SETTLEMENT CONSTRUCTION MORATORIUM APPLIES TO WEST

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 000024

SIPDIS

SIPDIS

STATE FOR NEA FOR FRONT OFFICE; NEA/IPA FOR
GOLDBERGER/SHAMPAINE/ROSENSTOCK/PECCIA; NSC FOR
ABRAMS/SINGH/PASCUAL

E.O. 12958: DECL: 08/30/2017
TAGS: PGOV PREL IS KPAL KWBG
SUBJECT: SETTLEMENT CONSTRUCTION MORATORIUM APPLIES TO WEST
BANK, NOT EAST JERUSALEM

REF: TEL AVIV 03597

Classified By: Charge d'Affaires Luis G. Moreno for reasons 1.4 (b),(d
)


1. (C) Summary: Since Annapolis, Israeli settlement plans
have been featured prominently and consistently in the
Israeli press. In December alone, there were five published
reports of GOI plans to build new residential and commercial
projects, primarily in East Jerusalem. Recent press reports
indicated that Prime Minister Olmert has barred new building,
planning, and occupancy tenders in settlements without his
approval, but it was unclear if this included East Jerusalem.
However, in a January 2 meeting with Senator George
Voinovich (R-OH),others, and the Charge d'Affaires, Olmert
clarified that these limitations do not necessarily apply to
East Jerusalem. He added that despite his moratorium on
settlement construction and land confiscation in the West
Bank, natural growth in built-up areas that Israel expects to
retain in a final status agreement cannot be prevented.
These areas, he claimed, are recognized by both the U.S.
Administration and Palestinian Authority (PA) President
Mahmoud Abbas as places Israel will retain, even if Abbas
could not publicly admit it. End summary.

The meeting was attended by:
The Charge d'Affaires,
Senator George Voinovich (R-OH),
Congressman Mike Turner (R-OH),
Congressman Steve Pearce (R-NM),
Congressman Rob Bishop (R-UT),
Congressman Phil Gingrey (R-GA).


--------------
West Bank Settlement Moratorium
--------------

2. (C) In a January 2 meeting with CODEL Voinovich and the
Charge d'Affaires, Prime Minister Olmert discussed the issue
of settlement construction in the territories. Senator
Voinovich had recently met with Palestinian interlocutors who
told him that the GOI's settlement activity was a major
obstacle that negatively affected the progress of
negotiations. In response to Senator Voinovich's questions,
Olmert confirmed that he has barred the authorization of new
building, planning, and occupancy tenders in West Bank
settlements without his approval. He noted, however, that
despite his ordered moratorium on settlement construction and
land confiscations, natural growth in built-up areas that
Israel expects to retain after a peace agreement cannot be
prevented and would continue. "I won't use my energy to stop
this," he said. These areas, he claimed, are recognized by
both the U.S. Administration and Palestinian Authority (PA)
President Mahmoud Abbas as places Israel will retain in a
final status, even if Abbas could not publicly admit it.


3. (C) Olmert said that he has notified the ministers of
defense, housing, and agriculture that there would be no
Palestinian land expropriations in the West Bank without his
approval. However, he noted, this does not apply to East
Jerusalem. On the issue of building in the East Jerusalem
settlement of Har Homa, Olmert said that this construction is
outside his purview and that the Palestinians know that Har
Homa is within Jerusalem's municipal boundaries. He
dismissed Har Homa as an insignificant issue and commented
that this was all part of the negotiation process. He
asserted that Israel should be worried about "real issues"
such as settlers being killed by terrorists associated with
the PA. (Note: Olmert's comment about settlers being killed
is in reference to the December 28 shooting that killed two
off-duty IDF soldiers while they were hiking near Hebron.
The Islamic Jihad and Fatah al Aksa brigades, which is a
faction of Mahmoud Abbas's Fatah organization, claimed
responsibility for the attack. End note.)


--------------
Recently Published GOI Settlement Plans
--------------

4. (C) In December, the Israeli press reported the
following GOI plans to build new residential and commercial
projects in East Jerusalem and West Bank settlements: (Note:
Coming so soon after Annapolis, these announcements --
whether or not accurate -- are provocative and create fodder
for Palestinian extremists who question Israel's commitment
to the process, while simultaneously weakening Palestinian
moderates who support it. End note)

TEL AVIV 00000024 002 OF 002



-- December 2: Ministry of Construction and Housing (MOCH)
and the Israel Lands Administration (ILA) published tenders
to build 307 housing units in the Har Homa settlement,
located in East Jerusalem.

-- December 19: Ha'aretz published an article indicating
that Housing Minister Boim endorsed a plan to build a new
Israeli neighborhood slated to contain more than 10,000
apartments near Atarot, located in East Jerusalem. (Note:
Per reftel, in a December 20 meeting with the Ambassador,
Boim disavowed any plans to build in this area. End note)

-- December 23: Reuters and Ma'ariv published articles
saying that the MOCH's 2008 budget had allocated some NIS 100
million to build a total of 750 housing units in the Ma'ale
Adumim (located in the West Bank) and Har Homa settlements,
in addition to the 307 Har Homa units that were previously
tendered. (Note: Housing Ministry Director General Chaim
Fialkoff told econoff that the MOCH 's 2008 budget allocated
money for the marketing of 750 housing units, including --
not in addition to -- the 307 previously tendered Har Homa
units. End note)

-- December 23: ILA issued a tender for construction of a
six-dunam (about 1.5 acres) plot of land for "hotels with an
option to re-zone as residential" in the Gilo settlement,
located in East Jerusalem.

-- December 30, ILA published a tender to build 440
apartments in East Talpiot, located in East Jerusalem.

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