SCENESETTER FOR JANUARY 11, 2006 JOINT POL-MIL

S E C R E T SECTION 01 OF 04 TEL AVIV 000092

SIPDIS

STATE FOR PM ASSISTANT SECRETARY HILLEN
STATE FOR NEA/IPA (MAHER) AND PM (RUGGIERO)
PENTAGON FOR ASSISTANT SECRETARY RODMAN AND OSD (JAMES
ANDERSON)

E.O. 12958: DECL: 01/04/2016
TAGS: PREL PINR PGOV PTER MASS OTRA PARM ISRAEL RELATIONS MILITARY RELATIONS GOI EXTERNAL GOI INTERNAL ISRAELI PALESTINIAN AFFAIRS
SUBJECT: SCENESETTER FOR JANUARY 11, 2006 JOINT POL-MIL
GROUP (JPMG) MEETING

Classified By: DCM Gene A. Cretz. Reasons: 1.4 (b, d).


1. (C) The Joint Pol-Mil Group (JPMG) meeting will be taking
place at a time when Israel's domestic political situation is
in flux and recent progress on the Israeli-Palestinian
conflict has stalled. PM Sharon suffered a significant brain
hemorrhage on January 4, and is now in critical condition,
having undergone emergency surgery. Alternate PM Ehud Olmert
is running the country, but the normally dynamic political
situation is in stasis as the country waits for more
information about the PM's health. Anxiety in Israel is high
about Iran and its nuclear weapons program, political
instability in Syria and Lebanon, and the terrorist threats
that emanate from those two countries, as well as from
Palestinian controlled areas. Amid all of this, the
U.S.-Israel relationship remains strong, based on our support
for Israel since its formation in 1948, our shared cultural
and political values, and our common strategic interests.
Despite turbulence in the relationship over significant
technology transfer scandals, which the GOI is taking some
steps to redress, our cooperation in counterterrorism
research areas involving the DOD has proceeded and is viewed
positively by the USG and GOI.


2. (C) MOD sources say that the Israeli side's aims during
the JPMG are as follows:
-- Export Controls: Present its bottom line on changes. Note
changes since September to export control legislation and
regulations, and to the export control system's
organizational structure.
-- Defense Sales to Venezuela: Present Israel's bottom line.
-- Iraq: Exchange views.
-- Middle East and Iran: Provide Israel's assessment of
security challenges in the region, and touch on Palestinian
issues. The Israelis will want to exchange views on Iran and
the way ahead.
-- Qualitative Edge: Exchange views. If Israel knows in
advance of proposed U.S. defense sales to other Middle
Eastern countries, it will want to comment on them.
-- Joint Security Assistance Planning: Present Israel's plans
on how it will use FMF over the long term.

--------------
ISRAEL'S DOMESTIC POLITICAL SITUATION IN FLUX
--------------


3. (C) Since the withdrawal of Jewish settlers, and the
Israeli Defense Forces (IDF) protecting them, from the Gaza
Strip and four settlements in the northern West Bank in
August, Israel's political situation has been in flux, with
"rebels" from PM Ariel Sharon's own Likud Party -- and former
PM Binyamin Netanyahu -- challenging Sharon's leadership. In
November, Labor Member of the Knesset (MK) Amir Peretz
successfully challenged former PM Shimon Peres for the
leadership of Labor, securing for himself leadership of the
second largest party in PM Sharon's coalition government.
Labor subsequently withdrew from the government. In a bold
response to the rebels within his own party, PM Sharon then
left Likud and formed a new centrist party: Kadima ("Go
Forward"),attracting to it defectors from Likud, Labor and
other parties. Labor's calls for early elections led to an
agreement by all parties to hold general elections at the end
of March. The general election campaign is now in full
swing. PM Sharon's success to date in making Kadima a viable
party to challenge Labor and Likud in the March elections
could take a turn for the worse if Sharon is incapacitated or
dies, but polls continue to show Kadima as the
highest-polling party, by far.

-------------- --------------
RECENT PROGRESS ON PALESTINIAN ISSUES HAS STALLED
-------------- --------------


4. (C) Israel's disengagement from the Gaza Strip and a
portion of the northern West Bank went very smoothly and was
broadly hailed as a bold and creative step. As a result of
disengagement and implementation of the November 15 Agreement
on Movement and Access, brokered by Secretary Rice, the
Palestinians now have a significant degree of control over
the Gaza Strip and control its border crossing into Egypt.
Other aspects of the agreement brokered by the Secretary
remain gridlocked: (a) the opening of the Rafah border
crossing between Gaza and Egypt remains plagued by problems;
(b) resuming convoys between Gaza and the West Bank; (c)
increasing throughflow at crossing points between Israel and
the occupied territories; (d) decreasing restrictions on
movement within the West Bank, and (e) making progress on a
seaport and airport for Gaza. Forward movement on those
issues has stalled as a result of Qassam rocket launches from
the Gaza Strip, other attacks perpetrated by Palestinian
terrorists in the wake of the agreement, and an assessment by
the IDF that the reported increasingly active PIJ presence in
the West Bank must be dealt with. Any progress on these
issues remains highly unlikely.


5. (C) Problems remain that could significantly affect
progress on the Israel-Palestinian conflict. The PA is
having difficulty asserting its authority in Gaza and the
West Bank as its ruling party, Fatah, is fractured by
internal rivalries, and is being challenged by Hamas,
Palestinian Islamic Jihad (PIJ),and other armed militias,
including those affiliated with Fatah. Palestinian Authority
(PA) President Mahmud Abbas secured an agreement from Hamas
in March to stop attacks in order to allow disengagement to
proceed, but Hamas and PIJ have conducted some attacks since
this Tahdiya ("calm") went into effect. While the Tahdiya
officially expired on December 31, Hamas appears to be
holding its fire in anticipation of Palestinian Legislative
Council (PLC) elections scheduled for January 25. The GOI
continues to press PA President Abbas to assert his authority
and dismantle the Palestinian terrorist groups as a condition
for moving forward on the peace process. The PA, fearful of
provoking widespread clashes, prefers to address the
situation more gradually. The GOI has also called on the PA
not to allow Hamas -- a terrorist group -- to run in the PLC
elections, stating that it will neither hinder nor help with
the elections if Hamas runs. It is unclear whether the
Palestinian elections will take place in January, due to (a)
lack of agreed modalities between Israel and the PA on
Palestinian voting in East Jerusalem, and (b) widespread
security concerns originating from armed groups associated
with Fatah, in some cases representing senior Fatah members
who do not believe they will be elected. Meanwhile, the IDF
continues to conduct extensive unilateral operations in the
West Bank, and also continues to play a security role in Gaza
via airstrikes and artillery barrages intended to counter
Qassam rocket launchings.


6. (U) U.S. policy remains firmly anchored in President
Bush's historic vision -- first enunciated in June 2002 -- of
two states, Israel and Palestine, living side by side in
peace and security. The USG remains committed to the
performance-based road map under the auspices of the Quartet
(the U.S., Russia, UN and EU) as the means for achieving the
President's vision. The Israeli and Palestinian sides have
endorsed the road map -- both with reservations -- but need
to take additional steps. Israel must continue to work with
Palestinian leaders to improve the daily lives of
Palestinians, while avoiding any activity that prejudices
final status negotiations. As the President has noted, this
means that Israel must remove unauthorized West Bank outposts
and stop settlement expansion. It also means that the
barrier now being built to protect Israelis from terrorist
attacks must be a security barrier, rather than a political
one, and take into account its impact on Palestinians who do
not threaten Israel's security. On the other side, the
Palestinians must stop terrorism, dismantle the terrorist
infrastructure within their society, and take steps to ensure
that a democratic society -- with open and transparent
governance -- takes root.


7. (C) Another tangible sign of U.S. commitment to peace in
the region is the U.S. Security Coordination (USSC) Mission,
recently take over by LTG Keith Dayton. General Dayton's
mission is to work Palestinian security sector reform issues,
and his multinational team works to ensure coordination and
communication between the PA and the GOI. General Dayton
returned to the region on January 6 after having met with
President Bush and Secretary Rice on the way forward for the
USSC.

--------------
ISRAEL'S NEIGHBORHOOD PRESENTS CHALLENGES
--------------


8. (C) Israel maintains that the greatest existential threat
it faces is a nuclear-armed Iran. Israel's position is that
the international community should press Iran harder --
diplomatically and via the threat of sanctions -- to get it
to abandon its weapons program, and there has been an
intensification of the threat to Israel voiced in public by
officials during the past several weeks. Israeli officials
accept that the USG continues to support the EU3 process, but
Israel is frustrated by what it believes is the EU3's record
of concessions to Iran (e.g., uranium conversion) for little
in return. Privately, GOI and IDF contacts have said that,
at best, we can slow down Iran's program, but probably cannot
stop it. Most Israeli officials also do not believe at this
stage that anyone could successfully confront Iran
militarily, noting that elements of Iran's nuclear program
are dispersed throughout Iran and, in some cases, probably
are hidden.


9. (C) Israel's northern border with Lebanon and Syria
remains tense, and flared up on November 21 with attempted
Hizballah incursions into Israel with the likely aim of
kidnapping Israeli soldiers. IDF units positioned along the
border -- operating under strict orders to show restraint in
responding to Hizballah challenges -- successfully repelled
the November 21 attacks, killing four Hizballah fighters.
Israel returned the bodies of the fighters to the Lebanese
government with the assistance of the Red Cross. On December
28, Palestinian terrorists (possibly the Popular Front for
the Liberation of Palestine-General Command) fired Katyusha
rockets from Lebanon into Israel, damaging several civilian
homes. The border is currently calm. Since Israel's
withdrawal in 2000 from southern Lebanon, the GOL has
consistently resisted all international pressure to move
Lebanese Armed Forces into areas along the border occupied by
Hizballah. A proposal to incorporate the divided village of
Ghajar completely into Israel was recently rejected but
highlights the difficulty the Israelis have had without an
effective Lebanese force. For the time being, UN
peacekeepers assigned to the UN Interim Force in Lebanon
(UNIFIL) try to maintain an uneasy calm on the Lebanese side
of the Israel-Lebanon border, often times within eyeshot of
Hizballah positions -- a situation that causes consternation
within the GOI and IDF.


10. (C) As the Mehlis investigation into the assassination of
former Lebanese PM Hariri gets closer to supporters of Syrian
President Al-Assad, there is concern within the GOI that
Syria will lash out at Israel to deflect international
attention away from the investigation. Indeed, the general
consensus within the GOI is that this was the reason for the
recent Hizballah attacks. GOI and IDF officials maintain
that Al-Assad needs to be pressured into behaving
according to international norms, but should not be pushed to
the point of collapse, as this would -- in their view --
likely result in his regime's replacement by what they see as
the growing Muslim Brotherhood in Syria.


11. (C) While the "cold peace" with respect to interaction
between the two peoples persists, Egyptian and Israeli
official relations have seen some improvement as a result of
Egyptian-Israeli coordination over the Egypt-Gaza border
during and after disengagement. Israeli defense planners
maintain that Egypt remains a serious potential military
threat, and note that President Mubarak could in the future
be replaced by a leader less friendly to Israel. As a
result, GOI officials frequently complain about U.S. military
sales to Egypt.


12. (C) Relations between Israel and Jordan are good. Jordan
has control of its border with Israel and prevents terrorist
infiltration in either direction.

--------------
COOPERATION WITH THE U.S. IS EXCELLENT
--------------


13. (C) The U.S. enjoys a strategic partnership with Israel,
and overall relations between our two countries are
excellent, based on U.S. support for Israel since its
formation in 1948. The relationship has suffered turbulence
due to high-profile tech transfer scandals that the USG
maintains helped to put U.S. and allied forces at risk. In
response to our concern about these transfers, Israel signed
a Statement of Understanding (SOU) in August requiring
coordination on future sensitive defense sales to third
countries. Since then, GOI and IDF officials have pushed to
gain USG agreement with their position that the technology
transfer scandals are water under the bridge. The USG
position has been that Israel still has much work to do in
order to restore the USG's trust in Israel's export control
system -- a position consistent with the SOU. Israel could
benefit from USG encouragement for the positive steps it has
taken so far to make changes to its export control
legislation and the organization of its system, per the SOU.

14. (C) Israel and the U.S. exchange information and
coordinate on policy through our annual Strategic Dialogue,
the Joint Political-Military Working Group (JPMG),and the
Defense Policy Advisory Group (DPAG). The GOI was pleased
with the last round of the Strategic Dialogue, which took
place in Washington, D.C. November 28-29, after a lapse of
more than two years.


15. (S) The fallout over the technology transfer scandals has
not affected cooperation between various USG and GOI agencies
on research and development in counterterrorism (CT)
technologies. Practical, joint R&D and testing through the
Technology Support Working Group (TSWG) continues, yielding
technologies that are being fielded by U.S. forces in Iraq.
The USG has noted its gratitude in the past for Israeli
contributions to counter-IED technology. The Department of
Energy and the Nuclear Regulatory Commission continue
cooperation with their Israeli counterparts to enhance
Israel's ability to prevent and mitigate the effects of
radiological device attacks. Israel and the U.S. signed an
MOU in December that allows the U.S. to assist Israel in
setting up a radiation detection system at its main port in
Haifa under the U.S. Megaports Initiative.

--------------
MFO: ISRAEL TO PRESS FOR NO CHANGES
--------------


16. (C) As your schedule includes a visit to Multinational
Forces and Observers (MFO) North Camp and a discussion of
MFO-related issues, you need to be aware that the USG
decision to phase out the MFO's UH-1 helos in exchange for
Blackhawks is a source of consternation within the GOI due to
the additional costs it entails for Israel and Egypt. Israel
views the MFO as a vital part of its strategic defense in
depth, and will resist USG efforts to attempt to reduce or
alter the MFO's force structure. Israel believes that the
MFO's presence provides stability in the Sinai at a time when
Egypt appears to face difficulty with terrorist activities
there. The MFO also monitors the Egyptian Border Guard Force
established in support of the Egypt-Gaza border agreement
that was signed in August.


17. (U) This cable has been cleared with State's NEA/IPA.

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