NETANYAHU'S "BAR ILAN ADDRESS" REFLECTS EMERGING

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 001295

SIPDIS

E.O. 12958: DECL: 06/15/2019
TAGS: PREL PGOV KWBG IS
SUBJECT: NETANYAHU'S "BAR ILAN ADDRESS" REFLECTS EMERGING
ISRAELI CONSENSUS

REF: OPEN SOURCE CENTER FEA20090614862663

Classified By: Ambassador James B. Cunningham, Reason 1.4 (b) (d)


1. (C) Summary. PM Netanyahu's June 14 speech was a
balancing act to deal with widely-perceived U.S. pressure
without causing the collapse of his coalition. By announcing
his acceptance of a demilitarized Palestinian state beside
Israel, Netanyahu moved to the center and embraced positions
supported by a large majority of Israelis. Netanyahu also
stressed the importance of Palestinian acknowledgement of
Israel as the "nation-state of the Jewish people." He said
Jerusalem should remain Israel's united capital and stuck to
familiar ground on settlements, saying his government would
not establish new settlements or confiscate Palestinian land,
but also would not prevent settlers from leading "normal
lives." Netanyahu urged the Palestinian Authority to resume
negotiations immediately and without preconditions. He
called for Gulf Arab investors to contribute to the
development of the West Bank, while expressing understanding
that economic development is not a substitute for a political
process. Perhaps most surprisingly for those who know
Netanyahu, he articulated the need for ISRAEL to recognize
Palestinian rights. National Security Adviser Arad told the
Ambassador that the Prime Minister's Office was pleased with
the White House statement, but they have received mixed
reactions from Europeans and hope the harsh response from
some Palestinians and Arabs will fade. Some right wing
members of the coalition, meanwhile, are pleased by
Palestinian rejection of Netanyahu's speech since they hope
the Palestinian posture will block the resumption of
negotiations and shift the diplomatic burden to the
Palestinians. Opposition leader Livni is expected to comment
later today, but she has already indicated that she saw the
speech as a step in the right direction. Netanyahu will
continue his efforts to bring Livni's Kadima Party into his
coalition. End Summary.


2. (SBU) Prime Minister Binyamin Netanyahu attempted a
difficult balancing act in his speech delivered the evening
of June 14: to deal with widely perceived U.S. pressure,
while finding a way to move that would preserve his
coalition. The choice of setting -- the Begin-Sadat research
center at Israel's only Orthodox university, Bar Ilan -- was
symbolically laden, both in terms of the association with
Menachem Begin, Netanyahu's original political mentor, and
the outsized representation of the religious Zionist movement
in the audience. After a weekend in which journalistic
insiders claimed to know that Netanyahu's speech would seek
to shore up his right flank by rejecting U.S. pressure to
accept the two-state solution and freeze settlements,
Netanyahu instead moved himself to the center of an emerging
Israeli consensus by announcing his acceptance of a
"demilitarized Palestinian state alongside a Jewish state of
Israel." As Ha'aretz commentator Ari Shavit wrote June 15,
Netanyahu's newly stated position could easily have been
articulated by Ehud Barak or Tzipi Livni. Shavit noted that
Netanyahu, once known as a partisan player of Israeli wedge
politics, is emerging as a "uniter of Israel." In the
estimation of Shavit, as well as veteran commentator Nahum
Barnea, perhaps seventy percent of Israelis accept the need
for ISRAEL to support a two-state solution, but also endorse
Netanyahu's insistence on Palestinian recognition of Israel's
Jewish identity and an outcome of negotiations which ensures
Israel's security and precludes the establishment of a second
Hamas-dominated state in the West Bank.


3. (SBU) In addition to raising demilitarization and a
series of related security limitations on a Palestinian
state, Netanyahu criticized "Palestinian moderates" for
refusing to acknowledge ISRAEL as the "nation-state of the
Jewish people," and insisted that the Israeli-Palestinian
conflict has persisted since Oslo due to Arab rejection of a
Jewish state within any borders. He said the Palestinian
refugee issue must be settled outside of Israel's borders,
and that it can be. He repeated his standing position that
Jerusalem remain the "united capital of Israel," and that the
Palestinian state's borders will be determined in final
status negotiations. On settlements, Netanyahu stuck to
familiar ground, stating that his government would not
establish any new settlements or confiscate any Palestinian
land, while asserting his support for the right of settlers
to live "normal lives," a short-hand for allowing them to
build within existing settlements to address "natural growth."


4. (SBU) Despite these hard-line points, familiar to anyone
who has listened to Netanyahu recently, there were new
elements intended to reach out to the U.S. and the Arab
states. He called for the immediate resumption of
negotiations with the Palestinian Authority without
preconditions; offered to meet Arab leaders anywhere,

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including Damascus, Riyadh, Beirut or Jerusalem; praised the
creativity of Gulf Arab investors and invited them to
contribute to large-scale water, energy and tourism projects
in the West Bank; and stressed that his understanding that
Palestinian economic development is not a substitute for
political negotiations. Perhaps most surprisingly for those
who know him, Netanyahu referred to Israel's need to
recognize Palestinian rights, saying, "So far I have spoken
about the need for Palestinians to recognize our rights. In
a moment, I will speak openly about our need to recognize
their rights." In the context of discussing the Jewish
historical claim to the Land of Israel, Netanyahu mentioned
the Palestinian presence in the Holy Land and noted that in
his vision of peace "two peoples live freely, side by side,
in amity and mutual respect." The tone of this passage is
much closer to the rhetoric of the Israeli left than the
right wing and must have been particularly jarring to some of
the Bar Ilan audience.


5. (C) National Security Adviser Arad told the Ambassador
this morning that the Prime Minister's office was pleased by
the White House statement, which featured prominently in
Israeli media coverage of the speech. Arad said they have
had mixed reactions from the Europeans, and hoped that the
harsh rhetoric from some Arabs and Palestinians would fade.
Arad will be in Cairo June 16 to consult with Omar Soliman.
He agreed with the Ambassador that there is still much to be
done.


6. (C) Some on the right wing of the coalition are pleased
with the sharply negative comments by Palestinian Authority
officials, including Saeb Erekat, since they hope PA
rejection of Netanyahu will block negotiations and shift some
of the diplomatic burden of proof onto the Palestinians. So
far, key right wing members of Likud have commented
cautiously. While there is no sign of revolt in Likud's
ranks, some Likud MK's are talking about how to prevent the
Prime Minister from implementing his policy. Opposition
leader Livni is expected to comment on the speech this
afternoon, and has already indicated that she felt it was a
step in the right direction. It is too soon to expect Livni
to join the government, as Netanyahu clearly hopes, but the
two reportedly are in close contact and Netanyahu may step up
efforts to attract right-leaning members of Kadima such as
Shaul Mofaz to break with Livni and join the government.


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CUNNINGHAM