Cablegate: Israel Media Reaction

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SUBJECT: ISRAEL MEDIA REACTION

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SUBJECTS COVERED IN THIS REPORT:
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Mideast

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Key stories in the media:
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All media continued to banner the global financial crisis and its
repercussions in Israel. Maariv reported that if the banks' cash
flow continues to deteriorate and stock exchange collapses go on,
the Bank of Israel intends to inject billions of shekels into banks
and to create a protection net for pension savings.

Ha'aretz reported that fallout from the mounting market panic was
palpable in Israeli politics too, helping Labor Party chair and DM
Ehud Barak to draw closer to forming a government with FM and prime
minister-designate Tzipi Livni. Barak stated Monday that during a
financial crisis, the most urgent priority is to deal with the
situation. In this way Barak was seen as lowering Labor's demands
for increased social spending in next year's budget. However, at
the end of a meeting he held with Histadrut labor federation chair
Ofer Eini and the president of the Manufacturers Association, Shraga
Brosh, Barak said he still thinks the budget can be expanded to
increase old-age pensions, spending on higher education, and certain
security priorities. Ha'aretz reported that there has been no real
change in Labor's demands from Kadima. Yesterday Likud Chairman
Benjamin Netanyahu, a free-market proponent, called for state
intervention in the financial market, adding that the only solution
at this time is holding new elections.

The Jerusalem Post reported that yesterday outgoing PM Ehud Olmert
clarified that the views he expressed in his interview with Yediot
last week were his own, and were not binding on prime
minister-designate Tzipi Livni.

Ha'aretz reported that security officials have warned that the time
for making a deal for the release of Gilad Shalit is running out.
The officials told Ha'aretz that the more time passes, the more
things can go wrong and the greater the danger that an opportunity
will be missed to bring Shalit home. The media reported on a rally
in Tel Aviv's Rabin Square last night that begged Shalit to
"forgive" the thousands of participants in the spirit of Yom Kippur.
Ha'aretz quoted Hamas leader Khaled Mashal as saying yesterday that
the negotiations for Shalit's release are stalled because of Israel,
which he said constantly reneges on its commitment.

Leading media quoted NATO Secretary-General Jaap de Hoop Scheffer as
saying yesterday that he was not certain that the world can stop
Iran from building a nuclear bomb. Scheffer was also quoted as
saying that he would never expect Israel to abandon its own,
"supposed nuclear arsenal." The Jerusalem Post quoted senior
Israeli defense officials as saying that Scheffer's remarks
regarding Israel's right to maintain a nuclear capability set a
"precedent" and sent a message to Iran that NATO stands by Israel.

The Jerusalem Post reported that Israel is in advanced talks with
the UN over a potential withdrawal of IDF troops from the northern
section of the split town of Ghajar, which Israel has occupied since
the end of the Second Lebanon War in 2006.

Ha'aretz reported that the historic Deir al-Sultan monastery on the
roof of the Church of the Holy Sepulcher in Jerusalem is in danger
of collapse. The newspaper reported that a long-standing dispute
between the Ethiopian and Coptic Churches is halting renovation
efforts.

Ha'aretz quoted diplomatic sources as saying that Olmert will seek
today to persuade Russian President Dmitry Medvedev not to sell
weapons to Iran and Syria, but with little chance of success.
Jerusalem is particularly concerned that sales of Russia's S-300
anti-aircraft missile system could threaten Israel's air superiority
over both states. And if Iran were to receive these missiles, it
would be able to protect its nuclear sites more effectively, making
an aerial strike on these sites more difficult. However, citing an
Interfax news agency wire report yesterday, Ha'aretz cited a denial
by Rosoboronexport, Russia's arms export monopoly, that it plans to
deliver the S-300 missiles to either Iran or Syria. Yediot reported
that if Israel fails to prevent the sale of missiles to Iran, Turkey
will open its territory to exercises in which Israeli forces will
practice operating a similar system.

Ha'aretz reported that the Labor Party refuses to make construction
in settlements an issue in its coalition agreement with Kadima.

Makor Rishon-Hatzofe reported that yesterday Tzipi Livni asked
Quartet envoy Tony Blair to stabilize financial conditions in the
PA.

Yediot reported on IDF anger over the participation of private
advisers in the defense establishment's debates over assessments of
the security situation.

Israel Radio reported on the illegal transfer of goods from Israel
to the PA - a potential source of terrorism. Ha'aretz quoted Talal
al-Karnawi, the Mayor of the Negev Bedouin town of Rahat, as saying
this week that the Bedouin living in his community are worried by
the influx of 4,000 Palestinians from the West Bank and Gaza Strip
who are living there illegally and could plan a terror attack.

Major media reported that yesterday Yemeni President Ali Abdullah
Saleh announced the dismantling of a "terrorist cell" with alleged
links to Israeli intelligence.

Yediot reported that the arrest of cabinet minister and former Shin
Bet head Ami Ayalon in the Netherlands in May at the request of an
anarchist group was averted by Israel's appeal to the Dutch
government.

The media reported that yesterday former Shas leader Aryeh Deri
dropped out of the race for Jerusalem mayor, deciding not to appeal
Thursday's court decision rejecting his request to run. Deri had
hoped the court would overlook the moral turpitude involved in his
bribery conviction in 2000. Ha'aretz reported that Knesset Member
and candidate for mayor of Jerusalem Meir Porush will try to close
deals with the people supposed to be his ultra-Orthodox partners:
Shas, Degel Hatorah, and Agudat Yisrael -- the latter two currently
forming the United Torah Judaism party.

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Mideast:
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Summary:
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Gershon Baskin, co-CEO of the Israel/Palestine Center for Research
and Information, wrote in the conservative, independent Jerusalem
Post: "If we will not find the way to allow the Palestinians to gain
their freedom and to end our occupation over them, in the not too
distant future, we will be atoning for our loss of our own freedom
in our own state and wondering how we missed the opportunity for
peace."

Block Quotes:
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"Between the Jewish New Year and Yom Kippur"

Gershon Baskin, co-CEO of the Israel/Palestine Center for Research
and Information, wrote in the conservative, independent Jerusalem
Post (10/7): "After 20 years of failing to convince Israeli
governments to accept the two-state solution, the Palestinian
national movement is in the process of reviewing and renewing its
political agenda.... The more simplistic version or 'sound bite' of
the new vision is the 'one-state solution'.... What the supporters
of this plan fail to understand is that the only hope for peace in
this land has always been based on the concept of partition. This
is the only way to move beyond an existential conflict of either 'us
or them'.... If the Israeli-Palestinian conflict moves back into
existential terms, then Israel/Palestine turns into Bosnia of the
1990s.... Israelis and Palestinians are not ready now or at any time
in the foreseeable future to share the same national home. We both
need a physical territory in which we can claim sovereignty and
express our own national identity. Olmert's soul searching of the
[Jewish] new year should be a collective soul searching in which we
all reach the same conclusions. If we will not find the way to
allow the Palestinians to gain their freedom and to end our
occupation over them, in the not too distant future, we will be
atoning for our loss of our own freedom in our own state and
wondering how we missed the opportunity for peace."

CUNNINGHAM

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