SHIMON PERES ON THE PALESTINIAN ELECTIONS

UNCLAS TEL AVIV 000391

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL IS PINR KPAL ETRD EG JO KISL ISRAELI PALESTINIAN AFFAIRS GOI EXTERNAL
SUBJECT: SHIMON PERES ON THE PALESTINIAN ELECTIONS
PREDICAMENT


1. Former Vice Premier Shimon Peres discussed Hamas with
Senator Joseph R. Biden, SFRC Democratic Staff Director
Antony Blinken and SFRC Professional Staff Member Puneet
Talwar on January 25. Commenting before the vote tallies
were in, Peres put a positive spin on the Palestinian
elections, which he described as "the first real elections in
Arab society. No single leader or one-party state
overshadowed these elections."


2. Peres responded to Senator Biden's query about the role
of Hamas post-elections with a question: "what are Hamas to
do with a victory? If they win, they face a dilemma. If
they enter the government, they must change or (risk)
endangering other Palestinians. They won't get the financial
support they need to deliver results if they don't stop
terror. That will put pressure on them to moderate." Peres
predicted a possible paradox: the more Hamas wins, the
stronger the position of Fatah in Palestinian politics.
Peres stressed that post-election dilemmas would be primarily
on the Palestinian side.


3. Peres intimated that Israeli policymakers faced a simpler
situation: If Hamas remains a terrorist organization; the
GOI will not work with them. Even so, he rued what he viewed
as excessive criticism of Palestinian President Abbas,
suggesting that Israeli pundits would do better to criticize
Israeli politicians rather than the absence of strong
Palestinian leadership: "They don't have a Ben Gurion or a
Lincoln, but the Palestinians are still a people."


4. Turning to Israeli politics, Peres reaffirmed his
appreciation of Ehud Olmert's "impressive entry" as Sharon's
successor. Commenting on Sharon's legacy, Peres said that
Sharon had brought an end to the Right in Israeli politics by
creating a centrist party with a strong base. Senator Biden
expressed his appreciation for this achievement of Sharon and
Peres.

Peres' Vision: Focus on Economics
--------------


5. Peres described his vision of regional economic
integration "from the Red Sea to the Syrian border,"
undaunted by the obstacles preventing Israeli-Palestinian
cooperation. Regional cooperation between Israel, Jordan and
the Palestinians is essential to economic survival. In his
view, Israel had made a mistake in stepping forward to
provide security by itself for regional joint ventures; this
made Israeli ventures targets. Peres also suggested that
exporting Gazan produce via Israel is "a blessing that has
become a curse: We must x-ray every tomato. Why should we
torture them?" Peres said he would prefer that Gaza export
its produce via the Egyptian Sinai at El-Arish. Peres
encouraged Gaza-Egypt and West Bank-Jordan cooperation as
better alternatives to Israeli-Palestinian initiatives.


6. Senator Biden asked whether such alternatives were viable
and, in particular, whether the market was large enough to
attract investment. Peres responded that Israeli, Saudi and
Palestinian billionaires are interested in investing in such
ventures. He stressed that the Saudis are becoming more
pragmatic as they realize how important Jordan is as a buffer
state with an Iraq dominated by the Shi'a. The DCM asked why
the GOI had not done more after disengagement to unfetter the
Gazan economy. Peres blamed the lack of movement on
Palestinian rocket fire, but offered no suggestions for
overcoming such spoiler moves by extremists. Senator Biden
then asked what could be done to prevent the disintegration
of the Gazan economy. Peres commended former PA Finance
Minister Fayyad as the best attribute of the PA, but offered
another possible panacea: Jordanian administrators could be
called in to run the West Bank economy while Egyptians could
run Gaza. Palestinians need to understand that they can make
money from business as well as from corruption -- "you make
wine from grapes as well as from water."

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