ABRAMS ENGAGES ITALIANS ON MEPP, IRAN AND

C O N F I D E N T I A L SECTION 01 OF 05 ROME 003214

SIPDIS

SIPDIS

E.O. 12958: DECL: 12/01/2016
TAGS: PGOV PREL XF IR LE UNAUS EUN IT
SUBJECT: ABRAMS ENGAGES ITALIANS ON MEPP, IRAN AND
SYRIA/LEBANON

REF: ROME 3050

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Classified By: Ambassador Ronald P. Spogli, reasons 1.4 (b) and (d)

Summary
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1. (C) Deputy National Security Advisor Elliott Abrams
November 27 engaged senior MFA officials, members of the
Prime Minister's Office and (on background) journalists from
Italy's leading dailies on Syria/Lebanon, the Middle East
Peace Process (MEPP) and Iran. On Syria and Lebanon, he
noted the need to support Lebanese PM Siniora, bring greater
economic and political pressure on Syria, and improve efforts
to prevent arms smuggling to Hizballah. He said UNIFIL was
currently failing the test of being a model for future
deployments in Palestinian areas because it was not working
energetically enough with the LAF to seize Hizballah arms
caches. On the MEPP, Abrams stressed the President's
continued, strong commitment to a two-state solution and
cautioned that uncoordinated initiatives such as the recent
Spanish/French one are unhelpful. But there have been
positive signs from both Palestinians and Israelis in recent
days, and the Quartet and the Roadmap remain the way forward.
On Iran, he noted Russia had been unhelpful at the UNSC, and
while there was movement toward a sanctions resolution, its
impact would likely be symbolic. Abrams therefore also
stressed the need for increased financial pressure on Iran,
particularly in the banking sector.


2. (C) The Italians said UNIFIL was fulfilling its mandate
and had had a positive impact by preventing further attacks
against Israel. They suggested movement on the Shebaa Farms
issue could help Siniora. GOI officials also supported the
notion of passing a UNSCR on sanctions against Iran quickly
and working with the USG to develop follow-up mechanisms once
they join the Security Council in January. While they agreed
on the need to keep up pressure on Syria and Iran, they
expressed concern about getting into a blind tunnel of
escalation with Tehran, absent greater U.S. engagement with
Iran. End Summary.


Lebanon/Syria: Press Syria, Support Lebanon
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3. (U) Deputy National Security Advisor Elliott Abrams
November 27 met separately with Italian MFA Middle East
Director Cesare Ragaglini, Vice Foreign Minister and Under
Secretary Ugo Intini, and MFA Director for Political Affairs

SIPDIS
Guilio Terzi. Abrams also met with FM D'Alema's Foreign
Policy Advisor, Marta Dassu', together with PM Prodi's Chief
Diplomatic Advisor Sannino and Sannino's deputy for the
Middle East, Marco Carnelos. Ragaglini was accompanied by
Minister Sergio Scarantino (DAS equivalent) responsible for
BMENA and Barcelona Process, Near East Office Director
Luciano Pezzotti, and Chief of Staff Carlo Formosa. VFM
Intini was accompanied by Chief of Staff Minister Giorgio
Malfatti, Pezzotti and a staffer. DG Terzi was accompanied
by Minister Sebastiano Cardi (new DAS equivalent UN
coordinator); NATO Office Director Minister Gianni Bardini;
and Nonproliferation and Disarmament Office Director Minister
Filippo Formica. Ambassador Spogli attended the meeting with
Terzi. Pol M/C and poloff attended all meetings.


4. (C) Abrams stressed to Ragaglini the need to support
Lebanon and the Siniora government, especially in the face of
Syrian efforts to use Hizballah to destabilize the Lebanese
government. He noted that the timing of the Gemeyel
assassination coincided with Syrian efforts to derail the
establishment of the Hariri Tribunal. Abrams said Syria gets
the wrong message with high-level visits to Damascus - the
Syrians don't listen to the messages delivered by their
interlocutors, however tough. All they register is the
presence of a high-level visitor, and it reinforces their
sense of legitimacy. He said it was important to figure out
with the EU a way to pressure Syria to change policy and
suggested EU countries consider increasing political and
economic pressure on Damascus.


5. (C) Ragaglini agreed with Abrams on the need to support
Siniora in order to help Lebanon become truly independent and
free from foreign influence. He said there appeared to be
two avenues to encourage a change in Syrian policies:
engagement or confrontation. He suggested starting with

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engagement, because if that doesn't work, we will be better
positioned to proceed to a policy of confrontation. He said
PM Prodi had delivered a strong message to Syrian President
Bashar al-Asad on the need for Syria to act positively in
Lebanon. The Syrian President had protested disingenuously
that his influence was limited, now that all Syrian troops
had pulled out of Lebanon at the international community's
request. Ragaglini observed that the Hariri tribunal, while
clearly important, will likely last quite a long time and
thus could be a factor affecting the country's stability for
an extended period.


6. (C) (In a later discussion with MFA Multilateral Affairs
Director Terzi, Abrams noted the problems Siniora's
government will face when it has to get final parliamentary
approval for the Hariri tribunal. He wondered if it would be
possible for the tribunal to be set up without securing the
Lebanese parliament's ratification, solely on the basis of a
UNSCR. Terzi said while he couldn't recall a precedent for
such a decision, it might be possible given the Security
Council's flexible authority. However, he cautioned that
some non permanent members of the Security Council, such as
Argentina, were already complaining about the Security
Council's enlargement of its authority in the recent past
(specifically on non-proliferation issues) and they, or other
non-permanent members, such as South Africa, might try to
block such an attempt.)


7. (C) Abrams said he agreed with much of Ragaglini's
analysis but said we are not starting from scratch in our
dealings with Syria. The U.S. had tried the path of
engagement, and had sent Secretary Powell and other
high-level visitors to Damascus, but the Syrians keep making
the wrong decisions. Bashar made the wrong decision in Iraq
and he is making the wrong decisions in Lebanon. Of course
it cannot yet be said for certain that Syria was behind the
Hariri killing, but their efforts to thwart the tribunal
would lead one to believe they were. The Syrians are
supporting the most extreme Palestinian terrorist groups.
The series of assassinations of anti-Syrian politicians and
journalists in Lebanon in the recent past indicates that
Damascus is not changing course. Finally, the Syrians are
not fulfilling their obligations under UNSCR 1559 or 1701.
So the situation is already fairly advanced and engagement
has not brought about positive behavior; therefore, the time
has come to increase economic and political pressure.


8. (C) PM Prodi's Chief Diplomatic Advisor Sannino said
Siniora had told Prodi movement on the issue of Shebaa farms
would help strengthen his domestic position. Sannino
suggested even small movement on the issue could help and
suggested placing the territory under UN-administered
control. Abrams acknowledged that this was Siniora's view,
and while the Israelis might even eventually buy into it, he
was skeptical such action would have the desired effect.
This is because the Shebaa Farms issue is likely only a
pretext, and if that is the case, then even if the disputed
area were put under UN control, there would be nothing to
prevent Syria/Hizballah from inventing another pretext for
Hizballah to retain its arms. Sannino appreciated Abrams'
analysis but suggested it might be worth trying, since doing
so was unlikely to have negative consequences. He asked
Abrams if the U.S. would support an Italian push, on
Siniora's behalf, toward some resolution on Shebaa farms.
Abrams said yes.

MEPP - Possible Beginning of a Virtuous Cycle
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9. (C) Abrams told Ragaglini that the so-called
Spanish-French Middle East peace Initiative had been
uncoordinated and unhelpful. The Israelis had already
rejected it. Ragaglini noted that on November 24 there had
been a meeting in Rome of the "Quint", an ad hoc EU Middle
East coordinating group within the EU that had no formal
status. He explained that after the intra-EU discord
following the surprise Spanish announcement, the Italians had
called a Quint meeting at the MFA Mid-East Director level to
coordinate a position. Ragaglini assured Abrams that it was
agreed by participants at the Rome meeting that there would
be no more uncoordinated initiatives. EU initiatives would
be coordinated not only at the Quint level, but with Solana,
the full EU 25, Quartet partners, and finally with Israel and
the moderate Arabs. That said, Italy and other European
countries accord priority attention to the Middle East.

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Instability there affects the security of Europe -- its
security, stability, commerce, and energy supply.


10. (C) Abrams underscored President Bush's commitment to a
two-state solution and pointed out that the U.S. would not
try to force a solution in order to fit the timing of our
election calendar. But there had been some positive signs
lately. A deal on a Palestinian government of national unity
was likely and could start a virtuous cycle, especially in
light of the recent cease-fire and Israeli PM Olmert's recent
speech. Once Israeli prisoner Shalit has been released,
regular Olmert-Abbas meetings can begin, more prisoners can
be released and the overall tone could improve. He noted
that not only were Israel and the Palestinians trying, but
the Egyptians and Saudis were also engaging, which was
encouraging.


11. (C) Ragaglini said we all agree the status quo is not an
option. Other senior MFA officials echoed this sentiment,
saying there was a new sense of urgency on this issue, a
sense that the situation was worsening. Ragaglini said he
spoke November 26 to FM D'Alema who was glad the Israelis
were showing restraint and that the cease-fire was holding.
He said the European Union was ready to support a PA
government that substantially reflects the Quartet
principles. Ragaglini said a degree of ambiguity might be
necessary, e.g. on the question of the formula for expressing
recognition of Israel. For the EU, another issue is the
composition of the government, e.g. who will be the Finance
Minister, since it will be a priority to track where the
money goes.


12. (C) Abrams said the choice of Minister of the Interior
was also important, given the issue of security force reform.
The Israelis have agreed in principle to the Palestinian
Badr Brigade deploying to Gaza from Jordan; however, General
Dayton has said they would need a few months of training
before they will be ready to be deployed. Abrams said it
would be better to have a truce on the ground first before
deploying the Badr Brigade in order not to put them in
confrontation with Hamas from the beginning. He also said
the U.S. remains concerned about arms smuggling. Ragaglini
suggested the best way to crack down on arms smuggling would
be to increase the number of Egyptian border guards along the
Gaza border.

UNIFIL: Failing Test as Model for Gaza
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13. (C) Abrams said if UNIFIL is a test case for future
deployments, it is failing that test so far. It has not
succeeded in preventing the flow of arms from Syria. UNIFIL
and the LAF are both careful not to challenge Hizballah. The
consequence is that Israel looks at it as a failed experiment
and not as a possible model for future deployments in Gaza.
Ragaglini said it was important for Italy that UNIFIL be a
success. Italy evaluates UNIFIL positively though it can
always be improved. UNIFIL can't seal the border with Syria
but it can control movement in the south and prevent
confrontation with Israel. UNIFIL is fulfilling its mandate
and has had a positive impact by preventing further attacks
against Israel. But Israeli overflights are disturbing.
Italy has asked Israel to halt the most provocative of
overflights, e.g. over Beirut and over French troops. Abrams
said the U.S. had done the same, although there was still a
legitimate requirement for some intelligence collection.

IRAN: Sanctions and Economic Pressure
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14. (C) Abrams engaged Vice FM Intini and DG for Political
and Multilateral Affairs Terzi on Iran. He said Ahmadinejad
and other hardliners in Iran could argue that their approach
has succeeded so far. Absent some consequences for Iran,
therefore, it was hard to see why they would choose to change
course or feel a need to get the diplomatic process back on
track. Abrams noted Russia had been unhelpful at the UNSC,
and while there was movement toward passing a UNSC sanctions
resolution before the new year, its impact would likely be
symbolic. Abrams also stressed the need for increased
financial pressure on Iran, particularly in the banking
sector. He noted the need to continue increasing the
pressure via banks working with Iran, and especially pointing
out the risk that they could be unwittingly assisting in
Iran's nuclear/missile procurement. Such concrete

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consequences, coupled with the symbolic blow of UN sanctions,
could have an effect on the Iranian economy and public
opinion. The Iranian government is not popular. The strong
desire of the government to avoid sanctions suggests they are
concerned about the domestic impact.


15. (C) Abrams said the USG hopes for Italian support for
UNSC sanctions and cooperation on increasing other financial
pressures. Iran is not just dangerous because of its nuclear
ambitions but because of its support for Palestinian
extremists, its support for Hizballah in Lebanon, and its
role in Iraq supplying arms to groups killing U.S. forces.


16. (C) Both Intini and Terzi said Italy would support an
initial round of sanctions and agreed that such sanctions
would not destroy the possibility for negotiations. Terzi
echoed Abrams' concern regarding the Russian position, saying
Italy agreed the time for sanctions was now, and offering
Italian cooperation with the U.S. on follow-up measures
(sanctions committee or other monitoring of the resolution,)
once Italy takes its Security Council seat in January. Terzi
hoped Italy would be consulted early and often now that it
will be taking its Security Council seat.


17. (C) Terzi noted Abrams' request for assistance with
tougher financial pressures on Iran and said he would share
it with Minister D'Alema. He said the "lack of a clear
financial framework" for dealing with Iran (as apposed to the
framework that exists for North Korea) makes things more
difficult. (Note: The GOI has stated similar concerns in
recent conversations with senior USG officials, per ROME
3050.) However, Terzi said the Italians were beginning to
take action. He said the Bank of Italy had reduced its
credit exposure vis-a-vis the Bank of Iran; additionally, he
said SACE's reduction of its exposure in Iran is particularly
significant for Italy, given Italy's trade position with
Iran. Regarding Bank Sepah, Terzi referred to ongoing GOI
exchanges on how to limit activity.
The director of the MFA's Office for Disarmament and
Non-proliferation, Filippo Formica, pointed out that Italy is
an active participant in the Paris G7 exercise to build a new
framework for countering proliferation finance. He said
Italy is very committed to the success of the exercise.


18. (C) On the internal struggle in Iran, Intini agreed the
current regime is unpopular, but cautioned that perceived
external threats could favor extremists, not moderates. He
said UN sanctions could be used by the regime to justify its
actions to the Iranian public. Both Intini and Terzi agreed
Iran needed to understand it could not split the West; Europe
will not let itself be divided over the issue, nor will it
let itself be split from the U.S. According to Intini, Iran
appears to want three things: ensure against regime change;
avoid future military attacks; and, most importantly, obtain
recognition, in particular from the U.S., of its role as a
key player in the region. While Intini and Terzi agreed on
the need to keep the pressure on Iran, they expressed concern
on about getting into a blind tunnel of escalation, absent
some form of increased U.S. engagement with Iran.

U.S./Italy UNSC Cooperation
--------------


19. (C) Abrams asked Intini, Terzi and PM Diplomatic Advisor
Sannino for Italian support at the UN to help us avoid being
put in the position of having to use our veto on unhelpful
Middle East resolutions, such as the recent one originally
sponsored by Qatar. Terzi agreed that the Security Council
should not be used as a venue to create additional venom and
expressed concern over a recent trend to split the EU vote.
He said Italy is planning to coordinate with the EU
presidencies on common EU positions (which he noted might not
always be the same as the U.S. position.) It was important
for the U.S. to have clarity on the EU position and important
for the EU to unify its position in order to have more clout
on the Council. Abrams agreed, and noted that European
freelancing and announcements such as the recent
Spanish/French initiative undermine the EU goal of a unified
and coordinated foreign policy. On Middle East peace process
issues, coordinating and working through the Quartet would be
most useful.

Comment
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20. (C) The Italians greatly appreciated the opportunity to
engage with Abrams on the peace process, Iran, and
Lebanon/Syria, all issues that are top foreign policy
priorities for them. It was also an opportunity for us to
administer a useful antidote to some exaggerated political
speculation, mainly on the left, about the possible impact of
midterm elections on US foreign policy. Abrams made clear,
especially with the journalists, that the Administration
remained in place, and that there will be policy continuity.
Even on Iraq, which was undoubtedly an election issue, the
much-discussed study group will propose, but the President
will dispose. GOI officials reflected governmental angst
about the possible fallout for Europe's stability,
prosperity, and security if there is no serious movement on
the Middle East peace process. Abrams's message of
Administration commitment, and the possibility of a virtuous
cycle starting, was therefore particularly welcome. The
Italians clearly shared our concern about the threat to the
Lebanese government's stability by Syria and its allies. And
Abrams strongly countered a few polite probes on the
practicality of enhanced engagement with Syria, pointing out
that this had already been tried. On Iran, the Italians
agreed completely on the need to move to UN sanctions, and on
coordinating more effective financial pressure, but with
their substantial economic/commercial ties to Iran they were
also clearly uneasy about where the process was heading. And
that is because, in their analysis, the holy grail for Iran
is not really the bomb; and it is not anything that Italy or
the EU can provide; rather, it is respect, recognition, and
engagement from the U.S. End Comment.


21. (U) DNSA Elliott Abrams cleared this cable.
SPOGLI