CONVERGENCE, THE ABRIDGED EDITION: Senior Kadima officials believe that the chances that Ehud Olmert will carry out the convergence plan in its original format are not high and probably Olmert will in the end be compelled to carry out a limited, symbolic move, in the form of a "limited convergence." At least two senior Kadima officials in the top ten who support the prime minister's positions said recently in private conversations that in the present circumstances there is no chance of passing the convergence plan. "With 29 seats, with Hamas in control on the other side, with international support not entirely guaranteed, most probably Olmert will have to give up significant parts of his plan," said a senior official who is well versed in the peace process and himself very moderate in his views regarding it.

According to this version, Olmert will find it very hard to persuade the American administration to recognize the new borders as a permanent border, and even harder vis-à-vis the European Union, so he will have to relinquish the plan and be content with a limited evacuation of small, isolated settlements outside the fence, in order to shorten the distances and ease the security effort. This position has been adopted by at least one additional senior Kadima official, and similar statements have been made recently by other members of the party.

National Security Council officials are formulating a plan and possible drafts. These officials believe that international support of the new permanent borders that Olmert wants is only possible if the withdrawal is deeper, even west of the separation fence in more places. A senior NSC official said that, "In certain circumstances, the world will be able to recognize the line somewhere between the present route of the fence and the Green Line."

On the other hand, Kadima Knesset Member Otinel Schneller, who is responsible for liaison between the government and the settlers, said that the number of people who will be evacuated in the convergence plan will be significantly lower than 70,000, and that figure is a wild exaggeration. "It is completely groundless," he told Israel Army Radio. "I don't know where all these figures that are appearing in the media are coming from. People on the Right are using them to create a fear of catastrophe. The left-wing is using them to tell the settlers-we'll show you. It is a very big exaggeration-a wild exaggeration." He added that if the security fence remains at its present location and doesn't include more West Bank settlements, he will consider this as a personal failure, and he knows that Olmert will also think so. Schneller said the convergence plan could take more than one term of government, and that it is the most right-wing plan currently on the agenda.

Of course, none of this will stop Olmert from trying to carry out the plan as originally conceived. He intends to begin implementing the initiative within 18-24 months, and he will try to broaden his coalition to 80 Knesset Members to provide enough breadth to succeed. According to the plan, settlements beyond the security fence will be evacuated and attached to the large settlement blocs of Maale Adumim, Ariel, Greater Jerusalem, and Gush Etzion, while the IDF is given a free hand in the West Bank and the Jordan Valley will be Israel's eastern border. Olmert intends to build thousands of housing units in the large settlement blocs in order to absorb evacuees from West Bank settlements. He intends to seek U.S. approval of this action and create a sufficient housing stockpile to avoid the crisis that emerged after the Gaza disengagement. (Ma'ariv, 4/28/06; Israel Army Radio, 5/1/06; & Ha'aretz, 5/4/06)

THE DARK SIDE OF THE GOON: Yisrael Beiteinu head Avigdor Lieberman used the opening of the new Knesset to demonstrate that Baruch Marzel doesn't have a monopoly on intolerance. In an unprecedented attack on Israeli Arab Knesset Members, he said, "At the end of the Second World War, not only criminals were executed in the Nuremberg trials, but also those who collaborated with them. I hope that will be the fate of the collaborators in this house. We demanded in that in the basic principles [of the new government] it be written: All those who incite and cooperate with terror and who sit in this house should be punished. All those who continue to freely meet with Hamas, with Hezbollah, who go to make visits in Lebanon."

Knesset Member Chaim Oron responded, "Lieberman's racist and dark statements provide a good explanation for why he was excluded from the coalition and raises astonishment why Olmert ever pursued him." Olmert himself quickly came to the defense of Arab lawmakers and said he has no doubt that all Knesset members-Jews and Arabs-act in the interests of Israel. "Let's not cross those certain lines that we tend to cross in the intensity of debate," he said. "We don't have 'more patriotic' and 'less patriotic' here. I don't see people who love the State of Israel more or less. We cannot take the debates between us into the realm of fiery extremism, impatience, and intolerance. The time has come to talk without incitement and without violating the law." (Ynet & Ha'aretz, 5/4/06)

PEACE NOW PROMPTS FRAUD INVESTIGATION: In response to an injunction from the High Court of Justice that was issued at the request of the Israeli Peace Now movement, the Israel Police's National Fraud Squad opened a criminal investigation into the illegal construction of hundreds of housing units in the Matityahu East neighborhood of the Modi'in Illit ultra-Orthodox settlement. The police investigation is focusing on Modi'in Illit council head Yaakov Gutterman, other senior council officials, entrepreneurs and large construction companies, Jewish real estate dealers who acquired privately owned Palestinian land, lawyers, and settler organizations involved in "land redemption." Hundreds of millions of dollars are believed to have changed hands in the affair.

According to police suspicions, a lawyer at one of the settler groups bought the land in question based on an affidavit submitted by the mukhtar of Bil'in, who claimed that because of the security situation, he was unable to get to the village and collect the signatures of the landowners. During a debate at the High Court, the justices were told of a land-laundering scheme that let real estate dealers and settler organizations convert private land-purchased sometimes through dubious means-into "state land." Ahead of construction of the security fence in the area, the land was "returned" to the buyers so that they could establish facts on the ground and press the Defense Ministry to move the fence route to the east of the new neighborhood. (Ha'aretz, 4/27/06)

PROOF IN THE PULLOUT PUDDING: Israeli Chief of Staff Dan Halutz rejected claims that the disengagement from Gaza harmed Israeli security and led to Hamas' rise to power. "The question is what you count," he said. "In terms of the dry statistics of casualties, it can be said that our security situation in Gaza has been changed entirely for the better. Since the withdrawal there has been no one killed on the Israeli side as a result of terror from the Gaza Strip. This is no small matter compared to dozens of people killed every year in the past. People are counting rockets, but before the disengagement thousands of mortars were fired, which hit Gush Katif. I don't think that Hamas came into power because of the disengagement. The elections, after all, were supposed to have been held in July 2005. Hamas would have received the same result then, perhaps a bit less." (Ha'aretz, 5/2/06)

HURRICANE WARNING: During a field trip to Ramallah last week, Ben Caspit of Ma'ariv talked with members of Palestinian President Mahmoud Abbas' bureau, who told him about a request submitted on behalf of Abbas to then-Israeli Defense Minister Shaul Mofaz. The Presidential Guard is the foundation of Abbas' attempt to withstand Hamas. Dozens of members of the Presidential Guard, Force 17, surround his home. According to the Palestinians, the guard force has only 80 Kalashnikovs in Ramallah and 120 in Gaza. In Egypt and Jordan, there are already shipments standing by. Israeli authorization is necessary to move them to Ramallah and Gaza. They want to form a force of 10,000 men, armed and equipped, who will obey only the president. Mofaz heard this, and responded dismissively. "Get weapons from your smugglers," he said to the Palestinians. (In Mofaz's version, he said, "There are enough weapons and ammunition in the PA.")

The officials in Ramallah were offended. We are a sovereign regime, the entire world recognizes Abu Mazen's legitimacy, the fact that he is a man of peace, say Abu Mazen's associates. "Now, in the face of his attempt to withstand the extremists, to protect the regime, Mofaz responds the way he did. It is offensive and improper," they said. [According to Reuters, Western diplomats say that the Bush Administration has agreed to back an expansion of the Presidential Guard, with the EU providing the funds for training and equipment.]

The Presidential Guard is supposed to be the president's strike force. Besides protecting the president, its personnel were dispatched to Rafah, and are now in charge of operating the border crossing. The American and Italian observers give them high marks. The additional task that Abu Mazen wanted to assign to this force was deployment in the northern Gaza Strip and preventing Kassam rocket fire. Here, too, the Israeli security establishment did not cooperate. In the meantime, Abu Mazen is struggling with an immense wave that is sweeping over him from all around the world. The international isolation, the economic strangulation, Hamas raising its head, and the upcoming clash with it. "It will begin," says a senior Palestinian, "with a single assassination. One liquidation of a senior Palestinian, which will open the gates of hell here."

Hamas' plan is simple: To get rid of Abu Mazen. According to the constitution, the parliament speaker, a Hamas member, will become president in his stead. Abu Mazen is perceived as the last obstacle preventing Hamas from achieving full control of the PA. When he disappears, then the world will also understand that Hamas is the only one, there is no one else beside it. In recent weeks there have been those who have warned Abu Mazen. He received an official warning, which was also recorded in secret protocols. They will take you down, he was told. Some consoled him "not to travel to Gaza."

The Palestinian security services, which are still controlled by Fatah, are monitoring Hamas, and are convinced that the blow-up is on its way. They have stopped observing the settlements, say senior Fatah members, and Hamas is now observing us. They are collecting intelligence on the houses of all the senior commanders of the security services. Buying weapons and explosives. Preparing the war. They will assassinate the members of the security services, they hope to take all our strongholds by storm. It will be a war of everyone against everyone. "This will be the formula," says a senior security source in Ramallah. "They will take down Abu Mazen, or another senior figure, and will not take responsibility. Al-Qaida will take responsibility in an anonymous leaflet. After all, there ware quite a few al-Qaida cells here already. Hamas will express regret, but will take over the inheritance quickly."

And what then? It is hard to say. Abu Mazen doesn't intend to yield easily to Hamas. He was elected in personal elections by a large majority. Hamas, despite its victory in the parliamentary elections, did not gain more votes than Fatah, but rather benefited from the split in the organization. And Fatah has not yet said the last word. Is it possible that the existential threat from outside, which is actually an existential threat from inside, will finally unite Fatah? Perhaps. What is certain is that a battle is on the way, but it is not clear who will win it.

Caspit wrote, "It is clear who will lose. As always, Israel. After all, we are responsible for all the ills that have taken place here. We expelled the PLO from Lebanon and made room for Hezbollah, we brought Syria into Lebanon, we established Hamas in the territories in order to compete with the PLO. This obsession, this fear of Arafat and his Fatah, brought the gates of hell here. Now we are helping bring Hamas to power. Does anyone recall the Israeli anticipation, with bated breath, of Arafat's demise? After him, said everyone in Jerusalem at the time, from Sharon to Silvan Shalom, from Mofaz to Yaalon, after him there will be someone to talk to. After him the Palestinian people will finally exit from slavery to freedom, and move ahead to peace. So here, Arafat is gone. And inwardly, quietly, we are beginning to miss him." (Ma'ariv & Reuters, 5/5/06)

GRUMBLING IN THE RANKS: A survey of Palestinian public opinion conducted by the Bir Zeit Development Program in mid-April found that 63% of Palestinians believe the only way to resolve the current crisis is to form a government that includes representatives of all the Palestinian factions, while just 24% prefer keeping the current Hamas government. 32% of respondents said that the current government's performance is good, 36% said it is medium, and 27% find it weak. If elections were held today, Hamas would win 44% (down from 50% in a poll conducted just 20 days earlier) and Fatah would receive 34%. As for political support, 38% expressed backing for Hamas, 30% for Fatah, 4% for PFLP, and 23% refused to support anyone. 53% said they were satisfied with the results of the elections, down from 59% in the previous poll. 43% said that President Mahmoud Abbas' performance was good, compared to 54% in the earlier poll, while 57% said Prime Minister Ismail Haniyeh's performance was good, compared to 64% in the previous survey. As for the problem of funding, 63% support Hamas' refusal to recognize Israel and its efforts to seek money from Arab and Islamic countries. (Al-Ayyam & DPA, 4/30/06)

KARNI-VAL OF TERROR: Senior Hamas operatives, including Ahmed Ghandour, commander of Hamas' military wing in the northern Gaza Strip, were behind the mass terror attack that was thwarted recently at the Karni crossing, according to the GSS investigation. The terrorists tried to bring in a car with about a half ton of explosives. The attempted attack was committed by members of the Popular Resistance Committees (PRC), under the command of Mumtaz Doghmosh and with guidance of senior Hamas operatives, including Ghandour and Ahmed Jaabari, a leader of the Hamas military wing in Gaza. Palestinian Preventive Security Service personnel foiled the attack.

Israeli security officials said that there is close cooperation between PRC operatives and Hamas. Security officials also say that Hamas is helping the PRC militants by supplying weaponry, training terrorists, and extending professional assistance. Sensing that perhaps it may not be the wisest thing to attack one of the few links between Gaza and the outside world, Palestinian Prime Minister Ismail Haniyeh appealed to militants to knock off launching strikes against border crossings needed to bring vital humanitarian supplies into Gaza. (Yedioth Ahronoth, 5/1/06; Ma'ariv-NRG, 5/1/06; & Reuters, 5/2/06)

SPLITSVILLE? Palestinian President Mahmoud Abbas is considering the option of dividing the Fatah movement and establishing a new party, similar to Kadima's split from Likud, according to al-Quds al-Arabi. The newspaper said that Abbas is planning to strengthen the standing of the young generation of Fatah at the expense of veteran figures. The movement would be headed by former Palestinian officials affiliated with Fatah, such as Rawhi Fattouh, Mohammed Dahlan, and Jibril Rajoub. (Al-Quds also reported that Abbas has appointed Fattouh as his personal representative, which Palestinian officials said could indicate that the PA leader is marking Fattouh as his successor.) There are serious differences of opinion, it said, between Abbas and Fatah's official Chairman Farouk Kaddoumi, who is based in Tunisia. The paper said that Abbas is highly interested in strengthening the young generation due to his frustration with the failure of his party to recover from its loss to Hamas in the general elections.

In response, Kaddoumi blasted "the initiative against the elected government of the Palestinian people," a statement that is seen as a surprising show of support for Hamas, in opposition of Fatah's stance. A senior Fatah member said, however, that chances for a split were low. "What is expected is a declaration of Abbas of a Committee conference or the setting up of a new leadership. So long as this smear of corruption on the veteran generation remains, we won't be able to deal with the challenges presented by Hamas," said the source. By the way, the Palestinian diplomatic corps is also split, which just a handful of ambassadors loyal to Abbas, with the rest appointed by Kaddoumi. Abbas raised the salaries of the ambassadors loyal to him, while the rest did not enjoy a pay increase. All this while the PA's 165,000 employees have gone months without salaries. (Ynet & Ha'aretz, 5/5/06)

A CHINA PATTERN: Ran Dagoni, reporting in Globes, said that a new report from the National Labor Committee spells out how China-not Israel or Jordan-is the main beneficiary of the U.S.-Israel-Jordan qualified industrial zone (QIZ) agreement, under which goods made with Israeli and Jordanian inputs are exported duty-free to the U.S. National Labor Committee executive director Charles Kernaghan said that most plants in Jordan's QIZs are owned by investors from China, Hong Kong, or other Asian countries. These investors are exploiting loopholes in the QIZ treaty and U.S.-Jordan Free Trade Agreement, undermining their purposes of deepening Israeli-Jordanian relations and boosting Jordan's economy. A document written by the Jordan Investment Board for U.S. investors sheds light on the pricing of QIZ products and how they are being manipulated by the Chinese.

For example, a child's shirt that costs $3.50 to make breaks down as follows: fabric and buttons from China, $2.20 (63% of the cost); Israeli inputs, including cutting and the supply of accessories, $0.32 (9.1%); direct production in Jordan, including direct labor, $0.42 (12%); and total recognized Jordanian inputs, $0.68 (19.4%). Indirect labor costs in Jordan, which are not eligible for duty-free imports to the U.S., amount to $0.26.

The aggregate Israeli-Jordanian inputs amount to $0.74, 21% of the total cost of these items. However, this figure is far less than the 35% aggregate Israeli and Jordanian inputs of the total value of a good to become eligible for duty-free imports to the U.S., as stipulated in the QIZ agreement. Here's where the Chinese manipulation comes in. The QIZ agreement stipulates that if apparel undergoes a "double process" at a factory, such as cutting and sewing, the factory can accredit the cost of the fabric as if it were produced in Jordan. In this way, Chinese investors inflate the local value of the cloth in order to obtain duties benefits in the U.S. In 2005, Jordan exported to the U.S. just over $1 billion in duty-free apparel sewn at QIZ factories, $682 million of which was comprised of Chinese inputs. (Globes, 5/4/06)