ISRAEL MEDIA REACTION

UNCLAS SECTION 01 OF 07 TEL AVIV 000222

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

--------------
SUBJECTS COVERED IN THIS REPORT:
--------------


1. Mideast


2. U.S.-Russia Relations


3. Stanley Fischer's Bank of Israel Nomination

--------------
Key stories in the media:
--------------

Israel Radio reported that this afternoon the Knesset
approved the 2005 state budget in a first reading, 64-
53, as the "rebel" Likud Knesset members -- except
former FM David Levy and Yehiel Hazan -- decided to
endorse it. All media had led with the possibility
that the vote of the "rebels" could have toppled PM
Sharon's new national unity government. Leading media
reported that United Torah Judaism (UTJ) is splitting
into its two component factions -- Agudat Yisrael and
Degel Hatorah -- which will remain in the government
coalition.

Leading media reported that Tuesday Sharon
congratulated PA chairman-elect Mahmoud Abbas (Abu
Mazen) on his "personal achievement" in the elections,
and told the cabinet that he would be meeting him in
the "near future." Israel Radio quoted Secretary of
State Colin Powell as saying Tuesday on Fox News-TV
that if Abbas fights those who support violence, "the
U.S. will be able to support him.'' The radio
reported that Powell talked on the phone with Sharon
and FM Silvan Shalom, and urged them to advance the
peace process. Israel Radio reported that Jibril
Rajoub, the PA's National Security Advisor, has
tendered his resignation. However, he could receive a
new position after the establishment of a new
Palestinian government. Jerusalem Post quoted sources
close to Abbas as saying that at least six PA ministers
would lose their job in the Palestinian government
reshuffling. Nagi al-Ghatrifi, deputy chairman of
Egypt's Al-Ghad Party, was quoted as saying in an
interview with Jerusalem Post that Sunday's election
was the jolt that the totalitarian political systems of
the rest of the Arab world needed.

Israel Radio reported that this morning an Israeli was
killed and three IDF soldiers were wounded in an
explosion near the southern Gaza Strip settlement of
Morag. Qassam rockets have been fired at Israeli
targets in the Gaza Strip. All media reported that an
Israeli who was wounded by a shell at the Erez Crossing
10 days ago died of his wounds. Israel Radio reported
that this morning IAF helicopters fired at targets in
the south of Gaza City. The radio also reported that
IDF troops killed two wanted Hamas men in a clash near
Ramallah, and that security forces made arrests in the
West Bank.
Yediot and Israel Radio reported that the defense
establishment has finalized its settlement evacuation
plans. Yediot says that the project will be approved
at Sharon's office on Thursday. Yediot reported that,
at the conclusion of the plan's implementation in the
Katif Bloc, the settlers' houses will be buried under
sand. Ha'aretz cited recommendations submitted to the
GOI by the IDF, according to which the IDF is planning
to maintain a mobile presence in the areas of the four
settlements to be evacuated from the northern West
Bank. The newspaper also quoted Col. Uzi Buchbinder, a
Home Front Command official as saying Tuesday that 46
communities in the western Negev will be exposed to
Qassam rocket fire after the disengagement plan is
implemented. Jerusalem Post reported that on Tuesday,
experts told the Knesset's Interior Committee that
strategic energy facilities in Ashkelon and water
supplies in northern Israel could be in danger if the
disengagement plan is carried out.

Maariv reported that incoming Interior Minster Ophir
Pines-Paz (Labor) has decided to dry up the settlers'
anti-disengagement PR campaign, whose cost thus far has
been estimated at USD 7 million. Following a petition
to the High Court of Justice by Peace Now Secretary-
General Yariv Oppenheimer, Pines-Paz will enforce the
ban on fund transfers from the local councils.
Ha'aretz quoted O/C Northern Command Maj. Gen. Benny
Ganz as saying Tuesday that the wave of threats from
pro-settlement elements to refuse to obey army orders
to evacuate settlements "is more dangerous than any
flying rocket."

Israel Radio reported that Israel has asked the U.S.
administration and Congress to help it set up new
border crossings to the PA, and to improve existing
crossings. The station quoted Washington sources as
saying that the cost of the plan is USD 450 million,
and that Israel is asking the U.S. to participate with
USD 180 million. The radio also reported that the U.S.
is preparing a new aid package for the Palestinians, in
the sum of USD 200 million, to bolster Abu Mazen. This
aid comes on top of a similar sum that the U.S. is
transferring to the Palestinians, by means of the UN
and other organizations.

Citing AP, Maariv reported that Israel has returned
parts of repaired Harpy drones to China -- after the
U.S. expressed concerns over the matter.

Israel Radio reported that Tuesday UN Secretary-General
Kofi Annan forwarded a letter to the UNGA setting out a
framework and the next moves for the creation of a UN
register of the damage Israel's construction of a
separation barrier is causing Palestinians in the
occupied West Bank. The UNGA called for the registry
last summer after demanding that Israel comply with an
advisory opinion issued by the International Court of
Justice (ICJ).
Israel Radio and Ha'aretz quoted IDF Intelligence chief
Maj. Gen. Aharon Zeevi-Farkash as saying Tuesday that
Iran will be capable of enriching uranium in six
months. Maariv quoted him as saying that Abbas is weak
and unpopular, and that he will not fight the
Palestinian public. Zeevi was speaking at Haifa
University.

All media reported that the Haifa District Court is due
on Wednesday morning to sentence the leaders of the
radical northern branch of Israel's Islamic Movement,
after they reached a plea bargain agreement with the
state prosecution. The Islamic leaders had mainly been
indicted for contact with a foreign (Iranian) agent and
abetting Hamas. Raed Salah, the group's leader, will
be released in six months, and the other defendants in
a few days. While citing the prosecution a saying that
the case represents one of the first actions against
financing of world terror, Israel Radio cited the
Islamic Movement as saying that "the mountain gave
birth to a molehill." The Shin Bet opposed the deal.

Ha'aretz reported that Israel has reported to the U.S.
administration on the recent crisis with Russia. The
newspaper says that Israel did not ask the U.S. to
intervene in solving the problem that caused the crisis
to erupt, even though the U.S. has dealt with this
matter in the past. Yediot cited a denial by official
Israeli sources of a Channel 2-TV report that the
bilateral crisis was the result of a claim by President
Vladimir Putin that Israeli elements have assisted and
funded Viktor Yushchenko's election campaign. Ha'aretz
also reported that tension is mounting in Jerusalem
ahead of Syrian President Bashar Assad's visit to
Moscow, on January 24.

Jerusalem Post reported that, three weeks after Israel
and Syria agreed that Golan Druze could sell their
apples in Syria, bureaucratic snags are delaying the
deal.

Israel Radio reported that the UN Security Council
asked Israel and Hizbullah on Tuesday to respect the
"Purple Line" demarcating the Israeli-Lebanese border.

Ha'aretz reported that an Arabic translation of
portions of the most extensive planning document ever
produced in Israel -- the master plan for the year 2020
-- has been published by the Center of Arab Unity
Studies in Beirut. This institution brings together
intellectuals from the Arab countries with the goal of
reviving pan-Arabism and addressing "Zionism and
imperialism."
Yediot reported that Orly Benny-Davis, a former Israeli
who resides in South Carolina and is a "respected
political activist in the Republican Party," will
arrive in Israel next week to promote the construction
of a "third temple." She is prepared to hear any
suggestion, except blowing up the mosques on the Temple
Mount.

Ha'aretz quoted a well-placed official Israeli source
as saying that the GOI believes that Stanley Fischer's
appointment to the post of governor of the Bank of
Israel will increase Israel's chances of acceptance to
the Organization for Economic Cooperation and
Development (OECD).

Jerusalem Post reported that visiting state attorneys
from U.S. states, in particular Delaware Attorney-
General Jane Brady, have expressed their admiration for
Israel's state of preparedness against terrorist
attacks.

Maariv, Jerusalem Post and Hatzofe reported that at a
news conference Tuesday, President Bush presented the
new Secretary of Homeland Security, Michael Chertoff,
who Maariv says is a Jew, and Jerusalem Post "a rabbi's
son."

Ha'aretz and Jerusalem Post quoted UN Secretary-General
Kofi Annan as saying Tuesday that he will convene a
special session of the UNGA on January 24 to mark the
60th anniversary of the liberation of the extermination
camps in Europe. Over 110 member nations of the UN have
already agreed to hold the meeting -- there have only
been 27 such sessions since the foundation of the UN.

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

1. Mideast:
--------------

Summary:
--------------

Senior op-ed writer Uzi Benziman observed in
independent, left-leaning Ha'aretz: "As things appeared
this week, Sharon and his new government intend to grab
the opportunity offered with the election of Abu Mazen
and not repeat the mistake of the previous government,
which waited for Abu Mazen the chick to grow its
feathers."

Senior columnist Haggai Huberman wrote in nationalist,
Orthodox Hatzofe: "Ariel Sharon has broken [a] record.
A Likud-led government -- Sharon's -- is being
supported by the votes of the Left and the Arabs."

Block Quotes:
--------------

I. "Helping the Chick Grow Its Feathers"

Senior op-ed writer Uzi Benziman observed in
independent, left-leaning Ha'aretz (January 12):
"Official Jerusalem understands that something happened
this week: a new government arose in Ramallah and in
Israel, and in another week a new administration will
take office in Washington. And there's the rub. The
powers that be in Israel are taking into account that
the second Bush administration will not necessarily be
identical with the first: neither in its approach to
the Israeli-Palestinian conflict, its composition, nor
the balance of power inside it. A significant change
is expected in Bush's attitude toward the Palestinians,
as could already be seen in the president's warm
congratulations to Abu Mazen and the invitation to the
White House that Bush extended to the new Palestinian
president. The U.S. administration will be the power
supply that sends current to Jerusalem and Ramallah to
divert the violent conflict to a track of political
dialogue. He will demand that Abu Mazen make a major
change in his government's capability for enforcing his
will on the Palestinian street and foremost on the
terror organization, and he will demand that Israel
help Abu Mazen and thus fulfill its part in the
actualization of the road map. As things appeared this
week, Sharon and his new government intend to grab the
opportunity offered with the election of Abu Mazen and
not repeat the mistake of the previous government,
which waited for Abu Mazen the chick to grow its
feathers."

II. "An Illegitimate Government"

Senior columnist Haggai Huberman wrote in nationalist,
Orthodox Hatzofe (January 12): "Ariel Sharon has broken
[a] record. A Likud-led government -- Sharon's -- is
being supported by the votes of the Left and the Arabs,
without a Jewish or Zionist majority. All those who, a
decade ago, claimed that the Rabin government was
illegitimate because it didn't enjoy a Jewish or
Zionist majority, cannot evade this contention today
when we're talking about the extreme Left government
headed by Ariel Sharon -- the government of the
transfer [of Jews from their homes]."

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

2. U.S.-Russia Relations:
--------------
Summary:
--------------

Defense and foreign affairs columnist Amir Oren wrote
in independent, left-leaning Ha'aretz: "The Foreign
Ministry ... has been warning in recent weeks about the
formation of a Sino-Russian axis as a counterweight to
the American supremacy in the world."

Block Quotes:
--------------

"A Cold Wind Is Blowing"

Defense and foreign affairs columnist Amir Oren wrote
in independent, left-leaning Ha'aretz (January 12):
"The Foreign Ministry's center for political research,
the smallest and poorest of Israel's intelligence
branches but perhaps the most sober of all of them in
its political assessments, has been warning in recent
weeks about the formation of a Sino-Russian axis as a
counterweight to the American supremacy in the world,
which would have a bad influence on Israel's strategic
position. Such an alliance could rip open a hole in
the front that has formed against a nuclear Iran. Bush
prefers to devote 2005 to political activity, to go
through two more elections in Iraq (for a constitution
and the permanent government),and only after 2006 go
to war against the ayatollahs. But Sino-Russian
opposition could speed up Bush's military moves. The
incoming American foreign policy leadership --
Condoleezza Rice, the designated undersecretary Robert
Zoellick and the designated deputy secretary for
political affairs Nicolas Barnes, now ambassador to
NATO -- is considered friendlier to Israel than the
outgoing trio -- Colin Powell, Richard Armitage and
Mark Grossman. That leadership is more aggressive
toward Iran, more suspicious of Russia and more
combative toward Syria, against whom the U.S. has
suspended its tensions for the coming weeks in exchange
for a promise from Damascus to freeze its aid to the
opponents of an Iraqi election. This is all far from
being a replay of the Cold War, the conflict that had
so many ramifications for the Israeli-Arab front, but
there is a searing cold in the air. It may be
seasonal, but it could last."

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

3. Stanley Fischer's Bank of Israel Nomination:
-------------- ---

Summary:
--------------

Conservative, independent Jerusalem Post editorialized:
"Should we not ... be proud that we, a small country,
have attracted an economist of such global stature?"
Independent, left-leaning Ha'aretz editorialized: "The
opposition to the appointment of a new immigrant to a
senior position is narrow-minded."
Block Quotes:
--------------


I. "Welcome, Stanley Fischer"

Conservative, independent Jerusalem Post editorialized
(January 12): "The choice of Stanley Fischer as the
eighth governor of the Bank of Israel was not an
obvious one, nor without risks. But it was a brave and
possibly inspired choice, both on the offering and
accepting ends.... The reaction of some, that this
choice is a slight against our own qualified economists
and business leaders, is somewhat small-minded. Should
we not instead be proud that we, a small country, have
attracted an economist of such global stature? Are we
not signaling, properly, that our economy is not an
island, and not just a bystander, but a potential
competitive player in the global economy?"

II. "Stanley Fischer, One of Our Own"

Independent, left-leaning Ha'aretz editorialized
(January 12): "The opposition to the appointment of a
new immigrant to a senior position is narrow-minded.
It is as if Israelis are willing to see new immigrants,
at least in the early days of their integration, only
as street-cleaners or standing behind the supermarket
check-out counter, no matter what their profession.
Opposition to the appointment of a bank governor,
either from Israel or America, who represents too right-
wing -- essentially Thatcheresque -- a worldview, could
be understood. But as long as the policy of the
government and the finance minister is such, it is
impossible to expect the appointment of a governor with
a different worldview."

KURTZER