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