Israel Resource Review 20th December, 2006


Commentary: Ceasefires and Negotiations
Arlene Kushner

The truce between Hamas and Fatah fell apart in the last couple of days: at least six have been killed and a former PA official has been kidnapped; Abbas cancelled a planned trip to Gaza. Quiet has been reinstated now -- for however long -- with Egypt serving as mediator. Reportedly gunmen on both sides have withdrawn.

The truce between Hamas and Fatah fell apart in the last couple of days: at least six have been killed and a former PA official has been kidnapped; Abbas cancelled a planned trip to Gaza. Quiet has been reinstated now -- for however long -- with Egypt serving as mediator. Reportedly gunmen on both sides have withdrawn.

Abbas, in the meantime, is backtracking -- appeasing, according to Khaled Abu Tomeah -- by saying that it's still possible to meet with Hamas to form a unity government. Hamas, you see, has said it would boycott early elections.

It took Abbas close to forever to announce the early elections, and he did so reluctantly. He is not going to stand strong against Hamas.


The whole discussion of whether we should meet -- or have already met informally -- with Syria has reached the point of the ridiculous. Seems we're in the midst of secret cloak-and-dagger scenarios. The Dubai-based Al-Arabiyuah television station has reported that when Olmert was in Germany last week he received from officials there a letter from Assad, in which Assad offered peace talks and said he would prevent the flow of weapons to Hezbollah, would minimize the influence of Hamas leaders outside of Palestinian areas, and would agree to an international tribunal to investigate the assassination of Hariri in Lebanon. Right.

Both Olmert and Assad deny there was any such letter, and I would tend to believe that a letter promising all of this, at any rate, was never passed.

However . . . it turns out that Olmert did dispatch an envoy to communicate with Syria. The envoy, American millionaire Daniel Abraham, met in Washington DC with Syrian ambassador to the US Imad Moustapha some weeks ago and then came here to report to Olmert. Reportedly, Abraham said he received "positive and moderate" messages from Moustapha. Moderate messages. From the man representing a nation that is currently war-mongering, that harbors terrorist and that is helping Hezbollah to re-arm. How cheap words are.

An Olmert aide, sensitive to the charges about the secret letter, said, "this was not a secret mission to pass messages to the Syrians."


All of this has import because Meir Dagan, head of the Mossad, has now told the Knesset Foreign Affairs and Defense Committee that Israel should not take any Syrian peace overture seriously because Syria is "more prepared than ever before" to move against Israel militarily." According to Dagan, Israeli deterrence was damaged during the Lebanon war (part of the never-ending Olmert legacy of restraining the IDF), so that Assad's self-confidence has grown and he's prepared to take more risks.

Recently Syrian foreign minister Walid Moallem gave an interview with the Washington Post in which he said Syria would be willing to begin negotiations without preconditions. However, says Dagan, at the very same time other Syrian officials were telling the Arab media that there was "no chance for peace" without the Golan Heights. This is typical Arab double-talk, with one message provided for eager Western ears and another message for fellow-Arabs.


In his report to the Knesset Committee, Dagan also addressed the issue of Iran, which he says is nearing nuclear capability. Ahmadinejad has said he wants 3,000 centrifuges by March 2007. (I note here the repeated reports from different quarters of "something" that will happen in three months, which fits this time table.) However, Dagan says Iran is not capable of meeting this deadline and likely will not achieve this until the end of 2007. If there are "no sanctions on Iran and no technological holdups," Iran will have 25 kilograms of enriched uranium by 2008 and nuclear warheads by 2009 or 2010. The clock is ticking . . .


Time Magazine, in an exclusive report, says that the Bush administration is considering a plan to fund political opposition to Assad in the hopes of bringing him down. Critics question whether there is a strong enough political opposition to be able to achieve anything; there is a suspicion is some quarters that this plan is being advanced not because of any expectation that it will really work, but rather because this will unsettle Assad and make him feel pressured.


Saw this coming. Olmert has announced that Israel and the PA will set up a committee to discuss the release of Palestinian prisoners. This announcement came after Tony Blair's meeting with Olmert, and, undoubtedly, "encouragement" from Blair regarding this. This is going to "bolster" Abbas in the Palestinian street, you see. Government sources are hedging on the timing and whether prisoners might be released before we get Shalit back.

As to including Marwan Barghouti, who is serving five life sentences and has considerable Jewish blood on his hands, Olmert said this: "The release of this type of prisoner is a long, complicated process, and to the best of my understanding it is not now on the agenda." Not now? To the best of his understanding? Watch this. While I feel very strongly that this man should never be released, I have unease about the possibility that it may yet happen. The Palestinians associated with Fatah (the "moderate" group we're supposed to bolster) would consider it a real coup to get him back.


Forty missiles have been fired on the Negev since the "ceasefire" began. Seven were launched today alone.

According to YNet, one senior Israel Defense Forces official said that "Israel's policy toward the incessant Qassam rocket fire may be interpreted as a sign of weakness."

Is this brilliant military reasoning or what? Hey! I had this figured out weeks ago, and I'm not an IDF official. Seems the IDF is really chafing under the limitations placed on it by this one-sided "ceasefire" and has been pushing for the opportunity to respond. Thus a statement from our wise and thoughtful defense minister. Peretz has now said that our current policy of restraint will have to be reviewed if the ceasefire continues to be breached. "If"? He thinks maybe they'll stop firing at us any moment now? Peretz explained that, "Israel has no intention to gamble with the safety of its citizens, there is a limit to our restraint." Could have fooled me.


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Letter supports charge Baker skirted sanctions: Businessman contends ex-secretary of state used middleman to 'sell out' Israel for profit
Aaron Klein, Israel Bureau Chief,

TEL AVIV An Israeli businessman who says he served as a broker in a multimillion-dollar Iraqi collection effort by the law firm of former Secretary of State James Baker has released a document to WND indicating the deal was near completion by July 2000 during the peak of American sanctions imposed against Baghdad.

Baker's firm told WND earlier this week efforts by a Korean company to push through the Iraqi deal did not commence before 2005, nearly two years after the U.S.-led invasion of Iraq deposed the regime of Saddam Hussein and nullified international sanctions.

The Israeli middleman, Nir Gouaz, president of Caesar Global Securities in Israel, has been charging that the deal which he said was represented by Baker's firm was structured to bypass U.S. sanctions on Iraq.

Gouaz claimed Houston-based Baker Botts made about $30 million collecting funds owed to the South Korean company, Hyundai Engineering, by the Iraqi government in spite of American sanctions against Baghdad.

He claimed Baker was directly involved in the deal.

Gouaz said he was tapped in 1998 by Baker Botts' senior partner Jeffrey Stonerock to serve as a middleman in the collection of $1.65 billion in debt owned to Hyundai Engineering by the Iraqi government.

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Hyundai had completed a series of major infrastructure projects in Iraq, including the construction of roads, railways and power plants and was supposed to be paid in Iraqi government bonds, but in the wake of the Gulf War, Saddam suspended payments to suppliers.

Gouaz said Iraq's failure to pay threatened the future of Hyundai.

Gouaz said he was asked to mediate the collection efforts to evade American sanctions on Iraq, which did not apply to Israelis.

He said he met initially with Baker and that the former secretary of state was involved in the collection deal.

Gouaz said he was asked by Baker's firm to meet with Shaiker Tawfik Fakoury, the president of the Bank of Jordan, which agreed to purchase the Iraqi government bonds from Hyundai at a lowered rate and resell them to the Iraqis at a profit in exchange for oil.

He said the Jordanian bank in July 2000 bought the Iraqi bonds from Hyundai using the services of Baker's firm at a price of $272 million. The Bank of Jordan, he claimed, then resold the bonds to Iraq for about $450 million in oil.

Gouaz said he estimated the Baker Botts law firm made about $33 million in fees for its services in the transactions.

He said it was "clear" from his communications with all parties involved that Baker's firm established the bonds exchange through Jordan using an Israeli middleman to bypass sanctions on Iraq.

"The point of involving me and setting up the collection, as it was done, was to get around the sanctions," Gouaz said.

Baker Botts released a statement to WND saying the firm has "no knowledge" of whether the purported transaction described by Gouaz ever occurred.

The statement said Baker Botts' role in the supposed transactions as described by Gouaz and the payment Gouaz said the firm received are inaccurate.

Mike Cinelli, a public relations manager at Baker Botts, told WND Hyundai's collection efforts did not commence during the period of U.S. sanctions.

Cinelli pointed to a press release on Hyundai's website from 2005 stating the company had not received funds owed by the Iraqi government.

But Gouaz today provided WND with a letter addressed to him from Hyundai's executive vice president dated July 14, 2000, thanking Gouaz for his efforts and stating the collection process was near completion.

"I appreciate very much that thanks to your sincere efforts the agreement for the project could be concluded at the meetings, whereupon the transactions will be done successfully," wrote Su Kwang Min, Hyundai's executive vice president at the time.

Gouaz said several days after the July 14 letter the Iraqi government bonds were sold to the Bank of Jordan.

Baker case documents saved from shred order

WND reported yesterday Gouaz charged Baker's firm tried to cover up the alleged transactions, concerned about exposure after the September 11, 2001, attacks.

Gouaz said Baker Botts partner Stonerock contacted him in November 2001 inquiring whether he had any documents related to the purported Iraqi deal.

Gouaz said he told Stonerock he still had a few papers.

He said Stonerock asked him to destroy all remaining documents related to the matter and sign a nondisclosure form pledging not to discuss the alleged deal.

"He told me to just sign the nondisclosure and forget about what happened," Gouaz told WND.

Gouaz said he refused to sign the nondisclosure agreement. He said he decided to retain all documents in his possession he said were related to the deal. The documents were obtained by WND yesterday.

"When they asked me to destroy the papers I became a bit skeptical," said Gouaz. "They were clearly worried about exposure after the 9-11 terror attacks."

Baker Botts today refused to comment on Gouaz's latest allegations.

Gouaz first spoke out last weekend in an interview with Israel's Maariv daily newspaper during which he passed a polygraph lie detector test.

He told WND he decided to come forward with details of the alleged transactions after the release earlier this month of a report by the Iraq Study Group, a commission headed by Baker that recommended an eventual U.S. withdrawal from Iraq and dialogue with Iran and Syria.

The report also urged Israel to withdraw from the West Bank and eastern sections of Jerusalem and to sign a deal with Syria in which the Jewish state would vacate the Golan Heights, strategic mountainous territory twice used by Damascus to launch ground invasions into Israel.

"As a citizen of Israel I cannot just sit by and watch the hypocrisy being spewed by Baker," said Gouaz. "If Baker was still a private citizen I could keep his business dealings private, but now he is involved in diplomacy that sells out Israel. People need to understand he is acting out of economic considerations."

Baker's envoy role conflict of interest?

In 2003, President Bush appointed Baker as special envoy to aid in the recovery of debt from Iraq. He was specifically tasked with trying to persuade the international community to forgive large sums of debt.

A number of media reports pointed out Baker simultaneously was working with commercial companies trying to recover money from Iraq and that the former secretary of state might have conflicts of interest with his role as envoy.

Baker's firm represents the government of Saudi Arabia, the country claiming the largest amount of debt from Iraq. Also, according to London's Guardian newspaper and the Nation magazine in New York, the Carlyle Group is involved in efforts to recover nearly $27 billion on behalf of the Kuwaiti government. Baker was a partner at Carlyle until last year.

Baker publicly has brushed aside the criticism, saying he has agreed to forego earnings from clients with obvious connections to the Iraqi debt.


Aaron Klein is WorldNetDaily's Jerusalem bureau chief, whose past interview subjects have included Yasser Arafat, Ehud Barak, Mahmoud al-Zahar and leaders of the Taliban.

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