ISRAEL MEDIA REACTION

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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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Leading electronic media reported that at 9 A.M. today (Israel Time)
the Winograd Commission probing the Second Lebanon War started
disclosing the testimonies of 24 people it questioned, including PM
Ehud Olmert, Defense Minister Amir Peretz, and former IDF chief of
staff Dan Halutz. As reported in various media, Olmert was quoted
as saying in his testimony that he knew all the time that Israel
would be attacked from the North and that he had warned the army
about it. Olmert was quoted as saying that the IDF's command was
faulty. Olmert reportedly also told the Commission that Peretz is
not responsible for the failure of the war. Halutz was quoted as
telling the Commission that the IDF had been ready to act. Peretz
was quoted as saying that his contribution to the war was important
and decisive.

Israel Radio reported that this morning three Qassam rockets were
fired at Israel. Leading media repotted that an IDF soldier was
lightly wounded in Nablus.

Yediot reported that starting today Jordanian King Abdullah II will
sponsor "marathon talks" to advance the Saudi peace plan and promote
the resumption of Israeli-Palestinian talks. The media reported
that today the Jordanian and Egyptian foreign ministers will meet
with FM Tzipi Livni in Cairo and that the King will host a group of
Israeli public figures in an effort to tell them that "there is
nothing to fear from the Arab peace plan." In four days Abdullah
will host Noel Prize laureates in Petra, including Shimon Peres.
Yediot wrote that two days later, in Aqaba, the King will take part
in a meeting of 200 Israeli and Palestinian figures to discuss ways
to implement cooperation between the two peoples and what should be
one so that Israel adopts the Arab initiative.

Makor Rishon-Hatzofe quoted associates of former PM and leading
premiership contender Ehud Barak as saying in an interview with the
newspaper that Barak will launch a plan to separate Israel from the
Palestinians.
Major media (lead stories in Maariv and The Jerusalem Post) reported
that on Wednesday Vice PM Shimon Peres told Olmert that he would
seek the state's presidency, and not cooperate with Knesset members
seeking to topple Olmert and have Peres replace him. (Makor
Rishon-Hatzofe dubbed Peres the "perennial candidate.") All media
reported that Likud MK Reuven Rivlin, a former Knesset speaker, met
leader of the Shas party, including the party's mentor, Rabbi
Ovadia Yosef, in a bid for the ultra-Orthodox party's support in his
race for president. However, the media quoted Shas Chairman, MK Eli
Yishai, as saying after the meeting that Shas's inclination is to
vote for Peres. Yediot cited June 13 as a likely date for holding
the presidential elections.

Ha'aretz cited the belief of Palestinian and Israeli security
sources that there are approximately 15 active tunnels in Rafah in

the southern Gaza Strip, between the PA and Egypt. The sources were
quoted as saying that tunnels are being used by smugglers to move
arms, drugs and people, The same sources were quoted as saying that
there are at least 10 other tunnels in the area that are not in use
due to various technical reasons. According to Ha'aretz, he Rafah
tunnels are being controlled by the most powerful clans in the area,
who consider them a very lucrative source of income. Ha'aretz noted
that the US is demanding in its "benchmarks plan" to Israel and the
Palestinians that the latter work to counter the tunnel phenomenon.

Deputy Defense Minister Ephraim Sneh was quoted as saying on
Wednesday, in an interview with Ha'aretz, that the World Bank report
on restrictions imposed by Israel on the freedom of movement of
Palestinians is full of errors and imbalanced.

Maariv reported that, in a makeover, most bodies of the Israeli
intelligence community favor negotiations with Syrian President
Bashar Assad. The newspaper wrote that the Foreign Ministry has
joined claims by Israel's National Security Council and IDF
Intelligence that Syria's signals should be seriously scrutinize.
According to Maariv, only the Mossad keeps insisting that Assad does
not want peace.

British Ambassador to Israel Tom Phillips was quoted as saying in an
interview with The Jerusalem Post that Israel will continue to come
under blistering criticism in Britain, some of it "totally
unjustified," as long as "Israel is regarded as an occupying
power."

US Representative Gary Ackerman (D-NY),Chairman of the House
Foreign Affairs Middle East and South Asia Subcommittee, was quoted
as saying on Tuesday, in an interview with The Jerusalem Post, that
Israel's handling of last summer's controversial conflict in Lebanon
should serve as a model for the US and its own war in Iraq.
Ackerman was quoted as saying that, while Israel is thoroughly
reviewing its military, "we have an administration that is still in
denial."

Leading media reported that Hamas's TV channel is using a lookalike
Mickey Mouse character to instill hate for Israel and the US in the
Palestinian children. The Jerusalem Post reported that Hamas pulled
the figure following protests.

Yediot cited the US-based Spanish-language network Telemundo-TV as
saying that Hizbullah has set up an organizational infrastructure
and a training base in Ciudad del Este, Paraguay. Yediot cited the
United States' concern that Hizbullah militants might infiltrate the
porous Mexican border to carry out attacks in the States.

All major media reported that on Wednesday IDF reservists were
videotaped hitting and punching Israeli protesters in the southern
Hebron Hills.

Ha'aretz reported that earlier this week the GOI declared illegal
the annex of Hamas in Israel -- the Reform and Change party.

Ha'aretz quoted National Infrastructure Minister Binyamin
Ben-Eliezer as saying on Wednesday that an Israel TV-produced
documentary that claimed that soldiers from the Shaked Battalion
unarmed Egyptian prisoners at the end of the Six-Day War harmed
Israel's relations with Egypt. Ha'aretz quoted Ran Edelist, the
film's producer, as saying on Wednesday that Egyptian and Israeli
media had culled inaccurate quotes from the movie. Edelist
clarified that his film does not claim that that the IDF had killed
POWs. Maariv reported that Egyptian FM Ahmed Ali Abu al-Gheit
confirmed this in a television interview.

Leading media cited a report on the functioning of the government
and other publicly funded institutions, which State Comptroller
Micha Lindenstrauss presented on Wednesday. The Jerusalem Post said
that the many irregularities found by the Comptroller are topped by
the army's alleged failure to properly handle the threat of Qassam
rockets from and weapons smuggling into the Gaza Strip. Ha'aretz
said that the state comptroller's reports on the Second Lebanon War
are not due for a few more months but that it is already clear from
the research done on the disengagement from the Gaza Strip that the
problems in the army and the defense establishment began long before

July 12, 2006, the day when Hizbullah abducted two IDF soldiers.

The Israeli human-rights organization B'Tselem inserted a paid
supplement in today's Ha'aretz. The publication states: "Israel
undoubtedly has the obligation to act in order to protect its
citizens' lives. But along with the power comes responsibility."

Ha'aretz, The Jerusalem Post, and other media reported that on
Wednesday the opposition submitted a proposal to hold early
elections for the prime minister's seat, without dispersing the
Knesset or altering the election system. The bill, which was
designed to replace PM Olmert and would mandate elections within 60
days, is not expected to pass.

Yediot reported that on Sunday the cabinet will approve a
650-million shekel (around USD 163.5 million) investment in the city
of Jerusalem. The plan includes the transfer of government branches
to the city, tax breaks, and a 200-million shekel (around USD 50.3
million) grant to the city.

The Jerusalem Post, Ha'aretz, and Makor Rishon-Hatzofe reported that
on Wednesday 37 African refugees -- 24 of them fleeing the Darfur
region of Sudan -- were tossed back and forth from the police to the
IDF. The media reported that the Beersheva Municipality eventually
opened the city's doors to the refugees.

The Jerusalem Post ran a feature about Yehuda Wedesheim, an IDF
soldier who grew up in Milwaukee and won a medal for his
single-handed heroism in the Second Lebanon War.

Yediot reported that Haim Yavin, the "mythological" Israel TV
newscast anchorman, is retiring. He will be hosting a talk show on
the same channel.

All media reported that on Wednesday the US dollar reached its
lowest rate in eight-and-a-half years on Tel Aviv's financial market
-- 3.974 shekels. Major media reported quoted Bank of Israel
Governor Stanley Fischer as saying on Wednesday that a recession in
the long term is likely in Israel, and that external financing
sources would be the key to pulling out of it.

Ha'aretz reported that a study conducted by Swiss research institute
IMD in cooperation with the Federation of Israeli Chambers of
Commerce has ranked Israel as first among the 55 most developed
countries in the world when it comes to public and private spending
on research and development compared to GDP. The study also found

Israel has the most skilled engineers in the work force, ranked
second in raising capital for business development, and second in
information technology. In contrast, Israel placed 52nd with regard
to participation of men and women in the work force, and 42nd in its
ability to maintain stable labor relations. The study also reviewed
countries' performance according to four indices: economic
efficiency, government efficiency, business efficiency and
infrastructure. Israel ranks 33rd, 25th, 16th and 14th in each
respectively. In real GDP growth Israel ranks 26th. GDP per capita
in dollar terms ranks Israel in 33rd place, while in terms of direct
investment by foreign residents it ranks fairly high, in 6th place.

Yediot quoted the Chief Rabbi of Rome, Riccardo Shmuel di Segni, as
saying on Wednesday that the anticipated beatification of the late
Pope Pius XII harms Jewish-Christian relations.

The Jerusalem Post reported that this week a group of US airport
authority heads got an inside look at the running of the Israeli
airport system in the hope of learning new ways to improve the
overall security and efficiency of US airports.

Yediot reported that an Israeli study published in the scientific
journal Geophysical Research proved the validity of the "butterfly
effect" theory that thunderstorms in Africa cause tropical storms
and hurricanes in the Atlantic Ocean that affect the US.

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Mideast:
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Summary:
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The independent, left-leaning Ha'aretz editorialized: "The gradual
improvement [of conditions in the Palestinian territories],
monitored by the Americans, would be an attempt to prevent an
outbreak of violence in the region.... There is no choice but to
agree, regretfully, with the findings of the World Bank report that
Israel is preventing the rehabilitation of the West Bank economy."

Veteran columnist Evelyn Gordon wrote in the conservative,
independent Jerusalem Post: "For Rice, desperate to buy Arab and
European support on Iraq with 'progress' on the Israeli-Palestinian
front, higher Israeli casualties may well be a price worth paying.
But no responsible Israeli government could concur."
Military correspondent Amir Rappaport wrote in the popular,
pluralist Maariv: "If ... the considerations are so clear, and show
that we should hold negotiations with Syria, why aren't talks being
held? The answer is simple: because the Americans have still not
decided whether they permit us to talk to our neighbors."

The Jerusalem Post editorialized: "Israel desperately needs a
full-time government now in order to begin a process of national
recovery.... For now, Kadima and Labor are standing
shoulder-to-shoulder to block such an eventuality."

Shlomo Avineri, Hebrew University Professor of Political Science and
former director-general of the Foreign Ministry, wrote in Ha'aretz:
"There will be no true compromise between Israel and the
Palestinians without a readiness on their part ... to admit that
they, too, are partly responsible for what happened to them in
1948."




Block Quotes:
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I. "No Life on the Other Side"

The independent, left-leaning Ha'aretz editorialized (5/10): "It is
difficult for Israelis who move freely throughout their country to
understand Palestinian life in the West Bank, which becomes more
difficult from year to year, from one agreement to the next. After
it was decided to remove West Bank roadblocks to allow for movement
that does not endanger Israeli security, it turned out that
additional surprise roadblocks had been established.... Even a
government that, due to its weakness, is not currently capable of
working to resolve the conflict with the Palestinians cannot free
itself of its obligation to manage the occupied territories in a way
that enables people to live there.... The Ehud Olmert government and
the Hamas government refuse to implement the steps the United States
has suggested to both sides, despite Palestinian Authority Chairman
Mahmoud Abbas's position on the matter. This refusal involves
neither intelligence nor purpose, just an ongoing and frustrating
failure. The gradual improvement, monitored by the Americans, would
be an attempt to prevent an outbreak of violence in the region. The
proposal was viewed by the Israeli government as a command, rather
than as the act of a helpful friend. Therefore, there is no choice
but to agree, regretfully, with the findings of the World Bank
report that Israel is preventing the rehabilitation of the West Bank
economy."

II. "Benchmarks For a Bloodbath"

Veteran columnist Evelyn Gordon wrote in the conservative,
independent Jerusalem Post (5/10): "US Secretary of State
Condoleezza Rice is not purposely trying to destroy all of Israel's
hard-won security gains of the last five years. But if she were, she
could hardly have improved on her new benchmark proposal.... Thus
six months before PA forces are even in position to combat Gazan
terror, Israel would be required to facilitate the export of this
terror to the West Bank. And sometimes there is no parallel demand
of the PA at all.... Indeed, Hamas publicly rejected the benchmark
proposal last week precisely because the organization is 'preparing
for battle,' to quote one of its leaders, Khaled Mashal. Why should
Israel facilitate this effort? For Rice, desperate to buy Arab and
European support on Iraq with 'progress' on the Israeli-Palestinian
front, higher Israeli casualties may well be a price worth paying.
But no responsible Israeli government could concur."

III. "It's Up to the Americans"

Military correspondent Amir Rappaport wrote in the popular,
pluralist Maariv (5/10): "It is not gratifying to admit, but more
than the [new, positive] position of the Israeli Foreign Ministry
over the question of whether to hold negotiations with Syria -- it
is the American position that matters.... Despite the fear of
holding futile talks, there is still a chance that the Syrians are
sincere in the intention to reach a peace agreement. But should
Israel hand over all of the Golan Heights in exchange for a peace
agreement with Syria? That is already a political issue, but it is
easy to guess what Ehud Barak would decide if he could turn back the
wheel to March 2000, when he was prime minister. The former Syrian
president, Hafez Assad, then met with US President Bill Clinton and
the last opportunity, to this day, was created to close a deal with
the Syrians and to detach it from its alliance with Iran and
Hizbullah. Israel did not agree to Assad's threshold conditions,
and the opportunity was lost. If, more than seven years later, the
considerations are so clear, and show that we should hold
negotiations with Syria, why aren't talks being held? The answer is
simple: because the Americans have still not decided whether they
permit us to talk to our neighbors."

IV. "Blocking Tactics"
The Jerusalem Post editorialized (5/10): "Though [former prime
minister Ehud] Barak claims that the Olmert government can survive
without Labor, it seems that most Labor leaders and members do not
share this view. Moreover, Barak's actions indicate the opposite,
namely thinks that the only way to avoid elections is for Labor to
cling to the government. That said, it could well be that Labor's
preference is for Kadima to oust Olmert so that Labor could have its
cake and eat it too: no elections and no Olmert. There are,
however, a few problems with this implicit Labor plan. The first is
that Kadima is showing no signs that it will replace Olmert....
Second, the Labor Party, which presumably would like to present
itself as representing change, renewal, and clean government, is in
the meantime looking like Olmert's security blanket. Third, there
is the biggest problem of all: that the world will not stop and wait
for Winograd's next pronouncement and for the government to fall....
Israel desperately needs a full-time government now in order to
begin a process of national recovery, to be ready for any
eventuality, and to pursue a strategy that will not just be
reactive, but will actively advance our national interests. For
now, Kadima and Labor are standing shoulder-to-shoulder to block
such an eventuality."


V. "Until They Accept Responsibility"

Shlomo Avineri, Hebrew University Professor of Political Science and
former director-general of the Foreign Ministry, wrote in Ha'aretz
(5/10): "We can understand -- without justifying it -- the
Palestinians' rejection of the [1947] partition plan, just as we can
understand -- without justifying it -- the Revisionist [right-wing]
Zionist position negating the partition. But most of the Jewish
community accepted the idea. And if most of the Palestinians had
accepted it, then an independent Palestinian state would have risen
on part of Mandatory Palestine in 1948, without war and without
refugees. The Palestinians are not prepared to deal with this
complex reality.... Far be it from me to maintain that in 1948 the
Jews were 'right' and the Arabs were 'wrong.' What troubles me and
other Zionist Israelis wishing to be attentive to the Palestinians'
pain and willing to help rectify injustices and accept a historic
compromise, is the Palestinians' complete unwillingness to
acknowledge that in 1948 they and their leaders made a terrible
historic mistake -- of both political and moral proportions -- by
rejecting the international compromise they were offered. It is for
this reason that the Palestinians' customary comparison between the
Nakba [catastrophe] and the Holocaust is so outrageous. Did the
Jews of Germany and Europe declare war on Germany? Were the world's
Jews offered a compromise that they rejected? Europe's Jews were
murdered by the Nazis because they were Jews. What does that have
to do with the Palestinians' decision to refuse the UN's compromise
proposal and go to war? It would not be exaggerated to say that
there will be no true compromise between Israel and the Palestinians
without a readiness on their part -- however minute and partial, for
the 'truth' is always complex -- to admit that they, too, are partly
responsible for what happened to them in 1948."

CRETZ