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August 6, 2007 - Vol. 8, Issue 36

MIDDLE EAST ARMS RACE?; BUYER BEWARE; THE SPOILER;

MIDDLE EAST ARMS RACE? German Foreign Minister Frank-Walter Steinmeier is among the most senior international figures to criticize the Bush Administration's plan to provide more than $43 billion in military aid to U.S. allies in the Middle East. "A military buildup is hardly the best solution to the unstable situation in the Middle East," Steinmeier told the Thursday edition of German daily Handelsblatt. Indeed, Gabi Avital, a lecturer at Israel's Air Force Flight Academy, noted that "the ink has not yet dried on [the news of the arms deals] and it has already been learned that Russia. will sell about 260 Sukhoi-30 jets, of the most advanced it has, to Iran." In his interview, the German foreign minister advocated that "a political dialogue with all of the actors in the region is the way to go."

Steinmeier is not the only person to link the weapons deals with a lack of American dialogue with its adversaries. Ha'aretz columnist Yoel Marcus pulled no punches Tuesday when he wrote that the "American decision to sell billions of dollars' worth of cutting edge weapon technology to Saudi Arabia and other Gulf countries, and to compensate Israel by increasing military aid to $30 billion over the next decade, boils down to an admission by President George W. Bush that after two botched terms, he is leaving behind a lot of scorched earth. The situation in Iraq is gridlocked; Iran is still developing the bomb; al-Qaida continues to stalk the earth; and the two-state solution in our neck of the woods is still far from being implemented, if it ever will be. His push for democratic elections in the territories has produced Hamastan in Gaza. Bush is ending his failed career the only way America knows how: Here, take the money, and work it out yourselves."

Yet, Ha'aretz editorial board member Zvi Bar'el sees the deal in a different light. "Coincidences are rare in the Middle East. Exchanging gifts, by contrast, is quite common," he writes. "And so, Saudi Arabia's recent announcement that it will participate in U.S. President George W. Bush's international conference on peace in the Middle East next fall comes as no surprise. After all, it closely followed Washington's announcement that it would sign a whopping $20 billion arms deal with Saudi Arabia to `maintain the existing strategic balance.'" Bar'el also notes that should "a Saudi delegation attend the summit alongside a delegation from Jerusalem, it will be an important - albeit not unprecedented - breakthrough for Israel. Saudi Arabia's participation in the international summit bears tremendous significance for consolidating the consensus reached at the Arab League summit of 2002, in what became known as the Arab Initiative."

Calling Saudi participation "an important gesture" that "may help the Israeli leadership in showcasing the rewards that await Israel if it accepts the conditions of the Arab Initiative," Bar'el writes that the Saudi announcement sends a valuable signal to Syria and Iran. Nevertheless, Bar'el concludes that "the Saudi presence cannot replace veritable breakthroughs in the dialogue with the Palestinians. Israel will have to make that happen." (Ha'aretz, 8/1 & 8/2/07; Ma'ariv 7/31/07)

BUYER BEWARE: Heftziba, one of Israel's largest construction companies, is rumored to be on the verge of bankruptcy. The publicly-traded company is reportedly as much as NIS 1.5 billion ($350 million) in debt, while as many as 4,000 families are waiting for unfinished apartments the company is supposed to build. Heftziba's financial troubles result in part from their role as chief contractor in the illegal construction of a new 3000-apartment settlement dubbed "Matityahu East." Last year, Israel's High Court ordered a halt to building work at this project, following a petition by Peace Now. Among other illegalities, construction at that site had encroached on private Palestinian land of the nearby village of Beilin.

Heftziba is reportedly currently involved in construction projects at a number of West Bank settlements including Beitar Ilit, Modiin Ilit, and Ma'aleh Adumim in the West Bank, as well as Har Homa in East Jerusalem.

Rumors that the company may go bankrupt prompted hundreds of families to enter unfinished apartments over the weekend, including at Matityahu East, out of fear that the apartments they purchased would be seized by creditors. Ha'aretz reported on Friday that the "squatters stressed yesterday that they were not in Matityahu East - or any other community over the Green Line - out of any desire to be settlers; they are merely in search of cheap housing." Israeli law requires construction companies to offer bonds or other secured guarantees to home purchasers who have paid 15% or more of the cost of a home. Nevertheless, Peace Now Director Yariv Oppenheimer noted that "what has happened to Heftziba shows that those who steal land from Palestinians end up stealing from Israelis."

Reports also surfaced last week that the Amana settler movement, headed by Ze'ev "Zambish" Hever, has been under criminal investigation by Israeli police for the illegal construction of outposts. Amana - the largest and oldest organization that develops land over the Green Line - has financed and carried out illegal settlement construction across the West Bank, including the establishment of outposts on privately-owned Palestinian property. Hever is a former head of the Yesha Council, an umbrella organization of all settlements, and has been called the "father of the outposts." Criminal charges against the unauthorized construction of settlements are unprecedented.

The revelation that a criminal investigation is ongoing was found in a letter sent to Peace Now last week by Israeli Deputy Attorney General Shai Nizan. Nizan was responding to a formal complaint submitted by Peace Now pointing out that Amana's website attests to its involvement in illegal activities. The Jerusalem Post found that even after the publication of Nizan's letter "advertisements for homes in the outpost of Amona and calls to move to the undeveloped settlement of Maskiot in the Jordan Valley could be found on the Amana Web site. The government, to date, has prohibited construction in Maskiot, and in January 2006 it destroyed nine empty homes that Amana had constructed at Amona."

Illegal settlement may turn out to be a bad financial move for settlers living illegally in Hebron's city market. These settlers, who thus far have refused to comply with eviction notices, may end up with the bill for the costs of their eviction, according to a letter sent to the squatters by the Israel's Military Advocate General. (Ynet, 7/30/07; Jerusalem Post, 7/31/07; Peace Now, 7/30/07; Globes, 8/2/07; Middle East Times, 8/3/07; Ha'aretz, 8/3 & 8/5/07)

THE SPOILER: If the Americans "go ahead with talks without including Hamas, then they must realize that [Palestinian President Mahmoud] Abbas would ultimately require Hamas' approval for implementing agreements," warned Ahmed Yusef, an advisor to Hamas leader Ismail Haniyah. Yusef added that any agreement Abbas might eventually sign with Israel will need to be approved either by a national Palestinian referendum or in a general election. "No such event will take place unless Hamas authorizes it," he threatened. Hamas spokesman Fauzi Barhoum, echoed Yusef's comments, telling Ha'aretz that "any agreement will necessitate the approval of Parliament, which is dominated by Hamas."

Taking note of these statements, veteran Ha'aretz columnist Danny Rubinstein writes Monday that "if Hamas calls for a boycott of the elections, it will be impossible to hold them in the West Bank, too." Rubenstein notes that the "Hamas government in Gaza is currently making every effort to show that it is capable of maintaining good governance, law and order. However, there is no doubt that Hamas is more capable of sabotaging Abbas' policy than it is of ruling. As long as the Hamas leadership has a hope of holding on in Gaza and of influence in the West Bank, there will be relative quiet. But when Hamas loses hope and it becomes clear that Abbas is far from achieving the minimum that the Palestinians are demanding, then the terrorism and violence almost certainly will be renewed. In other words, all the current political activity is liable to turn out to be nothing but bunk. Ultimately, the opinion of many Palestinians will turn out to be right: If Hamas isn't in the game, there is no game."

Issuing a similar warning that a political process cannot succeed without Gaza, Ben-Gurion University scholar Yoram Meital suggests that it is time to "abandon the assumption that it is possible to separate between the developments in the West Bank and in the Gaza Strip. Encourage the dialogue recently begun by the representatives of Fatah and Hamas, with the aim of resolving by consensual means the severe conflict between the two large Palestinian movements. Urge Abu Mazen to keep his promise and soon announce elections for the Palestinian Legislative Council and for the presidency. Israel and the United States should announce that they will consider any elected leadership-that is interested in dialogue and agreements with them-as a legitimate partner. There are groups both within the ranks of Fatah and within Hamas that are interested in engaging Israel in dialogue." Meital concludes that the "search for an agreed-upon political horizon within the framework of an international conference can continue, but reaching agreements on the topics mentioned here, with an elected leadership and with international backing, is the order of the day."

Ha'aretz diplomatic editor Aluf Benn suggests that, under the current political constraints, the best way for Israel to "translate good intentions into real changes" is to "remove some of the restrictions on Palestinian freedom of movement in the West Bank. No aspect of the occupation is more cruel and painful, and there is no greater obstacle to reviving the Palestinian economy and improving everyday life. What is the point of suggesting meetings of businessmen from both sides, as [former British Prime Minister Tony] Blair did, when West Bank roads are blocked? Exchanging business cards with Nochi Dankner and Yitzhak Tshuva will contribute nothing to merchants and contractors from Nablus and Hebron, who wish to visit one another. The `roadblock test' is a good indication for the seriousness of Israel's intentions and for Olmert's ability to make a change in the existing reality." (Ha'aretz, 8/2 & 8/6/07; Yedioth Ahronoth, 8/6/07)

THE SPOILER, PART II: "For the past year, Syrian President Bashar Assad has been sending a clear, consistent and systematic message to Israel at every opportunity: Syria wishes to renew negotiations and to reach a peace agreement with Israel," writes Tel Aviv University Professor Eyal Zisser, who notes that Assad is issuing an ultimatum: "if such a diplomatic process does not take place, Syria will consider employing a military option of one kind or another against Israel."

Zisser believes that Israel "should start taking Bashar Assad seriously. He has been occupying his seat securely for over seven years-a respectable achievement not only in terms of any ordinary Israeli politician, but also in Syrian terms. His cautious and reserved willingness to make peace with Israel draws upon his father's legacy, and upon the support of a broad consensus of Syrian public opinion for a diplomatic resolution of the conflict with Israel. His threats against Israel stem from the growing self-confidence of a ruler who feels increasingly like a ruler in his own right, not only by virtue of his father; this is also the self-confidence of a person who reads differently than we do the outcome of the latest war between Israel and Hizbullah last summer."

Zisser includes a warning in his analysis. "It is possible that Bashar is not headed for an initiated military strike against Israel, and that the military preparations being reported in the media are a result of his fear of an Israeli or American move against his own regime. But the reality in the region has a dynamic of its own, which is negative in nature and brings the two countries closer to a confrontation even if they do not want one. Bashar projects a desire to break the deadlock in which he is found on all fronts-domestic and foreign. A similar deadlock, we should remember, led Egypt in 1973 to the decision to launch the Yom Kippur War."

Former Israeli Ambassador to the Unites States Itamar Rabinovich also compares the Israel-Syria track with the period that led to the Yom Kippur War. "At that time, Anwar Sadat, the new president of Egypt who suffered from low esteem, expressed his willingness to establish peaceful relations with Israel (a startling move for those days), but all the while he prepared for war and even warned, more than once, that the coming year would be `the decision year.' The next installment in the developments is something we all remember well."

"Up until a few months ago, Israel turned down Assad's initiatives," observes Rabinovich, who once led Israel's negotiating team on the Syria track. "Prime Minister Ehud Olmert rejected them several times, sometimes on his own cognizance and sometimes with the explanation (not necessarily spelled out and not necessarily out of his own mouth) that the United States is opposed to Israeli-Syrian negotiations. The fact is that senior spokesmen in President George [W.] Bush's administration have not concealed their negative attitude toward renewing the talks. The Bush administration has been harboring hostility toward Assad and his regime for several years; as far as the U.S. is concerned, even beginning public negotiations between Syria and Israel will reward the Syrian ruler with a prize he does not deserve. In 2005 it looked as though Bush was trying to bring down Assad, but at the last moment he avoided crossing the line. Apparently he was afraid that if Assad was deposed he would be succeeded by a regime connected to the Muslim Brotherhood. And thus the attempt to bring down Assad was replaced by the attempt to isolate him. In this connection, Bush considered Israeli-Syrian negotiations a step that would help Assad to extract himself from isolation and to acquire international legitimacy."

Rabinovich writes that as Washington and Jerusalem have softened their public rhetoric on this front in recent months, Assad has toughened his rhetoric, insisting on a guarantee of Israeli withdrawal as a pre-condition for negotiations. The former Israeli negotiator believes that one factor behind the toughening of the Syrian position "is the desire to react to what Damascus sees as disregard of Syria. Bush's first speech about reviving the Israeli-Arab peace process dealt exclusively with the Palestinian issue. Tony Blair's mission is also focused on the Palestinian issue. Bush and U.S. Secretary of State Condoleezza Rice have several times explained their desire to leave a positive `legacy' or `impression' (in contrast to Iraq) in the form of an Israeli-Palestinian agreement. This goal is not acceptable to Assad and his regime, and their initial and characteristic reaction is a toughening of positions. Afterward, they will consider additional steps, such as activating their Palestinian clients in the Gaza Strip and in the West Bank, and their Lebanese partners, in order to `heat up' the arena and make it clear that Syria cannot be left out of the picture."

With this in mind, Rabinovich writes that the "natural tendency of the Olmert government is to prefer the Palestinian track [over talks with Syria]. On this track there is already a format for action, and it is the track preferred by the U.S. and, in truth, by most of the Arab world."

"It would be wise and proper for Israel to advance on this track, but it is not in Israel's interest to push Syria into a corner," warns Rabinovich. "We must not respond to the toughening of Syria's position by shrugging our shoulders and slamming the door. The answer should be a rejection of the opening condition presented by Assad, and an ongoing indication of our desire to talk directly and clandestinely to find out whether there is a real option for an agreement that will meet Israel's needs and demands."(Yedioth Ahronoth, 8/2/07; Ha'aretz, 8/2/07)