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CONFIDENTIAL CONFIDENTIAL//NOFORN SECRET SECRET//NOFORN UNCLASSIFIED UNCLASSIFIED//FOR OFFICIAL USE ONLY

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### Viewing cable 07TELAVIV1114, CODEL ACKERMAN'S MEETING WITH OPPOSITION LEADER

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Reference ID | Date | Classification | Origin
--- | --- | --- | ---
07TELAVIV1114 | 2007-04-18 06:06 | CONFIDENTIAL | Embassy Tel Aviv

`

    VZCZCXRO8870
    OO RUEHROV
    DE RUEHTV #1114/01 1080655
    ZNY CCCCC ZZH
    O 180655Z APR 07
    FM AMEMBASSY TEL AVIV
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 0564
    INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY
    RHEHNSC/NSC WASHDC PRIORITY

` `

    C O N F I D E N T I A L SECTION 01 OF 03 TEL AVIV 001114

    SIPDIS

    CODEL
    SIPDIS

    H PLEASE PASS TO REPRESENTATIVE ACKERMAN

    E.O. 12958: DECL: 04/17/2017
    TAGS: PREL PGOV KNNP EFIN IR KPAL IS
    SUBJECT: CODEL ACKERMAN'S MEETING WITH OPPOSITION LEADER
    BINYAMIN NETANYAHU:  ECONOMIC SQUEEZE ON IRAN AND HAMAS;
    SCENARIOS FOR A NEW GOVERNMENT; RIGHT OF RETURN AS ACID
    TEST OF ARAB INTENTIONS

    REF: TEL AVIV 1086

    Classified By: Ambassador Richard H. Jones, Reason 1.4 (b) (d)

    ¶1.  (C) Summary.  Representative Gary Ackerman (D, New York),
    Chairman of the Middle East and South Asia Subcommittee of
    the House International Relations Committee, accompanied by
    the Ambassador, met with Opposition Leader Binyamin Netanyahu
    at the Knesset April 11.  The discussion covered Netanyahu's
    ideas on how to pressure Iran in order to block its nuclear
    program and topple President Ahmadinejad; Netanyahu's views
    on dealing with the Palestinians; his critique of Prime
    Minister Olmert's handling of the Second Lebanon War; and
    Netanyahu's analysis of Israel's domestic political
    situation. On Iran, Netanyahu advocated intensified financial
    pressures, including a U.S.-led divestment effort focused
    largely on European companies that invest in Iran, as the
    best way to topple Ahmadinejad.  On the Palestinians,
    Netanyahu did not object to supporting President Abbas but
    said Israel and the U.S. should first focus more on
    "strangling" Hamas.  Netanyahu asserted that Israel's
    mishandling of the Lebanon war had strengthened Israel's
    enemies.  He predicted that Olmert would not be able to stay
    in power much longer, then described several different
    mechanisms for forming a new government.  Netanyahu expressed
    confidence that the Israeli public recognized that he had
    been right, that unilateral withdrawals were a mistake, and
    that the priority now must be stopping Iran.  Netanyahu noted
    that he thought dropping the "right of return" was the acid
    test of Arab intentions and insisted that he would never
    allow a single Palestinian refugee to return to Israel.  End
    Summary.

    ¶2.  (U) House Middle East and South Asia Subcommittee
    Chairman Gary Ackerman, accompanied by the Ambassador, Pol
    Couns, Subcommittee Staff Director David Adams, and Staff
    member Howard Diamond called on Opposition and Likud Party
    Leader Binyamin Netanyahu at the Knesset April 11.  Netanyahu
    was joined by foreign policy adviser Dore Gold and MFA North
    American Department Congressional liaison Eyal Sela.

    Toppling Ahmadinejad
    --------------------

    ¶3.  (C) Representative Ackerman told Netanyahu that in his
    meeting the day before with Egyptian President Mubarak, he
    had asked Mubarak if military action were necessary to
    prevent Iran from obtaining a nuclear weapon, should the
    strike be carried out by the U.S. or Israel?  Mubarak had
    responded that if it came to that, the U.S. should do it and
    Israel should stay out.  Netanyahu said he took Mubarak's
    point, but commented that he thought the Iranian regime, or
    at least President Ahmadinejad, could be toppled by economic
    pressure, including a divestment campaign. Noting that
    economic sanctions lose their effect over time, but can be
    powerful in the short term.  The goal should be to encourage
    Ahmadinejad's political rivals to remove him from power.
    Afterward, if the pressure could be maintained it might be
    possible to bring down the entire Iranian regime, but that
    would also entail identifying alternative leaders.  The idea
    was to use economic pressure to create a public sense of
    regime failure.  Netanyahu said he had consulted with noted
    historian Bernard Lewis, who believed that Iran would be less
    dangerous once Ahmadinejad was removed.

    ¶4.  (C) Netanyahu said there were three bills in Congress
    designed to divest U.S. pension funds from investing in about
    300, mostly European, companies currently doing business in
    Iran.  Divestment would immediately bring down the credit
    ratings of these companies, thus forcing them to respond.
    Netanyahu urged Congress to support the divestment
    legislation, adding that he also planned to use a visit to
    the U.S. to raise the issue with Wall Street fund managers.
    His approach was to tie in Darfur to expand the scope of
    anti-genocide divestment and link it to U.S. policy goals.
    Netanyahu said he was unsure that financial pressures would
    be enough to stop Iran's nuclear program, but he was
    confident they would succeed in bringing down Ahmadinejad.
    He commended Dore Gold's efforts to put Ahmadinejad on a
    genocide watch list as part of a broader effort to
    delegitimize the Iranian President.  Asked about the quality
    of U.S. and Israeli intelligence on Iran, Netanyahu said his
    nightmare was that we had missed part of the Iranian program.
    He added that if the current intelligence was correct, it
    would take Iran a few more years to develop a nuclear weapon.
     He agreed with Ambassador Jones' assessment that

    TEL AVIV 00001114  002 OF 003

    Ahmadinejad's announcement of a breakthrough in Iran's
    centrifuge program was probably exaggerated.  It would be
    critical, Netanyahu stressed, to target companies investing
    in Iran's energy sector.

    Bring Down Hamas
    ----------------

    ¶5.  (C) Congressman Ackerman asked Netanyahu for his views on
    Palestinian President Mahmoud Abbas.  Netanyahu said Abbas
    was a "nice man who means well," but he added that Israel and
    the U.S. should focus on "bringing down Hamas" through an
    "economic squeeze."  Netanyahu asserted that eight months
    ago, the Hamas government had been on the brink of collapse,
    but had become stronger because Israel became weaker as a
    result of the Lebanon war.  Without elaborating, Netanyahu
    said it would be easier to weaken Hamas than to strengthen
    Abbas.

    ¶6.  (C) Netanyahu commented that Shimon Peres had admitted to
    him that the Oslo process had been based on a mistaken
    economic premise, and as a result European and U.S.
    assistance to the Palestinians had gone to create a bloated
    bureaucracy, with PA employees looking to the international
    community to meet their payroll.  Netanyahu predicted that
    Palestinians would vote for Abbas if they believe that he can
    deliver the money.  He suggested putting in place an
    "economic squeeze with an address," so that Hamas would
    receive the popular blame.  Asked if Fatah knew how to
    conduct an election campaign, Netanyahu said the Palestinian
    patronage system should be forced to collapse, which would
    have an immediate impact since the entire Palestinian economy
    was based on graft and patronage. Instead, he asserted, the
    opposite was happening.  Hamas was also handling the prisoner
    release issue well since they had created the impression that
    Hamas was in control of the process and "sticking it to the
    Israelis."

    ¶7.  (C) Congressman Ackerman asked if Abbas would survive
    politically.  Netanyahu said he was unsure, since politics
    were stressful, especially Palestinian politics.  The policy,
    he added, should be to starve the NUG.  If any money is
    given, it should go directly to Abbas.  Netanyahu said it was
    not clear the GOI has a policy, there was a general climate
    of weakness.

    Lebanon War Failures
    --------------------

    ¶8.  (C) Turning to the Second Lebanon War, Netanyahu said the
    problem was not the war's goals but rather the disconnect
    between goals and methods.  If the IDF had used a flanking
    move by a superior ground force, it could have won easily.
    Instead, Israel "dripped troops into their gunsights," an
    approach he termed "stupid."  The top leadership had lacked a
    sense of military maneuver.  In addition, they had been
    afraid to take military casualties, but instead got many
    civilian casualties.  If Olmert had mobilized the reserves in
    ten days, seized ground, destroyed Hizballah in southern
    Lebanon, and then withdrawn, he would be a hero today.
    Instead, Netanyahu predicted, Olmert will not last
    politically.  Olmert's current public support levels of three
    percent were unsustainable.

    A New Government?
    -----------------

    ¶9.  (C) Netanyahu said the pressure on Olmert was
    accumulating as a result of corruption investigations as well
    as the impending release of the Winograd Commission's interim
    report.  Olmert could be pushed out as a result of a
    rebellion within the Kadima Party.  Kadima members are
    realizing they cannot allow Olmert to stay in power, but
    Kadima itself might collapse since it was a "fake party."
    Netanyahu described several options, including Kadima
    replacing Olmert, a new coalition formed in the Knesset, or
    Netanyahu's preferred option, new elections.  New elections,
    he stated, are supported by sixty-five percent of the public.
     Netanyahu insisted he was in no rush since he was "enjoying
    the time with his family" and rebuilding the Likud Party.
    Likud was reaching thousands of new supporters, including
    many highly educated professionals and high tech
    entrepreneurs, through the internet.

    ¶10.  (C) Netanyahu asserted there was a growing sense in the
    public that he had been right in the last election.

    TEL AVIV 00001114  003 OF 003

    Unilateral "retreats" (i.e. such as the withdrawals from Gaza
    and southern Lebanon) were the wrong way to go.  Israel had
    allowed an Iranian enclave to establish itself in Gaza.
    Syria was arming itself for the first time in 20 years,
    Hizballah had rearmed since the war, and Gaza was being
    turned into a bunker.  Egypt was not doing on a twelve mile
    front along the Gaza border what Jordan was doing on a
    150-mile front.  The way out was to stop Iran, thereby
    dealing with the octopus, not just its tentacles.

    Right of Return the Acid Test
    -----------------------------

    ¶11.  (C) Netanyahu stated that a return to the 1967 borders
    and dividing Jerusalem was not a solution since further
    withdrawals would only whet the appetite of radical Islam.
    Ackerman asked if the Palestinians would accept peace based
    on the 1967 lines.  Netanyahu said he would not agree to such
    a withdrawal since the 1967 lines were indefensible, but he
    added that the "right of return" was the real acid test of
    Arab intentions.  Instead of Israel making more step-by-step
    concessions, Israel should insist that further concessions be
    linked to reciprocal steps toward peace.  The Palestinians
    must drop the right of return and accept Israel's right to
    exist.  The Arab initiative did not meet this standard since
    it keeps the right of return open.  Israel will only have a
    peace partner when the Palestinians drop the right of return.
    Asked whether Israel could accept case by case exceptions,
    Netanyahu insisted not one refugee could ever return. Israel,
    after all, was not asking for the right of Jews to return to
    Baghdad or Cairo.

    ¶12.  (C) Netanyahu said UNSCR 242 was not a bad formula since
    it did not specify precisely from which territories Israel
    would withdraw.  After the withdrawals from Gaza and Lebanon,
    there was deep disillusionment among Israelis about the
    principle of land for peace.  Even the noted Israeli leftist
    writer AB Yehoshua had said in a recent interview that he
    despaired about peace because the Arabs wanted all of Israel.
     From 1948 to 1967, the conflict had not been about occupied
    territories, but that point had been obscured by "effective
    propaganda."  The root of the conflict was an Arab desire to
    destroy Israel, which had now become part of the larger
    ambitions of radical Islam.

    ¶13.  (C) The 1967 borders were not the solution since Israel
    was the only force blocking radical Islam's agenda of
    overrunning Jordan and Saudi Arabia.  Netanyahu proposed that
    Israel offer to work with the Saudis against Iran.  If Iran
    was not stopped, there would be no agreement with the
    Palestinians, and the peace treaties with Jordan and Egypt
    would come under tremendous pressure.  There could be no
    deterrence against "crazies" such as Ahmadinejad.  Netanyahu
    advised Congress to expedite the legislative effort for
    divestment.  If that did not work, we could reconsider other
    options. Congressman Ackerman said that if Netanyahu came to
    Washington, he would hold a hearing on divestment.

    ¶14.  (U) CODEL Ackerman did not have the opportunity to clear
    this message.

    ********************************************* ********************
    Visit Embassy Tel Aviv's Classified Website:
    http://www.state.sgov.gov/p/nea/telaviv

    You can also access this site through the State Department's
    Classified SIPRNET website.
    ********************************************* ********************
    JONES

`