MFO DG LAROCCO LAYS OUT NEXT STEPS ON HELO

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 000453

SIPDIS

STATE FOR PM ASSISTANT SECRETARY JOHN HILLEN
STATE FOR NEA DAS ELIZABETH DIBBLE
STATE FOR PM FRONT OFFICE (RUGGIERO) AND NEA/IPA (MAHER)
PENTAGON FOR ASSISTANT SECDEF (ISA) PETER RODMAN
PENTAGON FOR OSD ISRAEL DESK OFFICER JAMES ANDERSON

E.O. 12958: DECL: 01/31/2016
TAGS: PREL MASS KPKO EG IS GOI EXTERNAL MILITARY RELATIONS
SUBJECT: MFO DG LAROCCO LAYS OUT NEXT STEPS ON HELO
TRANSITION, MFO RECONFIGURATION

Classified By: Ambassador Richard H. Jones. Reasons: 1.4 (b, d).

--------------
SUMMARY
--------------


1. (C) In a January 30 meeting with Ambassador Jones,
Multinational Force and Observers (MFO) Director General
James Larocco reviewed next steps for concluding the MFO's
transition to Blackhawk helicopters, noting U.S. success in
obtaining Israel's agreement, in principle, to pay its USD 2
million portion of the transition. Larocco said he now plans
to canvas EU member states and Norway for contributions to
the MFO. Larocco said that authority for the MFO would be
transferred from FORCECOM to CENTCOM in June 2006, and
indicated his belief that this will help the MFO in making
necessary force protection improvements. He said that the
MFO has no position on a U.S. proposal to reconfigure the
American uniformed presence in the field, but stressed that
Israel would oppose any change that would appear to reduce
America's commitment to the MFO and its mission. END SUMMARY.

--------------
LAROCCO REVIEWS NEXT STEPS ON HELO TRANSITION
--------------


2. (C) Larocco thanked the Ambassador and DAS Dibble for
helping to get the Israelis to agree to the MFO's successful
transition to Blackhawk helicopters. He characterized A/S
Hillen's intervention with Israeli MOD DG Jacob Toren during
the January 11-12 JPMG as crucial to getting the Israelis to
commit, in principle, to paying their portion of the helo
transition. He noted that the U.S. Administration had agreed
to fund part of the transition in its 2006 draft budget, and
asked the Ambassador to highlight this to the Israelis when
the Administration's budget is released on February 14. Now
that Israel has agreed, in principle, to pay its portion of
the helo transition, Larocco said he should be able to get
the same commitment from the Egyptians when he returns to the
region in April. Larocco explained that the next step after
that is for the GOI and GOE to formally commit, after
securing agreement from their respective foreign affairs and
finance ministries, by signing the funding agreement.
Larocco said he would then go back to the USG to get the U.S.
contribution and finish the deal. Larocco said that even
though the Israeli MOD has submitted an austerity budget to
the Israeli government, it has "fenced off funds" for the MFO
helo transition. He said he hopes the new Israeli government
will approve the budget quickly after the March elections.


3. (C) On the MFO budget, Larocco said:

(a) the MFO's budget for 2006 was the same as the one for
2005, except for the increase of USD 4 million in each year
for 2006-7 in connection with the helo transition.

(b) The MFO will owe this USD 8 million to the U.S. Army. If
Larocco succeeds in his current mission, he will collect USD
6 million from the U.S., Israel and Egypt. This leaves the
MFO owing USD 2 million to the U.S. Army in 2008.

(c) The MFO will pay the USD 2 million "when it is able."
Larocco said that he had run this plan by the U.S. Army.

(d) The MFO will now survey EU capitals and Norway to see
whether any would be willing to make a one-time or annual
contribution to the MFO to cover the outstanding USD 2
million and any future financial burdens the MFO undertakes.
(Larocco said such donations historically constitute only
three percent of the MFO's budget.)

(e) After 2008, the MFO's budget should return to its
previous level of USD 19 million per year, per Larocco's
plans. Larocco said his goal has been to "straight-line" the
MFO's budget at 19 million annually. Despite increases in
some areas (fuel) this was made possible by tight controls on
spending.


4. (C) Larocco said that he would meet with MOD DG Toren on
February 2 and ask him to urge the GOI to encourage EU
countries and Norway to contribute to the MFO. To fend off
any possible objection by the Israeli MFA, Larocco said he
will make it clear that the MFO only wants funding from the
EU -- not personnel or advice. He said he hopes to get a
commitment of 5 million Euros annually from the EU, and that
when he returns to Rome, he will ask the Italians to help
with the EU.

-------------- --------------
... NOTES CENTCOM TO TAKE OVER RESPONSIBILITY FOR MFO
-------------- --------------


5. (C) Larocco said the next priority for the MFO is
improving its force protection in light of the four terrorist
attacks that occurred in the Sinai in 2005 (including an
August IED attack against an MFO vehicle). He predicted that
this would be easier for the MFO as (a) it had received
additional funds from the USG to boost security; and (b)
CENTCOM would be assuming "full command authority" for the
MFO starting in June 2006. Larocco clarified that the MFO
has no formal position on this change, although he personally
welcomed it. He said the Egyptians have some concerns that
CENTCOM's assumption of control of the MFO might be used as a
pretext for moving CENTCOM assets into the Sinai in some
future crisis. Larocco promised to provide the Ambassador
with talking points that he plans to use with the Israelis
and Egyptians on the issue. He said he will meet with
Israeli Defense Intelligence Deputy Director BGEN
Kupperwasser to discuss both force protection requirements
and any impact that the results of the January 25 Palestinian
Legislative Council elections might have on the MFO's ability
to carry out its mission. Larocco will raise the same issue
with Egyptian Intelligence Chief Omar Suleiman on February 5.

-------------- --------------
...STRESSES ISRAELIS CONCERNED ABOUT MFO RECONFIGURATION
-------------- --------------


6. (C) Larocco noted his awareness of the details of a U.S.
proposal to reconfigure the American presence in the MFO --
with a reduction in troops and greater reliance on sensors --
but clarified that MFO has no position on the issue. He
stressed, however, that Israel would never agree to the
removal of the U.S. battalion and its replacement by sensors.
Michael Sternberg, Larocco's representative in Israel,
strongly backed this assessment, saying that Israel sees
America's commitment to the MFO as critical, especially in
the wake of terrorist attacks in the Sinai.

********************************************* ********************
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