Identifier
Created
Classification
Origin
06TELAVIV2226
2006-06-09 12:17:00
CONFIDENTIAL
Embassy Tel Aviv
Cable title:  

FM LIVNI DISCUSSES FUNDING MECHANISM, PALESTINIAN

This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 002226 

SIPDIS

E.O. 12958: DECL: 06/07/2016
TAGS: PREL EAID KWBG KPAL IS GTIP ISRAELI PALESTINIAN AFFAIRS ISRAEL RELATIONS
SUBJECT: FM LIVNI DISCUSSES FUNDING MECHANISM, PALESTINIAN
PRISONERS' DOCUMENT, AND GTIP

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

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 002226

SIPDIS

E.O. 12958: DECL: 06/07/2016
TAGS: PREL EAID KWBG KPAL IS GTIP ISRAELI PALESTINIAN AFFAIRS ISRAEL RELATIONS
SUBJECT: FM LIVNI DISCUSSES FUNDING MECHANISM, PALESTINIAN
PRISONERS' DOCUMENT, AND GTIP

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


1. (C) SUMMARY: In a June 7 meeting with NEA A/S David Welch,
the Ambassador, and NSC/IPA/J Director Greg LoGerfo, Foreign
Minister Tzipi Livni reiterated Israel's willingness to help
avoid any humanitarian crisis in the Occupied Territories.
A/S Welch urged the GOI to consult closely with the USG on
the alternate funding mechanism. Livni said that Israel has
few problems with the current draft of the mechanism, but
remains firmly opposed to any payment of salaries as part of
the third window. Livni criticized the content of the
prisoners' document that may form the basis for a referendum
within the Palestinian Authority (PA). She also questioned
whether President Mahmud Abbas has considered what he
ultimately wants to achieve with a referendum and expressed
concern that he will use it to focus on final status issues,
a tactic that she said will fail and result in further
violence. A/S Welch urged the GOI to keep the end goal --
the removal of, or change in policy by, Hamas -- in mind. He
agreed with Livni that the international community has made
progress in isolating Hamas by maintaining a unified
commitment to the Quartet's principles. At the end of the
meeting, Livni expressed real "disappointment" that Israel
had been downgraded by the latest TIP report. END SUMMARY.

-------------- --------------
Upcoming GOI Decision on Alternate Funding Mechanism
-------------- --------------


2. (C) Livni noted that the alternate funding mechanism will
undoubtedly be a major topic during her trip to Europe during
the week of June 11. She said that the GOI's general message
is that Israel is willing to use the revenues it collects on
behalf of the PA to help avoid any humanitarian crisis. She
said a decision on whether the GOI would utilize the
alternate funding mechanism will be made after Israel is
certain that it would only be used for humanitarian purposes
and not to fund the Hamas government. A/S Welch urged the
GOI to consult closely with the USG prior to making any
decision on the mechanism.



3. (C) Livni added that the GOI has few concerns about the
proposal as it now stands, despite some unease over what the
mechanism -- or other parallel structures -- might cover in
the future. Specifically, she stressed that on June 5 she
had bluntly told EU HighRep Javier Solana that "salaries are
not acceptable." Livni also opposed any support for what she
called the "Hamas education of incitement." In reaction to
Livni's concerns about the timeline for the mechanism, A/S
Welch reassured her that the USG takes the Quartet language
on "limited in scope and duration" seriously. Livni shared
A/S Welch's assessment that any Arab League funding should
either be disbursed through the mechanism, or, at the very
least, be bound by its rules.


4. (C) Livni claimed that the PA Ministry of Health had told
the World Health Organization that they would not accept
Israel's offer to use approximately USD 10.2 million of
GOI-collected PA revenues to purchase medicines, but would
accept cash assistance. In Livni's assessment, the subtext
of the PA's refusal is that "there is no crisis." Livni
expressed concern that some Europeans fail to understand that
Abbas is using the difficulties faced by Hamas to strengthen
his own hand internally and to obtain movement on the
prisoners' document. In her view, it is not in the interest
of Abbas to open new windows to transfer funds and salaries
to the PA.


5. (C) A/S Welch outlined U.S. views of the current European
draft of the alternate funding mechanism. The USG believes
that the "first window" may be too open-ended; the Presidency
should be the recipient -- and not a conduit -- for funding
to avoid removing the onus of failure from the Hamas-led
Finance Ministry. A/S Welch said that the U.S. has no real
difficulty with the "second window" involving EU payment of
fuel supplies for the Gaza power plant. A/S Welch noted that
the USG had objected strenuously to any payment of salaries
as pat of the "third window." The U.S. has had at least
limited success in focusing the Europeans, and even Abbas, in
the direction of a needs-based mechanism independent of the
government payroll. A/S Welch also mentioned that the USG
would prefer to see an international or European bank handle
the transfers to ensure proper oversight. On timing, A/S
Welch suggested that approval of a mechanism should wait
until after Abbas has made a decision on the referendum
issue, despite EU pressure for an agreement by June 12.

--------------
GOI Concerns With the Prisoners' Document
--------------


6. (C) Livni asked if the Palestinians themselves know what
they want to achieve with the potential referendum on the
prisoners' document. A/S Welch replied that the advisers to
Abbas intend to use the referendum to overcome the current
stalemate and get rid of Hamas by dissolving the government.
Livni questioned how this could happen, claiming that Abbas
had been unclear about his legal ability to dismiss the
government when she met with him in Egypt on June 21. She
expressed doubt that Hamas would resign or accept removal
without a fight.


7. (C) Livni strongly criticized the content of the
prisoners' document, saying it falls short of the Quartet's
conditions and "cannot be part of the process between
Israelis and Palestinians." She added that Abbas must
understand that Israel is willing to strengthen him in his
showdown against Hamas, but -- if he is successful -- Abbas
must return to the Roadmap or work on realignment, not focus
on final status issues. In her opinion, the gap between the
GOI and PA is too wide for any progress on final status
issues in the next nine months. She cautioned that any
initiative to address final status issues would fail, thereby
strengthening Hamas and increasing violence.


8. (C) A/S Welch urged the GOI to keep the end goal in mind
-- an end to a Hamas government -- without becoming mired in
the procedural details or exact wording of a referendum. He
said that the USG shares many of the GOI's concerns with the
prisoners' document, but wants to strengthen Abbas while
simultaneously avoiding steps that could be seen as
interference and endangering the safety of Palestinian
reformers.

--------------
Isolation of Hamas
--------------


9. (C) A/S Welch outlined progress on the international
community's steps to isolate Hamas unless it accepts the
Quartet's three conditions. He noted that the Arab League
has delivered little of its promised assistance, many of the
Arab states are averse to assisting Hamas, some Gulf states
appear more concerned about Iran than the Palestinians, and
the Europeans remain on board despite their unease about the
-- often overstated -- humanitarian situation in Gaza. Livni
stressed the importance of maintaining the Quartet's
strategy, admitting that she had been pleasantly surprised by
the strength of international solidarity opposing Hamas.

-------------- --------------
Disappointment with Trafficking in Persons (TIP) Status
-------------- --------------


10. (C) Both Livni and Ambassador Ayalon expressed real
"disappointment" that Israel had been downgraded by the
latest TIP report, despite concrete progress in fighting
trafficking in women and ongoing efforts to end trafficking
in labor. The Ambassador noted that passage of legislation
to criminalize labor trafficking would be a big step forward.


11. (U) A/S Welch has cleared this cable.

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