ISRAELI HOUSING MINISTER DISCUSSES SETTLEMENTS AND

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 004284

SIPDIS

E.O. 12958: DECL: 07/10/2015
TAGS: PREL PGOV KWBG KPAL IS GAZA DISENGAGEMENT SETTLEMENTS
SUBJECT: ISRAELI HOUSING MINISTER DISCUSSES SETTLEMENTS AND
DISENGAGEMENT WITH STAFFDEL TALWAR

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


1. (C) Summary: Staffdel Talwar met with Minister of Housing
Isaac Herzog on July 6 at the Knesset to discuss Israeli
settlements in the West Bank and the disengagement process.
Herzog said that he had stopped all new residential
construction beyond the green line, but intends to eventually
approve new projects in Ma'ale Adummim and Betar Illit.
Speculating about the future, Herzog admitted that the
security barrier "will create the possible final border for
the State of Israel," and said that he foresees at least part
of the E-1 area within the fence. Herzog told staffdel that
the GOI will have housing available for every Israeli
evacuated as part of the disengagement process, but he
expects that some settlers will move to shantytowns and tents
to make a political point. Herzog said that disengagement
has thrown Israeli politics into "total disarray" and
predicted that some parties in the Knesset will split as a
result of the process. He requested U.S. support for
disengagement and U.S. assistance in cautioning the
Palestinians that they must end terror attacks against
Israel. Herzog also noted that at least one GOI minister is
trying to prevent participation by Hamas in the upcoming
Palestinian legislative elections. End summary.

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Outposts, Settlements, and the Security Barrier:
Residential Construction Freeze - for now
-------------- ---


2. (C) Herzog maintained that he had "frozen all construction
in the illegal outposts" and had taken steps to stop illegal
construction in settlements. Herzog said that he has not
allowed new construction on one residential unit beyond the
green line since January 2005. He admitted that the GOI
continues to work on a number of infrastructure projects,
calling them the result of contracts "signed years ago."
Herzog noted that Sharon cannot tackle the problem of illegal
outposts and settlements at the present time because the
Prime Minister cannot afford to "split his forces" during the
traumatic disengagement process.


3. (C) Speculating about the future, Herzog admitted that the
security barrier "will create the possible final border for
the State of Israel." He said the GOI intends to eventually
build 700 new housing units in Ma'ale Adummim and Betar
Illit, claiming that Ma'ale Adummim "needs a critical mass to
sustain itself." He called this policy an improvement over
previous GOI plans, contending that it focuses Israeli
activity on two Israeli settlements and is "accepted all over
the world," including Geneva. Herzog said that current plans
for the E-1 area are on hold while zoning issues are studied
and maintained that the future of E-1 could be settled
"later," possibly by dividing the area between the PA and
Israel. He listed his two main goals for E-1 as maintaining
a "lifeline to Ma'ale Adummim" and providing contiguity for
Palestinians transiting between the northern and southern
parts of the West Bank. He noted that once a road for the
Palestinians (route 80) is complete, Israel intends to "fence
in the block."

--------------
Housing Available for Every Evacuee
--------------


4. (C) Herzog told staffdel that the GOI will have 1,550
housing options for evacuated settlers by the start of
disengagement, enough for every evacuee. He said the
evacuated settlers will eventually have three options:
housing in new villages and towns currently under
construction; housing in the 350 units planned for settlers
from Gush Katif in the Nitzana area between Ashkelon and
Ashdod; or housing in one of 850 apartments leased throughout
Israel. Herzog predicted that some settlers will move
nevertheless to shantytowns and tents in order to make a
political point in their "psychological battle" against
disengagement.

-------------- --------------
Disengagement: Israeli Politics, U.S. role, and the PA
-------------- --------------


5. (C) Even though he expects that terror attacks will
continue after disengagement, Herzog said that the Labor
Party strongly supports the process. He noted that this
policy is consistent with Labor's long-held belief that the
only way to maintain a viable democratic Jewish state is to
divide the land with the Palestinians. Herzog said that
disengagement has thrown Israeli politics into "total
disarray" and left the political scene "on the verge of an
earthquake." The issue has revealed deep internal divisions
within many of the parties represented in the Knesset, he
added, and will lead to splits in United Torah Judaism, the
National Union, and the National Religious Party. He
admitted that his own party, Labor, is hampered by the "huge
price" it paid for supporting Oslo and a vicious leadership
battle. In Herzog's view, PM Sharon is not in as much
political difficulty as reported, because Israeli voters
"like people who are tough."


6. (C) When asked about a U.S. role in disengagement, Herzog
requested political support. He also asked the USG to let
the Palestinians know -- "without threatening them" -- that
Israel is capable of retaliating many times over for any
terrorist attacks.


7. (C) Herzog said that the GOI fully supports PA President
Mahmud Abbas, but is concerned that he is not producing
results. Herzog does not see the PA as a transitional
administration for Hamas, because he believes that a large
silent majority of Palestinians supports the current policy
of maintaining calm with Israel. He noted that Justice
Minister Tzipi Livni is working to exclude Hamas from the
upcoming legislative elections, arguing that the Oslo accords
do not permit anti-Israeli parties to compete. Herzog noted
that the GOI needs to work with the international community
in deciding how to handle Hamas. In a broader discussion on
democratization in the region, Herzog told staffdel "you have
to accept extremists if they are elected."


8. (U) This cable was cleared by staffdel.

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