GUIDANCE AND ACTION REQUEST: ISRAEL'S SETTLEMENT

UNCLAS SECTION 01 OF 04 STATE 122214 SENSITIVE SIPDIS E.O. 12958: N/A TAGS: IS KPAL PREL KWBG SUBJECT: GUIDANCE AND ACTION REQUEST: ISRAEL'S SETTLEMENT MORATORIUM ¶1. (U) This is an action request. See paragraphs 3 and 4. ¶2. (U) On November 25, the Government of Israel (GOI) announced a 10-month moratorium on new settlement construction and new approvals in the West Bank. Following the announcement by the GOI, Secretary Clinton released a written statement and Special Envoy (S/E) for Middle East Peace George Mitchell gave a public statement and press briefing. Transcripts of both are available on the state department website and are in both Hebrew and Arabic. ¶3. (SBU) Post should engage with the host government on the moratorium and stress the U.S. commitment to the resumption of negotiations that lead to the two-state solution and report back host government's reaction front channel by December 3, 2009. ¶4. (SBU) Talking points: General: - We believe that a two-state solution to the conflict is the best way to realize the shared goal of Israelis and Palestinians to live in peace and security. - The President, Secretary, and S/E Mitchell know that achieving this goal will be difficult, but also have said that they will not waiver in their persistent pursuit of a comprehensive peace in the Middle East. - For that reason, the President has dedicated himself and his Administration to the resumption of Israeli-Palestinian negotiations and to the creation of an atmosphere that maximizes the prospects for success. - It is our hope to resume negotiations without preconditions as soon as possible. The United States will play an active role in those negotiations once they resume. Israel's West Bank Moratorium: - The moratorium is a unilateral decision by the Government of Israel. - To be clear: this is neither an agreement between the U.S. and Israel on settlements, nor is it an agreement between Israel and the Palestinians. - For the first time ever, an Israeli government will stop housing approvals and all new construction of housing units and related infrastructure in West Bank settlements. The moratorium includes construction on projects that have full approvals and are not yet started. - This is a positive development. - The Israelis have said that the only exception will be a small number of public buildings (28 total),such as schools and synagogues, within existing settlements. - Under the moratorium, those buildings already under construction will be completed (roughly 700 buildings or 2500 units). But the number of buildings under construction will decline, since as each new building is completed, there will not be a new building started. - So implementation of the moratorium could mean much less settlement construction than would occur if there is no moratorium. - While this announcement falls short of a full freeze, we believe the steps announced by the Prime Minister are STATE 00122214 002 OF 004 significant and could have substantial impact on the ground. - United States policy on settlements remains unaffected and unchanged. As the President has said: "America does not accept the legitimacy of continued Israeli settlements." - To be clear, the steps we have suggested to all parties - Israel, the Palestinians, and the Arab states - to improve the atmosphere for negotiations are not ends in themselves and they certainly are not preconditions to negotiations. - But they can make a valuable contribution toward achieving our goal of successful negotiations that result in a two-state solution. - That's why we've urged the Palestinians to expand and improve their security efforts and to take strong and meaningful action on incitement. It's why we've urged the Arab states to take steps toward normalization of relations with Israel. And it's why we've urged Israel to stop settlement activity. - (IF ASKED) According to data provided by the GOI, there are an estimated 700 buildings currently under construction (this translates to roughly 2500 housing units. This is less than the average number of units under construction over the past 10 years. In absolute numbers, the number of housing units under construction is the lowest it has been since 1995.) Jerusalem: - We recognize that the Palestinians and other Arab governments are concerned because Israel's moratorium permits the completion of buildings already started and limits the effect of the moratorium to the West Bank. - We share those concerns. - As to Jerusalem, United States policy remains unaffected and unchanged: As has been stated by every previous administration which addressed this issue, the status of Jerusalem, and all other permanent status issues, must be resolved by the parties through negotiations. - The United States also disagrees with some Israeli actions in Jerusalem affecting Palestinians in areas such as housing, including the continuing pattern of evictions and demolitions of Palestinian homes. - The United States has not accepted and disagrees with any unilateral action by either party which could have the effect of pre-empting negotiations. Re-launching negotiations: - It is our goal to re-launch negotiations between the parties as soon as possible. - We believe that further delay is not in the interests of Palestinians, of Israelis, or of the U.S. There never has been and there likely will never be a perfect time. - We recognize of course that there are problems and difficulties. But waiting will only make things worse. So our goal is to enter negotiations as soon as possible. - As the Secretary said: "We believe that through good faith negotiations the parties can mutually agree on an outcome which ends the conflict and reconciles the Palestinian goal of an independent and viable state based on the 1967 lines, with agreed swaps, and the Israeli goal of a Jewish state with secure and recognized borders that reflect subsequent developments and meet Israeli security requirements." - It is important to emphasize that in her remarks, the Secretary said that both sides should be able to reconcile their goals, and specifically referred to the "Palestinian goal of an independent and viable state based on the 1967 STATE 00122214 003 OF 004 lines, with agreed swaps." - Her statement of U.S. policy on negotiations goes further than the President's UNGA speech. It also goes further in referencing the 1967 line as part of U.S. policy than any pervious administration has officially done. This is significant. - The U.S. will play an active role in those negotiations and we envision them to be time limited. Supporting the PA (for all action addressees except Abu Dhabi): - We must show tangible support for Abu Mazen and the Palestinian Authority now; their budget is facing a critical point. - The PA,s need for immediate budgetary assistance is acute. The PA will not be able to meet the education, health, and security needs of its people ) let alone fund its plan for Gaza recovery or its two-year plan to build the institutions of statehood ) without your assistance. - Sustaining the viability of the PA now is central to keeping us on the path toward the two-state goal. - We cannot allow controversies and uncertainties about Abbas, leadership, or other political issues of the day to move us from that objective. And President Abbas and the PA need your support now to get through this period. - The U.S. already transferred $200 million to the PA in July, part of $350 million in budget support we provided the PA during our last fiscal year. We are also looking for additional ways to get them even more help now. Saudi Arabia also transferred $200 million to the PA in August. Even with this level of assistance, we understand that the PA faces up to a $177 million end-of-year deficit. We need you to come forward with assistance now to ensure that the PA remains a strong partner for peace. - If we are serious about peace, we cannot let the institutions of responsible Palestinian government fail. The PA, led by President Abbas and Prime Minister Salam Fayyad, is the most transparent and effective government that Palestinians have ever seen. Donor support is helping to drive reforms that are translating into a better quality of life for Palestinians now, and which will make donor support less needed in the future. - We are fully confident in the measures that the PA has put in place to ensure financial accountability and transparency. We would not have transferred one half billion dollars over the past two years in U.S. assistance to the PA as budget support if we had doubts. - In Gaza, the PA effectively is a lifeline to more than half a million people (PA employees and their families) ) keeping them out of absolute misery by making sure that salaries and social welfare payments are paid on time. Hamas and other extremist groups are the immediate beneficiaries if the PA cannot meet the needs of its people. For Egypt, Jordan, Saudi Arabia, UAE, only: - We need your help in urging the Palestinians to resume negotiations as soon as possible. These steps by Israel are significant, even though they fall short of a full freeze. - We understand that you are concerned about the moratorium, especially the fact that it excludes Jerusalem. - S/E Mitchell mentioned our own concerns about Jerusalem - including about demolitions and evictions - in his remarks after the Israeli announcement of the moratorium. - Our policy has not changed and Jerusalem will be an issue on the table for negotiations. - We believe that the best way to resolve the issue of STATE 00122214 004 OF 004 Jerusalem and to have more leverage on divisive actions is to re-launch negotiations. - Secretary Clinton,s statement of U.S. policy on negotiations goes further than the President's UNGA speech. It also goes further in referencing the 1967 line as part of U.S. policy than any pervious administration has officially done. - This is noteworthy and significant; it is what the Palestinians said was needed in order to resume negotiations. - Now we need your help to bring them to the table and to support them in this process. - Let me assure you that the U.S. will play an active role in the negotiations and help move the Israelis, but your support of the PA and the resumption of negotiations is critical. ¶5. (SBU) Please contact Alon Sachar for questions about Israel's settlement moratorium (office: 202-647-2267, blackberry: 202-664-7214). Please email Alon Sachar (SacharAX@state.sgov.gov) and Payton Knopf (KnopfPL@state.sgov.gov) with post's reply cables. CLINTON