ISRAEL MEDIA REACTION

UNCLAS SECTION 01 OF 07 TEL AVIV 006121

SIPDIS

STATE FOR NEA, NEA/IPA, NEA/PPD

WHITE HOUSE FOR PRESS OFFICE, SIT ROOM
NSC FOR NEA STAFF

JERUSALEM ALSO FOR ICD
LONDON ALSO FOR HKANONA AND POL
PARIS ALSO FOR POL
ROME FOR MFO
E.O. 12958: N/A
TAGS: IS KMDR MEDIA REACTION REPORT
SUBJECT: ISRAEL MEDIA REACTION


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SUBJECTS COVERED IN THIS REPORT:
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1. Mideast


2. U.S.-Israel Relations

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Key stories in the media:
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All media led with the release Sunday of Azzam Azzam,
the Israeli Druze who was convicted of espionage in
Egypt, where he was spent eight years in jail. He was
exchanged for six Egyptian students who were captured
in August on suspicion of planning terrorist attacks in
southern Israel. Ha'aretz reported that Israel also
stated that it is considering the release of dozens of
Palestinian prisoners who do not have "blood on their
hands." Ha'aretz quoted PM Sharon as saying Sunday
that Egypt believes in the seriousness of his
disengagement plan and wants to contribute to it. The
newspaper quoted Foreign Ministry sources as saying
that Egypt would probably appoint an ambassador to
Israel after the elections in the PA on January 9.
This morning, Israel Radio quoted FM Silvan Shalom as
saying that over the past Israel has successfully been
coordinating its disengagement plan with Egypt.
Several media reported that right-wing groups
questioned how it is possible that Israel can negotiate
and swap prisoners with Egypt but not with its closest
ally, the U.S. -- referring to Jonathan Pollard.

Israel Radio cited London's Daily Telegraph as saying
that late this month or early next month, a conference
of Middle Eastern leaders, probably at foreign-minister
level, will convene in London. The Daily Telegraph
quoted an Israeli source as saying that, should Marwan
Barghouti be elected PA chairman, the conference would
not take place. Israel Radio reported that efforts
are going on within Fatah to convince Barghouti to
renounce his candidacy.

On Sunday, Jerusalem Post reported that Palestinian PM
Ahmed Qurei (Abu Ala) on Saturday accused Israel of
escalating tensions by pursuing its policy of targeted
killings and settlement construction.

Ha'aretz quoted Knesset Member Omri Sharon, the PM's
son, as saying that a "broad-based government" with the
Labor Party will not be a "national-unity government of
equals." The newspaper says that his remark is
directed at the members of the Likud Convention, which
will Thursday debate the Labor Party's entry into the
government.

On Sunday, Jerusalem Post quoted Efraim Inbar, Director
of the Begin-Sadat Center for Strategic Studies at Bar-
Ilan University as saying: "We [Israel] don't have to
open negations with Syria since the Americans aren't
interested in this track. The Americans don't want us
to smile at [Damascus]."
Israel Radio reported that co-initiator of the Peoples'
Voice peace initiative and former Shin Bet head Ami
Ayalon joined the Labor Party today. Maariv reported
that Ayalon associates have suggested he vie for a
ministerial portfolio.

All media reported on the visit of the three most
senior PA leaders to Damascus, scheduled for today,
which Ha'aretz views as "historical, possibly signaling
the change underway in the Middle East since the death
of Yasser Arafat last month." Ha'aretz quoted PLO head
Mahmoud Abbas as saying that the PA will negotiate a
hudna (truce) with the Hamas leadership in the West
Bank, rather with than the organization's leaders
overseas. Senior Palestinian security official Jibril
Rajoub, who is visiting Egypt, told Israel Radio this
morning that Israel is prepared to advance
disengagement in coordination with the PA. On Sunday,
leading media quoted senior Hamas member in the West
Bank Hassan Yousef as saying over the weekend that he
is prepared to establish a long-term hudna in exchange
for Palestinian statehood. On Sunday, Maariv wrote
that the relatively moderate statements emanating
recently from the territories reveal the beginnings of
a crack in the Hamas's leadership, as it appears that,
for the first time in a long period, the local
leadership of Hamas does not see eye-to-eye with the
expatriate leadership based in Damascus. On Sunday,
leading media reported that Abd a-Natif Muhammad Tayeh,
the leader of Hamas in Tulkarm, was arrested during the
weekend.

Jerusalem Post quoted Defense Minister Shaul Mofaz as
saying at Sunday's cabinet meeting that the number of
attempted terrorist attacks has dropped since Yasser
Arafat died three weeks ago, with Palestinian terror
groups in "waiting mode" to see how things develop on
the ground. Maariv reported that following Arafat's
demise and the possibility that Abbas could be elected
PA chairman, Israel could reconsider its decision to
physically dismantle the settlements it intends to
evacuate in the Gaza Strip and the northernmost part of
the West Bank. On Sunday, Maariv quoted Labor Party
Chairman Shimon Peres as saying that Israel must
disengage from all the territories.

On Sunday, Ha'aretz reported that Iran and Hizbullah
have intensified their efforts to operate in the
territories in order to prevent a cease-fire.

On Sunday, leading media reported that Syria has asked
the international community to pressure Israel to agree
to talks without preconditions.
Jerusalem Post quoted O/C Chaplaincy Corps Brig. Gen.
Yisrael Weiss as saying Sunday he has received a series
of threatening letters form anti-disengagement
activists. Leading media also reported that three
right-wing extremists were arrested Sunday for
allegedly stoning the home of Rabbi Menahem Froman --
known for holding talks with Arafat and Hamas leaders -
- in the West Bank settlement of Tekoa.

Maariv reported that the Likud's Moshe Kahlon, who is
of Libyan origin, could soon visit Libya, thus becoming
the first Knesset member ever to meet with Libyan
leader Muammar Qadhafi. The newspaper also writes that
in two weeks senior representatives of the Libyan
government will attend a world conference of Jews of
Libyan origin in Rome. Maariv also reported that
Sunday a senior member of Tunisia's Parliament, who is
a close associate of Zine el Abidine Ben Ali, contacted
Likud MK Majalli Whbee, telling him that Israel-Tunisia
links are expected to warm up soon.

Leading media quoted Industry, Trade and Labor Ehud
Olmert as saying Sunday that Israel, Egypt, and the
U.S. are set to sign a free trade area agreement next
week, similar to the qualified industrial zone (QIZ)
Israel shares with Jordan.

On Sunday, leading media reported that over the weekend
the U.S. Administration has finally approved the sale
of 50 sophisticated air-to-air missiles to Jordan.

Leading media quoted nuclear whistleblower Mordecai
Vanunu as saying, in an interview with the British Sky
News TV Sunday, that Israel's nuclear weapons are
pushing other countries in the Middle East to develop
similar arms.

On Sunday, Ha'aretz reported that the police have
reopened an investigation into a deal between the
Hachsharat Hayishuv company, controlled by the Nimrodi
family, and the Sycamore Ranch, owned by Sharon's sons.
The company may have illegally given 1.3 million
shekels (about USD 300,000) to the Sharon family.

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1. Mideast:
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Summary:
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Independent, left leaning Ha'aretz editorialized:
"Egyptian obstinacy in the Azzam case has now been
replaced by a gesture that must be understood within
the political context: in the last few days there has
been a significant improvement in the personal and
public ties between Egypt and Israel."
Liberal op-ed writer Ofer Shelach opined in the
editorial of mass-circulation, pluralist Yediot
Aharonot: "Now, after Arafat's death and thanks to
Egyptian interests, an escape hatch has been found for
Sharon."

Arab affairs correspondent Jackie Hoogie wrote in
popular, pluralist Maariv: "The freedom of Azzam Azzam
is the blessing that Mubarak is giving to Sharon and
himself in the light of the new chapter that has been
started."

Conservative, independent Jerusalem Post editorialized:
"Cairo has hitherto apparently failed to absorb the win-
win nature of true normalization. Let's hope the
overdue release of Azzam Azzam is an early indicator
that Egypt is finally getting the message."

Nationalist, Orthodox Hatzofe editorialized: "[Mubarak]
continues to produce strategic weapons in other
domains."

Block Quotes:
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I. "Foundations of the New Hope"

Independent, left leaning Ha'aretz editorialized
(December 6): "The news of Azzam Azzam's release from
prison in Egypt contains both joy and hope. Joy that
an Israeli citizen -- who was sentenced by an Egyptian
military tribunal to 15 years in prison after being
convicted on dubious charges -- was released after
serving a little more than half his sentence.... It is
also joy over the success of tireless diplomatic
efforts initiated by Israel together with the United
States. Azzam's arrest and trial became, in time, a
symbol of the cool relations between Egypt and
Israel.... Egyptian obstinacy in the Azzam case has now
been replaced by a gesture that must be understood
within the political context: in the last few days
there has been a significant improvement in the
personal and public ties between Egypt and Israel....
These developments did not begin with Azzam's release.
They have been going on for several months, and for the
Israeli public they culminated on Sunday. Once again
there is hope that what was seen Sunday as a rare
expression of friendship will soon become the norm.
Sharon's disengagement plan, the new voices among the
Palestinians, even among radical groups like Hamas, and
especially Egypt's willingness and desire to change the
political reality in the region, are the foundations of
the new hope."
II. "We Didn't Abandon Him for a Moment"
Liberal op-ed writer Ofer Shelach opined in the
editorial of mass-circulation, pluralist Yediot
Aharonot (December 6): "Sharon marketed disengagement
to a people bleeding and in pain, which didn't want to
hear about a partner. He thus managed to turn an
initiative which most of the military and political
establishment opposed into a popular public initiative
and was supported by a majority in the Knesset. But on
the ground, unilateral disengagement is liable to be
disastrous.... And now, after Arafat's death and thanks
to Egyptian interests, an escape hatch has been found
for Sharon. Under Egyptian sponsorship, the
Palestinians will be able to reach an agreement among
themselves, an agreement that Israel will profess not
to take into account, but in practice, will cooperate
with. The Egyptians will help the Palestinians take
responsibility and will provide a cover for
controversial security moves, such as leaving
Philadelphi Road. They will be the responsible adult
behind which hides the partner, in a way that allows
all the sides to pretend that they are only talking to
themselves. From moment to moment, from step to step,
the sides are approaching the moment of truth. At that
moment they will have no choice but to relinquish their
convenient narratives, behind which they have
barricaded themselves for the last four years. They
will again have to recognize their common interests,
despite the hatred and the blood, and even admit
responsibility, each on his own side, for some of the
bloodshed. Will this indeed happen? It's difficult to
know. But Azzam Azzam's return home, a joyful human
occasion, is another step in this greater move, and the
final step has yet to be taken."

III. "Hoping For More"

Arab affairs correspondent Jackie Hoogie wrote in
popular, pluralist Maariv (December 6): "In contrast to
Netanyahu, with whom he had exchanged childish taunts,
or Barak, who did not know how to appease [events on]
the ground, Sharon has displayed to the Egyptian
President the wisdom of tribal elders. He is engaged
in actions, speaks little, and reaps the rewards -- the
elimination of Hamas, the destruction of the tunnels,
the suppression of the Intifada. Mubarak is also fed
up with this whole war.... Since [Arafat] passed on,
there has been no one to give friendly support to Hamas
or disturb the disengagement process. In the absence
of Arafat, there is no one to punish Sharon for the
boycott he imposed upon him by dispatching cells from
Gaza after the withdrawal. Neither is there anyone to
stand firm against the security rehabilitation plan of
the Gaza Strip conceived by Egyptian Intelligence
Minister Omar Suleiman. Here is an opportunity to
establish a Palestinian state, said Osama Sariyeh, a
senior Egyptian journalist yesterday. It needs the
propulsion of processes, and Azzam Azzam is one of
them.... The freedom of Azzam Azzam is the blessing
that Mubarak is giving to Sharon and himself in the
light of the new chapter that has been started. It is
a humble gift that was frozen for eight years, only in
order to be pulled out for exactly these purposes. The
Egyptian hope is that the gift will leave the desire
for more here."

IV. "A First Step"

Conservative, independent Jerusalem Post editorialized
(December 6): "While Mubarak's praise for Sharon is
gratifying, the president has yet to consent to the
simple, face-to-face contact with our prime minister
that is the foundation of good relations.... Progress
here is crucial if Egypt -- which has played a spoiling
role at crucial moments of Israeli-Palestinian contact,
like the July 2000 Camp David talks -- wants to be
perceived as a constructive force toward Arab
acceptance of, and genuine reconciliation with, Israel.
Were Egypt now to truly press for such a goal, it would
not only benefit Israel. And it would not only echo
positively with a U.S. government that provides Egypt
with vast financial aid. It would also, self-evidently,
benefit Egypt itself -- not least in its own fight
against Islamic extremism. None of this should need
saying, yet Cairo has hitherto apparently failed to
absorb the win-win nature of true normalization. Let's
hope the overdue release of Azzam Azzam is an early
indicator that Egypt is finally getting the message."





V. "Don't Be Blinded"

Nationalist, Orthodox Hatzofe editorialized (December
6): "Hosni Mubarak felt that there was growing
criticism of Egypt in Israel. He decided to throw some
'small change' and to calm the waters. Indeed, the
words worked, but he continues to produce strategic
weapons in other domains. Mubarak is interested in an
Israel-Syria agreement that would most certainly bring
about a significant pullout from the Golan. Arab
states will provide words, whereas Israel will give
territories, bringing it to the 'Auschwitz borders.'
[reference to the 1967 borders]"

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2. U.S.-Israel Relations:
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Summary:
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German Ambassador to Israel Rudolph Dressler wrote in
independent, left leaning Ha'aretz: "Israel must decide
-- economic relations [with the EU] only or also a
renewed political approach? Israel will not be spared
a debate over partially freeing itself from the United
States."

Block Quotes:
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"A German National Interest"

German Ambassador to Israel Rudolph Dressler wrote in
independent, left leaning Ha'aretz (December 5):
"Nearly 60 years after the demise of Nazi Germany and
almost 40 years since diplomatic relations were
established between Israel and the second German
republic -- in May 1965 -- the German Embassy in Tel
Aviv operates in a unique environment for German
diplomacy. Germany is today seen in the eyes of many
Israeli leaders as the second most important partner
after the United States in the fields of politics,
economics, research and technology.... We are the
second most important partner in Israel's foreign
trade.... The enlargement of the European Union to 25
countries is a historic event. The single currency,
the euro, is something akin to a miracle. The economic
power this generates is still unfathomed. The inherent
possibilities have only been partly elaborated -- more
people than in the U.S., greater purchasing power than
in the U.S., more economic strength. These facts and
possibilities are now at Israel's doorstep. This also
has political significance: whether one likes it or
not, Europe is destined to play a more important role
in the Middle East. And herein lies the implication:
Israel must decide -- economic relations only or also a
renewed political approach? Israel will not be spared
a debate over partially freeing itself from the United
States.... My country wants to assist Israel. This
assistance relates to the principle we defined during
the visit of the president of the State of Israel in
Berlin last spring: ensuring the existence of Israel is
a German national interest and is thus one of the
centerpieces of our political thinking."

CRETZ