SEVEN ARCHES HOTEL TARGETED BY ISRAELI

C O N F I D E N T I A L JERUSALEM 000027 SIPDIS NEA FOR FRONT OFFICE AND IPA; NSC FOR SHAPIRO/KUMAR E.O. 12958: DECL: 01/06/2020 TAGS: PGOV PREL KPAL IS JO SUBJECT: SEVEN ARCHES HOTEL TARGETED BY ISRAELI PRO-SETTLEMENT GROUPS REF: JERUSALEM 26 Classified By: Consul General Daniel Rubinstein for reasons 1.4 (b,d). ¶1. (C) Summary: In the midst of debate over the approval of 24 new Israeli residential units on the Mount of Olives (reftel),press reports that the nearby Seven Arches Hotel had been sold to Israeli owners generated further controversy. The hotel's Jordanian management described the reports as the latest in a series of false rumors spread by pro-settlement Israeli organizations attempting to drive away tourists and force the hotel out of business. Contacts in the anti-settlement NGO community confirmed a campaign of harassment against the hotel but noted -- as did hotel management -- that any attempt to change the hotel's status quo in the current climate was unlikely, given the likely consequences for Israeli-Jordanian relations. End summary. ¶2. (C) On January 6, Hebrew-language Israeli newspaper Yedioth Ahronoth reported that Israeli interests had "recently" purchased the Seven Arches Hotel, located atop the Mount of Olives. The report quoted Jerusalem city council member Elisha Peleg as confirming that "the hotel is already under Jewish ownership," and "the IDF (Israel Defense Forces) use the premises on weekends for workshops." Reports of the hotel's supposed sale coincided with the announcement (confirmed to Post by municipal officials) of the approval of permits for the construction of 24 new Israeli residential units adjacent to the Beit Orot Yeshiva (religious seminary), which is also located on the Mount of Olives. Note: Officials in the office of Jerusalem Mayor Nir Barkat said they had no knowledge of the hotel's reported sale. End Note. ¶3. (C) Seven Arches Hotel General Manager Awni Inshewat told DepPolCouns on January 6 that he believed that Peleg's comments and the accompanying news reports represented the latest in a series of false rumors about the hotel's imminent demise or sale, spread by the pro-settlement group Ir David ("City of David," an alternate name used by the Elad organization) and its political allies. The purpose of the rumor campaign, he said, is to discourage tour groups from booking at the hotel, thus further aggravating the operational challenges faced by its Jordanian management. "Ir David wants us out of operation," Inshewat said. "Not because they want to run a hotel. But because they want the underlying land." ¶4. (C) According to both Inshewat and Khalil Tufakji, a researcher at the Orient House Arab Studies Society, a Jerusalem NGO, the Seven Arches Hotel was built by the Intercontinental Hotel Group in 1962, on land that the Jordanian government expropriated under its Enemy Property Act. In 1967, following its annexation of East Jerusalem, the GOI in turn expropriated the land under its own legislation. "They (Israeli officials) left the hotel," Tufakjiremarked, "because it was a new hotel, a luxury building, and they were short on rooms for all of the visitors who wanted to come to Jerusalem at that time." ¶5. (C) The Intercontinental Group continued to operate the hotel until 1988, when it failed to renew its lease following the drop in Jerusalem tourism in the early years of the First Intifada. Despite continued disputes between the GOI and the GOJ over ownership (according to Inshewat, the GOJ considers the land under the hotel to be owned by the Jordanian Islamic Waqf, and the hotel itself to be owned by the GOJ),Jordanian and Israeli officials cooperated to keep the hotel open, forming an Israeli shell company ("Seven Arches Ltd.") contracted by the Israeli Ministry of Finance to operate the hotel and staffed by Palestinian and Jordanian employees under Jordanian management. ¶6. (C) According to Inshewat, Hagit Ofran of NGO Peace Now, and Jerusalem activist Danny Seideman, Israeli settlement organizations recently began advocating the closure of the Seven Arches and the use of the underlying land for GOI facilities or Israeli residences. Inshewat noted that following the failure of an initiative several years ago to have the Israeli Ministry of Finance transfer responsibility for the site to the Israeli Ministry of Defense for use as a military installation, Ir David began booking rooms at the hotel for weekend educational retreats attended by IDF soldiers. Inshewat noted that he accepted the bookings, saying, with a shrug, "this is a business." ¶7. (C) Soon afterwards, Inshewat said, Ir David and its allies began to campaign publicly for the hotel to convert its kitchens to kosher, citing the presence of IDF troops as justification. According to Inshewat, hotel management refused, also on business grounds. "The IDF are maybe 3 percent of my business," he said, "and for most of the rest of my customers, this (kosher food) is not what they want." Following that, Inshewat said, the hotel became subject to regular rumor and press speculation that it would be closed, sold, or otherwise taken off the market -- rumors Inshewat blamed on Ir David and its allies. "They're trying to convince tour agents not to book here, making it seem like this is not a safe place to reserve a room," he argued. ¶8. (C) Inshewat was skeptical -- as were Israeli NGO contacts -- that the hotel would be leased or sold anytime soon by the GOI to any private Israeli organization, including Ir David. "This would be a huge political problem for the Israelis and the Jordanians," he predicted, "and so that stands against it." Inshewat also noted, "we have heard nothing from (GOJ officials) in Amman about this (rumored sale) -- and they are in contact all the time with the Israeli Ministry of Foreign Affairs on this issue." He noted that the hotel's Israeli custodian from the Ministry of Finance, with whom he had met only the day before, had said nothing about this. ¶9. (C) Still, Inshewat said, given the strategic and historical importance of the hotel's location, and the continued growth of Israeli residential pockets in Arab neighborhoods on the Mount of Olives, he expected what he described as low-level harassment from Ir David and similar groups to continue. He noted, pointing to faded carpets and mirrored coffee tables dating from the 1970s, that the ongoing uncertainty over the hotel's legal status and future left the hotel's Jordanian management unable to attract investors or carry out needed renovations. "It's like a boxing match," Inshewat said, "when each side continues to strike strong blows, but neither is able to knock the other side out." RUBINSTEIN