FM LIVNI DISCUSSES GAZA, A TWO-STATE SOLUTION,

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 001684

SIPDIS

CODEL
SIPDIS

DEPARTMENT FOR NEA AND H

E.O. 12958: DECL: 05/31/2017
TAGS: PREL PGOV PINR IS KPAL KWBG IR LE EG JO
SUBJECT: FM LIVNI DISCUSSES GAZA, A TWO-STATE SOLUTION,
IRAN, AND LEBANON WITH CODEL LEAHY

Classified By: Ambassador Richard H. Jones for Reason 1.4 (B/D)


1. (C) Summary: In a meeting with CODEL Leahy May 29, FM
Livni described the situation in Gaza and southern Israel as
intolerable and emphasized the importance of stopping arms
smuggling from Egypt. She told the CODEL that Egypt was
cooperating, but needed to do more to prevent smuggling
through tunnels. Action against smuggling and improving the
security situation in Gaza would affect the GOI's ability to
compromise on extending the "ceasefire" to the West Bank
since the public's views and those of the leadership were
influenced by the situation in Gaza. Livni argued that
stagnation on the peace process was not due to GOI policy and
that any process had to be based on the "true pillars" of a
two-state solution and the Quartet principles. She added
that the Palestinian National Unity Government blurs the
distinctions between Fatah and Hamas and said that the
outbreak of intra-Palestinian fighting had predictably led
once again to increased attacks on Israel. Livni told the
delegation that the GOI was keeping channels to President
Abbas open, and the next meeting between Olmert and Abbas had
been scheduled for June 7, although final status issues were
not on the table. On regional issues, Livni expressed
satisfaction with her recent meetings in Cairo on the Arab
Peace Initiative, said regional understanding of the Iranian
threat had increased and also indicated that she hoped for a
second UNSCR resolution on the Lebanese arms embargo. End
Summary.

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NOT OPTIMISTIC ABOUT PROGRESS TOWARD A TWO-STATE SOLUTION
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2. (C) Livni told the CODEL it was the GOI's goal to keep
Israel a Jewish and democratic state and that the GOI
therefore wanted to compromise on land to create two states.
Livni explained that the idea of a Palestinian state was to
give Palestinians a national homeland, just as Israel was a
homeland for the Jewish people. She complained that
Palestinians still demand the "right of return" to Israel
without understanding that it would make a two-state solution
impossible. Livni told the CODEL that Israeli settlers live
on less than 8% of the West Bank and argued that the Israeli
people would support an equitable solution to the conflict if
the GOI could negotiate one.


3. (C) In response to a question from Senator Salazar (D-CO)
about the urgency of finding a resolution to the
Israeli-Palestinian conflict, Livni replied that the GOI saw
a need to end the conflict as soon as possible, but
questioned whether that would be possible. Livni said Israel
was willing to take risks and was working with moderate
Arabs. However, she argued that the Arab Peace Initiative's
conditions did not help the Palestinians or encourage them to
compromise. Livni said it would be helpful if the U.S. and
the international community, especially the Europeans, could
help the Palestinians focus on a feasible outcome, adding
that she was not sure they could bridge the gaps now. As a
result, Israel's current focus is on dialogue with Abbas on
issues other than final status. Livni told the CODEL that
addressing serious issues too soon could lead to a breakdown
in talks.


4. (C) In response to a question from Senator Cochran (R-MS)
about steps to achieve peace and the U.S. role, Livni told
the CODEL not to believe the Israeli-Palestinian conflict was
the cause of turmoil in the region. Rather, it was the
result of an increase in extremist ideology. She said the
more pragmatic leaders recognized the situation was not a
zero-sum game, but one in which both the Arab and Israeli
sides could benefit. Livni added that Israel needs to know
where the U.S. stands on regional threats.

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LIVNI'S MEETING WITH EGYPTIAN AND JORDANIANS FMS
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5. (C) In response to a question from Senator Hagel (R-NE)
regarding follow-up to the May 10 Arab League meeting and
Israel's ability to reach a negotiated solution, Livni said
that she met with the Egyptian and Jordanian foreign
ministers in Cairo as Arab League representatives and
explained how their initiative could hurt moderates by making
it politically more difficult for them to compromise in
negoations with Israel. The two foreign ministers agreed not
to dictate the outcome of the initiative or to replace the
Palestinians as a negotiating partner and said they would
accept and support whatever the Palestinians decide. Livni
said she also asked the Egyptian and Jordanian foreign

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ministers to provide the GOI with a "political horizon" by
making gestures to it even before a deal was struck with the
Palestinians and suggested that the U.S. might be able to
help in this area.

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NEW REGIONAL UNDERSTANDING OF IRANIAN THREAT
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6. (C) Livni told the CODEL that the Gulf States could not
afford a nuclear Iran and said there was a new understanding
in the region that the Iranian threat is an "existential" one
and has become more significant than the Israeli-Palestinian
conflict. There was a risk of the Israeli-Palestinian
conflict becoming religious in nature, but there was also an
increased possibility of working together. She argued that
just as Hizballah does not act in Lebanon's interests, Hamas
does not act in the Palestinians' interests. Hesitation by
the international community on Iran could lead to a domino
effect among the Gulf States in appeasing Iran regarding its
nuclear program or in seeking nuclear weapons of their own.


7. (C) In response to a question from Senator Leahy (D-VT)
regarding Ambassador Crocker's meeting with the Iranians,
Livni emphasized the importance of perceptions and said that
the USG should continue to propagate the message that the
meeting served U.S. interests. This would help to prevent
contact with Iran from being viewed as weakness.


8. (C) In response to a question from Senator Cardin (D-MD)
on how to stop arms smuggling in Lebanon, Livni replied that
a second UNSCR is necessary, but Lebanese PM Siniora is too
weak to ask for one.


9. (U) CODEL Leahy has cleared this message.

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