Secretary of state: This cable sets out amended assessments, priorities for relevant interactions on Israeli-Palestinian Issues.

Friday, 10 December 2010, 15:25

S E C R E T STATE

NOFORN

DECL: 11/18/2035

SUBJECT: (S) REORIENTATION OF POLICY PRIORITIES: ISRAELI-PALESTINIAN CONFLICT

1. (S/NF) SUMMARY: This cable sets out amended assessments, priorities for relevant interactions on Israeli-Palestinian Issues (paragraph 2-end) by Department personnel and other Country Team members.

A. (S/NF) The directive results from a recent Washington-led review of progress and sets forth contextual priorities intended to guide participating USG agencies and personnel as they deal with Israeli-Palestinian Issues. The priorities may also help personnel in productive reporting and collection, including formulation of Mission Strategic Plans.

B. (S/NF) Important information responsive to this directive is available to non-State members of the Country Team whose agencies participated in the review leading to its issuance. COMs, DCMs, and State reporting officers can assist by coordinating with other Country Team members to encourage relevant implementation through their own or State Department channels.

2. (S/NF) Amended assessments, opportunities for progress on Israeli-Palestinian Issues - priority issues

Settlement freeze
A. (S/NF) USG focus on obtaining freeze in Israeli settlements in the West Bank for additional 90 days has been discontinued. Recognized that previous 10-month freeze was wasted by Palestinian Authority, which failed to enter direct talks in good faith. PM Netanyahu considered USG request for additional 90-day freeze, though concerned about domestic political fallout. Contacts with PA and Department assessment indicated that new freeze would achieve little: Israel reluctant to discuss border issues in isolation from other Final Status Issues including security, refugees, Jerusalem; Palestinians seeking Israeli border concessions, unwilling to engage on other issues.

B. (S/NF) Status of Israeli settlements, regarded as illegitimate by USG, constitutes Final Status Issue. Previous focus complicated rather than smoothed diplomatic engagement; ignored demonstrable Israeli readiness to resolve issue (Gaza disengagement 2005, etc.). USG affirms previous Administration understandings with Israeli government (President George W. Bush to PM Sharon, 2004, “In light of new realities on the ground, including already existing major Israeli populations centers, it is unrealistic to expect that the outcome of final status negotiations will be a full and complete return to the armistice lines of 1949…),” regarding certain sympathy for expansion of sovereignty to encompass major West Bank settlement blocs in the context of land swaps to be demarcated in Final Status Agreements. USG expects Israeli government not to expand “footprint” of existing settlements, to avoid provocative construction beyond pre-1967 lines including East Jerusalem.

Indirect talks, refugee issue, withdrawals, security forces
C. (S/NF) USG now working indirectly via relevant personnel to broker initial framework accord, offering bridging proposals where appropriate. USG conscious of PA President Abbas’s failure to capitalize on former PM Olmert’s terms (2008). USG conscious of unhelpful PA inflation of scale of refugee problem, untenability of ongoing formal demand for right of return. USG sees Arab League Peace Initiative as useful starting point for resolution of refugee issue, emphasizes that resolution will involve only minor Israelisanctioned family reunification inflow to Israel, with main focus on USG-led international community offering financial compensation and, where appropriate, relocation opportunities.

D. (S/NF) USG aware of danger of premature Israeli withdrawal from the West Bank given precedent of HAMAS violent takeover in Gaza (2007); replication in the West Bank would render entire Israeli territory vulnerable to rocket attack. USG appreciates progress in training PA security forces under USG oversight, appreciates forces’ maintenance of law and order during Israeli-Gaza conflict (2008-9); USG wary of forces’ potential abuse against Israel if negotiations fail, wary of unproven capacity in potential face-off against HAMAS.

Other international players
E. (S/NF) Previous USG emphasis on policy reconciliation with European partners deemed counterproductive. Certain EU government positions unhelpfully influenced by factors including Muslim demographics, media bias, misconceptions on Israeli room for maneuver, underestimation of ongoing regional hostility to Israel, ignorance (Israel a fraction of a percent of regional territory; state not established in place of previous state of “Palestine,” etc.), anti- Semitism (not to be overstated), trending to a climate placing unrealistic expectation on Israel. USG rejects counterproductive temptation among some EU governments to ascribe blame to the Israeli- Palestinian conflict for extremist stance and actions among minority of their own domestic Muslim communities.

F. (S/NF) USG concerned by certain domestic misrepresentation of Israeli-Palestinian Conflict, and of USG efforts to resolve it. Unfortunate US media claims that USG is engaged in “assisting suicide” for Israel, indulging purported Israeli time-wasting, condemning Israel to apartheid/pariah status, etc., in turn embraced by minority of domestic legislators, echo more widespread European overestimation of Israel’s capacity to resolve conflict alone, underestimation of Palestinian rejectionism.

G. (S/NF) USG, concerned at consequent international and potential domestic delegitimation of steadfast ally Israel, and potential erosion of Israeli QME, sees imperative to lead on realistic approach to Israeli-Palestinian issues, even at cost of consensus with other Quartet partners. USG thoroughly conscious of dangers for direct parties, the US interest, of failure to make urgent headway.

3. (S/NF) Amended assessments, opportunities for progress on Israeli-Palestinian Issues - wider context

Israeli government - stability and orientation
A. USG personnel and agencies assess: PM Netanyahu, relatively stable in power, with potential support from opposition Kadima if possibility of negotiated breakthrough triggers departure of right-wing coalition partners. Unwilling to match Olmert, Barak terms. Rhetoric suggests shares USG assessment of untenability of status quo; however, negotiating stance and actions inconclusive, even unhelpful. In all contacts, reiterates justice of Israeli claims in West Bank; raises fundamental injustice of Palestinian demand for no Jewish presence in West Bank after withdrawal, contrasted with equality within Israel for substantial non-Jewish populace. Assertion that Israel has no desire to rule over the Palestinians seems genuine; apparently prepared for Israeli concessions in Jerusalem and regarding security arrangements in Jordan Valley. Concerned at security threat to Israel after any West Bank withdrawal; highlights the absence of viable solution for Gaza. Uncompromising in opposing right of return.

B. PM Netanyahu has encouraged “economic peace” in West Bank, fueling economic growth there by easing freedom of movement, access, etc, bolstered by Quartet envoy Blair. Reluctant to give ground in substantive negotiations on Final Status Issues, because of domestic political constraints and own traditional ideology, but acutely conscious of importance of ties to USG, therefore susceptible to cautious risk-taking in context of improved faith in USG.

Palestinian government - stability and orientation

C. USG personnel and agencies assess: PA President Abbas heading unreformed Fatah movement, nearing end of political career, reluctant to take personal risk. Unwilling or unable to concertedly encourage policy of reconciliation with Israel, evidenced by ongoing incitement and delegitimation (see November PAendorsed study discounting Jewish connection to Western Wall); occasional comments, when abroad, in recognition of Jewish rights in region met with heavy criticism within Fatah and beyond.

D. President Abbas formally committed to demand for right of return, although hints at opportunities for compromise. Inconsistent on possibility of West Bank land swaps to resolve settlement bloc issue. Unhelpfully encouraged by numerous international players to believe he can establish Palestinian state without confronting Final Status Issues. PM Fayyad, presiding over admirable progress toward institution-building in Palestinian West Bank territories with summer 2011 statehood timetable, lacks public backing to promote compromise, debilitated by difficult relationship with Abbas.

4. (S/NF) Amended assessments, opportunities for progress on Israeli-Palestinian Issues - recalibration pointers
Israel
A. Israeli mainstream commitment, interest in accommodation hitherto underestimated by this Administration. Israeli consensus recognizes geo-strategic, demographic disadvantages; sees imperative for normalized relations. This evidenced by Barak (2000) and Olmert (2008) terms, notably (Olmert) including willingness to relinquish sovereignty asserted post-1967 to paramount Jewish sites in “Holy Basin.” Netanyahu instinctively less forthcoming than PM predecessors; distressingly unforthcoming in aborted direct talks (September 2010), albeit in unpromising context. Israeli public prepared to oust PM seen missing opportunities for peace (1999 elections). Little such current readiness, given Israeli public sense of Palestinian rejectionism.

Palestinians
B. Palestinian commitment, interest in accommodation hitherto overestimated by this Administration. Palestinian leadership sees international community, EU included, supporting statehood without resolution of Final Status Issues, so lacks incentive for such resolution. Abbas intimidated by ongoing hostility to Israel from both Fatah and HAMAS.

USG role
C. Clinton (2000) parameters remain viable blueprint for permanent accord, provided USG can leverage substantive Palestinian engagement and build wider climate of regional reconciliation, in turn encouraging Israeli public opinion to return to moderate consensus (early-to-mid 1990s). Right-wing domestic Israeli opposition to territorial compromise genuine threat to major West Bank territorial withdrawal, dismantling of settlements, unless firm public opinion consensus in favor, in turn dependent on firm public sense that Final Status Agreements yield full regional normalization for Israel.

USG leverage on regional partners crucial. USG credibility in this endeavor tested not in pressuring ally Israel but in face-off against Iran.

D. (a), USG ultimately asking Israelis to relinquish territory to which they claim peerless attachment, from which they were attacked for first two decades of statehood; to enemy/partner that fostered recent terrorist onslaught that killed hundreds of their people, and some of whose institutions vow unceasing enmity against them; against track record of international failure to prevent violent, Iranian-backed Islamists (Hezbollah, HAMAS) filling vacuum left by previous US-backed Israeli withdrawals (Lebanon, Gaza); (b), USG can serve all interests by stringent oversight of process of Palestinian state-building, to promote reconciliation, minimize military, demographic threats to Israel.

E. Time is not on the side of the Israelis, moderate Palestinians, relatively moderate regimes in region, or the American interest. State-championed (Iran) Islamic extremism feels itself ascendant, sees America hesitant, in retreat. Previous lukewarm allies such as Saudi Arabia concluding that Iran will prevail in nuclear face-off with USG, looking to safeguard own interests via altered alliances, domestic nuclear initiatives, etc. Warmer allies such as Jordan, concerned for fundamental interests, recalibrating relations with Iran.

F. Imperative to re-establish USG credibility, damaged by underestimation of Iranian intransigence on nuclear issue, indulgence of Syrian hypocrisy. Imperative to emphasize robust USG commitment to Israel, support for negotiated path to Palestinian statehood, firm determination to prevent Iran obtaining nuclear weapons capability, with all options on table.

G. USG, under successive administrations, underplayed ongoing terrorist activity, incitement, notably under former Palestinian leader Arafat, hopeful it would recede. Imperative to demolish illusions on either side of alternative to negotiated settlement involving farreaching compromise on both sides.

5. (S/NF) Amended assessments, opportunities for progress on Israeli-Palestinian Issues - operative conclusions
A. Participating USG agencies and personnel to emphasize in all contacts with PA unviability of unilateral path to statehood, advantage of rapid return to direct talks.

B. Participating USG agencies and personnel to emphasize in all contacts with PA imperative to internalize Jewish sovereign rights alongside Palestinian state. Progress on this issue seen as single most important step toward creating climate for Final Status Agreements. Stress financial cost to PA of failure to negotiate in good faith, in terms of lost USG and wider aid. Stress political cost, in terms of lost USG and wider support.

C. Participating USG agencies and personnel to emphasize in all contacts with Israeli government imperative for dialogue, confidence-building measures (further economic steps, minimized IDF incursions into PA territories, avoidance of settlement construction in areas Israel expects to relinquish under Final Status Agreements), sensitivity toward creation of climate of conciliation among Palestinians. Stress that effort at gradual reorientation of USG and other international parties’ stances is geared to produce climate for productive negotiations - to Palestinians’ and Israel’s crucial benefit. Hence Israeli imperative to assist in reorientation in close coordination with USG, minimize provocative actions, prepare domestic climate for far-reaching compromises, seize opportunity for negotiated settlement as/when it arises.

D. Participating USG agencies and personnel to emphasize in all contacts with international parties imperative to thwart PA unilateralism and encourage compromise; overtly tie diplomatic, financial support to PA reforms aimed at promoting conciliation with Israel.

E. Participating USG agencies and personnel to emphasize in all contacts with international parties imperative to cease indulgence of PA, wider Arab intransigence regarding Israel, incitement against it, to encourage PA conciliation amid wider struggle with Islamic extremism in the region. Previous cables from relevant USG agencies and personnel confirm first priority for moderate Middle Eastern regimes lies in thwarting Iranian nuclear weapons program; this goal not contingent on Israeli-Palestinian breakthrough. Israeli-Palestinian progress emphatically helpful, however, in securing supportive Middle Eastern public opinion, bolstering USG credibility, with positive ramifications for regional priority of tackling Iran.

CLINTON