S E C R E T SECTION 01 OF 02 TEL AVIV 006285

SIPDIS

E.O. 12958: DECL: 12/10/2014
TAGS: PGOV PREL KWBG IS SY GOI INTERNAL GOI EXTERNAL
SUBJECT: PERES: SUCCESS OF LIKUD-LABOR COALITION
NEGOTIATIONS COULD BOIL DOWN TO PORTFOLIOS

REF: TEL AVIV 6007

Classified By: Ambassador Daniel C. Kurtzer for reasons 1.4
(b,d).


1. (C) Summary: Prior to the Likud Central Committee's
positive vote on December 9 to open coalition negotiations
with the Labor Party, United Torah Judaism, and Shas (see
septel), an obviously exhausted Labor Party leader Shimon
Peres stressed to the Ambassador the depth of his own
problems in convincing the Labor Party to join the
coalition. Peres repeatedly emphasized the "limits in my
capacity" to bring Labor into a coalition without an offer
from Prime Minister Sharon of at least one, and more
reasonably, two major ministerial portfolios. Peres also
underlined his desire to see disengagement proceed and said
elections in 2005 would be a "waste of five-to-six months"
during which time disengagement could have been
implemented. In a separate meeting with the Ambassador
December 9, Labor Party Whip Isaac Herzog echoed Peres'
worries, and laid out a likely Labor Party timetable for
approving a Sharon offer to join the coalition and possible
ministerial assignments.


2. (C) Summary cont'd: In response to the Ambassador's
query on the prospects of GOI negotiations with Syria,
Peres stressed that it would not be feasible for the GOI to
achieve settlement withdrawals both from Gaza and the Golan
at the same time. End summary.

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Unity Prospects Hinge on Portfolio Divisions
--------------


3. (C) Labor Party leader Shimon Peres stressed to the
Ambassador December 9 that if Prime Minister Sharon offers
"meaningless portfolios" to Labor for joining the
coalition, there are "limits" in his capacity to bring his
party into the coalition. Peres agreed with the Ambassador
that this could present an immediate impasse in Labor's
coalition negotiations with Likud. Noting that Labor would
constitute one-third of a unity coalition, Peres underlined
that Sharon should understand that Labor should receive one
or two major ministerial portfolios. Shar

on should
understand that Labor can not be satisfied with
"secondary" portfolios just to help Sharon pacify Likud
opponents to a unity government, Peres emphasized.


4. (C) Peres explained that if Likud votes in favor of
opening coalition negotiations with Labor -- as it did
later December 9 with a 62 percent majority -- and Sharon
immediately invites Peres to the negotiating table, Peres
must first bring the issue before the Labor Party Bureau's
240 members, which requires 48 hours notice before holding
a meeting. Obtaining the Bureau's approval will be a
"tough fight," Peres said, since it includes many
ministerial portfolio contenders. If the Bureau approves
negotiating with Likud, Peres continued, the matter must
then be taken before the party's Central Committee for a
vote. He did not specify when such a vote could occur.


5. (C) Labor Party Whip Isaac Herzog subsequently told
Ambassador Kurtzer separately December 9, however, that
Peres could bring the matter to the Party Bureau for a vote
as early as December 11, and then to the Central Committee
during its previously scheduled meeting December 12 when
the party is supposed to decide on a date for party
primaries. (Note: During the meeting with the Ambassador,
Herzog received a call from Labor faction Chair Dalia Itzik
to inform him that Ehud Barak and Peres had agreed on a
compromise date for party primaries for June or July 2005,
thereby avoiding a party showdown. See reftel. End
note.)


6. (C) According to Herzog, Sharon intends to offer Peres
eight ministerial portfolios, including what amounts to two
ministerial portfolios in return for forgoing the foreign
ministry. In total, Sharon would offer 11 portfolios to
Labor, UTJ and Shas, Herzog noted. He said that Sharon
would likely first bring Labor and the UTJ into the
coalition and may even "find a way later" to return Shinui
to the coalition. Herzog opined that the main "stumbling
block" in the portfolio negotiations will be that Sharon
will not give Peres the portfolio of alternate prime
minister, a post currently held by Likud MK and strong
Sharon ally Ehud Olmert. He said that Peres will likely be
offered a role relating to implementing disengagement.
Labor may ask for the ministries of Interior,
Transportation, and Education, but Herzog quickly added, "I
don't think we'll get them." He opined that Sharon may
offer instead the Internal Security and Labor and Welfare
portfolios to Labor. Herzog said that he believes Justice
will remain with Likud MK Tzipi Livni.


7. (C) Herzog said that once a coalition agreement is
reached with Likud, perhaps as early as December 16, Labor
would then decide on its candidates for ministerial
portfolios, most likely shortly after that decision. He
then shot off a list of Labor contenders for ministerial
slots in order of importance, including Binyamin
Ben-Eliezer, Ephraim Sneh, Matan Vilna'i, Dalia Itzik,
himself, Ofir Pines-Paz, and Shalom Simhon. Herzog noted
several times in the meeting that he was showing up as
"very popular" within the Labor Party. These candidates
would likely be voted as ministerial candidates through
either separate internal party votes or by a single vote on
a "coalition list" that Peres would propose. Herzog opined
that Chaim Ramon may not be popular enough within Labor to
receive a portfolio. In response to the Ambassador's
query, Herzog said that Barak would not seek a portfolio.

--------------
Window of Opportunity
--------------


8. (C) Peres noted said that while Sharon could create a
majority government without Labor, such a coalition would
not support disengagement. Elections would likely be the
result if a unity government with Labor can not be formed,
Peres noted. "I don't want this government to fall," Peres
stressed, since elections would "waste five-to-six months"
of 2005 and postpone implementation of the disengagement
plan. Reflecting his desire to join with Sharon now, Peres
said that: "I feel if I don't put my strength into
[advancing disengagement], it will not work.... I am
fighting for a cause." Peres noted that while he does not
like the disengagement plan, it represents the best hope to
move the peace process forward.


9. (C) Herzog also commented on the need to move
disengagement forward speedily, but from the perspective
that Peres himself is waning in strength and focus. "Peres
has the chance to help Sharon," Herzog stressed. He noted,
however, that there is only a small window of opportunity
since Peres "is not the same...is weak and not focused."
On Labor support for disengagement, Herzog explained that
the three main constituencies in Labor -- the "good"
settlement movement consisting of Kibbutzim and moshavs,
the Israeli-Arab sector, and the veterans and elderly --
reluctantly support disengagement for varying reasons. He
stressed that to gain the support of the elderly, Labor
would have to bring some economic benefits for that group
to the coalition table with Likud. "There will be a big
debate on economic issues with Likud," Herzog stressed.
"[Finance Minister Netanyahu] Bibi hates us and we hate
Bibi," Herzog said.

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Negotiations on the Golan, Not Now Feasible
--------------


10. (S) Asked by the Ambassador how he viewed opening
negotiations with Syria, Peres noted that there is an
"open" or public GOI position on this issue and a "private
one." Peres explained that the GOI's public position is
that it cannot agree to negotiations with Syria while that
country continues to host terrorist organizations.
According to Peres, the GOI's realistic and private
position is that Israel cannot -- for domestic reasons --
feasibly negotiate with Syria on settlement withdrawals
from the Golan at the same time it moves forward with
settlement withdrawal from Gaza. Peres also noted it would
be problematic for Israel to negotiate with President
Assad, who represents only a minority in Syria and whose
actions are based on his desire to improve his world image.

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