BARAK AND FAYYAD PROMOTE THE TWO-STATE SOLUTION AT

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E.O. 12958: DECL: 02/05/2020
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SUBJECT: BARAK AND FAYYAD PROMOTE THE TWO-STATE SOLUTION AT
HERZLIYA CONFERENCE

Classified By: DCM Luis G. Moreno, Reason 1.4 (b) (d)


1. (SBU) Summary. Speaking at a standing room only panel at
the annual Herzliya Conference February 2, Defense Minister
Barak and PA Prime Minister Fayyad offered a rare glimpse of
Israeli-Palestinian convergence as both made the case for the
two-state solution. Photographers at the event mobbed both
men in a failed attempt to snap a picture of a handshake.
Not surprisingly, however, while both argued passionately in
favor of two states living in peace, the logic of their
arguments conflicted on a number of points. Barak stressed
that the "Zionist dream" will only be secure once there is a
peace agreement with the Palestinians. He called for an
"internal border" to be established within the "Land of
Israel" to ensure that Israel becomes neither a bi-national
nor an apartheid state in the future. Barak asserted,
however, that while there should be no doubt that the
majority of Israelis want peace, the position of the
Palestinian side is less clear. Barak urged the
international community to press the PA to resume
negotiations, adding that while he expects a final status
agreement to take more than two years, the time has come to
get started, with an emphasis on top-down and bottom-up
simultaneously.


2. (SBU) Fayyad, in a rare appearance before an Israeli
audience, said the Palestinians accept Barak's call for a
two-state solution and asserted that they have accepted
Israel's right to exist since the 1993 Oslo agreements. The
problem, Fayyad noted, is that negotiations have not led to
the desired outcome. Security, stability and peace can only
be achieved through Israel's acceptance of a Palestinian
state. Noting the current impasse, Fayyad said Palestinians
need a "new dynamic" that makes clear that negotiations will
lead to a state. After detailing the accomplishments of his
government over the past year, Fayyad called for Israel to
freeze settlement construction and end IDF incursions into
PA-controlled areas in order to show Palestinians that the
"occupation is being rolled back." He stressed that
Jerusalem must be on the negotiating agenda since East
Jerusalem is an "integral part" of Palestinian territory.
There can be no lasting peace, he stressed, without
Palestinian control of East Jerusalem. Fayyad said he was
proud to call his two-year plan for building the institutions
of a state "unilateral" since it was being carried out as a
Palestinian initiative. State-building reinforces but does
not replace a negotiating process, he said, but added that
within a year and a half, the state-building process will
reach a "critical mass" for Palestinian independence even if
a final status agreement has not been reached. Lastly,
Fayyad called on Israel to "lift the siege" on Gaza,
suggesting that opening the crossings would enable the PA to
reestablish itself in Gaza, though he did not explain how
that would occur. He also called for an "end to the
separation" between Gaza and the West Bank as a necessary
condition for Palestinian independence, but did not address
how this would take place. Israeli commentators have
generally applauded Fayyad for having the courage to address
the Herzliya Conference, but many have stressed both his
not-so-veiled threat of a unilateral declaration of statehood
in 2011, as well as the absence of a mechanism for addressing
the division between the West Bank and Gaza. End Summary.

Barak Sees Threats and Opportunities
--------------


3. (U) Barak began his remarks (Note: speaking throughout
in Hebrew, all translations are ours) with a review of the
strategic situation facing Israel, noting that while quiet
now prevails on all fronts, there are "threats on the
horizon" from Iran, Hamas and Hizballah, "the like of which
we have not faced in decades." Barak commented that the
Middle East has "no mercy for the weak," so Israel must
maintain its deterrence and demonstrate that it cannot be
defeated if it wants to survive. Only on this basis can
Israel reach agreements with its neighbors, Barak said, but
added that the alternatives to pursuing peace are all bad.
Israel can remain a Zionist, democratic state only through
peace agreements with its neighbors.


4. (U) Today there are 12 million people living between the
Jordan River and the Mediterranean, five million of them
Arabs. If this area remains one state, it cannot remain
Jewish and democratic, Barak observed, adding that neither a
bi-national state nor an apartheid state will fulfill the
Zionist dream. Therefore, a border must be imposed within
the Land of Israel, not as a favor to the Palestinians but in
the interests of future generations of Israelis. Barak
cautioned that Israel faces growing international isolation
because the international community will not accept a
permanent occupation. Israel is strong, he stressed, and can

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afford to allow itself to move forward.


5. (U) Barak admitted that Israeli society is divided and
addressed himself to both the right and the left. To the
right, he said those who believe in the Land of Israel must
accept the setting of a border not because Israel has no
right to the land, but because Israel's interests require it.
Barak noted that ancient Israel's borders shifted
continually, and Jewish leaders of the ancient world
understood the necessity of flexibility. To the left, Barak
said Israel has a responsibility to defend its people and
Jews everywhere. Israel must seek a "sober peace," not an
illusion. He appealed to the left to help the Netanyahu
government make peace with the Palestinians rather than
follow the "Trotskyite" formula of "making things worse in
order to make them better." Israel needs security, he said,
but also to move forward.


6. (U) Barak said he had told Abu Mazen that he needed to
tell the Palestinian people that the time has come to make
peace and "give up their dreams" (i.e. the return of
refugees). Barak asserted that while he had no doubt that
the majority of Israelis want peace, the Palestinian position
was less clear. Barak then praised PM Fayyad for his
state-building project of developing the PA's institutions,
security services and developing the economy. Barak said he
believes in developing the Palestinians' capabilities. While
Israel is not ready to cede security responsibility for the
West Bank, Barak noted that even the settlers recognize the
emergence of a "new security environment" in the West Bank
through cooperation between the IDF and the PASF.


7. (U) Noting that "good fences make good neighbors," Barak
observed that the "Arab discourse" has changed since the
"three no's" of Khartoum in 1967. Israel cannot accept the
Arab Peace Initiative as drafted, but it provides a framework
with which to work. Turning to Gaza, Barak noted the
security challenges posed by Hamas and said Israel will not
allow the West Bank to follow the model of what followed the
withdrawals from southern Lebanon and Gaza.


8. (U) Barak said negotiations will take time to produce an
agreement, "probably more than two years," but they must get
started. The core issues are known to all and should all be
dealt with at the same time. If there are proximity talks,
they will only be an instrument to get negotiations started.
The Netanyahu government accepts the Road Map, all past
agreements, and the two-state solution. Progress toward
peace must be bottom-up as well as top-down. Barak appealed
to the international community to send a unified message to
the Palestinian leadership that the time has come to resume
negotiations. The Arab states, and especially the Gulf, can
help by providing financial support for the PA. Israel needs
a Palestinian state to achieve its own interests he concluded.

Palestinians Agree and Accept Two-State Solution
-------------- ---


9. (U) Fayyad began by noting that he had expected to debate
Barak in a panel format and had not come prepared to give a
speech. He then launched, in English, into an articulate
demand for Palestinian independence within two years. Noting
that Barak had made a compelling case for a two-state
solution from an Israeli perspective, Fayyad said the
Palestinians agree and accept the two-state solution. He
stressed that the Palestinians have recognized Israel's right
to exist since the 1993 Oslo Agreements, but Israel at that
time did not accept the Palestinians' right to a state.
Negotiations since then have not produced the desired
outcome, even though that entire international community has
embraced the goal of a Palestinian state since President
Bush's speech in the summer of 2002.


10. (U) Fayyad agreed with Barak that the Middle East is a
rough and troubled region, but asserted that it can be made
less rough by Israeli steps to end the occupation. The
Palestinians want to live beside Israel in dignity, in a
permanent and lasting peace. Fayyad said the Arab Peace
Initiative provides a framework that would bring a sense of
greater security to the entire Middle East. Security,
stability, and peace are the Palestinians' driving force, but
only if Israel accepts the concept of a Palestinian state.


11. (U) Fayyad acknowledged that the process is at an
impasse. Many years have been spent on negotiations, so we
must learn the lessons from past negotiations. Palestinians
now need a "new dynamic." The process needs to being to
evolve in a manner that makes clear that negotiations lead to
a state. Palestinians are determined to prepare themselves
for statehood and are getting the institutions of government
going in all spheres. Security, he noted, is important to

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everyone, not just to Israelis.


12. (U) After losing Gaza, the PA focused on establishing a
sense of security and law and order. Noting that the Road
Map assumes progress toward a Palestinian state, Fayyad said
Israel's obligations are to accept conditions consistent with
a state. That includes a freeze on settlements and stopping
IDF incursions into Palestinian-controlled areas, where the
PASF are capable of providing security. Israel must show
that the occupation is being "rolled back." Fayyad commented
that Palestinians are sensitive to Israeli security needs,
but there can be no security for anyone unless there is
security for all. The PA should have a formal security
presence outside of Area A in order to help give them the
sense that the occupation is ending.


13. (U) Turning to Jerusalem, Fayyad noted that East
Jerusalem was occupied in 1967 and is an integral part of
Palestinian territory. He cautioned Israelis that there can
be no lasting peace without Palestinian control of East
Jerusalem. Asking rhetorically why Palestinians have
insisted on a settlement freeze this time, Fayyad said that
settlements are expanding on land on which a Palestinian
state is supposed to be established. If the Israeli
Government cannot even freeze settlements, how can the
Palestinians have confidence that negotiations will produce
results?


14. (U) Fayyad said his government is assuming the
responsibilities of a state by delivering services to the
people. Noting that some have called this unilateralism,
Fayyad stated that it is and should be unilateral since the
Palestinians are now building their own state.
State-building reinforces the negotiating track, but is not a
substitute for negotiations. The PA, he stressed, will step
up its efforts in order to be ready for statehood by the end
of 2011. Fayyad said the PA has made great progress during
the past two years, for example implementing over one
thousand community projects and establishing a
well-functioning central bank.


15. (U) Fayyad declared that by the end of 2011, the
achievements on the ground will reach a "critical mass." If
there is not a final status agreement by that time, he
cautioned Israelis that these achievements will "put great
pressure" for the establishment of a state anyway. The
Palestinians' partners in the international community will
not continue to invest in the PA without a sense that the
outcome will be a state.


16. (U) Turning to Gaza, Fayyad said the Palestinians must
be unified, the division between the West Bank and Gaza must
end. He called for Israel to "lift the siege" on Gaza,
calling Israeli policy "both wrong and wrong-headed."
Lifting the siege would help the PA reestablish itself in
Gaza he asserted, without further comment. Palestinians have
the right to hold elections, but cannot do so without
unification with Gaza. Again without elaborating, Fayyad
said a solution requires the end of the internal Palestinian
division.


17. (U) Appealing to Israelis on a human level, Fayyad
admitted both peoples have suffered and noted that their "two
diametrically opposed narratives" cannot be changed. He
concluded by reiterating that Palestinians aspire to live in
peace in their own state beside Israel.


18. (C) Comment. Barak's message that a Palestinian state
is an Israeli imperative is not new, but sounded more like
the arguments of opposition Kadima party leader Livni rather
than those of PM Netanyahu, whose acceptance of Palestinian
statehood is always accompanied by a series of caveats.
Barak's security requirements are in fact the basis for
Netanyahu's position, but perhaps in deference to Fayyad,
Barak chose only to make a vague reference to a "sober peace"
rather than spell out his thinking on Israel's security
requirements as he sees them. Israeli commentators in the
past few days have generally praised Fayyad's courage for
addressing a largely Israeli audience in a forum
traditionally associated with the security-minded Israeli
center-right, but they have also found fault with both his
implied threat of state-building leading inexorably to
statehood by the end of 2011 regardless of negotiations, as
well as the vagueness of his rhetoric about resolving the
divide with Gaza.
Cunningham