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Israeline — Tuesday, July 8, 2003 —

** 65-Year-Old Woman Killed in First Homicide Bombing since Cease-Fire Declaration
** Abbas Cancels Meeting With Sharon Amidst Internal Palestinian Discords
** Abbas, Dahlan Invited to the Knesset
** Shalom: PA’s Anti-Israel Incitement Is Decreasing
** Other News in Brief
** Economic & Hi-Tech Briefs


65-Year-Old Woman Killed in First Homicide Bombing since Cease-Fire Declaration
Mazal Afari, 65, of Moshav Kfar Yavetz, east of Netanya, was killed on Monday and three of her grandchildren were injured, after a terrorist infiltrated their home and exploded himself, HA’ARETZ reported. The attack, claimed by a Jenin-based cell of Islamic Jihad, was the first homicide bombing carried out since Palestinian terror groups declared a temporary cease-fire. The terror group identified the bomber as 22-year-old Ahmed Yehyia from the village of Kufr Rai in the northern West Bank. According to Israel Radio, KOL ISRAEL, senior Islamic Jihad official Mohammed al-Hindi denied all connection between the bombing and the terror organization, saying that those who carried out the attack had acted alone.

“The ‘hudna’ (temporary cease-fire) which they signed is not worth the paper its written on," Ra’anan Gissin, Prime Minister Ariel Sharon’s spokesperson said, adding that, "the ceasefire is no substitute for relentless and real actions to dismantle the terrorist infrastructure."

Minister of Foreign Affairs Silvan Shalom noted today that the attack, “demonstrates, more than anything, the need for the Palestinians to fulfill their obligation that they undertook under the road map, to dismantle the terrorist infrastructure.” Shalom said that Israel would continue with the diplomatic process, but would stop holding talks with the Palestinians if terror attacks continued.

In other news, the Israel Defense Forces announced that it had arrested three wanted Palestinians in the West Bank early this morning. Two of the men were arrested in the Ramallah area, while the third was picked up west of Hebron.

According THE JERUSALEM POST, an 18-year-old would-be female homicide bomber, who was reportedly arrested by Palestinian Authority security officials on Sunday in the Gaza Strip, was released into her parents’ custody early Monday morning.


Abbas Cancels Meeting With Sharon
Palestinian officials announced today that Palestinian Prime Minister Mahmoud Abbas had cancelled a meeting with Prime Minister Ariel Sharon set for Wednesday, because of an internal crisis within the Palestinian leadership, HA’ARETZ reported. They said the crisis involved opposition within Yasser Arafat’s Fatah political movement – of which Abbas is a senior member – to Abbas’s negotiating strategy in a current peace negotiation with Israel.
Sharon and Abbas were due to meet to discuss Israel’s release of Palestinian prisoners. In recent days Israel’s defense establishment has been considering the possibility of including a small number of jailed Hamas and Islamic Jihad men in the planned release of hundreds of security prisoners. One of the recommendations of the Israeli Security Agency was that members of “rejectionist” organizations – principally Hamas, the Islamic Jihad, and the Popular Front for the Liberation of Palestine – be excluded from candidacy for release. Senior PA officials have argued that such a ban would spark a serious internal crisis among the Palestinians. PA security chief Mohammed Dahlan raised the issue with Minister of Defense Shaul Mofaz in their meeting Sunday.

Hardliners within Fatah’s policymaking Central Committee, the backbone of the Palestinian Authority, have blasted Abbas’s performance in his dealing with Sharon and asked him to step down from the body. Senior Palestinian officials said that after a shouting match between Abbas and Central Committee critics, Abbas had sent two letters to Arafat, one of them offering his resignation from the Central Committee. According to one PA official, “in the other letter, he asked Arafat and Fatah to send him their instructions on how to run his government and negotiations with Israel”. “If he rejects their ideas, he will resign as prime minister,” the official said.


Abbas, Dahlan Invited to the Knesset
Palestinian Prime Minister Mahmoud Abbas and Palestinian Security Minister Mohammed Dahlan, have been invited to the Knesset as guests of the Shinui party, MA’ARIV reported. Abbas indicated on Monday night he had made no plans for an immediate visit, but noted that he would be happy to host any Israeli minister in Ramallah.
Minister of Justice Tommy Lapid, Shinui’s leader, said on Monday that, “the idea to invite Abu Mazen (Abbas) came up yesterday before noon in a meeting with Palestinian minister for prisoners affairs Hisham Abdul Razek and the Palestinian Minister of Justice Abed El Karim Abu Salech.”

Knesset Speaker Reuven Rivlin explained that Lapid had approached him and asked for his authorization to issue the invitation for the visit. Rilvin said he approved the unofficial invitation but indicated, “this is not a state visit so there won’t be a Palestinian flag raised in the Knesset and Abu Mazen won’t enter the plenum and there won’t be any official ceremony.”

Monday was busy with a series of high-ranked meetings between Israeli and Palestinian officials. Besides the meeting between Lapid, Isham Abdul Razek and Abed El Karim Abu Salechon which focused on the issue of the release of Palestinian prisoners, Minister of Foreign Affairs Silvan Shalom met with Palestinian Minister of Information Nabil Amr. The two discussed the subject of incitement in the PA. Minister of Infrastructure, Yossef Paritzki, met with his colleague Nabil Kasis, in charge of planning in the PA and Minister Yasser Abed-Rabbo. Their talks revolved on the topic of the peace process, the Road Map and the release of prisoners.


Shalom: PA’s Anti-Israel Incitement Is Decreasing
Following his meeting with Palestinian Authority Information Minister Nabil Amr, Israel’s Minister of Foreign Affairs Silvan Shalom released a statement saying that there had been a positive change in the degree of anti-Israel incitement within the Palestinian Authority, THE JERUSALEM POST reported. This is the first statement made by a senior official that feelings toward Israel are changing within the PA. Shalom said that, “this proves that where there is the will, results can be achieved.” He added that a strategic decision to abandon the language of hatred still had to be made. Amr said that his decision to tackle the issue of anti-Israel incitement included meeting with Palestinian media and a review of schoolbooks. Amr added that he would work with the United States to define incitement and address the issue in an effective manner.

One of the road map’s first achievements was the establishment of a joint committee headed by Maj.-Gen. (res.) Ya’acov Amidror, and a Palestinian counterpart, dealing with the issue of incitement. Subcommittees will also be set up to tackle anti-Israel messages in the print and electronic media, and in the mosques. Amidror said his committee was different from previous ones created during the Oslo process in that, more than ever, the sides understood that hate had to be taken very seriously and that anti-incitement measures were an integral part of the fight against terrorism. Amidror added that this was only the “first step toward a shift in attitudes toward Israel by Palestinians.”


Other News in Brief

* According to an article published in the London-based Al-Quds al-Arabi newspaper, Egypt and Jordan are considering returning their ambassadors to Tel Aviv by the end of the month, THE JERUSALEM POST reported. This comes a month after Egypt and Jordan rebuffed U.S. requests at the Sharm el-Sheikh summit to do so. The paper reported that the United States was pressuring Cairo and Amman to return their diplomats in light of the recent progress made in the diplomatic process. Egypt recalled its ambassador in November 2000, soon after the outbreak of the Palestinian violence, while Jordan, whose ambassadorship was empty at the time, decided not to fill the vacant post. Israeli diplomatic officials said that Jordan’s King Abdullah promised at the Aqaba summit last month that an ambassador would be sent in the near future. According to Israel Radio, KOL ISRAEL, Minister of Foreign Affairs Silvan Shalom said on Monday that Europe had recently placed pressure on both Arab countries to return their ambassadors.

* Salmin Mohammed Khamis, 27, is the fifth person to be charged with murder in connection with a terrorist attack that killed at least ten Kenyans and three Israeli tourists in November in a hotel on Kenya’s Indian Ocean coast, THE JERUSALEM POST reported. In the attack, assailants shot shoulder-fired missiles on chartered Israeli jet which narrowly missed the plane. Within a few minutes of that attack, homicide bombers exploded a car outside a beachfront hotel and killed 15 people. Khamis was charged with 15 counts of murder. At least three out of the five suspects in the attacks had ties to al-Qaida.


Economic & Hi-Tech Briefs

* Minister of Industry and Trade Ehud Olmert said that Israel, Jordan and the European Union had reached a three-way agreement that would allow tax-exempt exports to the EU of goods made jointly in Israel and Jordan, HA’ARETZ reported. The agreement will improve Israeli goods’ competitiveness in Europe. In addition, Israeli manufacturers will be able to employ Jordanian workers without losing tax advantages. The first beneficiaries of the agreement will be textile companies.

* The export of goods rose by an annualized 5.4 percent in January-May 2003, GLOBES reported. Industrial exports, excluding diamonds, rose by an annualized 4.1 percent , according to a Bank of Israel analysis of Central Bureau of Statistics data. The figures indicate that Israel’s export situation is improving. Total export of goods, excluding diamonds, rose by an annualized 5 percent and agricultural exports by an annualized 13.3 percent in January-May.

Today’s Israel Line was prepared by Adina Kay, Carmel Raphaeli, Victor Chemtob and Biranit Zarmon at The Consulate General of Israel in New York.

Israeline — Wednesday, July 9, 2003 —

** U.S. Shores Up Support for Abbas
** Islamic Jihad Terror Cell Arrested
** Declassified Documents Show Israel’s 1967 Attack on USS Liberty Was Accidental
** Palestinian Economy Suffers Tremendous Damage as a Result of Terror
** Economic & Hi-Tech Briefs


U.S. Shores Up Support for Abbas
The United States is shoring up support for Palestinian Prime Minister Mahmoud Abbas as the latter is facing increasing opposition within the Palestinian Authority leadership regarding his handling of peace negotiations with Israel, HA’ARETZ reported. “We stand behind Prime Minister Abbas," State Department spokesman Philip T. Reeker said. "We think it’s important to keep acting and act now to reinforce the positive progress and signal our support," Reeker added. On Tuesday, Abbas quit as deputy head of the Fatah Central Committee – a resignation that the Central Committee refused to accept. Abbas also threatened to resign as prime minister and cancelled a scheduled meeting with Prime Minister Ariel Sharon.

As a part of the U.S. efforts to rally behind the Palestinian premier, the Bush administration is pressing Israel to expand gestures towards Palestinians by taking down more unauthorized outposts and accelerating expected prisoner releases. On Tuesday, U.S. envoy John Wolf, assigned by President George Bush to monitor the progress of the road map, and U.S. Ambassador to Israel Daniel Kurtzer met Minister of Foreign Affairs Silvan Shalom in order to request that Israel take goodwill gestures. Wolf and Kurtzer were slated to meet with Minister of Defense Shaul Mofaz today.

Reacting to the requests made by the United States to Israel, Minister without Portfolio Tzipi Livni ruled out the release of Hamas and Islamic Jihad prisoners, saying that such a step would be contrary to the road map peace plan, which calls for taking action against terrorist organizations. "We cannot release them as it would be wrong from the standpoint of the peace process," she told Israel Radio, KOL ISRAEL. "Under the road map to which they are committed, the Palestinians must act against terrorist organizations. That is to say, they have a specific obligation to arrest Hamas and Islamic Jihad members. It’s hard to understand demands on Israel to release onto the Palestinian street terrorists of the kind that the PA has committed itself to arresting."

Meanwhile, in a break with long-standing American policy, the Bush administration plans to soon provide the first direct aid to the PA in the form of $20 million to be used to improve basic services in Palestinian areas that are now being vacated by Israeli forces as part of the implementation of the road map. Should further progress in the peace process be registered, the PA would be eligible for far more direct American aid – potentially hundreds of millions of dollars in the coming months – to beef up its security forces and and improve infrastructure projects.


Islamic Jihad Terror Cell Arrested
The Israel Security Agency arrested four Palestinian members of Islamic Jihad responsible for carrying out a series of terror attacks against Israelis, HA’ARETZ reported. The four – all in their early 20s – are being held on charges of aiding a terror organization, assisting senior terror suspects in avoiding arrest, recruiting volunteers to drive booby-trapped cars into Israel, preparing and placing incendiary devices on West Bank roads, carrying out shooting attacks on Israeli buses and gathering intelligence information on potential targets. Police say that the four have confessed to the allegations.

Meanwhile, an Israel Defense Forces undercover unit tried to arrest a wanted commander of the Fatah Tanzim armed group whom the army said was on the verge of dispatching a gunman for a planned attack on Israelis. Military sources said that in the course of the operation in the Jenin-area village of Burkin, the soldiers were fired on, and a gunbattle ensued, during which soldiers said they hit an armed Palestinian terrorist.

In security related events, 29 warnings of planned attacks were registered on Tuesday – a marked decrease compared to previous weeks, when there were close to 60 warnings. While terror warnings have significantly decreased over the last week, terror incidents have not. In the Gaza Strip on Tuesday, security forces blew up an anti-tank mine that had been buried near the hothouses of Morag in Gush Katif. A mortar shell was fired at an IDF post near Neveh Dekalim, and grenades were thrown at an army post near Rafah. In the West Bank, shots were fired at border policemen near Qalkilya and at IDF forces near Jenin. In a village near Carmel in the Hebron Hills, police arrested a suspected terrorist. They searched his home and discovered a sniper rifle and ammunition.


Declassified Documents Show Israel’s 1967 Attack on USS Liberty Was Accidental
The United States’ National Security Agency released new documents this week confirming Israel’s claim that its attack on the USS Liberty during the 1967 Six-Day War was a tragic error, HA’ARETZ reported. Israel’s shelling of the American spy ship off the coast of Gaza, which killed 34 American servicemen and wounded 171, has been the source of much controversy. Israel has consistently insisted it had no idea the ship was American, but conspiracy theorists and anti-Israel propagandists claimed Israel struck the ship in the full knowledge that it was American.

The NSA documents, originally defined as top secret, were publicized by Florida Judge Jay Cristol, who has been investigating the Liberty incident for 14 years and published a book on the subject in 2002. On Monday, the NSA gave Cristol a transcript of conversations held by two Israeli Air Force helicopter pilots who were hovering over the Liberty after it was hit. The transcripts confirm Israel’s claim that the attack on the ship was an accident. After the Israel Air Force and Navy bombed the Liberty, the two helicopter pilots were sent to assess the damage and evaluate the possibility of rescuing the surviving crewmembers. An American spy plane, which arrived at the scene immediately after the attack, recorded their conversations, as well as the conversations between the pilots and their supervisor at Hatzor Base, which took place between 2:30 and 3:37 P.M. on June 8, the third day of the war. The transcripts begin with the pilots and their supervisor referring to the damaged vessel as an “Egyptian warship.” The pilots were told: "Pay attention. The ship is now identified as Egyptian.” This identification supports Israel’s claim that it had believed the ship was Egyptian when it ordered the attack. Over half an hour had passed until the pilots first informed that the ship might not have been Egyptian at all. They were ordered to identify the nationality of surviving crewmembers: "Clarify by the first man that you bring up, what nationality he is, and report to me immediately," the supervisor instructed, according to the transcript. "It’s important to know." Soon after, one of the pilots informed Hatzor that he saw an American flag flying over the wounded ship. He was asked to investigate and determine whether it was really an American ship.

Although Israel gave its own recordings of the pilots’ conversations to the British television station Thames in 1987, conspiracy theorists charged that the tapes had been doctored to hide the fact that Israel had bombed the Liberty intentionally. The NSA transcripts refute any such claims since they were never in Israeli hands.

Israel has maintained that it attacked the Liberty because it believed it was an Egyptian supply ship ferrying supplies to the Egyptian troops fighting against Israel. When it discovered the error, it immediately informed the Americans, apologized and paid compensation to the victims’ families.

"It’s the last piece of intelligence that remained classified, and every rational person that will read it will understand that there is no truth in these conspiracy theories against Israel," Judge Cristol said Tuesday. But he added: "Those who hate Israel, who hate Jews, and those who believe in conspiracy will not be convinced by anything."


Palestinian Economy Suffers Tremendous Damage as a Result of Terror
The first 27 months of the last three years of Palestinian violence has plunged the Palestinian GNP 38 percent lower in 2002 than in 1999, GLOBES reported. The World Bank reports that unemployment amounted to 37 percent of the labor force at the end of 2002. The stricter standards utilized by the International Labor Organization (ILO), which only include people actively seeking work in the labor force, show 27 percent unemployment at the end of 2002. Per capita income fell by over 46 percent, compared with 1999, and the poverty rate – defined as less than $2.10 a day in income – was almost 60 percent of the population, compared with 21 percent before Palestinian violence became a daily occurrence. The Palestinian population grew by 13 percent between 1999 and 2002. Palestinian imports and exports were cut by a third in the period examined.

Investment fell almost 90 percent from $1.45 billion in 1999 to $150 million in 2002. Physical damage from the violence rose from $305 million at the end of 2001 to $930 million at the end of 2002. The World Bank states that the Palestinian Authority’s financial situation is very unstable. Monthly revenues fell from $91 million in December 2000 to $18 million in December 2002, due to rising unemployment, falling demand, and the halt in money transfers from Palestinians working in Israel. The PA received an average of $39 million a month in aid from donor countries in 2002. The World Bank reports that the Palestinian private sector suffered the most economic damage. GDP fell 35 percent between 1999 and 2002, and the PA owes private sector suppliers $200 million.


Economic & Hi-Tech Briefs

* Bank Leumi announced today that it was ranked top bank in the Middle East and number 126 in a list of the world’s top 1,000 banks in the July edition of the prestigious banking magazine "The Banker," GLOBES reported. Leumi said it was rated as the largest bank in Israel with the highest capital. Bank Hapoalim, Leumi’s main rival, was rated number 127 in the world. "The Banker" rated Citigroup as the largest bank in the world and HSBC as the largest bank in Western Europe.

* Given Imaging, the developer of the M2A capsule (the camera-in-a-pill) announced it has received FDA clearance establishing the Given Diagnostic System as a first-line tool in the detection of abnormalities of the small bowel, GLOBES reported. By close of trade on Wall Street on Tuesday, its share had gained 34 percent on the day. The Given Diagnostic system, featuring the M2A Capsule Endoscope, is the only noninvasive method for direct visualization of the entire small intestine. The capsule passes throughout the gastrointestinal tract, transmitting color video images as it passes. The procedure is ambulatory, allowing patients to continue daily activities throughout the endoscopic examination.

Today’s Israel Line was prepared by Victor Chemtob, David Dorfman and Naomi Peled at The Consulate General of Israel in New York.

Israeline — Thursday, July 10, 2003 —


** Palestinian Leadership Internal Crisis Solved as Egypt Tries to Mediate
** Hamas’s Rantisi Refuses to Extend Cease-Fire
** EU Considers Including Israel in its Wider Europe Scheme
** Olmert to Lead Effort Towards Improvement of Economic Ties with the PA
** Other News in Brief
** Economic & Hi-Tech Briefs


Palestinian Leadership Internal Crisis Solved as Egypt Tries to Mediate
On a visit to China, Palestinian Foreign Minister Nabil Sha’ath said Palestinian Prime Minister Mahmoud Abbas was “facing problems” problems but the crisis over his threat to resign appeared to have passed, HA’ARETZ reported. Sha’ath said that the problems were exacerbated by difficulties with Israel – a reference to disputes between the sides over issues including the release of Palestinian prisoners held by Israel. Sha’ath added that Abbas’ resignation was rejected unanimously and “he is still on the job.” Abbas threatened to quit as premier and resigned from a key body of the mainstream Fatah movement on Tuesday.

Meanwhile, according to Israel Radio, KOL YISRAEL, a delegation of Egyptian intelligence officers visiting Gaza met with Fatah, Hamas and Islamic Jihad leaders Wednesday. Egyptian President Hosni Mubarak asked Palestinian Authority Chairman Yasser Arafat on Wednesday night to put an end to the crisis in Fatah and the Palestine Liberation Organization. To this end, Egyptian intelligence chief Gen. Omar Suleiman told Arafat and Abbas that he intended to arrive in the Gaza Strip by Friday night to try to ease the tensions.


Hamas’s Rantisi Refuses to Extend Cease-Fire
Senior Hamas leader Abdel Aziz Rantisi has refused to extend the cease-fire from three to six months, as an Egyptian delegation requested, and threatened an escalation in fighting, HA’ARETZ reported. Rantisi said that the escalation was expected due to Israel’s refusal to release prisoners from Hamas and Islamic Jihad.

On Wednesday, Sheikh Ahmed Yassin, the spiritual leader of Hamas, reaffirmed the group’s commitment to a temporary cease-fire with Israel, but emphasized the importance of prisoner release. After talks with Egyptian envoys, Yassin said that Israel’s unwillingness to free thousands of Palestinian prisoners could undermine the cease-fire

Meanwhile, Palestinian Legislative Council member Ziad abu Ziad said the Palestinian end of the cease-fire was under control. “The hudna, or cease fire, is stable and strong,” he said. “It’s not at all fragile.”

Meanwhile, after being delayed several times because of internal Palestinian disputes, a meeting between Minister of Defense Shaul Mofaz and Palestinian Minister for Security Affairs Mohammed Dahlan is slated to take place tonight. The two are supposed to meet in Jerusalem to discuss Palestinian demands for the release of prisoners in Israeli jails. Mofaz and Dahlan are also expected to try to formulate the work schedule for the joint security council that they co-chair.

The inner Palestinian dissensions involve – among others – a debate over the authority of Dahlan. The Fatah Central Committee and close associates of Palestinian Authority Chairman Yasser Arafat are demanding a reduction in Dahlan’s powers, as part of their talks with Abbas. Committee members, under Arafat’s guidance, claim that Dahlan has control over the interior ministry, which is formally run by Abbas, without the okay of the central committee and in contravention of a law passed by the Palestinian government several months ago. Arafat’s associates are also demanding that security issues be managed by the "national security council" recently established and headed by Arafat himself.


EU Considers Including Israel in its Wider Europe Scheme
The European Commission announced on Wednesday that it intended to incorporate Israel into its Wider Europe scheme – a decision that may give Israel a status close to that of European Union member states, especially on commercial and economic issues, HA’ARETZ reported. Over the past few weeks, Israel has created an interministerial task force to formulate its stance on the Wider Europe scheme. Adopting this scheme would mean a new model of relations with the EU, similar to the one the EU currently has with Switzerland and Norway.

EU representatives, who met with a Foreign Ministry delegation in Brussels on Wednesday as part of the annual meeting of the Israeli-EU Association Agreement Committee, said that as of now, EU-Israeli relations would no longer be conditional on the progress of the Israeli-Palestinian peace process. A large part of the talks focused on energy and the environment, and the Europeans asked Israel to finish ratifying the Kyoto Protocol on environmental protection. A positive answer from Israel would considerably improve Israel’s status in the EU as Israel’s signature on the document would bring the number of ratifying states up to the minimum required by the treaty for it to come into effect. Israeli Ambassador to the EU Oded Eran said that considerable progress had been made during the meeting, and that the Europeans were surprisingly positive on many issues. Among others, he said, Europe proposed formalizing contacts to bring an Israeli work group into the European satellite project Galileo.


Olmert to Lead Effort Towards Improvement of Economic Ties with the PA
Prime Minister Ariel Sharon appointed Minister of Industry, Trade and Labor Ehud Olmert to lead a government effort to improve economic ties with the Palestinian Authority, THE JERUSALEM POST reported. Olmert said that the decision reflected the Prime Minister’s confidence in his ability to improve ties with the PA.

Following the announcement, Olmert said he would immediately set out to meet with leading figures dealing with economic issues in the PA including PA Finance Minister Salam Fiad. Recently, Olmert met with the PA Trade Minister in Palermo, Italy and invited him to meet again in Jerusalem. Olmert said increasing financial ties with the PA would help strengthen the political process.

Before the Palestinian terror wave began, Israel sold some $2.5 billion in goods and services annually to the PA, and purchased $800 million annually in return. Since the outbreak of Palestinian violence, however, these figures have been cut in half. Olmert said he hoped to restore the figures to their original levels before the terror began.
An issue likely to be discussed is the continued transfer of payments to the PA of monies collected from Palestinian laborers and businesses. Numerous Israeli companies, including Bezeq, Egged, and Israel Electric, have demanded the government freeze the funds to pay outstanding bills owed to them by the PA and for damages incurred by the Palestinian terror.

Sharon himself has threatened to stop the payments if the terror continued. However, Israel continues to transfer about NIS 130 million to the PA monthly. The Trade, Industry, and Labor Ministry said that the responsibility for the payments rested with the Finance Ministry, which said it "will continue to transfer funds according the current procedure." Economists estimate that the Israeli economy has lost some NIS 30 billion (approximately $7.1 billion) annually for the past three years due to the violence.


Other News in Brief

* Police and Israel Defense Forces troops evacuated today a newly established outpost near the Elon Moreh community in the West Bank, HA’ARETZ reported. Police removed one tent and took in for questioning 12 youths suspected of entering the closed military zone without permission and setting up the outpost.
In other news, Israel will allow the Palestinians to renew flights from Dahaniya Airport in the Gaza Strip shortly.
Additionally, an Israeli security source said Wednesday that Israel had considered making a goodwill gesture toward Palestinian Prime Minister Mahmoud Abbas in the prisoner release issue by considering the possibility of releasing Hamas and Islamic Jihad prisoners who do not have blood on their hands.

* A senior Fatah terrorist believed to be involved in a series of deadly attacks against Israelis, reportedly told the Israel Security Agency that he sheltered in Palestinian Authority Chairman Yasser Arafat’s Ramallah Muqata for more than a year, HA’ARETZ reported. Ali Alian, a member of the Fatah’s military wing, was arrested in May after the army besieged a house where he was hiding in a town west of Ramallah. Alian is suspected of taking part in several shooting incidents in the Ramallah area and of planning to send a terrorist on a suicide mission to Jerusalem. Defense sources said Alian had told his ISA interrogators he hid in Arafat’s Muqata compound for close to 18 months. He admitted to leaving the Muqata frequently whenever the IDF siege was lifted, often returning there after carrying out attacks. Defense sources indicated that several other wanted Palestinian terrorists were still in hiding in Arafat’s compound.

* Vicki Knafo, a single mother, who walked to Jerusalem from her home in Mitzpeh Ramon in the south of the country to protest the government’s economic decisions met with Minister of Finance Benjamin Netanyahu today to discuss her opposition to welfare cuts, HA’ARETZ reported. Representatives of single-parent families also took part in the meeting, during which Knafo reportedly asked the Minister of Finance to get rid of the cuts in welfare supplements for children. At the conclusion of the talks, the sides agreed that Knafo and her advisors would continue to be in contact with the Treasury, in an effort to ease the cuts faced by single mothers. "It was an achievement that he himself met with us in person," Knafo said on Israel Radio, KOL ISRAEL. "And he listened," she added.


Economic & Hi-Tech Briefs

* Eight new high-tech start-ups have been issued a total of $1.2 million in funds to participate in incubator programs, THE JERUSALEM POST reported. Commenting on the start-ups, Chief Scientist Eli Offer noted that there had been an improvement in the quality of the companies requesting grants. According to the Chief Scientist’s Office, there are 24 high-tech incubators in Israel which give out grants ranging between $350,000 – $500,000 to individual companies. Close to 700 start-ups completed Israeli incubator programs in 2002.

Today’s Israel Line was prepared by Adina Kay, David Dorfman, Carmel Raphaeli, Naomi Peled and Victor Chemtob and at The Consulate General of Israel in New York.

Israeline — Friday, July 11, 2003 —

** Sharon, Abbas To Hold Road Map Meeting Next Week – Arafat Accuses Abbas of Betrayal
** Israel Calling for More Action Against Iranian Nuclear Program
** Katsav Visits Croatia Breaking 12 Year Absence
** Two Infiltration Attempts Foiled in Gaza – IDF Continues Counter-Terror Activities
** Other News in Brief
** Economic & Hi-Tech Briefs

Sharon, Abbas To Hold Road Map Meeting Next Week – Arafat Accuses Abbas of Betrayal
Palestinian Prime Minister Mahmoud Abbas is expected to meet with Prime Minister Ariel Sharon next week in order to further advance the implementation of the road map, HA’ARETZ reported. The two leaders are slated to discuss the release of more Palestinian prisoners as well as the transfer of more cities from Israeli to Palestinian control. Abbas canceled a meeting with Sharon earlier this week, in the midst of an internal Palestinian dispute over the way negotiations have been conducted with Israel so far, especially on the prisoner release issue. More criticism of Abbas emanated from Palestinian Authority Chairman Yasser Arafat himself on Thursday as the Arafat accused the Palestinian premier of "betraying the interests of the Palestinian people." Arafat’s comments were made during his meeting with UN envoy Terje Larsen. "Abu Mazen is behaving like a tyro who doesn’t know what he is doing," Arafat’s criticisms follow a wave of similar attacks launched at his associates during a Fatah Central Committee meeting Monday night. The verbal assaults aim to undermine Abbas’s authority. Reacting against attempts to weaken his position, Abbas resigned from the central committee and offered to quit as prime minister – both decisions were rejected.

In other news, Palestinian Minister in charge of security Mohammed Dahlan and Minister of Defense Shaul Mofaz held their second meeting of the week at the Erez checkpoint Thursday night in order to maintain the momentum of the road map. Dahlan urged Israel to release more Palestinian prisoners and to transfer security control of another West Bank city to the PA. Mofaz rejected both requests, explaining the Palestinian leadership had to first begin disarming the terrorist organizations. "The next few weeks are critical, and the moment of truth is approaching," Mofaz said. However the Minister of Defense confirmed that Israel would consider a limited release of Hamas and Islamic Jihad prisoners who did not have blood on their hands. Final decisions on the issue, Mofaz added, would be made at next week’s meeting between Sharon and Abbas. Regarding the transfer of another West Bank city, Mofaz said the PA had not yet proved its ability to fight terror in Gaza and Bethlehem – the two areas it has already received. Until it does so, no further handovers will occur. Most of the additional West Bank cities to potentially be transferred to the Palestinians are considered "high risk" because of their proximity to Israel.


Israel Calling for More Action Against Iranian Nuclear Program
Israel is calling on the international community to deal with Iran’s nuclear weapons program by bringing enriched uranium production in Iran to a complete halt, HA’ARETZ reported. Minister of Foreign Affairs Silvan Shalom is expected present this position when he meets with European leaders in the coming days.

Iran is currently under massive international pressure to increase the transparency of its nuclear program and accept international supervision, to ensure the project is being used for peaceful purposes – as the Iranians say – rather than for the development of nuclear weapons. Tehran has indicated, under pressure, that it would accept the Additional Protocol, which was introduced after the 1991 discovery of Iraq’s secret atomic weapons program. The Additional Protocol would give the IAEA access to more information about Iran’s nuclear activities and the right to carry out more inspections on short notice.

Iranian President Mohammed Khatami hosted IAEA director Mohamed ElBaradei on Wednesday and told him Iran viewed the Additional Protocol "positively," but wanted further clarifications. ElBaradei said the two had agreed to dispatch an IAEA team next week to clarify Iranian concerns over tighter nuclear inspections.

Israeli experts believe that tightening international nuclear inspection without imposing restrictions on the Iranian project is dangerous. First, the Iranians can "play for time" in the talks on joining the Additional Protocol Treaty and even after signing, the tighter inspections may not be enacted automatically. Thus the Iranians could produce a nuclear bomb under cover of the extended talks with the IAEA.

In addition, the experts said, Iran will demand in exchange for signing the Additional Protocol an international agreement to continue producing enriched uranium, allowing them to continue the nuclear project under seeming transparency.

Officials in Jerusalem, however, expressed satisfaction with the plan presented about three weeks ago by EU foreign policy and security chief Javier Solana to halt the proliferation of weapons of mass destruction. Solana’s plan, which was also sent to Prime Minister Ariel Sharon, proposes several ways to enforce the regulations. These include international agreements, inspection mechanisms, political and economic sanctions and as a last resort the use of force.


Katsav Visits Croatia Breaking 12 Year Absence
President Moshe Katsav arrived in Croatia today for the first visit by an Israeli head of State since the former Yugoslav republic achieved its independence in 1991, HA’ARETZ reported. Katsav told a group of Croatian lawmakers that Israel was willing to "go a long way" to achieve peace with the Palestinians, but said they needed to back up their anti-terrorist proclamations with concrete actions. "Israel is prepared … to go along way toward peace and reconciliation," Katsav said. Katsav also said that he believed in Palestinian Prime Minister Mahmoud Abbas’s "sincerity to bring about the cessation of violence, terror and incitement." But he cautioned that "declarations against terrorism are not sufficient." "The Palestinian leadership must act in order to uproot the plague of terror," Katsav added. Katsav also referred to the "difficult and painful" memories Jews have of World War II in Croatia, and he praised the country’s anti-fascist movement of the time. His visit underscored a growing friendship between Israel and Croatia. "I am very glad to be here … to find that here, in Croatia, dramatic improvement happened," Katsav said earlier Friday as he began his three-day stay by meeting with Croatian President Stipe Mesic. The two leaders complimented each other and called for intensified ties between their countries in a visit that pointed up the dramatic change in relations between the two nations.

Israel and Croatia established diplomatic relations in 1997, but only after Tudjman deleted a section from his 1989 book that questioned the number of Jews who died in the Holocaust. Tudjman was never invited to Israel despite his desire to visit. Croatia’s new government, which took power years ago, is openly critical of Nazism. Mesic, who visited Jerusalem in 2001, apologized to Jews for their suffering here during World War II. On Sunday, Katsav is scheduled to visit Jasenovac, the site of the most notorious of some 40 concentration camps run by Croatia’s Nazis. About 30,000 Jews perished in concentration camps run by Croatia’s Nazi puppet state. Katsav is currently on a week-long tour of four countries – Turkey, Moldova, Slovakia and Croatia.


Two Infiltration Attempts Foiled in Gaza – IDF Continues Counter-Terror Activities
Security forces thwarted two separate infiltration attempts into Israel from the Gaza Strip on Thursday night, THE JERUSALEM POST reported. In one case, three men infiltrated an area between Kibbutz Mefalsim and Kibbutz Kfar Aza near the northern Gaza Strip before being spotted by troops. The soldiers chased them, wounding one and capturing the other two. In the second infiltration attempt, a man who had managed to enter n area near Kerem Shalom, near the southern Gaza Strip, was stopped after being lightly wounded by small arms fire. In both cases the men, were unarmed. Also, Palestinians fired at soldiers and workers of the Gaza Coast Regional Council near Rafiah Yam in the southern Gaza Strip. No casualties were reported.

Even as alerts for terrorist attacks remained relatively low, soldiers on Thursday uncovered several bombs in Palestinian Authority territory. Soldiers discovered a large roadside bomb near Rafiah along the Egyptian border, while soldiers operating south of Nablus uncovered seven pipe bombs. Senior security sources said they registered 23 specific warnings about planned homicide bombings and other operations, both inside Israel and in the territories. The figure is a marked decrease from the more than 50 daily warnings they were receiving daily prior to the cease-fire declaration of nearly two weeks ago.

In other news, the Israel Defense Forces continued their offensive against terrorism with the arrests of seven wanted Palestinians on Thursday night in the West Bank. Paratroopers and IDF Special Forces captured 4 men in Hebron, one suspected terrorist in Bethlehem and two wanted Palestinians in Nablus. Most of the people arrested belong to the Islamic Jihad.


Other News in Brief

* IDF Chief of Staff Moshe Ya’alon is due to travel to the United States next week and meet with senior U.S. officials, both in the military and in the administration, HA’ARETZ reported.

Ya’alon will discuss with his hosts the lessons of the recent war in Iraq and developments in the Middle East, particularly the role of Syria and Iran in terrorism. Ya’alon is scheduled to meet Defense Secretary Donald Rumsfeld, National Security Adviser Condoleezza Rice, Secretary of State Colin Powell, as well as his counterpart, the chairman of the Joint Chiefs of Staff, General Richard Myers.

* The 20th International Film Festival opened in Jerusalem on Thursday, HA’ARETZ reported. The film "Hero" by Chinese filmmaker Zhang Yimou opened the festival at the Sultan’s Pool in the capital. Hundreds of films will be screened during the 10-day event. Eleven feature films are competing for the festival’s centerpiece, the Wolgin Award for Israeli film. The competition begins today with the screening of "A Gift from Heaven," by Dover Kosashvilli. Two years ago the director won the Wolgin Award for his film "Late Marriage."


Economic & Hi-Tech Briefs

* Birthright Israel estimates it will bolster Israel’s tourism industry by a whopping $25 million over the course of its summer season, THE JERUSALEM POST reported. As participation is up 70 percent from last season, including a threefold increase in the number of participants from North America, the 10-day educational solidarity scheme anticipates that this summer is going to be a successful one. "Tourism is a major branch of the Israeli economy that has suffered a lot because of the geopolitical situation," explained Director General of the Israel Hotel Association Avi Rosental, who regretted to say that over the last three years, general tourism to Israel had dropped by about 80 percent causing hotels across the country to fire about 50 percent of their employees. "The increase in Birthright Israel tourists will perhaps bring us to a turning point where hotels can rehire staff and increase employment all over the country," Rosental added.

* A major U.S. video company is currently in preliminary negotiations to acquire Israeli company Vitis Technologies, GLOBES reported. Founded in 2001, Vitis develops processing technology using the MPEG2 standard for digital video in a compressed space (when the video signals are in a compressed state). Video and DVD industry sources say that an important advantage of Vitis’s technology is that it provides a software solution for tasks that professional video companies currently perform using either hardware or a hardware-software combination. Another advantage is that Vitis’s program, which makes it possible to process compressed video signals without decompressing them, can be combined with cheaper, off-the-shelf digital signal processors.

Today’s Israel Line was prepared by Jonathan Schienberg and Victor Chemtob and at The Consulate General of Israel in New York.