SHARON TO CODELS: WE NEED TO BUILD IN THE

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 002761

SIPDIS

E.O. 12958: DECL: 05/03/2010
TAGS: IS KPAL OREP PREL XF SETTLEMENTS
SUBJECT: SHARON TO CODELS: WE NEED TO BUILD IN THE
SETTLEMENT BLOCS AND PLEASE LEAVE US ALONE


Classified By: Ambassador Daniel C. Kurtzer for reasons 1.4 (b) and (d)

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Terrorism and Palestinian Authority Performance
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1. (C) During a May 2 meeting with Senator Bill Frist and
Senator Joseph Lieberman, Prime Minister Sharon described in
familiar terms his concerns about the failure of the
Palestinian Authority to dismantle terrorist infrastructure.
Sharon said that he personally remains committed to all that
he has promised, including implementation of the
disengagement plan, and that if Palestinians implement their
commitments on dismantling terrorism, it will be possible to
move back to the roadmap. He said he had been ready for
painful compromises for peace, but could not make any
compromises in the face of Palestinian terrorism.


2. (C) Sharon said that Palestinian terror groups continue
preparing for acts of terrorism. He noted that Israel had
captured a suicide bomber a few days before. Although the
volume of terrorism has declined, the reality is that
Palestinian President Abbas committed a major mistake by
promising not to take steps against terrorist groups if they
abided by the "tahadiya" or period of calm that precedes a
ceasefire. Sharon said the PA continues to make declarations
but fails to act. Smuggling continues, military industries
are working, and Palestinian terror groups are training. The
Palestinians are taking advantage of the fact that Israel is
not taking pro-active steps against them. Sharon asserted
that nothing will happen if terrorism does not stop and if
terrorist organizations are not dismantled.

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Disengagement Coordination
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3. (C) Sharon said he remains ready to coordinate
disengagement with the Palestinian Authority and, in fact,
some contacts have begun following U.S. pressure on the
Palestinians. He said it is imperative for the PA to
understand that disengagement should not occur under fire,
for if the IDF and settlers are fired upon, Israel will have
to react in a very harsh way. The Palestinians need to be
prepared to deploy their forces, take over the assets that
Israel leaves behind and prevent radicals from asserting
control in Gaza.


4. (C) Sharon complained that Egypt is not doing enough to
prevent smuggling into Gaza. He said he had asked Mubarak in
their last conversation to make a greater effort against
smuggling but so far there has been no change. This is
making it more difficult for Israel to contemplate leaving
the Philadelphi strip.


5. (C) In response to a question, Sharon said that Israel
has helped President Abbas in tangible ways, for example,
releasing 500 prisoners and allowing deportees to return.
Sharon has asked Vice Prime Minister Peres to work with
Palestinians on such issues as building up infrastructure,
social security, industrial zones, desalination and power
stations. Sharon said he personally likes the idea of
providing a social security net for poor Palestinians. On
the other hand, Sharon said he is concerned about Hamas'
participation in elections and the likelihood that Europe
will remove Hamas from the list of terrorist organizations
once Hamas joins the Palestinian Authority.

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Settlements
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6. (C) Senator Lieberman asked about Israeli construction
in Ma'ale Adumin and whether more coordination is needed
between the U.S. and Israel to define acceptable settlement
activity in agreed settlement blocs. Sharon responded that,
since 1967, the U.S. has always objected to Israel's building
of Jewish communities in the West Bank, Gaza and Golan
Heights. At the same time, all Israeli governments, on the
left and on the right, have felt it important from a
strategic perspective, to hold on to at least part of these
areas. Today, more than 250,000 Jews live in areas that were
formerly under Jordanian occupation; this is the same area
that historically was the cradle of the Jewish people.
Sharon said the U.S. and Israel had agreed last year that
settlement construction would be permitted within the lines
of built-up areas in settlements, but the two sides did not
discuss how this applied within the settlement blocs. Sharon
said he believes that Israel should be permitted to build
within the outer line of construction of the settlement blocs
so as to create contiguity for those areas that will always
remain within the State of Israel. He said there should not
be a problem for Israel to build within the blocs.


7. (C) Sharon asked rhetorically why in this case has
Israel not defined the outer limit of the settlement blocs.
He said that he does not know if or when Israel will be able
to move forward, but he does know what the outer circle is of
the settlement blocs. Sharon repeated that when it comes to
the settlement blocs and to areas which are state land,
Israel should be able to build inside those areas. The U.S.
has told him not to expect American support for this
position, but "in the meantime, we build." Sharon said he is
in a complicated internal situation in which his political
problems are made harder each time the U.S. criticizes him
about settlement construction. Accordingly, Sharon said, "we
need quiet and we need to be left alone."


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Northern Front
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8. (C) Sharon said that Syria has not evacuated all of its
forces from Lebanon and continues to look for ways to
maintain its influence and control. The Syrians and Iranians
are relying on and working through Hizbollah. Sharon said he
fears that if the Syrians and Iranians are allowed to
continue their activities, Lebanon could lose this
opportunity to become an independent, democratic country.
Sharon said that Lebanese elections should be held as soon as
possible and that the Lebanese government should then
confiscate all Hizbollah weapons. Hizbollah, he said, cannot
be a political party bearing weapons.


9. (C) Sharon asserted that preparations are underway to
move the headquarters of Palestinian terrorist organizations
from Damascus to Lebanon. He thought the new headquarters
would be located in Palestinian refugee camps. (Note: In a
separate meeting with Senator Lieberman later in the day,
Israeli Military Intelligence BG Kupperwasser said there is
evidence that Palestinian "assets," i.e. people and
equipment, are moving from Syria into refugee camps in
Lebanon, but that Palestinian terror headquarters remain in
Damascus).

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Iran
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10. (C) Sharon urged that the Iranian issue be brought to
the Security Council as soon as possible. He said Europe has
already accepted the inevitability of Iran's developing
nuclear weapons, and the U.S. seems to be relying on European
diplomacy vis-a-vis Iran. He said it is a very dangerous
situation to be dealing with a country that speaks openly of
its goal to eliminate the State of Israel. For change to
occur, Iran needs to be under pressure. The Iranian people
will push for change in Iranian policy only when they begin
to suffer the effects of an economic boycott or financial and
political pressure.


11. (U) Codel Frist and Codel Lieberman did not clear this
message before their departure.

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