COGAT DANGOT ON PEACE PROCESS, WEST BANK AND GAZA

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 000359



NOFORN

SIPDIS



NSC FOR SHAPIRO/KUMAR, SEMEP FOR RUDMAN/HARDEN, TREASURY

FOR A/S BAUKOL



E.O. 12958: DECL: 02/17/2020

TAGS: EAID, PTER, KPAL, KWBG, IS

SUBJECT: COGAT DANGOT ON PEACE PROCESS, WEST BANK AND GAZA



Classified By: Ambassador James B. Cunningham; reasons 1.4 b/d



1. (C/NF) Ambassador had a wide-ranging discussion with Gen.

Eitan Dangot, Coordinator of Government Activity in the

Territories (COGAT) on February 16 in which he urged movement

on various aspects of West Bank and Gaza issues. Dangot said

he expected the GOI to authorize on February 18 transfer of

as much as 300 million surplus shekels from the Gaza banks

back into Israel. If approved, actual transfer should take

place within a matter of days. He was more negative on

transfers of dollars, noting that the GOI was allowing in $30

million a month for UNWRA operations and salaries. However,

the GOI would be reluctant to do anything that would make it

easier for Hamas to pay its salaries in hard currency or to

support the tunnel economy. The Ambassador argued that the

transfers were important to preserve the PA-regulated banking

system, and noted that we understood the security services

had prepared an options paper for the Prime Minister's Office

which we looked forward to discussing. Dangot reiterated the

GOI view that the economic embargo was putting pressure on

the Hamas leadership in Gaza, as were Egyptian travel

restrictions on Hamas leaders. Dangot said the GOI had not

given up on negotiating the release of Gilad Shalit, even

though the Damascus-based Hamas leadership had forced the

Gazan leaderhip to be less pragmatic for the moment. Noting

that the GOI had recently expanded the categories and amount

of goods going into Gaza, Dangot added that he was looking at

what more could be done within the current policy

constraints, particularly with one-off, containable

infrastructure projects. He said that he would be meeting

again with UNSCO Robert Serry the week of February 22 to get

a few of the UN projects moving forward, adding that he also

expected to be doing more with USAID in this area. The

Ambassador noted we were still interested in pursuing the UN

reconstruction projects, and that we had worked with the UN

to create end-use assurances that should be satisfactory for

Israel. He also pointed to the commitment that Serry had

made to ensure that the PA got maximum credit for UN-funded

projects in Gaza. Dangot agreed that the PA role was

important, and said he was coordinating carefully with the PA

on Gaza. The Ambassador expressed interest in setting up a

bilateral policy dialogue on Gaza that would look at not only

short-term humanitarian issues, but could also assess how

best to achieve shared objectives in Gaza. Dangot thought

this would be worthwhile and committed to participating in

such a dialogue.



2. (C/NF) Dangot said he had met with PA Prime Minister

Fayyad earlier in the week. He said Fayyad had raised with

him a plan to ask the Egyptians to allow PA customs and

security officials to operate on the Egyptian side of the

Rafah crossing into Gaza, which Dangot told Fayyad would be a

mistake. The Ambassador noted that the Egyptians also might

not find the proposal in their interest. Dangot

characterized Fayyad as gaining in political confidence and

grass roots popularity, though he warned that current

anti-Israel rhetoric in the PA was creating an atmosphere for

renewed violence, noting the recent killings of a rabbi and

an IDF soldier. Dangot also raised concern that PA Minister

of Justice Ali Khashan was once again engaging the

International Criminal Court in an effort to delegitimize

Israel, noting that this would certainly prompt a GOI

reaction (others have raised this with us recently, warning

the PA re-engagement with the ICC will be seen very

negatively). Dangot added that he hoped movement toward

negotiations would begin before the March 27-28 Arab League

summit in Libya. Dangot said that Libya had agreed not to

allow Hamas to take part in the Summit, under pressure from

Egyptian President Mubarak, but worried that this could

change between now and the end of March.



3. (C/NF) On West Bank issues, Dangot said the security

situation remained good and cooperation with the PASF was

better than it had ever been. However, the uptick in hostile

political rhetoric and staging of "spontaneous"

demonstrations -- often, in his view, in areas where there

were no particular problems between the Israelis and the

local population, but which were close enough to Ramallah to

be convenient for PA leadership to participate were of

growing concern. At minimum, these activities made it more

difficult for the IDF to cut back on Area A incursions and to

further reduce movement and access impediments, said Dangot,

and at worst, blurred the distinction between Fatah and Hamas

or other terror groups contending for the West Bank "prize."

Dangot also complained that burning Israeli settlement goods

in a public bonfire in Salfit and the expansion of the trade

boycott to include products from Green Line Israel sent wrong



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signals to both the Palestinian and Israeli populations.



4. (C/NF) Dangot said Fayyad's focus on short-term projects

that yield rapid results was having an impact on the West

Bank economy, citing his willingness to pull the plug on an

ineffective Palestinian effort to invest in the Jenin area

and turn the project over to a Turkish investor with a good

track record. He said the Rawabi project would be another

big shot in the arm for the West Bank. He noted that the

Prime Minister's Office had not yet agreed to redesignate

land from Area C to Area B for the 2.4 kilometer main access

road, but added that COGAT was looking to be helpful in any

other way that it could. On Wataniya, Dangot said that the

GOI intended to withhold the remaining 1.0 MHz of bandwidth

in an effort to force the PA to begin regulating illicit

radio stations. He said 78 radio stations had sprung up in

the West Bank over the past couple of years, many of which

were operating in frequencies that interfered with Israeli

military or civilian aviation signals. Dangot said the GOI

would soon extend operating hours at the Shar Ephraim

crossing, as they had done at the Tarqumiyah crossing, which

should allow more Palestinian goods to be moved at lower

cost. He said the IDF continues to move or remove roadblocks

and to encourage investment.



5. (C/NF) In response to the Ambassador's question, Dangot

said COGAT would do all it could to make the May 2010

Bethlehem Investment Conference a success. The Ambassador

raised NGO and foreign investor visas problems, noting this

was a serious problem for the US and was undercutting the

capacity building effort. Dangot said "We are hurting

ourselves with these policies." He said he had had some

difficulty in getting the Ministry of Interior to discuss the

problems with him, but had finally set up a meeting with

Minister Yishai during the first week of March. The

Ambassador informed Dangot that we were also pushing the MOI,

and that the USG had some thoughts on how to deal with the

various visa and access problems. Dangot asked that Emboffs

brief his staff before the March meeting with MOI (NOTE:

Embassy will give COGAT a copy of the non-paper and

recommendations; we have also passed a copy to Eran Lerman in

the Prime Minister's Office. END NOTE.) The Ambassador

suggested that USAID/SEMEP/Emboffs also brief Dangot on the

work USAID had done on prospects for a "known-trader" secure

supply chain program, which could also give a boost to West

Bank agriculture and industry. Dangot said it sounded

interesting and he would welcome the briefing. The

Ambassador pointed out that Israeli restrictions on dual use

items are another serious impediment. Dangot confirmed that

dual-use imports continue to be a problem for both Israeli

security and Palestinian industry, and applauded Embassy

efforts to work directly with the various security services

who make recommendations on dual-use items.



6. (C/NF) Comment: Dangot is clearly a different sort of

COGAT than we have dealt with in recent years. He has claimed

(and the MOD PolMil Bureau has now grudgingly confirmed) that

he will play a lead role in policy issues related to

Israel-Palestinian relations. The concerns he raised about

PA incitement are becoming a common theme from GOI officials

and Israeli analysts of Palestinian politics alike.



Cunningham