SPECIAL ISRAEL MEDIA REACTION

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SUBJECT: SPECIAL ISRAEL MEDIA REACTION

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SUBJECTS COVERED IN THIS REPORT:
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U.S. Special Envoy Sen. George Mitchell to Israel, West Bank,

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Key stories in the media:
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The Jerusalem Post reported that sources close to PM Benjamin
Netanyahu were quick to dismiss reports of growing tensions between
Israel and the U.S. over the best path for peace with the
Palestinians. The sources described NetanyahuQs meeting with U.S.
Special Envoy George Mitchell as a very positive one in which both
Israel and the U.S. promised to cooperate fully on regional matters.
The Jerusalem Post quoted the sources as saying that Mitchell
invited Netanyahu to visit Washington on May 11, but that this
proved problematic for scheduling reasons. The Jerusalem Post
reported that, during the conversation, Netanyahu assured Mitchell
that Israel wanted to move forward to create a sustainable peace
with the Palestinians, but that this peace had to take into account
IsraelQs vital security interests.

All media reported that in his talks with senior Israeli officials,
Mitchell emphasized the necessity of a two-state solution Maariv
(Ben Caspit) quoted a senior Israeli diplomatic source as saying
yesterday that PM Benjamin Netanyahu will eventually grudgingly
recognize the principle of Qtwo states for two peoples.Q All media
reported that in his talks with Mitchell, Netanyahu is trying to
condition this on Palestinian recognition of a Jewish state. Maariv
said that the Americans recognize the premierQs demand and that
Mitchell used explicit language on the subject in his meeting with
FM Avigdor Lieberman.

HaQaretz reported in its lead story that the Obama administration is
preparing a Middle East peace process that will include simultaneous
bilateral talks between Israel and the Palestinians, and between
Israel and Syria. The plan is based on the Arab peace initiative
that offers establishing normal relations between Israel and Arab
League states in exchange for withdrawing from the occupied
territories and establishing a Palestinian state. According to
HaQaretz, the U.S. will put together a "security package," including
demilitarization of the territories from which Israel will withdraw
and the option of stationing a multinational force in them for
years. HaQaretz cited the Obama administrationQs belief that a
breakthrough in the peace process between Israel and the Arab states
would restrain Tehran's influence and contribute to the diplomatic
effort to block Iran's nuclearization. The regional peace plan will
be the focus of President Barak Obama's meeting with Jordan's King
Abdullah in the White House later this month. HaQaretz reported
that senior Palestinian Authority officials told Western diplomats
yesterday that PA President Mahmoud Abbas will be invited to the
White House after the Jordanian King's visit to discuss the
Palestinians' participation in the initiative. Although unconfirmed
by American sources, Abbas's visit is expected to take place before
Obama's first meeting with PM Benjamin Netanyahu. Saudi Arabia's
King Abdullah is pressing the U.S. administration to adopt the Arab
initiative, which began as a Saudi initiative. Maariv noted that
Mitchell told his Israeli interlocutors that the U.S. is checking
into the Saudi initiative as a means to fight the Iranian nuclear
program and Qweaken the Axis of Evil.

The Jerusalem Post reported that President Shimon Peres told
Mitchell yesterday that talk of Israel hitting Iran is absurd.

Maariv reported that FM Lieberman embarrassed Mitchell by not
escorting him out of the Foreign Ministry. Yediot Aharonot reported
that Egyptian intelligence chief Omar Suleiman is expected to meet
with Lieberman in Israel next week.

All media reported that yesterday the Israel Air Force attacked a
booby-trapped building near the Gaza border fence in response to a
rocket attack from Gaza the night before. The IDF has evidence that
the house had been serving terrorist groups in the Strip for attacks
and kidnapping efforts directed at IDF border patrols. The
structure, which contained hundreds of kilograms of explosives, was
blown up, the first Israeli attack on Gaza in about three weeks.
Israel Radio reported that last night a Qassam rocket was launched
at Israel.

Leading media cited the independent Egyptian daily Al Masr Al-Youm
as saying that two Palestinian Fatah members accused of belonging to
the Hizbullah-linked cell uncovered recently in Egypt were planning
to carry out a major suicide attack in Tel Aviv.

HaQaretz reported that the Israeli defense establishment is
reconsidering the purchase of F-35 fighter jets due to the
unexpected high cost and disagreements with the manufacturer
regarding the installation of Israeli systems in the planes. "This
is undoubtedly the ideal fighter plane, and we'd like to have it
very much, but not at any price," a senior defense establishment
official was quoted as saying. HaQaretz reported that a defense
establishment evaluation concludes that the IAF can maintain its
operational and technological supremacy even without the advanced
fighter aircraft. This could be achieved by upgrading the IAF's
F-15 and F-16 aircraft and buying more advanced models.

The Jerusalem Post reported that yesterday DM Ehud Barak met with a
delegation of U.S. congressmen and urged them to help Israel secure
funding for the development and production of the Arrow 3 ballistic
missile defense system. The daily also cited IsraelQs concern that
the sale of the large American defense conglomerate Textron to a
group of businessmen from the UAE will jeopardize deals with Israeli
defense industries.

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U.S. Special Envoy Sen. George Mitchell to Israel, West Bank:
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Summary:
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Diplomatic correspondent Ben Caspit wrote in the popular, pluralist
Maariv: QIn order to position itself in front of Iran, a bloc of
moderate Arab countries must present achievements garnered from
Israel. It is Obama who will have to bring those goods. Netanyahu
will have to provide them.

Diplomatic correspondent Herb Keinon wrote in the conservative,
independent Jerusalem Post: QIt is likely that Netanyahu will come
up with some of his own diplomatic initiatives to take up to
Washington for his first meeting with Obama sometime in May.

Senior Middle East affairs analyst Zvi Bar'el wrote in the
independent, left-leaning Ha'aretz: QThe Obama administration is
beginning to look as if it might prefer Iran to the Arab axis.

Intelligence affairs correspondent Yossi Melman wrote in Ha'aretz:
QIf I were Prime Minister Benjamin Netanyahu's national security
adviser, I would advise attacking Iran.... In any case, Israel must
wait in order to not disrupt U.S. President Barack Obama's strategy
of talking to Iran, a strategy that is destined to fail.... I would
explain to the Prime Minister than an attack alone, even if it
succeeds, would not serve Israel's true national interests.

Editor-in-Chief Amnon Lord wrote in the editorial of the
nationalist, Orthodox Makor Rishon-Hatzofe: QPresident Barack Obama
is playing a dangerous game in the Israeli-Palestinian game.

Block Quotes:
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I. QNo Way but Two States

Diplomatic correspondent Ben Caspit wrote in the popular, pluralist
Maariv (4/17): QBenjamin Netanyahu will eventually recognize the
principle of Qtwo states for two peoplesQ -- as if he had any choice
in the matter. The problem is that this might not be enough. As it
now looks, the Obama administration will not be happy with a
Qdeclaration of principles,Q or declarations, or intentions, or
well-covered conferences. Obama and Hillary Clinton will evaluate
actions and only actions.... Bibi will have to decide whether to
join or remain [outside of an international coalition].... Barack
Obama knows that, in order to handle the Iranian problem, he needs
international backing. He will get it only if he comes to the
Iranians with clean hands, holds true negotiations, and provides
something else: Israeli goods. In order to position itself in front
of Iran, a bloc of moderate Arab countries must present achievements
garnered from Israel. It is Obama who will have to bring those
goods. Netanyahu will have to provide them.




II. QRounding Up the Anti-Iranian Posse

Diplomatic correspondent Herb Keinon wrote in the conservative,
independent Jerusalem Post (4/17): QThe expectation in Jerusalem is
that the new U.S. administration will ask Israel to toe its line.
In other words, what Obama is saying to Israel is, QI am putting
together a broad coalition that wants to make peace in the Middle
East and stop the Iranians. What is your contribution?Q And itQs
clear to a certain degree what the administration wants Israel to
contribute.... [Israeli] government sources said recently that it is
likely that Netanyahu, currently going over all elements of IsraelQs
relationship with the Palestinians, including the status of the
Roadmap and what was agreed upon in the negotiations between the
Olmert government and the PA, will come up with some of his own
diplomatic initiatives to take up to Washington for his first
meeting with Obama sometime in May.

III. QAn Ever-Thickening Plot

Senior Middle East affairs analyst Zvi Bar'el wrote in the
independent, left-leaning Ha'aretz (4/17): QIn exposing the
Hezbollah cell, Egypt wants to focus all responsibility on Iran.
The timing here is not coincidental. Now, while the U.S. is
beginning to openly court Tehran, with President Barack Obama seeing
it as a potential partner in solving regional problems -- from Iraq
and Afghanistan, through Lebanon and even Palestine -- the time has
come to expose Iran's plotting for terrorist activities.... If the
Bush administration was seen as anti-Arab and anti-Muslim, as an
administration that divided the Middle East into Qgood Arabs and bad
Arabs,Q occupied Iraq and Afghanistan, saved Israel from itself, and
considered Iran to be the central point of the Qaxis of evilQ -- the
Obama administration is beginning to look as if it might prefer Iran
to the Arab axis.

IV. QNeeded: A Formative Historic Event

Intelligence affairs correspondent Yossi Melman wrote in Ha'aretz
(4/17): QIf I were Prime Minister Benjamin Netanyahu's national
security adviser, I would advise attacking Iran. In any case,
Israel must wait in order to not disrupt U.S. President Barack
Obama's strategy of talking to Iran, a strategy that is destined to
fail.... If I were the national security adviser, I would explain to
the Prime Minister than an attack alone, even if it succeeds, would
not serve Israel's true national interests. In order to implement a
strategic breakthrough, the Israeli government will have to
orchestrate a formative historic event. It must agree to the
establishment of a Palestinian state and operate at a feverish pace
to that end. In such a case, not only would the United States and
the pro-Western Sunni Arab world accept the attack on their Shi'ite
rival, they would even welcome it, thus making it possible to pave
the way to more peace agreements with Arab nations, security
arrangements a strategic alliance based on common interests.


V. QA Dangerous American Game

Editor-in-Chief Amnon Lord wrote in the editorial of the
nationalist, Orthodox Makor Rishon-Hatzofe (4/17): QPresident Barack
Obama is playing a dangerous game in the Israeli-Palestinian
game.... Expectations raised by the Americans that Israel will swear
to Qtwo states for two peoplesQ might invite flare-ups from the
Palestinian side. Alternatively, the well versed Israeli side might
itself initiate security moves that will take away the initiative
from the terrorists.

CUNNINGHAM