YESHA COUNCIL DIRECTOR-GENERAL REJECTS U.S. CALL

C O N F I D E N T I A L JERUSALEM 001270

SIPDIS

NEA FOR FRONT OFFICE AND IPA; NSC FOR SHAPIRO/KUMAR; JOINT
STAFF FOR LTGEN SELVA

E.O. 12958: DECL: 07/23/2019
TAGS: PREL PGOV KWBG KPAL IS
SUBJECT: YESHA COUNCIL DIRECTOR-GENERAL REJECTS U.S. CALL
FOR SETTLEMENT FREEZE

Classified By: Consul General Jake Walles, for Reasons 1.4 (b) and (d)


1. (C) Summary. It will be "impossible" for the USG and
Israel to agree on settlements without accommodating natural
growth, according to YESHA Council Director-General Pinchas
Wallerstein. A freeze on settlement construction would have
the greatest impact on the settlement blocs, which account
for 85% to 90% of current West Bank settlement construction,
Wallerstein said. He rejected the notion that continued
construction in the settlements is an obstacle to peace, and
refused to speculate on the fate of settlements that end up
outside Israel's final borders. End Summary.


No Agreement Without Accommodating
Natural Growth
--------------


2. (C) YESHA Council Director-General Pinchas Wallerstein
told PolOff during a July 20 meeting that, unless the USG
agrees to accommodate natural growth, it will be "impossible"
for it to reach agreement with the GOI on settlements. The
YESHA Council is actively lobbying the GOI on settlement
construction, Wallerstein said. In his opinion, "at a
minimum," construction must be allowed in the settlement
blocs, individuals must be allowed to build homes for
themselves and their families using their own money, and
construction must be allowed to continue in settlements where
the GOI has already invested in infrastructure for new
neighborhoods.


Settlement Blocs Will "Bear the
Brunt" of Construction Freeze
--------------


3. (C) Wallerstein complained that the U.S. call for a
complete freeze on settlement construction disproportionately
"punishes" the settlement blocs, which would "bear the brunt"
of a construction freeze. Some 85% to 90% of construction is
taking place in the blocs, Wallerstein said, which are also
the areas with the highest growth rates and highest demand
for new housing. (Note: Wallerstein's claim that
construction in the settlement blocs accounts for the
majority of West Bank settlement construction roughly matches
ConGen's assessment, based on numerous visits to settlement
construction sites in June and July. End note.) Wallerstein
opined that U.S. pressure for a complete halt to settlement
construction has unified all sectors of Israeli society
against the United States.


Settlements are not the Obstacle to Peace
--------------


4. (C) Wallerstein asked why the USG is focused on stopping
settlement construction, adding, "clearly, settlements are
not an obstacle to peace. Olmert offered the Arabs 97% of
the West Bank, and they rejected the offer." Wallerstein
continued, "this proves that they are not interested in a
peace agreement." Wallerstein said that he "can't even
conceptualize a discussion of expelling Jews from their
land." He added that it is impossible to entertain the idea
of an agreement that is conditional on evacuating settlers
from their current homes.


Wallerstein to Join the Government?
--------------


5. (C) Asked about recent press reports that he had been
tapped to replace Uzi Keren as the Prime Minister's advisor
on settlement affairs, Wallerstein confirmed that the vetting
process is underway. As for when an official offer might be
extended, Wallerstein shrugged and said "I haven't gotten a
call from Bibi yet."
WALLES