Deal with Russia and Syria to withdraw from Lebanon?

HA'ARETZ 4/13/99: "Foreign Minister Ariel Sharon has asked Russia to serve as the intermediary between Israel and Syria in a deal that would have let the government withdraw from Lebanon before the elections and open negotiations with Syria immediately afterward - if the Likud is re-elected.

The first stage would focus on an Israeli withdrawal from Lebanon. The second stage, assuming that Prime Minister Benjamin Netanyahu is re-elected, would focus on the Golan Heights, security arrangements and a peace agreement. According to the Sharon proposal, the first stage of the two-part deal would have to be completed before the elections, and would focus only on the IDF withdrawal from South Lebanon.

The proffered deal includes a Syrian agreement to an orderly Israeli withdrawal and a quiet agreement by Damascus to prevent any terror attacks by the Hezbollah or other groups on Israeli settlements in the north.

Sharon's assumption is that an orderly withdrawal from Lebanon, with Syrian agreement, would greatly help Netanyahu's re-election campaign. After the elections, Netanyahu would immediately begin negotiations with Syria over the Golan Heights and a peace agreement between the two countries.

No mention of how deep a withdrawal Israel is prepared to make on the Golan, and whether it would accept the previous Syrian demand that a withdrawal be complete, was made in the Israeli offer. Syria demanded from both Yitzhak Rabin and Shimon Peres that an Israeli withdrawal go back to the lines of June 4, 1967.

Syria is not expected to accept the deal in its entirety without a guarantee that Israel's withdrawal from the Golan would be complete. Damascus understands that without U.S. involvement in the process, there would be neither a carrot nor a stick in Russian hands to force Israel to complete the second stage of the deal.

The Foreign Ministry has been left totally in the dark on the Russian mediation role Sharon has proffered. Just as there was no input from the Foreign Ministry on the establishment of a Russo-Israeli committee to prevent Russian military technology transfers to Iran, there was no internal discussion of the approach to Moscow to become an intermediary between Israel and Syria."

No satellites sales to Russia, but US yes, and Israeli support for NATO?? Huh?

HA'ARETZ 4/13/99: "Prime Minister Benjamin Netanyahu pledged to U.S. Assistant Secretary of State for Near East Affairs Martin Indyk that Israel will not engage in any commercial satellite activity or military sales with Russia, a senior Clinton administration official said last night.

"A lot of assurances were just provided by the prime minister regarding sales and other issues connected to Russia," the U.S. official said regarding the Sunday evening talks in Jerusalem.

Washington was worried that Israel was urging Washington to restrict Russian commercial satellite launchings on U.S. vehicles as a lever to halt Moscow's technology transfers to Iran, while at the same time Israel would pick up the slack by staging its own satellite launchings on Russian vehicles.

Apart from assurances about commercial satellite activity, Indyk also insisted that Netanyahu instruct Foreign Minister Ariel Sharon to issue a statement of unambiguous support for NATO actions in Yugoslavia. U.S. officials are satisfied with the statements coming from Netanyahu, but want similar statements from Sharon.

The senior U.S. official said Israel should realize that if NATO does not prevail in Kosovo, U.S. credibility will be damaged in dealing with Iraq. The official said, "Serbia and Iraq are allies. If NATO does not emerge victorious in Kosovo, Iraq will draw conclusions in its own neighborhood. Saddam will interpret what happens in Kosovo as a test of wills."

In criticizing the timing of Sharon's initiative to Russia, the senior U.S. official said, "Russia has not given any support either in Kosovo or in Iraq." The U.S. has complained that Israel's initiative to deal with Russia was not coordinated in advance with the Washington.

In Russia, Sharon told reporters that he "drew attention to the great dangers inherent in possible leaks of weapons technologies to Iran and other Middle East nations."

In addition to weapons proliferation, Sharon and Ivanov discussed Russia's decision to supply weapons to Syria, Israeli-Palestinian relations, the crisis in Yugoslavia and ways to forge stronger economic ties.

Sharon announced the opening of an Israeli consulate in Russia's second-largest city, St. Petersburg. Ivanov said they discussed ways of "painlessly living through the May 4 date," when the five-year term of interim autonomy for Palestinians expires.

During talks in Moscow earlier this month, Russian officials urged Palestinian leader Yasser Arafat not to unilaterally declare an independent state on May 4. Sharon, who arrived in Moscow on Sunday for a three-day visit, also met with Russian Prime Minister Yevgeny Primakov on Monday for talks on economic ties and the Mideast peace process.

The visit to Moscow was Sharon's second since mid-March, when he accompanied Prime Minister Benjamin Netanyahu to the Russian capital."

Russia wants to renew role in Mideast

ICEJ News Service 4/9/99… Russia has proposed a summit on Middle East peace that would boost Moscow's prestige in the region.

During meetings this week with visiting Palestinian Authority chairman Yasser Arafat, Russian leaders suggested a gathering of co-sponsors and signatories to the Israeli-Palestinian Oslo accords, before the interim agreement expires on May 4.

Addressing a joint press conference Tuesday with Foreign Minister Igor Ivanov, Arafat said he welcomed the proposal.

Besides Israel and the PA, the envisaged meeting would include Russia and the United States, as well as the Western and Arab countries which witnessed the signing of the agreement.

The suggestion is seen as another bid by Moscow to re-assert its influence in global affairs, diminished since the end of the Cold War. Russia has long expressed resentment at being sidelined from Middle East peacemaking efforts, virtually monopolized by the U.S. since the mid-1990s.

Arafat's visit to Moscow is the latest in a round of consultations with world leaders aimed at winning maximum support for Palestinian statehood, in return for postponing a unilateral declaration of independence beyond May 4.

Ivanov told reporters there was no question the Palestinians had the right to a state.

"I want to stress here that the very right of the Palestinian people to self-determination and statehood cannot be and is not a topic of discussion."

He said Russia was concerned about the lack of movement in implementation of the agreement signed at the Wye River Plantation last October.

"This situation is becoming critical with the approach of May 4 when the transition period is to end and the final status of Palestinian territories determined."

Russia had therefore suggested a "coordination meeting of all signatories.."

Arafat welcomed the proposal, telling the press conference Oslo was "not a bilateral Palestinian-Israeli document, but an international accord."

"As you know, the peace process was started under the aegis and on the initiative of Russia and the United States in Madrid [in 1991]. Then we and Israel signed an agreement which subsequently became known as the Oslo Agreement."

Besides the two co-sponsors, he noted that the European Union, Norway, Egypt and Jordan had also signed the agreement, while representatives of the United Nations and Japan had attended.

"We welcome the idea of the Russian co-sponsor to hold an international meeting of co-sponsors and other signatories of the temporary agreement, especially in conditions of the approaching end of the five-year period, that is, May 4, 1999."

After that date, Arafat said, "we have the right to create the state of Palestine."

He cited "international decisions of legal force," including UN resolution 181 - the 1947 decision which partitioned British-mandated Palestine into separate Jewish and Arab states (SEE NEXT REPORT).

Arafat also visited the Ukraine and Japan this week. In the Ukraine, President Leonid Kuchma said his country would welcome the proclamation of an independent Palestinian state. In Japan, Arafat hinted during talks with Prime Minister Keizo Obuchi that he would not declare an independent Palestinian state before Israel's general election on May 17.

Israel rejects resolution 181

ICEJ News Service 4/9/99… Israel has rejected recent Palestinian attempts to revive United Nations resolution 181 as a legal basis for statehood.

In a letter sent last week to UN secretary-general Kofi Annan, Israel's UN ambassador Dore Gold argued that by rejecting the resolution in 1947, and subsequently attacking the fledgling Jewish state, the Arab parties had nullified it.

"The fundamental act of international illegality was the invasion of the nascent State of Israel and the attempt to overturn a resolution of the General Assembly with armed force," he wrote.

" ... in fact, resolution 181 was made irrelevant by the actions of the Arab states and the Palestinian leadership in 1948, whose refusal to accept the resolution altered the circumstances in the Middle East on which it was originally based."

Dore called the attempt to resurrect 181 "a transparent effort to belatedly derive benefit from a resolution which the Palestinian leadership itself violently rejected 50 years ago."

The resolution has not been cited in any of the agreements signed between Israel and the Palestinians to date.

Kosovar Refugees in Israel

HA'ARETZ 4/13/99: "One hundred and twelve Albanian Muslim refugees, including a physician, two dental students, an engineer, a theatrical director, several infants, an elderly woman in a wheelchair, and the daughter of a couple recognized as "Righteous Gentiles" for saving Jews during World War II - will begin their lives in Israel this morning after being flown yesterday to Israel from a refugee camp in Macedonia and receiving refuge here in an ostentatious mission jointly planned by the government and the Jewish Agency to coincide with the eve of Holocaust Remembrance Day.

The refugees appeared to be healthy, but the faces of many of them reflected the shock of being expelled from their homes. Most arrived here with nothing, not even identifying documents. Most know nothing about Israel and do not have a clue as to what they will do here.

They said they wish to return home, but it appears that many of them are beginning to understand that they will always be refugees. Upon their arrival, they received tourist visas good for six months, but Prime Minister Benjamin Netanyahu, who greeted them at the airport, promised that those who wished to extend their stay would be permitted to remain.

The refugees will each receive an "absorption basket" worth NIS 30,000 and will be housed at the field school at Kibbutz Ma'agan Michael. Their visas allow them to work. The refugees, members of 18 families, were selected from among 180 candidates who expressed interest in settling in Israel.

A Jewish Agency representative, Ori Conforti, said that it was not easy to find these candidates. He had to walk among the tents and, using a megaphone, call on people to sign up for refuge in Israel. "It was surreal," says Conforti..."

Soldier killed in South Lebanon

HA'ARETZ 4/13/99: "An IDF soldier was killed yesterday afternoon near the Beaufort castle in south Lebanon, and the security cabinet held an emergency session last night to discuss Israel's response. Hezbollah claimed credit for the roadside bomb that killed 21-year-old trooper Noam Barnea, a master sergeant from Mevasseret Zion.

Before the cabinet meeting last night, Defense Minister Moshe Arens called in the top military command to discuss the situation. In attendance were the chief of staff, his deputy, the head of the northern command, the top echelons of military intelligence, and the head of the Mossad.

A month and a half ago, when Brig. Gen. Erez Gerstein was killed by a roadside bomb, Prime Minister Benjamin Netanyahu and Arens declared that Israel would not tolerate further attacks on its soldiers in Lebanon. A few hours later, the air force attacked Hezbollah camps, including the command post in the Beka'a.

Security sources said last night that it is possible the cabinet will take similar action now. The sources said that Israel cannot allow the Hezbollah to continue hitting IDF troops in Lebanon while the guerrillas hide behind the Grapes of Wrath agreements, using the civilian infrastructure in Lebanon to strike at the IDF..."

Foreign investment hits record $75 billion

(Haaretz Monday, April 12, 1999)
By Moti Bassok, Ha'aretz Economics Correspondent
Foreign investment in Israel reached an all-time high at the end of 1998: $74.5 billion, an increase of $3.6 billion over the close of 1997, and $13.7 billion more than at the end of 1996.

Forty percent of total foreign investment at the end of 1998, or $3 billion, was in tradable securities, compared with 36 percent at the end of 1996 and 30 percent at the end of 1994, the Bank of Israel announced yesterday.

The central bank boasted that the increase shows how open Israel's economy is to the world, which it said means Israel would reap the fruits of increased global saving and that the central bank would have to adhere strictly to criteria of fiscal and monetary discipline.

The composition of foreign investment has changed over the years. At the end of 1994, securities issued by the private sector comprised 35 percent of total foreign holdings. By 1998 that share had risen to 50 percent. The central bank says the increase demonstrates that Israel's private sector is becoming part of the global economy.

The value of tradable foreign-held securities totaled $15 billion at year-end 1998. Of this $5.4 billion were traded in Israel, the rest overseas. The central bank added that even during the height of the global crisis, August to October 1998, while Westerners were fleeing emerging markets - they sold only $0.4 billion worth of Israeli securities.

Sharon taking heat for stance

(CNS, WORLD TRIBUNE, ICEJ via FYI)
Israeli Foreign Minister Ariel Sharon is at the center of a growing storm at home for his views on the crisis in the Balkans. In several interviews and speeches over the past week,

Sharon voiced concern about the Kosovo situation on two counts:

that NATO military action on behalf of rebels fighting against a sovereign state sets a risky precedent that could have future ramifications for Israel; and that an independent Kosovo could become a base in Europe for Islamist terror.

On the issue of it having ramifications for Israel -- last month, Italy's ambassador to Israel, Gian Paolo Cavarai, raised such a possibility during a meeting of diplomats with Sharon. Ministry sources said Sharon was stunned that a NATO ambassador would raise the prospect of NATO intervention in the Arab-Israeli conflict just several days after the March 24 launch of the alliance's campaign against Yugoslavia.

On the issue of a terrorist state -- In his meeting with US Jewish leaders on Monday in New York, Sharon said the Kosovo Liberation Army has obtained significant aid from terrorist organizations backed by Iran, including the mujahadeen fighters in Afghanistan, Hizb'Allah and Osama Bin Laden, accused of blowing up two US embassies in Africa last year. Sharon said an independent Kosovo would enable Islamic terrorism to spread throughout Europe.

The situation has not been lost on the Palestinians. PA/PLO Cabinet Secretary Ahmed Abdul Rahman recently stated, "There is a new international situation. We must make it clear that what is happening in Yugoslavia must serve as a lesson to Israel to withdraw from its current policies before something similar happens to it as what is now taking place in Yugoslavia."

At first, senior PA/PLO officials played down Abdul Rahman's remarks, first made on PA/PLO radio on Monday. But by Tuesday, officials decided they were worth highlighting and several Palestinian dailies published his remarks on their front page.

Meanwhile, the Jewish Agency sent a third aircraft in a week to Albania on Friday, carrying blankets, beds, warm clothing, food and baby formula for Kosovo refugees. More flights are planned next week. Israel's full-equipped army field hospital in Macedonia has been operating since Wednesday, winning the praise of NATO forces who were struggling to handle refugees' medical needs before its arrival. The hospital, comprising 100 beds and 70 medical personnel, was flown to Macedonia on Tuesday.