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. Global War on Terror


2. Lebanon


3. Israel: Governance

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Key stories in the media:
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The Jerusalem Post reported that diplomatic officials told the
newspaper yesterday that while acknowledging that an agreement with
the Palestinians on all issues, including Jerusalem, was impossible
by the end of 2008, PM Ehud Olmert still wants to see a "historic
agreement" concluded by the end of the year that will explicitly
state that Jerusalem will be left for a later day and a different
framework. The officials' comments came after Olmert said yesterday
in an appearance at the Knesset's Foreign Affairs and Defense
Committee that a comprehensive agreement with the PA was impossible
by the end of the year due to the difficulty of negotiations
surrounding the issue of Jerusalem. However, The Jerusalem Post
quoted senior diplomatic officials as saying that Olmert still
believed a historic agreement that would touch with "great
specificity" on all the other core issues was within reach.
According to officials, the agreement would contain a clause
defining an agreed-upon mechanism between Israel and the PA for
dealing with the issue of Jerusalem in 2009.

Ha'aretz reported that indirect talks between Israel and Hamas over
a prisoner swap that will free Gilad Shalit are expected to resume
today after they were suspended for three weeks. However, Ha'aretz
reported that security officials told the newspaper that talks over
the exchange have been hampered by the instability of Israel's
government resulting from the corruption investigations against PM
Olmert. Ha'aretz's web site quoted a senior source in Jerusalem as
saying yesterday that Olmert is willing to further relax the
criteria for the release of Palestinian prisoners in efforts to
include more names in the list Israel plans to free in the swap deal
for Shalit. The source was quoted as saying that Israel has some
room for flexibility on the list of hundreds of prisoners Hamas is
demanding in exchange for Shalit, but that any compromise by Israel
must be met with a compromise by Hamas.

Israel Radio reported that Olmert emissaries Yoram Turbowicz and
Shalom Turgeman are leaving for Turkey today for a fourth round of
indirect talks with Syria. Ha'aretz reported that senior officials
in Jerusalem confirmed yesterday that Syria has carried out a number
of measures in recent weeks that reflect that it is taking talks
with Israel seriously. Ha'aretz quoted Olmert as saying that he was
pleased with the measures and with the negotiations with Syria. He
predicted that Israel's talks with Damascus will soon cause Syria to
come into conflict with Hizbullah and Iran. Olmert said that when
Syria reaches that crossroad it will have to decide which direction
to pursue. Meanwhile, Ha'aretz quoted a Western source as saying
that Syria is interested in making as much progress as possible with
Olmert so that his successor will be bound to whatever commitments
he makes. Ha'aretz quoted its sources in Jerusalem as saying that
Syria is interested in having the U.S. or a European country mediate
talks with Israel. France, which currently holds the Presidency of
the Council of the EU, is considered a strong candidate for the
role. Major media reported that yesterday Syria's Ambassador to the
U.S., Imad Mustafa, told the American branch of Peace Now that a
peace deal with Israel, Syria and Lebanon was possible. "Let's sit
down, make peace and end this war status once and for all," Mustafa
was quoted as saying. He later added that Israel had an opportunity
to make peace with Lebanon at the same time. The Jerusalem Post
reported that Israeli diplomatic officials were not overly impressed
by the interview with Mustafa.

Ha'aretz reported that the defense establishment is close to
deciding whether to demolish the Jebel Mukaber home of Ala Abu
Dhaim, the terrorist who committed the attack on the Mercaz Harav
yeshiva in Jerusalem. However, legal difficulties are still delaying
decisions on destroying the houses of the two terrorists who
committed the bulldozer attacks in Jerusalem this month, Hussam
Duwiyat of Sur Baher and Ghassan Abu Tir from Umm Tuba. Ha'aretz
quoted Olmert as saying yesterday before the Knesset's Foreign
Affairs and Defense Committee that Jews and Arabs living side by
side in Jerusalem inevitably leads to terror attacks.

Leading media reported that prominent figures from the "farm (or
ranch) forum" that served as a support group to Ariel Sharon will
become external advisers to FM Tzipi Livni in her race for Kadima
chairmanship. The forum includes strategist Eyal Arad, advertiser
Reuven Adler, and Attorney Yoram Rabed. Yediot reported that Livni
also tried to gain the support of Histadrut Labor Federation
Secretary-General Ofer Eini.
The Jerusalem Post reported that PA officials in Ramallah told the
newspaper yesterday that the PA is facing a severe financial crisis
due to the failure of donor countries to fulfill their pledges to
fund the Palestinians.

The media reported that yesterday the Knesset's State Control
Committee decided to establish a state commission of inquiry into
the serious water crisis facing Israel. The committee will look at
the failure to implement the recommendations of a series of
professional committees and cabinet resolutions aimed at addressing
the water situation over the years. The commission will also be
asked to draft short- and long-term recommendations to ensure a
regular supply of water to the public.

The media reported that just eight months after its official launch
Jewish American billionaire Sheldon Adelson's free Hebrew daily
Israel Hayom (Israel Today) has outdistanced Maariv to become the
second most widely circulated newspaper in the country, according to
the TGI market research company's biannual survey of exposure for
dailies, magazines, and radio stations.

Ha'aretz quoted peace activists operating south of Hebron as saying
that the police are persecuting them because of their efforts to
help West Bank Palestinians.

Ha'aretz reported that yesterday the Knesset passed a bill
transferring from the Interior Ministry to courts almost the entire
authority of revoking an individual's citizenship.

The media reported that yesterday the Bank of Israel raised the rate
charged to commercial lenders by a quarter of a percentage point to
4%, after inflation exceeded the government's target range for a
seventh consecutive month.

Ha'aretz reported that "Exit Wounds," a graphic novel by the Israeli
comics artist Rutu Modan, won the 2008 Will Eisner Comic Industry
Award this weekend for the best new graphic novel -- the most
prestigious U.S. prize for works in the comics industry.

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1. Global War on Terror:
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Summary:
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The conservative, independent Jerusalem Post editorialized:
"Wouldn't the world be a better place if terrorists found no
sanctuary, no financial backing and no diplomatic cover -- because,
simply, no 'reason' justified their actions?"

Block Quotes:
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"Why Terror Thrives"

The conservative, independent Jerusalem Post editorialized (7/29):
"Tragically, the international community has only itself to blame
for making terrorism permissible as a tool of war.... One can only
fantasize about how much safer the world would be today had the UN,
instead of legitimizing Arafat's terrorism, charged him with war
crimes. Would disgruntled Muslims have established al-Qaida's
global network -- or Abu Sayyaf in the Philippines, Al Shabaab in
Somalia, or the Army of Muhammad in India -- had the international
community sent a different signal all those years ago? But not only
did Arafat get a green light from the international community, the
world has since helped nourish self-defeating Palestinian tendencies
toward violence, intransigence and radicalism. Seldom have the
Palestinians been told to choose between violence and political
accommodation. When the Quartet gave Hamas precisely that choice,
the Palestinians stood their ground.... Violence may be endemic to
mankind, yet the community of nations nevertheless managed to outlaw
poison gas and criminalize genocide. Is it beyond people's capacity
to, belatedly, define deliberate attacks against civilians as a
crime against humanity? Wouldn't the world be a better place if
terrorists found no sanctuary, no financial backing and no
diplomatic cover -- because, simply, no 'reason' justified their
actions?"

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2. Lebanon:
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Summary:
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Deputy Managing Editor and right-wing columnist Caroline B. Glick
wrote in the conservative, independent Jerusalem Post: "U.S.
military support for Lebanon grows even as the Lebanese armed forces
demonstrate at every turn that they collaborate with Hizbullah."

Block Quotes:
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"Ending Lebanon's Free Ride"

Deputy Managing Editor and right-wing columnist Caroline B. Glick
wrote in the conservative, independent Jerusalem Post (7/29): "U.S.
military support for Lebanon grows even as the Lebanese armed forces
demonstrate at every turn that they collaborate with Hizbullah....
All of this is depressingly familiar. In many ways, the Siniora
government is to Hizbullah in Lebanon what the Fatah terror groups
is to Hamas in the Palestinian Authority. As in the case in
Lebanon, the U.S. trains, finances, and arms Fatah.... With even the
Olmert-Livni-Barak government calling openly for a revision of
Resolution 1701 to curtail the Lebanese military's ability to
facilitate Hizbullah's rearmament and assertion of control over
southern Lebanon, and with even Britain finally classifying
Hizbullah's militia as a terror group, the time has come to revisit
U.S. policy.... It is reasonable for the U.S. to seek to support
pro-Western democrats in the Arab world. It is unreasonable for the
U.S. to be bankrolling a terror-controlled regime populated by
terrorists and democrats who support their aggression. This is
particularly the case when the same terrorists are waging war not
only against Israel, but against its own forces in Iraq. Olmert's
July 12, 2006 declaration is still apt, Lebanon must be forced to
suffer the consequences of its support for Hizbullah."

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3. Israel: Governance:
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Summary:
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Senior columnist and longtime dove Yoel Marcus wrote in the
independent, left-leaning Ha'aretz: "When Olmert sheds those
crocodile tears about being lynched, he's got it backwards. He is
the one who is lynching the State of Israel."

Block Quotes:
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"Lynching the State"

Senior columnist and longtime dove Yoel Marcus wrote in the
independent, left-leaning Ha'aretz (7/29): "In his book 'Cry the
Corrupt Country,' [journalist] Arieh Avneri writes that Ehud Olmert
has been through 18 police investigations in his political career.
And this curriculum vitae has not kept him from climbing to the top.
It was no coincidence that Ariel Sharon, mired in a police probe
himself, chose Olmert as his right-hand man during the Gaza
disengagement.... Olmert knows that he's done for, but he is
dragging things out in an attempt to save his own skin and settle
accounts. So what if he has a country to run? The surveys show
that he has hit rock bottom in the eyes of the public. Israel's
citizens have lost faith in him, both as an honest person and a
functioning prime minister. When Olmert sheds those crocodile tears
about being lynched, he's got it backwards. He is the one who is
lynching the State of Israel."

MORENO