ISRAEL FIRST REACTION: ANNAPOLIS GOOD START, BUT

UNCLAS TEL AVIV 003377 SIPDIS SIPDIS E.O. 12958: N/A TAGS: PREL PGOV KPAL IS SUBJECT: ISRAEL FIRST REACTION: ANNAPOLIS GOOD START, BUT DIFFICULTIES REMAIN ¶1. The day after the international conference in Annapolis, most Israelis view the event as a success but still think the difficulties in achieving peace are too great to overcome, especially before the end of 2008. Newspapers have devoted most of their front page and large internal sections to the event, but no one seemed to rush home last night to see the speeches, and the television stations quickly returned to their regular programming when the three opening statements were done. However, there are already signs of a growing thread of optimism on the street; the lack of enthusiasm appears to stem from public weariness after past disappointments. Overall, the event bolstered U.S. prestige, achieved broad Arab attendance, and elicited rage from the Iranians and other extremists-- all significant positives for most Israelis. ¶2. Many Israelis feel that Annapolis was theater, while the most cynical think Prime Minister Olmert is only engaging in this show to buy himself more time in the face of the still-looming Winograd final report and several criminal investigations. This includes an announcement expected this week on whether the Prime Minister will be indicted for alleged improprieties in the privatization of Bank Leumi while he was Finance Minister. Most observers think that by agreeing to the 2008 timeframe for an agreement, Olmert has deftly secured another year in office and kept Labor chairman Ehud Barak in the governing coalition despite Barak's promises to leave when Winograd is released. ¶3. For its part, the political right wasted little time in mobilizing against the Annapolis event. Danny Dayan, chairman of the settler's council, vowed to fight concessions on land with every means available, while a Likud spokesperson immediately called for right-wing parties SHAS and Yisrael Beiteinu to quit the governing coalition. SHAS party chairman Eli Yishai released a statement within hours of Olmert's speech on Tuesday night calling it "fantasy," and underlining that real concessions cannot be made until terror ends, there is no more incitement in Palestinian schools, and Palestinians recognize Israel as a Jewish state. He added that SHAS spiritual leader Rabbi Ovadia has made it clear that SHAS must quit the coalition if any move is made to divide Jerusalem. ¶4. Yisrael Beiteinu leader and Minister for Strategic Threats Avigdor Lieberman called the statements in Annapolis "pitiful" and said it was a sign of how difficult final status talks will be. However, Lieberman, like SHAS, said that Annapolis was not significant enough to warrant leaving the coalition. Lieberman called instead for Israel to deal with its most immediate threat by mounting a major military operation into Gaza. ¶5. Even those who see Annapolis as theater admitted it was good theater, with broad attendance from the Arab world and an unexpected joint statement that laid out the way forward. The images in the Israeli media showed strong American leadership, Arab foreign ministers listening to Olmert and sitting alongside Foreign Minister Livni, and Syria in attendance but marginalized. Before the conference, polls indicated most Israelis favored peace, but over 60 percent thought the Annapolis conference would do nothing to achieve that peace. Now, the Israeli public seems to see Annapolis as a positive development that will start a real process, even if they believe the obstacles to peace will remain immutable. ********************************************* ******************** 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. ********************************************* ******************** MORENO