PERES DESCRIBES POSITIVE CHANGE IN QURAYA'S

C O N F I D E N T I A L SECTION 01 OF 03 TEL AVIV 002722

SIPDIS

E.O. 12958: DECL: 04/27/2015
TAGS: KWBG PREL ECON PGOV EAID IS GAZA DISENGAGEMENT
SUBJECT: PERES DESCRIBES POSITIVE CHANGE IN QURAYA'S
ATTITUDE ON DISENGAGEMENT COORDINATION

Classified By: DCM Gene A. Cretz for Reasons 1.4 (B) and (D).


1. (C) SUMMARY: Vice Premier Peres told A/S Welch and Charge
April 27 that Palestinian PM Quraya', in an April 21 meeting
with Peres, showed a positive change of attitude toward
disengagement coordination. Peres said he cautioned Quraya'
not to push for final status talks after disengagement; doing
so could give the GOI an excuse not to move forward on the
roadmap, which Peres termed the only "end game" and the best
document possible for the PA. Peres called Israeli criticism
of President Abbas's performance "exaggerated," arguing that
Abbas has made no significant mistakes in trying to manage
the broken system he inherited. He said the GOI should do
more to help Abbas, e.g., by releasing more than the 400
remaining prisoners that it committed to release, and
"talking about" removing every remaining checkpoint and
roadblock in the territories. On economic development in the
territories, Peres said he urged Quraya' to try to establish
QIZes, and to develop beach resorts in Gaza. He called for
developing greenhouses on 25,000 dunams of Gaza land in
addition to the 4,000 or so on which settlers have already
built them. He said the PA now appears more open to letting
an intermediary, who Peres suggested should be the Dutch, act
as a transitional caretaker for greenhouses. Peres said he
is urging DefMin Mofaz to do more to open passages and remove
checkpoints, although he expressed understanding for the
security and budget constraints facing Mofaz. Peres said he
would ask Quartet envoy Wolfensohn to help find financing for
a rail link between Gaza and Ashdod to help facilitate cargo
traffic in and out of Gaza while the Gaza sea port is
developed. On Galilee/Negev development, Peres said the GOI
is seeking U.S. financial support because time is short for
creating jobs and infrastructure in these regions. END
SUMMARY.

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Meeting with Quraya'
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2. (C) In comments about his April 21 meeting with PA Prime
Minister Quraya', Vice Premier Shimon Peres told A/S David
Welch and Charge April 27 that he had seen a clear, positive
change in Quraya's, and the PA's, attitude about coordinating
aspects of disengagement with the GOI. He speculated that
Quraya' might have moved toward a more accommodating position
because disengagement coordination provides him opportunities
to improve his cooperation with President Abbas and to exert
leadership over leading PA figures such as Muhammad Dahlan
and Sa'eb Erekat. Quraya' might also see in disengagement
coordination, Peres said, an opportunity for the PA to prove
that it can deliver something. He said that he and Quraya'
had agreed to continue regular consultations, supported by
joint working groups that the two established.


3. (C) Peres recounted that he cautioned Quraya' about trying
to jump ahead to final status issues upon completion of
disengagement. He said he told Quraya' that the roadmap, not
a leap to final status, represents the "end game." The
roadmap is the best document that the Palestinians are bound
to receive. With the roadmap, the Palestinians enjoy support
from the whole world. Should the PA try to jump ahead to
final status talks, the issues of Jerusalem and refugees,
neither of which can be solved in the short run, would come
to the fore. Peres said he therefore advised Quraya' to
forget about final status issues for now, not least because
PA insistence on jumping ahead to them would give the GOI an
excuse not to move forward on the roadmap.


4. (C) Peres said he also stressed to Quraya' the importance
of PA action against terrorism for establishing the
conditions for continued progress after disengagement. A
failure to act against terrorism would undermine U.S.
sympathy for Palestinian needs. Peres said he told Quraya',
"You have an open court in the United States. Use it. You
may not have it forever."

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Assessing Abbas's Performance
--------------


5. (C) Peres expressed concern about a divergence between
current Palestinian/Arab expectations in the peace process
and Israeli "worries." Perhaps both sides, he said, are
guilty of overstating their positions. Preventing the
divergence from widening is essential.


6. (C) Peres called criticism of President Abbas's
performance in the Israeli media "exaggerated." No other PA
figure could do better, he said, adding that he did not
believe that Abbas has made any important mistakes. Rather,
he said he thought Abbas is struggling with a broken system
not of his creation, and without a real army.


7. (C) Welch commented that Abbas, despite his possible
inability so far to deliver security performance on the
ground, still benefits from a period of confidence in his
leadership that happens to coincide with the run-up to
disengagement. He noted that he had asked DefMin Mofaz the
previous week what the GOI could do to strengthen Abbas's
position. Mofaz had replied that the GOI could not do more
that it has already given GOI perceptions of PA inaction on
security, particularly with regard to fugitives. He asked
Pers whether this GOI position is sustainable.


8. (C) Peres replied that the GOI needs to be more
forthcoming. First, it must take the risk of releasing
Palestinian prisoners, both the remaining 400 it committed
already to release, and more after them. Second, the GOI has
to begin talking about how to remove every remaining
roadblock and checkpoint within the West Bank and Gaza.
These impediments to free movement have both an important
economic and "psychological" cost, he said. Third, the
United States should press Abbas to reorganize the PA
security forces, not only for fighting against terrorism, but
also against internal chaos within Palestinian society.


9. (C) Welch responded that the U.S. has already done much
through the Ward mission to advance PA security reform. He
noted that PA leaders have been telling U.S. officials that
they need more lethal equipment to do their job, but Mofaz
takes the position that the PA security forces lack only
assertiveness, not equipment. The equipment could, however,
help build security force confidence, Welch commented.


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Economic Development in PA
--------------


10. (C) Peres said he stressed to Quraya' that Israel has an
interest in seeing Gaza overcome its poverty. He held out
Jordan, with its Qualified Industrial Zones (QIZes) as an
economic model of "quiet success" for the Palestinians. The
PA, he said he told Quraya', should try to establish a QIZ
and focus clearly on its target export markets. Israel would
be undoubtedly remain a target export market for agricultural
and other goods. Peres said he also advised Quraya' to
exploit the resort potential of Gaza beaches. Israeli Arabs
-- 300,000 of whom already vacation in Jordan each year --
and West Bank Palestinians would be likely visitors to Gaza
resorts.


11. (C) Peres identified one of the key economic priorities
in Gaza during the run-up to disengagement as the handover
and development of greenhouses. Up to 30,000 dunams (about
7,500 acres) of Gaza land could potentially be dedicated, he
said, for greenhouses, each of which can employ 45
Palestinians. (Note: Peres did not say how many greenhouses
per dunam he was calculating. About 9,000 Palestinians are
currently employed in Gaza settlement greenhouses.) Of the
30,000 dunams, about 4,000 to 4,500 dumans of land already
have settler-built greenhouses. Most employees in these
greenhouses are Palestinians. The Peres center is willing to
help build greenhouses on another 10,000 dunams. An
additional 15,000 dunams is also available for greenhouse
development, he claimed.


12. (C) The key greenhouse problem connected to
disengagement, Peres continued, is ensuring that greenhouses
already in place remain intact. He suggested as a
transitional measure using an intermediary caretaker, who, he
proposed, could be the Netherlands. The GONL, he said, is
already providing financial support to the Peres Center for
an agricultural marketing program in Gaza, and the
Palestinians, for the first time, appear inclined to agree to
a transitional arrangement with a third party. Peres said he
is discussing this proposal with the Dutch, although he noted
his general frustration in dealing with Europeans, who almost
never, he said, live up to their pledges of support. He
recounted that he complained in his recent meeting with
President Chirac that France pledged $60 million for the
Palestinians, but never delivered. Chirac said he would make
sure the money is transferred. Peres acknowledged that it is
not his job to represent Palestinian interests, but lamented
that the PA does not do enough for itself.


13. (C) Another key immediate issue Peres identified, both
for the West Bank and Gaza, is passages. He expressed regret
that passages into and out of the territories are "not open
enough" and that too many roadblocks within the territories
still exist. He said he raises the issue regularly with
DefMin Mofaz, who, he commented, appears "to have his heart
in it" but is constrained by security threats and a shortage
of budget resources. One key problem to resolve at all the
passages, including the prospective Gaza sea port, is the
inspection regime. Given a PA desire to remain within the
Israeli customs envelope, Israeli inspectors would have to
serve both a security and economic function.


14. (C) Peres said he reminded Quraya' in their April 21
meeting that the GOI had agreed to open a sea port, but not
an airport, at the February Sharm al-Sheikh summit. Given
that the sea port will take about three years to build, Peres
said he urged Quraya' to focus on rebuilding the rail link
between Gaza and Ashdod, which would cost, he said, only NIS
60 million. He said he would raise the issue of financing
the project with Quartet envoy Wolfensohn.


15. (C) Welch asked Peres whether the sort of progress he
envisages at the passage points would be possible on the
Gaza-Egypt border if the IDF remains in the Philadelphi
Strip. Peres said the IDF must withdraw from Philadelphi,
although it needs help from Egypt to do so. He characterized
GOE performance so far in negotiations over the deployment of
its border guards to the Gaza border as "one step forward,
two steps back." In any case, he said, another passage
point, perhaps at Rafiah or Nitzana, should be opened.

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Galilee/Negev Development
--------------


16. (C) Peres said the GOI would not normally ask the U.S.
for financial assistance in developing the Galilee and Negev
regions, but is doing so because time for these projects is
now short, given the imperative of relocating settlers. U.S.
assistance is needed for job creation and infrastructure. He
praised Israeli settlers, "even though we may not like them,"
as young, devoted "pioneers" who "did their job" in the West
Bank and Gaza, even though the settlement enterprise turned
out to be "a waste." He called them one of four waves of
pioneering spirit in Israeli history, the others being the
early members of the kibbutzim and moshavim, the founders of
the IDF, and the developers of Israel's high-tech industry.


17. (U) A/S Welch cleared this message.

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