Israel Resource Review 21st April, 2005


Russian Gift to Palestinians:
2 Helicopters and 50 APCS
Eli Bardenstein
Correspondent, Maariv

Next week, Russian President Vladimir Putin will land in Israel for an historic visit, while Russian involvement in the region, which has been criticized many times by Israel, continues at full speed. In the framework of a deal being made at present, Moscow will donate to the Palestinians two helicopters and a large force of armored vehicles.

Russia offered the Palestinian Authority a gift: two MI-17 transport helicopters and 50 BRDM-2 APCs, which are no longer in service in the Russian army, as reported by Jane's, the British magazine about military and security industry matters. According to the report, the helicopters will mainly serve the transportation needs of PA Chairman Abu Mazen and other senior Palestinian Authority officials between the Gaza Strip, the West Bank and Jordan.

It has also been learned that Russian Foreign Minister Sergei Levrov and other senior Russian officials informed opposition chairman MK Yosef Lapid and Foreign Affairs and Defense Committee Chairman Yuval Steinitz, who visited Moscow last week, about the deal.

The Palestinian Authority already had Russian-made helicopters in the past, but they were destroyed by the IDF a short time after the outbreak of the Intifada in December 2001. Security officials argued then that the helicopters would be used to smuggle weapons to the Gaza Strip. The APCs that were in the possession of the Palestinian police were also almost totally destroyed by the IDF. [.]

Yesterday Palestinian security officials said that they are waiting for the equipment to reach Gaza, and be handed over to the national security forces, i.e., the Palestinian army, under the command of Moussa Arafat.

Yesterday senior Israel sources said that, "Israel has still not give any permission to the Palestinians to equip themselves with helicopters and APCs." The security officials said that, "The Palestinian Authority will not be able to bring in anything without our approval. It is true that the Russians are interested in selling them these things, but we have not yet given our approved." Despite these statements, it is not impossible that Israel will in the end approve the deal, in order to bolster Abu Mazen's internal status.

Putin's visit to Israel will take place only a few months after the publication of the sale of shoulder-borne missiles to Syria. Israeli-Russian relations at the time threatened to deteriorate, but despite Israel's pleas, Moscow decided not to withdraw from the deal. Yesterday in an interview to Channel One, Putin confirmed the details of the deal and said that it would be carried out despite Israeli opposition.

The US and Israel have also greatly criticized the nuclear cooperation between Russia and Iran. Despite this, the deputy secretary general of the Iranian National Security Council, Hussein Moussayan, announced on Tuesday that Putin might visit Tehran in the near future, as reported by Russian newspaper, Vremya Novosti. "Naturally, Tehran and Moscow are prepared for this visit," the senior Iranian official was quoted as saying.

This piece ran in Maariv on April 21st, 2005

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Russian Supply of Missiles to Syria
Special Middle East News Line Report

[The trajectories of the anti-aircraft missile technology have been transformed into surface to surface missiles, posing more of a threat to Israel than people realize - db]

Russian Sale of Missiles to Syria

TEL AVIV [MENL] -- Russia said the sale of its anti-aircraft missiles to Syria would reduce Israeli air force missions over that Arab country.

The Russian assessment has been shared by Israel, and senior officials of that country said advanced Russian surface-to-air missiles would threaten Israeli fighter-jets in missions over Syria or Lebanon.

"It [Israel] will have difficulties with aviation," Russian President Vladimir Putin told Israeli state television on Wednesday. "Israeli jets will no longer be able to fly over Assad's palace."

The reference was to an Israel Air Force mission in 2003, in which F-16 multi-role fighters buzzed the palace of Assad in the Syrian port city of Latakia. Syrian anti-aircraft forces did not respond.

Putin said the deal to sell Syria the SA-18 anti-aircraft missile, also known as the Strella-S, has been signed. The SA-18, a man-portable anti-aircraft defense system, has a range of six kilometers and was designed to overcome thermal countermeasures.

Earlier, Russian officials said Moscow would transfer information to Israel to overcome the SA-18 missile. It was not clear from Putin's statement whether the technical data would be relayed to the Israeli military.

Moscow also pledged that KBM, the manufacturer of the SA-18, would deliver the missile systems aboard combat vehicles, officials said. They said this was meant to assuage Israeli concerns that the man-portable systems would be transferred to Hizbullah or Palestinian insurgency groups.

Russia and Syria agreed to a $20 million SA-18 deal during the visit by Syrian President Bashar Assad to Moscow in January 2005. Officials said deliveries of the first SA-18s could begin by the end of 2005.

Report Issued by Middle East News Line on April 21st, 2005

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The Fast of Tisha B'av has Nothing to Do with the Delay in Eviction
David Bedein

Concerning the notion that Prime Minister Ariel Sharon has delayed the eviction of Jewish communities in order to avoid a conflict with with Jewish customs of the mourning period that commemorates the destruction of the two ancient Jewish Temples in Jerusalem, the Jewish customs in this regard remain quite different.

Clause 122 of the Code of Jewish Law mentions that does not build a "home of joy and happiness" during the three week period of mourning in Jewish Law.

Eviction is hardly a situation of "joy and happiness".

Clause 141 of yet another Jewish legal text, known as the Mishne Brurah, actually requires a person of the Jewish faith to move into a new home during these three weeks of Jewish mourning if his previous home has been destroyed.

According to sources at the Israel Ministry of Finance, the reason for delaying the eviction of entire communities is because the Government of Israel does not yet have the way to cover the costs required for such a monumental task at hand.

Implemementation of this Israeli government policy is completely dependent on funds which have been promised yet not allocated by the US government for this purpose. President Bush may have promised some of these funds. There is no indication that the US Congress will approve.

Indeed, in May, 2000, President Clinton promised Israel an $800 million incentive if the Israeli government would withdraw its troops from Lebanon. Israel withdrew its troops and the US Congress did not approve of the allocation.

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The Current State of Peres
David Bedein

After years of speculation that the architects of the Sharon plan had an economic motivation up their sleeve, Deputy Prime Minister Shimon Peres, the original architect of the Oslo process , told the AP that he was involved in engineering a major operation to convert the confiscated beachfront property of the Jewish communities in Gush Katif into a profitable oasis, saying that "We could convert a settlement into a Club Med," he said.

"Our fighters need rest and recuperation after their hard labors," one Palestinian official said told AP, without any denial whatsoever that the definition of the Palestinians who are slated to inherit the Jewish communities property is exactly as the Palestinian spokesman says it is: "fighters", who will continue their military struggle to liberate the rest of Palestine, once Gush Katif and the Northern area of the Shomron are handed over to the Palestinian Authority.

The history of Shimon Peres's direct involvement in the economic support system for the Palestinian military struggle is not new, ever since Peres convened press conference in January 1998 and June 1999, to develop an investment fund to support the Palestinian infrastructure, known as the " Peace Technology Fund", which this week announced that it would discontinue its activity.

Although Peres had announced that he was providing funds for the Peace Technology Fund through the good offices of the Peres Center for Peace, registered as a non-profit organization in Tel Aviv, an examination of the publicly available books of the Peres Center for Peace show that no funds were ever expended on behalf any such investment in the Peace Technology fund, which was managed through the Evergreen Investment Fund in Canada, controlled by chairman Jacob Burak, who managed the fund, and raised $65 million for it. The fund had invested $20 million to date in enterprises in the PA, including shares of Palestinian communications company PalTel Palestine Telecommunications Co. -Itisalat (PSE: PALTEL) (the Palestinian equivalent of Bezeq (TASE: BZEQ], the Ramallah shopping mall, and a Palestinian mortgage bank.

In January, The Israel Resource News Agency asked the Knesset Ethics Committee to examine if Mr. Peres had a personal role in the establishment and in the profits accrued from the Peace Technology Fund

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.

Israel Resource News Agency asked about the possibility that Mr. Peres profited from the Paltel investment and also asked 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.

The response of the Knesset ethics committee was that it is not an investigative body and can only determine whether documented activities violate government rules.

The Knesset ethics committee has asked for further detailed information about whether Mr. Peres's current multimillion-dollar investments in Palestinian enterprises.

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.

Peres would not be the only person in the Israeli government elite involved in Palestinian business enterprises.

Back in December 2002, Israel Resource News Agency uncovered the fact that Weissglass, then the office manager of Prime Minister Ariel Sharon, indeed represented the casino resort interests of the Palestinian Authority, which built their first casino in Jericho, which was jointly owned by Arafat and an Austrian firm headed by Martin Schlaff, one of the financiers of Ariel Sharon's election campaign in 1999.

Two Israeli journalists, Amos Harel and Avi Issacharov, have just published a book titled The Seventh War, in which they report that Weissglass actually celebrated the electoral victory of Ariel Sharon in the company of Muhammad Rashid on election night in February, 2001. Rashid was the Palestinian appointed by Arafat to manage the casino in Jericho.

From October, 2000, when the casino in Jericho closed down by the Israeli army with the outbreak of hostilities, Weisglass had publicly lobbied the Israeli army to re-open the casino. However, commander of IDF operations in the central region of Israel, General Yaakov Ohr, responded that the Jericho casino had been used to launder funds to purchase weapons for terror activity. When Weisglass threatened to sue General Ohr for making such a statement, Ohr did not back down. Weisglass did back down.

Weisglass and Peres, who are next door neighbors in Ramat Aviv, are working together on the Club-Med arrangement. Whether either Israeli official stands to profit from this arrangement will come out of an investigation that needs to be conducted and well financed.

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