INDO-ISRAEL RELATIONS BACK ON TRACK

C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 007966

SIPDIS

E.O. 12958: DECL: 12/16/2014
TAGS: PREL PGOV TSPA PTER ECON IN IS
SUBJECT: INDO-ISRAEL RELATIONS BACK ON TRACK

REF: A. NEW DELHI 7348

B. NEW DELHI 981

Classified By: DCM Robert O. Blake, Jr. Reasons 1.4 (B,D).


1. (C) Summary: Israeli Vice Prime Minister Ehud Olmert's
December 5-10 visit to India was "extremely positive" and
provided an opportunity to expand the bilateral relationship
beyond defense, Israel Embassy DCM Yoed Magen told A/PolCouns
and Poloff on December 16. The visit, the first high-level
exchange between India and Israel since the UPA government
assumed power in May, was a welcome improvement over the poor
foreign office consultations that took place in November.
Even FM Natwar Singh emphasized the importance of ties with
Jerusalem, a reflection of the growing consensus within the
GOI about the utility of good relations with Israel. Magen
said the successful Counter Terrorism Joint Working Group,
held just prior to Olmert's visit, highlighted the countries'
mutual concerns and helped recover the momentum lost after
the foreign office consultations. Israel raised its concerns
about Iran, prompting NSA Dixit to acknowledge that India
faces a "real dilemma," given New Delhi's good relations with
Iran and Tehran's nuclear ambitions. If the November
India-Israel foreign office consultations demonstrated the
sometimes opposing views at work within the GOI on relations
with Israel, the Vice PM's visit illustrated solid support
for them at the Ministerial level. End Summary.

Many Ministers But No PM
--------------


2. (C) Offering a readout of the first high-level exchange
between India and Israel since the UPA government assumed
power, Israel Embassy DCM Yoed Magen (protect throughout)
told A/PolCouns and Poloff that the December 5-10 visit of
Vice Prime Minister Ehud Olmert was a significant improvement
over the "uncomfortable" foreign office consultations held in
November (Ref A). Signaling New Delhi's intent to strengthen
ties with Israel, Olmert received meetings with seven
ministers, including FM Natwar Singh, Finance Minister
Chidambaram, and Minister of Commerce Kamal Nath, as well as
the Ministers of Agriculture, Science and Technology, and the
Ministers of State for Communications and Information
Technology, and the Prime Minister's Office.


3. (C) PM Manmohan Singh declined to meet with the
delegation, despite former PM Vajpayee's meeting with Deputy
PM Silvan Shalom (of lower rank than Olmert) in February (Ref
B). Magen opined that a meeting with the PM would have
publicly signaled a "close degree of intimacy" with Israel,
something the GOI may prefer to keep private. Reflecting the
economic focus of the visit, representatives from over 50
Israeli companies also participated in the trip and traveled
to Bangalore, Mumbai, and New Delhi, and held hundreds of
meetings with Indian business people.

Natwar's Friendly Gesture
--------------


4. (C) According to Magen, Olmert had an "excellent"
discussion with FM Natwar Singh, a stark contrast to the
"disappointing" foreign office consultations held at the
Secretary level in November. He speculated that the meeting

SIPDIS
was the first time Natwar had ever been exposed to Israeli
policy directly from a senior Israeli official, calling the
conversation an "extremely important step in building
confidence between the two countries." He said that Natwar
and Olmert "had good chemistry" during the meetings, and the
FM unexpectedly appeared at a dinner in honor of the Israeli
delegation, "as a friendly gesture and to reassure Israel of
the importance India attaches to relations." Natwar
emphasized that Israel was important to him, "despite what
people say," Magen stated, adding that he heard Natwar had
excused himself from a cabinet meeting in order to attend the
dinner. Commenting on the evolution of Natwar's thinking,
Magen noted that the FM did not mention the Non-Aligned
Movement once during his November 6 speech at a "Hindustan
Times" conference or in his recent remarks before Parliament.


5. (C) As an emerging global power, India does not want to
be absent from developments in the Middle East, Magen
observed, noting that New Delhi has been demonstrating a
greater interest in the region. In 1991 when the
Israeli-Palestinian peace process began, India had no role
because New Delhi did not have diplomatic relations with
Jerusalem. The GOI, including NSA Dixit and PM Manmohan
Singh, now recognize the "ground reality" there, he argued,
adding that either Defense Minister Mukherjee or FM Natwar
Singh would likely visit Israel in the coming months.

Counter Terrorism: "On Safe Ground"
--------------


6. (C) Offering a readout of the December 1 India-Israel
Counter Terrorism Joint Working Group (CTJWG),Magen told us
the event "helped bring the relationship back on course."
Led by Israeli Deputy Director for Strategic Affairs Jeremy
Issacharoff, the CTJWG underlined the two countries similar
concerns and approach to terrorism and terrorist financing.
The Israelis felt so comfortable discussing counter terrorism
with India that "we felt that we were on safe ground," he
remarked.

Iran
--------------


7. (C) Issacharoff raised Israeli concerns about Iran "very
sharply" with New Delhi during the CTJWG, Magen remarked,
adding that Olmert's delegation also flagged nuclear-related
concerns and Iran's negative role in the Middle East peace
process. The Israelis argued that Iran's influence in the
occupied territories deters progress, stressing that
"whatever happens in the Middle East will affect India." NSA
Dixit reportedly told Issacharoff that India faces a "real
dilemma" because "we have good relations with Iran, but the
nuclear issue is a problem." Magen said Dixit had said that
he was blunt during his mid-October visit to Tehran, telling
the Iranians to honor their international commitments (to the
Non-Proliferation Treaty) or "pay the consequences."

Beyond Defense
--------------


8. (C) Magen noted that a major objective of Olmert's visit
had been to diversify relations beyond defense, to include
cooperation in economic, hi-tech, biotechnology, and
agricultural areas. The two countries agreed to establish a
joint study group to formulate a comprehensive economic
partnership, and signed an agreement with the Ministry of
Finance that would set up a mechanism to guarantee Israeli
investments (comparable to the USG's OPIC). He commented
that Israel had raised the issue last year, but the GOI had
not been interested. Finance Minister P Chidambaram approved
the agreement during the visit, a move that surprised Magen.

Comment
--------------


9. (C) If the November India-Israel foreign office
consultations demonstrated the sometimes opposing views at
work within the GOI on relations with Israel, the Vice Prime
Minister's visit illustrated solid support for them at the
Ministerial level. While India may not want to publicize its
ties with Jerusalem (evidenced by the PM's refusal to meet
with the delegation),neither does it want to slow the pace
of bilateral engagement. India will likely continue to
enhance its ties to Israel, while maintaining a low public
profile.
MULFORD