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