SENATOR ALLEN'S FEBRUARY 13 MEETING WITH FINANCE

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 000955

SIPDIS

E.O. 12958: DECL: 02/17/2015
TAGS: PREL ECON OVIP KWBG IS GAZA DISENGAGEMENT ISRAELI PALESTINIAN AFFAIRS GOI INTERNAL
SUBJECT: SENATOR ALLEN'S FEBRUARY 13 MEETING WITH FINANCE
MINISTER NETANYAHU


Classified By: Ambassador Daniel C. Kurtzer for Reasons 1.4 (b,d)


1. (C) Summary: Senator Allen and Finance Minister Bibi
Netanyahu discussed the present situation between Israel and
the Palestinians and Gaza disengagement. Netanyahu was
guardedly optimistic about prospects for further steps toward
accommodation with the PA noting that Abu Mazen faced serious
challenges to become an effective partner. It was still
questionable whether Abu Mazen had the will or the power to
reign in terror groups and confront corruption in the PA. On
disengagement, Netanyahu argued that a referendum was
necessary to defuse the growth of violent protests in Israel,
refuted the wisdom of unilateral disengagement, and argued
that Israel's security needs would necessitate continued
control of access to the West Bank and Gaza and the
Philadelphi strip. End Summary.

--------------
Abu Mazen's Conundrum
--------------


2. (C) Senator Allen began the meeting by asking Minister
Netanyahu for his view of the present situation with the
Palestinians. Netanyahu said that things had gotten better in
recent weeks but that that was not enough, as Abu Mazen faced
serious difficulties and some hard decisions. He
characterized the Palestinian Authority (PA) not as a
government but a "collection of armed gangs" and Palestinian
society was dysfunctional, locked in a "fantasy ideology."
Abu Mazen had made a series of agreements with Israel but he
had yet to be tested. "Until then we don't know if we have
anything", said Netanyahu. Arafat had power but did not want
to use it, Netanyahu commented, whereas Abu Mazen has an
intention to act but the question remains does he have the
power to act. Abu Mazen must face the twin problems of
security and corruption. To have a viable state he must have
an effective security force that can dismantle terror groups.
To win popularity he must change the prevailing culture of
corruption.


3. (C) Senator Allen asked Netanyahu whether the hatred
of Israel was imbedded in the Palestinian people and
represented an obstacle to peace. Netanyahu said the
Palestinian leadership was to blame for this attitude since
it guided the people to a commitment to get rid of Israel in
stages. There was an urgent need for the PA to change the
political culture, attitudes, tolerance and the lack of
government accountability. The most pressing problem between
Israel and the Palestinians was the refusal by Palestinians
to accept the state of Israel. If they are not satisfied with
anything less then the solutions will not go beyond the
stability of a truce. Perhaps, Netanyahu commented, the PA
could be weaned from this belief by economic aid but in
reality the PA needed to change its own propaganda and stop
others from pressing this viewpoint.

--------------
Unilateral Disengagement a Mistake
--------------


4. (C) In response to Senator Allen's question about
progress on disengagement, Netanyahu explained his opposition
to unilateral withdrawal. In his view, unilateral withdrawal
without the give and take of negotiations left the perception
that withdrawal was a victory for terrorism. In the minds of
the Palestinian's this was a victory for Hamas and actually
hurt Abu Mazen, leaving him unable to take any credit for
action prompting the withdrawal. Netanyahu took issue with PM
Sharon's belief that leaving Gaza would start a process that
would expand into the peace process because there would be no
buy-in from Hamas or change in the attitude of the
Palestinians. Describing how he would have handled this
issue, Netanyahu said the there needed to be give and take,
to get some concessions for leaving Gaza.

-------------- --------------
Referendum Necessary to Defuse Domestic Opposition
-------------- --------------


5. (C) Senator Allen moved next to the question of Israeli
opposition to the Gaza Disengagement plan and the need for a
referendum. Netanyahu responded saying the referendum is
necessary to defuse the coming conflict in Israeli society.
He was not opposed to disengagement but the referendum was a
"matter of expediency." He disagreed with PM Sharon's view
that a referendum would fan the flames of opposition, and
argued that it would have the exact opposite effect. He
insisted that a referendum would pass 60 to 40 percent in
favor of disengagement and lower the number of Israelis
actively opposed to the plan. Otherwise, Netanyahu said,
disengagement will not go peacefully. The decision to move
should be made by the people, not the military, or the
protests will worsen. Netanyahu pointed to the attempted
attack on him at a Bar Mitzvah in a small kibbutz as evidence
of the "hot lava" out there. The Senator asked if this was a
tragedy in the making, citing the fact that descendants of
Virginians who were compensated and moved to make way for the
Shenandoah National Park still harbored ill feelings.
Netanyahu surmised that there were a thousand bad scenarios
that could be contemplated, from assassination to suicides of
distraught settlers. The presence of news cameras at the
settlements would likely cause increased protests but if the
government failed in disengagement due to violent opposition
the result would be anarchy.

--------------
Security After Disengagement
--------------


6. (C) Responding to the Ambassador's question about the
results of not carrying out disengagement, Netanyahu said
that disengagement will go through, but additional steps were
needed to ensure Israeli security. The fence must be
completed along the main settlement blocks of Ariel and two
other large settlements, and there must be a balance of
security. To achieve this balance Israel must continue to
access points to Gaza and the West Bank. Noting that it would
be a long time until the security situation was transformed,
Netanyahu argued that opening borders or giving up control of
the Philadelphi strip was an invitation to a large arms
buildup in Gaza. Netanyahu doubted that the Egyptians would
have the will to fight to stop smuggling into Gaza after
disengagement and viewed the establishment of a Gaza port
"like a huge tunnel."


7. (U) Senator Allen did not have a chance to review this
cable.

********************************************* ********************
Visit Embassy Tel Aviv's Classified Website:
http://www.state.sgov.gov/p/nea/telaviv

You can also access this site through the State Department's
Classified SIPRNET website.
********************************************* ********************
KURTZER