AMBASSADOR JONES'S COURTESY CALL ON INTERIOR

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 006639

SIPDIS

E.O. 12958: DECL: 11/25/2015
TAGS: PREL PGOV KWBG IS GOI INTERNAL
SUBJECT: AMBASSADOR JONES'S COURTESY CALL ON INTERIOR
MINISTER OFIR PINES-PAZ


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


1. (C) Summary: In their introductory meeting on the day of
the Labor leadership election, Interior Minister Ofir
Pines-Paz told the Ambassador that regardless of who wins, it
was not a foregone conclusion that Labor would stay in the
coalition because it has two major disagreements with Likud.
Pines-Paz said that Labor wants a "strategic change" in
budget priorities away from defense spending toward social
welfare programs, to which, he said, Finance Minister Ehud
Olmert does not seem to have agreed. He also commented that
Labor wants the GOI to come up with a concrete plan to remove
illegal outposts rather than simply make declarations on this
issue without carrying them through. Pines-Paz revealed that
after a flurry of initial activity, Justice Minister Tzipi
Livni's inter-ministerial committee formed in response to the
Sasson report had not met for several months. The members
have been waiting for Livni's position paper on the report
before approving any final recommendations. (Note: Ha'aretz
reported on November 23 that the Justice Ministry has
rejected four out of the Sasson report's eight proposed
amendments to prevent more outposts from being established.
End note.) End summary.

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Labor's Disagreements with Likud
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2. (C) Interior Minister Ofir Pines-Paz on November 9 (the
day the Labor leadership election was held) told Ambassador
Jones that regardless of who won the election, it was not a
foregone conclusion that Labor would stay in the coalition
because Labor has two major disagreements with Likud: the
budget and outposts. He explained there has not been a lot
of "noise" about these disagreements because Peres and Prime
Minister Ariel Sharon have handled things "amongst
themselves," but noted that these issues will have to be
dealt with now that Gaza disengagement has been implemented.

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More Social Spending in Budget Priorities
--------------


3. (C) With respect to the budget, Pines-Paz emphasized that
Labor is looking for a major shift in the budget's
priorities. He commented that Labor officials want more
spending on social programs, and opined that while Finance
Minister Ehud Olmert seems willing to provide more funds in
this category, he has only agreed to some minor readjustments
and not to the "strategic changes" Labor wants. Pines-Paz
told Ambassador Jones that the GOI could cut the Ministry of
Defense's budget because "there must be savings from the
disengagement plan," and because terror attacks decreased in
2005 so there is "less to fight against."

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GOI Should Remove Outposts
And Negotiate with Abbas
--------------


4. (C) The Labor party also wants the GOI to prepare a
concrete plan to remove illegal outposts, according to
Pines-Paz, because, he said, it is not enough to make
declarations without carrying them through. He remarked that
Israel has an agreement with the USG to remove 20-24
post-March 2001 outposts, and should fulfill it. (Note: USG
settlement watchers count 44 post-March 2001 outposts. End
note.) He continued that Labor members also want Israel to
negotiate with Palestinian Authority (PA) President Mahmud
Abbas according to the road map because they believe he is a
partner. Pines-Paz cautioned that he does not know if Abbas
"can deliver," but opined that Israel should give him some
time and conceded to the Ambassador that GOI actions
influence Abbas's ability to govern. Pines-Paz stressed that
the PA and GOI cannot afford to lose the momentum created by
Gaza disengagement because terrorists and extremists on both
sides will step in to fill the vacuum.

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Livni's Committee on Sasson Report
--------------


5. (C) In response to the Ambassador's question on Justice
Minister Tzipi Livni's inter-ministerial committee on the
Sasson report, Pines-Paz -- a member of the committee --
responded that Livni needs to do much more. He reported that
the committee had ten meetings when it was first formed, but
then stopped because there was no point in repeatedly meeting
without a position paper, by Livni, on which to base
decisions. He claimed that Livni has not yet prepared any
recommendations. (Note: Ha'aretz on November 23 reported
that the Justice Ministry has rejected four out of the
report's eight proposed amendments to prevent more outposts
from being established. End note.)

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Evacuees Leaving Slowly but Surely
--------------


6. (C) Pines-Paz told Ambassador Jones that the reason so
many Gaza settler evacuees are still in hotels is because
they want to keep their communities together. They have not
looked for permanent housing, even though ample compensation
from the GOI enabled them to do so. He mentioned, however,
that approximately 40-50 families are leaving the hotels each
week, and that they should all be gone by the end of
December. He said that there were originally 1,200 families
in hotels, but that fewer than 400 families now remain. He
admitted that it is costing the GOI a lot of money to support
the evacuees, which is "problematic," but emphasized that the
problem is being solved as the evacuees slowly move out of
hotels to more permanent quarters.

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JONES