PERETZ WANTS MERETZ, BUT BEILIN IS BETTING ON BIBI

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 004177

SIPDIS

E.O. 12958: DECL: 10/20/2012
TAGS: PREL PGOV PINR KPAL IS
SUBJECT: PERETZ WANTS MERETZ, BUT BEILIN IS BETTING ON BIBI

REF: TEL AVIV 4107

Classified By: Charge d'Affaires Gene A. Cretz. Reason 1.4 (B/D)


1. (C) PM Olmert's courting of Avigdor Lieberman's Yisrael
Beiteinu (YB) party as a potential coalition partner has
forced Labor Party chairman Amir Peretz to look left to
Meretz for political survival. Meretz MK Avshalom Vilan last
floated the idea of a Meretz-Labor partnership at the end of
September, but his idea wasn't taken seriously by the Labor
Party until its whip, MK Ephraim Sneh, expressed interest
this week (reftel). Peretz then told the press, on October
19, that "it is absolutely necessary to examine the idea of
uniting forces in the Israeli peace camp." Meretz Party
chairman Yossi Beilin reportedly responded that "it would be
absurd for a guiding light like Meretz to link up to a
sinking ship," according to press reports. But Beilin's aide
confirmed to poloff October 20 that Beilin (despite his
public statements) and Peretz would meet the week of October
23 to test the waters on two separate but related issues:
participation in the coalition and possible merger of the two
parties. Joining the coalition would offer Beilin an
opportunity to exert some influence, with Peretz, on
government policy toward the Palestinians. For his part,
Olmert reportedly told the press: "I am willing to accept
Beilin, I am willing to accept Lieberman, but without
changing the basic principles of this government."

BEILIN ON OLMERT'S POLICY OPTIONS


2. (C) In late September, Beilin told the Ambassador that
public opinion polls had undermined the coalition leaders'
status as well as their self-assurance. Beilin commented
that Olmert was "paralyzed" politically and needed to lay out
a new policy agenda now that convergence/realignment is on
hold. Beilin recommended that Olmert "re-energize the
Roadmap" by interpreting its provisions as a parallel
process, rather than a linear one. Specifically, Beilin
advocated a focus on Phase II of the Roadmap, which he termed
"convergence via negotiations" that is "tailor-made for
Olmert and Abu Mazen." On the Quartet demands of the PA,
Beilin responded "don't abandon them. If the PA fails to make
parallel progress on roadmap steps on security issues, then
don't release money to the PA." Even if Gilad Shalit is
freed, Beilin did not believe this would result in much
political bounce for Olmert. "Since he (Olmert) said he
would pay no price -- and he will have to pay a price -- the
day of (prisoner) release will weaken him."

BEILIN BETTING ON BIBI


3. (C) Contrary to current Kadima Party spin that suggests a
coalition with Lieberman is imminent, Beilin predicted that
Likud Party chair, Binyamin Netanyahu, would attempt to form
a governing coalition without going to elections. Beilin
said he thought Lieberman would be more likely to line up
with Netanyahu than with Olmert, and hinted that Netanyahu
might woo former Defense Minister MK Shaul Mofaz from Kadima
back to the Likud if the MOD portfolio were dangled in front
of him. Beilin also mentioned that the seven members of the
Pensioners party were wild cards that hadn't been counted.
"MK Moshe Sharoni is beyond Lieberman," Beilin dramatized.
He concluded that Likud combined with Shas, United Torah
Judaism (UTJ),YB, and the National Union would yield fifty
seats, so Netanyahu would only need a third of the Kadima
faction (10) and several Pensioners to obtain a majority.


4. (C) Comment: Although pundits still predict Lieberman
has a better chance of joining the coalition than does
Beilin, Yisrael Beiteinu was forced to make its first retreat
by pulling its government reform bill from a preliminary
hearing in the Knesset on October 18. Knesset contacts
informed our political specialist that if Lieberman had
initiated a preliminary reading of his bill, as he had
planned (reftel),it would have faced a vote. Lieberman does
not yet have sufficient support lined up, and has opted to
postpone his initiative rather than risk a six-month delay --
which is required if legislation fails to obtain a majority
at its first reading. As for Beilin's analysis of
Netanyahu's chances to regain the helm, we think Beilin
overstates the ease with which Netanyahu could carve up
Kadima. The Knesset law requires that for any faction to
split from another it must have no fewer than one third the
number of MKs in it. End Comment.


5. (C) Bio Notes: Although Meretz is often characterized as
the "left-wing" of the Israeli political spectrum, Beilin
personally rose to prominence in the Labor Party as a protege
of Shimon Peres, who is now with Kadima, and supported former
Prime Minister Sharon's disengagement policy from Gaza and
parts of the West Bank. Beilin still breaks bread with Peres
over lunch every Friday, even though their political
trajectories have separated. Beilin is also personally
friendly to Lieberman, despite the deep political divide that
separates them. Former MK Yossi Sarid (Meretz) wrote livid
op-ed pieces about Beilin's betrayal of the Meretz mantra
after it was revealed that Beilin and Lieberman often shared
meals together.

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