1. (C) SUMMARY: In meetings that took place in the hours
following the Sheikh Yassin assassination, USD Dov Zakheim
discussed the targeted killing and Gaza disengagement with
Ministers Olmert and Mofaz and MKs Steinetz and Sneh.
(Selected GOI comments from these meetings reported reftels.)
Mofaz defended Yassin's killing, and said the GOI would
continue such operations. Sneh blasted the operation, which
he characterized as typical GOI undermining of Palestinian
moderates. Mofaz and Olmert both focused on the issue of
U.S. support for the disengagement plan, with Olmert
predicting that President Bush would privately hint to Sharon
that support would come after the U.S. election. Sneh urged
the U.S. to withhold its support until Sharon took a number
of steps, including on settlements and outposts in the West
Bank. Steinetz said Sharon would have to refrain from any
West Bank withdrawals if he hopes to win the support of
Steinetz and other key Likud members. Olmert suggested that
Netanyahu and Shalom would back the PM. Mofaz thought
withdrawal would begin around the end of the year and
continue until summer, 2005. END SUMMARY.



2. (SBU) Visiting Under Secretary of Defense Dov Zakheim
discussed Gaza disengagement and the Yassin assassination in
a series of meetings March 22 with Alternate Prime Minister
Ehud Olmert, Defense Minister Shaul Mofaz, Knesset Foreign
Affairs and Defense Committee Chairman Yuval Steinetz and
Labor MK Ephraim Sneh. The Ambassador and/or emboffs
accompanied Zakheim to the meetings. (Selected GOI comments
from these meetings reported reftels.)



--------------------------


Yassin Assassination


--------------------------





3. (C) The meetings all took place the morning of Israel's
targeted killing of Hamas leader Sheikh Yassin. Mofaz
strongly defended the GOI decision to kill Yassin, and said
Israel would continue carrying out such operations. He
accused Yassin of sending hundreds of suicide bombers to kill
Israelis and called him "the Palestinians' Bin Laden." The
Ambassador asked Mofaz about the impact the killing might
have on PM Sharon's attempts to get Egypt to play a
significant role in Gaza withdrawal. "We're going to fight
Hamas, in any case," Mofaz replied, adding that Egypt even
before the assassination had been interested only in
low-level involvement, with no "responsibility" for
Palestinian actions.



4. (C) Sneh, while asserting that Yassin undoubtedly deserved
his fate, criticized the GOI action, predicting that it would
accelerate what he said was the movement of PA security force
members towards the Hamas orbit. Does the GOI, he asked
rhetorically, want Hamas to rule Palestine? An Islamic
government, he said, would be intolerable, but the GOI is
doing nothing to encourage moderate Palestinians to take
over. Olmert, who, as a member of the inner Cabinet, would
have helped make the decision to kill Yassin, also commented
that the assassination could have a problematic impact on the
future of Gaza, citing the greater difficulty the GOI would
have in coordinating with the PA over security issues related
to the Israeli withdrawal.



--------------------------


U.S. Support for Gaza Disengagement


--------------------------





5. (C) Mofaz said that he gained the impression from a visit
to Washington the week before that the USG favors Sharon's
Gaza disengagement plan and appreciates why Israel must take
unilateral action. From his own point of view, he saw the
removal of settlements from Gaza improving Israel's overall
security situation and giving the IDF greater flexibility.
The plan, he said, preserves chances for the roadmap. He
said he hoped that U.S. support would help convince GOI
members currently opposed to the plan to support it.



6. (C) Olmert focused as well on the importance of U.S.
support, but averred that he did not expect the U.S. to
provide financial assistance for Gaza withdrawal. The extent
of Israeli withdrawal from the West Bank under consideration
was probably not enough to motivate strong U.S. support. He
did predict, however, that President Bush, in a one-on-one
meeting with Sharon, would ask Sharon to trust him on the
question of support on the withdrawal plan and Israel's
rejection of a Palestinian "right of return" until after the
U.S. election.



7. (C) Sneh blasted what he called Sharon's "strategy behind
the pullout," charging that Sharon's ultimate goal is to get
assurances that Israel will be left alone on West Bank
matters. The result of Sharon's approach, he asserted, would
be a "Hamastan" in the South to go along with the
"Hizballahstan" that Israel already allowed to be created in
the North.



8. (C) Asked by Zakheim about the U.S. role, Sneh said the
GOI could not "cynically" ask the U.S. for financial
assistance. To do so would be neither "respectful" nor
"dignified." For its part, Sneh continued, the U.S. should
ensure that:

-- There is no Hamas state in either Gaza or the West Bank;

-- Israel dismantles outposts in the West Bank before
proceeding with Gaza settlements;

-- The separation barrier sticks "strictly" to the Green Line;

-- The GOI "negotiates" with Dahlan and Gaza security figures
in advance of Israeli departure from Gaza;

-- The GOI does not pay "exaggerated compensation" to the
7,000 or so Gaza settlers, as this would create an impossible
precedent for removing the 100,000 or so West Bank settlers
whom the GOI would have to move in any agreement on the West
Bank;

-- The status of West Bank settlements be negotiated
(Comment: Sneh did not say with whom) before any settlers are
removed from Gaza.



--------------------------


Internal GOI Politicking on Disengagement


--------------------------





9. (C) Looking ahead to prospects for approval of Sharon's
plan in the Cabinet, Olmert commented that Finance Minister
Netanyahu's wishes were unclear, although many insiders
believe that he's in favor of withdrawal from Gaza.
Netanyahu does, however, appear to be worried about the U.S.
position and his own prospects, as finance minister, for
ending up stuck with the bill. Olmert predicted that Foreign
Minister Shalom, who has not taken a position yet, would
ultimately come around to Sharon's plan. He claimed that
Shalom had come to realize after a recent meeting with some
of his base supporters in the Yemenite Orthodox community
that he could afford politically to back the PM.



10. (C) Steinetz told Zakheim that he might ultimately be
able to support the withdrawal, but only if it involves Gaza
only, not the West Bank. Israel, he said, could afford to
take more security risks in Gaza than in the West Bank, which
sits close to the most strategic places in Israel, e.g.,
Jerusalem, Ben-Gurion airport, and the economic centers
around Tel Aviv. If the withdrawal were limited to Gaza
only, he predicted, no Likud members, or virtually none,
would leave the party.



--------------------------


Withdrawal Logistics


--------------------------





11. (C) Mofaz said he hoped to begin the withdrawal from Gaza
at the end of the year. This would permit completion of the
plan by the summer of 2005. Zakheim asked why the process
will take so long. Mofaz replied that removal of the
settlers, including "talking with them" and finding them new
housing, would prove time-consuming. Pressed by Zakheim for
a budget estimate for withdrawal, Mofaz demurred, but finally
said, "Maybe a few billion shekels. I can't say if it's five
or eight billion." Sneh said he had the impression that Gaza
settlers would move in roughly equal proportion to the Negev,
to other parts of Israel, and to West Bank settlements.



12. (C) Olmert said the GOI had no definite timetable for the
withdrawal, although he thought it might begin after the U.S.
election. Should President Bush lose the election, the start
could be delayed.



13. (U) U/S Zakheim cleared this message.

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