ISRAEL MEDIA REACTION

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SUBJECT: ISRAEL MEDIA REACTION

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SUBJECTS COVERED IN THIS REPORT:
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Mideast

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Key stories in the media:
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The Jerusalem Post and Maariv reported that, amid growing tension
between Jerusalem and Washington, the IDF and Defense Ministry have
held brainstorming sessions to discuss the possibility that the U.S.
would cut military aid to Israel. The Jerusalem Post reported that
last night, IDF officers gathered in Tel Aviv for a discussion on
U.S.-Israel relations, during which they talked about new Pentagon
regulations regarding the way Israel can use the almost $3 billion
in military aid. According to defense officials, the Pentagon
informed the Defense Ministry that the foreign military financing
(FMF) needed to be used strictly for weaponry and defense-related
projects. In past years the Pentagon had made exceptions and
allowed the IDF to purchase nonessential items such as covers for
trucks, uniforms and even food for soldiers. During the discussion,
the officials also discussed the possibility that the US would cut
the FMF due to the political tension between the countries or
because of the global financial crisis. Maariv quoted a senior
Israeli defense source as saying: QThe partnership of interests
between Israel and the U.S. sustains the link [between the
countries] and the mutual pledges. A cut in defense aid would
indeed be a blow in the short term, but, in the long run, we shall
be able to expand income from worldwide cooperation and sales that
are not currently being carried out because of the U.S. The
Americans insist at this time that deals and sales that involved
technologies that were jointly developed by Israel and the U.S harm
interests they were engaged in.

The media emphasized that many members of PM Benjamin NetanyahuQs
governing coalition voted in the Knesset against the land reform
bill desired by the PM -- according to some media, the Qfirst
political crisis of the Netanyahu government.Q Next week Netanyahu
plans to bring another bill to the Knesset for a vote that is no
less important to him -- the so-called Mofaz law. This legislation
would make it much easier to split up Kadima's Knesset faction, but
the bill has also been fiercely opposed by senior Likud members.
The leader of the fight against the Mofaz law is Improvement of
Government Services Minister Michael Eitan (Likud).

HaQaretz cited newswire stories quoting the Institute for National
Security Studies (INSS),a Tel Aviv-based think tank, as saying
yesterday in a report -- QThe 2009 Strategic Assessment for Israel
-- that Netanyahu's recent qualified and conditional commitment to
the establishment of a Palestinian state may not be enough to avert
a clash with Washington, unless it "substantiates its desire to
settle its conflicts with the Arab world with practical measures."
Presenting its annual Israeli strategic survey, the INNS said a
stalemate on the Israeli-Palestinian issue "is the potential for
tensions between the U.S. and Israel." Israel, a summary of the
survey said, had to formulate a strategy for negotiations with the
Palestinians and with Syria and had to establish a "constructive
exchange" with the U.S. on how to deal with Iran's nuclear
ambitions. Possible regional developments, such as the withdrawal
of U.S. forces from Iraq or challenges to moderate Arab regimes,
could force Israel to grapple with new threats and sources of
instability, the institute said. The Jerusalem Post cited the INSS
report as saying that interim solutions are the best bet for
regional stability.

The Jerusalem Post reported that RussiaQs special Middle East envoy
Alexander Saltanov, who is on a regional tour, told the newspaper
yesterday that Russia hopes to begin preparatory talks Qin the next
few monthsQ with hey regional and international players to
determine the parameters of a Middle East peace conference it hopes
to hold in Moscow. The newspaper quoted Saltanov as saying that the
conference Qneeded to be prepared thoroughly, properly, with an
elaborate agenda, with the determination of the participants, and
with at least a prognosis of what the results will be. The daily
recalled that both Israel and the PA recently dropped objections to
the conference, if it is properly planned, and cited speculation
that it might even be a venue for President Obama to put forward a
detailed plan for a regional agreement.

A HaQaretz headline reads: QThe End of Obamania? At Home and
Abroad, the Presidential Magic Begins to Wane.

The Jerusalem Post quoted defense officials as saying yesterday that
United States Air Force Commander Gen. Norton A. Schwartz held talks
in Israel over the past week. SchwartzQs visit came on the heels of
a similar visit IAF Commander Ido Nehushtan made to the U.S. last
month. The newspaper noted that Schwartz is the first Jewish
commander of the USAF.

Maariv reported that senior PA negotiator Saeb Erekat asked to meet
with National Security Adviser Dr. Uzi Arad, who subsequently
refused to accept ErekatQs request.

The Jerusalem Post and Israel Hayom reported that yesterday,
speaking on IDF Radio, Intelligence Agencies Minister Dan Meridor
criticized Secretary of State Hillary ClintonQs warning to Tehran
that the U.S. has a plan on how to safeguard the region with a
Qdefensive umbrellaQ should Iran go nuclear. Meridor was quoted as
saying that it seemed that the U.S. had accepted the inevitability
of a nuclear Iran.

QIDF Radio reported that hundreds of right wingers intend to visit
JerusalemQs Temple Mount prior to Tisha B'Av, the day commemorating
the fall of the two Temples, in defiance of the U.S. demand to stop
construction in East Jerusalem.

Maariv reported that the Israeli defense establishment, which fears
violent clashes with right-wing youth, will postpone evacuation of
outposts until after the summer school vacations. The newspaper
quoted a senior defense source as saying that pictures of wounded
children would negatively influence any move.

Leading media quoted Turkish PM Recep Tayyip Erdogan as saying in
Syria yesterday that he might restart mediating Israel-Syria
negotiations. However, HaQaretz quoted Western sources as saying
that Syrian President Bashar Assad is not currently prepared to go
ahead on talks with Israel.

Israel Radio reported that yesterday the 18th test-launching of the
Arrow missile defense system in U.S. failed. During the test off
the California coast, the improved Arrow was supposed to intercept a
missile mimicking an Iranian ballistic missile. The radio said that
the ArrowQs communication systems did not function.

HaQaretz reported that, although official Israel has asked the world
to stop dealing with outfits that work with Iran, it continues to
contract with those same firms -- notably the giant German company
Siemens.

HaQaretz reported that Palestinian stoneworkers and Israeli traders
are joining hands against swindlers, many of them settlers, who sell
fictitious permits to expedite the passage of stone products from
Palestinian workshops in the West Bank into Israel. Trucks with
waybills bearing the names of Israeli factories can pass through
crossing.

Maariv reported that FBI-released transcripts of the interrogation
of the late Iraqi dictator Saddam Hussein include his comment that
he ordered Scud missiles fired on Israel in 1991 as retribution for
the bombing of the Osirak reactor ten years earlier.

The Jerusalem Post and other media reported that 11 people have been
arrested in Israel -- and a twelfth at Newark Liberty Airport on his
way to Israel -- for allegedly running a phony lottery scam and
bilking elderly Americans out of $25 million. Targeting wealthy
victims, mostly 75 and older, the suspects supposedly pretended to
be calling from lottery sweepstakes companies and convinced people
to send thousands of dollars in fees and taxes associated with their
victims. Victims were plied with gift baskets and phony QInternal
Revenue ServiceQ documents to convince them of the sweepstakes
legitimacy.

HaQaretz reported that the performances of a play by veteran Israeli
author Amos Kenan, "Friends Talk about Jesus," scheduled for next
week at the Arab-Hebrew Theater of Jaffa, have been canceled due to
opposition from Christian Jaffa residents.







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Mideast:
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Block Quotes:
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I. "Working on Their Relationship"

Senior commentator Ari Shavit wrote in the independent, left-leaning
Ha'aretz (7/23): QPresident Barack Obama made two bad mistakes in
his treatment of Israel: He lost the trust of both the Israeli
public and the Israeli prime minister. Neither mistake was really
necessary.... If Obama had embraced Israel and Benjamin Netanyahu,
he would have achieved what Anwar Sadat, Bill Clinton and King
Hussein did. He would have melted the right, conquered the center
and brought Israel to the left. An Israel-loving Obama truly
committed to Israel's security would have easily become the king of
Israel. But for some reason Obama chose to take the opposite
approach. His meeting with Netanyahu in the Oval Office several
months ago was an ambush. Without any preparation or advance
warning, Obama placed his ultimatum in front of Netanyahu. Instead
of acting as a good friend or counselor, he became the bad cop.
That is how he turned Netanyahu from an admirer into an adversary in
the blink of an eye. But Obama did not settle for that.... Barack
Hussein Obama trashed the letter written by George W. Bush and the
policies of William Jefferson Clinton. That is how he taught the
Israelis a lesson they will not quickly forget: The word of a U.S.
president is not worth much. A pre-withdrawal promise is only a
promise. Obama is not hostile toward Israel. Quite the opposite.
But his mistaken behavior has paralyzed the Israeli public's
willingness to support the next large-scale withdrawal. Because of
Obama's actions and failures, only a few Israelis view him as a true
friend of Israel. In his dealings with the U.S., Netanyahu made two
bad mistakes: He did not take the initiative and did not make an
effort to explain himself.... Obama and Netanyahu must start
speaking to each other directly and intimately.... Without them
nothing good can happen in the Middle East. Their relationship
means the future of us all.

II. "Listen to the Left"

Veteran journalist Evelyn Gordon wrote in the conservative,
independent Jerusalem Post (7/23): QWhat is genuinely puzzling ...
is why Obama supporters appear deaf to the anguished cries of
IsraelQs left, which has long advocated precisely [settlement
freeze, withdrawal, and division of Jerusalem] policies. When the
editorial staff of HaQaretz, a bastion of IsraelQs hard left, pens
three opinion pieces criticizing Obama in the space of 10, days, it
ought to be clear even to left-of-center American Jews that Obama
has an Israeli problem.... When even the hard-core leftists of
HaQaretzQs editorial board that a) Obama seems hostile to Israel and
b) his policies actually undermine the peace process, his American
Jewish supporters ought to take note. Because no matter how
sincerely Obama wants peace, a president who has lost even IsraelQs
hard left has no chance of delivering it.

III. "Around the Obama Peace Plan"

Veteran journalist and television anchor Dan Margalit wrote in the
independent Israel Hayom (7/23): QIn view of the stormy
confrontation that the Obama [peace] plan is expected to generate,
the fight over the construction of a Jewish neighborhood in the
Sheikh Jarrah [neighborhood of East Jerusalem] is negligible.
There will be a diplomatic confrontation over the next year. Saudi
Arabia and EgyptQs cool response to ObamaQs demand for some gestures
to reassure Israel calls into question his ability to overcome
objections in the Arab world to the recognition of Israel as a
Jewish state.

IV. "The Jewish Question"

Editor-in-Chief Amnon Lord wrote in the nationalist, Orthodox Makor
Rishon-Hatzofe (7/23): QThe tendency to focus IsraelQs anger on
ObamaQs QJewish advisersQ in the current crisis is an erroneous
step. It may be unfair, but it is inevitable to note that the
identity of the Jewish strategic advisers gives them a twisted sense
of understanding the adversary -- in this case: Israel. But what
characterizes people like [Rahm] Emanuel and [David] Axelrod is not
a feeling that they have an intimate understanding of Israel, but a
partisan perception that also gushes onto international
relations.... [On a general level] there are indications at this
stage that the onus of the useless confrontation has moved to the
White HouseQs staff.... The latterQs recognition that the settlement
issue has harmed the diplomatic process is intensifying.

CUNNINGHAM