ISRAEL MEDIA REACTION

UNCLAS SECTION 01 OF 08 TEL AVIV 001854

SIPDIS

STATE FOR NEA, NEA/IPA, NEA/PPD

WHITE HOUSE FOR PRESS OFFICE, SIT ROOM
NSC FOR NEA STAFF

SECDEF WASHDC FOR USDP/ASD-PA/ASD-ISA
HQ USAF FOR XOXX
DA WASHDC FOR SASA
JOINT STAFF WASHDC FOR PA
USCINCCENT MACDILL AFB FL FOR POLAD/USIA ADVISOR
COMSOCEUR VAIHINGEN GE FOR PAO/POLAD
COMSIXTHFLT FOR 019

JERUSALEM ALSO FOR ICD
LONDON ALSO FOR HKANONA AND POL
PARIS ALSO FOR POL
ROME FOR MFO

E.O. 12958: N/A
TAGS: IS KMDR MEDIA REACTION REPORT
SUBJECT: ISRAEL MEDIA REACTION

--------------
SUBJECTS COVERED IN THIS REPORT:
--------------

Mideast

--------------
Key stories in the media:
--------------

Major media quoted FM Tzipi Livni as saying Wednesday
that Israel has agreed to release tax revenue it has
withheld from the PA since February to pay for
humanitarian aid. Yediot and Israel Radio said Israel
has thus acceded to the Quartet's demands. The radio
reported that Defense Minister Amir Peretz has asked
Gen. Yosef Mishlav, the coordinator of GOI activities
in the territories, to prepare the transfer of USD 50
million to the PA. Ha'aretz reported that on
Wednesday, US representative to the UN Ambassador John
Bolton told visiting IDF soldiers from the National
Security College in Israel that the US is wary of the
initiative agreed upon at a meeting of the Quartet on
Tuesday, under which a mechanism will be created to
transfer financial assistance to the Palestinians.
Bolton was quoted as saying that "the US has still not
granted its final agreement" to the mechanism, and that
only after the US receives all the details will it
"evaluate the proposal and consider its response."

Ha'aretz, Yediot, and Maariv bannered moves allegedly
being considered by Peretz. Ha'aretz reported that
Peretz is considering easing the policy on transporting
goods between Israel and the Gaza Strip, out of concern
that the stringent policy at the border crossings is
causing a humanitarian crisis in Gaza. Ha'aretz
reported that Peretz has demanded explanations from the
top IDF brass regarding artillery fire on Palestinian
communities in the northern Gaza Strip and that he has
instructed the police and IDF to arrest settlers who
attack and harass Palestinian children in the vicinity
of the Maon farm in the southern Hebron hills. Yediot
reported that Peretz is calling for immediately
engaging in a dialogue with PA Chairman [President]
Mahmoud Abbas, against the view of PM Ehud Olmert, and
contrary to what the newspaper says is the
international community's decision to break off
contacts with the PA as long as it is led by Hamas.
Yediot also wrote that Peretz intends to instruct the
IDF to immediately complete the evacuation of all
illegal settler outposts in the West Bank within a
year. Maariv, which bannered: "Peretz: We Must Help
Abu Mazen," anticipated a confrontation between his
views and the defense establishment's traditional
stances.

Yediot and Hatzofe reported that Olmert is considering
implementing his convergence plan in stages. Leading
media quoted Disengagement Administration head Yonatan
Bassi as saying Wednesday that evacuating 70,000 West
Bank settlers is not realistic.

Ha'aretz reported that Western diplomats dealing with
the Israeli-Palestinian conflict expressed concern
Wednesday that Israel would carry out a rapid
unilateral withdrawal from the territories and create a
new reality in the West Bank without first exhausting
the possibility of serious diplomatic negotiations with
the PA. The newspaper quoted some of the diplomats
involved in the Quartet's talks on Tuesday in New York
as saying that that they intend to apply pressure on
Israel not to make any decisions on the matter in the
near future. Ha'aretz wrote that a western diplomat
told the newspaper Wednesday that "the Americans also
know our position on this matter, and they recognize
that we will not look favorably on unilateral steps at
this stage." The diplomat was further quoted as saying
that talks between Israel and Abbas could lead to "much
more positive results than unilateral actions." Yediot
cited the disappointment of GOI officials over the fact
that in its final statement Tuesday, the Quartet did
not refer positively to the convergence plan and that
it twice stressed its objections to unilateral steps.

The Jerusalem Post reported that AIPAC is lobbying
against US administration efforts to oppose a proposed
bill that would limit aid to the PA. The newspaper
reported that on Monday, AIPAC circulated a memo in
favor of the bill, known as the Palestinian anti-
terrorism act of 2006. The Jerusalem Post also
reported that on Tuesday, Americans for Peace Now sent
a letter to Congress refuting AIPAC's answers to
"frequently asked questions" about the bill. Israel
Radio also took up the issue.

Ha'aretz cited Reuters that Israel's National Security
Adviser Giora Eiland told reporters on Wednesday that
if Iran eventually acquires nuclear weapons, it will be
unlikely to share them with the Islamic militants it
backs in the Middle East. Eiland was quoted as saying
that he does not believe that Iran is irresponsible.
Ha'aretz reported that gaps have appeared between the
US on one hand, and Germany and France on the other on
the Iranian issue. IDF Radio and Ha'aretz's web site
reported that Iranian President Mahmoud Ahmadinejad
told students in Jakarta today that Israel is a "regime
based on evil that cannot continue and one day will
vanish."

Leading media reported that Lebanese PM Fuad Siniora
met this week with senior British officials, including
PM Tony Blair, and asked them to pressure Israel to
withdraw from the Sheba Farms.

Ha'aretz cited Reuters that on Wednesday, Jordanian
government spokesman Nasser Joudeh accused Hamas of
trying to recruit operatives to undergo military
training in Syria and Iraq and stage attacks in Jordan,
and quoted Joudeh as saying that Jordan had found new
weapons that included Iranian rocket launchers.
Ha'aretz printed a DPA (German Press Agency) dispatch
that on Wednesday, Hamzeh Mansour, a top leader of the
Islamic Action Front, Jordan's largest political party,
sent a message to Swiss President Moritz Leuenberger
praising his stated readiness to meet with officials
from the Hamas-led Palestinian government as an
"objective viewpoint."

Maariv reported that Brig. Gen. Aviv Kochavi's
commanders have decided to send him to the US for
studies. Kochavi was supposed to begin classes at the
Royal College of Defense Studies in the UK, but gave up
the idea following concerns that he would be arrested
there on war crime charges. He commanded the IDF
forces in Gaza.

All media reported that on Wednesday, four Labor Party
Knesset members bucked coalition discipline by
refraining from voting for the 2006 state budget, which
passed its first reading in the Knesset by a 62-47
margin.

Ha'aretz reported that The Annals of Neurology, the
official journal of the American Neurological
Association, published in its April issue an article
stating that Ariel Sharon received reasonable
neurological treatment and that his doctors' decisions
were acceptable.

Maariv reported that the Israeli airline Arkia has
asked Israel's Civil Aviation Administration for a
permit to operate scheduled flights to New York and
destinations in Europe and South America.

Maariv reported that an unnamed American billionaire
donated USD 2.5 million for the construction of an
emergency ward in the Negev town of Dimona.

Yediot reported on a huge delay -- nine weeks - in the
time needed to obtain non-immigrant visas to the US.
The newspaper cited a press release issued by the US
Embassy in Israel, which strongly encourages all
individuals who plan to travel to the United States at
any time between now and the end of September to make
an interview appointment as soon as possible, through
the Embassy's visa appointment internet web site
(detailed in the article). Yediot further cited the
press release: "The Embassy will do all that it can to
help individuals obtain an expedited appointment date
for a true emergency, but this may not be possible in
all instances, due to the exceptionally strong demand
for visa appointments and the Embassy's limited visa
interviewing capacity." Maariv reported that starting
next year every visitor to the US will be required to
have biometric pictures taken, including handprints.

Leading media quoted President Bush as saying Wednesday
that his brother, Florida Governor Jeb Bush, is
presidential material.

--------------
Mideast:
--------------

Summary:
--------------

Chief Economic Editor Sever Plotker wrote in mass-
circulation, pluralist Yediot Aharonot: "As long as
Hamas refuses to accept the conditions set by the
Quartet, no aid should be sent to the PA organizations
-- neither direct nor indirect."

Foreign News Editor Arik Bachar wrote in popular,
pluralist Maariv: "Israel's image and its diplomatic
situation have so improved of late, that every Jew with
any experience should start worrying."

Veteran columnist Evelyn Gordon wrote in the
conservative, independent Jerusalem Post: "Agreeing to
fund PA salaries and other governmental activity would
... facilitate the Hamas government's survival.... For
its own sake as well as Israel's, one must hope that
the US will rethink this disastrous idea before it is
too late."

Columnist Ari Shavit wrote in independent, left-leaning
Ha'aretz: "The most important decision of this decade
will be made in the coming months by one man: Bush.
And Israel's role is to assist this one man, who is
under great pressure."

Arab affairs commentator Danny Rubinstein wrote in
Ha'aretz: "Whatever Fatah, Israel, the Arab states, and
the entire world do to undermine the Hamas government
will not work. The Palestinian public is loyal to it.
So it is best to look for a way to live with it."

Senior columnist Haggai Huberman wrote in nationalist,
Orthodox Hatzofe: "The Palestinian leadership has
managed to channel the multitude's rage against its
classical enemies -- Israel and the United States."

Block Quotes:
--------------


I. "The World Bank's Palestinian Workers"

Chief Economic Editor Sever Plotker wrote in mass-
circulation, pluralist Yediot Aharonot (5/11): "The
Quartet ... which coordinates foreign policy and
international aid to the Palestinians, decided in its
late meeting to make the workers of the PA employees of
the World Bank. That, succinctly, is the meaning of
the 'Hamas bypass arrangement' to transfer aid money,
as formulated by the Quartet to ease the great economic
distress that has reigned in the Palestinian
territories since the Hamas government was sworn in....
The Hamas government will be able to be released of any
budgetary responsibility and enjoy having the
connection cut between crime and punishment. Its hold
on the Palestinian public will gain in strength, not
weaken. It can boast to its voters: Look, we didn't
fold and we didn't bow to international pressure to
change our charter and our attitude toward Israel, and
even so, aid was resumed. The terrible economic
situation in the PA is the direct consequence of the
Intifada and of terror (which only hurt the
Palestinians),of the ongoing and overbearing Israeli
occupation (which only hurts Israel) and the corruption
of the Palestinian government itself. To improve their
living conditions from the bottom up, there must be an
Israeli-Palestinian peace agreement. Therefore, as
long as Hamas refuses to accept the conditions set by
the Quartet, no aid should be sent to the PA
organizations -- neither direct nor indirect.
Unfortunately, the international community has
voluntarily given up on its main means of pressure on
Hamas -- that of money -- and missed an historic
opportunity to force it, as a governing body, to
maintain budgetary, administrative and political
discipline."

II. "A Worrisome Improvement"

Foreign News Editor Arik Bachar wrote in popular,
pluralist Maariv (5/11): "One can only feel sorry for
all those experts in foreign policy, from Condoleezza
Rice to Javier Solana, who made themselves a bed of
thorns. In the script, it all worked beautifully --
Israel leaves Gaza, the Palestinians warmly adopt the
democratic system of elections. Until Hamas came along
and decided it didn't like the text, which said that to
fulfill the vision of two states for two peoples, it
should recognize Israel and start talking to it. The
script of Europe and the US underwent radical changes
ever since Sharon brought us out of the Gaza dung heap,
and left the Palestinians with the burden of proof that
they are capable of beginning to function as a
responsible people. Now the Palestinians have been
given the role of beggars ... while Israel clips the
coupons in the diplomatic sphere, particularly in
Europe.... Israel's image and its diplomatic situation
have so improved of late, that every Jew with any
experience should start worrying."
III. "The Mockery of Funding PA Salaries"
Veteran columnist Evelyn Gordon wrote in the
conservative, independent Jerusalem Post (5/11): "To
say that ordinary Palestinians should not suffer
because of the government they themselves elected, and
whose objectionable policies they continue to support,
is thus to ensure that they have no incentive not to
reelect Hamas in the future. Agreeing to fund PA
salaries and other governmental activity would make a
mockery of the international aid boycott and facilitate
the Hamas government's survival. And by proving that a
policy of Islamic extremism entails no long-term price,
it would also encourage the election of similar
governments elsewhere in the Middle East. Thus, for
its own sake as well as Israel's, one must hope that
the US will rethink this disastrous idea before it is
too late."

IV. "The Hum of the Centrifuges"

Columnist Ari Shavit wrote in independent, left-leaning
Ha'aretz (5/11): "Israel is behaving like an ostrich.
The Middle East is on the verge of going nuclear, and
the locals are obsessed with the convergence. Yet it
is clear that there is no convergence without American
leadership. Equally clearly, the US is a superpower
that cannot simultaneously manage the battle against
Iran, the war in Iraq and the Israeli withdrawal. It
is therefore evident that the convergence will have to
wait. The vital task of dealing with the settlements
will have to wait until after the urgent task of
dealing with the centrifuges has been completed. The
most important decision of this decade will be made in
the coming months by one man: Bush. And Israel's role
is to assist this one man, who is under great pressure,
to make the right decision, in the right way and under
the right circumstances.... Israel must not make it
difficult for him, and should not divert his attention
from the priority. Israel's role now is to keep a low
profile: It should stick to the road map, deal with the
illegal outposts and not draw any unusual attention to
itself. It must help Western public opinion to
understand the inevitable and also prepare Israeli
public opinion for the unavoidable. Only after the
great international crisis of 2007 can Israel return to
the routine of the conflict, the occupation and the
shaping of its borders. Only after the hum of [Iran's
nuclear] centrifuges has been silenced will it be
possible to seriously deal with the systematic
uprooting of settlements."


V. "Bypassing Hamas"

Arab affairs commentator Danny Rubinstein wrote in
Ha'aretz (5/11): "Hamas and Israel are ... strategic
partners in the non-partner position.... it is possible
that there will be a security lull the likes of which
has not been seen here in years. It turns out that
there might also be a financial arrangement that would
enable the Hamas government to function and survive.
The Quartet decided Tuesday night to create a mechanism
that will pay salaries to tens of thousands of PA
employees, most of whom work in vital services, the
school system and the health system.... It is clear to
everyone now that whatever Fatah, Israel, the Arab
states, and the entire world do to undermine the Hamas
government will not work. The Palestinian public is
loyal to it. So it is best to look for a way to live
with it."

VI. "Palestinians Obviously Blame Israel and the US"

Senior columnist Haggai Huberman wrote in nationalist,
Orthodox Hatzofe (5/11): "Domestic [Palestinian]
violence never reached intolerable levels, and the
cease-fire [between Hamas and Fatah] was reached within
a few days. The Palestinian leadership has managed to
channel the multitude's rage against its classical
enemies -- Israel and the United States. Those claims
were repeatedly made in sermons delivered in the
mosques: We suffer because of Israel and the Americans.
The economic crisis is their fault. They're
responsible for the hunger and for the siege on the
Palestinian Authority. Palestinian suffering serves
Israel and the US, therefore they're to blame for
everything."

JONES