SPECIAL ISRAEL MEDIA REACTION

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SUBJECT: SPECIAL ISRAEL MEDIA REACTION

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SUBJECTS COVERED IN THIS REPORT:
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President Bush to Israel, West Bank, January 9-11, 2008

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Key stories in the media:
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All media covered the second day of President Bush's visit to Israel
and the PA (not a lead story in Yediot and Maariv). This morning
the President visited Yad Vashem. He will tour two Christian sites
on the shores of the Lake of Galilee (the Mount of Beatitudes and
Capharnaum) and then fly to Kuwait.

Ha'aretz bannered President Bush's statement summing up his visit:
"There should be an end to the occupation that began in 1967," Bush
said, presenting an outline for solving most of the core issues,
which would include a compensation mechanism for Palestinian
refugees, a contiguous Palestinian state, and secure and defensible
borders for Israel. Ha'aretz quoted an Israeli official as saying
on Thursday that Israel sees President Bush's push for reaching a
peace treaty with the Palestinians within a year as a positive step.
"We see the Bush remarks as the basis of moving forward. We accept
them. We see them as consistent with understandings with the
Americans and as a positive foundation for moving forward," the
official was quoted as saying, speaking on condition of anonymity.
Ha'aretz noted that the Israeli response was the first to Bush's
call for an end to what he said was the 40-year "occupation" of the
West Bank, and for signing a peace treaty before he leaves office in
January 2009. Ha'aretz said that Bush's comments marked a hardening
of his tone toward Israel and could put Olmert at odds with
right-wing members of his coalition who oppose sweeping peace
concessions.

The Jerusalem Post stressed President Bush's wish to see a peace
treaty signed by the time he leaves office. The newspaper
emphasized the President's complaint that a Palestinian state is
"long overdue." (Various media raised the option of a "shelf
state.") The Jerusalem Post quoted Israeli diplomatic officials as
saying that certain elements in the statement the President read to
U.S. reporters in the King David Hotel on Thursday afternoon were
welcome in Jerusalem, while others were deemed more "problematic."
Among the welcome elements were what was deemed Bush's clear
rejection of the Palestinian claim of a "right of return" to Israel,
by saying that a future Palestinian state would be a homeland for
the Palestinians, just as Israel is a homeland for the Jews.
Jerusalem was also pleased that Bush essentially reiterated what was
written in his 2004 letter to Ariel Sharon -- namely that final
borders will entail mutually agreed adjustments, language that
Israel interprets to mean a U.S. recognition that Israel can hold
onto the large settlement blocs in a future agreement. Likewise,
there was satisfaction that Bush said "security is fundamental," and
that "no agreement and no Palestinian state will be born of terror."
Bush also reaffirmed America's steadfast commitment to Israel's
security. The most problematic aspect had to deal with some of the
language, with eyebrows raised that Bush referred to the
"occupation."

The Jerusalem Post quoted National Security Advisor Stephen Hadley
as saying that Bush would be returning to the region "at least once
and maybe more" before the end of his term to push his program
forward.

The media reported that Bush met with cabinet ministers at a dinner
in his honor hosted by PM Ehud Olmert at his official residence in
Jerusalem. One of the President's messages was about domestic
Israeli politics. According to Ha'aretz, President Bush implored
senior cabinet ministers to work to promote the peace process,
telling them that the current situation cannot continue and efforts
to achieve a peace treaty must be made. "Take care of Olmert, so he
will stay in power," media quoted Bush as saying at the dinner.
"He's a strong leader. Israeli politics is like karate, you never
know when the next chop will come." Ha'aretz quoted PM Olmert as
saying at the dinner that the peace process must go forward. Vice
Premier Haim Ramon agreed with Bush's statement on the necessity of
creating a Palestinian state. "Israel's problem is the occupation,
which jeopardizes [our existence as] a Jewish and democratic state,"
Ramon said. "That's not the Palestinians' problem, that's our
problem." Shas chairman Eli Yishai, the Industry, Trade and
Employment Minister, raised reservations, telling Bush, "I
appreciate your visit and your concern for Israel but we cannot make
peace with half of the Palestinian nation, while Abu Mazen
[Palestinian President Mahmoud Abbas] does not control the Gaza
Strip." Yishai recited several psalms emphasizing the importance of
Jerusalem and said he would not compromise on the unity of the
capital. Acting against the wishes of PM Olmert, Yishai gave Bush a
letter from Shas spiritual leader Rabbi Ovadia Yosef urging the
release of convicted spy Jonathan Pollard, as well as a letter from
Pollard's wife, Esther.

Channel 10-TV's regional correspondent noted last night that the
President's presence and speech in Ramallah were advantageous for
the PA in the short term, but that they would become detrimental to
it in the long term.

Secretary of State Condoleezza Rice was quoted as saying in an

SIPDIS
interview with The Jerusalem Post that QIran is the single greatest
threat to the kind of Middle East we all want to see." In response
to the question, "What is your message to Israel in the event that
it is now preparing to confront that danger alone," the Secretary
was quoted as saying: "Israel is an American ally. The President
has made clear that we have a stake in Israel's security and
defense. This is similar for our Gulf allies with whom we have had
security relations for decades. The U.S. takes those obligations
and responsibilities." In the interview, the Secretary also
reiterated the major points of the United States' Mideast policy.

Ha'aretz and Israel Radio reported that following a debate at the
High Court of Justice on Thursday, Defense Minister Ehud Barak has
given temporary orders to cancel planned cuts in the supply of
industrial-use diesel fuel to the Gaza Strip.

Ha'aretz cited newly declassified U.S. documents showing that the
CIA, backed by bodies including the State Department's Bureau of
Intelligence and Research, determined in August 1974 that Israel had
nuclear "weapons in being, a small number" of which it "produced and
stockpiled."

Leading media reported that President Bush also named Lt. Gen.
William Fraser to monitor the Israeli-Palestinian road map for
peace, the White House said Thursday. Ha'aretz quoted White House
spokesman Gordon Johndroe as saying that Fraser, who is Assistant to
the Chairman of the Joint Chiefs of Staff, will "help monitor road
map commitments.".

Maariv and other media quoted The Washington Post as saying that
Olmert is Bush's "poodle." The Jerusalem Post quoted senior Likud
sources as saying on Thursday that PM Olmert acted like a
"sycophant" by excessively praising President Bush at their joint
press conferences, rather than defending Israel's interests. The
Jerusalem Post cited the dismay of right-wing movements at the low
turnout for anti-Bush rallies.

The media reported that on Thursday cabinet ministers tasked with
laying the groundwork for a prisoner exchange to secure the release
of kidnapped soldier Gilad Shalit met with PM Olmert and presented
him with the list of Palestinian prisoners who could be released --
signaling that negotiations with Hamas may be close to a deal.

Yediot reported that PM Olmert intends to "honor a promise made to
President Bush" by removing an unauthorized outpost -- perhaps
Migron -- before the publication of the final Winograd report on
January 30.

All media reported that Likud Chairman Binyamin Netanyahu told
President Bush on Thursday: "We have no partner. Abu Mazen (Abbas)
is a virtual partner." Yediot reported that the President told the
sons of Ariel Sharon that he longs for the former PM.

Israel Radio reported that the UN Security Council (UNSC) condemned
this week's Katyusha rocket on the Galilee, saying that it breached
UNSC Resolution 1701. The radio said that the Libyan ambassador to
the United Nations, Giadalla Ettalhi, who is the current President
of the UNSC, had to read out the Council's statement, despite his
objection to the decision. In its lead story, Maariv cited the
belief of Hizbullah Secretary-General Hassan Nasrallah that Israel
will soon declare the two IDF soldiers abducted to Lebanon in July
2006 as fatalities. The newspaper quoted a senior Israeli defense
source as saying that Israel does not want to perpetuate their
status as MIAs.

Maariv reported that on Thursday Transportation Minister Shaul Mofaz
launched a campaign in Kadima to replace Olmert.

Former U.S. Ambassador to Israel Daniel Kurtzer was quoted as saying
in an interview with Yediot that the Clinton administration was
greatly to blame for the failure of the Camp David talks. Kurtzer
also criticized later mistakes -- the failure to talk with Iran,
Hamas, and Syria.

Leading media reported that Bank Hapoalim, Israel's largest bank,
will need to write off $350 million on its U.S. credit portfolio --
on top of a previous $90 million -- following the crisis in the U.S.
credit markets.

Maariv printed the results of TNS/Teleseker polls that asked who was
the most worthy and suitable person to replace PM Olmert, were he to
resign: Binyamin Netanyahu: 40.5%; Tzipi Livni: 21.7%; Ehud Barak:
16.4%.

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President Bush to Israel, West Bank, January 9-11, 2008:

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Summary:
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The independent, left-leaning Ha'aretz editorialized: "The President
clearly understands his critical, irreplaceable role in advancing
the peace process.... [The time remaining to him] must not be viewed
as time that is lost from the get-go."

Op-Ed Page Editor Ben-Dror Yemini wrote in the popular, pluralist
Maariv: "Bush entered the White House after the Palestinians
rejected the Clinton plan. So what exactly did people expect him to
offer in order to be more 'balanced'?"

Columnist Calev Ben-David wrote in the conservative, independent
Jerusalem Post: "During [Bush's] time in the White House, though, he
has sometimes confused rhetoric with reality, and overestimated the
power of simply having a vision."

Block Quotes:
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I. "Not a Lost Year"

The independent, left-leaning Ha'aretz editorialized (1/11): "The
experience from the last several years teaches that Olmert and Abbas
need more than goodwill -- they need all the support from the
President of the U.S. that they can muster in order to make
progress. Bush's visit to the region extricated the negotiations
from the mud in which they sank after Annapolis and pushed the
parties into starting talks on the core issues. For these talks to
move forward and turn into an agreement, they will need careful
shepherding by the U.S. It will also be a test for Bush: Will he
make do with pretty pronouncements about a brighter future or will
he play a determined, serious role in making it happen? In
Wednesday's press conference at the Prime Minister's residence Bush
spoke, perhaps slightly in jest, about 'nudging them forward.'
Calling his trip here a 'pretty significant nudge.' The President
clearly understands his critical, irreplaceable role in advancing
the peace process. The year remaining to him in the White House is
the right time to realize that responsibility and to rescue the
two-state solution. It must not be viewed as time that is lost from
the get-go."

II. "The Anti-American Bug"


Op-Ed Page Editor Ben-Dror Yemini wrote in the popular, pluralist
Maariv (1/11): "The Israeli establishment is still pro-American....
But parts of the Right and the Left hurl criticism at Bush.... Bush
entered the White House after the Palestinians rejected the Clinton
plan. So what exactly did people expect him to offer in order to be
more 'balanced'? West Jerusalem, on top of East Jerusalem? The
evacuation of Tel Aviv University to make good on the right of
return to Sheikh Munis [a destroyed Palestinian village on the
university's site]? As is well known, the culture of deceit
presents a totally different picture. That culture has taken over a
significant part of the Arab media and an important one in the
Western media."

III. "Why the Bush Vision of Peace is Still Somewhere over the
Rainbow"

Columnist Calev Ben-David wrote in the conservative, independent
Jerusalem Post (1/11): "Bush has talked plenty about 'vision' during
this visit --- in fact, it's far and away the word he's used the
most.... Unfortunately, the problem with those Palestinians who
oppose a two-state solution isn't that they lack a vision for the
Palestinian state -- it's that they lack a vision for a Jewish state
existing alongside it.... Bush is to be commended for his sincere
belief in the power of a vision of peace, and on his dedication this
week to try to make it happen. During his time in the White House,
though, he has sometimes confused rhetoric with reality, and
overestimated the power of simply having a vision -- such as
'Bringing democracy to the Middle East' -- with the ability to make
it actually happen.... It's nice, and right, to dream, especially of
peace. But as the U.S. President saw this week in Jerusalem,
sometimes the skies here are not blue -- and when you're not in
Kansas anymore, or in the Wonderful Land of Oz, dreams and visions
shouldn't be confused with reality."

JONES