SHEETRIT OFFERS VIEWS ON REALIGNMENT,

C O N F I D E N T I A L SECTION 01 OF 04 TEL AVIV 002346

SIPDIS

E.O. 12958: DECL: 06/15/2016
TAGS: PREL PGOV KWBG IS ISRAELI PALESTINIAN AFFAIRS ISRAEL RELATIONS SETTLEMENTS
SUBJECT: SHEETRIT OFFERS VIEWS ON REALIGNMENT,
NEGEV/GALILEE DEVELOPMENT, AND OUTPOSTS

REF: TEL AVIV 2271

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


1. (C) Summary: Minister of Construction and Housing Meir
Sheetrit told the Ambassador on June 14 that the GOI should
have started planning Gaza disengagement well in advance to
have permanent homes available for the settlers who were
evacuated. He said this would have saved the GOI a
considerable amount of money on temporary houses, and added
that he is willing to take on the responsibility of providing
housing for West Bank settlers if a realignment takes place.
However, he stated bluntly that he is unhappy with the
realignment plan because this was not part of Kadima's
original platform, former PM Sharon opposed further
unilateral steps, and it will not lead to peace. The
Ambassador said that for now realignment is not a concrete
plan, and that the President made clear to Prime Minister
Ehud Olmert that the USG prefers negotiations rather than
unilateral action by the GOI. Sheetrit thanked the U.S. for
maintaining pressure on Hamas to accept the three conditions
necessary for recognition, and said that if the international
community also pressures the group, it may eventually comply
and Israel may be able to deal with it at some point in the
future. He added, however, that if Hamas does not accept the
conditions, Israel should prepare itself for a long interim
period in which there is no peace, and wait for a new
Palestinian government to rise. Sheetrit expressed concern
about Qassam rockets landing in Sderot, but also with Israeli
retaliation in urban areas in the Gaza Strip, which he
characterized as a "mistake." He claimed to have predicted
an incident like that of the Palestinian family killed on the
beach on June 9, and said another such event would turn
everything "upside down." The Ambassador recounted his
experience with the Israel Lebanon Monitoring Group (ILMG),
and noted that the beach incident is an example of a case
that could be turned to a group such as the ILMG. He
explained that this would also help Palestinian Authority
(PA) President Mahmud Abbas increase public support.
Sheetrit commented that the GOI does not talk to Abbas but
that it should, especially if there is to be another
realignment.


2. (C) Summary cont: Sheetrit referred back to Gaza
disengagement, and said that it would have been good if the
evacuees had moved to the Negev or the Galilee. He remarked
to the Ambassador that northern and southern Israel lack
transportation infrastructure, but reported that the GOI will
be spending about $10 billion over the next five years to
improve and extend the railroads and highways in these areas.
He complained about a lack of aid for urban and social
renewal, and the Ambassador noted the contrast between
spending in settlements and spending in the Negev and
Galilee. The Ambassador asked Sheetrit about his thoughts on
outposts, and Sheetrit called them a "shame to law
enforcement in Israel," and said that "they should just go."
He defended settlements as being legally established,
however, and acknowledged that growth would continue in the
settlement blocs because the GOI is going to "keep those."
Sheetrit agreed to provide the Embassy with advance warning
of any tenders that the GOI plans to issue.


3. (C) Summary cont: In a brief pull aside after the
meeting, Sheetrit further showed his frustration with the new
GOI. He urged the Ambassador to ask Washington that it
listen to all the voices within the government -- not just
those around the PM. End summary.

--------------
Gaza Disengagement Should
Have Been Better Organized
--------------


4. (C) Minister of Construction and Housing Meir Sheetrit
agreed with the Ambassador in a June 14 meeting that the
Ministry of Construction and Housing (MOCH) would have a key
role in any future settlement evacuations under the GOI's
realignment plan. He said that the GOI would have to start
planning in advance. It was inexcusable that the government
did not start building permanent houses for Gaza evacuees
until after the disengagement began, he said. As a result,
he explained, Israel spent $100,000 per home for temporary
houses for the evacuees, when that money would have been
better spent on permanent homes. According to Sheetrit,
approximately 1,400 settler families are still in temporary
quarters, 50 families are in permanent homes in the Ashkelon
area, and 100 other families are dispersed elsewhere. He
claimed that there were "too many cooks in the kitchen" when
the GOI was planning housing for the settlers, including the
Ministry of Defense (MOD),the Disengagement Authority, the
Jewish Agency, and the municipalities. In the end the GOI
was unprepared to handle the evacuees. Sheetrit emphasized
that he would take on the responsibility of establishing
housing as quickly as possible for evacuated West Bank
settlers if the GOI gives him the tools necessary to do so.
He mentioned that he hoped Gaza settlers' temporary homes
could be turned over to the homeless in Israel because they
have roads, schools, and other infrastructure already in
place.

--------------
Sheetrit: Realignment
Will Not Lead to Peace
--------------


5. (C) The Ambassador noted that proper planning will be
particularly important if Israel wants West Bank settlers to
leave peacefully. Sheetrit agreed, cautioning that it would
be impossible to evacuate 60,000-80,000 settlers against
their will. He bluntly confided, however, that he is not
happy with the realignment plan because it was not on
Kadima's platform when former Prime Minister Ariel Sharon
first launched the party. He claimed that he personally
knows that Sharon was against further unilateral actions.
Sheetrit said that there are two ways to end the
Israeli-Palestinian conflict. He noted that his preference
is for a process by which peace can be achieved in time, thus
making it easier for settlers to eventually leave the West
Bank quietly, which he thought they would do in the context
of a peace agreement -- but not as part of a unilateral plan.
The alternative would mean leaving more territory now, and
subsequently having a terrorist semi-state as a neighbor. He
advised that if Israeli gives up the central West Bank, while
keeping the Jordan Valley and the settlement blocs, the
Palestinians will not accept this, and it will not be a
solution for either the Palestinians or the Israelis because
there will not be peace. Sheetrit asked rhetorically, "If we
leave, what is the next step?"

--------------
We Could Deal With Hamas
--------------


6. (C) The Ambassador said that for now realignment is an
idea without much detail, not a concrete plan, and
highlighted that the President made clear to Prime Minister
Ehud Olmert in their meeting in May that the USG strongly
prefers a serious negotiating effort with Palestinian
Authority (PA) President Mahmud Abbas prior to any unilateral
action by the GOI. He explained that Israel would have to
clearly pursue a credible process of creating a Palestinian
partner. Sheetrit asked what would happen if the GOI did not
negotiate with Hamas, and said that for the time being he
favors keeping pressure on Hamas until the government falls
and a new government rises. He thanked the U.S. for
maintaining pressure on Hamas, and insisting that the group
recognize Israel, renounce terrorism, and accept previous
agreements. He assessed that if the rest of the
international community also pressures Hamas to accept these
conditions, there may be the possibility that Israel could at
some point deal with Hamas. Sheetrit commented that this is
the paradox of the doves of war and the hawks of peace,
characterizing Hamas as the Palestinian right-wing, which
could bring peace between the Israelis and Palestinians. If
Hamas does not accept the international community's
conditions, however, Israel would have to prepare itself for
a long interim period in which there is no peace, and in
which the GOI would have to try to control Palestinian
terrorism as much as possible while allowing Palestinians to
live in the best way they could, according to Sheetrit.


7. (C) The Ambassador noted that part of the GOI's plan to
control terrorism is to build the separation barrier.
Sheetrit wondered aloud why construction is taking so long,
particularly in the southern West Bank. He claimed that
"they are just lazy," and recounted that during his tenure as
a minister in the Finance Ministry in 2003, he held the line
on the MOD's budget, but told Defense officials that there
would be no limit to the amount he would give the MOD for
construction of the barrier. He told the Ambassador that he
would have been willing to utilize U.S. loan guarantees if
necessary to build the barrier.

--------------
Violence in Gaza
--------------


8. (C) Sheetrit expressed his concern about Qassams landing
in Sderot, but also with what he called "our mistake" of the
killings of Palestinian civilians in counter attacks against
Qassam rockets. He said that he had told Sharon that
shooting in densely populated Palestinian urban areas would
not achieve anything, "not even deterrence." Sheetrit
reported that he had once formed a brainstorming group to
deal with the Qassam attacks issue, and that it had to
recommended the development of a Qassam-like retaliation
weapon that makes a lot of noise but does little damage. He
said that the GOI needs a clever way to deter attacks without
causing damage, and added that with a weapon of this type, if
the Palestinians launch two Qassams at Sderot, the IDF could
launch 200 in response. The Ambassador recounted his
experience in Lebanon with the Israel Lebanon Monitoring
Group (ILMG),consisting of Syria, France, Israel, Lebanon,
and the U.S., which served as a forum for investigating
complaints of violence directed against civilians. He
explained that the ILMG became an intellectually honest
exercise in which both the Israelis and Lebanese admitted
mistakes, and he noted that the beach incident is a perfect
example of a case that could be referred to such a group to
short-circuit the inevitable escalation in violence. The
Ambassador also commented that an ILMG-type group might
provide an opportunity for PA President Abbas and to gain
support by appointing the Palestinian representative in the
group.

--------------
The GOI Should Talk to Abbas,
Especially if Realignment Occurs
--------------


9. (C) Sheetrit responded that the GOI is not talking to
Abbas, "although I think we should." He characterized Abbas
as weak, but said that he has good intentions. He opined
that the GOI should have met with him when planning Gaza
disengagement, and admitted that if the GOI had coordinated
disengagement with the PA, it would have solved the problem
of the settler house demolitions. Sheetrit said that he was
against the demolitions, and that the houses should have been
given to refugees. He claimed that he met with settlers when
he was "responsible for the compensation law," and that they
told him they did not want the houses demolished because they
hoped to some day return under peaceful circumstances to show
their children where they had once lived. The Ambassador
pointed out that there would be even more empty houses after
evacuations from the West Bank, and Sheetrit underlined that
if the evacuations take place without coordination, there
will be "total chaos" in the West Bank. He reiterated that
he does "not accept" or "think it's right" to go through with
realignment. Sheetrit said even Yossi Beilin is against
realignment if it means transferring settlers to the seam
zone instead of to Green Line Israel.

--------------
Strengthening the Negev and Galilee
--------------


10. (C) Referring back to Gaza disengagement, and possibly
looking forward to West Bank evacuations, Sheetrit opined
that it would have been a good idea if Gaza evacuees had
moved to the Negev or the Galilee. He said they did not,
however, because the settlers wanted to remain together and
not join already established communities. According to
Sheetrit, this has doubled the cost for the GOI to build new
communities for them, and he opined that the government
should have simply given the settlers money and had them buy
or rent houses on their own without offering to build new
communities. He claimed the GOI offered settlers an extra
$30,000 to go to either the Negev or the Galilee, but few
took the offer.


11. (C) The Ambassador asked whether Sheetrit as Housing
Minister is working on the Negev and Galilee now with Shimon
Peres. Sheetrit responded sarcastically that "Peres is in
the stratosphere" and needs "cement legs to stay on earth."
He remarked, however, that there is a lot of competition
between central Israel and more remote areas, and that many
contractors are lobbying hard for zoning changes in central
Israel to build more homes because "there is a lot of money
in this for them." Sheetrit said there is no interest in the
south because it lacks transportation infrastructure. He
said that the National Highways Company has a plan and 5-year
budget of NIS 19 billion ($4.2 billion) to build roads to
enable residents in any part of the country to reach a major
metropolitan center in 30 minutes. He explained that
residents of the Galilee should be able to get to Haifa in 30
minutes, residents of central Israel should get to Tel Aviv
or Jerusalem in 30 minutes, and residents in the Negev should
arrive in Beer Sheva in 30 minutes. He noted that a plan
with a NIS 26 billion budget ($5.8 billion) has also been
approved for additional trains, and all that is needed is to
"cut the ribbons."


12. (C) Sheetrit complained that funds are also needed for
urban and social renewal. He noted that the budget last year
only appropriated $2 million to strengthen town centers and
neighborhoods when residents flee to new suburbs, and the old
or poor are left behind. He said that the budget this year
is only $300,000. Sheetrit claimed that grants for social
renewal in the Negev and Galilee have been cut to zero.

--------------
Outposts? Easy, Just
Kick Them Out
--------------


13. (C) The Ambassador remarked that this is in stark
contrast to the incentives that are given to settlers in the
West Bank, and Sheetrit agreed, adding that he is "against
it." He commented that the incentives are very costly for
the government. He also objected to the many settlements
that have special committees which prevent people from moving
to the settlements if they do not have the "right" ideology.
He said that a number of the settlers are from the extreme
right-wing, and that they have their own way of thinking and
their own education systems. The Ambassador asked Sheetrit
about his thoughts on outposts, and the GOI's negotiations
with settlers to dismantle them. Sheetrit replied that
outposts are a "shame to law enforcement in Israel," without
having anything to do with the Palestinians. He told the
Ambassador that he knows that outposts have received money
from the government, particularly his own ministry, and that
this has taken place with or without the top political
echelon being aware, although he quickly claimed that Sharon
did not encourage outposts after he became prime minister.
Sheetrit defended settlements, saying that they exist
legally, but stressed that outposts do not, so the government
should not negotiate with the settlers to remove them, and
that "they should just go." He mentioned that he has heard a
lot of talk about the negotiations, but claimed that Defense
Minister Amir Peretz is not acting decisively and is dragging
his feet. According to Sheetrit, Peretz should simply call
the settlers with a deadline to leave, and kick them out if
they do not. He added that he expects the outposts to be
demolished before the beginning of a realignment.

--------------
Construction in Settlements
Blocs To Continue
--------------


14. (C) The Ambassador asked about construction in the
settlements blocs, and noted the tender for construction of
53 single-family homes in Elkana settlement, south of
Qalqilya (reftel). Sheetrit responded that the GOI would not
provide funds to outposts, but that growth would continue in
the settlement blocs because the GOI is going to "keep
those." The Ambassador emphasized that the GOI has committed
to the USG to freeze settlement expansion. He asked whether
Sheetrit would revive a previous practice of providing the
Embassy advance warning -- before publication -- of any
tenders that the GOI plans to issue, and Sheetrit asked for
clarification. Dr. Chaim Fialkoff, senior deputy director
general for planning and coordination at the MOCH, explained
to Sheetrit that former Housing Minister Natan Sharansky had
called the Embassy before tenders were published in the
Israeli press. Sheetrit agreed that this could be continued.
Fialkoff also reported to the Ambassador that the MOCH's
staff is currently preparing a report for Sheetrit to inform
him of planning activities taking place in the ministry.
Both Fialkoff and Sheetrit offered to provide the Ambassador
a copy when the report is finished.


15. (C) In a brief pull aside at the end of the meeting,
Sheetrit asked to raise a "political issue." He then asked
the Ambassador to advise Washington not just to listen to
those around the Prime Minister. There are other voices
(including his) within the GOI which should be heard, he
said. Comment: Sheetrit's remarks indicate the fragility of
the new GOI, with party members like these who need
(political) enemies. End comment.

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