ISRAEL MEDIA REACTION

UNCLAS SECTION 01 OF 07 TEL AVIV 006388

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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Mideast

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Key stories in the media:
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Echoed by all media, Channel 2-TV last night reported
that in the wake of U.S. complaints about Israeli
deviations from weapons purchasing and sales rules and
about an Israeli report to the U.S. about a weapons
sale to China, the Pentagon (leading media named U/S of
Defense Douglas Feith) has demanded that the GOI
dismiss Defense Ministry D-G Amos Yaron. Yediot quoted
senior Israeli sources as saying that Feith has made
these claims because he feels pressured by FBI
investigations currently conducted against him and
other Pentagon officials in the alleged Larry
Franklin/AIPAC affair. Channel 2-TV said that Israel
is now upgrading a sophisticated weapons system for
China and has not informed the Pentagon about it.
Quoting Israeli sources, Channel 2-TV reported that the
system, which was not identified, has been returned to
Israel for repair and maintenance. Israel Radio cited
denials by Defense Minister Shaul Mofaz, Israel's
Ambassador to the U.S. Danny Ayalon, and a Pentagon
spokesman, who said this was not a personal issue, but
a matter of policy that has been discussed between the
countries. The station quoted the spokesman as saying
that nobody in the Pentagon had demanded Yaron's
dismissal. Jerusalem Post quoted defense officials as
saying Wednesday that the U.S. has demanded
clarification of the matter and that a joint inquiry
has been launched. Israel Radio cited Israeli
officials as saying that the weapons sale took place in
the early 1990s and that Israel did not sell weapons to
China after the Phalcon AWACS affair. Former
ambassador to China Ora Namir told Israel Radio this
morning that there is not enough supervision within the
Defense Ministry.

All media reported that Wednesday at the Herzliya
Conference, FM Silvan Shalom called for the reconvening
of last year's Aqaba summit to show support for
Palestinian moderates and to jump-start negotiations
with the PA. He said: "Everyone must do everything
they can to ensure that this year will be the year of
the moderates." He called on the Palestinian
leadership to "immediately make a decision to defeat
terror" following the January 9 elections in the PA.
Shalom also said that rather than trying to negotiate a
final-status deal with Syrian President Bashar Assad,
Israel should adopt an evolutionary," step-by-step
approach similar to what is now being employed with the
Palestinians. Shalom conditioned the resumption of
peace negotiations with Syria upon the cessation of
Syrian support for terrorism. Channel 2-TV and Yediot
cited sources in Sharon's bureau as saying that a
second Aqaba convention is in opposition to the PM's
position. Channel 2-TV also said that Sharon was "less
than enthusiastic " about confidence-building measures
on the Syrian track.
Israel Radio quoted Sharon adviser Dov Weisglass as
saying this morning at the Herzliya Conference that
British PM Tony Blair intends to convene Palestinian
and European officials in London in around two months
to discuss ways to assist the Palestinians. Weisglass
said that Arafat's departure has created an entirely
different condition, and that Arafat's heirs are
"normal people anchored to reality, who understand they
will have to agree to the rules of the game."
Weisglass praised the role of the U.S., which he said
makes sure that the Palestinians "do their homework."

Israel Radio reported that President Bush has written
Secretary of State Colin Powell regarding the

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postponement for another six months of any relocation
of the U.S. Embassy to Israel from Tel Aviv to
Jerusalem.

Leading media reported that last night five Israelis
were wounded, two of them moderately, in two shooting
incidents on the Gaza Strip's Kissufim-Gush Katif road.
IDF soldiers killed two of the attackers. Israel Radio
reported that this morning four mortar shells were
launched at Israeli targets in the northern Gaza Strip.
There were no casualties. Jerusalem Post reported that
in a concerted effort to boost security against the
threat of terrorism from the sea, Israel Navy has
dramatically increased the number of surprise at-sea
boarding on merchant ships heading to Israeli ports.

Leading media (banner in Jerusalem Post) reported that
PM Sharon warned the Labor Party that he will initiate
early elections if his final offer to join the
coalition is not accepted. Leading media reported that
Labor is interested in controlling various ministerial
portfolios, as well as the Israel Lands Administration
(ILA) and the Israel Broadcasting Authority (IBA).
Israel Radio reported that chief Labor negotiator in
the coalition talks Dalia Itzik has complained about
Likud's "greed." The radio reported that this morning
Labor Party Chairman Shimon Peres will meet with Sharon
at Peres's request to try to solve the differences
between the sides.

Jerusalem Post reported that Wednesday PLO Chairman
Mahmoud Abbas (Abu Mazen) rejected a new Israeli
initiative to resettle Palestinian refugees in the West
Bank, Gaza Strip, and neighboring Arab countries.
Ha'aretz reported that Wednesday Hamas and Islamic
Jihad strongly criticized remarks made by Abbas that
the use of weapons in the second Intifada was a mistake
and that it should end.

Ha'aretz reported that Egypt has postponed until April
2005 its increased deployment of soldiers along the
Egyptian side of the Philadelphi route on the Sinai-
Gaza border in the Rafah area. Ha'aretz also reported
that the release of Palestinian prisoners that is to be
carried out as part of the goodwill gestures aimed at
the PA and Egypt is likely to take place next week.
Israel Radio quoted Egyptian President Hosni Mubarak as
saying that there is an agreement between Egypt and the
U.S. regarding advancement of the peace process soon.

Ha'aretz reported that Wednesday, the Knesset's Finance
Committee allocated 90 million shekels (about USD 2
million) for the paving of a West Bank road linking
Anatot and Azariya north of Jerusalem. The newspaper
notes that this sum represents around 10 percent of the
overall annual road construction budget, which will
amount to 1 billion shekels in 2005.

Israel Radio reported that Jerusalem and Diaspora
Affairs Minister Natan Sharansky has asked UN Secretary-
General Kofi Annan and National Security Advisor and
secretary of state-designate Condoleezza Rice to act to

SIPDIS
put an end to the broadcasting of two anti-Semitic TV
series sponsored by Iran and Syria, one of which is
screened on Hizbullah's Al Manar-TV.

Israel Radio reported that World Bank President James
Wolfensohn will visit the region next week.

Yediot reported that in the next few days a USD 2-
billion suit against the Arab Bank will be filed in a
New York federal court in the name of hundreds of
Israeli victims of terrorist actions carried out by
Hamas and Islamic Jihad.

Jerusalem Post and Yediot reported that in what Israeli
officials are calling a first, Israel is sending some
USD 20,000 in aid to Sudan to help alleviate the
humanitarian crisis there.

Ha'aretz quoted Shahram Chubin, an expert on Iranian
foreign policy who attended the Herzliya Conference, as
saying that the U.S. missed an opportunity to conduct
negotiations with Iran about terrorism and the nuclear
issue after the occupation of Baghdad.

Israel Radio reported that New York City businessman
Leib Kohn admitted Wednesday to participating in an
arms smuggling ring that shipped missile and fighter
jet components from the U.S. to Israel and possibly on
to Iran. Kohn bought the parts from companies in
Connecticut and California.

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Mideast:
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Summary:
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Independent, left-leaning Ha'aretz editorialized:
"Israel, at least based on Abu Mazen's remarks, must
also adopt a new attitude, based on the existence of a
serious Palestinian partner with whom to conduct
negotiations."

Chief Economic Editor and senior columnist Sever
Plotker editorialized in mass-circulation, pluralist
Yediot Aharonot: "The strengthening of economic
connections is not a substitute for peace, but it helps
to anchor it. When new winds blow in the Middle East,
we must not miss out on them."

Middle East affairs commentator Guy Bechor, a lecturer
at the Interdisciplinary Center, wrote in Yediot
Aharonot: "Four years after the Oslo process shattered
in a tremendous crash, a Likud government headed by
Ariel Sharon has gone back to its fundamental premises,
as if there has been no Intifada."

Former editor-in-chief Moshe Ishon wrote in
nationalist, Orthodox Hatzofe: "One doesn't need to
make many efforts to reach the conclusion that [Abu
Mazen] is following in Yasser Arafats' footsteps. In
fact, this is what he stated on the day he received
Arafat's scepter."

Block Quotes:
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I. "Beyond Words"

Independent, left-leaning Ha'aretz editorialized
(December 16): "'The use of weapons in the current
Intifada is damaging and must cease.' That was the
important message that PLO Chairman Mahmoud Abbas
delivered in his first statement on the subject
following the death of Yasser Arafat. It was not the
first time that Abbas made such a statement, but its
importance this time is derived from his position, and
the anticipation that it will be received with
understanding and acceptance, by a majority of
Palestinians -- the same majority that in recent public
opinion polls has expressed the view that the
negotiations with Israel should be resumed.... Abu
Mazen's remarks were not meant for Jerusalem and
Washington's ears, but were spoken to Ash-Sharq Al-
Awsat, in Arabic -- as Israel has often demanded, to
the Arab and not only the Palestinian public. It was
meant for every Arab and Palestinian movement and
school of thought, inside and outside the territories,
including Iran and Hezbollah, so that they know the
intentions of the person who will be running the PA....
Against that background, Israel, too, no less than the
Palestinian leadership, now faces a test in the eyes of
its public. For Israel, at least based on Abu Mazen's
remarks, must also adopt a new attitude, based on the
existence of a serious Palestinian partner with whom to
conduct negotiations. Israel need not worry that its
embrace might mark Abu Mazen in Palestinian eyes as a
collaborator. The Palestinian public certainly would
not regard its leader as a traitor if he won freedom
for Palestinian prisoners directly from Israel, and not
at the request of the Hezbollah or Egypt, or if Israel
unfroze Palestinian funds and reduced the military
operations to the absolute necessary minimum. Indeed,
that is what the Palestinian public now expects."

II. "Economy and Peace"

Chief Economic Editor and senior columnist Sever
Plotker editorialized in mass-circulation, pluralist
Yediot Aharonot (December 16): "One cannot exaggerate
the political and economic importance of the agreement
to establish a joint Israeli-Egyptian industrial zone
whose products are intended for the American market and
which will enjoy far-reaching benefits. The agreement,
which was signed in an official ceremony the likes of
which has not been held in Cairo for years, lays a new
infrastructure for business cooperation between Israeli
and Egyptian industrialists on the basis of profits for
both. It opens the enormous U.S. markets before them
on condition that they join hands and funds in
investments and manufacture. A joint industrial zone
of a similar nature operates in Jordan with enormous
success. It has survived the entire Intifada. The
Egyptian-Israeli peace appeared dead in recent years.
Now it has revived: another result of disengagement
from Gaza and the changes in the Palestinian
leadership. The strengthening of economic connections
is not a substitute for peace, but it helps to anchor
it. When new winds blow in the Middle East, we must
not miss out on them."




III. "Arafat is Dead, Oslo Returns"

Middle East affairs commentator Guy Bechor, a lecturer
at the Interdisciplinary Center, wrote in Yediot
Aharonot (December 16): "Four years after the Oslo
process shattered in a tremendous crash, a Likud
government headed by Ariel Sharon has gone back to its
fundamental premises, as if there has been no Intifada,
as if we haven't suffered more than 1,000 dead, as if
Israeli society had not matured since. In other words,
nothing was learned.... Since [Abbas] remembers his
last attempt to come out against the Intifada, which
culminated in his disgraceful ouster from office, he is
probably the last person who is going to combat
terrorism.... In the Oslo days, people said we need to
engage in negotiations with the Palestinian side as if
there is no terror.... It was Ariel Sharon who said
that no negotiations would be held until all terrorism
stopped. But now the negotiations are being resumed,
this time using backchannels, there is a sense of a new
era dawning, but terror is still running rampant,
mainly in the Gaza Strip.... And finally, the idea of a
new Middle East is back in the arena: economic
development will, by necessity, produce positive
political changes.... More than 90 percent of the fruit
of [the U.S.-sponsored free trade] agreement will be
picked by Egypt, which still has not explained why
three-quarters of the foreign aid it receives from the
U.S. is used for the acquisition of weaponry and
military equipment. That amassment of military might
is aimed only against Israel.... Sharon has proven
himself to be Peres's twin when it comes to all the
eschatological beliefs of the Oslo process about
Palestinian democracy, a Palestinian war on terror and
regional economic development. Perhaps that is the
logic of having Peres join the government and play a
key role."

IV. "Abu Mazen's Double Game"

Former editor-in-chief Moshe Ishon wrote in
nationalist, Orthodox Hatzofe (December 16): "One day.
[Abu Mazen] swore he would faithfully continue Yasser
Arafat's anti-Israeli line. On another day, he
promised to follow a balanced policy that would
supposedly soon lead to peace with Israel. His fickle
policy found its expression this week, following the
murderous attack in Rafah. In his initial response, he
justified the terror attack against IDF soldiers. Abu
Mazen said this was occupied territory and that Israel
did not have any right to be there. He later avoided
responding.... Judging by the Palestinian Authority's
current actions, notably the conduct of Abu Mazen, who
is making inconsistent remarks, it is difficult to
determine not only where he is heading, but also where
he will lead the PA after seizing the reins of
power.... If Abu Mazen outwardly apparently endeavors
to create the impression that he is confident about
publicly expressing his thoughts, one doesn't need to
make many efforts to reach the conclusion that he is
following in Yasser Arafats' footsteps. In fact, this
is what he stated on the day he received Arafat's
scepter."

KURTZER