PERES ADVISOR AND NSC ADVISOR CITE "SLOWDOWN" IN

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 002999

SIPDIS

E.O. 12958: DECL: 05/16/2015
TAGS: PREL KWBG ECON IS GAZA DISENGAGEMENT
SUBJECT: PERES ADVISOR AND NSC ADVISOR CITE "SLOWDOWN" IN
DISENGAGEMENT TALKS WITH PA

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


1. (C) Vice PM Peres advisor Einat Wilf and NSC advisor Gabi
Blum told EconCouns in separate meetings that a "slowdown" is
taking place in joint GOI-PA technical negotiations, in part
because of a proposed 70-point agenda the PA orally presented
to the GOI that touches on "final status" issues such as safe
passage, and raises legal questions such as the location of
Gaza borders following withdrawal. It will take at least
three weeks, Wilf said, for the GOI to determine its
positions and respond to the PA on these issues. Wilf also
emphasized that while the PM will continue publicly
disavowing Israeli responsibility for Gaza
post-disengagement, Wilf said, the GOI will not seek
international recognition that occupation has ended. Both
Wilf and Blum noted several areas of continued disagreement
between the GOI and the PA, including the GOI,s planned West
Bank-Gaza rail link; the PA,s continued requests for an
airport despite their Sharm el-Sheikh agreement to a seaport
instead; and "mixed messages" from PA leadership on whether
the GOI should demolish settlement houses or transfer them
intact. Wilf said PA Civil Affairs Minister Dahlan is
unwilling to allow his technical staff to meet with their
Israeli counterparts until he has come to agreements on
principles and guidance for the negotiations. End summary.

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PA's List Requires Internal GOI Talks
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2. (C) Einat Wilf, foreign policy advisor to Vice PM Shimon
Peres, told EconCouns May 10 that the GOI must meet
internally to determine its position on several questions the
PA raised in early May as part of an orally-presented 70-item
agenda for negotiations. It will take at least three weeks,
she said, for the GOI to prepare its response to the PA.
These "sticky issues" include the legal status and accepted
borders of the Gaza Strip following disengagement, details of
the potential continuation of the customs union, the status
of settlements in the northern West Bank, and "safe passage"
for goods and people between Gaza and the West Bank. On the
Gaza Strip, Wilf asserted that the GOI will not seek
international recognition of "the end of occupation" once
troops and settlers have withdrawn, although PM Sharon will
continue to state publicly that Israel will not be
responsible for what happens in Gaza post-disengagement. On
the customs union, she said the GOI must determine its
response to the PA,s preference to maintain it and be
permitted to carry out customs duties itself. There is a
lingering internal dispute over the value of a third party to
carry out customs duties within the Israeli envelope, she
added, with the Ministry of Industry, Trade, and Labor and
the Ministry of Finance reluctant to concede this authority
and most other ministries prepared to do so. On the northern
West Bank settlements, Wilf explained that the GOI is
reluctant to adhere to conventional area demarcations of A,
B, or C following withdrawal.


3. (C) On "safe passage," NSC advisor Gabi Blum said she
expects that PA President Mahmud Abbas will raise the GOI,s
planned West Bank-Gaza rail link during his upcoming visit to
Washington, and will likely express his concern that a rail
link will prejudice final status discussions of safe passage.
Wilf emphasized that the GOI is currently not considering
alternatives to the back-to-back method of shipping, but
intends to increase capacity at the border crossings via new
container scanners. Wilf questioned whether any of the USD
50 million earmarked for GOI crossings improvements could go
towards the purchase of these scanners, noting that the
timing of the supplemental may make this idea unfeasible.

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PA Renews Request for Seaport
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4. (C) Blum said that PA Civil Affairs Minister Muhammed
Dahlan had recently told NSC director Giora Eiland that GOI
flexibility on "safe passage" and a fixed-wing airport in
Gaza are pre-conditions to beginning more intensive technical
coordination. In discussions last week, Blum said, Dahlan
had expressed PA concurrence with Eiland's assertion that
questions of safe passage cannot be discussed at this time,
and that discussions must focus on technical solutions to the
need to move goods and people. Dahlan's apparent change of
tune, she said, was most likely due to opposition from PM Abu
Ala'a, who wishes to keep "safe passage" on the table for
President Abbas' Washington trip. In the GOI's view the
airport issue in particular remains a non-starter, she said,
on which any forward movement would have to come from the
PM,s level. Wilf said that the PA "does not see the
difference" between building a seaport and an airport, and
has revitalized the push for fixed-wing service despite
reportedly accepting the PM,s Sharm el-Sheikh refusal to
bring this issue forward.

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PA Position on Assets Unclear
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5. (C) Wilf and Blum emphasized what they termed recent
inconsistencies in the PA,s public position on the transfer
of settlement assets. Wilf said that while "PA officials at
all levels" had assured Vice PM Peres that the PA would
"accept whatever the GOI decides to do" regarding the
disposition of settlement houses in tandem with the pullout,
Negotiations Affairs Minister Saeb Erekat has recently
contradicted this by stating publicly that the PA would
prefer demolition and removal of rubble to intact transfer.
His statements, Blum said, make it difficult for PM Sharon to
make any changes on the planned transfer of assets. Blum
noted that the PA made a formal request to the GOI for the
settlement asset inventory that included things the GOI
cannot deliver for legal and policy reasons, such as the
accounting for profits Israeli companies had made in Gaza,
but both Blum and Wilf emphasized that the GOI will provide
as much information it can in the near future.


6. (C) Comment: While Peres advisor Wilf expressed somewhat
more optimism than NSC advisor Blum regarding the potential
for progress on GOI-PA negotiations, it seems clear there
will be no talks for at least three weeks. Even then,
according to Wilf and Blum, Dahlan has stated to the GOI that
he wishes to keep discussions centered on the PA's agenda,
thus it will likely take additional time for the parties to
address the complex but key technical issues surrounding
passages and assets.

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