SENATOR LIEBERMAN AND ISRAELI A/PM OLMERT DISCUSS

C O N F I D E N T I A L SECTION 01 OF 03 TEL AVIV 001470

SIPDIS

E.O. 12958: DECL: 04/12/2016
TAGS: PREL PGOV PTER PARM KPAL KWBG IR IS ISRAEL RELATIONS ISRAELI PALESTINIAN AFFAIRS
SUBJECT: SENATOR LIEBERMAN AND ISRAELI A/PM OLMERT DISCUSS
THE CONVERGENCE PLAN

Classified By: Ambassador Richard H. Jones; Reasons: 1.4 (B and D).


1. (C) Summary: On April 11 -- the day that the Cabinet
elected him Acting Prime Minister -- a confident and relaxed
Ehud Olmert met with Senator Joseph Lieberman and the
Ambassador. Olmert outlined his "convergence plan," with
which he hopes to create defensible security borders,
minimize Israeli-Palestinian contact, relocate 80,000
settlers, and separate Israelis from 95 percent of the
Palestinians and 90 percent of the West Bank within the next
four years. Olmert expressed hope that his plan to set
Israel's borders will be coordinated with and supported by
the United States. He maintained that such steps will be
necessary due to a lack of a Palestinian partner needed to
make progress on the Roadmap. On other issues, Olmert 1)
stressed the need for tough UN sanctions against Iran, 2)
analyzed the outcome of the Knesset elections, 3) expressed
his intention to form a new government including parties from
across the political spectrum by the end of the month, and 4)
presented a rosy picture of the Israeli economy. Senator
Lieberman's legislative assistant Frederick Downey and
military escort LTC Edward Fortunato, as well as GOI foreign
affairs adviser Shalom Tourgeman, PM military aide MG Gadi
Shamni, and MFA Congressional liaison Eyal Sela also
participated in the meeting. End summary.

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Olmert Discusses the Convergence Plan
--------------


2. (C) After expressing admiration for the manner in which
Olmert has handled the difficult period following PM Sharon's
illness and welcoming his upcoming visit to Washington,
Senator Lieberman asked Olmert about his "convergence" plan
to relocate settlers from isolated parts of the West Bank
into settlement blocs. In Olmert's assessment, Israel
"cannot live with the Palestinians more or less as we live
now" and avoid the outbreak of another Intifada. Although he
saw the Roadmap (negotiations) as the best way forward, with
no Palestinian partners his answer is to set "defensible
security borders" that minimize Israeli-Palestinian contact,
and separate Israelis from 95 percent of Palestinians who
will be left with 90 percent of the West Bank. Such a step
entails the relocation of 80,000 settlers from isolated areas
to existing or newly built sections in the major settlement
blocs.


3. (C) Olmert described his timeline as two years to try
negotiations, plan, prepare, and consult with the USG,
followed by two years to implement the move of the settlers.
He termed the effort a "huge, major, dramatic undertaking ...
unprecedented in the State of Israel," cautioning that its
scale and Israel's emotional attachment to what it calls
"Judea and Samaria" would result in much controversy.
Senator Lieberman called the plan achievable and courageous.

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Olmert's Views of the U.S. Role
--------------


4. (C) Olmert repeatedly stressed that he hopes to carry out
convergence with the full understanding and support of the
United States. He claimed that the plan is consistent with
the President's letter of April 14, 2004. Senator Lieberman
sought clarification of what this support might entail. As a
start, Olmert urged Congress to pass legislation prohibiting
assistance to Hamas in order to send a clear message that
there will be no assistance without a change in Hamas policy.
Senator Lieberman replied that both the USG and EU were
moving in the right direction on the assistance issue.


5. (C) Olmert also expressed a desire that consultations with
Washington will result "in an agreement with the United
States that these (the convergence borders) are the final
lines." He expected that the USG will assist Israel in
obtaining European acceptance for the border, a possibility
he said was more likely with leaders such as German
Chancellor Angela Merkel. Olmert repeatedly praised
President Bush, saying that he believes that the President's
commitment to fight terror is a moral -- and not just a
political -- decision. "In the end of the day," added
Olmert, "this is what brings us closer together as nations,
as people, and as leaders."


6. (C) Olmert claimed that convergence would also realize a
Palestinian dream by creating a contiguous area free of
Israelis -- except for moves by security forces as needed --
as a basis for a Palestinian state. He cautioned that
conflicts with the Palestinians would continue at a lower
level until they realize that a return to the 1967 borders
"will never happen" and are prepared for a permanent peace.

-------------- -
Gaza-West Bank Link and Palestinian Employment
-------------- -


7. (C) Senator Lieberman asked about links between Gaza and
the West Bank, as well as about the future of Palestinian
workers in Israel. Olmert suggested that Israel has several
ideas for a Gaza-West Bank link, but would not offer them
without receiving concrete concessions in return. He said
that the frequent closings of crossing points make it
impractical for the 25,000 Palestinians currently employed in
Israel to retain their jobs, adding that he preferred in
principle that they work in the Palestinian areas. He
suggested options such as industrial parks located along the
barrier route, but acknowledged that this idea is also
impractical without partners on the Palestinian side.

-------------- --------------
Lack of Roadmap Partner Makes Convergence Necessary
-------------- --------------


8. (C) Olmert called the Roadmap a reasonable framework for
resolving the Israeli-Palestinian conflict, but lamented the
lack of a Palestinian partner. He assessed the chances of
the Palestinians taking necessary steps to restart
negotiations as "nonexistent" and questioned their ability to
do so even if Hamas collapses. He complained that President
Mahmud Abbas remains reluctant to take concrete action,
noting that he had spoken with Abbas by phone a few days
earlier. When asked by Senator Lieberman what steps Abbas
could take, Olmert replied he should disarm the terrorist
organizations. Olmert suggested that the USG and GOI might
agree on benchmarks that the Palestinians must meet to avoid
unilateral Israeli moves, but added that there is "no use
waiting forever." He expressed a clear intention to proceed
with the convergence plan during the term of the current U.S.
administration.


9. (C) Olmert noted that the Israeli Cabinet had earlier in
the day decided to boycott the PA's "terrorist government."
He added that Abbas would be treated separately as the
elected President; Tourgeman later told the Ambassador that
Abbas would be excluded from the boycott of the PA but that
GOI officials would not meet with him as they had nothing to
discuss. Tourgeman noted that the exception for Abbas was
personal rather than for the Presidency as an organization.
The GOI could not exclude the possibility that some of the
Presidency's employees might have contact with Hamas.

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Iran: Olmert Urges UN Sanctions
--------------


10. (C) Senator Lieberman requested Olmert's views on the
Iranian nuclear program. Olmert called Russian and French
ideas on joint enrichment "a surrender to Iranian
aggression." He urged the USG to take a "much more
aggressive position in the United Nations," claiming that
effective sanctions are the only opportunity to stop Iran
short of military action. Stressing that Iran is an
international -- not just an Israeli -- problem, Olmert said
he intends to raise the issue with the President in
Washington.

-------------- --------------
Olmert Seeks Broad Domestic Coalition by End of April
-------------- --------------


11. (C) Senator Lieberman asked Olmert to analyze the outcome
of the Knesset elections. Olmert said that voters had sent
two clear messages: 1) they were opposed to the policies and
personalities of Likud, while at the same time distrustful of
Labor's ability to lead; and 2) they wanted Kadima to win,
but with a limited mandate to keep the party from becoming
"too ambitious." Olmert claimed that Likud leader Bibi
Netanyahu was harmed by his right-wing views and by what
Olmert described as the irresponsible manner in which he had
split with PM Sharon. At the same time, Labor had lost seats
despite the collapse of Likud and Kadima's last-minute
formation. He attributed Kadima's smaller-than-expected
victory to pre-election polling, which led some voters to
switch to the pensioners party to help it over the threshold
for entry into the Knesset without affecting Kadima's
expected majority.


12. (C) Olmert claimed that he is not personally involved in
the details of coalition negotiations, which are being
handled by his advisers. He predicted "the usual bargains"
during coalition talks, adding that he wants parties from
both sides of the political spectrum in his coalition. His
goal is to avoid over-reliance on either Labor or the
right-wing parties. Nevertheless, Olmert stressed the
important role that a right-wing party or parties could play
for the coalition in reducing anxiety over the convergence
plan and building bridges to the settlers. He expressed his
intention to form the new government by the end of April and
have it functioning in early May.

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Rosy Outlook for Israeli Economy
--------------


13. (C) Olmert presented a glowing assessment of the Israeli
economy, predicting growth of 4.3 percent this year and a
reduction in the unemployment rate from current levels of 8.8
or 8.9 percent. He gave former Finance Minister Netanyahu
credit for adopting policies to facilitate growth, but
claimed that his hubris and doctrinaire belief in free
markets had blinded him to the need to provide relief for
under-privileged members of society. Olmert also gave credit
to PM Sharon for creating an "environment of good-will to
Israel and confidence," making the country a more secure
location for business. Olmert proudly noted that Intel,
Microsoft, and IBM have all invested recently in Israel and
said that Bill Gates had told him that all real technical
innovations in today's world originate in either the U.S. or
Israel.


14. (U) This cable was cleared by Senator Lieberman.

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