1. (C) SUMMARY: National Security Advisor Giora Eiland told
Codel Hagel/Biden that the GOI is trying to avoid repeating
the "mistakes" it made when PLO Chairman Mahmoud Abbas was
prime minister in 2003. In order to help Abbas succeed this
time, the GOI, he said, will have to be "more flexible" about
pursuing militants from the al-Aqsa Martyrs Brigades, who
present Abbas his foremost security challenge. Eiland also
advocated GOI transfer of security authority to the PA in
areas where the PA says it can take over; a direct message to
the Palestinian people from Israel's leadership, perhaps in a
post-election speech to the PLC; trilateral negotiations
about an Israeli withdrawal from the Philadelphi Strip ahead
of disengagement; and, steps to boost the Palestinian
economy. Eiland complained that Egypt is unwilling to offer
jobs to Palestinians in QIZs that could be built in the
Sinai, and asserted that Arab leaders, in general, want to
perpetuate the Israeli-Palestinian conflict, which they see
as protection against pressure for reform. Senator Feinstein
pressed Eiland about Israeli settlement expansion. Eiland
reported that the GOI will change the route of the separation
barrier, but that a Cabinet debate on route changes has been
repeatedly postponed because of the political environment.
END SUMMARY.



2. (C) Senators Chuck Hagel, Joseph Biden, Dianne Feinstein,
and Lincoln Chafee (Codel Hagel/Biden) queried National
Security Advisor Giora Eiland about the Israeli approach to
the new Palestinian leadership in a December 1 meeting in
Jerusalem. Eiland's staff member, Gabi Blum, joined the
meeting, as did Charge, poloff, and Senate staff and military
escorts from the codel.



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


Helping Abbas Succeed


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





3. (C) In recounting the Codel's November 30 meeting with PLO
Chairman Mahmoud Abbas, Sen. Feinstein commented that Abbas
seemed prepared to do all that Prime Minister Sharon had told
the Codel, in another November 30 meeting (septel), that he
expected of the PA. Eiland remarked that the GOI is trying
to avoid the "mistakes" it made during Abbas's brief term as
PA prime minister in 2003. Asked for examples of GOI
mistakes, Eiland cited public statements GOI officials made
about their expectations for the PA, notably a weakened
Arafat. Such statements, he said, embarrassed Abbas and
helped set Arafat against him. Another "mistake" Eiland
cited was GOI reluctance to take the security risks that
would have left ordinary Palestinians with a sense of change
in their lives. "We weren't generous enough," he said,
quickly adding that deficiencies in the GOI approach were not
the main cause for Abbas's failure as prime minister. He
blamed instead Arafat, Hamas, and the armed Fatah factions
for Abbas's resignation.



4. (C) Sen. Feinstein said that Abbas had told the Codel that
he wished to see disengagement linked to the three phases of
the roadmap. Expressing surprise, Eiland said that the GOI
does not believe that disengagement relieves the PA of its
security obligations under Phase One of the roadmap. The GOI
accepted the roadmap, he said, only because its sequencing,
contrary to that of Oslo and other earlier peace efforts,
placed action on security before negotiations over final
status issues.



5. (C) Stressing his recognition that an outsider could make
policy recommendations but that Israel had to contend with
terrorism and would bear the consequences of a policy
failure, Sen. Biden expressed the view that Arafat's death
provides the first opportunity in over 30 years for realizing
a two-state solution. The new PA leaders, he said, "appear
enlightened" and "appear to recognize the need for a
two-state solution," but their constituency is small.
Abbas, moreover, has no control over Iran and Hizballah, who,
Biden noted citing GOI figures, instigate 80% of planned
terrorist attacks emanating from the West Bank. Biden noted
that he had asked Sharon in the November 30 meeting whether
the PM had refined his security expectations for the PA given
Abbas's inability to control Iranian/Hizballah interference.
Biden asked for Eiland's views of Abbas's security
capabilities.



6. (C) The GOI has to change how it thinks and makes
decisions about security, Eiland replied. Abbas's primary
security challenge, he said, comes from the armed wing of
Fatah, principally the al-Aqsa Martyrs Brigades. Unlike
Hamas, which can rely on its social activities to sustain its
political and financial support during a cease-fire, al-Aqsa
depends entirely on the use of violence for its support. Abu
Mazen can dissuade al-Aqsa from using violence and accepting
financial assistance from Iran only if the GOI is "more
flexible" and "creative" in its approach to pursuing wanted
members of al-Aqsa, Eiland said. Biden praised Eiland's
pragmatism.



7. (C) Saying she was startled by the poor conditions,
unhappy faces, and ethnic separation she saw while being
driven through Abu Dis the day before, Sen. Feinstein pointed
to the need for Israel to give hope to the "occupied."
Eiland replied that a number of GOI steps along these lines
were possible, although the GOI would generally refrain from
action before the PA elections. He advocated the following
steps:

-- Transfering security authority to the PA for those towns
in which Abbas says the PA is ready to assume control. Abbas
will have to take big risks in doing so, Eiland commented,
adding that "Arab" leaders, in general, are averse to being
held accountable.

-- Having "Israeli leadership" address the Palestinian people
directly, perhaps in an address to the Palestinian
Legislative Council after the PA elections.

-- Giving Abbas "achievements" beyond the withdrawal of
Israelis from the Gaza Strip, a step that all know Israel
will take regardless of the Palestinian leadership. Eiland
advocated, in particular, Israeli-Palestinian-Egyptian
cooperation leading to the IDF evacuation of the Philadelphi
Strip prior to completion of the disengagement plan. An IDF
withdrawal from Philadelphi, he said, would allow Abbas to
say that he had convinced Israel to depart and thereby to
abandon its intention to keep Gazans in "jail." Abbas could,
moreover, claim responsibility for returning to Gazans the
freedom that they have not known since 1948, Eiland said.

-- Promoting Palestinian economic improvements. Blum listed
economic dimensions in which she said that the GOI has
already made commitments to the World Bank: upgrading
passages in and out of both Gaza and the West Bank;
developing industrial zones; and, transferring settlement
assets. On the latter point, Blum noted that the GOI
understands that PA Prime Minister Ahmed Querei'a has told
World Bank officials that the PA does not wish to take over
private homes on the Gaza settlements. This PA attitude, she
said, would facilitate GOI plans to dismantle the homes. In
response to Sen. Feinstein's question, Blum said the GOI also
planned to dismantle synagogues and transfer cemeteries.



8. (C) Sen. Feinstein asked for GOI views on Egyptian
proposals to increase the number of Qualified Industrial
Zones (QIZs) in Egypt. The GOI, Eiland replied, believes
that QIZs in the Sinai could provide jobs for Palestinians,
but gave up pursuing the issue after the GOE had insisted on
limiting employment in the QIZs to Egyptians. Blum said that
the "official" GOE reasons for refusing proposals to employ
Palestinians in Sinai QIZs included wage gaps between
Egyptians and Palestinians, the high unemployment rate among
Sinai residents, and local content laws. Eiland charged that
the unspoken GOE rationale is that it does not want
Palestinians coming to Egypt.



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



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


Promoting a Constructive Approach from the Arab World


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



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





9. (C) Eiland complained about the "less than constructive"
attitude of the Arab world in general to resolving the
Israeli-Palestinian conflict. Arab leaders, he charged, do
not want to see an end to the conflict because the conflict
provides them their "ultimate excuse" for resisting post-9/11
reform pressures from the U.S. and EU. He claimed that
mostly official, Saudi sources continued "until recently" to
account for 70% of the funding going to Hamas. Sen.
Feinstein asked what the U.S. could do to change Saudi
behavior. Eiland said the U.S. should point to the real
nature of Hamas "charities" to urge the Saudis to stop
funding Hamas.



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


Dealing with Settlement Expansion


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





10. (C) Sen. Feinstein asked Eiland why, especially in light
of the opportunities of the moment, the GOI continues to
"add" settlements. Eiland denied that the GOI is "adding"
settlements. Internal Israeli political realities, he said,
limit how far PM Sharon can now go with settlement removals.
As long as settlers remain in the territories, the GOI must
protect and support them.



11. (C) Sen. Feinstein noted that she had seen new housing
going up in Jewish areas as she was en route to Ramallah the
day before, and that she had heard about the GOI demolition
of a Palestinian-owned hotel in Abu Dis. Why, she asked,
does the GOI continue to complicate chances for peace in the
future? Why does the GOI not stop all settlement activity?
Eiland replied that the GOI does not consider construction
anywhere in Jerusalem as settlement activity, adding that he
would not comment on the wisdom of building Jewish
neighborhoods so close to Palestinian areas. Later in the
meeting, Sen. Biden, emphasizing that Israel has no better
friend than him in the Senate, asserted that there is
widespread belief that Israel is "expanding settlements."
This has a real impact, both politically and psychologically,
on Americans, the vast majority of whom, not just Jews and
Evangelical Christians, are committed to the well-being of
Israel.



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


Update on Separation Barrier


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





12. (C) In response to a query about the West Bank separation
barrier, Eiland reported that the GOI has not yet taken any
final decisions, either officially or in internal
deliberations, about changes to the route of the fence.
Everyone understands, however, that the Israeli High Court
decision invalidating sections of the route, along with
international pressure including "understandings" with the
USG, would require the GOI to change the route, Eiland said.
He predicted that route changes would soon be presented to
the Cabinet. A Cabinet debate has been repeatedly postponed
"week to week," he said, because of "political sensitivities."



13. (U) Codel staff cleared this message.

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