KEY MINISTERS AND WEISSGLAS REVIEW POTUS-SHARON

C O N F I D E N T I A L SECTION 01 OF 03 TEL AVIV 002335

SIPDIS

E.O. 12958: DECL: 04/21/2014
TAGS: PGOV PREL KWBG IS GAZA DISENGAGEMENT GOI INTERNAL ISRAELI PALESTINIAN AFFAIRS
SUBJECT: KEY MINISTERS AND WEISSGLAS REVIEW POTUS-SHARON
UNDERSTANDINGS, DISENGAGEMENT POLITICS, IMPLEMENTATION AND
AFTERMATH


Classified By: Ambassador Daniel C. Kurtzer for Reasons 1.4 (B) and (D)
.


1. (C) SUMMARY: In April 20 meetings with U/S Bolton and the
Ambassador, Olmert and Weissglas said there is still a chance
to keep the GOI coalition together, even if disengagement
moves forward. However, Minister Lieberman, leader of one of
the right-wing parties that is expected to bolt, told the
Ambassador that there was no chance he would stay once the
Cabinet approves disengagement. Sharansky, a Likud opponent
of disengagement, hinted that he probably would not resign.
Weissglas described the President's April 14 statements with
Sharon as a shock to the Palestinian Authority, and thereby a
potential spur to PA reform. He asserted that success in
maintaining order in Gaza after Israeli withdrawal would have
a major impact on Israeli public views about West Bank
disengagement. Disengagement opponent Sharansky lauded the
President's letter to Sharon, and asserted that the GOI would
introduce it, along with a similarly favorable 1976 letter
from President Ford, in final status talks. Olmert claimed
that Sharon's April 18 statement tying Gaza withdrawal to
completion of the West Bank fence was carefully worded to
allow wiggle room. Weissglas said the withdrawal process
could take up to 18 months if the settlers resisted, but
recent settler expressions of interest in compensation
indicated that withdrawal would move more quickly. He said
Sharon is examining whether the settlers can receive advance
payments; this would allow departures to begin within "a few
months." Weissglas lauded Egyptian cooperation, and Olmert
lauded PM Blair, although he said he shared Sharon's dim view
of a UK security role with the Palestinians. Netanyahu
emphasized the importance of Gaza economic development, his
best ideas for which were the planned Aqaba to Ashdod "land
bridge" and the employment of Gazans in "huge entertainment
centers" outside Gaza. He said he had not yet given thought
to integrating Gaza settlers into the Israeli economy, but
thought it would "probably" be a problem. END SUMMARY.


2. (C) Visting Under Secretary John Bolton and the Ambassador
discussed Gaza disengagement in April 20 meetings with Likud
ministers Olmert, Netanyahu, and Sharansky, and with PM Chief
of Staff Weissglas. The Ambassador discussed the same topic
in a separate April 20 meeting with Transportation Minister
Lieberman of the National Union (NU).

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Coalition Future
--------------


3. (C) Rejecting the conventional wisdom that the GOI's two
right-wing coalition members, the National Religious Party
(NRP) and NU, will inevitably quit the government over Prime
Minister Sharon's Gaza withdrawal plan if it goes forward,
Olmert, the leading proponent of disengagement within Likud,
said he hoped the coalition would stay together, and believed
it could. The coalition, he said, would need the two
pro-settler parties to help manage national emotions once the
wrenching process of settlement dismantlement begins. Their
departure from the coalition would also create a potentially
difficult interim period between coalitions because Sharon
would not have a majority behind him in the Knesset. Olmert
believed NRP and NU could stay in the coalition and save face
by arguing that their departure would not stop Gaza
disengagement in any case, but that it would lead to a new
coalition featuring both Shimon Peres and Shinui.


4. (C) Weissglas likewise held out hope that NRP and NU could
choose to stay in the coalition, claiming that the two
parties' determination had been wavering in recent days.
Their "red lines," he commented, had not stayed fixed, moving
from the PM's commitment to the disengagement policy, to a
Cabinet vote in favor, to actual steps on the ground.
Netanyahu, while also expressing the hope that NRP and NU
would remain in the coalition, thought it unlikely. He
lamented the impact of a possible change of coalition on his
economic program, commenting that "Likud, Shinui and
Lieberman" had an agreement to move quickly on free-market
reforms.


5. (C) Lieberman categorically rejected any possibility that
he would stay in the coalition after the Cabinet approves the
disengagement plan. The Ambassador pressed Lieberman on
whether he did not see any advantages to staying in the
coalition. Lieberman replied that one does not have a choice
in certain decisions. Asking him to stay in the coalition
after it approves settlement removals would, he said, be like
"asking a religious man to eat pork." Sharansky, another
disengagement opponent, said he could not imagine how the
coalition would hold together after Sharon's plan moves
forward. The Ambassador asked Sharansky whether he,
personally, would stay in the coalition if disengagement
prevails. Sharansky hinted that he would probably stay in,
calling resignation a "more symbolic than practical" gesture,
and commenting that his decision would hinge on whether he
would have more influence inside or outside the Cabinet.
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Impact of Bush-Sharon Meeting
--------------


6. (C) Weissglas described the results of the April 14
Bush-Sharon summit as an important source of much-needed
leverage with the Palestinians. Experience over the past two
years, he argued, has demonstrated that few means of pressure
are available to use on the Palestinians. Economic pressure
has little value on a population that is already very poor.
Changes that one might be able to help shape in Palestinian
public opinion yield little, if any, political action by the
leadership. Israel's ability to apply military pressure is
constrained by diplomatic and humanitarian concerns.


7. (C) The April 14 message out of Washington, however, very
much shook Palestinian leaders, in Weissglas' view. For the
first time, these leaders confronted the possibility that
outsiders would make decisions for them. This new source of
pressure might lead to internal change in the PA. If all
goes according to plan, Palestinians will find themselves in
control of Gaza sometime next year. How they handle this
responsibility could prove to be an "extremely constructive
pilot" project, with ramifications for the future of the West
Bank. The maintenance of peace and order in Gaza would have
a big impact on Israeli public opinion. Weissglas, however,
was uncertain whether the Palestinians were up to the
challege, commenting that an "outdated Palestinian mentality"
left the Palestinians inclined to complain, rather than take
charge of their own problems.


8. (C) Sharansky, while reaffirming his opposition to
disengagement, lauded Sharon for the letter he received from
President Bush. He noted that President Ford had written a
letter in 1976 that was similarly positive to Israeli
positions. Saying he did not want to sound too cynical,
Sharansky said that the GOI would try to use both letters to
its benefit in final status negotiations. In any event,
Sharansky said, he did not see that the "dramatic and
difficult" steps involved in disengagement would advance the
peace process, although he said he hoped that he was wrong.

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Understandings with Bibi about the Fence
--------------


9. (C) Netanyahu's decision after the Washington summit to
endorse Sharon's disengagement plan came up in the meeting
with Olmert, although not in the meeting with Netanyahu,
himself. Olmert asserted that Netanyahu had not wanted to
find himself isolated in opposition to the plan after the
April 17 Rantisi assassination. The PM made Netanyahu's
support possible by appearing to accede to Netanyahu's demand
for completion of the West Bank separation barrier to precede
disengagement, and for the fence to take in Ariel. In fact,
Olmert stressed, the PM's statement linking fence issues to
disengagement had been carefully worded. Sharon, according
to Olmert, said that "we'll make an effort" to complete the
fence before disengagement begins, and that the route of the
fence would be "in accord with the GOI decision" about the
route, i.e, that there is no change in status quo plans for
the route.

--------------
Disengagement Timetable
--------------


10. (C) Weissglas said Sharon's disengagement plan originated
with the realization that the near future held no prospects
for a final status agreement. The plan seeks to "rearrange
space" and security provisions, and undo the deadlock between
the parties. The plan might not follow the terms of the
roadmap, but it makes progress in the right direction.
Disengagement also dispels Palestinian doubts about the
willingness of Israel ever to make territorial concessions.


11. (C) Asked about the timeline for withdrawal from Gaza,
Weissglas described two scenarios. If the settlers resist
leaving their homes, the process could take 18 months.
(Comment: Weissglas apparently meant 18 months from the
beginning of actual departure/removal of settlers.) The
process would go much more quickly, he said, if a significant
number of settlers cooperate. Signs so far indicate that
cooperation is likely. A number of attorneys, some of whom
represent entire settlements, have already inquired about
compensation. Weissglas said Sharon had asked the Ministry
of Justice on April 19 to advise whether advance payments to
settlers would be possible. If so, some settlers could begin
moving out of Gaza within "the next few months."

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Role of Outsiders
--------------


12. (C) Weissglas presented a potentially rosy portrait of
Gaza after Israeli withdrawal. The agro-industrial
facilities that settlers will leave behind could produce
three times the food requirements of Gaza City. Egyptian
intelligence chief Omar Suleyman had claimed that Egyptian
assistance could help turn Gaza into a new Singapore.
Weissglas lauded Egyptian cooperation overall on
disengagement, commenting that the prospect of Israeli
withdrawal from Gaza had forced the GOE "to leave its
armchair." He hoped that Jordan would be similarly helpful
on West Bank disengagement. While West Bank settlement
removals envisaged in current plans are only "symbolic," the
GOI, he claimed, has plans for "deeper" removals in
subsequent stages.


13. (C) In response to Bolton's question about European
reaction to the President's statements of April 14, Olmert
said that PM Blair had been very helpful. The reactions of
other Europeans would depend on the evolution of events,
although they wanted to be helpful. Olmert thought that the
Europeans could help foster a "less loaded atmosphere" in
Gaza, and pointed to the work the UK is doing with Dahlan.
The Ambassador pointed out that Sharon had told the President
that he objected to the UK role. The Ambassador urged the
GOI to "think strategically" by leaving room for a
constructive European role in Gaza that goes beyond economic
development. Olmert commented that he does not see things
exactly as Sharon does and would like to give the Europeans a
greater role, although he said that he, too, disapproved of
the UK role in security.


14. (C) Olmert asked the Ambassador for his vision of
European involvement, noting that he had difficulty
envisaging a meaningful role for France or the Scandinavians.
Some German officials, such as FM Fischer, are, on the other
hand, friendlier to Israel. The Ambassador responded by
pointing to the message the President delivered to Sharon the
previous week. The President indicated that he saw
disengagement leading to his two-state vision, and that he
hoped to see the Palestinian economy develop. Assisting on
this side could be a good role for the Europeans. The
Ambassador commented that the U.S. and Israel need to do some
strategic thinking together about this question.

--------------
Economic Future after Disengagement
--------------


15. (C) Netanyahu predicted that the actual process of
withdrawal from settlements would be a "convulsion," the
impact of which is unclear. The process should thus not go
too fast. The GOI is already taking important steps to
create a better post-disengagement reality in Gaza by
"cutting Hamas down to size." He underlined the need to
begin economic projects in Gaza. The Ambassador asked
whether the GOI had formed any kind of working group to
examine the question. Without answering directly, Netanyahu
said the greatest contribution would come from a "land
bridge" project linking the ports of Aqaba and Ashdod. The
Palestinians would get docks at Ashdod and thereby be able to
exploit export opportunities to Europe.


16. (C) The Ambassador pressed Netanyahu about plans that
would lead to job creation in Gaza. Positing that Gaza's
comparative economic advantages lie in low labor costs and
agriculture, Netanyahu said consideration should be given to
new labor-intensive industries, notably tourism. The
creation of "huge entertainment centers" would create many
jobs. These centers could be "next door" to Gaza, as
security considerations and the absence of rule of law would
deter outsiders from investing in Gaza, itself. Bolton asked
whether the GOI foresaw problems integrating Gaza settlers
into the national economy. Netanyahu replied that he had not
yet given the question any thought, but thought it would
"probably" be a problem.


17. (U) U/S Bolton did not have an opportunity to review this
message.

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