SETTLEMENT SQUATTERS WILL NOT BE EVACUATED

C O N F I D E N T I A L SECTION 01 OF 03 TEL AVIV 002630

SIPDIS

SIPDIS

STATE FOR NEA FOR FRONT OFFICE; NEA/IPA FOR
GOLDBERGER/SHAMPAINE/ROSENSTOCK/PECCIA; NSC FOR
ABRAMS/SINGH/WATERS

E.O. 12958: DECL: 08/28/2017
TAGS: IS KPAL KWBG PGOV PREL
SUBJECT: SETTLEMENT SQUATTERS WILL NOT BE EVACUATED

REF: TEL AVIV 00604

Classified By: Ambassador Richard H. Jones. Reasons: 1.4 (b) (d).


1. (C) Summary: On August 1-2, hundreds of
would-be-homeowners broke into unfinished apartments in West
Bank settlements and the Har Homa settlement in East
Jerusalem following rumors that Heftsiba, one of Israel's
largest construction companies, had gone bankrupt. Acting on
instructions from rabbis, the primarily ultra-orthodox buyers
arrived in the middle of the night to various settlement
building sites to establish ownership, fearing that these
properties would be seized by the company's creditors. This
wave of apartment invasions has subsequently led to hundreds
of families squatting in West Bank settlements and Har Homa
in East Jerusalem. Most notably, however, are some 300
families currently squatting in Mattityahu East, located
northwest of Jerusalem, despite a 2006 Israeli High Court of
Justice (HCJ) injunction barring occupation of these units.
Although trespassing in Mattityahu East violated the criminal
code and contravened the injunction, the Court subsequently
ruled on August 27 that the squatters would be allowed to
stay until Heftsiba's financial and legal statuses were
clarified and the courts determined whether the buyers could
legally claim the apartments or receive a refund. End
summary.


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Ultra-Orthodox Storm Settlements
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2. (C) Following rumors that the Heftsiba real estate
company had gone bankrupt, on August 1-2 hundreds of angry
would-be homeowners forcefully entered unfinished apartments
they had bought from the company -- including those in the
Mattityahu East, Ma'ale Adumim, Kiryat Sefer, Betar Illit,
Efrata, and Har Homa settlements. Acting on instructions
from rabbis, the primarily ultra-orthodox buyers arrived in
the middle of the night to various settlement building sites
to establish ownership, fearing that these properties would
be seized by the company's creditors. This wave of apartment
invasions has subsequently led to hundreds of families
squatting in settlements. Most notably, however are some 300
families currently squatting in Mattityahu East apartments,
despite an HCJ injunction barring occupation of these units.
In January 2006, in response to a petition by Peace Now and
Palestinians from the adjacent village of Bil'in questioning
the construction's legality, the Court issued an injunction
freezing construction at the Mattityahu East site, forbidding
any habitation of about 400 apartments that have already been
constructed, and prohibiting delivery of any ownership to
buyers (reftel). (Note: Mattityahu East is in the Modi'in
Illit settlement bloc, located north-west of Jerusalem. The
injunction issued questions the legality of some 3,000
housing units being built by the Heftsiba and Green Park
companies. End note.)


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No Evacuation of Mattityahu East Squatters
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3. (C) Although trespassing in Mattityahu East is not only
a criminal offense, but also contravenes the Court's
injunction, the Court subsequently ruled on August 27 that
the squatters would be allowed to stay in the apartments
until Heftsiba's financial and legal statuses were clarified
and the courts determined whether the buyers could legally
claim the apartments or receive a refund. According to the
Court's decision, squatters who had invaded the apartments
prior to August 6 would not be evacuated. Those who squatted
or will squat after August 6 would not be entitled to the
Court's protection, according to Ha'aretz and YNET. (Note:
Using the Central Bureau of Statistics average West Bank
family size of 4.6, it is estimated that almost 1,400
individuals are squatting in Mattityahu East. However, since
most, if not all of the buyers are from the ultra-orthodox
sector, the 4.6 multiplier is a modest estimation for the
average family size from this community and the actual number
of squatters is likely higher than 1,400. A variety of
scholastic publications and press reports estimate that the
average ultra-orthodox family size ranges from 6-10 members.
End note.)


4. (C) Michael Sfard, attorney for Peace Now and
Palestinian residents of Bil'in, described the Court's
decision as "having no logic," noting to econoff the

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dichotomy of the Court's decision: the Court upheld the
injunction barring occupation of the apartments while it also
prevented the evacuation of the squatters. Sfard speculated
that the decision was made to avoid a clash that would entail
the forcible evacuation of about 300 families and their
sympathizers. Sfard added that he neither had seen nor was
aware of any active GOI measures barring additional squatters
from entering these units. He speculated that in the end, the
Court would not order all of the Mattityahu East apartments
to be destroyed regardless of their legal status.


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Squatters, Heftsiba Blame Peace Now
--------------


5. (C) Heftsiba and the squatters blame Peace Now for the
company's collapse, claiming that the organization's HCJ
petition froze the sale of hundreds of apartments and caused
a sharp cut in the firm's cash flow. On August 15, Director
General for Peace Now Yariv Oppenheimer told econoff that
Shas leaders (ultra-orthodox political party) had appealed to
Yossi Beilin (Meretz-Yahad party head) to urge Peace Now to
drop its petition against Mattityahu East's construction.
Shas leaders said that the buyers were innocent victims
caught in middle of a dispute between the State, the
construction companies, and Peace Now and Bil'in residents.
Although sympathetic to the buyers, Oppenheimer said the
petition would remain. For Oppenheimer, a just solution for
all victimized parties in the Mattityahu East case -- the
Israeli buyers and Palestinians from Bil'in -- would be for
the GOI to compensate the buyers so that they could resettle
elsewhere.


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Heftsiba
--------------


6. (C) According to the Jerusalem Post, Heftsiba had been
the biggest builder for the ultra-orthodox -- arguably the
poorest community in Israeli society -- with about 30 percent
of the firm's activities targeted towards this sector. Dorit
Seideman, employed by the Bank of Jerusalem and wife of
embassy contact Danny Seideman, told econoff on August 22
that documents Heftsiba submitted to Israeli courts indicated
that, with the exception of Mattityahu East, the company was
in the process of building or completing about 950 apartments
in West Bank and East Jerusalem settlements. Dun and
Bradstreet, the leading business information company in
Israel, also indicated that Heftsiba had been in the process
of building more than 4,000 housing units, with an additional
8,000 homes in various stages of planning in Israel,
Jerusalem, and the West Bank. In the wake of Heftsiba's
collapse, however, Bank Hapoalim and Heftsiba subcontractor
Denya Sibus Ltd. have reached an agreement to allow customers
of 162 apartments in Har Homa and Ma'ale Adumim to legally
receive their apartments, according to press reports.


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Comment
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7. (C) Heftsiba's downfall offers a glimpse of what is in
the settlement pipeline -- possibly thousands of housing
units which have been planned and approved by the GOI, but
have not yet been built. In the past, we have asked the GOI
for information of their plans, but have yet to receive it.


8. (C) Embassy is also closely monitoring the Mattityahu
East case. Per reftel, if the HCJ upholds the legality of
the Civil Administration's retroactive approval of the
unauthorized construction of some 3,000 housing units in
Mattityahu East, this precedent may be applied to legalize
outposts that the GOI has committed to evacuate. It also may
embolden settler leaders and other companies to independently
build new or expand existing settlement neighborhoods or
outposts with the knowledge that legalization is increasingly
possible.

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