LIEBERMAN JOINS THE COALITION

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 004256

SIPDIS

E.O. 12958: DECL: 04/28/2011
TAGS: PREL PGOV PINR KPAL KWBG IS IR EG JO LE SY
SUBJECT: LIEBERMAN JOINS THE COALITION


Classified By: Ambassador Richard H. Jones. Reason 1.4 (B/D)


1. (C) Summary: In a meeting with the Ambassador on October
24, Yisrael Beiteinu (YB) party leader Avigdor Lieberman
confirmed that he would join the governing coalition with the
titles of Deputy Prime Minister and Minister for Strategic
Threats, perhaps as early as October 25. Lieberman would not
predict how Labor would react to YB joining the coalition,
but he described Peretz as an "indecisive leader," and echoed
the press in claiming that the Labor Party central committee
was against Labor leaving the coalition. (Note: Following
two meetings with Olmert, Peretz announced that he will
recommend to Labor Party members that Labor remain in the
expanded coalition. End Note.) Lieberman maintained that YB
would take a hit in the polls for joining the coalition due
to disappointment from the right; he described his move as
one intended to promote government stability that would allow
Prime Minister Olmert the opportunity to focus on the major
policy challenges facing Israel rather than worry about
keeping his coalition together. The budget will not become a
major hurdle now that Yisrael Beiteinu is in the coalition,
in Lieberman's view. Lieberman also discussed Iran --
Israel's number one strategic threat -- and his ideas for
dealing with the Palestinians and neighboring states. The
Ambassador emphasized the importance the U.S. places on
implementing the AMA and on Israeli commitments regarding
outposts and settlements. End Summary.

LIEBERMAN'S ROLE IN THE GOVERNMENT


2. (C) Lieberman confirmed that his ministerial portfolio
would be focused on strategic threats, namely Iran. In
addition, he wants to assume the role of a Director of
National Intelligence-like coordinator for Israeli security
services (e.g., Mossad, Shin Bet, the Israeli Atomic Energy
Commission - IAEC, National Security Council -NSC, etc.) so
that the government decision-makers are provided with "the
best of Israeli thinking." He talked of having a "small"
15-20 person staff to assist him in his ministry, which media
reports indicate will be located within the office of the
Prime Minister.

IRAN IS THE STRATEGIC THREAT


3. (C) Lieberman said a comprehensive/global strategy is
needed to deal first and foremost with Iran, which he
compared with Nazi Germany. "The Iranian leader is not so
stable, and could take dramatic steps.... They state their
intention to destroy us very clearly." All other regional
challenges were dependent on how Israel and the U.S. dealt
with Iran. The Ambassador noted that discussion of the
Iranian threat has been a major component of our strategic
dialogue with Israel. Lieberman went on to criticize the
recent Lebanon war as failing to deal with Syria and Iran,
and he assessed that Israel's position is now "worse off"
than before the war. "Iran has a strong incentive to push a
confrontation between Syria and Israel."

PALESTINIAN PROBLEM REQUIRES A COMPREHENSIVE SOLUTION


4. (C) Lieberman complained that Israel's approach to
Palestinian issues had always been too narrow. He argued for
an approach combining security/military action with economic
development and political elements. The Ambassador noted
that we also saw economic development and political solutions
as critical. In this regard, the Ambassador described USG
objectives vis a vis AMA, focusing on the importance of
quality of life, freedom of movement, crossings and market
access for Palestinians as the best way to prevent power from
accruing to Hamas.

OUTPOSTS AND SETTLEMENTS


5. (C) The Ambassador emphasized the importance the U.S.
attaches to Israeli commitments to President Bush on outposts
and settlements. "These are not the main issues (now),"
Lieberman responded, expressing his view that the question of
outposts and settlements must be considered "together" as
part of a final package rather than as a first, one-sided
step. Lieberman, who lives in a West Bank settlement,
reiterated that Palestinian economic issues are critical, and
said that Israeli outposts and settlements provide jobs to
Palestinians. He also claimed that Palestinians "like IDF
security." The Ambassador underscored that many of the
outposts were "illegal" under Israeli law, but Lieberman
scoffed that there were only 1000 illegal houses in the West
Bank while there were, he claimed, "100,000 illegal (Arab)
houses in the Negev and Galilee." He added that the outposts
in the occupied territories were "encouraged -- under the
table -- by former PM Sharon" and argued that their removal
would provoke internal conflict in Israel without advancing a
comprehensive settlement.


6. (C) Lieberman disparaged the current leadership of the
Palestinian Authority. He called President Abbas "weak and
corrupted, and no longer relevant;" Hamas are "fanatics;" and
Mohammed Dahlan is unreliable and not a player in the West
Bank. He said he thought the U.S. and Israel should first
find the right Palestinian partner in the West Bank, and
mentioned Mohammed Rashid as one Palestinian leader with
potential -- "Although he is no Woodrow Wilson." Salam
Fayyad would be a good "Number two or number three," he
added.

IMPORTANCE OF JORDAN; WEAKNESS OF EGYPT


7. (C) Jordan must be involved in any steps taken vis a vis
the West Bank, which he saw as the place to start, Gaza being
mired in chaos. He criticized Sharon for failing to involve
Jordan in consultations regarding disengagement. Lieberman
was less emphatic about the importance of Egypt. He faulted
President Mubarak for being fixated on the political future
of his son rather than serious national security challenges,
such as Al-Qaeda's presence in the Sinai. "Egypt may
collapse in 15-20 years and become a really radical country."
Possibly mindful of the 2008 U.S. elections, Lieberman
stressed: "We have two years to resolve the situation in the
West Bank." Otherwise, in his view, the situation there will
become like Gaza. Lieberman argued that the status quo in
Gaza was untenable; he anticipated the need for military
operations to prevent the continued smuggling of weapons that
could threaten southern Israeli cities such as Ashkelon and
Ashdod.


8. (C) Lieberman closed the meeting with a caveat: he
admitted that his information comes from the media and is
neither complete nor fully informed. He sought a subsequent
meeting with us on Palestinian issues once he had vetted
ideas off the GOI security establishment. The Ambassador
agreed to stay in touch.

BIO NOTES


9. (C) Avigdor Lieberman's small parliamentary office barely
contained the smoke from his Tip O'Neill-esque cigar, which
he politely snuffed out before the meeting. Despite the
media frenzy surrounding the coalition negotiations,
Lieberman kept the meeting closed and confidential rather
than opt for a photo-op. He speaks Russian, Hebrew, and
Yiddish fluently, and is conversant in English. During the
meeting, Lieberman only occasionally asked his aide for
assistance in finding the most appropriate English
expression. He lives in the West Bank settlement of Nokdim
(SE of Bethlehem),and professes to have a wide range of
Palestinian contacts, both in the territories and abroad.
Our Kadima contacts note that Lieberman and Olmert enjoy a
comfortable personal relationship, one that will be crucial
to coalition stability in the months to come.


10. (C) Comment: At first blush the deal that Olmert has
worked out with Lieberman appears to give each something they
critically need. Olmert gets a more stable coalition and
hopefully can now focus on real issues rather than
exclusively on his political situation. It also gives Olmert
some respite from Labor and threats by Peretz and company
whenever they don't like the direction he is heading on
policy matters close to Labor's heart. Lieberman, in return,
gets a prestigious title and a seat at the policy table. He
will also probably gain access to the best daily intel
available to Israeli leaders which will allow him to speak
with more authority in public debates as well as within the
security cabinet. More importantly, this is an important
first step for Lieberman in getting into the mainstream of
Israeli political life, which he undoubtedly hopes will
bolster him when he launches a run at the PMship in the
future. The key question is to what extent Olmert will be
constrained in moving too far forward vis-a-vis the
Palestinians given his new "partner." It will also be
interesting to see how Lieberman's entry into the PMO affects
the pecking order there.

********************************************* ********************
Visit Embassy Tel Aviv's Classified Website:
http://www.state.sgov.gov/p/nea/telaviv

You can also access this site through the State Department's
Classified SIPRNET website.
********************************************* ********************
JONES