ISRAEL MEDIA REACTION

UNCLAS TEL AVIV 000757

SIPDIS

STATE FOR NEA, NEA/IPA, NEA/PPD

WHITE HOUSE FOR PRESS OFFICE, SIT ROOM
NSC FOR NEA STAFF

SECDEF WASHDC FOR USDP/ASD-PA/ASD-ISA
HQ USAF FOR XOXX
DA WASHDC FOR SASA
JOINT STAFF WASHDC FOR PA
CDR USCENTCOM MACDILL AFB FL FOR POLAD/USIA ADVISOR
COMSOCEUR VAIHINGEN GE FOR PAO/POLAD
COMSIXTHFLT FOR 019

JERUSALEM ALSO ICD
LONDON ALSO FOR HKANONA AND POL
PARIS ALSO FOR POL
ROME FOR MFO

SIPDIS
E.O. 12958: N/A
TAGS: OPRC KMDR IS

SUBJECT: ISRAEL MEDIA REACTION

--------------
SUBJECTS COVERED IN THIS REPORT:
--------------

Mideast

--------------
Key stories in the media:
--------------

Major media (banners in Maariv and Hatzofe) quoted PA Chairman
[President] Mahmoud Abbas as saying on Sunday, during his talks with
PM Ehud Olmert, that abducted IDF Cpl. Gilad Shalit might be
released even before the formation of a Palestinian national unity
government. Leading media quoted Hamas officials as saying that
Abbas's remarks are unfounded. Israel Radio quoted Olmert as saying
that Israel will not negotiate with a Palestinian government that
includes Hamas members. The media reported that the meeting was
held in an overall positive atmosphere. Israel Radio quoted
Palestinian sources as saying that FM Tzipi Livni secretly met with
Abbas associates Yasser Abed Rabbo and Salam Fayad. The radio
reported that Livni denied the report. On Sunday The Jerusalem Post
reported that Olmert was expected to rebuff appeals by Abbas to
extend the Gaza "cease-fire" to the West Bank.

Ha'aretz reported that the U.S. administration is holding separate
talks with Israel and Saudi Arabia before the Arab League summit in
Riyadh late this month that will deliberate renewed approval of the
overall Arab peace plan known as the Saudi initiative. Ha'aretz and
Maariv quoted Olmert as saying on Sunday at a cabinet meeting that
the initiative should be taken very seriously. "We hope very much
that during the meeting of the heads of Arab states that will be
held in Riyadh, the positive elements expressed in the Saudi
initiative will be validated and perhaps will enable the
strengthening of the chances for negotiations between us and the
Palestinians," Olmert added. Olmert made the statement at the start
of the cabinet meeting, in front of television cameras. It was both
more positive and detailed than his previous comments on this issue.
Previously he only referred to the "positive elements" in the Saudi
initiative. Ha'aretz reported that political sources in Jerusalem
confirmed on Sunday that diplomatic talks are being held concerning
the Saudi initiative, but that they refused to give details. Yediot
reported that Deputy Defense Minister Ephraim Sneh had a chance
meeting with Saudi Ambassador in Washington Adel al-Jubeir over the
weekend. The Jerusalem Post reported that an Arab diplomat, speaking
on condition of anonymity, told the newspaper that Israel should
accept the principle of the right of return for Palestinian refugees
and then negotiate the terms of its implementation.

The Jerusalem Post reported that Israel is hinting at stopping
talks with Palestinian moderates over a "political horizon" if the
European Union drops its insistence that the PA government recognize
Israel, renounce terrorism and accept previous agreements. The
Jerusalem Post quoted FM Livni as saying, according to the protocol
of a meeting Foreign Minister Tzipi Livni held in Brussels last week
with EU foreign ministers: "Israel's ability to engage and make
progress with moderates on the Palestinian side is closely tied to
the international community's continued refusal to legitimize any PA
government that fails to fully comply with the Quartet principles."
Her comments came as certain EU countries -- Italy, France, Spain
and Finland -- are pressing for the EU to be more flexible in
demanding that all contact with the PA government be cut off until
it accepts the Quartet's three conditions. The Jerusalem Post quoted
senior GOI officials as saying that Livni was not threatening the EU
foreign ministers, but rather explaining what the consequences of
their recognition of Hamas might be without that organization's
acceptance of the Quartet's three conditions.

On Sunday Yediot reported that Damascus sent Jerusalem stern
warnings that it would not tolerate Israeli jets flying in Syrian
airspace any more and would "respond with fire, if put to the test.
FM Livni said in a telephone interview she granted Israel Radio from
Washington last night that Israel has no controversy with the US
regarding possible negotiations with Syria and that the US
administration is not preventing Israel from achieving diplomatic
progress in any direction.

On Sunday Maariv reported about a meeting that was held recently
between Hizbullah Secretary-General Sheikh Hassan Nasrallah and the
Vice President of Germany's intelligence agency BND, who was only
identified as "Konrad." In this meeting Nasrallah reportedly said
that the two soldiers that Hizbullah guerrillas kidnapped in July,
Eldad Regev and Ehud Goldwasser, were alive. Nasrallah demanded
that Israel release a large number of prisoners, including terrorist
Samir Kuntar, in exchange for a sign of life from the kidnapped
soldiers. Maariv reported that Israel has refused to accept
HizbullahQs demands, which are deemed "exorbitant."

On Sunday, Ha'aretz quoted Labor Party ministers queried by the
Winograd Commission probing last summer's war in Lebanon as saying
that Olmert is evading responsibility for his naming Amir Peretz
Defense Minister. Leading media reported the commission will
publish part of its protocols on the Internet over the weekend.
The censorship will decide which portions of the document will be
made public. Ha'aretz reported that on Sunday, a senior IDF officer
criticized Olmert for failing to order the army to implement
military plans for an extensive ground assault during the first
three weeks of last summer's war in Lebanon. The officer reportedly
told Ha'aretz that the existence of the plans was well-known, and
criticized Olmert for delaying the ground assault -- even after,
according to the officer, it had been proved that the attempt to
stop Hizbullah from firing Katyusha rockets on northern Israel by
aerial bombing and limited ground incursions had failed.

The Jerusalem Post cited a report by the British think-tank Royal
Institute for International Affairs (Chatham House) as saying that
Israel should pursue a strategy of "open nuclear deterrence" towards
Iran if international attempts to curtail Tehran's nuclear ambitions
fail. On Sunday The Jerusalem Post cited reported that Iran is
expected to dominate the policy agenda of the 5,500 AIPAC members
convening in Washington to lobby elected officials.

On Sunday The Jerusalem Post reported that on Friday the State
Department confirmed that Secretary of State Condoleezza Rice is
expected to visit the Middle East in the near future for further
talks aimed at advancing peace Israelis and Palestinians. However,
The Jerusalem Post reported that one State Department source told
the newspaper that the visit would likely occur in conjunction with
another regional trip she has tentatively planned in early April
regarding Iraq.

On Sunday Maariv reported that the IDF and Hamas have been preparing
for the possibility of a fierce military clash in the Gaza Strip.
The two parties have recently accelerated those preparations.

The Jerusalem Post dubbed Defense Minister Amir Peretz's visit to
the US "watered-down," because no meetings have been scheduled for
him with President Bush or Secretary of State Condoleezza Rice.

Ha'aretz and Yediot reported that on Sunday Al-Qaida deputy head
Ayman al-Zawahiri sharply criticized Hamas for agreeing to respect
past accords with Israel as part of the national unity government
agreement sponsored by Saudi Arabia in Mecca. According to an audio
recording broadcast on Al Jazeera-TV, minutes before the
Olmert-Abbas ended their meeting in Jerusalem, Zawahiri blamed Hamas
for having "fallen in the swamp of surrender."

On Sunday Maariv and The Jerusalem Post quoted UN Secretary-General

Ban Ki-moon as saying on Friday that he will visit Israel and the PA
later this month on an effort to help revive the peace process
between the two sides.

The Jerusalem Post reported that the Foreign Ministry Spokesman
confirmed on Sunday that the ministry has issued directives to
foreign embassies and consulates in Israel explaining the new
regulations for allowing foreign passport holders who are not listed
in the Palestinian population registry to spend time in the West
Bank. Thos foreign citizens may extend their entry visas for up to
27 months without having to leave the West Bank.

The Jerusalem Post quoted the human rights group Machsom Watch as
saying in a report published over the weekend that the outcome of
remand hearings held in Israeli military courts for Palestinian
suspects are frequently determined in advance without the suspect's
lawyer having a genuine opportunity to defend his client.

The Jerusalem Post reported that on Sunday the cabinet gave a
bureaucratic push to a joint Israeli-Jordanian-Palestinian project
called the "Peace Valley," which Vice PM Shimon Peres has been
pushing for years. On Sunday Maariv reported that the cabinet was
scheduled to decide to begin a number of large major projects that
require huge investment, which are geared to improve and strengthen
Israel's international relations with Jordan and the PA. Among
other things, Peres would be given the authority to promote a joint
project with Jordan -- laying a railway line that will connect the
two countries for the first time. Moreover, The Jerusalem Post said
that planning will be begun for additional railway lines that will
be laid between Jordan and the PA via Israel.

Maariv quoted Egyptian soldiers who took part in the Six-Day War as
saying in interviews with the Egyptian newspaper Al-Masri Al-Yawm
that the IDF had performed atrocities on their bodies. This
development follows alleged reports of killings of Egyptian soldiers
by IDF troops in that war.

The Jerusalem Post reported that a ceremony marking the designation
of eight additional sites in Israel on UNESCO's World Heritage List
will be held today at Avdat in the Negev. The localities were
selected by UNESCO as world heritage sites in 2005.

The Jerusalem Post (on Sunday) and Maariv reported that the Zionist
Organization of America (ZOA) is calling on world Jewry to boycott
the Coca-Cola Co. ZOA claims that the company refuses to compensate
a Jewish family whose property was sold to Coca-Cola after it was
confiscated by Egyptian authorities.

On Sunday The Jerusalem Post cited a Jewish Telegraphic Agency
report saying that "some big names in Hollywood" hope that the
Israeli TV series B'Tipul (In Treatment),whose American version is
being created by HBO, will be a great success in the US.

Leading media reported that Hollywood actor Leonardo DiCaprio is
visiting the country with his Israeli girlfriend, supermodel Bar
Refaeli.

--------------
Mideast:
--------------

Summary:
--------------

Diplomatic correspondent Ben Caspit wrote in the popular, pluralist
Maariv: "Perhaps on the eve of the demise of the current US
administration, someone there will rise to the occasion and make the
parties a creative offer that they will not be able to refuse?
Blessed is the believer."

The independent, left-leaning Ha'aretz editorialized: "The
approaching exit of the US from Iraq is dictating the global agenda.
Israel, too, must think about the day after rather than clinching
to obsolete ideas."

Diplomatic correspondent Aluf Benn wrote on page one of Ha'aretz:
"Only Saudi Arabia can grant Israel regional recognition and
legitimacy, in exchange for its withdrawal from the territories."

Deputy Managing Editor Anshel Pfeffer wrote on page one of the
conservative, independent Jerusalem Post: "So what's in [the Saudi
initiative] for Israel? Mainly appearances, but right now that's
about all the government can hope for.... And most importantly, the
Americans are all for it."

Senior columnist Haggai Huberman wrote in an editorial on page one
of the nationalist, Orthodox Hatzofe: "The Arab world, which
embraces the Saudi initiative, will not be prepared for any
compromise regarding Arab sovereignty in the Old City [of
Jerusalem]."

Block Quotes:

--------------


I. "Plus Minus"

Diplomatic correspondent Ben Caspit wrote in the popular, pluralist
Maariv (3/12): "If the moderate Arab states had only agreed to
accept the proposition that establishing a Palestinian state solves
the right of return in and of itself, it would have been possible to
pronounce it a done deal. But they are far from agreeing to such a
thing, just as we are far from agreeing on any other formula that
will enable the shadow of a hint of permitting the tip of a
refugee's moustache from crossing the borders of sovereign Israel.
This is the issue upon which the entire moderate diplomatic axis
will either rise or fall now, and is awaiting a savior who will
appear and arrange a creative solution. Or perhaps on the eve of
the demise of the current US administration, someone there will rise
to the occasion and make the parties a creative offer that they will
not be able to refuse? Blessed is the believer. In the meantime,
as odd as it may sound, anyone who recalls the previous summit
between Olmert, Abu Mazen and Condoleezza Rice can assume that of
these three, it is the Palestinian who has the highest chances of
survival: Condoleezza Rice will become history in less than two
years. It will take Olmert much less time to do so at the present
rate. Only Abu Mazen looks like he is here to stay. For the time
being."

II. "Finger on the Pulse"

The independent, left-leaning Ha'aretz editorialized (3/11): "The
approaching exit of the US from Iraq is dictating the global agenda.
Israel, too, must think about the day after rather than clinching
to obsolete ideas. The axis of evil sketched out by the Americans
is becoming increasingly blurry, and the US is now ready for
diplomacy where it once thought that only force could work....
Whenever diplomacy can take the place of force, this should be
encouraged. The North Korean and Libyan threats were dissolved with
a combination of diplomacy and economic pressure. At a time when
alliances rise and fall daily to accommodate new realities, when
yesterday's enemy may be tomorrow's partner in dialogue, the primary
part of removing the Iranian nuclear threat must not be compromised.

But, at the same time, we must reexamine Israel's interests daily
rather than becoming entrenched in intransigence."

III. "Only Saudi Arabia Can Do It"

Diplomatic correspondent Aluf Benn wrote on page one of Ha'aretz
(3/12): "After months of stagnation and hesitation, in which Prime
Minister Ehud Olmert lost almost all public support in his
leadership, he revealed a new political agenda on Sunday. Olmert
began the weekly cabinet meeting with a positive statement about the
Saudi plan for a comprehensive peace between Israel and the Arab
states, and hinted that if changes were made to it, it would be
capable of serving as the basis for a renewed political process with
the Palestinians. Olmert's statement also hinted at contact taking
place between Saudi Arabia, Israel, and the United States, in
anticipation of the Arab summit scheduled for Riyadh at the end of
the month. At the core of these contacts lies the shared interest
in curbing Iran's increasing power and the desire to from a regional
'axis of moderates' around a renewed peace process. Everyone
recognizes that the Palestinians' unstable situation makes it
difficult for them to contribute their part to a political process
or an agreement, and the Saudi involvement is meant to provide them
with patronage. Only Saudi Arabia can grant Israel regional
recognition and legitimacy, in exchange for its withdrawal from the
territories. From Olmert's perspective, the Saudi plan is the only
alternative that allows him to demonstrate initiative and political
action.... Above all, the magic of the Saudi initiative stems from
its being merely a declaration of principles rather than a detailed
plan. Thus it is possible to speak in slogans, negotiate over the
wording, and defer paying the domestic price that withdrawal from
the West Bank and the Golan Heights entails. But make no mistake:
If Israel accepts the Saudi initiative, even only as the basis for
negotiations, it will be taking a huge step toward the end of its
control over the territories -- one that even Olmert's successors
will have difficulty renouncing."

IV. "The Saudi Fig Leaf"

Deputy Managing Editor Anshel Pfeffer wrote on page one of the
conservative, independent Jerusalem Post (3/12): "More than any
other country in the region, the Saudis desperately need stability
to ensure their oil fortunes and, by extension, the survival of
their despotism. Out of sheer necessity, they have realized that
Israel is a crucial partner in their campaign for maintaining the
status quo, since Israel can do a lot to ruin their cherished
stability.... So what's in it for Israel? Mainly appearances, but
right now that's about all the government can hope for.... And most
importantly, the Americans are all for it. The establishment of a
coalition of 'moderate states,' recently replaced by the formulation
'responsible states,' has long been the dearest wish of the US State
Department. The Saudi initiative will never hatch a realistic peace
plan. But if talking about it is going to make US Secretary of
State Condoleezza Rice happy when she comes for another one of her
'maintenance trips,' the Israelis and Saudis will play along."


V. "Olmert Is Giving Up Jerusalem"

Senior columnist Haggai Huberman wrote in an editorial on page one
of the nationalist, Orthodox Hatzofe (3/12): "'Moderate' Palestinian
leader Abu Mazen, whom Olmert has met, has never declared he was
prepared too concede the refugees' 'right of return.' But what
about the full withdrawal to the 1967 lines, including Jerusalem?
Is this also an 'element that should be discussed'? We all know the
truth: The Arab world, which embraces the Saudi initiative, will not
be prepared for any compromise regarding Arab sovereignty in the Old
City [of Jerusalem]. Is Olmert prepared for Palestinian sovereignty
on the Temple Mount?"

JONES