LIVNI DISCUSSES THIRD PARTY, HAMAS, OUTPOSTS, AND

C O N F I D E N T I A L SECTION 01 OF 03 TEL AVIV 006357

SIPDIS

E.O. 12958: DECL: 11/04/2015
TAGS: PREL PGOV KWBG IS ELECTIONS GOI INTERNAL GOI EXTERNAL GAZA DISENGAGEMENT ISRAELI PALESTINIAN AFFAIRS
SUBJECT: LIVNI DISCUSSES THIRD PARTY, HAMAS, OUTPOSTS, AND
WEST BANK-GAZA LINK WITH AMBASSADOR

REF: A. TEL AVIV 06247


B. TEL AVIV 01524

Classified By: Ambassador Richard H. Jones for reasons 1.4 (b) and (d)


1. (C) Summary: Minister of Justice Tzipi Livni told the
Ambassador on November 3 that, although "the numbers do not
show it yet," Sharon will find a majority for his ministerial
nominations because most Likud members do not want new
elections. She said that it is significant that Israel has
accepted a third-party observer at Rafah, and that the third
party should be effective and have the authority necessary to
maintain security. She added that a successful third-party
solution could lead to cooperation on the Gaza airport and
seaport. Livni opined that Hamas should not be allowed to
participate in Palestinian elections because Palestinian
Authority President Mahmud Abbas would be even weaker once
Hamas "is 30-40 percent of the parliament." She claimed that
releasing prisoners or allowing more Palestinian travel
between the West Bank and Gaza would not be enough to
strengthen Abbas against Hamas, and that the international
community should force him to ban Hamas's participation in
the elections. Livni blamed the Ministry of Defense (MOD)
for the lack of movement on dismantling outposts, defending
her inter-ministerial committee on the Sasson report as being
charged with strengthening the legislation on outposts for
"the future" while the MOD is responsible for dealing with
outposts now. She voiced a strong preference for an
underground tunnel for a West Bank-Gaza link, arguing that a
rail or vehicle convoy would cut Israel "in half." With
respect to Patent Term Extension legislation, Livni claimed
that Israel's pharmaceutical industry is "the underdog," so
the U.S. should understand the GOI's position. End summary.

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Sharon's Ministerial Nominations
--------------


2. (C) Minister of Justice Tzipi Livni told the Ambassador
on November 3 that she did not know what would happen next
week with respect to Prime Minister Ariel Sharon's
nominations of Ronni Bar-On, Ze'ev Boim, and Ehud Olmert as
Ministers of Industry and Trade, Immigration Absorption, and
Finance, respectively. She said it is not the "most
important issue in the world," but that Sharon sees it as a
test of his ability to govern, so for him it is a dramatic
vote. She explained that some Likud members will find a way
to compromise on the nominations, but that there are five or
six who, despite "talking ideology," are against Sharon
personally, and are willing to let the government fall. In
response to the Ambassador's question on whether the PM would
split up the nomination packages, Livni responded that for
now Sharon is trying to find a majority and will not split
the nominations the day before the vote because he will be
seen as backing down. She continued that, after the Likud
Central Committee vote in September (ref A),most of its
members do not want early elections. At the end of the day,
she added, the nominations will pass, but noted that for now
"the numbers do not show it yet" and "no one is blinking."

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Third Party Issues
--------------


3. (C) Livni underlined the fact that it is significant that
Israel has accepted a third-party observer at Rafah, and even
more significant that the third party will be the European
Union and not the U.S. She acknowledged that there are many
unresolved security issues, but emphasized that it is
important that the EU team be effective and have the
authority it needs to maintain security, because otherwise
Israel "will say no." She asked for advice on how to deal
with the fact that different countries in the EU have
different "rules of engagement," and the Ambassador suggested
that Israel work out ROEs as much as possible with the
country or countries actually involved. Livni again
emphasized the need to have an effective third party because
it could lead to cooperation on the airport and seaport. She
also mentioned that Defense Minister Shaul Mofaz in Cabinet
meetings has been against the idea of a transportation link
between the West Bank and Gaza Strip because terrorists can
transfer expertise. If the third-party solution is
effective, she said, she can argue that "it works" and
perhaps apply it to the West Bank-Gaza link. With respect to
having a live video feed between the Palestinian-EU side of
the crossing and the GOI's security establishment, Livni
explained that the rationale behind this idea is not mistrust
of the Palestinians or a need to monitor Palestinian security
effectiveness. From the GOI's perspective, sharing all live
video feed is a confidence-building measure that also helps
both sides stop any potential terrorist attacks much more
effectively than passing day-old tapes.

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Hamas in the Elections
--------------

4. (C) Livni commented that having Hamas participate in
Palestinian elections is a "big issue." The Ambassador asked
whether the GOI is going to publicly comment any more than it
already has on Hamas' participation. Livni said "no," but
added that the international community, including the U.S.,
should provide Palestinian Authority President Mahmud Abbas
political cover by making statements against Hamas's
inclusion in the elections. She rejected Abbas's claim that
he is too weak to take on Hamas now, asking "what happens
when Hamas is 30-40 percent of the parliament and they are
still terrorists?" Livni opined that Hamas would not become
more moderate if it joins a Palestinian government because
"it wants to destroy Israel and does not accept a two-state
solution." She added that "we'll be stuck" because the
Israeli right wing can use that as a reason to not engage
with the Palestinians. She remarked that having terrorist
organizations participate in elections is incompatible with
democracy, and cited the example of Spain excluding Batasuna,
the Basque party associated with the terrorist organization
ETA, from elections. Livni commented that one possible
solution would be to have Hamas publicly declare that it is
giving up its terrorist activities.


5. (C) The DCM asked whether it is possible to strengthen
Abbas in the next few months before elections, and Livni
responded there is no way at this late stage to make a
dramatic impact on the attitudes of the Palestinian people.
She recounted that she was involved with the Zinni, Tenet,
and Wolf missions, and all wanted a release of Palestinian
prisoners to help the PA leadership, but asked rhetorically,
"If I release Hamas prisoners, is this a victory for the PA
or for Hamas?" She continued that increasing the number of
cars that can travel from Gaza to the West Bank from 35 to
100 would not make a dramatic difference either, but despite
this, Israel will continue to do what it can to help Abbas --
as long as there is no security threat.

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Outposts and Sasson Report
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6. (C) The Ambassador referred to removal of illegal
outposts as a possible way to help Abbas. Livni professed
surprise that he raised the issue, but mentioned that the GOI
is working on it. She claimed that she believes the outposts
are illegal, but minimized the importance of her
inter-ministerial committee's inaction, saying that the
Ministry of Defense (MOD) need not wait for the committee's
recommendations to dismantle outposts which are illegal.
(Note: Livni chairs the inter-ministerial committee tasked
with determining how to implement the recommendations in
Talia Sasson's report on illegal outpost activity. The
committee was supposed to have issued its recommendations in
late June, but it received a 60-day extension, and is now
over two months beyond the extension. End note.) She
characterized her committee as being charged with
strengthening the legislation on outposts "for the future,"
and the MOD as responsible for dismantling outposts now.
Livni said that the GOI has made some progress on controlling
outposts, however, and cited a few examples:

-- Attorney General Menachem Mazuz issued a statement that no
money is to go to outposts from any ministry.

-- The Defense Minister has not signed permission forms for
any new buildings or trailers to be set up in outposts.

-- Construction and Housing Minister Yitzhak Herzog is not
approving any investments in outposts.

-- The Cabinet adopted the Sasson report in full. (Note:
Per ref B, the GOI adopted "only the principle that the rule
of law should be obeyed," and not the report itself. Mazuz
allegedly said that the Cabinet could not adopt the report in
its entirety until its conclusions are examined more closely.
End note.)


7. (C) When the Ambassador asked whether dismantling some
illegal outposts could help Abbas, Livni replied that the GOI
had already done this with Gaza disengagement, "and they were
legal," referring to the settlements. She said Israel
evacuated homes built legally with the support of both Likud
and Labor governments, and yet the Palestinians are still
firing Qassams into Sderot. She added that the GOI also has
to convince the Israeli public that disengagement was
worthwhile, and said that a statement from Hamas renouncing
terrorism would demonstrate for Israelis the benefits of
disengagement. Livni said that the way to help Abbas is to
get rid of Hamas and force him to prevent Hamas's inclusion
in Palestinian elections.

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Gaza-West Bank Link
--------------


8. (C) With respect to a Gaza-West Bank link, Livni claimed
that a passage for Palestinians would create Palestinian
contiguity, but would destroy Israeli contiguity and cut the
country "in half." She preferred that a tunnel be built
between the West Bank and Gaza instead, so that Palestinians
could still move between the two, but out of view from
Israelis. She acknowledged that it would take a long time
and a lot of money to build a tunnel, despite the fact that
it would be what she termed "only 34 kilometers" long, but
added that it would change Sharon's mind positively on the
link issue. The Ambassador pointed out that the USG has
offered to do feasibility studies on a number of alternatives
for the link, and was waiting for a GOI response on terms of
reference, including options. Certainly a mixture of a
sunken road or railroad combined with a tunnel was a
possibility. Livni responded that she does not want to be
able to see the link at all and would prefer that it be
entirely underground.

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PTE Legislation
--------------


9. (C) The Ambassador told Livni that the U.S. is concerned
about the effect that the Patent Term Extension (PTE)
legislation drafted by the MOJ will have on the commercial
rights of research-based pharmaceutical firms in Israel. He
explained that the USG is concerned about retroactive
implementation of the legislation and the hurdles applicants
would have to go through to fill out patent extension
applications. The Ambassador asked whether the legislation
could be put on hold in the Knesset until the USG and GOI
have had an opportunity to discuss the issue further. Livni
responded that Israel put the legislation on hold earlier
while waiting for a response from the U.S. but did not
receive one. She added that she was not that familiar with
the issue overall, but commented that Israel and the U.S.
have competing pharmaceutical interests. She said that
Israel is "the underdog," so the U.S. should understand its
position. Livni mentioned, however, that the MOJ is willing
to continue discussions on the legislation, and the
Ambassador offered to provide specific views. He added that
Israel's steps on intellectual property rights were taking it
away from OECD standards which was not in its best interest.

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