GAZA DISENGAGEMENT UPDATE #2

C O N F I D E N T I A L SECTION 01 OF 04 TEL AVIV 002428

SIPDIS

NEA FOR FO/WELCH/DIBBLE
NSC FOR ABRAMS/DANIN

E.O. 12958: DECL: 04/13/2015
TAGS: KWBG PGOV EAID ECON IS GAZA DISENGAGEMENT
SUBJECT: GAZA DISENGAGEMENT UPDATE #2

Classified By: Charge d'Affaires Gene A. Cretz for reasons 1.4 (b) and
(d)


1. (C) Summary: This is the second in a series of updates on
GOI, donor community, and Post preparations for Israeli
withdrawal and the post-disengagement Gazan economic and
security situation.

-- Developments in security coordination have focused on
activities of U.S. Security Coordination Mission (USSCM),led
by General Ward, which provides an overall framework and
comprehensive plan for international donors, security
assistance. The USSCM has established milestones for
consolidation and restructuring of the PA security services,
with the end state of PA security forces, accountable and
responsive to civilian authority and the rule of law, that
effectively maintain order in PA-controlled areas and fight
terror.

-- Developments in the IDF's preparations for disengagement
include increased IDF responsiveness to donor concerns about
humanitarian access to Gaza, but a lack of IDF details on the
potential economic and humanitarian impact of the probable
"lockdown" of the Strip in the run-up to Israeli withdrawal;
a number of improvements in the Gazan crossings and permits
regime, including an increase in the number of Gazans
crossing daily into Israel to over 4,000 from 200-300; and
continued Gazan concern over delays at Karni terminal and
strict security procedures at Erez and Rafah crossings.

-- Developments in the GOI's internal positions have focused
on responding to settler attempts to derail disengagement,
such as the Gush Katif Settlers' Council's arrangements for
the logistical support of thousands of Israelis it hopes will
enter the Gaza settlements to help oppose the July-August
pullout; High Court appeals by Gaza settlers seeking to
repeal the law implementing disengagement; and a letter to PM
Sharon from the Nissanit and Eli Sinai settlements arguing
that because their land was never under Egyptian control it
is not in the same category as other Gaza settlements and
cannot be evacuated. Additionally, the GOI may approve a
plan to resettle over 100 Gush Katif families in the Nitzanim
protected nature reserve, in exchange for their compliance
with evacuation.

-- Developments in economic coordination on disengagement
include PA Civil Affairs' Minister Dahlan's suggestion that
the U.S. or another donor obtain permission from the GOI to
share settlement asset data with the PA without a formal PA
request; Dahlan's reported "warning" to a group of Gazan
businesspeople not to purchase settler assets privately; the
awarding of the Palestinian Agriculture Partnership Activity
(PAPA) program to the CARANA Corporation; and the agreement
by the Israeli Water Commission and the Palestinian Water
Authority to discuss water supply and infrastructure issues
related to Gaza Disengagement. End summary.

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Security Coordination
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2. (C) USSCM COORDINATING ASSISTANCE, IDENTIFYING
MILESTONES: General Ward's USSCM held a Security Coordination
Meeting April 6 meeting in Jericho, outlining his mission to
the donor community. Ward stressed the need for a "single
pipeline" for international assistance. Interior Minister
Nasser Yusif, he said, is the sole point of contact for
security aid to the PA, and donors should avoid using
side-channels to bypass institutional authority. Ward said
that PA legislative reform is an integral part of the
security reform process. The EU,s major contribution to PA
security is their EU Coordinating Office for Palestinian
Police Support (EU COPPS) program, offering mission-focused
training and equipment assistance, tied to reform benchmarks.
The Ward mission is currently working closely with PA
security officials to identify restructuring milestones,
which will include concrete steps to establish order and
prevent terror, and implementation of the PA,s new pension
law, allowing retirement of security personnel over age 60.

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IDF Preparations for Disengagement
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3. (SBU) TFPI PLEASED WITH IDF RESPONSIVENESS, CONCERNED
ABOUT LOCKDOWN -- TFPI members met with Gaza Division
commander Brigadier General Uri Kohavi the week of March 28
on issues relating to international and humanitarian access
to the Gaza Strip. This meeting represented the achievement
of the TFPI's longstanding goal of securing direct access to
brigade and division commanders. Kohavi suggested regular
meetings, and ordered his assistants to work with COGAT staff
on "creative solutions" to the TFPI's "minimum requirements"
document that addresses issues of cargo capacity, and
crossings delays. Despite this step forward, IDF brigade and
division commanders have not yet been able to provide the
TFPI with key details on the GOI's probable "lockdown" of the
Gaza Strip in the run-up to disengagement, and the effect it
may have on freedom of movement for Gazan Palestinians. The
activities of 40,000 to 50,000 IDF troops and several
thousand additional Israeli National Police forces to be
deployed to the Strip on or around June 1 may cause a de
facto closure of the Strip to Palestinians as well as Israeli
settlers. The Embassy has made clear to the GOI that COGAT
and IDF assistance will be required in ensuring ease of
travel for some 60 Gazans slated to travel to the U.S. on
USAID and Public Diplomacy-sponsored programs between June
and October.


4. (C) CROSSINGS IMPROVEMENTS DON'T MAKE A SPLASH AMONGST
GAZANS -- Despite several improvements in the Gaza crossings
regime, contacts report that only a limited number of
businesspeople and other "elite" have benefited, and that a
majority of average Gazans note little positive impact on
their daily lives. Improvements have included a recent
increase in laborer permits to 5,600 from 1,100, an increase
in the number of laborers crossing into Israel daily to over
4,000 from 200-300 prior to February, the partial re-opening
of the Erez Industrial Zone, and the easing of private
vehicle restrictions at Abu Kholi junction in central Gaza.
Recent reports from Gaza have primarily focused, however, on
the negative, including continued delays at Karni cargo
terminal of 20-30 days, humiliating security checks for
laborers crossing through Erez terminal, and a new passenger
scanner at the Rafah crossing that Gazan sources claim emits
harmful radiation despite IDF assurances to the contrary.

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Internal GOI Positions
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5. (SBU) AGRICULTURE MINISTER URGES FARMERS TO COMMUTE TO
GAZA POST DISENGAGEMENT -- Minister of Agriculture Yisrael
Katz has advised Gush Katif farmers that he plans to push
forward an extension on the evacuation timetable that would
allow them to commute to Gaza after the withdrawal to work in
their greenhouses. According to Katz, the current evacuation
timetable precludes moving agribusinesses into Green Line
Israel in time for the upcoming growing season. Katz's plan
would include IDF escorts for the commuting farmers. Katz
has not revealed any details of how he plans to "push
forward" this extension within the GOI.


6. (SBU) SETTLERS AND THEIR ALLIES MOBILIZE -- Israeli media
reported that the Gush Katif Settlers' Council is making
arrangement for the logistical support of thousands of
Israelis it hopes will enter the Gaza settlements to help
oppose the July-August pullout. PM Sharon ordered the
Israeli security establishment to allow Israelis to visit
Gush Katif during the Passover holiday, but to ensure that
"whoever comes does not move there," according to Israeli
media reports. Although the date on which the Strip will be
closed has not yet been finalized by IDF and GOI planners,
media continue to speculate that access to the settlements
will be cut off following Israeli Independence Day on May 12.


7. (SBU) GAZA OUTPOST RESURFACES -- On April 10, 20 members
of the ultra-Orthodox "Chabad" Hassidic movement reportedly
established an outpost near Neve Dekalim settlement using as
a base a shack that was built four months ago in earlier
attempt to establish an outpost, subsequently destroyed by
the IDF, and almost immediately rebuilt by Gush Katif youth,
but left uninhabited until this week. In addition to a shack
that serves as a synagogue, the young men have erected a
large tent as living quarters and say they expect "thousands"
more Chabad students to join them in the coming weeks and
months.


8. (C) "GUSH NITZANIM" -- PM Sharon, despite opposition from
environmentalists, is pressing ahead with a plan to relocate
interested Gush Katif settlers as a bloc to Nitzanim, a
protected nature preserve along the coast just north of the
Gaza Strip, near the Israeli cities of Ashkelon and Ashdod.
The plan came about after a group claiming to represent a
group of "pragmatic" settlers from Gush Katif approached
former Israel Lands Authority Director Avi Drexler, promising
to leave Gaza with "a minimum of friction" if they could be
resettled as a group in Nitzanim. Approximately 100 families
currently live in the area, and the proposal is to expand the
inhabited area from its current single small town to 650
families living in four small towns. Opponents of the plan
claim that real estate developers are using disengagement to
grab at a windfall development opportunity. Furthering this
view, press reports claim that as many as 1,780 houses may
eventually be built if the area is opened for construction.
Press reports claim that the PM is inclined to approve the
deal if the settlers can provide convincing evidence that
they will be able to enforce the promised calm.


9. (SBU) LEGAL ACTIONS OPPOSING DISENGAGEMENT, PART I -- A
special 11-member panel of the Israeli High Court heard
arguments the week of April 4 on eight petitions filed by
Gaza settlers seeking to repeal the law implementing the
disengagement plan. The settlers, who are members of the
Gaza Coast Regional Council, and a number of
Gaza-settlement-based, Israeli factory owners argued that the
law violates elements of the Basic Law governing human
dignity and freedom and that the compensation designated by
the law is too low. The State argued that the petitioners
settled in the area knowing that it was territory seized
during war and that its eventual evacuation was possible. A
decision on the petition is pending.


10. (SBU) LEGAL ACTIONS OPPOSING DISENGAGEMENT, PART II --
Residents of the northern Gaza settlements of Nissanit and
Eli Sinai in early April wrote to PM Sharon to challenge the
GOI's plans to remove them from the Gaza Strip. They argued
that the land on which the two communities are located was
never under Egyptian control and was instead a demilitarized
zone under UN control. Thus, according to the settlers'
logic, the Palestinians have no right to the land since the
Palestinians seek to regain under international law only what
was under Egyptian control. The settlers are requesting
revisions of the disengagement plan that would leave these
two settlements in place. They further argue that the
separation fence already in place around Gaza actually runs
to the south of their two settlements.

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Economic Coordination
--------------


11. (C) PA WANTS SETTLEMENT DATA WITHOUT A FORMAL REQUEST --
The GOI has compiled an inventory of settlement assets to be
handed over to the PA following withdrawal, and has passed
this information to the East-West and Aspen Institutes and
several of the donors. GOI interlocutors say that they are
waiting for a formal request from the PA before passing the
data to PA Civil Affairs Minister Muhammad Dahlan and his
disengagement planning committee. Peres staffers reported,
however, that in a late March meeting with Israeli Vice PM
Peres, Dahlan noted that a formal ministerial-level request
for the data will be difficult to make due to political
sensitivities. He suggested that the U.S. or another donor
obtain permission from the GOI to share the data with the PA.
So far no donor, including the U.S., has moved to bring this
request forward to the GOI. (Note: Dahlan made this same
suggestion in a meeting with USAID Director and ConGen
EconChief April 1, reported in Jerusalem 1433. End note.)


12. (SBU) PAPA PROGRAM READY TO GO -- USAID's Palestinian
Agribusiness Partnership Activity (PAPA) was officially
awarded to the CARANA Corporation on April 6. During the
first 18 months following Israeli withdrawal from the Gaza
Strip, PAPA will invest at least USD 15 million in fixed
capital investments and technical assistance to support the
creation of mutually beneficial Palestinian-Israeli
agribusiness partnerships that will transfer modern
technology and establish Palestinian access to Middle East
and EU markets. PAPA's effectiveness depends in part on the
PA's approval of a caretaker entity to manage Gush Katif
settlement assets immediately following withdrawal, and the
eventual privatization of those agribusiness assets. PAPA
will proceed with agribusiness partnerships in other areas in
the West Bank and Gaza regardless of the asset transfer
related to the Gush Katif complexes.


13. (C) DAHLAN "WARNS" BUSINESSES AWAY FROM ASSETS -- At a
March meeting with the Palestinian Business Association, PA
Civil Affairs Minister Dahlan reportedly "warned" businesses
against independently purchasing settlement lands or assets
within the Erez Industrial Zone (EIZ),since doing so would,
in the PA's view, give de facto legitimization to Israeli
ownership. Dahlan asked the PBA not to get ahead of his
coordination with the GOI on the transfer of assets.
According to PBA reports, Dahlan's lecture was in response to
the recent purchase of EIZ factories by three private Gazans,
and the reported attempts by a limited number of Gush Katif
settlers to negotiate the sale of settlement land with Gazan
agribusiness firms. Several private sector contacts
confirmed they had heard of this outreach on the part of
settlers, but were unable to confirm the identities of the
Gazan firms involved. (Note: In an April 13 meeting with the
PA,s Ministerial-level Gaza withdrawal committee, Prime
Minister Quraya, warned that any private contract for land
or assets that will be handed over to the PA after the
Israeli withdrawal is to be considered null and void. End
note.)


14. (SBU) GOI AND PA WATER AUTHORITIES AGREE TO DISCUSS
DISENGAGEMENT -- At the meeting of the Trilateral Water
Working Group held at USAID offices in Tel Aviv April 7, the
Israeli Water Commission and the Palestinian Water Authority
agreed to discuss water supply and infrastructure issues
related to Gaza Disengagement. A significant point of
negotiation may be mechanisms by which the GOI will continue
to supply water at cost to settlement areas
post-disengagement -- a question raised by the GOI's
announcement it would re-route six million cubic meters of
water from Gush Katif to green line Israel settlements
following disengagement. The Commission and the PWA agreed
to meet this week or next for initial discussions and to put
together a plan by mid-May. NEA Senior Advisor for S&T
Charles Lawson is scheduled to review the water plan with the
two sides in early June.

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