ISRAEL MEDIA REACTION

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SUBJECT: ISRAEL MEDIA REACTION

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SUBJECTS COVERED IN THIS REPORT:
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1. Iran


2. Mideast

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Key stories in the media:
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The three major Hebrew-language dailies and Israel Hayom led with
the Morris Talansky affair and PM Ehud Olmert's political future.
Maariv quoted an Israeli law-enforcement official as saying that
Olmert will be indicted in the Talansky affair. Yediot reported
that Olmert will be probed in additional affairs. Yediot reported
that the police will apparently recommend that the case of the house
on Jerusalem's Cremieux Street be closed. Ha'aretz quoted Olmert's
associates in Kadima as saying that he will not run for the Kadima
leadership despite his statements to the contrary. Media reported
that last night Olmert agreed to allow the winner of September's
Kadima primary to form a new government and immediately replace
him.

The Jerusalem Post reported that during the weekend of June 28,
while Chairman of the Joint Chiefs of Staff Adm. Michael Mullen was
in Israel for talks with senior defense officials, the U.S. Navy
held an unprecedented exercise testing the communications network
supporting the Aegis missile defense system across the Middle East.
The Jerusalem Post reported that defense officials have said that in
the event of a conflict with Tehran, the U.S. would deploy an Aegis
system off Israel's coast to provide another layer of defense
against Iranian ballistic missiles. . Ha'aretz quoted an Israeli
specialist as saying that the long-range missile fired yesterday was
an old version of the Shihab-3 that is only capable of reaching only
1,300 km. Revolutionary Guard Commanders said that the nine
missiles tested were medium and long-range weapons including some
that are capable of striking Israel

Maariv reported that Secretary of State Condoleezza Rice plans to
invite the Israeli and Palestinian negotiating teams to the State
Department during the second half of July in order to produce a
document showing all agreed-upon points, including an outline for
the continuation and a declaration for the resumption of the talks
during the next administration.
Ha'aretz reported that Olmert wants to get the U.S. involved in any
negotiations between Israel and Syria, to persuade President Bashar
Assad to advance to direct talks. Ha'aretz reported that Olmert
told Italian FM Frattini on Tuesday that he can persuade President
Bush to sponsor the talks.

Israel Radio reported that last night the IDF killed an 18-year-old
Palestinian man who crossed the Gaza border. The radio reported
that in a village near Jenin, undercover Border Police killed a
wanted Hamas man, Talal Abed. The radio also reported that last
night the IDF was active in Nablus. The Jerusalem Post reported
that yesterday Hamas PM Ismail Haniyeh accused Israel of waging a
"dirty war" against Hamas. He also accused the PA of
"participating" in the Israeli campaign.

Leading media reported that two Israeli Bedouin from the Negev town
of Rahat, named by police as Taher Abu Sakut, 21, and Omar Abu
Sakut, 22, were charged yesterday with plotting terrorist attacks
via the Internet with al-Qaida members overseas and marking out
civilian and military sites as targets.

Major media reported that yesterday intelligence officials told the
diplomatic-security cabinet that Hizbullah has 42,000 rockets.

Leading media reported that in ten days IDF Chief of Staff Lt. Gen.
Gabi Ashkenazi will visit the U.S. -- for the second time in a
month.

Yediot reported that over 1,800 housing units will soon be built
beyond the Green Line. Makor Rishon-Hatzofe reported that hundreds
of housing units will be built in the East Jerusalem neighborhoods
of Pisgat Zeev and Har Homa. Maariv reported that at its meeting in
Japan the G8 demanded the freezing of construction in the
settlements. Maariv reported that the residents of the West Bank
village of Bil'in will today sue in a Montreal court Canadian
companies building in the Modi'in Illit neighborhood of Matitiyahu
East to have 2,000 dunams (around 494 acres) of land returned to
them.

Maariv reported that the IDF has decided to close Nablus's
prosperous mall, threatening merchants and buyers of five years
imprisonment and saying that the earnings go to Hamas.

The Jerusalem Post reported that yesterday the Knesset passed three
bills in preliminary readings. They are seeking to enforce stiffer
measures against Israelis involved in terrorism.

Ha'aretz reported on Ambassador Richard Jones' farewell visit last
week to the Druze village of Beit Jann. The newspaper reported that
Jones acknowledged the existence of a communications channel between
Israel's Druze community and the U.S., with the goal of assisting
the Druze abroad -- in Syria and Lebanon.

Leading media report that President Shimon Peres will head the
Israeli delegation at the Beijing Olympic Games.

The Jerusalem Post reported that this week the American Friends of
the Hebrew University granted Bill Gates the Einstein Award.

Major media reported that yesterday the Baha'i Holy Places in Haifa
and Western Galilee entered UNESCO's World Heritage List.

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1. Iran:
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Summary:
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Liberal columnist and anchor Ofer Shelach wrote in the popular,
pluralist Maariv: "For more than a decade we have been dealing with
the Iranian threat, and there is still no answer to the question of
whether Tehran is indeed determined to obtain a bomb, or whether it
is just waiting for the right deal in order to give up the option."


Block Quotes:
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"Blind in the Dark"

Liberal columnist and anchor Ofer Shelach wrote in the popular,
pluralist Maariv (7/10): "The U.S., Iran and Israel are beginning a
critical year, in a common situation that can be compared to blind
people groping in the dark: Yesterday, for example, on the same day
that the Iranians fired Shihabs in the desert, Assistant Secretary
of State for Near East Affairs William Burns said that Iran was
farther from the bomb than it was thought. How does Burns know? Is
he speaking on the basis of intelligence or signaling something to
Israel, after other Americans have signaled different things by
leaking the large aerial exercise recently staged by the IDF? What
does Iran understand from this, what does Barack Obama understand
from this -- the man who may have to make the critical decision?
For more than a decade we have been dealing with the Iranian threat,
and there is still no answer to the question of whether Tehran is
indeed determined to obtain a bomb, or whether it is just waiting
for the right deal in order to give up the option. How can we know
this, while we don't even know who will sit in the White House or
the Prime Minister's Residence on the day the decisions have to be
made? Only one thing is clear, because we have learned it from the
history of democracies and dictatorships alike: The louder the
rhetoric, the more the blind people wave the sword in the dark, the
greater the chance for what the IDF called last summer (with regard
to Syria) a 'miscalculation.' Only in this case, a mistaken
calculation will cost more than ever."

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2. Mideast:
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Summary:
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Settler leader Israel Harel wrote in the independent, left-leaning
Ha'aretz: " The 'beefed-up UNIFIL,' whose forces were augmented to
prevent Iran's preparations for a missile attack on Israel from
Lebanon, has become the guardian of Hizbullah -- the executor of the
Iranian plan -- against an attempt by Israel to foil it with a
preemptive strike."


Block Quotes:
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"The Sole Achievement Has Been Erased"

Settler leader Israel Harel wrote in the independent, left-leaning
Ha'aretz (7/10): "After Hizbullah smuggled into Lebanon some 40,000
rockets, a few of which are capable, according to the Defense
Minister, of reaching Dimona, Ehud Barak remembered this week to
threaten, in the French Foreign Minister's presence, that 'Israel
will not put up with the continuing erosion of Resolution 1701.' It
appears it is France's fault that Israel did not prevent Hizbullah,
immediately on discovering the first signs of smuggling, from
violating 1701.... In a missile attack from Lebanon on Tel Aviv,
Dimona, and other strategic targets in the country -- by means of
Hizbullah -- Israel's hands would be tied tighter than they were in
the Lebanon war. After all, the 'beefed-up UNIFIL,' whose forces
were augmented to prevent Iran's preparations for a missile attack
on Israel from Lebanon, has become the guardian of Hizbullah -- the
executor of the Iranian plan -- against an attempt by Israel to foil
it with a preemptive strike."

JONES