2006-05-05 07:43:00
Embassy Tel Aviv
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C O N F I D E N T I A L SECTION 01 OF 03 TEL AVIV 001754 


E.O. 12958: DECL: 05/04/2016

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

C O N F I D E N T I A L SECTION 01 OF 03 TEL AVIV 001754


E.O. 12958: DECL: 05/04/2016

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

1. (C) Summary: Meir Dagan, director of the Mossad, told
Codel Lieberman on April 20 that Hamas won the Palestinian
elections because it was more united and organized than
Fatah. He said that Palestinians mainly voted for Hamas to
protest Fatah corruption, but added that 60 percent "still
back guns." Dagan described the Hamas's four main sources of
funding, as well as its connection to the Muslim Brotherhood.
He claimed that Hamas would never change its basic
philosophy against Israel, even if it can be practical and
change its rhetoric. Dagan advised against channeling U.S.
assistance to Palestinian Authority (PA) President Mahmud
Abbas's Presidential Guard, however, because he claimed that
Abbas would use it to buy influence in other security
services under the Hamas-led government, rather than on his
own Presidential Guard. He suggested that U.S. assistance go
to humanitarian needs instead because "the security services
can get their salary anywhere," explaining that the PA has
enough money in the Palestinian Investment Fund, and
donations from Iran and Qatar, to last approximately six
months. Dagan said that when the PA is bankrupt by the end
of the year, "maybe Jordan or Saudi Arabia could help the
Palestinian community through Fayyad," but he did not
elaborate on this concept. Moving on to Iran, Dagan said
that the international community must plan a coordinated
effort, which includes inflicting effective sanctions on Iran
through the UNSC, preventing proliferation, "damaging the
(nuclear) project," and undermining the regime. He claimed
that Iran will have the military capability to deliver a
nuclear weapon in 2-3 years. End summary.

Palestinian Elections

2. (C) Meir Dagan, director of the Mossad, told Codel
Lieberman on April 20 that the Israeli intelligence community
thought that the Palestinian elections would result in a
"close tie," but later realized that Fatah would not win when

it analyzed the results of the municipal elections. He said
that Hamas' victory was not clear-cut, however, because Fatah
candidates received more votes, but lost because Hamas was
more organized and united. He assessed that those who voted
for Hamas want to bring an end to corruption. Senator
Lieberman agreed, informing Dagan he had met with Palestinian
Authority (PA) President Mahmud Abbas and Chief Negotiator
Saeb Erekat, and both said that corruption and social
services were the most important factors in determining for
whom Palestinians voted. Dagan responded that even if
Palestinians voted for Hamas to tackle the corruption issue
in the PA, they knew it would also result in a change in
Palestinians' foreign policy. He claimed that Palestinians
continue to support armed struggle, and said that Khalil
Shikaki's polls show that despite showing support for
negotiations with Israel, 60 percent of those polled "still
back guns."

Sources of Funds for Hamas

3. (C) In response to the Senator's question, Dagan replied
that Israeli intelligence identifies four funding sources for
Hamas. The most significant is internal "zakat," or
donations by Palestinians in the West Bank and Gaza Strip.
He continued that "a great deal" comes from the Gulf states
through private donations by individuals. The third largest
source of funds originates from Iran, which is now Hamas's
only state supporter, according to Dagan. The fourth most
significant source is non-governmental organizations in
Europe and the U.S., "even though the Al-Aqsa Fund is
closed." Dagan acknowledged that most people who donate do
not do so "for terrorism, even in the Gulf," but he said that
their charity is diverted to the military wing once it
reaches Hamas's hands.

Hamas and the Muslim Brotherhood

4. (C) Dagan added that Hamas's links to the Muslim
Brotherhood (MB) are clear. He claimed that the people who
collect funds are the same for both organizations,
particularly in NGOs. He cited the example of an individual
who was part of the MB in Egypt, was expelled to Qatar, and
now chairs the Allah Fund to collect money for Hamas. "They
are more connected than people realize," Dagan said. Senator
Lieberman asked whether Hamas would change its policies
toward Israel, given that it is part of the greater MB
movement, and Dagan replied that there is no chance Hamas
will change its basic philosophy. He said the group's
leaders may pay lip service to agreements and change their
rhetoric, but ultimately they will not change their
philosophy. He commented that Hamas may say it backs the
Saudi initiative, but without clearly recognizing it. He
concluded that Hamas will be practical, but will not give up
its ideology.

5. (C) According to Dagan, members of the MB in Egypt and
Jordan are extremely pleased with the Palestinian election
results, and hope they can copy Hamas' success in the
governments of their own countries. Senator Lieberman asked
whether the Egyptian and Jordanian governments want Hamas to
fail, and Dagan replied that while Egypt privately
acknowledges Hamas is a problem, it encourages and supports
the group in public despite the fact that Hamas does not
accept Israel. He added, however, that Egyptian Intelligence
Chief Omar Soliman "knows the real picture, and it's not
flattering." Dagan remarked that there is no difference in
Jordan's public and private comments regarding Hamas because
it knows "Hamas is a major threat for them," and it is
willing to undertake stronger measures against the group.

Assistance to the PA

6. (C) Senator Lieberman told Dagan that Abbas had asked him
for U.S. support for the President's Office and the
Presidential Guard, whether financial support or training
assistance. He asked Dagan if this seemed reasonable, and
Dagan responded that Abbas is not strong, and will quickly
surrender if pressured by Hamas. He said that most of the
security is under the Hamas-led government. Abbas's
Presidential Guard is not effective because it is comprised
of people who were loyal to Yasir Arafat, and Abbas has not
been able to put in his own people to take control. Dagan
assessed that for this reason, any assistance Abbas receives
will go to buying influence in other security services under
the Hamas-led government, rather than to his own Presidential

7. (C) Dagan advised channeling U.S. assistance to
humanitarian needs and added that "the security services can
get their salary anywhere." He explained that the
Palestinian Investment Fund (PIF) is worth $500 million,
claimed that the PA will get $100 million from Iran and $50
million from Qatar, and declared that these funds would carry
the PA through for 6-7 months. (Note: Dagan did not give a
timeframe for when the PA would receive the funds from Iran
and Qatar. End note.) He related that Abbas has a special
relationship with Qatar because his son frequently visits,
implying that this is the reason why Qatar is willing to
donate to the PA, and added that Muhammad Rashid set up the
PIF to control profits from the tobacco and cement
monopolies. When Salam Fayyad took over as finance minister,
he took control of the PIF, so it is now under the Finance
Ministry, which Hamas runs, according to Dagan. The
Ambassador pointed out that half of the PIF's assets are
collateralized for loans, and Dagan said, "but they still
have it." He said that Hamas has its "own agenda" regarding
security services salaries. He noted that the PA spends
approximately $90 million per month on salaries, but if Hamas
does not have the funds, it can say that it is unable to pay,
and that it must cut the ranks by 20,000 soldiers. The group
can then hire its own members into the security services for

8. (C) Senator Lieberman asked what would happen in six
months when the PA runs out of money. Dagan replied that the
PIF would be spent by then, and that it is unlikely that Iran
would continue to provide $100 million per month
indefinitely, so the PA will be bankrupt by the end of the
year. He continued that whoever can bring in the funds at
that point would be the person controlling the government.
Dagan predicted that the Palestinians would turn to the EU,
and would ask Israel for the frozen revenues, but Dagan said
that he was not sure Israel would transfer the funds. He
claimed that Israel is "not trying to create a crisis," and
added that the GOI would look for ways to help the
Palestinian community. Dagan continued that Abbas could call
new elections if Hamas is unable to pay any government
salaries, but asked rhetorically whether he is brave enough
to do so. Dagan offered that he would not channel any funds
through Abbas, and remarked that "maybe Jordan or Saudi
Arabia could help the Palestinian community through Fayyad."
He did not elaborate on this concept, but reiterated that no
funds should be channeled through Abbas because he will use
it to pay the salaries of Fatah members, and "Hamas will
eventually profit."


9. (C) Moving on to Iran, Senator Lieberman told Dagan that
the U.S. is very concerned about Iran's nuclear program and
the country's current leadership. Dagan said that Iranian
President Ahmadinejad is openly presenting the opinions of
Iran's religious leaders, and that what he is saying is
"nothing new." He said Khatami and Rafsanjani held the same
beliefs, but "both had a better face." Dagan said he
believes that Ahmadinejad means what he says, and added that
this makes Iran a threat not just for Israel, but for
everything the U.S. is trying to accomplish in Iraq. He
claimed that the Shia community in Iraq is following
guidelines from Iran.

International Community Must
Impose Sanctions

10. (C) Dagan advised taking Iran to the U.N. Security
Council, and "hitting it hard with sanctions." He explained
that the Iranian political system is dependent on public
opinion, and that the public can turn against the government
if it suffers sanctions. Dagan commented that the
international community should try to "use all of its
diplomatic weapons now" before resorting to military attacks.
He said that China is unlikely to veto sanctions against
Iran because it cannot go against world opinion, even if it
is dependent on Iran for oil. He added that Russia will be
cornered because Iran will not accept its proposal not to
enrich uranium.

11. (C) Senator Lieberman asked whether the U.S. should
encourage a change of government. Dagan replied that until
now, no government has undertaken a serious effort to change
the ruling regime, and added that this cannot happen
overnight and requires significant cooperation from many
different groups, such as the Azeri, Kurdish, and Mujahideen
opposition in Iran. Dagan commented that "we need to sit and
form a plan so we can achieve mid-term goals to mold the
regime." He explained that the Iranian government needs to
understand that it will pay a price for supporting terrorism,
and said that "sanctions now don't hurt a lot." He noted
that there is a "long list of things that could be done to
create serious problems," but remarked that the intelligence
communities in Israel and the U.S. need political directives.
Dagan characterized his policy in four pillars:

-- inflicting effective sanctions through the UNSC.

-- preventing proliferation.

-- "damaging the (nuclear) project."

-- undermining the regime.

He added that "talking about a military strike" creates a lot
of debate in Iran, and that this is good for the
psychological impact. Senator Lieberman said that the media
will always focus on this even if it is the last thing the
U.S. wants to do.

12. (C) Dagan continued that Iran could take 1.5 years to
work on centrifuges, and on a separate track focus on the
launching systems for a nuclear missile. He said that with
these two tracks put together, Iran could have a military
capability to deliver a weapon in 2-3 years, and is working
hard in this direction. He said the Shihab-3 missile has a
range of 1,500 kilometers and can currently carry nuclear
material, and reported that Iran is also trying to adapt the
BM-25 missile, which already has a longer range, for this
purpose. He commented that Iran bought a few cruise missiles
from Ukraine, and is reverse-engineering them now. Senator
Lieberman said that the U.S. and Israel will not be the only
targets because Iran will be able to reach Sunni oil states,
at least for blackmail. Dagan agreed that having a nuclear
weapon improves Iran's bargaining position, and gives it a
unique capability.

13. (U) CODEL Lieberman has cleared this cable.

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