LIEBERMAN DISCUSSES TRADE AND IRAN IN MOSCOW

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 003105

SIPDIS

E.O. 12958: DECL: 12/24/2019
TAGS: PGOV PREL RS IS
SUBJECT: LIEBERMAN DISCUSSES TRADE AND IRAN IN MOSCOW

Classified By: Acting Political M/C David Kostelancik for reasons 1.4 (
b) and (d).


1. (C) Summary: In Moscow for the Russia-Israel
Intergovernmental Commission's first session in three years,
FM Lieberman had discussions with Russian counterparts on
economic and trade issues. This meeting is further evidence
that the bilateral relationship continues its upward trend.
Most analysts agree, however, that discussions recently have
focused on the Iranian nuclear issue and Israel's attempts to
pressure Russia on the pending S-300 sale. The tete-a-tete
between FM Lieberman and PM Putin in Moscow shows that the
Russian White House is listening to Israel's concerns. End
Summary.

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Routine Meetings Produce Routine Results
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2. (C) December 4-6, Minister of Foreign Affairs Avigdor
Lieberman led the Israeli delegation to Moscow for a meeting
of the bilateral commission on trade and economic
cooperation. Russia's First Deputy Prime Minster Viktor
Zubkov headed the Russian side. Israeli Embassy officials
were careful to note that Lieberman's visit was not as
Foreign Minister but rather in his capacity as Co-Chair of
the commission. According to Israeli embassy contacts,
discussion topics included civil aviation, pensions, and
potential cooperation in agriculture and nanotechnology.
Additionally, Zubkov ordered the Russian side to resolve
difficulties in investment protection within two months.
While no formal agreements were reached, both sides confirmed
their intention to pursue joint activity in these areas and
work to overcome obstacles to economic trade and cooperation.
There was no resolution on Israel's request to open
consulates in St. Petersburg and Novosibirsk. Israeli
embassy staff claimed Lieberman did not have official
political discussions with government officials, although he
did have a one-on-one meeting with PM Putin. While in
Moscow, Lieberman also met with leaders of Russia's Jewish
community and private economic and business officials.
Israelis in Moscow stated that the bilateral relationship
seemed to be improving, especially in light of Russia's
continuing delay in completing the contracted S-300 sale to
Iran.


3. (C) Alexander Rudakov, Senior Counselor on the Israel
Desk of the MFA's Department of the Middle East and North
Africa, confirmed that only protocol agreements were signed
during the commission's meetings and no concrete plans were
established. PM Putin accepted Lieberman's invitation to
visit Israel in 2010, possibly during the next commission
meeting in April. Ultimately, Rudakov said it would be hard
to say Israeli-Russian relations were improving since there
were few bilateral problems.

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But Arms Sales Remain a Touchy Subject
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4. (C) Rudakov did agree, however, that arms sales remained
a difficult issue. He said that Russia had already signed a
contract with Iran (for the S300s) and could not violate it,
only delay it. On the other hand, he said that, while Israel
claimed not to be selling arms to Georgia, Russia had both
contracts and proof that the transactions were taking place.
"It is a matter of intentions versus actions. We have only
intentions on our side while on the Israeli side you see
actions."

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Private Conversation with Putin Focused on Iran
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5. (C) Evegeny Satonovskiy, President of the Institute of
Middle Eastern Studies in Moscow, said that Lieberman's visit
was a routine meeting of the bilateral commission with no
practical results. The most interesting aspect was
Lieberman's conversation with Putin. Satonovskiy, who
himself had an hour-long closed-door session with Lieberman
after the Putin meeting, said that the discussion with Putin
centered on the Iranian nuclear program. He claimed that
Russian leaders, especially military leaders, recognized the
military goals of Iran's program and, behind closed doors,
did not deny its intentions. In spite of this, Russia treats
Iran carefully and wants to be as constructive as possible
because it is difficult to "have a hooligan as a neighbor."
The main reason for treating Iran with kid gloves is the
potential for escalating conflict over oil in the Caspian Sea
region, although Russia also knows an Iran with nuclear
weapons would be destabilizing to the region.

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6. (C) According to Satonovskiy, Lieberman communicated
Israel's uncertainty about how far the Iranian nuclear
program had progressed. Satonovskiy indicated that many
Israelis he had talked to believed Iran's program was fairly
close to achieving the technical capability to produce a
nuclear weapon and that PM Netanyahu had agreed to a 10-month
moratorium on settlement construction in the West Bank only
to buy time with which to focus on the Iran problem. Middle
East peace, he claimed, was much less critical for Israel now
than resolution of the Iranian nuclear issue.
Rubin