TRIAL BALLOON FOR A CABINET SHAKE UP

C O N F I D E N T I A L TEL AVIV 000025 SIPDIS SIPDIS E.O. 12958: DECL: 01/05/2012 TAGS: PGOV PINR IS SUBJECT: TRIAL BALLOON FOR A CABINET SHAKE UP Classified By: Charge d'Affaires Gene A. Cretz. Reason 1.4 (B/D) ¶1. (U) On the evening of January 4, Israeli TV news reported that PM Olmert had decided to remove Labor Party leader Amir Peretz as Defense Minister and replace him with former Prime Minister Ehud Barak. Peretz would be offered the vacant Social Welfare ministry, according to these press reports. Although the leak apparently originated in the Prime Minister's Office (PMO),the PM's bureau issued an immediate "clarification" to counter the TV reports: "Prime Minister Ehud Olmert has not decided to dismiss Defense Minister Amir Peretz or to transfer him to another post. As far as the PM's bureau is concerned, the issue is not on the agenda." ¶2. (C) Peretz's political advisor, Hagai Allon, dismissed the cabinet shuffle brouhaha as "spin" by the PMO. He claimed, in a conversation with POL/C, that "legally and politically," Olmert cannot remove Peretz from his current post before Labor primaries in late May. Allon claimed that even Labor members who do not support Peretz were angry at Olmert's perceived intervention, which Allon thought would backfire against the PMO. Indeed, one such MK, Collette Avital, confirmed to poloff January 5 that the Olmert team's trial balloon was poorly timed from the perspective of the Labor Party rank and file, coming just one day after Labor supported the Government budget, one which was not perceived as meeting the needs of many Labor Party supporters. "Even those who support a change of the Minister of Defense do not support the way it is being done." Such a move, while technically permissible under the Prime Minister's powers, would constitute a breach of the coalition agreement and throw the Labor Party as well as the coalition into crisis, in her view. She added that "deposing" Peretz before the conclusions of the pending Winograd Commission report on the Lebanon war was premature and unlikely to happen at this time. ¶3. (C) Avital affirmed, however, "There is no smoke without fire," and acknowledged that many in the Labor Party are dissatisfied with Amir Peretz's leadership of the party and would like a stronger person in the Ministry of Defense. She specified that Labor Party stalwart, MK Binyamin (Fuad) Ben-Eliezer, had organized a rally of sorts among his supporters on January 4 on the need to support a "reliable" candidate like former Prime Minister Ehud Barak in the upcoming May primaries. Avital added that Barak told her January 4 that he is currently taking soundings within the Labor Party, but has not even named a campaign manager for the Labor primaries. Although she said she assessed that Barak had made his mind up in favor of entering the race, she thought Barak had been as surprised as anyone about the press reports of an Olmert initiative to instigate an immediate cabinet reshuffle in which he would play a starring role. ¶4. (C) Comment: While this spat clearly reveals the extent of the current, well-publicized tension between Olmert and Peretz, it is unlikely to result in a reshuffle of portfolios before the publication of the Winograd Commission findings in about a month's time. Should these findings hammer Peretz for particularly poor performance in the Defense Ministry, he has already indicated that he will leave that ministry of his own volition. In the meantime, we expect the finger pointing and recrimination between Olmert and Peretz to continue. ********************************************* ******************** 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