Israel: Government Budget Cuts Defense and Welfare

On Friday, the Israeli Government approved a new two-year budget. However, cuts both in defense and welfare brought criticisms from parts of the coalition. Following the NIS 2.7 billion (about $700 million) reduction in the defense budget, ministers from Israel Beiteinu stormed out of the meeting and Foreign Minister Avigdor Lieberman, the leader of the party, threatened to vote No in the Knesset. Minister of Welfare Isaac Herzog (Labor) also left the meeting before voting.

Speaking to Israel Radio, Public Security Minister Yitzhak Aharonovitch (Israel Beiteinu) said:

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If the government doesn't fund the office, Israeli society will be harmed. There is a need to strengthen the police and the prison service. The ministry can't be run [without additional funding.]

Israel Beiteinu is the senior partner [in the coalition], but we're treated otherwise. I say to the government and to the prime minister: we'll meet in the Knesset. We're voting against the budget - it will not pass!

Shas's leader, Interior Minister Eli Yisha,i announced that he will fight in the Knesset for the increase in welfare funds.

Defense Minister Ehud Barak (Labor) did not target the government but underlined the "challenges faced" by the Israel Defense Forces:

We made a difficult decision, taking into consideration the economic and social situation in Israel. There are consequences to this decision, and I showed them to the cabinet.

Barak added that he hopes the IDF can "stand before the challenges in the resources budgeted to us. The balance between the security budget and the other budgets can bring us to deal correctly with the security and social challenges in Israel."

The IDF released a statement, thanking both Prime Minister Benjamin Netanyahu and Finance Minister Yuval Steinitz (both from Likud).

Following the voting, Steinitz said:

The government approved a proffesional budget, which balances the different needs of the market. After years in which the security budget recieved significant additions, which strengthened the military, the government has chosen to give these additions to the education budget, health and welfare.

My mission is that the coming years will bring a shrinking of social gaps by strengthening the weaker sectors. The 2011-2012 budget will allow the government to plan for the long term and will strengthen the stability and security in the market.

And Prime Minister Netanyahu said:

The budget we compiled today is a responsible and balanced budget, that grants stability to the Israeli economy for the next two years.

The public in every country pays for going over the budget and unchecked spending. It may not be clear when a government goes over the budget, but we see what happened in some European countries. We can't let such irresponsibility happen in Israel.

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The European Union's High Representative for Foreign Affairs and Security Policy, Catherine Ashton, arrives in the Middle East today. During her three-day trip, Ashton will meet Israeli Prime Minister Benjamin Netanyahu, Defense Minister Ehud Barak, Foreign Minister Avigdor Lieberman, Palestinian Authority President Mahmoud Abbas, PA Prime Minister Salam Fayyad, and the Quartet's special envoy to the Middle East, Tony Blair.

Ashton is due to visit the Gaza Strip on Sunday. There are no plans to meet any Hamas officials, with Ashton visiting the projects of the United Nations Relief and Works Agency for Palestine Refugees.

Before her visit, Ashton said:

We stand ready to support the opening of the Gaza crossings for the traffic of goods to and from Gaza. The European Union has been calling for an urgent and fundamental change of policy regarding the closure of Gaza.

Middle East Inside Line: US Reaction to House Demolitions, Netanyahu-Mubarak Meeting Deferred and More…

Middle East Inside Line: US Reaction to House Demolitions, Netanyahu-Mubarak Meeting Deferred and More...

US Criticises Demolition of Palestinian Houses: On Wednesday, State Department spokesman Philip Crowley criticized Israel's recent demolition of Palestinian houses in East Jerusalem: "It is the very kind of action that poses a potential obstacle to direct negotiations. Any steps that the Israelis, Palestinians or other parties take that change the facts on the ground, we think are unhelpful."

Netanyahu Not Going to Cairo: Egypt deferred "the planned meeting between President Hosni Mubarak and Prime Minister Benjamin Netanyahu. Israeli sources claim that the underlying reason of the postponement is Mubarak's deteriorating health situation (see separate EA entry with further information). However, speaking with Al-Shorouq on Wednesday, a senior Egyptian official denied reports of Mubarak's ailing health, saying the meeting was pushed back due to "provocative moves made by Israel".

Turkey Insists on International Probe of Flotilla Attack: After Maj.-Gen. Giora Eiland announced that a military commission's findings that the Israeli Navy had made "operational mistakes" in the 31 May operation against the Freedom Flotilla to Gaza, Turkey's Foreign Minister Ahmet Davutoglu told reporters Tuesday that he welcomed the acknowledgement of "mistakes". However, he said the Israeli commandos had committed "a crime" and said Turkey wants an international enquiry.

Israel Radar System Successfully Tested: Israel tested the Iron Dome's advanced radar system successfully on Wednesday, moving a step closer to deploying both radars and interceptor missiles along the Gaza and Lebanon borders.

Hezbollah's "List of Targets": In an interview with AFP, Naim Kassem, the leader of Hezbollah, said that the group has "large and precise" list of Israeli targets to attack if a third Lebanon war breaks out. He continued:

We now hold a large and precise bank of Israeli targets, and Israel will have to pay the price for any step it takes.

Hezbollah has worked to develop its readiness to rise to the challenge should it arise, and we can safely say that in the past four years we have prepared ourselves far more than Israel has.

Israel-Palestine Analysis: What Can Netanyahu Offer the Palestinians?

On Monday the Jerusalem municipal planning committee approved construction of 32 new apartments in a Jewish neighborhood in the Pisgat Ze'ev across the Green Line.

Elisha Peleg, a member of the Jerusalem Municipal Planning and Construction Committee, said: "We will continue to plan and build in every neighborhood in this city and we will not allow external forces to intervene."

The development comes days before US special envoy George Mitchell arrives for talks with Palestinian Authority leader Mahmoud Abbas, who in turn meets Egyptian President Hosni Mubarak before the weekend.

While some argue that Ramallah will not go to direct talks when the four-month proximity discussions end in September --- since Israelis have not agreed to continue the December 2008 negotiations and to halt construction both in East Jerusalem and in the West Bank --- Yasser Abed Rabbo, a Palestine Liberation Organization official, hinted a possible deal. He said:

We don't know that the proximity talks have stopped. Mitchell is coming next week, and the context and the core of the talks are more important to us than the way they are being held.

If the Palestinians move from proximity talks to direct talks, I believe that the negotiations between Israel and the Palestinians will be similar to the type of negotiations between the two sides before it stopped in December 2008.

PA officials in Ramallah on Monday did not rule out the possibility. “We don’t rule out direct talks,” said one official. “But before we move to these talks, we want to have a clear agenda and timetable.”

Ramallah will not make a decision without the Arab League's confirmation but the advance towards direct talks can only come with Israel's clear pledges for the continuation of discussions stopped in December 2008. Even then, it is not going to be easy for the Palestinian Authority to sit on the table when construction is continuing in East Jerusalem, let alone when the freeze on building in the West Bank end in September.

The Palestinians are likely going to ask for a public declaration of intent to make East Jerusalem the capital of a future Palestinian state. Whether that is enough to swallow the Israeli refusal, in advance of talks, to curb settlements is unknown.

Even so, given the various interests of a broad Israeli coalition, can Netanyahu even go this far to fulfil his claim that he is ready for direct exchanges with his Palestinian counterparts?

Israel-Palestine Analysis: Netanyahu Manoeuvres with US & Egypt to Put PA in a Corner

UPDATE 1030 GMT: Juan Cole has posted a complementary analysis, beginning with the Palestinian Authority's position, "Abbas: Israeli Colonization Impedes Start of Direct Talks".

Israeli Prime Minister Benjamin Netanyahu is talking about bringing the Palestinians on the table for direct talks. But how?

It is reported that, following consultations with some of his ministers, Netanyahu is thinking of announcing an end to Israel Defense Force operations in a number of Palestinian cities in the West Bank. Haaretz reports, from "senior officials", other confidence-building measures:

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- Israel will enable the Palestinian police to broaden its activities beyond Area A, which is under PA security control. They would be allowed to set up six new police stations in Area B, where the PA is currently responsible only for civilian affairs, and possibly also have some authority over civilian matters in Area C.

- Israel will lift more road blocks in the West Bank.

- Israel will transfer to Palestinian control a portion of land that is currently in Area C, under full Israeli control, in order to build a road connecting Ramallah and a new city currently in the planning stage, Rawabi.

With the Palestinian Authority under pressure from the Obama Administration to start the direct talks with Israel, Netanyahu is wisely trying to corner the PA and also other possible actors such as the Egyptian Government. PA leader Mahmoud Abbas rejected Obama's approach to change his mind, but Netanyahu, at his cabinet meeting on Sunday, stated that he planned to meet President Hosni Mubarak in Egypt on Tuesday to discuss how progress in negotiations can be achieved.

What is the benefit for Egypt? At a time when channels of dialogue are open with Hamas to some extent, following the Freedom Flotilla crisis, Cairo can use this initiative to push for Hamas flexibility in a Palestinian reconciliation agreement. It can boost its regional and domestic credibility by playing the role of second mediator between Ramallah and West Jerusalem.

Asked in an interview with Fox News whether there can be a Palestinian state by 2012 (a follow-up Palestinian leader Salam Fayyad's "A Palestinian State by 2011" statement), Netanyahu said:

I think there can be a solution. It may be implemented over time, because time is an important factor of getting the solution, both in terms of security arrangements and other things that would be difficult if they're not allowed to take place over time.

Can we have a negotiated peace? Yes. Can it be implemented by 2012? I think it's going to take longer than that.