VZCZCXRO8379
OO RUEHROV
DE RUEHTV #1184/01 1531325
ZNY SSSSS ZZH
O 021325Z JUN 09
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2017
INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

S E C R E T SECTION 01 OF 03 TEL AVIV 001184 
 
SIPDIS 
 
E.O. 12958: DECL: 06/02/2019 
TAGS: PREL PGOV KNNP IR KWBG EG IS
SUBJECT: CODELS ACKERMAN AND CASEY MEETINGS WITH PRIME 
MINISTER NETANYAHU 
 
Classified By: Deputy Chief of Mission Luis G. Moreno, Reason 1.4 (b),( 
d) 
 
¶1.  (S) Summary.  CODEL Ackerman and Casey met separately May 
26 and 27 with Prime Minister Binyamin Netanyahu.  The Prime 
Minister discussed his visit to Washington, focusing on his 
discussions of Iran, a regional approach in support of 
Israeli-Palestinian negotiations, and his approach to the 
Palestinians and settlements, including his opposition to a 
complete freeze on settlement construction.  Netanyahu said 
he was pleased with President Obama's approach to engagement 
with Iran and on a regional component to peacemaking.  On the 
Palestinians, he reiterated his view that the Palestinian 
Authority (PA) must declare its recognition of Israel as a 
Jewish state, and also reviewed his thinking on the 
importance of security for Israelis and his support for 
increased Arab private investment in the West Bank.  On 
settlements, Netanyahu said he would take action against 
illegal outposts and would not build new settlements or 
confiscate more Palestinian land, but he insisted that he 
would not support a complete freeze on construction, and 
noted that his advisers would try to close the gap with the 
U.S. on this issue.  Members of the CODELs pressed Netanyahu 
on the importance of finding ways to strengthen PA President 
Abbas and Prime Minister Fayyad, as well as to address 
humanitarian and reconstruction needs in Gaza.  End summary. 
 
Washington Visit 
---------------- 
 
¶2.  (S) Prime Minister Netanyahu told CODEL Ackerman that he 
did not feel boxed in politically and that his coalition in 
fact reflects the demands of the Israeli public to address 
their concern about security.  While some argue that 
agreements bring security, Netanyahu said Israel's experience 
of the past fifteen years proved that neither agreements nor 
unilateral withdrawals brought security.  Netanyahu said he 
had told President Obama that while he would not condition 
negotiations with the Palestinians on halting Iran's progress 
toward a nuclear weapon, if Iran obtained such a weapon it 
would destroy any progress made toward peace.  He added that 
Egyptian President Mubarak and Jordanian King Abdullah were 
in complete agreement with him on that point. 
 
¶3.  (S) For the sake of both security and peace, the first 
task is to stop Iran's nuclear program. Netanyahu noted that 
the President had assured him that by the end of the year, 
the U.S. will decide whether engagement is working and that 
the goal is to stop Iran's program.  The President told him 
that all options remain on the table, a point confirmed by 
Secretaries Clinton and Gates.  Netanyahu said he and Mubarak 
agreed that a nuclear Iran would lead others in the region to 
develop nuclear weapons, resulting in the biggest threat to 
non-proliferation efforts since the Cuban Missile Crisis. 
This "nightmare scenario" is well understood in Washington, 
he said. 
 
¶4.  (C) Turning to peace efforts, Netanyahu said the 
President is bringing a fresh approach to regional peace 
whereby the Arabs would enhance the Israeli-Palestinian 
track.  It will be especially important to get the Saudis on 
board, he added.  On the two-state solution, Netanyahu noted 
that the President had stressed his support for two states. 
He had told the President that Israelis did not want to rule 
Palestinians.  Netanyahu said he was prepared for 
"arrangements" with the Palestinians that would entail some 
limits on their sovereignty such as no Palestinian army, and 
Israeli control over borders, airspace, and the 
electromagnetic spectrum.  Netanyahu asserted that seventy to 
eighty percent of Israelis are ready to make concessions for 
peace but they do not believe they have a Palestinian partner 
since Hamas is in control of Gaza and Iran has a base on 
Israel's border.  How can there be peace without a new 
situation in Gaza, he asked. 
 
¶5.  (C) Turning to settlements, Netanyahu noted that he had 
told the President that both Israel and the Palestinians had 
unfulfilled Roadmap commitments.  Without elaborating, he 
noted that there were written and oral understandings between 
President Bush and Prime Ministers Sharon and Olmert on the 
Roadmap.  In Gaza, Israel dismantled twenty-seven settlements 
but got six thousand rockets from Hamas in return. 
 
Support the PA 
-------------- 
 
¶6.  (C) Chairman Ackerman commented that President Abbas and 
Prime Minister Fayyad are necessary for progress, and noted 
that both Israel and the U.S. will be in trouble if they are 
replaced.  Something needs to be done to help them stay in 
power.  They need material support but also the promise of 
 
TEL AVIV 00001184  002 OF 003 
 
 
statehood.  Foreign investment in the West Bank would give a 
real horizon as well.  Netanyahu agreed, saying Gulf Arab 
investors had been successful in transforming their own 
societies and could make a great contribution to the 
Palestinians.  He added that he wanted to bring Gulf 
investors into the West Bank since they would change reality 
for the Palestinians but also give Israelis confidence. 
Ackerman responded that this was a great idea, but it should 
come from Abbas, not Israel.  The more credit Abbas can take 
for steps forward, the better. 
 
¶7.  (C) In response to a question about the PA security 
forces' capabilities, Netanyahu commented that he supports 
the PA's desire to keep Hamas at a distance.  A national 
unity government without Hamas' acceptance of the Quartet 
conditions would serve Hamas' interests, adding that Israel 
has a common interest with the PA to prevent a Hamas takeover 
of the West Bank.  Netanyahu said there is a steady flow of 
Iranian weapons to Gaza through Sudan or Syria and then by 
sea, but he said Egypt's performance in stopping the tunnels 
has improved now that Cairo understands that the Iranian arms 
pipeline is a direct threat to Egypt as well. 
 
¶8.  (C) On the economic side, Netanyahu said he wants to 
establish a joint plan with the PA to improve conditions in 
the West Bank.  He cited Cyprus as an example of economic 
prosperity leading to reduced political tensions.  Sen. 
Lautenberg pushed Netanyahu to &put Israel,s best face 
forward8 in the West Bank, and to work with the PA on water 
issues, conservation and health, where Israel could 
contribute a great deal and there are many opportunities to 
build cooperation that would benefit people.  Netanyahu 
responded that his ministerial committee on improving the 
lives of Palestinians in the West Bank met earlier in the day 
and that he is committed to overcoming the turf wars and 
excessive caution that have undercut development efforts in 
the West Bank in the past.  He said the GOI is looking at 
creative ideas, such as how to facilitate tourism to Jericho, 
advance projects in water and agriculture, in addition to 
promoting business (note: he estimated that there are 100 
projects Israel is examining in the West Bank).  &It is 
beyond belief8 what can be done in the West Bank, he said, 
but he hoped the PA would engage with Israel on these 
efforts.  Netanyahu added that the fact that there had not 
been any large anti-Israel demonstrations in the West Bank 
during Operation Cast Lead meant that Palestinians in the 
West Bank want a better life, not confrontation with Israel. 
 
¶9.  (C) Representative Ellison, noting that he is the first 
Muslim to be elected to Congress, said he visited Gaza in 
February and met with NGO representatives who could deliver 
assistance without the credit going to Hamas.  He urged 
Netanyahu to consider opening the Gaza crossings, adding that 
Gazans he had met told him they want peace and would like to 
get their jobs back in Israel.  Netanyahu responded that he 
is looking at ways to balance Israeli security with enabling 
Gazans to have a normal life.  The flow of money and weapons 
to Hamas remains a problem since Hamas is extending the range 
and payload of the rockets it possesses.  In response to 
Representative Ellison's comment that Israel should allow 
USAID to return to Gaza, Netanyahu said he thought that it 
might be a good thing to have USAID operate in Gaza. 
 
Settlements and Outposts 
------------------------ 
 
¶10.  (C) Netanyahu said that illegal outposts were a legal 
question and his government would enforce the law.  The 
outposts should be removed through dialogue with the GOI if 
possible, but it should be done in any case.  Regarding 
settlements, Netanyahu said he wants to work with the U.S. on 
the basis of the understandings reached with the Bush 
Administration, i.e. that Israel will not build new 
settlements or seize more land, but if families grow, they 
will still have the right to build within existing settlement 
boundaries.  Now Israel is hearing that the U.S. wants no 
construction at all.  Israelis consider this position to be 
unfair, he said.  The question is whether the U.S. is seeking 
a geographic or a demographic restriction on settlements. 
 
¶11.  (C) Netanyahu commented that Israel needs a common 
understanding with the U.S.  The U.S. position should be 
"reasonable," since opposition to a total freeze cuts across 
political parties in Israel.  This is more of an issue with 
the U.S. than with the Palestinians, Netanyahu asserted, 
arguing that the PA will go along if there is an 
understanding between Israel and the U.S.  He noted that 
Israeli officials were meeting with U.S. officials on this 
issue, adding that there could be an understanding if the 
U.S. wants one.  Netanyahu commented that he understood there 
should be no land seizures, but he could not tell settlers 
 
TEL AVIV 00001184  003 OF 003 
 
 
not to have children.  In response to a question about GOI 
incentives to settlers, Netanyahu's adviser Ron Dermer said 
the Olmert government had already removed them.  Netanyahu 
said this was an issue that Israel could discuss further with 
the U.S. 
 
Iranian Threat 
-------------- 
 
¶12.  (S) Chairman Ackerman said that in his meetings with 
Arab leaders, he found them all concerned about Iran.  They 
said it would helpful to resolve the Palestinian issue, but 
Israel-Palestine is not the main threat to the region. 
Netanyahu, following a similar comment during his meeting 
with CODEL Casey, responded that there are no Arab leaders 
who would tell the U.S. to wait on Iran until there is a 
settlement to the Israeli-Palestinian issue.  Ackerman also 
explained that the U.S. will try engagement in order to 
prevent an unwise and premature use of force.  We will 
tighten sanctions at the same time, for which we need the 
support of the international community, Ackerman explained. 
Netanyahu noted that Ahmadinejad had said he would not stop 
Iran's nuclear program.  President Obama had been clear in 
his comments to Netanyahu that U.S. engagement would be 
results-oriented and not open-ended.  If engagement did not 
work, the U.S. would gain the moral high ground, which would 
help make economic pressure more effective.  Ackerman agreed 
that more pressure was needed and said we need to figure out 
what the Russians and others want.  Netanyahu said that in 
contrast to North Korea, the Iranian nuclear and missile 
programs were direct threats to Israel, Europe and U.S. 
interests in the Gulf, and he emphasized that the program was 
not defensive in nature.  In response to a question from 
Representative Jackson-Lee, Netanyahu encouraged quick action 
on a bill in the Congress to pressure foreign oil companies 
not to sell refined petroleum to Iran.  This might not be 
enough to stop Iran's program but it would send a strong 
signal.  Netanyahu also urged that the U.S. demand that Iran 
stop all uranium enrichment since enrichment is the main 
element of their program.  He commented that Iran might try 
to use the talks with the U.S. to continue or accelerate 
their enrichment process.  Netanyahu cautioned that he was 
skeptical of the idea that the Iranian leadership could 
change.  They have a dangerous worldview, a violent 
theocracy, but it may be possible to move them if they find 
the U.S. strong and determined.  Iran, he commented, is bent 
on becoming a global and not just a regional power. 
 
¶13.  (U) CODELS Ackerman and Casey did not have the 
opportunity to clear this message. 
 
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