Cablegate: Mfa Conference Provides Platform for Livni

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1. (SBU) Summary. Foreign Minister Livni used the MFA's
first annual policy and strategy conference as a platform to
elucidate her cautious approach to peace negotiations,
stressing her views that negotiations must be grounded in
political reality, should not be accelerated to accommodate
political calendars, and that negotiations with Palestinian
pragmatists will continue in parallel with Israeli efforts to
combat extremists. Sounding a frequently-heard theme here,
Livni called for the international community to apply
stronger pressure on Iran in order to avert the need for
military action. Other speakers included Palestinian
Authority Foreign Minister Al Malki, French Foreign Minister
Kouchner, and former German Foreign Minister Fischer. Al
Malki stressed Palestinian disappointment that "promises"
made at Annapolis to achieve a peace agreement by the end of
the year had not been achieved and criticized continued
building of Israeli settlements as a violation of Roadmap
commitments, but he also underscored the PA's determination
to continue the negotiations. Kouchner and Fischer both
stressed Europe's moral commitment to Israel's survival as a
Jewish, democratic state, urged Israel and the PA to complete
their negotiations, and condemned Ahmadinejad's anti-Semitic
rhetoric. In a subsequent panel discussion, former Mossad
Director Efraim Halevy and former policy adviser to Netanyahu
Uzi Arad suggested that the multiple crises facing Israel and
the world require more effective multilateral efforts,
including outside the framework of ineffective existing
institutions. Their comments were indicative of the Israeli
policy community,s focus on Iran and the possible use of
military force. In a hierarchy of international threats and
opportunities, those of the Middle East are at the top, they
said, and Israel must play a role in the ad hoc coalitions
formed to confront those threats. End Summary.

MFA Conference a Platform for Livni
--------------------------------------------- -

2. (U) MFA Director General Aaron Abramovich convened what
was billed as the Ministry's first annual conference for
policy and strategy October 5-7. The MFA invited a number of
prominent foreign officials to address the October 5 opening
session, while the following two days were devoted to
in-house panels on a broad range of policy agendas. The
purpose of the conference, as described by Senior Deputy
Director General Yossi Gal, is to increase the MFA's
influence within the GOI's policy formulation process. The
conference will produce an MFA paper assessing Israel's
foreign and national security policies that will be
distributed to the security cabinet and key Knesset members.

3. (SBU) Foreign Minister Livni used her address to the
conference -- her first public speech since winning the
Kadima primaries and being designated by President Peres to
form a new government -- as an opportunity to stake out a
tougher stance toward negotiations than that offered by PM
Olmert in his Rosh Ha-Shana interview with Yediot Aharonot
(reftel). Livni directed her comments both to the
international community and to the complaints made by PA
Foreign Minister Al Malki, all the while playing to an
Israeli domestic audience.

4. (U) Livni made the following key points:

-- Negotiations are in Israel's interest. Those within
Israel who criticize the peace process must propose an
alternative. Israel is a Jewish, democratic state seeking to
live in peace with its neighbors. It is also an integral
part of the community of democracies with which it shares

-- Iran is not just Israel or the Middle East's problem, it
is a problem for the entire international community, and it
must be handled at the international level. Resolving the
Israeli-Palestinian conflict has nothing to do with the
struggle against Iran. While the world understands the
threat posed by Iran, there is not yet sufficient action to
deal with that threat. Only by combining the threat of force
with political and economic sanctions can the international
community compel Iran to change course and thus avert the
need to use force in the future.

-- We have passed the stage at which Israel should have to
prove its desire for peace; it seeks peace and normalization
with all the Arab countries. Peace is not just a matter of
Israel deciding which concessions to make, it is also a
matter of handling the process wisely.

-- Peace cannot be a dream, it must be grounded in reality.

TEL AVIV 00002308 002 OF 003

Palestinians must accept that violence and terrorism will not
achieve their goals. The work begun at Annapolis must
continue. Its goal is an end to the conflict based on the
principle of two national states for two peoples. A
Palestinian state is also Israel's goal provided that its
establishment means the end of the conflict and the full
realization of Palestinian national aspirations. Israelis,
Palestinians, and the international community cannot have an
interest in the establishment of a failed state or an
extremist state.

-- Political calendars and transitions should not stand in
the way. The negotiations should not cease but neither
should they be brought to a partial or premature conclusion.
The rules agreed to at Annapolis remain in effect: nothing
is agreed until everything is agreed.

-- The Arab world has a key role to play in acting to support
Palestinian moderates and delegitimize extremists.

The Palestinian Authority's View

5. (U) PA Foreign Minister Riad Al Malki spoke before Livni.
In what must have been the first official address by a
Palestinian official inside the MFA headquarters at least
since the heyday of the Oslo process, Malki said the
Palestinians had believed in promises made at Annapolis that
they would achieve a peace agreement by the end of 2008. Now
it is October, and Palestinians are losing hope.

-- Settlement activity is increasing in total violation of
the Annapolis conference principles, but at the same time,
the PA and GOI have developed excellent relations at the
political and security levels. Not enough has been done to
implement the first phase of the Roadmap. No party should be
allowed to run away from its Roadmap obligations.

-- The PA remains committed to negotiations, but the
Palestinian public expects results. The Arab world is
putting pressure on the PA due to the expansion of
settlements and the perception of a lack of results, and
Hamas exploits that perception as well.

-- Peace is still possible. President Abbas remains
committed to the two-state solution. A Palestinian state is
the best guarantee of Israel's security. The remaining
months of 2008 are important. Palestinians want to assume
full security responsibility in the territories under their
control, while also implementing economic development
projects and enhancing the justice system and rule of law.
-- Political uncertainty is high. There are big differences
between the U.S. presidential candidates with regard to the
peace process. Livni's efforts to form a government will
hopefully succeed since this would provide continuity.
Hopefully the intra-Palestinian dialogue will succeed and
lead to the return of Gaza to PA control.

European Friends of Israel

6. (U) French Foreign Minister Bernard Kouchner and former
German Foreign Minister Joschka Fischer emphasized Europe's
moral commitment to Israel's survival as a democratic, Jewish
state as well as their support for a two-state solution.
Kouchner called Israel "a modern miracle," said France stood
at Israel's side in its war on terrorism, condemned the
"intolerable" words of President Ahmadinejad, and called Iran
a danger for the entire international system. France will
continue to work with its partners to move to a dialogue with
Iran if Iran honors its international commitments.

7. (U) Fischer said he would never forget Germany's
responsibility for the Holocaust. A more multi-polar world
is emerging, and the impact of the international financial
crisis will be far-reaching for Russia as well as for the
U.S. and Europe. Iran is not a superpower when its economic
and social characteristics are considered, but it does seek
regional hegemony. Fischer advocated a "realistic approach"
to Iran based on an accurate understanding of Iran's internal
dynamics. Fischer echoed Kouchner in rejecting Ahmadinejad's
anti-Semitic rhetoric. Russia must be included in the
development of stronger sanctions on Iran, and therefore the
West should reconsider its "post-Georgia priorities."
Fischer said Israeli-Syria negotiations could "change the
parameters in the region" since Iran would be completely
isolated without Syria. Engaging Syria and Iran would also
be necessary as the U.S. seeks to end its involvement in
Iraq. While expressing understanding of the complicated
politics on both sides, Fischer said the effort to achieve a
two-state solution must continue. Speaking as a "friend of

TEL AVIV 00002308 003 OF 003

Israel," Fischer said he found the idea of the two-state
option fading away to be frightening.
Israeli Ideas for Confronting Iran

8. (SBU) The opening speeches were followed by a panel
discussion in which the Ambassador participated. The theme
of the panel discussion was "Challenges to Diplomacy in the
21st Century," and led off with retired Ambassador Oded Eran
asking whether diplomacy remains relevant to addressing the
world's critical issues. Comments by former Mossad Director
Efraim Halevy and former Mossad operative and policy adviser
to Bibi Netanyahu Uzi Arad were indicative of the Israeli
policy community's focus on the Iranian threat.

9. (U) Arad said the world appears to be drifting toward a
major international crisis. From an Israeli perspective, the
combination of the proliferation of WMD, terrorism, and the
challenge to the West by radical Islam has a multiplier
effect, especially when combined with high oil prices.
Meanwhile, the multilateral architecture established by the
U.S. after World War II is failing. Arad pointed to the
IAEA's failure to deal with Iran's nuclear program as an
example. The prudent course of action requires dropping
outmoded concepts such as the inviolability of national
sovereignty, getting our priorities right, as well as strong
leadership. Arad said the alternative multilateral system is
likely to involve an alliance of democracies and/or
coalitions of the willing rather than the "severely
inadequate" multilateral institutions.

10. (U) Halevy also noted that "cajoling and threatening"
Iran has thus far had little result. Halevy commented that
the current world order may be "on the brink of the abyss,"
since Kissinger described a nuclearized world as
"uncontrollable." In prioritizing the threats and
opportunities facing the world, those of the Middle East
stand at the top. Halevy said that ad hoc coalitions are
needed to fight the gravest threats. Israel is both a major
player in the Middle East and a junior partner in the
community of democracies. Despite all the talk about a
military solution to the Iranian threat, a political solution
is still preferable. Israel must be a partner in the
international effort to deal with Iran, Halevy said, adding
that Israel has assets that ensure it a place at the table.

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