Middle East Inside Line (30 August): Israel-Gaza Tension Rising, Sweden and Israel Still Fighting

Israel Tension with Hamas Rising: The tension between Israeli forces and Palestinians in Gaza has been increasing since Monday. Palestinian militants fired a Qassam rocket into the Western Negev. A 20-year-old Palestinian was shot dead when he approached a security fence separating Israel and the northern Gaza Strip; the Israeli military claimed that gunmen were placing a bomb near the security fence and opened fire. After the Palestinian's death, mortar shells fired from the Gaza Strip injured an Israeli soldier; the Popular Resistance Committees (PRC), a Palestinian militant group, claimed responsibility.

On Tuesday, two Israeli jets dropped bombs on smuggling tunnels in the southern town of Rafah. The IDF said that the airstrike, which killed three Palestinian brothers and wounded seven others, was in response to Monday's mortar shell fire at Israel on Monday.

Israel-Sweden Fight Continues:

After recent tension over Palestine and the "stolen organs" controversy, diplomatic storm clouds are still over Stockholm and Tel Aviv. On Friday, Egyptian Foreign Minister Ahmed Aboul-Gheit gave a clear yet a provocative statement in Sweden:

East Jerusalem must be included in a freeze of settlement activity before Middle East peace talks can restart....Jerusalem is Arab and it will continue to be so.

Meanwhile, Washington has denied reports that the Obama Administration dropped the demand for the freezing of settlements in East Jerusalem in exchange for the Israeli concession of a 9 to 12-month settlement freeze in the West Bank.

Middle East Inside Line: US Missile Defense "in Israel", Israeli Views of Obama

Missile Defence in Israel and Turkey: Poland’s Wyborcza newspaper claims that the Obama Administration is not going to place an American missile defense system in Poland and Czech Republic. Instead, interceptor missiles on ships and bases in Israel and Turkey, as well as a possible location in the Balkans, are being considered.

The article quotes Riki Ellison, chairman of the Missile Defence Advocacy Alliance, a Washington-based lobby group, "The signals that the generals in the Pentagon are sending are absolutely clear: as far as missile defence is concerned, the current US administration is searching for other solutions than the bases in Poland and the Czech Republic."

Ellison claims Moscow's objections are behind the change in plans, "The outcome of this debate, it has been increasingly clear, will see the Polish and Czech option abandoned… the new administration pays more attention to Russia's arguments."

Israel's Verdict on Obama: According to a Smith Research poll taken this week on behalf of The Jerusalem Post among 500 Jewish Israelis, only 4 percent see the Obama Administration’s policies as pro-Israeli. Just over 50 percent consider them more pro-Palestinian than pro-Israeli, and 35 percent stated that they are neutral.

However, it appears that a lot of those who see Washington as neutral also favour some concessions from Tel Aviv. When Israeli Jews were asked whether they would support settlement freeze for a year as part of an American deal, forty-one percent said “yes” whereas fifty percent said “no.” The large minority supporting the freeze is somewhat surprising, given that 85 percent of respondents consider Obama’s demand for a settlement freeze as a potential threat to Israeli interests.

Israel-Palestine Trade Up: According to the Customs Administration of the Israel Tax Authority, Israeli-Palestinian trade has been steadily growing and almost reached New Israeli Shekel 20 billion ($5.28 billion) in 2008, despite the global economic crisis. Of this amount, NIS 14.6 billion ($3.85 billion) was domestic trade between the State of Israel and the Palestinian Authority, while NIS 4.6 billion ($1.21 billion) was Palestinian imports and exports through Israeli ports.

The Tax Authority also stated that the trade has been continuously increasing in the first half of 2009. Three years ago, Israeli-Palestinian trade was NIS 15.6 billion ($4.2 billion). ($11.1) billion.

Israel-Palestine: After Mitchell Meeting, Netanyahu Presses His Advantage

The Middle East/Iran Inside Line: Hezbollah In, Lieberman Out, France-Germany Making a Difference?
Israel and Mitchell-Netanyahu: No Agreement Yet “Good”
Israel-Palestine: Fayyad Puts Invitation to Israel within a “Palestinian State”

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An Israeli government source says that, in his meeting with President Obama's envoy George Mitchell on Tuesday, Netanyahu proposed a nine-month freeze on settlements in the West Bank. However, he set clear conditions: this would not be an obstacle for the “continuation of normal life" and would not include 2,500 housing units on which construction has already started. It was also dependent on reciprocal steps from the Palestinian Authority and Arab states. In the event that Arabs did not meet expectations, Netanyahu asked for an American guarantee not to oppose renewed building.

The American response to Netanyahu’s proposal will be given in Washington next week when Mitchell meets with Netanyahu's envoy, attorney Yitzhak Molcho, and Defense Minister Ehud Barak's chief of staff, Brigadier General Mike Herzog. In the second week of September, Mitchell is expected to visit Israel in order to finalize the agreement.

Meanwhile, Netanyahu commented on Palestinian Authority leader Mahmoud Abbas's reported willingness to meet him at next month's UN General Assembly session in New York: "If Abbas is behind this declaration, that would be progress. This is a positive thing, a positive first step." Since Abbas had refused to meet Netanyahu if Israel does not impose a full halt on its settlements in the West Bank, this could be construed as a Palestinian concession. Indeed, Netanyahu seized the opportunity to press another condition, the Palestinian leadership's recognition of a Jewish state: "We also have core issues, and the issue of recognition is core, in my view. If we insist on the recognition, there will be a peace agreement."

Israel and Mitchell-Netanyahu: No Agreement Yet "Good"

Israel-Palestine: After Mitchell Meeting, Netanyahu Presses His Advantage
Israel-Palestine: Fayyad Puts Invitation to Israel within a “Palestinian State”

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The four-hour meeting between President Obama's envoy George Mitchell and Israeli Prime Minister Benjamin Netanyahu has ended. Predictably, there has been no agreement on the settlement issue. However, the joint statement put out by both sides characterized the meeting as “good” and added: “Both sides [Israelis and Palestinians] need to take practical steps towards furthering the peace."

After Monday’s meeting between British Prime Minister Gordon Brown and Netanyahu, in which the latter said the settlement issue could be resolved through negotiations but the Palestinian refuse to recognise Israel as a Jewish state is a major obstacle, today’s “good” meeting is a more hopeful sign. It was agreed that representatives from Netanyahu’s office will go to the U.S. for further discussions with Mitchell’s staff.

The Cable blog adds:

Several Washington Middle East hands believe the parties are close to an agreement on resuming Middle East peace talks between Israel and the Palestinians, Israel and Syria, and on resuming normal relations between Israel and its Arab neighbors in the fall. The Obama administration is expected to announce its peace plan parameters and a rough timeline for proceeding around the time of the United Nations General Assembly opening session in New York later next month.

Netanyahu is now on his way to Germany, with the situation of the Israeli soldier, Gilad Shalit, held in Gaza, and the Iranian issue likely to be high on the agenda of talks with Chancellor Angela Merkel.

Netanyahu in London: Will Israel Make Any Move on Settlements and Jerusalem?

Israel and Lebanon: Tensions at Boiling Point?
Saturday Debate: Prosperity or Invasion in the West Bank?
Boiling Point for US-Israeli Relations: The Warning to Israel from Within

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UPDATE 1730 GMT: Israeli Prime Minister Benjamin Netanyahu, in a press conference with British Prime Minister Gordon Brown, has said today that Israel and the United States are nearing a compromise that would allow for the resumption of peace talks with the Palestinians and as well as "normal life" for Jewish settlers in the West Bank.

However, Netanyahu held firm on his stance that Israel will not limit Jewish construction in East Jerusalem. "The settlers need kindergartens and homes for their families," adding that this does not mean that this would necessitate expropriating more land in the West Bank.

Israeli Prime Minister Benjamin Netanyahu is in London, scheduled to meet his British counterpart Gordon Brown on Tuesday and President Obama's envoy George Mitchell on Wednesday before seeing German Chancellor Angela Merkel on Thursday.

In Netanyahu’s meetings with Brown and Merkel, the top issue is expected to be Tel Aviv’s demands on the European Union to strengthen sanctions against Tehran. On Sunday, before Netanyahu left Israel, he phoned French President Nicholas Sarkozy with that message.

Undoubtedly, Netanyahu’s most challenging discussion will be held with Mitchell, notably on the current situation with regards to the settlement freeze in the West Bank and East Jerusalem. The Netanyahu Government has accepted a maximum six-month freeze in the West Bank, but the Obama Administration is insisting on a freeze for a year both in the West Bank and East Jerusalem.

The Jerusalem Post reports that a senior Israeli official said, before Netanyahu’s flight to London, that Israel would not accept any limitations on its sovereignty in “the capital". Netanyahu would insist on “the continuation of normal life in the settlements”, which has already replaced the rhetoric of “the natural growth in the settlements” used by Israeli officials.

It is still a mystery whether Tel Aviv will be willing to give more concessions on the timetable but, even if it does, Netanyahu has already established the ground of resistance in case of a demand to divide Jerusalem into two section as a precondition for a two-state solution. Netanyahu told his Cabinet on Sunday that "the discussions with Mitchell were just the beginning of a series of talks and exchanges that had been going on intensively recently, and in good spirits". He continued: “There is a wish to hold direct talks between us and the Palestinians, even though this depends on the understandings with the Americans and the Palestinians."

The US State Department said on Monday that Mitchell was getting closer to winning agreement from the Israelis and Palestinians to resume peace talks, but Ha'aretz reports, from a political source in Jerusalem, that a compromise of 9-12 months on construction in the West Bank would not include East Jerusalem or most of the 2,500 housing units whose construction had already commenced. On Sunday, Foreign Minister Avigdor Lieberman told reporters:

In the 16 years since the Oslo Accords, we haven't managed to bring peace to the region, and I'm willing to bet that there won't be peace in another 16 years, either. Certainly not on the basis of the two-state solution… The establishment of a Palestinian state within two years is an unrealistic goal… There are some who believe this is possible, and I do not want to interfere. I am ready to grant time so that there will be another effort to reach a Palestinian state, but I will not take on tasks that I do not believe in.

So, as Netanyahu prepares for his meeting tomorrow with Mitchell, there is the immediate question of whether Israel will offer a settlement freeze in the West Bank for 12 months to avoid the same demand on construction in East Jerusalem. But that in turn opens up the bigger question: is there any Israeli intent to pursue a resolution of Jerusalem's status as part of a two-state solution?