BASSEY UPDATES ON DISENGAGEMENT LEGISLATION,

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 000286

SIPDIS

E.O. 12958: DECL: 01/14/2015
TAGS: ECON PREL KWBG IS GAZA DISENGAGEMENT SETTLEMENTS
SUBJECT: BASSEY UPDATES ON DISENGAGEMENT LEGISLATION,
NEGOTIATIONS WITH SETTLERS AND ASSET TRANSFERS


Classified By: Economic Counselor William Weinstein for reasons 1.4 (b)
and (d).


1. (C) Summary. Yonatan Bassey, director of the
Disengagement Authority (SELA),provided Economic Counselor
and Economic Officer on January 12 with updates on
disengagement planning. Bassey reported that the evacuation
legislation should go to its third reading in the Knesset in
late January or early February, and that compensation for the
settlers may rise by 20 percent. Bassey continued that more
settlers are now coming to negotiate with SELA, either on
their own or through lawyers, and that the GOI is prepared to
help those who want to move as groups by establishing new
moshavim for them to move to. He also stressed the
importance of pushing the Palestinian Authority (PA) to make
a decision about how assets should be transferred,
particularly greenhouses in the Gaza Strip. While the the
GOI is willing to leave any necessary equipment in the
greenhouses, time may be running out to convince the settlers
that this is beneficial to them. End summary.

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Status of Disengagement Legislation
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2. (C) Yonatan Bassey, director of the Disengagement
Authority (SELA),told Economic Counselor and Economic
Officer on January 12 that he expects the disengagement
legislation to go to the Knesset for its third reading during
the last week of January or the first week of February, and
that his staff meets with the Knesset Finance Committee every
day to discuss the law. Bassey reported that compensation
may rise by 20 percent because the GOI is under heavy
pressure from the settlers and MKs to increase the amounts.
He opined, however, that compensation should not be
exaggerated because Palestinians will still fire Qassam
rockets at Sderot and the GOI cannot be seen as compensating
the settlers in excess while residents of this city and
others remain underfire.


3. (C) In response to EconCouns's question, Bassey replied
that there will be a separate budget for disengagement
because the left is against the 2005 budget but for
disengagement, while the right is for the 2005 budget but
against disengagement. Bassey said the 2005 budget should be
approved by the end of February and the disengagement budget
should be approved in March.

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Settlers are "Coming Around"
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4. (C) Bassey continued that he has been more optimistic
about disengagement over the past two or three weeks since
negotiations have been going well with the settlers. He
explained that the settlers' denial about eventual evacuation
is dissipating, and as a result, more and more are coming to
talk to SELA. According to Bassey, many settlers have talked
to SELA through their lawyers because they are afraid of
being seen negotiating with the GOI by other settlers.
Despite this, Bassey has met with about 20 groups of settlers
who want to move together, which he explained was easier for
him to work with, and said that he would have contracts
signed with half of them by the end of the month. He
concluded that he wrote a letter to the settlers three months
ago telling them to "wake up" and go talk to him so they
could find a solution together, and that they were now coming
around.


5. (C) For those settlers who want to move as a group,
Bassey said the GOI would help by preparing two or three
moshavim with temporary caravans for them to move to until
their permanent houses are built. He continued that some in
the end may not choose to go to the moshavim at all, but that
psychologically it would be better for them because they
would be absorbed into their communities much faster. He
commented that a contract with the settlers from Ele Sinai
who want to move together just south of Ashkelon is "90
percent done."


6. (C) Bassey characterized the settlers from the Gaza Strip
as 70 percent religious but of "many varieties" because they
follow different rabbis. He hoped that the rabbis would be
able to convince the settlers to evacuate peacefully, but
acknowledged that two settlements, Kfar Darom and Netzarim,
"will not budge" and may be left to the end. He
characterized Netzarim as the eventual "Castle Netzarim"
where most hold-outs will congregate. Bassey explained that
the other 30 percent of the Gaza Strip settlers moved there
for a better life and are not "so fanatic."


7. (C) Moving on to compensation prepayments, Bassey opined
they were not attractive enough to split in two or three
tranches so most settlers would not leave early. In
addition, many settlers will have to wait for the end of the
schoolyear -- which has been moved up from the end of June to
the end of May for the Gaza Strip -- so even if their new
homes are built, they will not go sooner. Bassey concluded
that June would be a big month for evacuation.

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The Ball is in the PA's Court
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8. (C) With respect to the Thai workers who are leaving the
Gaza Strip, Bassey explained that they are only 10 percent of
the manpower there and farms could continue to function with
just Palestinian laborers. He continued that the bigger
problem is the transfer of the greenhouses after the
evacuation. He said he wants growers to leave the
greenhouses intact -- with their equipment -- for the
Palestinians in order to avoid a humanitarian disaster, but
that the U.S. should push the Palestinian Authority (PA) to
decide how it wants the assets transferred. Bassey continued
that this was not the GOI's problem, and that now that Abu
Mazen has been elected, he needs to make a decision. He said
the GOI would be willing to compensate the settlers for 40
percent of the value of the equipment if the PA decides it
wants to keep it, and that the Ministry of Agriculture could
train the Palestinians if needed.


9. (C) Bassey continued with a discussion of businesses in
the Erez Industrial Zone, saying some would close altogether
and others would relocate to Ashkelon or Sderot. Most will
close, however, because they will not be able to compete
since their labor costs will be much higher in Israel.
Bassey concluded that the businesses in Erez are a much
smaller problem compared to the relocation of homes.

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