ISRAEL MEDIA REACTION

UNCLAS TEL AVIV 000629 SIPDIS STATE FOR NEA, NEA/IPA, NEA/PPD WHITE HOUSE FOR PRESS OFFICE, SIT ROOM NSC FOR NEA STAFF SECDEF WASHDC FOR USDP/ASD-PA/ASD-ISA HQ USAF FOR XOXX DA WASHDC FOR SASA JOINT STAFF WASHDC FOR PA CDR USCENTCOM MACDILL AFB FL FOR POLAD/USIA ADVISOR COMSOCEUR VAIHINGEN GE FOR PAO/POLAD COMSIXTHFLT FOR 019 JERUSALEM ALSO ICD LONDON ALSO FOR HKANONA AND POL PARIS ALSO FOR POL ROME FOR MFO SIPDIS E.O. 12958: N/A TAGS: OPRC KMDR IS SUBJECT: ISRAEL MEDIA REACTION -------------- SUBJECTS COVERED IN THIS REPORT: -------------- ¶1. Global Stock Market ¶2. U.S.-Israel Relations ¶3. Iran -------------- Key stories in the media: -------------- All media, except The Jerusalem Post, led with the financial crisis on Wall Street and all capital markets, including Tel Aviv Stock Exchange, which dropped by 4% on Monday and by 9% over the past three days. Property stocks and banks have been hit the hardest with the biggest loser being Bank Hapoalim (it had heavy exposure to the U.S. subprime market) which is down 35% this year. Banners in Yediot: "Pressure"; Maariv Collapse; and Israel Hayom: Tsunami on the Markets." Ha'aretz reported that the Israeli market fell mostly out of fear and was exacerbated by increasing numbers of mutual fund redemption requests. However, despite the weak dollar hurting exporters, high commodity prices and the sluggish real estate market, the Israeli economy is still expected to grow 3.5% this year. (This is down from previous estimates of around 5.%.) Ha'aretz reported that last night Israel and the PA officially renewed negotiations on core issues after two weeks of suspension following the Gaza flare up. Monday's meeting was carried out under protest from the Palestinians over Israeli construction in Givat Ze'ev and East Jerusalem. Leading media quoted Qurei as saying: "We completely reject the building, not only of one room, but of even one brick being laid in any of the Israeli settlements in the West Bank and East Jerusalem." Ha'aretz quoted FM Livni as saying, as the two sides prepared on Monday to resume the negotiations, that terror could not be used as an excuse to suspend talks. The Jerusalem Post reported that for the first time since 1998, the IDF Civil Administration hosted a one-day symposium with its Palestinian counterparts, bringing together all of the officials that coordinate civilian and defense issues between Israel and the PA. Ha'aretz quoted PM Ehud Olmert as saying on Monday, during a press conference with visiting German Chancellor Angela Merkel, that "we have not stopped, we are not stopping and we will not stop the negotiations, until we reach the essential results that we believe in." Olmert said Israel "has no intention of evading or denying its obligations but our primary obligation, a prerequisite condition for progress, is an end to terrorism. It is impossible to compare it to any of the other commitments on the Roadmap." Regarding construction in Jerusalem, Ha'aretz and The Jerusalem Post quoted Olmert as saying that "everyone knows that there is no chance that Israel will give up Har Homa, which is part of Jerusalem. The Palestinians know this, and therefore there is no significance to one more or less buildings. Everything else is open to negotiation." Israel Radio reported that Egyptian Intelligence Minister Omar Suleiman has postponed his visit to Israel, citing Israel's "violation of the calm" when it assassinated four Islamic Jihad men in Bethlehem. The Jerusalem Post and Ha'aretz reported that the Shin Bet is planning an online recruitment campaign, complete with blogs, at the Web address http://www.shabak.gov.il/. The Jerusalem Post reported that the Palestinian Authority is planning to mark Israel's 60th anniversary by calling on all Palestinians living abroad to converge on Israel by land, sea, and air. The idea of unilaterally implementing U.N. resolution 194 was drawn up by Ziad Abu Ein, a senior member of Fatah, and is calculated to embarrass Israel during 60th anniversary celebrations by highlighting the issue of "right of return". The plan calls for refugees to peacefully march to Israel's borders with suitcases, tents and UN flags with the stated goal of settling in their former villages and calls on Israelis to "live together with them in the land of peace." Ha'aretz reported that some people present at a meeting between visiting German Chancellor Merkel and PM Ehud Olmert describer her remarks about the Iranian nuclear program as being "tough and decisive." All media reported that on Monday a joint meeting took place between Israeli and German ministers. Over the past few days major media reported that Syria may have sent peace feelers to Israel. Some media said that Turkey acted as an intermediary. Senator John McCain, the Republican candidate for president, who is due to arrive in Israel today, was quoted as saying in an interview with Yediot that he is concerned about the possibility of missiles being launched at Israel, and that he wants to explore how it is possible to help in the Israeli-Palestinian tension. All media reported that the elections for chairmanship of Meretz will take place today. The three candidates are Knesset members Ran Cohen, Zahava Gal-On, and Haim Oron, who is considered to have the highest chances of winning. If Oron does win, he is expected to keep his party in the opposition despite hints in recent months from Olmert's associates that if the governing coalition continues to fracture over negotiations with the PA, that Meretz may step in as a partner. The party which reached its peak in 1992 with 12 Knesset seats has only five in the current parliament. Israel Radio reported that this morning the head of an ultra-yeshiva was stabbed and injured at Jerusalem's Damascus Gate. Ha'aretz reported that on Monday jailed Fatah/Tanzim leader Marwan Barghouti announced that he was considering running for PA president. The media reported that senior police officers, both active and retired, are highly critical of the Jerusalem police's conduct on Sunday night when they failed to prevent Jewish rioters from pelting homes and cars in the East Jerusalem village of the Mercaz Harav terrorist. The police opted to let the Jewish demonstrators vent their anger after the terrorist attack at the yeshiva on March 6, in which eight youths and young men were murdered by a gunman from the village of Jebel Mukaber. Makor Rishon-Hatzofe reported that some Kadima Knesset members have threatened to establish a commission of inquiry if PM Olmert does not finally resolve the claims made by the evacuees from Gaza's Gush Katif. Makor Rishon-Hatzofe cited the results of a study conducted by the IDFQs Behavioral Sciences Department, according to which the army units in which grave defects were found in the security of equipment and stores were the same units against which complaints were submitted by Palestinians. Ha'aretz reported that important Israeli businessmen Yitzhak Tshuva and Nochi Dankner may delay their planned $7-8 billion investment in Las Vegas due to the financial crisis. Ha'aretz cited CNN Money as saying that that Delek U.S., a subsidiary of the Israeli energy company Delek, is among three top contenders to acquire the refineries from energy giant Valero Energy Corp. The other bidders are Petroplus and Petroleo Brasileiro (Petrobras). Leading media reported that Israeli VIPs flew to Namibia to attend the bar-mitzvah of the son of Kobi Alexander, the founder and former CEO of Comverse Technology, who is sought by U.S. authorities. Maariv published the results of a TNS/Teleseker poll: Q: If general elections were to be held today and the following parties were running, for which party would you vote? Results in Knesset seats. (In parentheses, results from a previous poll conducted on January 31 and current Knesset seats): Likud: 30 (30; current strength: 12); Labor Party: 19 (21; current strength: 19); Kadima: 15 (11; current strength: 29: Yisrael Beiteinu: 12 (10; current strength: 11); Shas: 10 (10; current strength: 12); Arab parties: 10 (9; current strength: 10); National Union Party and National-Religious Party: 8 (9; current strength: 9); Meretz: 6 (6; current strength: 5); United Torah Judaism: 5 (5; current strength: 6); New party headed by Arkady Gaidamak: 5 (7; current strength: 0); Pensioners Party: 0 (0; current strength: 7). Q: To what extent, in your opinion, did the affair of Binyamin NetanyahuQs trip and expenses in London and the publicity damage NetanyahuQs public image? Damaged very much/rather a lot: 60.2%; did not damage too much/ caused no damage: 35.6% were undecided. The Jerusalem Post and Israel Radio reported that a Palestinian public opinion poll published on Monday showed that Hamas PM Ismail Haniyeh would defeat PA President Mahmoud Abbas if presidential elections were held these days in the West Bank and Gaza Strip. The poll also showed that Haniyeh would defeat Marwan Barghouti if the latter were to run in a presidential election. The Jerusalem Post noted that Barghouti is altogether more popular than Abbas among the Palestinians. -------------- ¶1. Global Stock Market: -------------- Summary: -------------- Chief Economic Editor Sever Plotker opined in the mass-circulation, pluralist Yediot Aharonot: "If [the captains of the U.S. economy] can lead the shipwrecked boat of the American financial market to safe shores, we're all saved. If not, may God have pity upon us." Block Quotes: -------------- "A Beacon of Light on a Dark Day" Chief Economic Editor Sever Plotker opined in the mass-circulation, pluralist Yediot Aharonot (3/18): "If [the captains of the U.S. economy] can lead the shipwrecked boat of the American financial market to safe shores, we're all saved. If not, may God have pity upon us. Until the end of last week, their record in handling the crisis was pretty much a failure. Hundreds of billions of dollars were injected into the markets to provide the oxygen needed for their normal performance. The fever has not vanished; the plague has not been eradicated.... What about Israel? Our stock exchange is behaving exactly like its sisters in the world.... At last one can sense that someone is in charge of the world economy.... We should not be deluded in our hopes." -------------- ¶2. US.-Israel Relations: -------------- Summary: -------------- Defense commentator Amir Oren wrote in the independent, left-leaning Ha'aretz: "As far as Israel is concerned, and in view of the candidates' current positions -- no one is better than McCain." Former ambassador to France and the UN Yehuda Lancry wrote in Ha'aretz: "The [reported] reservations of [diplomatic] sources in Jerusalem [about U.S. ambassador-designate to Israel James Cunningham] are curious and even obnoxious." Block Quotes: -------------- ¶I. "The Best of All Possible Presidents" Defense commentator Amir Oren wrote in the independent, left-leaning Ha'aretz (3/18): "As far as Israel is concerned, and in view of the candidates' current positions -- no one is better than McCain. The Republican candidate is clearly more qualified than his rivals to be commander in chief -- in theory of the American armed forces only, but in practice also of the international alliance against radical states and terrorist organizations. McCain has a deep understanding of the region's strategic problems and publicly supports a nuclear deterrent for Israel. McCain visited Israel many times as part of Congressional delegations.... While Obama and Hillary kept silent, and years before they entered politics, McCain dared speak out -- not only against an Iranian nuclear capability, but also in favor of an Israeli one. In essence, McCain seeks both to prevent nuclear proliferation and grant Israel an exemption from this regime; he calls it a 'special status'.... McCain does not require an explanation of the linkage between progress on the diplomatic track, which involves withdrawal from the territories, and ensuring Israel's strategic strength." II. "An Unwelcome Welcome" Former ambassador to France and the UN Yehuda Lancry wrote in Ha'aretz (3/18): "Maariv recently wrote about 'disappointment in the Foreign Ministry' concerning the new U.S. ambassador to Israel, James Cunningham, whose appointment is described by Israeli 'diplomatic sources' as a weak and strange choice of a 'diplomatic bureaucrat' who lacks understanding of, and diplomatic background in, the Middle East. Both in form and essence, the reservations of the sources in Jerusalem are curious and even obnoxious.... During my service in the United Nations, I knew Cunningham in his capacity both as deputy ambassador and as the acting ambassador of the U.S. delegation to the UN. He showed himself to be an excellent, professional and decisive diplomat, very much exposed to the complexities of the Middle East. The UN delegation heads, along with the representatives of the permanent members of the Security Council, treated him with respect. The second Intifada had placed Israel in some difficult situations before the Security Council. Cunningham made considerable efforts to follow his superiors' instructions and bail out their friend, Israel, either by using the U.S. veto or making sure Israel escaped with minimal damage. In extreme situations, when in its fight against terror Israel extracted an unusually high cost of Palestinian lives, Cunningham might well have suggested during closed talks that Israel restrain itself when exercising force. But he scarcely did so, and he should not be viewed as holding strict views on Israel." -------------- ¶3. Iran: -------------- Summary: -------------- The conservative, independent Jerusalem Post editorialized: "The great challenge facing any presidential candidate is to show how he or she will galvanize Western strength and unity to achieve victory in the war against totalitarian Islamism." Block Quotes: -------------- "McCain's Challenge" The conservative, independent Jerusalem Post editorialized (3/18): "By saying, as early as January 2006, 'There's only one thing worse than the United States exercising the military option; that is a nuclear-armed Iran,' McCain has taken the critical step of asserting that Iran must be stopped at almost any cost. But he has not shown how he intends to bring along the 'hearts and minds' of other democracies into such an effort. This is something that McCain can and should begin to do in the context of his visits to London and Paris. Although these capitals are the strongest on the Iranian issue, they would be the right place for McCain to call for a completely united front between Europe and the U.S. -- by Europe joining the American trade embargo, not by the U.S. joining Europe's overly head in the sand mindset. The stark truth is that America is not currently winning against Iran, and cannot win unless there is more Western unity behind an effective policy, rather than behind empty rhetoric and weak sanctions. The great challenge facing any presidential candidate is to show how he or she will galvanize Western strength and unity to achieve victory in the war against totalitarian Islamism." JONES