(C) OTTE SAYS HE'S PRESSING PA FOR SECURITY

1. (C) In a March 7 meeting with the Ambassador, EU Middle
East envoy Marc Otte said he would press the PA, during his
visit this week, on the need for security service reform,
while focusing in his GOI meetings on Israeli-Palestinian
economic cooperation. He reported that World Bank President
Wolfensohn had told him that the Bank would not ask for donor
support for Palestinian economic infrastructure absent
Israeli security "openings." Noting that Abu Mazen told EU
officials in Brussels following the recent Tel Aviv bombing
that the PA is not capable of responding in areas it does not
control, Otte said expectations for PA performance should be
tempered by realism about PA capabilities. The Ambassador
pressed back, pointing out that the PA could find many ways
to assist an investigation, such as the one into the Tel Aviv
bombing, even without full security control in relevant
areas.



2. (C) Otte confirmed reports that the EU is debating how to
deal with Hamas in the run-up to Palestinian Legislative
Council elections, although he said that chances for removing
Hamas from the EU terrorist list are slim given the EU
requirement for consensus. Otte saw chances for the EU
listing Hizballah as similarly slim, despite Hizballah's
recent pro-Syrian posture, because "even the Brits" want to
defer a decision until after the Lebanese elections. Noting
that the Syria-Lebanon turmoil was a major topic of
discussion during his just-completed visit to Cairo, Otte
assessed that Egyptian officials are pressing President Assad
hard, and that they appear well-informed about Assad's
intentions. GOE intelligence chief Soleiman expressed
concern about the Syria-Lebanon situation, commenting that
"the Syrians don't get it." Recalling his meeting with Assad
a week before the Hariri assassination, Otte commented that
Assad seemed to view high-level visits to Damascus not as
signs of international displeasure with the SARG, but as
reaffirmation of his own importance. END SUMMARY.



3. (C) Amb. Marc Otte, the EU Special Representative for the
Middle East Peace Process, told the Ambassador March 7 that
he would focus, during his visit this week, on security
reform in his meetings with PA officials, and on
Israeli-Palestinian economic cooperation in his meetings with
the GOI. He noted that the EU has accelerated its assistance
to the PA security services, but that he would make clear to
his PA interlocutors that EU material assistance must fit
into a larger PA plan to "transform" the services. He gave
few details of the economic issues he would raise with the
GOI, but noted that World Bank President Wolfensohn recently
told him that the Bank would not/not ask donors to contribute
to economic infrastructure projects for the Palestinians
absent security "openings" by the Israelis to facilitate the
movement of people and goods.



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


PA Security Reform


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





4. (C) Otte reported that he had stressed the need for the PA
security services to act against terrorism when he met,
during a just-completed trip to Egypt, with Egyptian
intelligence chief Omar Soleiman. He said he urged Soleiman
to step up GOE assistance to the PA security services. The
Ambassador commented in response that our current message to
Soleiman stresses the need for Egypt to work with PA security
force leaders to help mold their organizational planning.
Material assistance is secondary.



5. (C) Reflecting on the PA security response to the February
25 suicide bombing in Tel Aviv, Otte noted that Abu Mazen had
told EU officials in Brussels after the bombing that PA
security forces could not be expected to pursue suspects in
areas under Israeli security control. Otte commented that
the international community should give weight to PA security
capabilities in formulating expectations for PA security
performance. The Ambassador concurred that the PA security
services have weaknesses, but pointed to ways that the PA
could use resources it does have to assist investigations
such as the one into the Tel Aviv bombing. The GOI, he
noted, shares responsibility with the PA for the difficulty
the two sides have had collaborating in the Tel Aviv bombing
investigation. The U.S. has been trying to coax the two
sides to overcome inhibitions, such as about protocol, to
cooperate more effectively in the bombing investigation and
broader joint security projects, especially the transfer of
authority in West Bank cities.



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


EU Debate on Hamas...


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





6. (C) The Ambassador asked Otte about reports that France
and Italy are advancing a proposal to remove Hamas from the
EU list of terrorist organizations. Otte acknowledged that
EU states are debating how to deal with Hamas during the
upcoming Palestinian Legislative Council elections. Chances
that the EU would delist Hamas are small, he said, because
the step would require EU unanimity. At the same time, he
added, "nothing prevents" EU states from taking national
measures on Hamas. He noted, for example, that the lack of
EU action on adding Hizballah to the list of terrorist
organizations has not prevented the Netherlands from
categorizing Hizballah as a terrorist organization on its
national list. (Comment: The comparison was unclear. Otte
did not explain how individual EU states could take steps to
interact with Hamas in ways precluded by Hamas' designation
on the EU terrorist list.)



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


... and on Hizballah


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





7. (C) The Ambassador asked for Otte's assessment of chances
that the EU would decide to place Hizballah on the terrorist
list, especially in light of Hizballah's recent pro-Syrian
stance. Otte said the Hizballah designation is still a
matter of debate within the EU. "Even the Brits," he said,
are "cautious" about the designation, preferring to wait
until after the Lebanese elections so that they can assess
Hizballah's role in domestic Lebanese political life.



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


Syria-Lebanon


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





8. (C) Otte reported that ongoing events between Syria and
Lebanon were a major theme in his discussions in Cairo. The
GOE, he commented, is clearly lobbying President Assad hard
and is aware of Assad's thinking. Egyptian FM Aboul Gheit,
for example, gave Otte the gist of Assad's speech on Syrian
troop redeployments in Lebanon a half-hour before Assad
spoke. Soleiman, he noted, expressed concern about the
direction of the Syria-Lebanon issue, telling Otte that "the
Syrians don't get it."



9. (C) Otte recounted that he had met with Assad about a week
before the Hariri assassination. Assad then tried to
convince Otte of his good intentions toward Lebanon and
Israel, and complained about what he perceived as President
Chirac's obsession about ending the Syrian presence in
Lebanon. Otte said he told Assad that the EU was not seeking
to isolate Syria, but that Syria had few friends and needed
to improve its posture toward Israel, Lebanon and Iraq. Otte
said he warned Assad not to spoil the positive momentum in
the Israeli-Palestinian track following the Sharm al-Sheikh
summit. The Ambassador asked Otte to assess whether Assad
appreciates the seriousness of messages he receives from
high-level visitors to Damascus, or whether Assad perceives
the visits as signs of his importance in the region. Otte
said that Assad appeared to have interpreted then-Deputy
Secretary Armitage's January visit as a sign of encouragement

SIPDIS
because it occurred despite what Assad perceived as likely
objections to the visit by USG hard-liners seeking to isolate
Syria.

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