C O N F I D E N T I A L TEL AVIV 000467

SIPDIS

SIPDIS

E.O. 12958: DECL: 02/28/2018
TAGS: PREL EAID KWBG TU JO JA GE IS
SUBJECT: PRESIDENT PERES PROPOSES AGREEMENTS ON WEST BANK
INDUSTRIAL PARKS IN TIME FOR THE POTUS VISIT


Classified By: Ambassador Richard H. Jones, Reason 1.4 (b) (d)


1. (C) Summary and Comment. At the latter's request, the
Ambassador called on President Shimon Peres the evening of
February 27. Peres said he wanted to ensure that President
Bush's May visit produce positive results. Noting that he
did not think a political agreement with the Palestinians
would be ready by May, Peres suggested that the symbolic
inauguration of work on three industrial parks in the West
Bank (sponsored by Japan, Germany, and Turkey), as well as
the signing of an Israeli-Jordanian Memorandum of
Understanding on the Red Sea to Dead Sea Peace Valley
project, be the central deliverables of the President's
visit. In addition, Peres proposed that the President
address a May 14 evening event that Peres is organizing to
thank America for its steadfast support throughout the sixty
years since Israel's founding. Peres described Defense
Minister Barak's approval as critical to having the West Bank
industrial parks ready for initiation by May. Noting that he
would continue to engage Barak himself, he also urged that
Secretary Rice press Barak to "resolve any obstacles" to

SIPDIS
these projects during her March 4-5 visit. Peres recommended
the Secretary could accomplish this in a joint meeting with
Barak and PA Prime Minister Fayyad during her visit. As for
the Peace Valley MOU, Peres said it was ready for signing by
King Abdullah, while he was introducing legislation in the
Knesset that would designate the Peace Valley as a
prioritized national project. In response to the
Ambassador's observation that no one in the GOI was actively
promoting economic development in the West Bank, Peres said
even though the three industrial parks would take years to
complete, just starting construction would create economic
opportunities and hope in the West Bank. Comment: It is not
clear to what extent Peres has coordinated this approach with
PM Olmert, whose support will also be critical. He is <

br>correct that without Barak's full backing, nothing will move.
We request guidance on how to respond to Peres' vision for
the May POTUS visit. End Summary and Comment.


2. (U) The Ambassador, accompanied by Econ Couns and Pol
Couns, called on President Shimon Peres February 27. Peres
was joined by policy adviser Orry Ben Porat and military aide
BG Shimon Hefetz. Peres explained that he wanted to discuss
President Bush's May visit. This would likely be the
President's last official visit to Israel, and Peres wanted
him to leave with some tangible accomplishments. A political
agreement with the Palestinians is not likely to be ready by
May, and more "photo ops" are not needed, he argued.


3. (SBU) Peres said his idea was to make the official
commencement of work on the three foreign-sponsored, Tony
Blair-backed industrial parks in the West Bank (near Jenin,
Tarqumiya and Jericho and sponsored by Germany, Turkey, and
Japan) be the center-piece of the President's visit, along
with the signing of an Israeli-Jordanian MOU on the Peace
Valley project. While noting that there remained a number of
obstacles to getting the industrial parks moving, Peres said
making the President's visit the target gate would give
impetus to current discussions between the PA, the Ministry
of Defense, and the donors. Noting the Secretary Rice will
visit March 4-5, Peres suggested that the Secretary meet with
PM Fayyad and Barak jointly to resolve outstanding issues.


4. (C) Peres said he had told Barak that while he understood
Barak had to be tough in Gaza, he should be easy on the West
Bank. Peres said Barak had been very impressed with the
Turks during a visit to Ankara two weeks ago, and this should
help Barak adopt a more supportive attitude toward the
industrial parks. In response to the Ambassador's question
whether MOD Director General Pinhas Buchris, whom Barak has
appointed to be responsible for working with the PA and the
donors on the industrial parks, was the right man for the
job, Peres said the appointment was not important because
Barak himself would make all the decisions. Peres said he
had also raised the issue with the commander of the IDF
Central Command (responsible for the West Bank), MG Gadi
Shamni, telling Shamni that he needed to do his part to
ensure that the industrial parks were ready to go by mid-May.
In response to the Ambassador's comment that no one in the
GOI was actively advocating for Palestinian economic
development, Peres said that launching the three industrial
parks would make a big difference. While it would take
several years for the parks to start production, the
construction alone would generate thousands of jobs and
create hope among Palestinians.


5. (SBU) Regarding the Peace Valley project, Peres said
there was a positive development in the Jordanian attitude.
Representatives of the American engineering firm MWH were
currently in Amman, where they were being positively
received. Peres said his office had drafted an MOU
requesting MWH prepare a work proposal. The MOU will be
ready for King Abdullah and PM Olmert to sign, Peres said, as
soon as the Knesset passes a bill to make the Peace Valley
project a national priority. (The Jordanian Ambassador
confirmed on February 28 that Peres has discussed this idea
with his government. However, he stressed that Peres has not
tabled a text for the MOU.) In addition to visiting the
sites of the industrial parks, President Bush could attend a
signing ceremony for the Peace Valley MOU.

6. (SBU) As for the rest of the President's May program,
Peres said he hoped the President would give a speech to the
May 14 evening event that Peres is organizing to thank
America for its steadfast support of Israel throughout the 60
years since its founding. Peres said such a speech would make
a bigger impact than addressing the Knesset, in part because
Knesset protocol would require four Israeli speeches (by
Knesset Speaker Itzik, Opposition leader Netanyahu, PM Olmert
and Peres) in addition to the President. Peres suggested the
President bring a bi-partisan Congressional delegation with
him to underscore the bi-partisan nature of U.S. support for
Israel. He added that it would be difficult to convene the
Knesset for an address by President Bush at the same time as
his event in any case due to the massive security
arrangements and the two venues' proximity.


7. (C) Comment. While Peres claimed to have coordinated his
concept with PM Olmert, it is not clear to us that Olmert,
who is traveling, is fully on board. We agree with Peres,
however, that Barak's support is absolutely essential to
reaching agreement on the industrial parks. We request
guidance on how to respond to Peres' initiative.

********************************************* ********************
Visit Embassy Tel Aviv's Classified Website:
http://www.state.sgov.gov/p/nea/telaviv

You can also access this site through the State Department's
Classified SIPRNET website.
********************************************* ********************
JONES