1. (C) Summary: Yariv Oppenheimer, General Director of
Peace Now, told Embassy econoffs that there are four possible
ways for the GOI to fund settlements. These include support
through the Defense Ministry for infrastructure, transferring
funds to the local councils, funding specific projects, and
reinvesting municipal taxes collected from the settlers.
Oppenheimer outlined over $113 million in 2005 budget outlays
to the settlements through various ministries. He said that
Talia Sasson's report on illegal outposts brought the issue
out in the open, but that the inter-ministerial Cabinet
committee is not going to do much about implementing her
recommendations. Oppenheimer said that Peace Now is
currently very popular because the Israeli public supports
Gaza disengagement, but also that he is concerned that no one
is thinking about West Bank settlements or outposts. End
summary.



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


Passing Funds to the Settlements


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





2. (C) Yariv Oppenheimer, General Director of Peace Now,
told Deputy Economic Counselor and Economic Officer that the
GOI utilizes four major ways to fund settlements. The first
is through the Defense Ministry (MOD), which provides
security packages to the settlements. These security
packages include such things as lighting, roads, armored
buses, training, and funds for settlers who guard
settlements. Gathering this information is close to
impossible, however, because the MOD's budget is classified
and very few people have access to it. In addition,
Oppenheimer explained that the GOI funds settlements through
other ministries who give the settlers money by transferring
funds to their respective local municipalities. The
ministries' budgets do not have specific line items to
differentiate what goes to the West Bank and the Gaza Strip,
and what goes to Green Line Israel. According to
Oppenheimer, the third way to fund settlements is for
ministries to provide money for specific projects, such as
the promenade in Hebron, which may sometimes be explicitly in
the budget. Finally, local municipalities reinvest what they
collect in taxes from the residents of the settlement. As
Oppenheimer said, we have seen examples of at least the first
three methods in Talia Sasson's report on illegal outposts.



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


2005 Budget Details


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





3. (C) To cite some examples in the GOI's 2005 budget
approved last month, Oppenheimer noted that the Agriculture
Ministry plans to give the Settlements Division of the World
Zionist Organization NIS 9.4 million for settlements in the
central West Bank and NIS 6.9 million for settlements in the
Gaza Strip. In addition, the Ministry of Construction and
Housing (MOCH) has budgeted NIS 36 million for Ma'ale Adumim,
NIS 73 million for Har Homa, and NIS 32 million for security
in East Jerusalem. The MOCH also has a line item of NIS 90
million that can be spent on anything it wants, from
infrastructure to public buildings to security.



4. (C) Oppenheimer explained that the Ministry of Industry
and Trade has at least two items in the budget that will go
toward supporting the settlements: NIS 8 million in benefits
to invest in the West Bank and Gaza Strip, and NIS 5 million
in subsidies. The Ministry of Transportation has budgeted
NIS 17 million for a road between Gilo and the Gush Etzion
bloc, NIS 12 million for a road between Bruchin and Ariel,
and NIS 198 million for a road around Mishor Adumim.



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


On the Sasson Report


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





5. (C) Oppenheimer opined that Sasson had done a great job
on her report on illegal outposts, and that it was good that
these issues were out in the open. He said it may force
settlers and their supporters within the GOI to think twice
before signing any documents authorizing more construction.
He mentioned, however, that "the bureaucracy is very strong,"
and that the inter-ministerial Cabinet committee on the
report is not going to do much about implementing Sasson's
recommendations. In fact, he remarked that Peace Now is
planning to host an azkera ceremony to mark the 30 days after
the "burial of Sasson's report."



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


Disengagement and Beyond


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





6. (C) Oppenheimer continued that the Israeli public is more
supportive now than ten years ago of Peace Now's activities
because the public supports the disengagement plan. He said
he is worried, however, about what will happen after
disengagement. Oppenheimer explained that he is concerned
that Israelis will say "we gave them Gaza Strip and the
Palestinians are still hostile toward us" so they will not
want to give up the West Bank. He said it will not take many
terrorist attacks for Israelis to think that "we tried to
leave the Gaza Strip and got more terrorists instead."
Oppenheimer noted that everyone is for disengagement from the
Gaza Strip in the short run, but no one is interested in West
Bank settlements, much less in outposts.



7. (C) Oppenheimer opined that the IDF is ready to begin
implementing disengagement. He explained that the IDF has a
clear plan and is practicing its maneuvers, and that he has
recently talked to IDF soldiers on four occasions as part of
a panel on disengagement. Oppenheimer said that he does not
think other ministries are ready, however. He mentioned that
there are no real solutions to the other problems of
evacuation, such as education for the settlers' children, and
that Yonatan Bassey of the Disengagement Administration is
not doing much because he does not have the backing of PM
Ariel Sharon. Oppenheimer cited the example of Sharon going
to visit Nitzanim without Bassey, and that Sharon is now the
only one making significant decisions on disengagement.

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