1. (C) Summary: Ministry of Defense Political-Military
bureau head Maj. Gen. Amos Gilad told EconCouns that the high
level of USG and international community actors involved in
disengagement planning -- including Quartet Special Envoy
(QSE) Wolfensohn, Security Coordinator Gen. Ward, and A/S
Welch -- has enabled the GOI to work for the first time on
security and economy together. He criticized PA President
Abbas for taking little action against terror and for
adopting a policy of political containment and adaptation
towards Hamas. While the PA is foundering and Hamas is
poised to take additional power in the upcoming PLC
elections, he said, the PA can be reinvigorated if the "old
guard" retires and new young Fatah leaders come to the fore.
In his view, the GOI and the PA must use the current quiet
interlude in their "collision course" to secure a better
economic future for Gaza, including international investment
in agribusiness and the crossings. End summary.



--------------------------

---
USG and International Involvement Creates Unique Opportunity


--------------------------



--------------------------





2. (C) Maj. Gen. Amos Gilad, head of the Ministry of
Defense,s (MoD) Political-Military bureau, told EconCouns
and USAID Country Director June 24 that the high-level
involvement of USG and international officials in
disengagement planning has enabled the GOI to more
comprehensively address civil and security issues. &This is
the first time we can really work based on the principle that
there is no security without economy, and no economy without
security,8 he said. Quartet Special Envoy Wolfensohn has
the unique ability to shape a brighter economic future for
Gaza, he explained, while Security Coordinator General Ward,
NSC director Abrams, and A/S Welch represent &the top levels
of the U.S. government8 on security and strategic policy.
Gilad expressed his doubt that such an opportunity would
arise again.



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Abbas and PA Foundering But Not Hopeless


--------------------------





3. (C) In Gilad,s view, PA President Mahmoud Abbas is
sincere in his desire to combat terrorism, but is not using
his considerable influence in order to dismantle terrorist
infrastructure because he believes that the current "period
of calm" is sufficient. On Hamas, Gilad said Abbas prefers
containment and adaptation over direct confrontation, a
policy that will prove problematic in the long run since
Hamas remains committed to armed struggle against Israel and
is using its civil institutions to support its terrorist
activity. Gilad complained that while "everyone, including
the international community" knew that wanted terrorist Hasan
Madhum was behind the recent attempted suicide bombing at a
Beer Sheva hospital by Jabaliya resident Wafa al-Biss, Abbas
and the PA have done nothing to catch him. Despite Abbas's
75 percent approval rating amongst Palestinians, Gilad
predicted that he will be forced by circumstance to resign
unless he takes concrete actions now to strengthen himself.
Without Abbas,s directive, he said, the security services
cannot act against terrorism. "The U.S. gives Abbas a kind
of 'Chapter 11' immunity from criticism," Gilad asserted,
"but Israel needs a real partner, not a symbol."



4. (C) Gilad described the PA as weak, charging that "the
PA doesn,t need a Prime Minister, and Abu Ala,a is
ineffective and dangerous," that Finance Minister Salaam
Fayyad is intelligent and honest but stands alone, and that
Civil Affairs Minister Dahlan is influenced by his corrupt
trade interests, and must be pressured by the U.S. to take on
more responsibility for Gaza's future. Hamas's influence is
increasing in Gaza not because the Palestinian people are
extremist or religious, he explained, but because they hate
Fatah's corruption. According to Gilad, Hamas has the
potential to win over one third of PLC seats in the upcoming
elections. In order for Fatah to have a chance, he said,
Fayyad will have to "send all the old idiots" to pension, and
the PA will have to allow a new cadre of young, energetic
leaders to come to the fore.



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--
Security and Economy in Post-Disengagement Gaza


--------------------------

--



5. (C) Gilad was pessimistic about longer-term GOI-PA
coordination and negotiations, arguing that the two sides are
on a "collision course," and must use the current interim
period of calm to resolve as many technical and security
issues as possible to ensure disengagement's success. In his
view, the PA will require significant additional economic
assistance following disengagement, particularly directed
toward Gaza's agriculture sector. He asserted that the
settlement greenhouses are a potential "goldmine" for the
Palestinians, and expressed frustration with what he termed
the PA's lack of initiative in ensuring they are transferred
intact. Gilad also underscored the need for improvements at
the Gazan border crossings, stating that Karni terminal used
to process upwards of 800 trucks per day during the period
when he served as Coordinator of Government Activities in the
Territories, while it is "lucky to process 200 now." (Note:
Several GOI and Gazan private sector contacts have said that
Karni is now processing approximately 600 trucks per day, but
that imports from the West Bank are routinely delayed up to
two weeks at the crossing. End note.) On utilities, Gilad
argued that the PA is ready to take on responsibility for
supplying water, gas, and electricity, but its continued
insistence on politics rather than practicalities has
prevented this. On Rafah and the Philadelphi corridor, Gilad
said that the IDF will only leave the area if the PA
demonstrates it can cope with terrorism. Contrary to press
reports, he noted, the Israeli-Egyptian agreement currently
in the approval process will not include the IDF's departure
from Philadelphi.



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Extra Bodies in Sa Nur No Problem


--------------------------





6. (C) In response to a question, Gilad asserted that he is
not worried about an influx of settler youth and other
opponents of disengagement into the northern West Bank
settlement of Sa Nur. &Withdrawal will be carried out on
schedule, regardless of whether it is hard or easy,8 he
asserted, expressing confidence that the IDF,s field
commanders will be capable of handling the situation.

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