ISRAEL MEDIA REACTION

UNCLAS SECTION 01 OF 08 TEL AVIV 005742

SIPDIS

STATE FOR NEA, NEA/IPA, NEA/PPD

WHITE HOUSE FOR PRESS OFFICE, SIT ROOM
NSC FOR NEA STAFF

SECDEF WASHDC FOR USDP/ASD-PA/ASD-ISA
HQ USAF FOR XOXX
DA WASHDC FOR SASA
JOINT STAFF WASHDC FOR PA
USCINCCENT MACDILL AFB FL FOR POLAD/USIA ADVISOR
COMSOCEUR VAIHINGEN GE FOR PAO/POLAD
COMSIXTHFLT FOR 019

JERUSALEM ALSO FOR ICD
LONDON ALSO FOR HKANONA AND POL
PARIS ALSO FOR POL
ROME FOR MFO

E.O. 12958: N/A
TAGS: IS KMDR MEDIA REACTION REPORT
SUBJECT: ISRAEL MEDIA REACTION


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SUBJECTS COVERED IN THIS REPORT:
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1. Mideast


2. North Korea's Announced Renouncement of Nuclear
Weapons

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Key stories in the media:
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Leading media (lead stories in Maariv and Yediot)
reported on political developments around PM Sharon six
days ahead of the Likud Central Committee meeting, as
his associates have initiated contacts to establish a
new party. Maariv reported on a rift among Sharon
associates. According to the newspaper, Sharon is
considering declaring today, in a general, non-binding
statement, that he will remain in the Likud. Yediot
reported that Sharon and his associates are courting
public figures such as Vice PM and Finance Minister
Ehud Olmert, former IDF O/C Southern Command Doron
Almog, former justice minister Dan Meridor, and former
Shin Bet head Avi Dichter, in order to form an
alternative list for the Knesset.

Ha'aretz quoted Israeli defense officials as saying
Monday that Egypt and the PA have sealed the Gaza-Egypt
border. The newspaper reported that the officials gave
most of the credit for this to PA forces, noting that
Egypt has apparently still not finished deploying its
forces. Yediot cited Israel's anger over the PA's
intention to open the Rafah terminal to the passage of
people next week.

Ha'aretz Washington correspondent Shmuel Rosner
portrayed incoming U.S. Ambassador to Israel Richard H.
(Dick) Jones. Rosner says that senior Israeli
officials who are visiting Washington during the
current period will soon know Jones, whom they
characterize as a no-nonsense person. Rosner writes
that Jones fits into the pattern of senior State
Department officials who are "polite professionals, but
have no special feelings toward Israel, including
negative ones."

The media highlighted North Korea's pledge to end its
nuclear weapons programs. Jerusalem Post quoted
President Bush as saying that this was a positive step,
but that he expressed some skepticism about whether
Pyongyang would live up to its promises. Israel Radio
quoted a State Department spokesperson as saying that a
new demand by North Korea that the U.S. provide it with
two nuclear reactors goes beyond Monday's agreement.
Ha'aretz cited Israel's hope that North Korea's
announcement will increase the pressure applied on Iran
at the International Atomic Energy Agency that is
convening in Vienna.

Israel Radio quoted FM Silvan Shalom as saying that
Iran might only be six months away from having nuclear
weapons. Leading media reported that Shalom held
"positive" (Jerusalem Post) meetings with the foreign
ministers of Egypt, Tunisia, and Turkey in New York.
Jerusalem Post and Israel Radio quoted Shalom's
spokesman, Ilan Ostfeld, as saying, "The Tunisian
minister said Tunisia is a moderate country, but it
will never be first or last to have contact with
Israel." Jerusalem Post and Israel Radio also reported
that Turkish FM Abdullah Gul asked Israel to refrain
from blaming PA Chairman [President] Mahmoud Abbas and
stopping the peace process if any Palestinians
perpetrate a terror attack. Yediot reported that
Shalom will deliver a speech to the UN General Assembly
today.

Ha'aretz reported that former U.S. president Bill
Clinton has announced in New York, at his international
economic conference, the Clinton Global Initiative,
that he is seriously examining setting up a new USD 300
million fund to ensure investments in Gaza and
neighboring areas. Leading media reported that on
Monday, the EU announced details of new aid for the
Palestinians, raising the 2005 total to USD 342.8
million on Monday. Jerusalem Post recapped that if
assistance from the 25 EU governments is added,
Europe's total annual aid to the Palestinians amounts
to some USD 612.15 million. Yediot reported that,
stunning the [building] Contractors Union, Defense
Minister Shaul Mofaz announced on Monday that the
employment of Palestinian laborers in Israel will be
terminated in the middle of 2008.

Last night, Channel 10-TV revealed that Sharon attended
a dinner in New York on Sunday night, at which more
than USD 150,000 was raised for campaign expenses in
the Likud primaries. The report raises suspicion of an
alleged violation of the Parties Law. Jerusalem Post
reported that sources close to Sharon vehemently denied
the report.

Ha'aretz (banner of English Ed.) cited a document
unveiled by Adalah - The Legal Center for Arab Minority
Rights in Israel, according to which the Justice
Ministry's Police Investigations Department allowed
four of the people killed during the Arab riots of
October 2000 to be buried without an autopsy, even
though autopsies could have helped determine which
policemen fired the fatal bullets. On the other hand,
Ha'aretz quoted retired Haifa District Court judge
Shalom Brenner as saying that the Israeli Arab
leadership (the Higher Arab Monitoring Committee) did
not cooperate with the preliminary investigative
committee he had headed in 2000. Maariv reported that
the Higher Arab Monitoring Committee will hold a
protest rally opposite the Prime Minister's Office on
Monday.

Ha'aretz reported that on Monday, the Knesset's Finance
Committee approved an increase of 1.5 billion shekels
(approximately USD 330 million) in the payouts to
settlers under the disengagement plan, bringing that
budget to 3.5 billion shekels (approximately USD 770
million).

Jerusalem Post cited the Manufacturers Association of
Israel as saying Monday that business figures from
Israel and the PA will meet Wednesday in Istanbul to
discuss a Turkish initiative to establish an
international company to manage the Erez industrial
park, just outside the Gaza Strip. Leading media
reported that National Infrastructure Minister Binyamin
Ben-Eliezer met Monday with PA and Jordanian
counterparts at the regional energy conference held in
Tel Aviv. Jerusalem Post reported that Ben-Eliezer and
PA Energy Minister Azzam Shawwa agreed that Israel
would provide the Gaza Strip with 20 million cubic
meters of water, and that they discussed further
cooperation in energy matters. Jerusalem Post cited
Ben-Eliezer's ministry as saying that the contacts
would continue today.

Maariv reported that Bank of Israel Governor Stanley
Fischer and Finance Ministry Director General Yossi
Bachar will lobby the International Monetary Fund
during its annual convention in New York during the
weekend to have Israel join the "group of 31
industrialized countries." The newspaper writes that
American sources have repeatedly promised that Israel
would join the group when additional countries do so,
but that it is still not certain when this will happen.
Leading media reported on, and Globes bannered,
Citigroup Inc.'s withdrawal of its recommendations on
Israel's stocks, and the subsequent falling of Israel's
benchmark index (the Tel Aviv-25 Index).

Maariv reported that Israel will donate USD 50,000 to
four famine-stricken African countries -- Burkina Faso,
Mauritania, Mali, and Niger. The newspaper writes that
it appears that the low sum is "more destined to
improve Israel's image in the world than to Niger's
hungry children."

Georgian FM Salome Zourabichvili was quoted as saying
in an interview with Ha'aretz that Russia will again
become an empire.

Israel's main radio stations and leading news web sites
reported that Nazi hunter Simon Wiesenthal died in
Vienna this morning at 96.


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1. Mideast:
--------------

Summary:
--------------

Diplomatic correspondent Aluf Benn wrote in
independent, left-leaning Ha'aretz: "A serious public
discourse is already required about whether the two-
state solution has evaporated with the disengagement's
implementation."

Uzi Arad, who was a senior advisor to former prime
minister Binyamin Netanyahu, wrote in mass-circulation,
pluralist Yediot Aharonot: "The declaration [Sharon]
made from the stage of the UN hints to future
additional concessions.... Is this where Sharon is
heading?"
Block Quotes:
--------------


I. "The New Partition Plan"

Diplomatic correspondent Aluf Benn wrote in
independent, left-leaning Ha'aretz (September 20):
"Sharon ... is placing the U.S. administration in a
dilemma between its two main principles: advancing Arab
democracy in general, and Palestinian democracy in
particular, versus the relentless war on terror and its
organizations.... But the significance of his threats
transcends the clumsy attempt to dictate the
Palestinians' list of candidates and election
platforms. It pertains to the root of the Palestinian
entity's existence, and undermines the link between its
two parts in Gaza and the West Bank.... Clearly Sharon
is using the separation of Gaza from the West Bank as a
bargaining chip in his relations with Abbas, like a big
stick perpetuating Israeli supremacy even after the
disengagement. It is clear that he is washing his
hands of the forgotten clause in the Oslo Accords, that
the West Bank and the Gaza Strip are 'one territorial
unit.' However, his consistent policy raises suspicion
that there is more at play here than bullying tactics
toward the PA. It is clear that someone is laying the
ground for a new order to replace the accepted idea of
establishing one state divided into two parts.... The
more Sharon establishes the difference in the status of
the Gaza Strip and West Bank, and as long as the PA has
difficulty imposing its authority, the more these ideas
will garner support in Israel. A serious public
discourse is already required about whether the two-
state solution has evaporated with the disengagement's
implementation."

II. "Erosion, Conciliation, and Appeasement"

Uzi Arad, who was a senior advisor to former prime
minister Binyamin Netanyahu, wrote in mass-circulation,
pluralist Yediot Aharonot (September 20): "Sharon
announced at the United Nations that Israel is
committed to the road map, with an incomprehensible
patent omission: why didn't he demand that the Quartet
respect its commitment to the road map, particularly
regarding its first, immediate stage -- the dismantling
of the terror organizations? This is no trivial
matter: only recently have people like Blair, Rice and
Wolfensohn called to shrink the stages of the road map
and pass over some of its components that touched upon
substantial Israeli interests.... What [Sharon] said
and what he surprisingly refrained from saying doesn't
only constitute a conciliatory gesture. The
declaration he made from the stage of the UN hints to
future additional concessions.... Is this where Sharon
is heading?"

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

2. North Korea's Announced Renouncement of Nuclear
Weapons:
-------------- --------------

Summary:
--------------

Washington correspondent Nathan Guttman wrote in
conservative, independent Jerusalem Post: "It is not
clear how many of the achievements can be credited to
the 'Bush doctrine'.... The only two arenas in which
the Bush doctrine has been put to a test -- Iran and
Iraq -- cannot yet be declared successes for the U.S."

Intelligence affairs correspondent Yossi Melman wrote
in independent, left-leaning Ha'aretz: "Unlike North
Korea, Iran wants nuclear capabilities in order to
build military power and deterrence.... Iran is not
North Korea and will not succumb to pressure."

Military correspondent Arieh O'Sullivan wrote on page
one of Jerusalem Post: "Without moves to halt this
proliferation of missile technology, it is too early to
tell if this agreement is profitable for Israel."

Block Quotes:
--------------


I. "A Good Week For U.S. Diplomacy"

Washington correspondent Nathan Guttman wrote in
conservative, independent Jerusalem Post (September
20): "Much of the credit for the North Korean deal must
go to China, but the Bush administration can mark the
end of a successful diplomatic week. Good news came
from all over the globe.... It is not clear how many of
the achievements can be credited to the 'Bush doctrine'
in foreign policy, focusing on preemptive activity
against states that support terrorism or develop
weapons of mass destruction.... The only two arenas in
which the Bush doctrine has been put to a test -- Iran
and Iraq -- cannot yet be declared successes for the
U.S.... How will these diplomatic successes affect the
U.S. involvement in the Israeli-Palestinian
conflict?.... The level of American intervention in the
conflict has never been affected by the North Korean
nuclear program, the internal situation in Afghanistan,
or even by Iran's nuclear ambitions. So the only
conclusion for Israel is that nothing will change,
except for maybe an upward swing in the
administration's collective mood."

II. "Iran Won't Cave In"

Intelligence affairs correspondent Yossi Melman wrote
in independent, left-leaning Ha'aretz (September 20):
"If North Korea keeps its commitments, as drafted in
the declaration of intentions in the six-nation talks
in Beijing, it will have achieved its goals.... The
agreement is a great accomplishment, especially for
China's diplomatic patience. But the agreement is also
an achievement for the U.S., which conditioned all
diplomatic recognition and economic aid on North Korea
abandoning its nuclear program. Unlike North Korea,
Iran wants nuclear capabilities in order to build
military power and deterrence.... Iran is not North
Korea and will not succumb to pressure. The
international atmosphere could have an indirect effect
on Israel's policy of strategic nuclear ambiguity. It
weakens Israel's position vis-a-vis its own nuclear
program, although there is no international pressure at
present and none is seen on the horizon. Israel can
therefore stick to its ambiguity policy as long as it
has the support of the U.S. and the EU."

III. "What About North Korea's Missile Sales?"

Military correspondent Arieh O'Sullivan wrote on page
one of Jerusalem Post (September 20): "The impact of
North Korea's decision to give up its quest for nuclear
weapons, while positive for world peace, would have
been greater if it also included a vow to halt missile
technology proliferation. Israel is not being
threatened either directly or indirectly by North
Korea's nuclear program. But it certainly is on the
targeted end of its ambitious ballistic missile program
that has provided Arab states and Iran with know-how
that has allowed them to amass an arsenal of Scud and
Shihab rockets capable of hitting Tel Aviv.... Without
moves to halt this proliferation of missile technology,
it is too early to tell if this agreement is profitable
for Israel."

JONES