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. Mideast


2. U.S.-Israel Relations

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Key stories in the media:
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Ha'aretz quoted a senior GOI source as saying that Hamas recently
increased the number of Palestinian prisoners it wants released in
exchange for Gilad Shalit, from 1,000 to 1,500. Ha'aretz and Israel
Radio reported that for the first time, Israel will share a list of
450 prisoners with Hamas, some "with blood on their hands." The
Jerusalem Post quoted sources in Gaza as saying that the results of
a recent election held for one of Hamas's key decision-making bodies
are likely to hinder efforts to free Gilad Shalit. Leading media
quoted Shalit's mother Aviva as saying yesterday that Israeli
politicians are too preoccupied with their own affairs to work for
her son's release. She was speaking at a rally to mark Shalit's
third birthday in captivity. Referring to comments made by
politicians about the number of Palestinian prisoners whom Hamas has
demanded in return for freeing Shalit, Aviva Shalit was quoted as
saying: "Whoever wants to avoid [paying] a high price -- you had all
the time in the world to do this. A country that forgets its
soldiers will eventually be forgotten by its soldiers."

Citing an interview of PA Chairman Mahmoud Abbas with Al Arabiya-TV,
leading media quoted him as saying that the return of Palestinian
refugees to Israeli territory is being discussed in the negotiations
with Israel. Abu Mazen said that the Palestinians were also
demanding all of East Jerusalem, which was occupied in the Six Day
War. He added that Secretary of State Condoleezza Rice agreed that
East Jerusalem, the Jordan Valley and the Dead Sea be included in
the territory of the Palestinian state. Israel Radio quoted GOI
sources as saying that if a Palestinian state is established,
refugees would only be able to enter it, and not Israel. The radio
reported that Egyptian FM Ahmed Abu al-Gheit heard from Secretary
Rice that an Israeli-Palestinian agreement will be ready by next
month.

The Jerusalem Post quoted diplomatic officials in Jerusalem as
saying yesterday that Syria's rush to take advantage of the conflict
in Georgia and the Russia-U.S. rift to cozy up to Moscow seems to
indicate that it is not interested in serious negotiations with
Israel even with U.S. participation.

Ha'aretz and other media reported that yesterday Labor's Knesset
faction stood squarely behind the party leader, DM Ehud Barak,
quashing rumors that there is a plot to replace him.

Ha'aretz and The Jerusalem Post reported that two boats run by the
pro-Palestinian Free Gaza group sailed back to Cyprus from Gaza
yesterday, carrying seven Palestinians, including five children.
Ha'aretz says that initially, the group had also planned to take 12
Palestinian students who have been accepted to foreign universities
but barred from leaving Gaza by Israel. However, that plan was
dropped when it turned out that the students did not have visas to
enter the countries in which they sought to study.

The Jerusalem Post reported that the U.S. Republican Party accuses
the Democrats of weakness on Iran. The newspaper cited the
Democrats' response that the Bush-McCain approach to foreign policy
has endangered Israel.

Leading media reported that two Israeli Arabs from Shfaram -- both
university students -- have been arrested on suspicion of belonging
to Islamic Jihad and planning attacks that included assassinating
Israeli pilots, scientists, and university professors. The father
of one of the two suspects is himself suspected of taking part in
the 2005 lynching of IDF deserter Eden Natan Zade, who killed four
Arab civilians in a bus.

The Jerusalem Post reported that a recent study by the IDF's
Planning Division shows that the ballistic missile threat to IDF
bases in the Central region and South is not as grave as once
thought and the bases would not need to be evacuated in the event of
a war in the North.

All media reported that yesterday Hizbullah downed a Lebanese Army
helicopter. Ha'aretz wrote that it was wrongly identified as an
Israeli one. Israel Radio gathered that the incident was linked
with the appointment of a new Lebanese chief of staff. Makor
Rishon-Hatzofe quoted Israeli defense sources as saying that the
Lebanese Army helps Hizbullah conceal construction of military
infrastructure from UNIFIL.

Yediot reported that former Israeli ambassador to Washington Danny
Ayalon has joined Avigdor Lieberman's Yisrael Beiteinu party.

Leading media reported that this morning police will interrogate PM
Ehud Olmert in his residence for the seventh time. The Jerusalem
Post quoted Morris Talansky's Israeli lawyers as saying that U.S.
prosecutors want to "debrief" him in connection with the ongoing
investigations in the U.S.

The Jerusalem Post reported that yesterday for the first time,
Interior Ministry officials allowed Druze women from the Golan to
participate in a religious pilgrimage in Syria, calling it a
"goodwill gesture" to commemorate Israel's 60th anniversary.

Ha'aretz reported that Meretz MK Ran Cohen is considering running
for Tel Aviv Mayorship.

Globes reported that the giant, American-based multinational
agricultural biotechnology corporation Monsanto will invest $65
million in the Israeli agricultural start-up company Abujan.

Maariv presented the results of a TNS/Teleseker poll:
If Knesset elections were to be held today and Livni to head Kadima
with the following parties running, for which party would you vote?
Results in Knesset seats. (In brackets: Maariv's August 1 poll):
Likud: 31 (33); Kadima:23 (20); Labor Party: 12 (17): Yisrael
Beiteinu: 12 (12); Shas:9 ( 9); Arab parties: 10 (10); National
Union Party and National-Religious Party:8 ( 6); Meretz: 5 (4);
United Torah Judaism: 6 (4); Social Justice -- new party headed by
Arkady Gaidamak: 4 (5); Pensioners Party:0 ; Green Party 0 (5)

If Knesset elections were to be held today and Shaul Mofaz to head
Kadima with the following parties running, for which party would you
vote? Results in Knesset seats. (In brackets: Maariv's August 1
poll):
Likud: 31 (33); Kadima:16 (16); Labor Party: 16 (20): Yisrael
Beiteinu: 11 (13); Shas:8 (9); Arab parties: 10 (10); National Union
Party and National-Religious Party:8 ( 6); Meretz:6 (4); United
Torah Judaism: 6 (4); Social Justice -- new party headed by Arkady
Gaidamak: 5 (4); Green Party 3 (0; Pensioners Party: 0.

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1. Mideast:
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Summary:
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Diplomatic correspondent Aluf Benn wrote in the independent,
left-leaning Ha'aretz: "The leader who understood the significance
of the change [in the world's balance of power] better than others,
and is working to leverage it to his advantage, is Syrian President
Bashar Assad."

Block Quotes:
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"New Middle East"

Diplomatic correspondent Aluf Benn wrote in the independent,
left-leaning Ha'aretz (8/29): "The leader who understood the
significance of the change [in the world's balance of power] better
than others, and is working to leverage it to his advantage, is
Syrian President Bashar Assad. In these days of uncertainty and
searching for allies, Assad is putting Syria up for sale. After a
prolonged isolation, which reached its climax in a series of
humiliations ... Assad launched a diplomatic offensive. The
previously ostracized president is now highly sought after.... Assad
was quick to take Russia's part in its war with Georgia.... Assad
resumed peace talks with Israel, at a low profile, signaling that
the border will remain quiet if Israel leaves Lebanon to him and
respects his new standing in the region. Ehud Olmert assented,
without paying a price politically.... Assad is waging the most
delicate and sensitive game with Iran: He wants to preserve the
strategic partnership with Tehran, while he offers the West and
Israel a weakening of those ties if they present him with an
alternative. Assad did not join in the hate-filled diatribes of his
ally Ahmadinejad, and agreed to take in stride the Iranian criticism
of his talks with Israel. Israel is currently preoccupied with
domestic political crises and criminal cases; the upheavals in the
region and in superpower relations are of zero interest. But these
are reshaping Israel's strategic horizon, and Olmert's heirs will
have to adapt their policy to fit a new and different world. They
will have something to learn from Bashar Assad."

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2. U.S.-Israel Relations:
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Summary:
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The conservative, independent Jerusalem Post editorialized: "[Hubert
H.] Humphrey, who ultimately lost to Richard M. Nixon, may have been
the last instinctive friend of Israel to seek the presidency.....
What the Obama-Biden ticket needs to demonstrate is that backing for
a secure Israel living within defensible boundaries is as integral
to Democrats today as it was when Hubert Humphrey was their
standard-bearer."

Block Quotes:
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"From Humphrey to Obama"

The conservative, independent Jerusalem Post editorialized (8/29):
"[Hubert H.] Humphrey, who ultimately lost to Richard M. Nixon, may
have been the last instinctive friend of Israel to seek the
presidency..... On the night Humphrey accepted the nomination,
Barack Obama, born August 4, 1961, was seven years old. For Obama's
generation, and even more for the ones following it, political,
moral or theological certainties about Israel -- or about anything
else -- are passe..... The Obama-McCain campaign kicks off in
earnest after next week's Republican National Convention, and
Israelis have been watching the presidential race with
fascination.... Do Obama and Biden think it is possible to be
'pro-Israel' in 2008 while being sanguine over an Israeli withdrawal
to the 1949 Armistice Lines? Where does the campaign stand on
strategic settlement blocs and a Jewish presence in such Jerusalem
neighborhoods as Gilo, East Talpiot, and Har Homa [that are beyond
the Green Line]?.... It may be unrealistic for Israelis to expect
that an administration taking office in January 2009 will empathize
with Israel the way a 1969 Humphrey White House might have. But
what the Obama-Biden ticket needs to demonstrate is that backing for
a secure Israel living within defensible boundaries is as integral
to Democrats today as it was when Hubert Humphrey was their
standard-bearer."

CUNNINGHAM