PERES TELLS CODEL BLUNT IMPORTANT FOR U.S. TO

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 006407

SIPDIS

E.O. 12958: DECL: 12/16/2014
TAGS: KWBG PGOV PREL IS GOI INTERNAL ISRAELI PALESTINIAN AFFAIRS GAZA DISENGAGEMENT
SUBJECT: PERES TELLS CODEL BLUNT IMPORTANT FOR U.S. TO
SUPPORT PALESTINIANS NOW

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


1. (C) Summary: In a December 13 meeting, Labor Party leader
Shimon Peres told Codel Blunt that he hoped Likud and Labor
would form a new coalition to avoid early elections and the
consequent postponement of implementation of Gaza
disengagement. Peres noted that with Yasser Arafat's death
and the upcoming Palestinian elections, an important
opportunity exists to advance the peace process. He stressed
the importance of international and, in particular, USG
assistance to the Palestinians, including economic aid. End
summary.


2. (U) Codel Blunt consisted of Representatives Roy Blunt,
Steny Hoyer, Mark Kirk, Tom Cole and Ben Cardin, who were
accompanied by staffers Brian Gaston, Brian Diffell, and
Geoff Plague, as well as military escorts Colonel Randy
O'Boyle and Captain Eugene Barlow. Ambassador Kurtzer and
poloff notetaker attended the meeting.

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Coalition: So Close
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3. (C) Labor Party leader Shimon Peres told Codel Blunt
December 13 that he "hopes" Likud and Labor find a way to
form a unity government to avoid early elections. Peres
noted that holding early elections would be "a tragedy" since
this would delay implementation of the disengagement plan by
months. Peres stressed that "2005 should be devoted to
policies, not politics." Without Labor in the coalition,
Peres said, Sharon would not have a majority to support
disengagement.

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Peres on the PA Leadership, Obstacles to Peace
-------------- -


4. (C) Peres stressed that Yasser Arafat's death presented a
"rare" opportunity, and that a positive Palestinian
leadership could emerge. He noted that this leadership would
face the challenge of working as a team and establishing
credibility with the Palestinian people. He said that, to
further the peace process, three obstacles would need to be
overcome: the status of Jerusalem, the Palestinian refugees'
right of return to Israel, and borders. Peres advocated
postponing negotiations on the status of Jerusalem, as the
"current climate" is not conducive to resolving the issue.
Peres also said that the Palestinian leadership is not
"ready" to give up the right of return. He advocated the
establishment of a viable Palestinian state before attempting
to resolve this issue. Peres opined that the issue of
borders is something that could be resolved, but he added
that Palestinian leaders such as Abu Mazen and Abu Ala'a
would need to take tough positions to prove themselves to the
Palestinian public. Peres said that Sharon has lost his
reason for unilateralism with the death of Arafat.

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Palestinians Need Help
--------------


5. (C) Israel will be leaving the Palestinians "in a
terrible economic situation" once it withdraws from Gaza,
Peres said. Peres advocated that a reconstruction campaign
be mounted in Gaza and suggested that the USG ask Saudi
Arabia to provide greater assistance to the Palestinians. He
opined that the Saudis could use their oil revenues to cover
the cost of such assistance. Peres underlined that the
Palestinians need to see advantages of disengagement,
including an improved economy. He suggested that the U.S.
and the EU consider including the Palestinians within free
trade zones. Gaza needs assistance addressing its water
needs and with modernizing its agriculture, Peres added.
"They are on the verge of starvation," Peres stressed. "We
cannot allow poverty to replace occupation," he said.


6. (C) Peres advocated Israeli withdrawal from all
Palestinian cities in preparation for Palestinian elections.
Peres stressed that the new leadership will need to ensure a
transparent financial system and a unified security force
after the elections. In response to the Codel's query, Peres
opined that PA chief negotiator Saeb Erekat -- with whom the
Codel would meet later that day -- is "reasonable,
democratic, and means well" but that "he is not a top
leader." Peres referred to Marwan Barghouti, who was
convicted in Israel of terrorist acts, as "a pain in the
neck" and not in the same class as Abu Mazen. He expressed
relief that Barghouti decided to support Abu Mazen in the
upcoming elections instead of running himself. Peres
stressed that USG support for the Palestinian elections and
its new leadership is "very important." Peres noted that Abu
Ala'a and Abu Mazen were currently traveling in the Arab
world to raise support for the PA.


7. (U) Codel Blunt did not clear this message.

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