree change regarding services 
to the Palestinians."  He complained, however, that Dahlan is 
making progress on passage improvement difficult by insisting 
on discussion of the Erez border line.  Yaron recalled that 
he told Quartet Special Envoy (QSE) Wolfensohn that while 
Israel has funded the establishment of a passage for goods at 
Erez, the Palestinians have insisted that work also continue 
on the Erez Industrial Zone.  In doing so, Yaron explained, 
the Palestinians demonstrate they wish to drag their feet, 
while Israel wants to move forward and allow the passage of 
goods from Erez to Ashkelon, the West Bank, and other 
destinations.  Yaron said Wolfensohn promised to speed up the 
delivery of USD 50 million to the GOI in return for the 
building of the new passage for goods at Erez.  Yaron 
suggested that the best solution would be for USAID to turn 
the USD 50 million over to the GOI so that it can use USD 30 
million to procure scanners and other U.S. technology through 
its defense procurement agency in New York, and use the 
remaining USD 20 million to cover infrastructure and 
operational costs.  Conversely, Yaron expressed concern that 
if USAID used its standard procedures for allotting the USD 
50 million, the acquisition process could be dragged out and 
end up complicated by questions about who signs the 
contracts.  Yaron said he is ready to work with USAID. 
 
6. (C) Yaron said that the GOI will improve the Karni passage 
to ensure that Palestinian goods will cross from the Gaza 
Strip to the West Bank "in a very short time," with the main 
passage running from Karni to Tarkumiya, south of Hebron.  He 
cautioned that GOI efforts to fulfill Dahlan's demand for 
"door-to-door" service are contingent on the maintenance of 
security in the area "for months" after disengagement. 
Israel, he said, is ready "in principle" to fulfill Dahlan's 
request, but needs time and equipment.  Delivery of the USD 
50 million in the near term would be helpful.  Palestinian 
observance of Israel's security needs would be crucial. 
Yaron said he told Wolfensohn that it does not matter what 
kind of checks the Palestinians perform on their side of the 
Gaza border -- Israel cannot rely on them. 
 
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YARON PROMISES TO THINK CREATIVELY TO RESOLVE RAFAH IMPASSE 
============================================= ============== 
 
7. (C) Yaron stressed that it is in Israel's interest to 
leave Philadelphi as soon as possible -- possibly before the 
Israeli holidays in October.  He mused that Israel might be 
completely out of the Gaza Strip within two months, as long 
as the parties reach agreement on the establishment of an 
Israeli-controlled border crossing at Kerem Shalom, at the 
intersection of the Israeli, Egyptian and Gazan borders. 
Yaron said that after Israeli troops pull out of Philadelphi, 
Israel wants to build a new terminal at Kerem Shalom that 
will service goods and people.  He said it could be completed 
in a short time, as long as there are no problems with the 
customs envelope arrangement under which Israel retains 
customs and security control of entry to Gaza.  In the GOI's 
view, however, the Palestinians cannot accept separate 
customs envelopes in the Gaza Strip and the West Bank, and 
Yaron indicated that Israel will use the threat of abrogating 
the customs union to press the Palestinians to agree to a 
Kerem Shalom crossing.  Yaron said the GOI has made it clear 
to the Palestinians that Israel is ready to allow the 
Palestinians to transport goods into and through Israel 
"without checking -- at least for the beginning" -- as long 
as the Palestinians continue to accept a customs envelope 
including Gaza for which Israel retains control.  The GOI 
would be willing to call the Kerem Shalom access point a 
"temporary terminal," and then decide its ultimate fate in 
the future. 
 
8. (C) In the meantime, Yaron said, Israel could not discuss 
third-party involvement at the Rafah terminal.  Yaron said 
the best compromise Israel could accept would be to open the 
temporary terminal in Kerem Shalom, and then allow 
construction of a seaport in Gaza.  Then, after a year, the 
two sides could assess the seaport in Gaza and make decisions. 
 
9. (C) A/S Welch and Ambassador Kurtzer suggested to Yaron 
that proceeding according to current plans will likely not 
satisfy Palestinian desires to see real, measurable changes 
in their situation.  While Israel will have withdrawn from 
the Gaza Strip, Israeli officials will still be checking 
goods and persons crossing even the Gaza border with Egypt. 
A/S Welch and the Ambassador urged Yaron to think creatively 
so that Israel will be able to maintain the customs duty, 
revenue collection and tariff code provisions of the customs 
envelope -- and its focus on security -- while demonstrating 
tangibly that the situation at Rafah has changed for the 
Palestinians as a result of disengagement.  They suggested 
that the GOI consider further how Israeli and Egyptian 
security interests coincide as a result of disengagement, and 
how Egypt might share Israel's interest in enforcing the 
security aspects of the passage of goods and people across 
Rafah.  A creative solution, including a third party role, 
should be able to demonstrate change at Rafah, while 
addressing Israeli security concerns, possibly through 
technological solutions at the Erez and Karni crossings into 
Israel as a discreet backstop.  Yaron acknowledged that, 
after considering all the options, his experts had concluded 
that a security regime involving Palestinians checking goods 
and persons under Egyptian supervision was Israel's "second 
best option" and promised to "think about it" as a possible 
way ahead to the Rafah issue. 
 
10. (U) This cable was cleared by Assistant Secretary David 
Welch. 
 
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