IAEA/GC/MIDDLE EAST: ISRAEL AND EGYPT TALK ABOUT

C O N F I D E N T I A L UNVIE VIENNA 000353

SIPDIS

DEPT FOR P, T, S/SANAC, S/SEMEP, ISN - BURK
ISN/MNSA, ISN/RA, IO/T

E.O. 12958: DECL: 07/22/2019
TAGS: AORC PREL KNNP IAEA EG IS
SUBJECT: IAEA/GC/MIDDLE EAST: ISRAEL AND EGYPT TALK ABOUT
TALKING WHILE A DIVIDED EU HOPES FOR U.S. LEADERSHIP

REF: A) UNVIE 326 B) UNVIE 333 C) UNVIE 343 C) 2008
UNVIE 546

Classified By: CDA Geoffrey R. Pyatt for reasons 1.4 b and d

Summary
--------------


1. (C) Israeli Ambassador Michaeli briefed Charge July 22 on
his consultations that morning with Egyptian Ambassador Fawzi
on Middle East GC issues. Michaeli was encouraged that Fawzi
agreed to receive Michaeli, who delivered a conciliatory
message from capital on reengaging in negotiations. The
atmospherics of the meeting were good even if there were no
major breakthroughs. Michaeli said he stressed with Fawzi
the need for a new approach to Middle East GC issues, though
he told Charge that he doubted Egypt would agree to a
proposal he put forward that would reflect divergent views on
the Middle East Safeguards (MES) resolution. The fact that
Israel is open to a new approach involving a single new text
is nevertheless noteworthy. Charge advised that, while
uninstructed, he agreed strongly that a new approach was
needed (including for tactical reasons) but did not elaborate
further on a possible single resolution (reftels.) For his
part, Fawzi, who Michaeli believes has limited negotiating
authority, adhered to the Egyptian line. He rejected last
year's Israeli amendments to the Egyptian MES resolution and
linking its disposition with the treatment of the Arab League
text. Fawzi promised to relay Israel's message and will
return to Cairo for consultation in early August. Both
Michaeli and Swedish Ambassador Lundborg (EU Presidency) in a
separate meeting July 21 told us they expected Egypt will
table its original MES text at the last minute. However,
they also both reported considerable debate in Cairo on the
GC resolution issue, which could provide an opening. Charge
suggested, and Michaeli readily agreed, that Michaeli should
immediately brief Lundborg on his meeting with Fawzi. Sweden
is reaching out to Cairo (to include possible involvement of
FM Bildt) and Michaeli asked if the U.S. also plans to do so.


2. (C) Lundborg confirmed deep divisions within the EU on GC
Middle East issues; finding an EU consensus was the
Presidency's priority. France, the Netherlands and UK were
arrayed against Spain and Ireland, which were under
instructions to support Egypt. Lundborg reported bad blood
in the EU as well as in Cairo over France's role last year
and its hard-line negotiating position again this year. EU
HOMs are inclined to proceed along separate negotiating
tracks with Cairo and the Arab League (which we discouraged),
but Lundborg was open to ideas about a possible new consensus
"package" to include a single resolution. He had begun
consulting with Israel and Egypt in Vienna and had also met
with the Arab Group, which he found to be hard-over and
resolute in its determination to bring the Israeli Nuclear
Capabilities (INC) resolution to a vote, discounting any "no
action" motion as doomed to failure. Lundborg doubted the
Arabs would settle for a debate and Presidential Statement on
the INC, as GC President New Zealand was hoping, and said he
would participate in further consultations with the Arab
Group and GC President in mid-August. However, it appears
the EU currently intends not to meet again on this issue at
HOM level until early September; should we want to champion a
new single resolution approach, it would require much earlier
engagement with and within the EU. Lundborg observed that
the GC outcome "depended on" the U.S. He welcomed U.S.
re-engagement in the Middle East and hoped to find a common
U.S.-EU position in the GC given the high stakes not just for
the IAEA but for the 2010 NPT Revcon.


3. (C) Meanwhile, the IAEA Secretariat has circulated a
revised agenda for a Middle East Forum, proposed to be held
September 22-23, to Israel and Arab states for comment.
There is little enthusiasm for the Forum idea and Israel
regards this annual kabuki to be a waste of time and a
sideshow, while understanding that when the music stops it
should not be Israel that is perceived to be at fault for
preventing the Forum from coming to fruition. The revised

IAEA proposal incorporated 90 percent of Egyptian comments
unacceptable to Israel, including deletion of a key reference
to the fact that this would not be a forum for negotiation.
Israel's response will also predicate the Forum on restoring
consensus in the General Conference. The timing of the
proposed Forum just after the GC is "ridiculous" and probably
an effort to squeeze this in before DG ElBaradei's term ends.
In any case, the Forum is unlikely to materialize. Michaeli
said Fawzi did not support it either. Our one concern, as
noted to Michaeli, is if the Arab Group should decide to
raise no objections to the revised agenda, Israel could
indeed be blamed for blocking the Forum. End Summary.

Egypt-Israel Bilats
--------------


4. (C) Israeli IAEA Michaeli told Charge July 22 he was
encouraged that Egyptian Ambassador Fawzi had agreed to meet
with him and had half-expected a last minute cancellation.
Michaeli said he had conveyed the following message from
capital: In order not to repeat last year's General
Conference outcome, Israel proposed direct negotiations of
the MES text with Egypt in Vienna, or elsewhere, noting that
Egyptian good will could allow for a compromise acceptable to
both sides. Fawzi first took the opportunity to chastise
Israel for last year's GC outcome; he argued that
negotiations with Israel had led nowhere and accused Israel
of complicity with France in sabotaging the Egyptian text.
Michaeli disputed this interpretation of events, but urged
Fawzi to set aside history and try a different approach,
stressing Israel's readiness for compromise. Michaeli
observed that there were three basic approaches in principle:
first, the old consensus focused on common ground, i.e. on
the commitment of all regional states to a free zone, while
ignoring disputes. Second, placing the emphasis on disputes,
as in the last few General Conferences, and seeking to impose
one's interpretation. While Israel still preferred the
consensus approach, Michaeli offered a third way -- to
recognize differences rather than ignoring them, while still
emphasizing common ground. He explained to Charge that under
this creative (if unusual) approach, the MES resolution
could, for example, take note of divergent views of the role
of the peace process on the establishment of a WMD free-zone.
Fawzi was a bit dismissive, snipping that he had not seen
anything like this in the UN system. Michaeli acknowledged
that he did not believe Egypt would realistically agree to
this unorthodox proposal. Still, Fawzi, who Michaeli
believes has limited negotiating authority, promised he would
report the Israeli overture to Cairo (and is himself going to
Cairo for consultations in early August.)


5. (C) Fawzi otherwise hewed to the Egyptian position that
the Israeli amendments on the peace process and compliance do
not belong in the MES resolution. Michaeli predicted Egypt
would table last year's original MES text, probably at the
last minute so as to not allow room for negotiations. He did
not see any reason to expect a change in Egypt's tactics, but
hoped to be proven wrong. Michaeli told Fawzi that many in
Israel believe Egypt prefers conflict over cooperation, while
Fawzi noted that many in Egypt have the same perception of
Israel. Michaeli responded "try us," offering to return to
consensus on the 2005 MES text. On the INC resolution, Fawzi
retreated to the usual Egyptian line denying any linkage with
the MES text. Pressed by Michaeli on this being disingenuous
given Egypt's leadership role among Arab states, Fawzi
insisted that there was no way for the Arab League to
withdraw the INC resolution unless Egypt names Israel in its
MES resolution.


6. (C) Charge reported his discussion with the Swedish EU
Presidency (below) on EU divisions and queried Michaeli about
the French position that the final MES text as amended be a
starting point for negotiations. Michaeli had met with the
new French Ambassador twice already and believed this was
probably tactical and meant as a caution to Egypt -- in light
of France's clear understanding that Egypt would not table
the Israeli-amended text -- that Egypt was headed down a road

that would again not glean EU support. Michaeli also had met
recently with Spain, which he agreed was a "hard knot," among
the most difficult of the EU members.


7. (C) Overall, Michaeli reported that the general
atmospherics of the Fawzi meeting were good and very
diplomatic. Charge welcomed the fact that Egypt had agreed
to meet with Israel and encouraged Michaeli to relay the
discussion to Swedish Ambassador Lundborg. Noting that he
was uninstructed, Charge agreed with Michaeli on the need for
a constructive new approach, even for tactical reasons if
negotiations are ultimately unsuccessful. He added that all
of this seems to have catalyzed an internal debate in Cairo,
also a good thing. Michaeli asked whether we will raise the
GC issue in Cairo and Charge advised him that it was
incorporated as a point for the forthcoming U.S.-Egypt
strategic dialogue.

Middle East Forum Kabuki
--------------


8. (C) Meanwhile, the IAEA Secretariat has circulated a
revised proposal for a Middle East Forum to Israel and the
Arab Group, soliciting their views and suggesting that the
Forum be held on September 22-23, just after the General
Conference. Michaeli shared the IAEA proposal (emailed to
the Department). He assessed that there was no realistic
prospect for a Forum, that no one, including Fawzi, was
enthusiastic about it, and that this was all a waste of time,
but Israel would play along. Michaeli complained that the
Secretariat's revised Forum proposal adopted 90 percent of
the changes Egypt had proposed last year. Israel's response
would note that it had accepted the 2004 Forum proposal and
would take issue with specific changes, most importantly, the
deletion of a reference to the fact that this would be solely
an information and discussion event and "not a forum for
negotiation." Israel strongly objected to the IAEA
Secretariat injecting itself into ME WMD-free zone
negotiations in principle, were they actually to take place,
in part because non-nuclear WMD issues that would have to be
considered went beyond the IAEA's mandate. Israel was
further troubled by the deletion of two references in the
proposal, at Egypt's suggestion, to the potential relevance
of other NWFZs, especially taken in tandem with the deletion
of the Israeli reference to this not being a forum for
negotiation. A single reference to the experience of other
NWFZs was retained in the last paragraph, which Israel would
highlight as the "heart of the matter" on the expectation
that Egypt would find it objectionable. Israel will also
predicate any Forum on reaching consensus in General
Conference on Middle East issues and underline the need to
discuss compliance, consistent with the 2008 MES resolution
as adopted. Asked by Msnoff as to whether there was any
concern the Arabs could agree to the revised proposal, making
Israel appear to be the recalcitrant party, Michaeli did not
discount the possibility of DG ElBaradei colluding with
theArab Group to that end. As to the proposed dates,
Michaeli dismissed as "ridiculous" any prospect of holding a
Forum just after the GC and noted that in 2004 the Forum had
been planned for the January after the September GC.


9. (C) Comment: Mission checked separately with IAEA EXPO
official Tariq Rauf, who authored the letter on the Forum
sent to regional states. Rauf explained that Israel had not
submitted objections to the agenda proposed last year, so the
Secretariat reflected the comments received, i.e., from the
Arabs. He noted that while the Forum continued to be part of
the Director General's mandate under the MES resolution,
there probably was no real prospect of agreement to hold a
Forum. He also said his understanding of Egyptian
instructions for the GC were to "play a spoiler role." Rauf
attributed the proposed date to venue scheduling conflicts,
but it seems clear to Mission (and Michaeli) that the reason
for the early date was a desire to hold any Forum during DG
ElBaradei's term of office, which ends November 30.

Bridging the EU Divide

--------------


10. (C) In a separate meeting with Charge July 21, Swedish
Ambassador Lundborg stressed EU unity as the Presidency's
priority and repeatedly underlined that finding common ground
within the EU would be difficult. He confirmed deep EU
divisions and would be meeting with the "hardline" faction,
France, the Netherlands and the UK in the next few days.
Lundborg advised Charge of bad blood with France within the
EU, as many felt the French Presidency during the last GC did
not play straight with them. Lundborg said the same bad
blood exists between Paris and Cairo on the issue. Charge
reported that the new French Ambassador proposed negotiating
on the basis of the 2008 MES text as amended, which Lundborg
agreed was a clear nonstarter for Egypt. The Dutch were also
a concern as their FM is "an extreme friend of Israel," he
noted, adding that the UK could be brought around by moderate
views. On the other side, he reported that Spain had strict
instructions to support Egypt, as did Ireland. Charge
cautioned that the Arab Group was smug in its perception that
it could divide and conquer the EU. (Comment: A split EU
would doom any "no action" motion. End Comment.)


11. (C) Lundborg also confirmed that based on initial
consultations, EU HOMs were still inclined to deal with the
two ME resolutions separately. Part of their calculus was
based on rumors of the third, Iranian-sponsored agenda item
on Israeli strikes against nuclear facilities, believing that
we should not mix this all together. He agreed with Charge,
however, that this rumored third agenda item did not seem
likely, especially since the Arabs are increasingly
disinclined to allow Iran to play a leadership role on Middle
East issues. Charge reported on his meeting with Arab Group
(ref c) and encouraged a holistic approach to ME issues
rather than negotiating on separate tracks. Noting that he
was uninstructed, Charge shared the personal view that if we
play the same cards, we will end up with the same result;
what was needed was a substantive new approach. Egyptian
Msnoff had told Charge separately that Cairo recognized this
as well. Lundborg wholly agreed and was receptive to the
idea of a single resolution/package deal in principle, and
though he was skeptical the Arabs would agree, intended to
float the idea with them.


12. (C) Lundborg had already met with Israel and the Arab
Group and would meet with Fawzi in mid-August upon the
latter's return from consultations in Cairo. He reported two
competing views in Cairo of the MES resolution but thought it
most probable that Egypt would end up tabling its original
text from last year minus the Israeli amendments. (Note:
Lundborg did not elaborate the competing views but the Indian
Ambassador told Counselor that Cairo is in a quandary as it
could not expect success on its original MES text nor accept
the amended version; not knowing what to do, Egypt is
considering championing the AL resolution. End Note.)
Lundborg confirmed Cairo's extreme sensitivity and
bitterness; the Swedish Embassy is speaking to MFA and he had
also encouraged FM Bildt to engage. As to the Arab Group,
Lundborg found them to be "hard over" on the INC text and
resolute in their determination/expectation to defeat any no
action motion. Interestingly, Syria participated in the Arab
Group meeting with the EU Presidency but was not present at
ours. Lundborg discussed the INC with EU HOMs who were
seeking instructions. He added that the Arab Group had
delivered the same message to New Zealand as GC President.
While New Zealand Ambassador Macmillan was not convinced the
Arabs could win a vote on the INC and still hoped that they
would settle for a debate and PRST, Lundborg was not so sure
on either account. (Comment: Why would the Arab Group not
bring the INC to a vote if the EU is divided and they could
win? End Comment. ) On a positive note, the Arab Group
(including Egypt) trusts Lundborg as an interlocutor due to
his role on the CTBT Palestinian Observership issue.
Macmillan advised him to not bring Germany and France into
the negotiation for the time being or to the Chatham House
Rules lunch with the Arab Group she will host in August (ref
a).



13. (C) Lundborg was generally pessimistic about the IAEA
General Conference, viewing the Middle East issues as a
projection of the negative atmosphere in the region. The
Obama Administration's reengagement with the Arab world was
the one reason for optimism. He observed that the GC outcome
"depends on the U.S." and hoped to find a joint EU/U.S.
position if possible. Lundborg understood the stakes, both
with respect to the IAEA General Conference getting worse
every year and more broadly with respect to the 2010 NPT
Revcon, agreeing with Charge that if we get this right, we
can contribute to a positive outcome for the Revcon.
PYATT