Identifier
Created
Classification
Origin
07TELAVIV2281
2007-07-26 13:53:00
SECRET
Embassy Tel Aviv
Cable title:
APHSCT TOWNSEND RECEIVES ACTION PLAN ON PALESTINIANS FROM ISRAELI NSC
how-toVZCZCXRO3234 PP RUEHROV DE RUEHTV #2281/01 2071353 ZNY SSSSS ZZH P 261353Z JUL 07 FM AMEMBASSY TEL AVIV TO RUEHC/SECSTATE WASHDC PRIORITY 2490 INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY RHEHAAA/WHITE HOUSE WASHDC PRIORITY RHEHNSC/NSC WASHDC PRIORITY RUEATRS/DEPT OF TREASURY WASHDC PRIORITY RUEAIIA/CIA WASHDC PRIORITY
S E C R E T SECTION 01 OF 02 TEL AVIV 002281
SIPDIS
SIPDIS
WHITE HOUSE FOR APHSCT TOWNSEND; TREASURY FOR U/S LEVEY;
NSC FOR ABRAMS.
E.O. 12958: DECL: 07/16/2017
TAGS: PTER, PREL, KNNP, KWBG, EFIN, IR, IS
SUBJECT: APHSCT TOWNSEND RECEIVES ACTION PLAN ON
PALESTINIANS FROM ISRAELI NSC
REF: TEL AVIV 1966
Classified By: Charge d'affaires Gene A. Cretz for reasons 1.4 (B/D).
S E C R E T SECTION 01 OF 02 TEL AVIV 002281
SIPDIS
SIPDIS
WHITE HOUSE FOR APHSCT TOWNSEND; TREASURY FOR U/S LEVEY;
NSC FOR ABRAMS.
E.O. 12958: DECL: 07/16/2017
TAGS: PTER, PREL, KNNP, KWBG, EFIN, IR, IS
SUBJECT: APHSCT TOWNSEND RECEIVES ACTION PLAN ON
PALESTINIANS FROM ISRAELI NSC
REF: TEL AVIV 1966
Classified By: Charge d'affaires Gene A. Cretz for reasons 1.4 (B/D).
1. (S) SUMMARY: Frances Fragos Townsend, Assistant to the
President for Homeland Security and Counterterrorism (APHSCT)
met with Israeli National Security Council (NSC) officials on
July 12. Danny Arditi, Head of the NSC Counterterrorism
Bureau, presented a plan to facilitate increased financial
support for the Palestinian government of Prime Minister
Salam Fayyad, while mitigating the risks of new funding for
terrorists and the Hamas "government" in Gaza. The core of
the proposal was the establishment of an active Palestinian
Financial Intelligence Unit (FIU) with supervision from the
United States or the European Union. NSC Chairman Ilan
Mizrahi offered Townsend a broader analysis of regional
threats, focusing on the specter of Iranian influence and
what he viewed as the growing confidence of al-Qaeda-related
groups. NSC officials additionally presented an action plan
for disrupting Hizballah's terrorist operations through an
aggressive legal strategy against the organization's
international criminal network. END SUMMARY.
--------------
Terrorist Finance Controls Key to Gaza Policy
--------------
2. (S) Brigadier General Danny Arditi, a counterterrorism
advisor to Prime Minister Ehud Olmert, presented Townsend
with a plan for increased cooperation with the Fayyad
government, facilitated by improved monitoring of the
Palestinian financial system. Arditi said that the objective
was to damage the Hamas government in Gaza financially
without creating a humanitarian crisis, and to buy time for
Fatah to rebuild support. In Arditi's view, the current
closure of Gaza border crossings is not sustainable, with
several thousand Palestinians currently waiting to enter Gaza
through the Rafah crossing. Arditi said that sooner or later
the GOI would have to deal with Hamas. At the same time,
said Arditi, Israel and the Fayyad government are in
agreement that they cannot allow free movement into and out
of Gaza without a mechanism for controlling the flow of money
and goods to terrorists and the Hamas government. (NOTE:
Arditi added that Israel and Fayyad are both willing to open
the Kerem Shalom crossing through Israeli territory. Hamas
has repeatedly rejected such a solution, preferring to hold
out for reopening Rafah for people and Karni for goods. END
NOTE.)
3. (S) Arditi's proposal called for the creation of an
external oversight system, with assistance from the United
States and/or the European Union. The proposed system would
include the creation of a strong Palestinian FIU based in the
West Bank, and "the adoption of Financial Action Task Force
(FATF) rules by the Palestinian banking system." Without
such oversight, Arditi expressed concern that Israeli banks
would cut off their correspondent relationship with the
Palestinians (reftel). Arditi said that Mossad Director Meir
Dagan also advocates a new Palestinian "social security
system" as an alternative to the Hamas Da'awa system of
charitable institutions, but Arditi remained skeptical on
this point. Arditi asked Townsend who would be the right
partner in the USG for the FIU plan, and inquired as to
whether it would be well-received in Washington. Townsend
recommended Under Secretary for the Treasury Stuart Levey as
a natural counterpart, and suggested that the Israelis
approach Deputy National Security Advisor Elliott Abrams on
the question of support.
4. (S) Arditi's presentation represented an attempt by the
Government of Israel (GOI) to find a way forward in dealing
with Hamas-controlled Gaza, but NSC officials admitted that
the GOI does not yet have a coherent policy. The Gaza/West
Bank split appears simple on the surface, said an aide to
Arditi, but carries many inherent contradictions. "This is
not the first time we have tried to help Fatah," he noted.
NSC officials told Townsend that the Israeli Cabinet remains
concerned about Hamas influence in the West Bank, and many
are skeptical about the ability of Abbas and Fayyad to "turn
back the wheel."
--------------
NSC Head Sees "Axis of Fear"
--------------
TEL AVIV 00002281 002 OF 002
5. (S) Chairman Ilan Mizrahi stressed that process, not
events, affects the spread of terror in the Middle East. He
pointed to three major factors in the region that create the
conditions for terrorism: the weakness of Arab and Muslim
communities and states that fail to join the advances of the
modern world; the erosion of the secular state and the rise
of ethnic politics, particularly in Iraq, the Palestinian
territories, and Lebanon; and the rise of political Islam.
Mizrahi also noted that the clash between Sunni and Shi'a
Islam tends to bring out the extremists on both sides. He
pointed out that both sides support terror groups that
further their interests, including the Gulf States and Saudi
Arabia, despite the fact that some characterize them as
"moderate Arab states" or "good guys." Mizrahi said that
many Arab states would be better characterized as an "axis of
fear," because they share a fear of Iranian influence.
6. (S) There are few forces restraining radical Islam, said
Mizrahi, particularly now that the United States and Israel
are viewed as weakened powers. Supporters of radical Islam
believe that their cause is ascendant, he continued, given
what they perceive as successes in Iraq, Afghanistan,
Somalia, North Africa, Iraq, and Lebanon -- as well as
growing militancy among Muslim communities in Europe and the
Far East. Iran supports terrorism throughout the region,
said Mizrahi, who asserted that Iran is currently sheltering
two senior al-Qaeda operatives. Townsend agreed with Mizrahi
that al-Qaeda-type groups were positioned for new strikes
against the West, particularly originating in North Africa
where al-Qaeda has gained from mergers with local
organizations. Townsend said that terrorists were
particularly determined to hit major oil facilities, and
could potentially pursue a combination of big and small
attacks over a period of time sweeping from Europe to the
Middle East.
--------------
Linking Crime and Terror
--------------
7. (S) NSC officials made a presentation on current GOI
efforts to pursue links between terrorism and criminal
activity, including Hizballah's involvement in drug
trafficking and money laundering. They thought criminal
investigations could be used to disrupt Hizballah's
operations, especially its financial resources. One NSC
official working on the plan said that he was working with
the New York District Attorney to prosecute criminal cases in
that state. Mizrahi also contended that the professional
level of criminality in North Africa, coupled with emigration
to Europe, posed a real threat when combined with terror
elements. Townsend added that given the visa waiver program
with many European countries, this posed an additional threat
to the United States. NSC officials queried Townsend on U.S.
commitment to combating Hizballah, and received assurances
that the organization remains a "tier 1 priority."
--------------
COMMENT: GOI LOOKS TO U.S. FOR DIRECTION
--------------
8. (S) It is not clear to what extent the NSC proposal for a
Palestinian FIU and international oversight is official GOI
policy. Israeli officials themselves admit that a clear
policy has yet to crystallize fully, especially with regard
to Palestinian institutions in Gaza. There appear to be
several camps within the GOI on the issue of financial links
with Gaza, with some advocating for a complete banking
quarantine. This current proposal originated in the Israel
Money Laundering and Terror Financing Prohibition Authority
of the Ministry of Justice (reftel),and represents a more
measured approach. Arditi and others are looking for a
balance between humanitarian concern for the Palestinian
population and effective tracking of possible terrorist
activity. Arditi and the NSC are likely seeking U.S. support
to strengthen their position in internal GOI discussions.
********************************************* ********************
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.
********************************************* ********************
CRETZ
SIPDIS
SIPDIS
WHITE HOUSE FOR APHSCT TOWNSEND; TREASURY FOR U/S LEVEY;
NSC FOR ABRAMS.
E.O. 12958: DECL: 07/16/2017
TAGS: PTER, PREL, KNNP, KWBG, EFIN, IR, IS
SUBJECT: APHSCT TOWNSEND RECEIVES ACTION PLAN ON
PALESTINIANS FROM ISRAELI NSC
REF: TEL AVIV 1966
Classified By: Charge d'affaires Gene A. Cretz for reasons 1.4 (B/D).
1. (S) SUMMARY: Frances Fragos Townsend, Assistant to the
President for Homeland Security and Counterterrorism (APHSCT)
met with Israeli National Security Council (NSC) officials on
July 12. Danny Arditi, Head of the NSC Counterterrorism
Bureau, presented a plan to facilitate increased financial
support for the Palestinian government of Prime Minister
Salam Fayyad, while mitigating the risks of new funding for
terrorists and the Hamas "government" in Gaza. The core of
the proposal was the establishment of an active Palestinian
Financial Intelligence Unit (FIU) with supervision from the
United States or the European Union. NSC Chairman Ilan
Mizrahi offered Townsend a broader analysis of regional
threats, focusing on the specter of Iranian influence and
what he viewed as the growing confidence of al-Qaeda-related
groups. NSC officials additionally presented an action plan
for disrupting Hizballah's terrorist operations through an
aggressive legal strategy against the organization's
international criminal network. END SUMMARY.
--------------
Terrorist Finance Controls Key to Gaza Policy
--------------
2. (S) Brigadier General Danny Arditi, a counterterrorism
advisor to Prime Minister Ehud Olmert, presented Townsend
with a plan for increased cooperation with the Fayyad
government, facilitated by improved monitoring of the
Palestinian financial system. Arditi said that the objective
was to damage the Hamas government in Gaza financially
without creating a humanitarian crisis, and to buy time for
Fatah to rebuild support. In Arditi's view, the current
closure of Gaza border crossings is not sustainable, with
several thousand Palestinians currently waiting to enter Gaza
through the Rafah crossing. Arditi said that sooner or later
the GOI would have to deal with Hamas. At the same time,
said Arditi, Israel and the Fayyad government are in
agreement that they cannot allow free movement into and out
of Gaza without a mechanism for controlling the flow of money
and goods to terrorists and the Hamas government. (NOTE:
Arditi added that Israel and Fayyad are both willing to open
the Kerem Shalom crossing through Israeli territory. Hamas
has repeatedly rejected such a solution, preferring to hold
out for reopening Rafah for people and Karni for goods. END
NOTE.)
3. (S) Arditi's proposal called for the creation of an
external oversight system, with assistance from the United
States and/or the European Union. The proposed system would
include the creation of a strong Palestinian FIU based in the
West Bank, and "the adoption of Financial Action Task Force
(FATF) rules by the Palestinian banking system." Without
such oversight, Arditi expressed concern that Israeli banks
would cut off their correspondent relationship with the
Palestinians (reftel). Arditi said that Mossad Director Meir
Dagan also advocates a new Palestinian "social security
system" as an alternative to the Hamas Da'awa system of
charitable institutions, but Arditi remained skeptical on
this point. Arditi asked Townsend who would be the right
partner in the USG for the FIU plan, and inquired as to
whether it would be well-received in Washington. Townsend
recommended Under Secretary for the Treasury Stuart Levey as
a natural counterpart, and suggested that the Israelis
approach Deputy National Security Advisor Elliott Abrams on
the question of support.
4. (S) Arditi's presentation represented an attempt by the
Government of Israel (GOI) to find a way forward in dealing
with Hamas-controlled Gaza, but NSC officials admitted that
the GOI does not yet have a coherent policy. The Gaza/West
Bank split appears simple on the surface, said an aide to
Arditi, but carries many inherent contradictions. "This is
not the first time we have tried to help Fatah," he noted.
NSC officials told Townsend that the Israeli Cabinet remains
concerned about Hamas influence in the West Bank, and many
are skeptical about the ability of Abbas and Fayyad to "turn
back the wheel."
--------------
NSC Head Sees "Axis of Fear"
--------------
TEL AVIV 00002281 002 OF 002
5. (S) Chairman Ilan Mizrahi stressed that process, not
events, affects the spread of terror in the Middle East. He
pointed to three major factors in the region that create the
conditions for terrorism: the weakness of Arab and Muslim
communities and states that fail to join the advances of the
modern world; the erosion of the secular state and the rise
of ethnic politics, particularly in Iraq, the Palestinian
territories, and Lebanon; and the rise of political Islam.
Mizrahi also noted that the clash between Sunni and Shi'a
Islam tends to bring out the extremists on both sides. He
pointed out that both sides support terror groups that
further their interests, including the Gulf States and Saudi
Arabia, despite the fact that some characterize them as
"moderate Arab states" or "good guys." Mizrahi said that
many Arab states would be better characterized as an "axis of
fear," because they share a fear of Iranian influence.
6. (S) There are few forces restraining radical Islam, said
Mizrahi, particularly now that the United States and Israel
are viewed as weakened powers. Supporters of radical Islam
believe that their cause is ascendant, he continued, given
what they perceive as successes in Iraq, Afghanistan,
Somalia, North Africa, Iraq, and Lebanon -- as well as
growing militancy among Muslim communities in Europe and the
Far East. Iran supports terrorism throughout the region,
said Mizrahi, who asserted that Iran is currently sheltering
two senior al-Qaeda operatives. Townsend agreed with Mizrahi
that al-Qaeda-type groups were positioned for new strikes
against the West, particularly originating in North Africa
where al-Qaeda has gained from mergers with local
organizations. Townsend said that terrorists were
particularly determined to hit major oil facilities, and
could potentially pursue a combination of big and small
attacks over a period of time sweeping from Europe to the
Middle East.
--------------
Linking Crime and Terror
--------------
7. (S) NSC officials made a presentation on current GOI
efforts to pursue links between terrorism and criminal
activity, including Hizballah's involvement in drug
trafficking and money laundering. They thought criminal
investigations could be used to disrupt Hizballah's
operations, especially its financial resources. One NSC
official working on the plan said that he was working with
the New York District Attorney to prosecute criminal cases in
that state. Mizrahi also contended that the professional
level of criminality in North Africa, coupled with emigration
to Europe, posed a real threat when combined with terror
elements. Townsend added that given the visa waiver program
with many European countries, this posed an additional threat
to the United States. NSC officials queried Townsend on U.S.
commitment to combating Hizballah, and received assurances
that the organization remains a "tier 1 priority."
--------------
COMMENT: GOI LOOKS TO U.S. FOR DIRECTION
--------------
8. (S) It is not clear to what extent the NSC proposal for a
Palestinian FIU and international oversight is official GOI
policy. Israeli officials themselves admit that a clear
policy has yet to crystallize fully, especially with regard
to Palestinian institutions in Gaza. There appear to be
several camps within the GOI on the issue of financial links
with Gaza, with some advocating for a complete banking
quarantine. This current proposal originated in the Israel
Money Laundering and Terror Financing Prohibition Authority
of the Ministry of Justice (reftel),and represents a more
measured approach. Arditi and others are looking for a
balance between humanitarian concern for the Palestinian
population and effective tracking of possible terrorist
activity. Arditi and the NSC are likely seeking U.S. support
to strengthen their position in internal GOI discussions.
********************************************* ********************
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.
********************************************* ********************
CRETZ