PM OLMERT DISCUSSES TWO-STATE SOLUTION,

C O N F I D E N T I A L TEL AVIV 001691

SIPDIS

CODEL
SIPDIS

DEPARTMENT FOR NEA AND H

E.O. 12958: DECL: 06/01/2017
TAGS: PREL PGOV PINR IS KPAL SY LE
SUBJECT: PM OLMERT DISCUSSES TWO-STATE SOLUTION,
SETTLEMENTS, AND ROLE OF ARAB MODERATES WITH CODEL LEAHY


CLASSIFIED BY: AMBASSADOR RICHARD H. JONES FOR REASON 1.4 (B/D)

SUBJECT: PM OLMERT DISCUSSES TWO-STATE SOLUTION,
SETTLEMENTS, AND ROLE OF ARAB MODERATES WITH CODEL LEAHY


1. (C) SUMMARY: IN A MEETING WITH CODEL LEAHY MAY 30,
ISRAELI PM EHUD OLMERT REAFFIRMED HIS COMMITMENT TO A
TWO-STATE SOLUTION AND DESCRIBED HIS EFFORTS TO REACH THIS
GOAL. CALLING THE INTERNAL PALESTINIAN SITUATION
"UNBEARABLE," OLMERT EXPRESSED HIS SINCERE DESIRE TO IMPROVE
THE SITUATION AND SAID HE IS PREPARED TO TAKE MEASURES BEYOND
THOSE OF ANY PREVIOUS ISRAELI PRIME MINISTER. HE TOLD THE
CODEL THAT "NO NEW SETTLEMENTS WILL BE PLANNED, ZONED,
APPROVED OR BUILT ON MY WATCH" AND "UNAUTHORIZED OUTPOSTS
WILL BE REMOVED." OLMERT EMPHASIZED THAT IT WAS HE WHO HAD
OFFERED TO WITHDRAW FROM 90 PERCENT OF THE WEST BANK
UNILATERALLY AND HE WHO PROPOSED THE BILATERAL WEEKLY
MEETINGS WITH PALESTINIAN PM ABBAS, FOR WHICH HE WAS READY TO
GO TO JERICHO TO SHOW EQUALITY. FURTHER, OLMERT HIGHLIGHTED
HIS READINESS TO TALK ABOUT THE ARAB PEACE INITIATIVE DESPITE
CONTINUED ARAB DEMANDS FOR THE "RIGHT OF RETURN" AND HIS
WILLINGNESS TO COMPROMISE ON THE BARRIER ROUTE AND
CHECKPOINTS TO IMPROVE THE QUALITY OF LIFE FOR PALESTINIANS.
HE SAID THAT HE IS ALSO WILLING TO BE FLEXIBLE ON THE
TRANSFER OF TAX REVENUES TO THE PALESTINIANS AND TO EXPAND
THE CEASEFIRE TO THE WEST BANK, UNDER CERTAIN CIRCUMSTANCES.
OLMERT DESCRIBED THE SITUATION ALONG THE LEBANESE BORDER AS
STABLE, ADDING THAT THE "INTERNATIONAL FORCE IS MEANINGFUL
AND 1701 IS BETTER THAN MOST UNSCRS ON THE MIDDLE EAST."
OLMERT POINTED TO SAUDI SUPPORT AS KEY TO HELPING
PALESTINIANS COMPROMISE, AND SAID IF THERE IS A CHANCE FOR
PEACE WITH SYRIA, HE DOES NOT NEED ENCOURAGEMENT FROM POTUS
TO SIEZE EVERY OPPORTUNITY. END SUMMARY.

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GOI COMMITTED TO PROGRESS TOWARD PEACE
--------------


2. (C) IN RESPONSE TO A QUESTION FROM SENATOR THAD COCHRAN
(R-MS),OLMERT SAID THAT THERE IS NO RELATION BETWEEN ANY OF
THE PEACE PROCESS ISSUES AND THE DOMESTIC POLITICAL
DIFFICULTIES FACING HIS GOVERNMENT. HE EXPLAINED THAT THE
GOVERNING COALITION IS VERY LARGE AND ITS STABILITY IS NOT
DEPENDENT ON PROGRESS TOWARD PEACE. NEVERTHELESS, OLMERT
STRESSED THAT HE IS "COMMITTED ANYWAY," NOTING HE HAD REVIVED
THE ARAB PEACE INITIATIVE IN HIS SDE BOKER SPEECH OF NOVEMBER
27, 2006. HE RECALLED THE FAILURE OF THE NOVEMBER CEASEFIRE
AND HIS RESTRAINT AS ROCKETS CONTINUED TO FALL ON SOUTHERN
ISRAEL. HE REITERATED HIS DESIRE TO CONTINUE MEETING WITH
ABBAS, WITH THE NEXT MEETING SCHEDULED FOR JUNE 7. OLMERT
SAID HE WANTED TO MOVE FORWARD, BUT HOPED THAT ABBAS WOULD
SHOW GREATER DETERMINATION IN DEALING WITH THE INTERNAL
PALESTINIAN SITUATION.


3. (C) OLMERT ALSO DISCUSSED PEACE WITH THE SYRIANS, SAYING
THAT IF THERE IS A CHANCE FOR PEACE, HE IS WILLING TO TAKE
GENUINE RISKS AND IS CONFIDENT POTUS WOULD NOT PREVENT HIM
FROM MOVING FORWARD.

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ROLE OF MODERATE ARAB COUNTRIES IN FACILITATING PEACE
-------------- --------------


4. (C) IN RESPONSE TO A COMMENT FROM SENATOR SALAZAR (D-CO),
OLMERT SAID THE SAUDIS COULD BE THE KEY TO A TWO-STATE
SOLUTION IF THEY WERE BRAVE ENOUGH TO HELP THE PALESTINIANS
COMPROMISE. HOWEVER, HE SAID HE HAD NOT YET SEEN ANY REAL
EFFORT ON THEIR PART TO DO SO. THE PALESTINIANS DO NOT HAVE
THE POWER TO COMPROMISE WITHOUT OUTSIDE HELP AS THEY ARE TOO
DIVIDED. OLMERT SAID HE HAD SENT MANY MESSAGES TO KING
ABDULLAH SAYING HE IS READY TO NEGOTIATE ON THE ARAB PEACE
INITIATIVE. HE ARGUED THAT IF THE ARAB QUARTET (SAUDI
ARABIA, UAE, EGYPT AND JORDAN) WOULD HOLD A PUBLIC MEETING
WITH ISRAEL, IT WOULD TRANSFORM PUBLIC ATTENTION AND GIVE THE
PROCESS AN "ENORMOUS BOOST." OLMERT NOTED THAT SUCH A
MEETING COULD NOT SERVE AS A SUBSTITUTE FOR DIRECT
NEGOTIATIONS WITH THE PALESTINIANS, BUT WOULD FACILITATE THEM.

-------------- ---
GOI AND THE MODERATE ARAB STATES - NEW ATTITUDES
-------------- ---


5. (C) RESPONDING TO A QUESTION FROM SENATOR HAGEL (R-NE),
OLMERT NOTED THAT ISRAEL'S RELATIONS WITH JORDAN ARE ALMOST
AS INTIMATE AS THOSE WITH THE U.S. THE TWO COUNTRIES ARE
WORKING ON SOME SENSITIVE INITIATIVES TOGETHER. OLMERT TOLD
THE CODEL THAT IN PRIVATE MEETINGS, ARAB LEADERS WARNED HIM
NOT TO TRUST THE PALESTINIANS, ALTHOUGH THEY WOULD NOT SAY SO
PUBLICLY. HE SAID THAT THE LEBANON CONFLICT LAST SUMMER LED


SEVERAL ARAB COUNTRIES "TO SPEAK OUT AS NEVER BEFORE" AND
DEMONSTRATED A NEW ATTITUDE ON THEIR PART, WHICH THE GOI IS
TRYING TO ENCOURAGE. "FOR THE FIRST TIME, WE ARE NOT ENEMY
NUMBER ONE," OLMERT SAID, REFERRING TO THE PERCEPTION THAT
IRAN HAD BECOME THE KEY THREAT.

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BARRIER NECESSARY BUT NEW SETTLEMENTS ARE NOT
--------------


6. (C) SENATOR PATRICK LEAHY (D-VT) COMMENTED ON THE
RESENTMENT AND HARM TO ISRAELS IMAGE AS A DEMOCRATIC,
PROGRESSIVE COUNTRY CAUSED BY THE SETTLEMENTS, THE IMPACT OF
THE BARRIER, THE UPROOTING OF OLIVE TREES, AND THE
RESTRICTIONS ON PALESTINIAN WATER USE. IN RESPONSE, OLMERT
ACKNOWLEDGED HE MIGHT EXPRESS THE SAME SENTIMENTS IF HE "SAW
THE SITUATION COLD." LISTING ALL HE HAD DONE FOR THE ARAB
COMMUNITY OF JERUSALEM AS MAYOR, OLMERT SAID HE HAD ALSO SEEN
NUMEROUS VICTIMS OF SUICIDE BOMBINGS FOR WHICH THE ONLY
SOLUTION WAS PM SHARON'S DECISION TO BUILD THE BARRIER. HE
ARGUED THAT ALTHOUGH THE BARRIER "AFFECTS (PALESTINIAN)
QUALITY OF LIFE, IT DOES NOT KILL; LACK OF A BARRIER DOES."
HE TOLD THE CODEL THAT HE WOULD REMOVE UNAUTHORIZED OUTPOSTS
AND ENSURE THAT "NO NEW SETTLEMENTS WILL BE PLANNED, ZONED,
APPROVED OR BUILT" ON HIS WATCH.


7. (C) IN RESPONSE TO A QUESTION FROM SENATOR CARDIN (D-MD)
ABOUT THE BARRIER, OLMERT REAFFIRMED HIS COMMITMENT TO A
TWO-STATE SOLUTION SAYING SUCH A SOLUTION WAS IN ISRAELS
INTEREST. HE MAINTAINED THAT THE PALESTINIANS WOULD BENEFIT
FROM ECONOMIC ARRANGEMENTS THAT DID NOT REQUIRE THEM TO CROSS
INTO ISRAEL, SUCH AS QUALIFIED INDUSTRIAL ZONES (QIZS).
OLMERT ALSO SAID THE GOI IS READY TO INVEST IN INDUSTRIAL
PARKS ON THE PALESTINIAN SIDE AND TO WORK TO GAIN PALESTINIAN
PRODUCTS DUTY FREE ACCESS TO EUROPE AND THE U.S. HE NOTED,
HOWEVER, THAT NONE OF THESE PROJECTS COULD WORK IN THE FACE
OF TERROR.


8. (C) IN RESPONSE TO A QUESTION FROM CONGRESSMAN WELCH
(D-VT) ASKING WHETHER A VIABLE PALESTINIAN STATE IS STILL
POSSIBLE, OLMERT RESPONDED THAT HE REFUSES TO LOSE HOPE AND
IS COMMITTED TO TRYING TO CHANGE THE SITUATION. "ISRAEL
CANNOT SURVIVE AS A JEWISH STATE WITHOUT A PALESTINIAN
STATE," HE CONCLUDED.


9. (U) CODEL LEAHY HAS CLEARED THIS MESSAGE.

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