Israel Resource Review 17th April, 2005


Israel's Suicidal Policy
Arlene Kushner
Investigative Journalist

The movement within Israel to hold a referendum on Prime Minister Sharon's "Disengagement" plan has fizzled now that the Knesset has voted solidly against it. Efforts to bring the government down by blocking the budget have failed as well.

The movement within Israel to hold a referendum on Prime Minister Sharon's "Disengagement" plan has fizzled now that the Knesset has voted solidly against it. Efforts to bring the government down by blocking the budget have failed as well.

A year ago, when Ariel Sharon announced his plan, it seemed to possess a certain logic. There was no partner for peace, he complained; no one existed on the Palestinian side with whom to bargain, and that wasn't likely to change. So he was putting aside the Roadmap and proceeding with this instead. He projected a pullout from all of Gaza and a part of northern Samaria (West Bank). "Pullout" referred to the residents in over 20 villages and towns as well as to military installations and presence within the designated areas (the Philadelphi Corridor along the border with Egypt being the only possible exception).

He called this a "unilateral disengagement plan." Because it was unilateral, it didn't depend on negotiations with the Palestinians. Israel was doing it for Israel's sake: this would take the IDF out of harm's way inside of Gaza, reduce clashes with Palestinians in that area, and lessen the burden of responsibility on Israel. Responsibility for Gaza would fall to the Palestinian Authority. The Israeli economy would benefit from this move and the Israeli military would function more effectively.

Additionally, he shared this rationale: the international community was expected to put pressure on Israel, making demands for various concessions to the Palestinians. Of major concern was the Geneva Accord - which was vastly destructive for Israel. By demonstrating good faith, the "disengagement" plan would buy time and provide breathing space. It is unlikely that there would be any further expectations on Israel for some time to come.

On top of all this, there was, according to the prime minister, an enormous political bonus from the United States. On April 14, 2004, Sharon visited the White House and secured (reportedly reluctant) support for his plan. Letters were exchanged between the two heads of state: Sharon, in his, outlined what he intended to do and why. President Bush looked with favor on this plan, but also spoke about the need for a Palestinian state. The Sharon government, focusing on two specific statements made by the president, touted his letter as breaking new ground:

"It seems clear that an agreed, just, fair and realistic framework for the solution to the Palestinian refugee issue as part of any final status agreement will need to be found through the establishment of a Palestinian state, and the settling of Palestinian refugees there, rather than in Israelů"

"In light of new realities on the ground, including already existing major population centers, it is unrealistic to expect that the outcome of final status negotiations will be a full and complete return to the armistice line of 1949."

The people of Israel were assured that this statement represented a guarantee of support from the U.S. that major settlement blocs could be kept by Israel, and that the U.S. would oppose the right of return.

As the weeks and months passed after the announcement of the "disengagement," however, it became increasingly clear that all was not as it seemed:

  • On close inspection, the promises attributed to President Bush turned out to be no promises at all. The president had made it clear that all issues would be resolved via two-party negotiations; there was no guarantee implicit. This has been confirmed by Secretary of State Condoleezza Rice and by U.S. Ambassador to Israel Dan Kurtzer (in a statement recently leaked to the press). What is more, the scenario outlined by the president in his letter simply reiterated the position of previous administrations with regard to such matters as not returning to the Green Line. No new ground was broken and there was no great political or diplomatic gain for Israel.

  • The very term "disengagement" is misleading: this is not about to happen. There is, indeed, a pullout anticipated. But there will not be a concomitant full disengagement (separation) from the Palestinian Arab population. Within the plan as outlined by the prime minister's office, Israel will continue to have considerable responsibility for the Palestinians with regard to such matters as providing utilities and allowing them entry into Israel for work. Most significantly, Israel signed on as a party to the promotion of assistance to the PA security forces, via money and training. Ostensibly, this was so that the PA would better be able to cope with the terrorists after the IDF was gone. But this is not disengaging from the Palestinians.

  • The planned action is not truly unilateral, either. The PA is being consulted on logistical matters with regard to withdrawal. Only in the most disadvantageous sense is this unilateral: the prime minister, by declaring this something that was being done for Israel's sake, abandoned the possibility of using the pullout as a bargaining chip. There was no Palestinian reciprocity requested or expected.

  • It is no longer accurate any longer to say there is no one on the Palestinian side with whom to bargain (although the question certainly remains as to whether the Palestinians are proving themselves to be honest and reliable in their interactions with Israel). Once Arafat was gone and Abu Mazen had assumed the chair of the PA, Israel began talking with the PA again. There was a February meeting in Sharm el-Sheikh attended by both Sharon and Abu Mazen; there are frequent meetings with regard to the transfer of Palestinian cities.

  • Sharon's plans do not preclude additional pressure on Israel from the international community. Quite the contrary: the message that has been received is that this is a good move but must be considered only a beginning. The projected Palestinian state, will require contiguity, which means Israel will have to move out of a considerable part of the West Bank. It appears that Sharon has begun a descent down a slippery slope with Israel's willingness to withdraw from some areas merely whetting the appetite of the international community for further withdrawals. A regrettable precedent is being set, with Israel willing to pull back without commensurate Palestinian actions.

  • In spite of Sharon's claims that this "disengagement" would buy Israel time and preclude the necessity for doing more for quite a while, it appears the expectation in the government was otherwise. Key aide, Dov Weisglass, is on record as stating that the reason for the pullout from northern Samaria is to demonstrate that Israel does not intend to remain in the West Bank forever. This is very different, indeed, from a pullout for Israel's sake.

None of these ambiguities, complexities and stumbling blocks seem to have given Sharon pause. He has forged ahead, politically strong-arming his opponents in order to get his program through.

Yet what has come to light as the day for actualization of the program approaches is a nightmare scenario:

  • The anticipated forced removal from their homes - legally purchased with the blessing of successive Israeli governments - of the residents of Gush Katif is no small matter. There are serious questions - legal and moral - as to whether the government has a right to cause them the injury they are about to receive when there is no demonstrable gain from what will take place. Were this occurring within the context of a peace agreement, the argument for doing it would be stronger. As it is, there will be severe emotional pain, logistical dislocation, and economic loss for the residents of Gush Katif. Farming communities, which should have had arrangements in place for relocation intact, will be split asunder. The residents of the area have been demonized as radical right-wing troublemakers; their contribution to the nation has not been acknowledged nor have they been shown sensitivity. The specter looms of Jew acting against Jew, and of use of the IDF - which is mandated to protect the Israeli population - acting in force against one segment of that population.

  • The economy will receive a severe blow from this plan. There is, first, the cost of the pullout, which is now estimated to be at least 10 billion shekel (approximately 2.27 billion dollars). The government will need to compensate those being relocated, move army bases, and bring additional military equipment and procedures into the area. There may also be hidden costs that cannot now be estimated, including anticipated damage to a newly recovering economy.

  • Most horrific, however, will be the security and political damage.

Abu Mazen is turning Sharon's approach against him. The prime minister declared a year ago that he was putting aside the Roadmap and proceeding in another direction instead. Now, to paraphrase Abu Mazen, we too want to put aside the Roadmap (which calls for approaching negotiations in carefully delineated stages) and proceed to final status negotiations: we may not have dismantled the terrorist infrastructure as required by the Roadmap, but we are delivering "quiet" and we want our state.

Indeed, the terrorist infrastructure has not been dismantled. Weapons are still being manufactured, smuggled in, and stockpiled, and the terrorist organizations are garnering strength during this time of "quiet."

In the last couple of weeks, there have been hair-raising security revelations. Any one of them alone, one would think, should have stopped Sharon in his tracks:

During a meeting in Cairo of 13 terrorist groups and the Palestinian Authority in mid-March, Abu Mazen offered major groups currently headquartered in Damascus (where Syria is under U.S. pressure to shut them down) the opportunity to move headquarters to Gaza after the Israelis are gone. Reportedly, they accepted. This signals confirmation of the predictions of experts such as Major-General (res.) Doron Almog, who wrote last summer that if Israel pulls out of Gaza, it would become a "mini-Afghanistan." This, at Israel's western border.

On March 26, Minister of Defense Shaul Mofaz reported to the Israeli cabinet that Strellas, anti-aircraft missiles, have been smuggled into Gaza from Egypt with the complicity of PA security forces. These are the forces that Israel is supposed to help arm and train so they can combat terrorism.

Less than a week later, an internal document from Shin Bet, acquired by The Jerusalem Post, revealed that smuggling of weaponry from Egypt has intensified. Between July of last year and February of this year, 180 anti-tank rockets, five anti-aircraft missiles, 600 kilograms of explosives, 3,000 rifles, 400 handguns, and 40,000 rounds of ammunition were smuggled from Egypt. Concern has been expressed regarding the oil pipeline that sits in the Ashkelon region, only about 4.5 kilometers from northern Gaza, as well as the Rotenburg power station, in Ashkelon, that provides 40 percent of Israel's power.

Finally, what we are seeing is that the Palestinians not only have increased capacity to generate terror; they also have increased motivation. Experts have repeatedly warned that withdrawal signifies weakness in Arab eyes. Perhaps no one has brought that message home more forcefully than Danny Rubinstein, precisely because he is a left wing journalist working for Ha'aretz, the most left wing of Israel's newspapers. At the Jerusalem Conference, on March 28, Mr. Rubinstein, an Arab speaker who monitors the Arab press, spoke about a Palestinian survey that indicated 75 percent of Palestinians view the "disengagement" as a great victory for them. They call it a retreat in the face of terror and are prepared now to secure additional territory.

Abu Mazen has changed his language, reported Mr. Rubinstein, and become more radical. The mood today in the Palestinian street is for renewal of violence.

General (res.) Ya'akov Amidror (who worked in Intelligence) calls this "a terrible program that will bring only damage to Israel." One is hard put to disagree with him.

Arlene Kushner lives and writes in Jerusalem. She has done four major reports on UNRWA for the Center for Near East Policy Research. Her book, Disclosed: Inside the Palestinian Authority and the PLO, has just been released and is available from this site., April 7, 2005

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Knesset Committee Seeks Further Information About Peres's Palestinian Authority Investments
Aaron Klein
Jerusalem Bureau Chief for

JERUSALEM - The ethics committee of Israel's Parliament, or Knesset, requested last month that a private investigative group provide more information about accusations of Vice Prime Minister Shimon Peres's involvement in a technology fund affiliated with the Palestinian Authority, a conflict of interest that could require Mr. Peres to leave his government position.

The Israel Resource News Agency requested in February that the Knesset look into Mr. Peres's establishment of the Peace Technology Fund, a $160 million venture capital group created in part to encourage investment in the Palestinian economy.

Investors, who allegedly joined the fund while Mr. Peres was the minister of regional cooperation in 1999 under then-Prime Minister Barak, include the Palestinian National Authority and several companies that have contributed at some point to the Peres Center for Peace, a nonprofit think tank founded by Mr. Peres.

The fund's first investment, a $9 million, 3% stake in Paltel, a Palestinian telecommunications company, was announced in Business Week in June 1999, one month after Mr. Peres assumed his ministerial position.

The article reported, "A venture capital fund founded by former Israeli Prime Minister Shimon Peres has taken a $9 million, 3.3 percent stake in Paltel. . . . The investment is the first by the peace fund, which was established last year by Israeli and Palestinian investors."

The price of Paltel's shares jumped from 2.5 Jordanian dinars in May 1999 to 4.5 in August of that year, a nearly $10 million profit from the fund's investment. The increase in the stock price has been widely attributed to a monopoly license granted in August 1999 by the Palestinian Authority to Paltel that gave the company the exclusive right to offer wireless services in the West Bank and Gaza Strip.

The director of the Israel Resource News Agency, David Bedein, has raised questions regarding the possibility Mr. Peres profited from the Paltel investment. Mr. Bedein also questioned whether Mr. Peres knew in advance, through government contacts while he was an Israeli minister, that the authority was going to grant the exclusive contract.

Other questions surround Mr. Peres's involvement in the procurement of a $22 million investment in the fund by the Palestinian National Authority, also allegedly made while Mr. Peres was a government minister. The PNC is a monetary branch of the Palestinian Authority.

As well, the fund raised nearly $10 million from Bank Leumi, Teva Pharmaceuticals, Federmann Enterprises, Koor Industries, Arison Investments, Strauss Holding, Delta Galil, Daimler Chrysler, and Keter Plastics. Most are contributors to the Peres Center for Peace, which itself is listed as a member of the fund's advisory board.

Mr. Bedein said the ethics committee responded last week to his request for an investigation, explaining that they are not an investigative body and can only determine whether documented activities violate government rules. He said the Knesset asked him to provide them with detailed information about whether Mr. Peres received or still receives fees for securing multimillion-dollar investments or profits from previous fund ventures.

"The next step is to find the proof," said Mr. Bedein. "For example, since Peres was the minister of regional cooperation when the Palestinian investment was made, my agency will see if Peres was paid a consulting or broker fee as payment for bringing in the investment."

Consultants procuring investments for companies or funds typically receive finders' fees of 2% to 5%. The Palestinian Authority's investment of $22 million could have earned Mr. Peres a fee of $440,000, according to Mr. Bedein.

Mr. Bedein said he will also determine whether Mr. Peres currently holds any shares in the fund. If he does, that may be a conflict of interest since the Palestinian Authority is a major investor. Mr. Bedein also wants to know why the Peres Peace Center is qualified to provide financial-consultation services to the fund.

The investigation comes at a delicate time for Prime Minister Sharon's administration, which is moving ahead with a plan to vacate Jewish settlements from Gaza and parts of the West Bank. Mr. Sharon's plan has divided his Likud party and created many nationalist opponents who have called for Mr. Sharon's resignation.

If Mr. Peres is found to have violated the Israeli government's official code of ethics, he would be required to vacate his post. His departure likely would undo Mr. Sharon's current unity government between Likud and Mr. Peres' Labor party and could precipitate new elections in Israel.

Mr. Peres has been a political fixture in the Jewish government. He has served twice as Israel's prime minister, once following the formation of a unity government in 1984 when he was an alternate prime minister with Likud leader Yitzhak Shamir and again in 1995 after Yitzhak Rabin, who was prime minister, was assassinated.

Mr. Peres has held several other government posts, including deputy defense minister, minister of immigrant absorption, minister-without-portfolio, minister of transport and communication, and minister of information. Mr. Sharon appointed Mr. Peres as foreign minister, a post he held until Labor left the government in 2003. Mr. Sharon then created the position of vice prime minister for Mr. Peres when Labor again joined Mr. Sharon's coalition in December.

Mr. Peres founded the Center for Peace in 1996 with the goal of "realizing [Peres's] vision of a 'New Middle East,' in which people of the region work together to build peace through socio-economic cooperation and people-to-people relations," according to the center's Web site.

This appeared in the New York Sun on April 15, 2005:

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