ISRAEL MEDIA REACTION

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SUBJECT: ISRAEL MEDIA REACTION

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SUBJECTS COVERED IN THIS REPORT:
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Mideast

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Key stories in the media:
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Ha'aretz and leading electronic media reported that last night
Kadima and Labor reached an agreement: Kadima will pledge to hold
primaries by September 25, while there will be no vote for the
dissolution of the Knesset today. Israel Radio reported that
Kadima's institutions will make their final decision on the date of
the primaries by July 10 -- i.e. before Morris Talansky's
cross-examination.

All media reported that the sixth day of the Gaza truce saw the
first violations when three Qassam rockets slammed into Israel,
slightly injuring three Israelis. The launches are believed to be
in response to the IDF killing of a top Islamic Jihad operative in
Nablus yesterday. Islamic Jihad claimed responsibility, but there
was no immediate military response from the IDF. Yediot reported
that Hamas was upset at Jihad's actions and announced that it will
do everything it can to prevent rocket fire. The Jerusalem Post
reported that government sources expressed astonishment at the
army's raid, saying that it was a case of the right hand not
knowing what the left hand was doing. Media reported that it
appeared that the target of the IDF raid, Tarek Abu Ghally, was
poised to carry out a terrorist attack when he was killed. Media
reported that yesterday Defense Minister Ehud Barak ordered the Gaza
crossing closed in response to the cease fire violation.

All media quoted Karnit Goldwasser, the wife of abducted IDF
reservist Ehud Goldwasser, as saying yesterday that PM Olmert has
promised that the deal with Hizbullah for the release of Goldwasser
and Eldad Regev, will be brought to the cabinet on Sunday. The
media spoke of Olmert's wavering after the decision was made to
investigate whether the two reservists should be declared dead.
Maariv quoted Ofer Dekel, the GOI's chief coordinator for prisoner
deals, as saying that such a declaration would be mistaken. Yediot
reported that a majority of cabinet members are in favor of
releasing Lebanese terrorist Samir Kuntar and four other Lebanese
prisoners in exchange for the two Israeli soldiers, even if they
are dead. Maariv filed a similar story.

Ha'aretz and other media reported that Ofer Dekel will depart for
Cairo tomorrow to renew indirect talks with Hamas over a swap for
Gilad Shalit. Israel believes Egyptian pressure may cause Hamas to
drop its demands that Israel release terrorists convicted of
carrying out major attacks against Israelis. Egypt had pledged to
step up its efforts with Hamas, if Israel agreed to a truce that did
not include a prisoner swap for Shalit. Leading media cited
Olmert's bureau as saying Egyptian President Hosni Mubarak has
pledged to not to open the Rafah crossing until Shalit is released.
Maariv quoted a senior Egyptian official involved in the talks as
saying that the fact that Israel is not releasing 36 terrorists is
putting off Shalit's release. The Jerusalem Post quoted former
Mossad director Ephraim Halevy as saying yesterday that Israel
should hold talks with Hamas since no peace agreement with the
Palestinians is viable without the inclusion of the violent Islamic
group.

All media reported that PM Olmert and FM Tzipi Livni announced
yesterday that they have nominated Professor Gabriela Shalev, 67, as
Israel's first woman ambassador to the United Nations. Shalev is a
jurist who has never been involved in diplomacy or foreign affairs.

All media reported that the suicide of a border policeman during the
departure ceremony for French President Nicolas Sarkozy yesterday at
Ben-Gurion Airport created panic, forcing Sarkozy, his wife, Olmert,
and President Shimon Peres to take shelter.

Yediot reported that for the first time in IAF history, there was no
kibbutz member among the Air Force cadets who successfully completed
their course yesterday.

Ha'aretz reported that Hamas's military wing, Izz Al-Din Al-Qassam,
has split into two groups after an attempt to depose its military
commander, Ahmed Al-Jabari. Palestinian sources were quoted as
saying that the attempt to replace Al-Jabari with Imad Akal failed,
but that it has split the organization into two camps: one led by
Al-Jabari and the other by Akal. Mohammed Deif, the former head of
Izz Al-Din Al-Qassam, was behind the attempt, according to the
sources.

The Jerusalem Post reported that development of the Iron Dome
anti-missile system has encountered an unexpected delay after a test
launch originally scheduled to take place two weeks ago was
postponed until next month.
Leading media quoted German FM Frank-Walter Steinmeier as saying at
the PA security conference in Berlin yesterday that $242 million had
been promised for an "operational justice system" in the West Bank.

The Jerusalem Post reported that yesterday the Knesset's State
Control Committee instructed State Comptroller Micha Lindenstrauss
to investigate how Palestinians were able to build 88 illegal houses
in the Garden of the King in Jerusalem's Silwan neighborhood.

Ha'aretz reported that in three weeks the new National Immigration
Authority will start operating under the auspices of the Interior
Ministry, bringing together under its umbrella all the bodies that
deal with foreigners living in Israel, as well as those interested
in coming to Israel. It will also handle registering Israelis in
the Population Registry, as well as issuing identity cards and
passports. The paper reported that the head of the new Authority,
Yaakov Ganot, told the Knesset's State Control Committee yesterday
that the authority will take responsibility for border control in
the first stage, a role now filled by the police. The Jerusalem
Post quoted Ganot as saying yesterday, during a special session of
the Knesset's Interior Committee and the State Control Committee to
mark International Refugee Day, that infiltrations across the
Egyptian border have declined dramatically since the beginning of
the year. Knesset members called on the GOI to show "special
sensitivity" toward the refugees.

The Jerusalem Post reported that around a dozen U.S. law enforcement
officials from large U.S. cities are n Israel for a weeklong visit
sponsored by the Anti-Defamation League.

Yediot reported that Dr. Eldad Davidov, an Israeli lecturer at the
German University of Mannheim was attacked in the street and
severely injured by unknown young people.

Ha'aretz and The Jerusalem Post reported that the number of
millionaires in Israel (in U.S. dollars) grew at twice the average
world rate in 2007, according to the World Wealth Report by Merrill
Lynch and Capgemini. The number of millionaires in Israel jumped
13.6% -- by 1,000 persons -- to a total of 8,200 by the end of last
year. The number of multi-millionaires grew by 12%, to 97. Green
investment instruments fed growth in sectors like clean tech, which
has enjoyed an increase of 41% over the past two years, particularly
in the fields of wind and solar energy, a trend that Ha'aretz does
not view as entirely positive.

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Mideast:
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Summary:
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Senior columnist Nahum Barnea wrote on page one of the
mass-circulation, pluralist Yediot Aharonot: "Olmert knows that his
term is finished. His enemies have beaten him. Even if he succeeds
in surviving until next March, he has lost the ability to lead and
the public confidence he needs to implement tough decisions."

Military correspondent Amir Rappaport wrote in the popular,
pluralist Maariv: "Yesterday is (yet another) sign that the chances
that the cease-fire will last for long are slim."

The conservative, independent Jerusalem Post editorialized: "In any
journey toward genuine acceptance and reconciliation that the quest
for peace demands, the ... narratives [of Jewish and Palestinian
relocation] will need to be mutually validated in some fashion."




Block Quotes:
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I. "Ego. That's the Story"

Senior columnist Nahum Barnea wrote on page one of the
mass-circulation, pluralist Yediot Aharonot (6/25): "[Yesterday, as
southern Israel was under a rocket offensive and the ceasefire at
risk] -- fateful matters -- the Defense Minister thought that his
prime minister was a crook, and the Prime Minister thought that his
defense minister was a scoundrel. And both of them deluded
themselves into believing that they were capable of conducting a
real and sincere discussion about an operation that has life and
death ramifications, while one is convinced that the other is a
scoundrel, and the other convinced that the former is a crook. This
is an unacceptable situation. Irresponsible. Unforgivable.... Ego.
That is most of the story. Olmert knows that his term is finished.
His enemies have beaten him. Even if he succeeds in surviving
until next March, he has lost the ability to lead and the public
confidence he needs to implement tough decisions. He clings to his
hope for a miracle.... As long as he sits on the seat of the prime
minister, he must create the impression that he will sit there
forever. Otherwise he will be eaten alive. Ego is most of the
story on Barak's side as well. He finds it strange that when he
commands Olmert to resign, Olmert does not hurry to do his
bidding.... I am not judging between them: Olmert was investigated
and badly besmirched in court; Barak is presently free of
investigations. But it is pretty clear that both of them are coming
out of this chimney black as coal."

II. "Missed Opportunity"

Military correspondent Amir Rappaport wrote in the popular,
pluralist Maariv (6/25): "How predictable -- the suspension of fire
from the Gaza Strip at the western Negev didn't last even a week.
How predictable -- after the first incident of fire yesterday,
Israel did not respond with fire from its side. Last night, the
Defense Minister decided to close the crossings for transferring
foods to Gaza, but the closure will only be in effect for one day.
This is a signal, not a step that will shock anyone in the Gaza
Strip. Ostensibly, it was an excellent opportunity to establish new
rules of the game, according to which after the cease-fire has gone
into effect, Israel will no longer accept any kind of fire into its
territory. According to a possible new formula, Israel will respond
firmly and disproportionately to any fire, as any other country
would probably do. However, this formula -- which many security
officials believe the time has come to adopt -- once again remained
an empty threat.... Hamas hurried to disassociate itself from the
fire, and as far as we know even conveyed a message to Islamic Jihad
stating that it was unacceptable to it. Chances are, however, that
Islamic Jihad will also fire at Israel at the next opportunity it
sees fit.... Yesterday is (yet another) sign that the chances that
the cease-fire will last for long are slim."

III. "The Other Mideast Refugees"

The conservative, independent Jerusalem Post editorialized (6/25):
"The world knows of the pain and dislocation experience experienced
by roughly 700,000 Palestinian Arabs when Israel was established; it
knows little about the trauma borne by some 850,000 Jews from the
Arab world who were uprooted from their homes.... In any journey
toward genuine acceptance and reconciliation that the quest for
peace demands, the two narratives will need to be mutually validated
in some fashion.... As the Zionists moved ahead in creating a Jewish
state in Mandatory Palestine, and as the Palestinian Arab leadership
adamantly rejected a two-state solution, Arabs elsewhere began to
turn against the Jews in their midst.... Roughly 580,000 Jews from
across the world ultimately found refuge in Israel. Another 260,000

Jews were absorbed elsewhere. For the Palestinian Arabs, by
contrast, the disaster of dislocation was compounded by the decision
of the 21 Arab states never to absorb them, and to force the UN to
create UNRWA [the UN Relief and Works Agency], whose surreal mission
-- with the acquiescence of the international community -- is to
perpetuate their homelessness in perpetuity."

JONES