SCENESETTER FOR CODEL MCCONNELL'S VISIT TO ISRAEL,

UNCLAS SECTION 01 OF 02 TEL AVIV 000803 SIPDIS SENSITIVE STATE FOR H:PRADEMACHER AND LSHANE; PLEASE PASS TO TOM HAWKINS (SEN. MCCONNELL) AND PHILIP SKUTA (USMC) E.O. 12958: N/A TAGS: PREL PGOV KPAL IS SUBJECT: SCENESETTER FOR CODEL MCCONNELL'S VISIT TO ISRAEL, APRIL 7-8 REF: TEL AVIV 764 ¶1. (SBU) SUMMARY: Your upcoming visit to the region comes during a time of transition in Israeli politics. Prime Minister Binyamin Netanyahu took office April 1 after assembling the largest government in Israeli history, and apparently one of the largest in the world. The government of 30 Ministers, eight deputy ministers, and various newly-created posts is a product of political wheeling and dealing that began soon after the February election. Negotiations with other party leaders had quickly established a steep cost to secure their participation, but Netanyahu was intent on a broad government that would give him his best shot at serving a lengthy term, and succeeded in securing a 74-seat coalition in the 120-seat Knesset. Interactions between Likud and Labor and Yisrael Beitenu and more specifically between Netanyahu and Barak and Lieberman, will be crucial determinants of the success of the new government as it confronts challenges, such as the peace process, the global economic crisis, and the threat from Iran. END SUMMARY. -------------- BROAD COALITION -------------- ¶2. (SBU) Although in the February elections former Foreign Minister Tzipi Livni's centrist Kadima party won 28 Knesset seats to the center-rightist Likud party's 27 seats, President Peres deemed Likud leader Binyamin "Bibi" Netanyahu more likely to succeed in creating a coalition, and tasked him with forming Israel's 32nd government. Livni refused to join the Likud-led coalition, preferring for Kadima to lead the Opposition. The right wing joined the coalition first: nationalist Yisrael Beitenu ('Israel is our home') brought 15 seats and the ultraorthodox SHAS party contributed 11 seats. The addition of smaller right-wing or religious parties (United Torah Judaism, 5 seats; Jewish Home, 3 seats) had the potential to give Netanyahu control over the Knesset, with 61 seats, but Netanyahu sought a broader coalition. ¶3. (SBU) Securing the 13 seats of Minister of Defense Barak's Labor party broadened the base and the resultant 74-seat coalition provided a healthy cushion against individual defectors. The agreement with Labor gained Netanyahu not only a government, but provided him additional international legitimacy by having the nominally dovish Labor party on board what would otherwise be a solid right-wing government. It also gives Netanyahu a Defense Minister in Barak whom the public largely trusts as Israel faces tough decisions on how to confront Iran's nuclear ambitions, as well as the continuing rocket attacks from the Gaza Strip and potential threats from Hizballah and Syria. Additionally, Labor's inclusion in the government dilutes some of the bargaining power of Netanyahu's right-wing partners. ¶4. (SBU) The large and diverse government is the result of the high market rate for securing coalition partners. While the two Vice Prime Ministers are Likudniks, the four Deputy Prime Minister positions reflect the breadth of the coalition: Labor's Ehud Barak remains Minister of Defense; Yisrael Beitenu's Avigdor Lieberman is Foreign Minister; Likud's Dan Meridor is Minister of Intelligence and Atomic Energy; and SHAS Eli Yishai is Minister of Internal Affairs. ¶5. (SBU) The government, though it appears bloated, may provide Netanyahu with his best hope for long-term stability. The 74-seat coalition means that any one party, save for Yisrael Beitenu could leave Netanyahu's coalition without depriving him of a governing majority. It also provides an additional buffer should the dissident faction within Labor (which opposed joining the coalition) split off from, or assume control of, the party. -------------- WHERE ARE THE POINTS OF FRICTION? -------------- ¶6. (SBU) A coalition and government this large can promote longevity, but it is likely to also be a painful existence. Netanyahu has good relations with the party heads in his coalition (most notably, his relationship with Defense Minister Barak is much better than the relationship between former Prime Minister Olmert and Barak in the last year of Olmert's term),but Lieberman's stridently secular positions could cause significant friction with the ultraorthodox SHAS and UTJ parties. Barak and Lieberman are neither enemies nor close friends, but Barak had earlier criticized Netanyahu's TEL AVIV 00000803 002 OF 002 decision to offer Lieberman, who is under criminal investigation, control over the Justice Ministry and the police. Lieberman, for his part, was openly critical of Barak's execution of Operation Cast Lead, and reportedly sought to block Netanyahu's plans to bring Barak and Labor into the coalition. Beyond party disputes, Netanyahu may be called on to delineate (either explicitly or implicitly) a clear division of responsibilities and pecking order among his ministers (some of whose portfolios appear to overlap), which could spark resentment among those relegated to the second and third-tiers. ¶7. (SBU) The disunity in Labor also could pose a challenge to Netanyahu. Five Labor holdouts did not vote confidence in his government (note: by not voting they technically did not break with party discipline, which suggests this is not yet an all-out rebellion),and they seem intent on ousting Barak in the next party leadership primary. Netanyahu, though his large government means he is not beholden to Labor, will have to be careful to avoid making policy decisions or statements that further alienate the rebellious faction in that party if he seeks to keep their 13 seats. Lieberman's hard-line public statement on assuming control of the Foreign Ministry the afternoon of April 1, in which he dismissed the Annapolis process and suggested that only strength, not more concessions, would bring peace, is likely to add to the misgivings within Labor about being in a coalition with Lieberman. -------------- PRAGMATISM OVER IDEOLOGY -------------- ¶8. (SBU) Netanyahu is solidly center-right on the political spectrum. He remains more pragmatic than ideological in most matters. On the peace process he is keeping all options open regarding a two-state solution, and may be willing to advance the process significantly as long as he is not forced to publicly acknowledge the extent of such progress. To succeed along such a path we expect him to rely heavily on his improved skills at political wheeling-dealing to keep the right flank on board while quietly (but perhaps slowly) cooperating on the peace process agenda, which he understands is critical to Israel's relations with the U.S. In his speech to the last Knesset session of the Olmert Government March 30, Bibi said his government will be willing to offer "generous concessions" for peace with the Palestinians, and that his government would "do all in its power to reach peace with all our neighbors and with the entire Arab world." We note that while largely non-ideological on the peace process, Netanyahu does maintain an ideological passion for free markets, which suggests to us that his commitment to facilitating investment in the West Bank is more than just rhetoric and will result in active personal involvement on his part. -------------- FOCUSED ON IRAN -------------- ¶9. (SBU) Netanyahu holds strong views on the Iranian threat. He believes that Iranian President Mahmoud Ahmadinejad should be taken at his word when he says Israel should be wiped off the map, and that deterrence theory does not apply to a nuclear-armed Iran. Netanyahu argues that Hamas in Gaza and Hizballah in Lebanon represent Iranian bases surrounding Israel. While some have suggested that Netanyahu may prefer to pursue negotiations with Syria rather than deal with the Palestinian issue, at least so far Netanyahu has consistently expressed great skepticism about Syria's willingness to give up its strategic ties to Iran in return for Israeli withdrawal from the Golan. ********************************************* ******************** Visit Embassy Tel Aviv's Classified Website: http://www.state.sgov.gov/p/nea/telaviv ********************************************* ******************** CUNNINGHAM