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 reported that an international summit is to be held in
Egypt in November, with representatives from Israel, the PA, and the
members of the Quartet. According to a senior official in
Jerusalem, the Israeli and PA participants will brief the Quartet
over progress made in the ongoing peace talks. The gathering is
said to be the result of a compromise between the U.S., Israel, and
the Palestinians. In recent months Secretary of State Condoleezza
Rice has been urging both sides to draft a document detailing the
points of agreement in the Israeli-Palestinian negotiations. She
suggested they compile an "inventory" detailing progress on each of
the core issues, such as Jerusalem, borders, refugees' right of
return, security, settlements, and water rights. Israel opposed
Rice's suggestion and argued that it would set the talks back. "It
would make each side harden its stance to appear as though it has
made no concessions," Ha'aretz quoted the Israeli source as saying.
"Finally, FM Tzipi Livni managed to persuade her Palestinian
counterpart, the head of the PA negotiating team, Ahmed Qurei, to
reject the inventory idea." Instead, the parties agreed on to give
a detailed briefing to the Quartet that they claim would be less
binding and would allow issues to be presented more freely.

All media reported that the U.S. administration has announced the
sale of 25 F-35 fighter jets to Israel, with an option for 50 more
in coming years, for a deal valued at up to $15.2 billion. Ha'aretz
quoted the Pentagon's Defense Security Cooperation Agency (DSCA) as
saying that the deal is vital to the U.S. national security interest
in assisting Israel as it develops and maintains "a strong and ready
self-defense capability." The Jerusalem Post reported that, fearing
that the U.S. will sell the plane to Saudi Arabia and other Middle
Eastern states, the Defense Ministry is seeking American approval to
install Israeli-made electronic systems on the stealth fighter jets
it buys. One reason Israel is asking for the changes is so that if
the aircraft is sold to other states in the region, the IAF's
version will be unique and superior. Unlike other media, Maariv
wrote that the difficulty in identifying the aircraft might be
useful in an Israeli attack against distant targets such as Iran.
In another development, Maariv reported on first-of-its-kind
cooperation since the Second Lebanon War that will allow commanders
of ground forces to order IAF fighter planes to attack enemy
targets.

Ha'aretz reported that Israeli security officials told Reuters on
Tuesday that the IDF will purchase Israeli-made cluster bombs with a
self-destruct mechanism. The M-85 bomblets, manufactured by Israel
Military Industries, explode shortly after they are dispersed on the
ground, which can greatly reduce civilian casualties. During the
Second Lebanon War, Israel made widespread use of cluster bombs,
some of which were American-made. Cluster bombs are outlawed in
many countries and the U.S. administration has prohibited Israel in
the past from using them in populated zones. Maariv reported that
the U.S. will stop selling cluster bombs to Israel.

The Jerusalem Post reported that Israel had no formal reaction
yesterday to the Bahraini FM's suggestion that all Middle East
nations -- including Israel and Iran -- form a regional
organization. A senior official in Jerusalem was quoted as saying
that it was an "interesting idea," but one that would almost
certainly not get off the ground. Bahraini FM Sheikh Khalid bin
Ahmed al-Khalifa said in an interview with the pan-Arab daily
Al-Hayat that a regional organization should be formed "even if we
don't recognize each other," and that the purpose would be to try to
resolve disputes. In a speech to the UN General Assembly on
Tuesday, Sheikh Khaled called for such a Middle East organization to
include countries "without exception." Asked by Al-Hayat if it
would include Israel, he replied, "With Israel, Turkey, Iran and
Arab countries. Let them all sit together in one group... This is
the only path to solve our problems. Why don't we all sit together
even if we have differences and even if we don't recognize each
other? Why not become one organization to overcome this difficult
phase?" The source said that no less interesting was the suggestion
to invite the Islamic Republic, since there was a great deal of fear
among Persian Gulf states that Teheran is pursuing nuclear weapons
because it wants hegemony in the region. While reiterating that the
regional forum was a "very interesting idea," the source in
Jerusalem said it was much too early for Israel to jump on the
"wagon," because "there was no wagon, no wheels, and no horses, just
one newspaper interview." The source was also quoted as saying that
the idea would be more significant were it to be taken up by a
country with more regional weight than Bahrain.
Ha'aretz reported that IDF GOC Central Command Maj. Gen. Gadi Shamni
has leveled harsh criticism against extremist West Bank settlers who
have attacked Palestinians and IDF soldiers in recent weeks. In an
interview with Ha'aretz over the Jewish New Year holiday, Shamni
said that the radical behavior among rightists has grown in light of
encouragement they receive from the settler leadership, rabbis, and
public. As the officer heading Central Command, Shamni is
responsible for the entire West Bank.

Under the headline, "The American Weapon that Pressures Hamas,"
Yediot ran a feature on the U.S.-assisted fight against tunnel
smuggling between Egypt and Gaza.

Ha'aretz reported that yesterday Syrian FM Walid Muallem denied the
Israeli accusation that his country is arming Hizbullah. Speaking
in an interview published by the Ash-Sharq al-Awsat newspaper,
Muallem said: "It is not correct that Syria is supplying Hizbullah
with weapons and equipment, as is claimed. Hizbullah does not need
this." He argued that Israel was making the accusations merely as
an excuse for IAF overflights of Lebanon.

Major media quoted Iran's supreme religious leader Ayatollah Ali
Khamenei as saying yesterday that his country will stand beside
Gaza's Hamas rulers and that Israel is on the path to destruction.
According to Iranian state-run television, Khamenei called Hamas's
PM in the Gaza Strip, Sheikh Ismail Haniyeh, a "mojahed," or soldier
of holy war, saying the Iranian nation will "never let you be
alone." He was also quoted as saying that Israel's Zionist regime
is moving toward weakness, destruction, and defeat and that the
current generation of Palestinians will see "that great day."

Leading media quoted PA President Mahmoud Abbas as saying that PM
Ehud Olmert's comments in the Jewish New Year interview he granted
Yediot were a "deposit" to be brought into play by the next
government. Yediot quoted Kadima Knesset Member Yoel Hassan as
saying that the PM's stances are contrary to Kadima's platform.
Makor Rishon-Hatzofe reported that Shas is wondering whether
Olmert's remark could mean an intention to divide Jerusalem.
Various right- and left-leaning commentators noted that Olmert's
political situation does not allow him to make far-flung
commitments. Media reported that the police will interrogate
Olmert for the eighth time today -- regarding the affairs of the
"Investments Center" and the "house on Cremieux St."

Ha'aretz reported that before the Jewish New Year,
prime-minister-designate Tzipi Livni rejected demands from Meretz
leaders to remove Justice Minister Daniel Friedmann. The media also
reported that Livni and her husband hosted Defense Minister Ehud
Barak and his wife for a holiday dinner. Maariv reported that
increasing voices in the Labor Party are calling for the party's
inclusion in Livni's future government.

The Jerusalem Post quoted Likud Chairman Benjamin Netanyahu as
saying in a pre-Jewish New Year interview with the Walla web site
that he will increase construction in existing West Bank settlements
to keep pace with the population's natural growth if he is elected
prime minister.

The media reported that on Monday police arrested a 19-year-old
Palestinian who planned to assault Jews in Jerusalem's Old City on
the eve of the Jewish New Year.

All media highlighted the U.S. Senate's compromise on a bailout
bill. The media reported that the crisis is affecting Israeli
savers.

Ha'aretz reported that Boris Spiegel, one of the Russian Jewish
community's most prominent supporters of President Vladimir Putin,
is set to be appointed head of the country's Keren Hayesod, also
known as the United Israel Appeal (UIA). The UIA is the central
fundraising body for Israel around the world, with the exception of
the United States.

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Mideast:
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Summary:
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Editor-in-Chief Amnon Lord wrote in the editorial of the
nationalist, Orthodox Makor Rishon-Hatzofe: "Olmert, as a senior
representative of the leading Israeli elite, fully recognizes the
Arab demands and concedes that none of the Israeli demands of the
Arab side have any validity."

Diplomatic correspondent Aluf Benn wrote in the independent,
left-leaning Ha'aretz: "The West Bank separation fence divides
Israeli society into two worlds utterly different in their
perceptions of reality and of the problems that affect them."

Former Mossad director Ephraim Halevy wrote in the mass-circulation,
pluralist Yediot Aharonot: "Once the decision is made, we must hope
that the Palestinian troops eradicate the Hamas movement and again
take control of Gaza and that Israel and the Israel and the U.S.
will be able to complete the job."

Military correspondent Alex Fishman wrote in the mass-circulation,
pluralist Yediot Aharonot: "When a fanatical terror organization
with no inhibitions vows to take revenge on the Hizbullah leadership
-- the Syrians' collaborators and allies -- Hizbullah officials
begin to fear for their lives. Now it isn't only we who issue
travel advisories. They do, too. That is what is known as
receiving one's just deserts."

Conservative Professor Gabi Avital wrote in the popular, pluralist
Maariv: "It is not clear who has now decided to violate the
principle that foreign troops should not be stationed in Israel."

Block Quotes:
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I. "A Moral and Ideological Collapse"

Editor-in-Chief Amnon Lord wrote in the editorial of the
nationalist, Orthodox Makor Rishon-Hatzofe (10/2): "The statements
that were made by the outgoing prime minister, Ehud Olmert, in an
interview to the media ... clearly signaled to the Palestinians, the
Arab peoples and all the other ill-wishers for Israel in the
international community that the long struggle against Israel has
paid off. The implication from Olmert's statements is that justice
-- both in terms of international law and from an ethical standpoint
-- lies entirely with the Arab side. Since this is a struggle that
has had a decidedly extremist and violent dimension to it, the Arabs
and their supporters ought to ask themselves: why stop at the 1967
line? Olmert, as a senior representative of the leading Israeli
elite, fully recognizes the Arab demands and concedes that none of
the Israeli demands of the Arab side have any validity. We ought to
take note that Olmert clearly admitted that there could not be peace
unless Israel gave up (nearly) everything that was conquered in

1967. What does that tell us about Jerusalem and about any
territorial compensation to which Israel is going to commit in order
to absorb the settlement blocs in Judea and Samaria [i.e. the West
Bank]?.... It seems that Olmert is adding to the crime of personal
corruption the sin of ethical stately corruption. He has lost any
faith in Israeli justice, but not his faith in his justice and in
the rotten elite's support for him. He believes that such a
far-reaching statement will give him legitimacy to 'fight' for the
sake of 'peace' in his last days or months in office."

II. "A Schizophrenic State"

Diplomatic correspondent Aluf Benn wrote in the independent,
left-leaning Ha'aretz (10/2): "The West Bank separation fence
divides Israeli society into two worlds utterly different in their
perceptions of reality and of the problems that affect them. On one
side are those disturbed by the crisis on Wall Street, by the lack
of leadership and the Iranian threat. Few worry about what is
happening in the West Bank, and certainly no one visits there. The
Palestinians are forgotten when there are no suicide bombings, the
settlers are viewed as a strange society, and the peace talks
pursued by Ehud Olmert seem like irrelevant spin. On the other side
of the fence, in Settlers' Country, things look quite different.
There, no one worries about Wall Street or Ahmadinejad, but about
survival. The settlers are angry with the state that evacuated the
Gush Katif settlements in the Gaza Strip, at the army and the
Supreme Court and the leftist media. They take seriously Olmert's
declarations of support for withdrawing from nearly all of the West
Bank, prepare for the coming withdrawal and make pilgrimages to
abandoned outposts like Homesh. This schizophrenia, convenient for
both sides, has been nurtured by the Olmert government. Despite the
Prime Minister announcing his backing for the evacuation of
settlements beyond the fence, he essentially gave the settlers free
rein after the destruction of the Amona outpost [in February
2006].... As violence continued across the fence, it raised only
minimal interest on this side. Then came the attack on Prof. Zeev
Sternhell as a reminder that ideological struggle knows no borders
or barriers. The remonstrations of Olmert and company were turned
up a notch, but the government restrained itself, hoping the quiet
would return or that a catastrophe would come along requiring it to
act. In the absence of such a catastrophe, Olmert's successors will
likely act just as he did, distancing themselves from the goings-on
in the territories, and nurturing the national schizophrenia on both
sides of the separation fence."

IV. "The Decisive Battle"

Former Mossad director Ephraim Halevy wrote in the mass-circulation,
pluralist Yediot Aharonot (10/2): "It is clear to anyone with eyes
in his head that the success of the PA is dependent on this or that
aid from Israel. The extent of the aid, the kind of aid, and the
degree of indirect or direct involvement will be the outcome of the
degree of the success of the Palestinian units. Since this will be
an ongoing operation, Israel may have to make some weighty decisions
in real time, based on developments on the ground.... As said, once
the decision is made, we must hope that the Palestinian troops
eradicate the Hamas movement and again take control of Gaza and that
Israel and the U.S. will be able to complete the job."


V. "Now It's Their Turn to be Afraid"

Military correspondent Alex Fishman wrote in the mass-circulation,
pluralist Yediot Aharonot (10/2): "The recent terror attacks in
Damascus and Lebanon are part of the revenge campaign by a fringe
organization that declared that it would not rest until the Syrians
and the people who helped assassinate the commander of their
organization had paid for their actions. It is ironic that the
Syrians and Hizbullah, who announced a campaign of revenge against
Israel following the assassination of Imad Mughniyah, are now
experiencing first-hand what they had planned to dish out to us....
This isn't a particularly difficult puzzle to piece together. The
organization that swore that it would take revenge was Fatah
al-Islam. As odd as this may sound, this is an organization that
was linked at its inception to Syrian intelligence.... When a
fanatical terror organization with no inhibitions vows to take
revenge on the Hizbullah leadership -- the Syrians' collaborators
and allies -- Hizbullah officials begin to fear for their lives.
Now it isn't only we who issue travel advisories. They do, too.
That is what is known as receiving one's just deserts."

IV. "The Radar: a Very Dangerous Trap"

Conservative Professor Gabi Avital wrote in the popular, pluralist
Maariv (10/2): "The positioning of a new radar at the Nevatim base
in the Negev, with its American crew, was announced loudly this
week. We were spared no praise about the brilliant capabilities of
the radar, which will improved deterrent capability facing missiles
from the East.... If there was any doubt about Israel being no more
than the cheapest mercenary in the world, and, unfortunately, in the
words of [right-wing] Professor Ezra Zohar, a 'concubine in the
Middle East,' the radar and the American soldiers are the ultimate
stamp of this.... It is not clear who has now decided to violate the
principle that foreign troops should not be stationed in Israel.
Are the dangerous implications of this violation known to the
decision-makers?"

CUNNINGHAM