ISRAEL MEDIA REACTION

UNCLAS SECTION 01 OF 08 TEL AVIV 000806

SIPDIS

STATE FOR NEA, NEA/IPA, NEA/PPD

WHITE HOUSE FOR PRESS OFFICE, SIT ROOM
NSC FOR NEA STAFF

SECDEF WASHDC FOR USDP/ASD-PA/ASD-ISA
HQ USAF FOR XOXX
DA WASHDC FOR SASA
JOINT STAFF WASHDC FOR PA
USCINCCENT MACDILL AFB FL FOR POLAD/USIA ADVISOR
COMSOCEUR VAIHINGEN GE FOR PAO/POLAD
COMSIXTHFLT FOR 019

JERUSALEM ALSO FOR ICD
LONDON ALSO FOR HKANONA AND POL
PARIS ALSO FOR POL
ROME FOR MFO

E.O. 12958: N/A
TAGS: IS KMDR MEDIA REACTION REPORT
SUBJECT: ISRAEL MEDIA REACTION

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SUBJECTS COVERED IN THIS REPORT:
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Mideast

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Key stories in the media:
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During the weekend, major media reported that President
Bush urged the international community on Saturday to
make clear to Hamas that it must recognize Israel's
right to exist or else be denied aid. Maariv (Ben
Caspit) reported tension between Washington and
Jerusalem regarding relations with PA Chairman
[President] Mahmoud Abbas. The newspaper cited the US
belief that Abbas should be strengthened and the Hamas
regime by-passed through Abbas. Maariv quoted Israeli
diplomatic sources as saying that the gap between the
positions of Israel and the US might lead to Israel's
isolation. On Sunday, Yediot wrote that Israel would
warn the US that US money could "drip" to Hamas and
fund its terrorist activities. On Sunday, The
Jerusalem Post reported that on Saturday, PA officials
expressed deep satisfaction with what they said was a
decision by the US and EU not to stop financial aid to
the Palestinians. Israel Radio reported that on
Saturday, the Quartet's Mideast envoy James Wolfensohn
wrote a letter to members of the Quartet, saying that
the PA is on the verge of economic collapse within two
weeks, that the international community should send USD
60 to 80 million in financial aid as soon as next week,
and that Israel should disburse its debt to the PA.
Major news web sites also cited Wolfensohn's letter.
Israel Radio reported that the EU foreign ministers
have decided to transfer USD 142 million to the
Palestinians to prevent the collapse of the PA. All
media (lead story in Globes) reported that the Israel
fuel company Dor Alon stopped fuel shipments to the PA.
However, The Jerusalem Post quoted a senior PA official
as denying reports in the Hebrew press suggesting that
a check payable to the company was intentionally
bounced in retaliation for Israel's decision to stop
the transfer of tax revenues.

All media quoted FM Tzipi Livni (Kadima) as saying in
an interview with Israel Radio on Sunday that PA
Chairman [President] Mahmoud Abbas, who "cannot
continue to be a fig leaf for a terrorist entity," is
"irrelevant." The Jerusalem Post reported that Acting
PM Ehud Olmert told A/S David Welch that there cannot
be two Palestinian authorities, a "good one" that is
represented by Abbas with which the international
community wants to continue doing business, and a "bad
one" represented by Hamas. However, Ha'aretz quoted
Shimon Peres, who is number two on the party's list
Knesset slate, as saying Sunday at a function in Miami
that "Israel must continue to talk with Abu Mazen
[Abbas].

On Sunday, leading media quoted Palestinian PM-
designate Ismail Haniyeh as saying in an interview with
The Washington Post/Newsweek that Hamas would recognize
Israel if Israel agreed to "recognize a Palestinian
state along the 1967 borders, release the prisoners and
recognize the rights of the refugees to return to
Israel." But Haniyeh was quoted as saying at a press
conference with Palestinian media in Gaza Sunday that
he never discussed the question of recognizing Israel
in the interview; saying only that if Israel fulfilled
those three conditions, Hamas would consent to a long-
term truce. Israel Radio quoted Khaled Mashal, the
head of Hamas's political bureau as saying that he is
prepared to talk with any international element. The
radio said that Mashal's comments rule out Israel. In
its lead story, Yediot reported that Iran has been
briefing Hamas on "how to run a country." The
newspaper reported that Iran is telling Hamas to hold
on for six months until Israel and the West yield.
Ambassador Henry A. Crumpton, the State Department's
Coordinator for Counterterrorism, was quoted as saying
in an interview with The Jerusalem Post that Iran wants
the same control over Hamas that it has over Hizbullah,
an organization that is nothing less than a "delivery
system" for Iranian weapons.

On Sunday, Maariv quoted Defense Minister Shaul Mofaz
as saying that the murderers of Israeli cabinet
minister Rehavam Zeevi would not remain free for long.
Mofaz was responding to a comment by Abbas that he is
not ruling out releasing them from their Jericho jail.
The media reported that Israel is applying pressure on
PA institutions in Jericho. On Sunday, leading media
reported that Sami Abdel Akilan, a member of the
Palestinian national security forces who allegedly
planned to launch terrorist attacks in the near future,
was arrested by Israeli security sources on Saturday.

On Sunday, Ha'aretz reported that the Lebanese
government publicly admitted recently, for the fist
time, that it had permitted the delivery of a convoy of
arms from Syria to Hizbullah. The newspaper wrote that
the UN responded by issuing a condemnation.

Major media (banners in Ha'aretz and The Jerusalem
Post) reported that on Sunday, Iran and Russia reached
an agreement in principle to set up a joint uranium
enrichment facility on Russian soil, a deal that could
assuage global concerns that Tehran wants to build
atomic bombs.

Ha'aretz reported that Israel will institute a number
of comprehensive changes to its defense export
arrangements at the insistence of the United States,
following the crisis over Israel's export of attack
drones to China. According to the newspaper, the
status of several central divisions in the Defense
Ministry will be changed, including that of the head of
security and the division for assistance and export.
Ha'aretz wrote that a new division will be established
in the Defense Ministry, and Foreign Ministry
representatives will sit on a supreme advisory council
for defense exports. The US administration has
reportedly been informed of the expected changes.

On Sunday, Ha'aretz reported that AIPAC has decided
that the 4,5000 participants in its annual policy
conference, which begins next week, will be singing
both Israel's national anthem "Hatikvah" and "The Star-
Spangled Banner." Last year's decision to skip
"Hatikvah" has been linked to the investigation at the
time of senior AIPAC officials and a desire to avoid
any suspicion of dual loyalties.

Major media reported that Brig. Gen. Aviv Kochavi
decided to refrain from beginning classes at the Royal
College of Defense Studies in the UK on the advice of
the Military Advocate General, who expressed concerns
that Kochavi would be arrested on war crime charges.
Yediot -- and The Jerusalem Post on Sunday -- reported
that Israel is trying to have suits against former Shin
Bet Director Avi Dichter and former IDF Chief of Staff
Moshe Ya'alon canceled in the US.
Leading media reported that three weeks ago, an Israeli
delegation attended a UN Environment Program conference
in Dubai.

Ha'aretz printed a dispatch by the German press agency
DPA that the Iranian media reported on Sunday that Iran
is to hold an anti-Israeli conference in mid-April.

During the weekend, all media reported on Friday's
attack against the Saudi oil processing facility of
Abiqaiq -- the most important in the world.

Yediot reported that a group of Sderot residents has
decided to sue the PA for 50 million shekels (around
USD 10.6 million) over the firing of rockets at Israel.

The Jerusalem Post reported that Fatah's Al Aqsa
Martyrs Brigades claimed responsibility for Saturday's
murder of Kamel al-Izra, an Israeli Arab who lived in
Yatta near Hebron, who was suspected of collaboration
with Israel.

On Sunday, Ha'aretz reported that several Jewish-
American leaders predict the religious right's
"campaign to baptize America" holds near-apocalyptic
consequences.

All media front-paged a march of tens of thousands of
people in Paris on Sunday in memory of Ilan Halimi, who
was kidnapped, tortured, and killed in an attack that
authorities say was partly motivated by anti-Semitism.

Yediot reported that the US and Russia might be heading
for a diplomatic crisis.

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Mideast:
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Summary:
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Washington correspondent Orly Azolai wrote in mass-
circulation, pluralist Yediot Aharonot: "The White
House has been forced to transfer the funds, but will
call them by a different name: not aid to the
Palestinian Authority, but aid for humanitarian
purposes."
Eytan Haber, veteran op-ed writer and assistant to the
late prime minister Yitzhak Rabin, commented in the
lead editorial of mass-circulation, pluralist Yediot
Aharonot: "[Israel] has paid very heftily for
declarations by Arab leaders. It is therefore acting
only on the ground."

Senior op-ed writer Akiva Eldar commented in left-
leaning, independent Ha'aretz: "The Olmert government
will soon have to decide if it prefers Hamas as a
partner in perpetuating the conflict, or Abu Mazen as
its final partner for peaceful resolution of it."

Chief Economic Editor Sever Plotker wrote in Yediot
Aharonot's editorial: "Should Israel search for a
formula for coexistence ... with Hamas ... or should it
seek an immediate and crushing military confrontation
.... ? [Israel's] large parties have been evading
giving a direct response to this question."

The conservative, independent Jerusalem Post
editorialized: "It is the Palestinians, not Israel, who
are fundamentally opposed to the entire land-for-peace
premise that underpins the peace process."

Nationalist, Orthodox Hatzofe editorialized: "There was
no doubt that the US would continue to pour the funds
as long as Abu Mazen heads the PA."

Block Quotes:
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I. "Bush's Dilemma"

Washington correspondent Orly Azolai wrote in mass-
circulation, pluralist Yediot Aharonot (February 27):
"The US administration headed by Bush warned before the
elections that aid would not be transferred to the PA
were Hamas to head the government. This was a
legitimate threat, as part of an effort to influence
the outcome of the elections, but after the outcome
became known this became a trap: if the administration
halts the aid, it will be a punishment for the entire
Palestinian people, which is bowed under the weight of
occupation in any case. If it transfers the aid, it
will look like it has gone back on its word. The
result is that the White House has been forced to
transfer the funds, but will call them by a different
name: not aid to the Palestinian Authority, but aid for
humanitarian purposes. The administration transfers
the funds just as it did in the past, but now it is
accompanying the transfer with a public call for Hamas
to change its ways. In a speech delivered in
Washington on Friday, President Bush said that the
world was waiting for Hamas's decision. He called upon
the international community to make it clear to Hamas
that elected leaders cannot put one foot in the
democratic camp and the other in the terrorist camp.
But Bush's money is neither a weapon against Hamas nor
is it a threat or a whip. Even before Hamas had a
chance to react to Bush's calls, an administration
representative already announced that the money would
continue to flow. The White House hopes that the
message will nevertheless filter down to Hamas. This
time they have decided to give the carrot and wait with
the stick."

II. "'Kalam Fadi' (Empty Words)"

Eytan Haber, veteran op-ed writer and assistant to the
late prime minister Yitzhak Rabin, commented in the
lead editorial of mass-circulation, pluralist Yediot
Aharonot (February 27): "After the Hamas leaders
recovered from the shock of their victory, they are
trying to soothe the jumpy world. Even the most
extreme leaders of that terrorist organization
understand that the US and Israel are holding the
Palestinians in a most sensitive spot.... [Palestinian
PM-designate] Ismail Haniyeh should learn the first
lesson in relations with Israel, if he hasn't done so
already: this state has paid very heftily for
declarations by Arab leaders. It is therefore acting
only on the ground. All the rest are 'kalam fadi'
(Arabic: empty words)"

III. "Choosing Between Abbas and Hamas"

Senior op-ed writer Akiva Eldar commented in left-
leaning, independent Ha'aretz (February 27): "Judging
by past results, Abu Mazen has failed to meet
expectations when it came to imposing his authority on
the security forces and ensuring proper administration
of the public services. But it is hard to say who is
more to blame for these failures: Abu Mazen, who proved
unable to fill Arafat's shoes or mend his ways, or
Ariel Sharon, for his decision to get rid of the PA and
to resort to unilateral steps. In any case, the Olmert
government will soon have to decide if it prefers Hamas
as a partner in perpetuating the conflict, or Abu Mazen
as its final partner for peaceful resolution of it."

IV. "Elections in the Shadow of the Volcano"

Chief Economic Editor Sever Plotker wrote in Yediot
Aharonot's editorial (February 26): "The Palestinian
vote connects with chilling phenomena taking place in
the Arab world, the resonant echoes of which penetrate
every household in Israel.... It is natural that in the
face of such deep tremors, the voters are looking for
statesmen that will be able to lead Israel in the
coming years, which may prove to be among the most
fateful we have known. Complex fundamental questions
arise, knocking on the doors of our consciousness.
Here is one main question: Should Israel search for a
formula for coexistence ('hudna') with Hamas and agree
to a prolonged truce with it, or should it seek an
immediate and crushing military confrontation, before
it succeeds in taking over the Palestinian Authority's
branches of government? The large parties have been
evading giving a direct response to this question and
its like, and content themselves with a stammered and
noncommittal response, either in the hawkish direction
('Netanyahu is strong against Hamas') or in the dovish
direction ('We will fight terror, we will beat
poverty'). The propagandists and PR executives are
still hoping to put the voters to sleep and dull their
vigilance. This may not be possible, because this is
not an awakening from a bad dream but rather awakening
to a bad reality.... The political map that is
ultimately drawn after the elections in March 2006 may,
therefore, be quite different from the map that emerged
from public opinion polls from January 2006."


V. "Hamas Immoderation"

The conservative, independent Jerusalem Post
editorialized (February 27): "Everyone knew it was
coming; Hamas, following its surprise victory, would
attempt to appear moderate in order to retain the flow
of Western financial assistance. If there is a
surprise now, it is that Hamas's nod toward moderation
is so imperceptible that it barely qualifies as a
'charm offensive'.... The harsh truth is that the
Palestinians have elected leaders who do not believe in
the two-state solution, except to the degree such a
'solution' can be used to advance Israel's destruction.
This not only means that the facade of compliance with
the Quartet's Roadmap held up by Yasser Arafat and then
Mahmoud Abbas has been removed, but that it is the
Palestinians, not Israel, who are fundamentally opposed
to the entire land-for-peace premise that underpins the
peace process.... What remains is for the international
community to finally follow its own declarations and
hold the Palestinian leadership accountable for its
actions, denying it funding if it does not comply --
rather than searching for or creating another fig leaf
for Palestinian rejectionism."

VI. "Abbas Has Taken the US Captive"

Nationalist, Orthodox Hatzofe editorialized (February
27): "Assistant U.S. Secretary of State David Welch
promised Abu Mazen and other senior officials in the
Palestinian Authority that his country would not stop
the aid to the Palestinians, but only the way it
transfers the money. According to Welch, the money
will be transferred via voluntary bodies. There was no
doubt that the US would continue to pour the funds as
long as Abu Mazen heads the PA.... Egypt and Hamas are
waiting with a stopwatch until the George Bush era
passes, to be replaced with an Israel-hating Democrat.
In any case, a State Department hostile to Israel would
be reborn. [In any case], Israel will surrender to
every US dictate. This is because utter blindness has
seized all large [Israeli] parties, which can't see how
Israel is taking its own life. Egypt is training on
the Israeli model during all its serious military
maneuvers. The quantity of weapons in its possession
... is ready for the moment Israel can be caught in its
weakness. Abu Mazen is the architect of this plan."

JONES