Icelandic PM, FM Host U/S Burns for First Bilat "Security

C O N F I D E N T I A L SECTION 01 OF 03 REYKJAVIK 000192

SIPDIS

SIPDIS

DEPT FOR P, EUR/NB, OES (J FIELD)
OSD FOR HURSCH

E.O. 12958: DECL: 07/01/2017
TAGS: PREL NATO SENV ENRG IC
SUBJECT: Icelandic PM, FM Host U/S Burns for First Bilat "Security
Dialogue"

Classified By: Amb. Carol van Voorst for reasons 1.4 (b) and (d).


1. (C) SUMMARY: Under Secretary Burns' visit to Iceland on June 14
reiterated the U.S. commitment to Iceland's security and laid the
groundwork for new areas of cooperation, particularly in energy
security and scientific research. New Foreign Minister Ingibjorg
Solrun Gisladottir carried herself well, demonstrating she is quickly
getting into her brief. On global affairs, attention centered on
developments in Iraq -- past and present -- and Afghanistan, with
considerable time devoted to the Middle East peace process and the
question of legitimizing Hamas. In private and in public, the
message came through that the U.S. remains Iceland's close friend and
ally. A lively roundtable with key opinion makers received lengthy
favorable coverage in all major news outlets. In the same vein, U/S
Burns' interview on Iceland's most popular television news show
generated ample positive buzz, with some observers terming it the
best interview of a foreign official in recent memory. End Summary.

U.S.-ICELAND DEFENSE TIES
--------------

2. (SBU) In separate meetings, and again over a joint PM-MFA working
lunch to review the strategic environment, PM Haarde and FM
Gisladottir noted that Iceland continued to look to the 1951
U.S.-Iceland Defense Agreement as the cornerstone of Iceland's
defense. At the same time, Iceland continues to expand and deepen
its defense ties with other NATO allies in the North Atlantic, as in
the case of recent defense MOUs signed with Norway and Denmark. The
FM added that similar discussions are underway with the German and
Canadian governments; PM Haarde will travel to Ottawa in August, and
a reciprocal visit by Canadian Prime Minister McKay may be in the
works.


3. (C) Both the PM and FM pressed for continued progress on issues
of importance to Iceland in the wake of the departure of permanent
U.S. forces in September 2006. On the Iceland Air Defense System
(IADS),both requested that the USG accelerate progress to ensure
that the air defense radars and other necessary system components
could be handed over on August 15 of this year, when U.S. funding
expires. Burns noted positively the work led by OSD's Jim Hursch to
coordinate bilateral work on the IADS issue, and reiterated the U.S.
commitment to leave Iceland with an adequate air defense system.
This would dovetail with efforts at the NATO Military Committee to
approve a plan for peacetime air surveillance and interception
preparedness (i.e., air policing). PM Haarde expressed his great
pleasure at hearing that the U.S. and Icelandic NATO delegations had
made significant progress on the air policing issue, with a draft
plan expected to pass silence in the Military Committee on June 22.


4. (C) FM Gisladottir also asked for U.S. assistance in two areas:
ensuring the continuity within NATO of the "Island Commander Iceland"
billet -- which the MFA Defense Department Head clarified as less a
request for continuing the structure of decades past and more a
request for a single Iceland Point of Contact within the SHAPE
structure -- and the possible lending of strategic assessment
expertise as Iceland works to establish a cross-party institution to
examine national security issues. Burns said the U.S. could assist
Iceland on both of these points.

AFGHANISTAN
--------------

5. (C) PM Haarde said Iceland's most significant involvement in
stabilization and reconstruction work abroad was in Afghanistan. He
further noted that the previous FM had changed the "way of our
[peacekeeping] mission" by withdrawing Icelandic PRT personnel in
April, although Iceland was still spending the same amount of money.
Throughout the day, Burns expressed his strong appreciation for the
contribution Iceland had made in Afghanistan, through ISAF airlift
funding, the management of Kabul International Airport, and through
PRT deployments in Chaghcharan. Noting that NATO is a big alliance
where every country brings something that they do best to Alliance
missions, Burns strongly urged that Iceland consider renewing its PRT
deployment, which had brought special skills to the table. FM
Gisladottir described a general apprehension among Icelanders at
seeing their fellow citizens in military or quasi-military roles, but
pledged to continue Iceland's activities in humanitarian
reconstruction. Burns reiterated the flexibility of the PRT concept,
nothing this flexibility allowed for Iceland to shape its
contributions in an appropriate manner. Burns updated the PM and FM
on progress in Afghanistan as a whole.

IRAQ
--------------

6. (C) In her meeting with Burns, FM Gisladottir drew attention to
the new coalition government's statement regretting the war in Iraq,
and pointed out that her party in 2003 had been deeply opposed to the
invasion. Burns noted that what was important at this point is the

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need to work together to promote progress in stabilizing the country.
Over lunch, he emphasized the need to put the arguments of 2003
behind us, and noted French President Sarkozy and German Chancellor
Merkel have both made helpful comments in this regard.

PALESTINE: FOLLOWING IN NORWAY'S FOOTSTEPS?
--------------

7. (C) Over lunch, FM Gisladottir expanded upon her recent idea that
Iceland should follow Norway's lead and recognize the Palestinian
Unity Government. Burns said the U.S cannot accept Hamas until the
organization renounces terrorism, accepts Israel and accepts peace,
and noted this was the Quartet view. FM Gisladottir responded that
some in the European Commission believe the EU is trapped in this
policy, because they have already invested so much in Palestine's
infrastructure, which is crumbling without direct aid. Burns argued
that the U.N. fills that role, while Hamas has continued to prove its
unreliability by smuggling weapons and, based on the day's news
reports, is working to annihilate Fatah. Time is needed to rebuild
credibility on the Palestinian side. Intrigued, FM Gisladottir asked
point blank for Burns' view on the Norwegians' initiative. Burns
said that, in light of current events, legitimizing Hamas would be a
mistake. Hamas was acting in a completely unacceptable way, and the
USG would make that clear to Norwegian FM Stoere. Gisladottir noted
that she will be meeting with Stoere in Oslo on June 20.

RUSSIA
--------------

8. (C) Haarde said that Iceland's relationship with Russia is
important, noting the historical trade ties and the strategic
situation in the Barents Sea. The Icelanders had an indication that
Putin might be coming to Iceland as a stopover during his July 1-2
visit to Maine to meet with President Bush. Haarde said that his
government has "watched in amazement" as Russia has attempted to
reassert itself in unpredictable ways, particularly in the last year
and with regard to the Baltic states. Gisladottir pointed out the
contradictions in Russian behavior at a Council of the Baltic Sea
States ministerial earlier in the week, where Russian FM Lavrov
flatly refused a meeting request from his Estonian counterpart, but
was all smiles and easy jokes over dinner later at the meeting.
Burns explained U.S. concern over Russian unpredictability,
describing U.S. efforts to be patient and not respond to Putin's
provocations. Both the PM and FM agreed that like-minded nations
need to work with Russia to encourage it to integrate with the
broader world.

ENERGY SECURITY/CLIMATE CHANGE
--------------

9. (C) Haarde noted that energy transportation in the North Atlantic,
especially between Russia and North America, will be an increasingly
important issue. Burns responded that we have great interest in
energy security. Haarde welcomed President Bush's climate change
initiative as very important to Iceland and said the U.S. should take
a leadership role on this issue. Gisladottir also noted the
importance of having India and China, in addition to the U.S., as
part of the global arrangement to reduce emissions. She described
Icelandic investment in the U.S. in geothermal development and said
there are a lot of possibilities to cooperate on deep-drilling
research. Haarde said that the "know-how" of harnessing geothermal
resources was an Icelandic export commodity, and reiterated the
Icelandic willingness to work together with the United States in this
area. Burns agreed that clean energy is an area where we can work
together, and promised to talk to the Department of Energy to
emphasize the importance of closer collaboration in research and
development.

WHALING
--------------

10. (C) Haarde proved more expansive on the reasoning behind
Iceland's position on whaling than in prior discussions on the topic.
He stated flatly that Iceland would "never compromise on the
principle" behind its issuance of a commercial whaling quota in 2006,
and that the whale stock around Iceland must be "contained and
culled." Reflecting his confidence in in GOI-sponsored research
claims that whales are a threat to Icelandic fish stocks, Haarde
noted that Icelanders depend on fishing for their livelihood and that
whaling should be viewed as a legitimate activity if it is done in a
sustainable manner. Haarde did allow that now that the Icelanders
"have demonstrated the principle," his government may choose not to
re-issue the commercial whaling quota if the largest company engaged
in whaling cannot find a market for the meat. While thanking Haarde
for Iceland's support of the aboriginal bowhead quota at May's
International Whaling Commission meeting in Anchorage (a vote the PM
was keenly aware of),Burns communicated the strong objection the
U.S. has to whaling for commercial reasons.

QUEST FOR A UNSC SEAT

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--------------

11. (C) Haarde noted that much had changed in the world since 1945
and Iceland was much in favor of reforming and strengthening the
United Nations and expanding the Security Council. He asked Burns
for U.S. support for Iceland's UNSC bid and noted that despite the
GOI's success in getting a few commitments for supporting votes, he
didn't know how reliable they would be in the end. Burns said that
Iceland would be a welcome addition to the Council but that the USG
does not disclose its votes in UN elections.

COMMENT
--------------

12. (C) Burns' visit to Iceland, the first by a senior U.S. official
since 2003, was greatly welcomed by the new Icelandic government, and
received heavy and positive press coverage. In the meetings, some
foreign policy divisions between the Prime Minister and his new
Foreign Minister, most particularly on support for the war in Iraq,
were deliberately underscored by Gisladottir. In general, however,
the personal relationship between the two most senior members of the
new coalition appeared collegial and relaxed. (In fact, Haarde said
that the new government coalition was so stable that he saw no reason
why it couldn't last for two to three terms.) Gisladottir was
willing to listen to the argument for a renewed Icelandic
contribution to the PRT in Afghanistan, although her obvious wariness
of any Icelandic association with any military means we still have
work to do to convince her to renew the mandate before winter. Both
leaders expressed confidence that bilateral relations with the U.S.
are back on a firm footing but want to wrap up the last of the base
legacy issues, especially the future of IADS, early this summer.
With Gisladottir clearly taking energetic control of her new brief,
and in a mood to travel, we can expect a request for cabinet-level
meetings in Washington within the near future. PM Haarde's visit to
the United States in August would present an excellent opportunity
for a White House meeting with a NATO leader who is not only likely
to be in place for a long time, but whose steadiness and calm
management went a long ways to taking the domestic fire out of the
base closure issue.

van Voorst