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Israeline — Monday, July 21, 2003 —

** Israeli Stabbed in Jerusalem’s Yemin Moshe Neighborhood – Terror Attempts Still Existent Despite Cease-Fire
** Sharon, Abbas Meet to Discuss Road Map Implementation
** Shalom Warns Against Iranian Efforts to Obtain Nuclear Weapon
** New Communities To Be Established in Negev and Galilee
** Other News in Brief
** Economic & Hi-Tech Briefs


Israeli Stabbed in Jerusalem’s Yemin Moshe Neighborhood; Terror Attempts Still Exist Despite Cease-Fire
Simyon Itkin, a 67-year-old Pisgat Zeev resident, was stabbed Sunday night in Jerusalem’s Yemin Moshe neighborhood, sustaining moderate injuries, HA’ARETZ reported. Itkin was walking with a friend near Montefiore’s windmill when a man stabbed him a number of times before fleeing. A doctor from the neighborhood treated Itkin until an ambulance arrived. A Magen David Adom paramedic said that Itkin was fully conscious and was able to answer all their questions. He was evacuated to Hadassah University Hospital at Ein Kerem where he was treated for stab wounds in the chest and back and his condition was listed as moderate. Police investigators are increasingly convinced that the attack was a terrorist act, according to ARMY RADIO. A search for the assailant is currently underway.

In other news, the Israel Defense Forces discovered and neutralized this morning near Nablus an explosive belt that was about to be transferred to terrorist for an imminent attack. The belt was comprised of eight explosive devices weighing a total of between 10 and 15 kilograms.

Islamic Jihad activist Rami Isleit, 23, was killed overnight while activating a roadside bomb near a military vehicle in Jenin. None of the soldiers were injured but their vehicle sustained serious damage.

Minister of Defense Shaul Mofaz said today that over the past week, IDF forces and the Israel Security Agency had seized three would-be homicide bombers about to carry out attacks within Israel. The three belonged to three separate Hamas cells in the West Bank city of Hebron.

Meanwhile, the IDF arrested six Palestinians in the Nablus area for questioning, and reported 16 specific warnings of terror attacks despite the cease-fire.


Sharon, Abbas Meet to Discuss Road Map Implementation
Prime Minister Ariel Sharon and Palestinian Prime Minister Mahmoud Abbas held their fourth meeting on Sunday in Jerusalem as Israel and the Palestinians strive to advance on the road map for peace in the Middle East, THE JERUSALEM POST reported. Sharon told Abbas Israel would be much more responsive to Palestinian needs if the Palestinian Authority took clear actions to dismantle the terrorist infrastructure. Sharon acknowledged the recent decrease in terrorism and incitement and noted that the PA was making an effort in this area. But the Prime Minister emphasized that it was impossible to ignore that terrorist organizations – with which the PA reached cease-fire agreements – were taking advantage of the current lull in hostilities to restructure and reinforce themselves.

The Palestinian delegation arrived at the meeting with a list of demands that included: the release of prisoners (including those belonging to Hamas and Islamic Jihad); the removal of roadblocks; the IDF withdrawal from additional Palestinian cities; freedom of movement for PA Chairman Yasser Arafat; and an end to the construction of the security fence.

Sharon told Abbas that the ministerial committee to discuss the issue of prisoners’ release would meet on Wednesday. An expected 300 to 400 prisoners should be freed upon Abbas’s return from a trip to the United States later this week.

Sharon agreed to have the Defense Ministry draw up a list of all the roadblocks and review them in order to determine which might be removed to enable additional freedom of movement.

Sharon said there had been no change regarding Israel’s policy toward Arafat – he is free to leave Ramallah, but there is no guarantee that he "will be able to come back."

Regarding the security fence, Sharon reiterated that he did not view the fence as a political border, but rather a security barrier. Finally, the Prime Minister stressed there would not be no further IDF redeployment before the PA presents Minister of Defense Shaul Mofaz with a detailed security plan for each city. Mofaz and Dahlan are expected to meet on the matter in the near future.


Shalom Warns Against Iranian Efforts to Obtain Nuclear Weapon
Minister of Foreign Affairs Silvan Shalom said today that Iran was "trying to do everything" to build a nuclear weapon and would pose a threat to the whole world unless it was stopped, HA’ARETZ reported. Shalom remarks were made while he was meeting in Brussels with the EU’s council of foreign ministers to discuss the peace process and means of strengthening relations between Israel and the EU.

Shalom told reporters that Tehran was enriching uranium and refusing to accept tougher inspections of its nuclear program. Iran equipped its elite revolutionary guards on Sunday with a locally-made ballistic missile – the Shihab-3 – capable of reaching Israel and U.S. forces stationed in Saudi Arabia and Turkey.

"Iran is threatening not only the Middle East, it is threatening Europe and the southern part of Russia," Shalom said. "I think the EU should take a key role in the last efforts to prevent them from having this ability."

The deployment of the Shihab-3 missile, which has a range of about 1,296 kilometers, came as Iran faces mounting scrutiny about a nuclear energy program Washington says may be a front for a covert bid to make atomic arms.

The missile was officially inaugurated during a military parade before Iran’s supreme leader Ayatollah Ali Khamenei, who is in charge of the country’s armed forces. EU foreign ministers demanded last month that Iran accept tougher inspections of its suspect nuclear program, and linked compliance to progress on a pending trade deal. It was the most serious warning the EU had sent Tehran since they began negotiating a trade and cooperation agreement late last year.


New Communities To Be Established in Negev and Galilee
The Prime Minister’s Office is planning to establish some 30 new towns, mostly in the Negev and the Galilee, HA’ARETZ reported. The project, which will be given top priority, is expected to be completed in the shortest possible period. According to the adviser to Prime Minister Ariel Sharon on settlement, Uzi Kern, Sharon reached the conclusion that following the enormous investment already made in the West Bank and the Gaza Strip, it was now necessary for the Government to turn its attention to the Galilee and the Negev. An inter-ministerial committee operating in the prime minister’s bureau, in charge of new communities, has been involved in setting up three new villages and the various ministries have been asked to rush preparations for the plan to establish as many as 30 new communities.

The Transport Ministry has been asked to make the necessary preparations for a new road for the new villages planned in the Nitzana region in the south, and a central road for the new villages in the Gilboa mountains, in the north. The plan for new villages was conceived with the intention of directing the population away from urban centers, to preserve state lands and to provide protection for Israel’s borders.


Other News in Brief

* The cabinet approved on Sunday the appointment of Roni Milo as Ambassador of Israel to Great Britain, THE JERUSALEM POST reported. Milo will replace Zvi Shtauber, who assumed his position in 2000. Milo is a former mayor of Tel Aviv.

The cabinet also approved the appointment of Yoav Biran, a career diplomat, as Foreign Ministry Director-General. Biran has been serving as acting director-general since November 2002.


Economic & Hi-Tech Briefs

* Minister of Finance Benjamin Netanyahu signed an injunction today allowing Israeli companies to conduct business with Iraq, HA’ARETZ reported. The decision will make it easier for Israeli businesses to participate in the rebuilding of Iraq – a process being led by Britain and the United States. Israelis will now be able to invest in Iraq and import and export goods between the two countries.

* According to the World Bank, Israel’s GDP fell by 9 percent between September 2000 and December 2002 because of Palestinian terror, GLOBES reported. Violence has cost Israel $3-3.6 billion. The Palestinian Authority’s GDP plunged by 36 percent and per capita income by 41 percent in the same period.

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

Israeline — Tuesday, July 22, 2003 —

** Abbas Refuses to Disarm Terrorist Organizations
** Security Establishment to Determine List of Palestinian Prisoners Slated for Release
** Bush: Syria, Iran to Be Held Accountable for Terror Support
** Other News in Brief
** Economic & Hi-Tech Briefs


Abbas Refuses to Disarm Terrorist Organizations
Despite demands from United States and Israel to dismantle Palestinian terrorists organizations, Palestinian Authority Prime Minister Mahmoud Abbas said today that “cracking down on Hamas, Islamic Jihad and other Palestinian organizations is not an option at all,” HA’ARETZ reported. According to Abbas a crackdown on these organizations would trigger a civil war.

Israel withdrew from parts of Gaza and the West Bank town of Bethlehem, but refuses to hand over more land unless the PA disarms the terrorist groups. Abbas has preferred to negotiate with with Hamas, Islamic Jihad and others in a bid to end attacks against Israel.

Meanwhile, Abbas and PA Minsiter of Interior Mohamed Dahlan held talks in Cairo Monday with Egyptian President Hosni Mubarak, Egyptian Foreign Minister Ahmed Maher and Egypt’s intelligence chief, Omar Suleiman. They discussed the road map and Abbas’s upcoming visit to Washington. The Palestinian prime minister is expected to meet U.S. President George W. Bush on Friday. Abbas said he would press Bush and other U.S. officials to make Israel comply with its road map requirements, including dismantling Jewish communities in the West Bank and Gaza Strip and ending restrictions on the movement of Palestinians. The Palestinians have also been pressing Israel to release more of the estimated 5,800 prisonners in Israeli jails. Israel has agreed to free several hundred, but has so far resisted demands for a mass release.


Security Establishment to Determine List of Palestinian Prisoners Slated for Release
Minister of Defense Shaul Mofaz will meet with Israel Security Agency Chief Avi Dichter today to finalize the list Palestinians prisoners set to be freed, HA’ARETZ reported. The meeting precedes Wednesday’s ministerial committee session on Palestinian prisoners, chaired by Prime Minister Ariel Sharon, which will discuss the criteria proposed by the ISA for freeing prisoners. While Israel has dropped a criterion prohibiting the release of Hamas and Islamic Jihad operatives, the ISA still holds the position according to which anyone with “blood on their hands” will not be released. This includes prisoners who killed, wounded, or dispatch terrorists that wounded or killed Israelis, as well as, homicide bombers who were caught before they could cause damage.

In addition, prisoners who have broken past committments signed in the past to renounce terror activities, as well as, prisoners who are still in the legal process of being questionned, will not be released.

Meanwhile, Israel’s Attorney General Elyakim Rubinstein has won a promise from Sharon that the names of the prisoners to be released would be made public in time for petitions to be brought to the courts. The prisoner release issue is expected to be on the agenda when Sharon visits Washington next week.


Bush: Syria, Iran to Be Held Accountable for Terror Support
Following a meeting with Italian Prime Minister Silvio Berlusconi on Monday, U.S. President George W. Bush condemned Syria and Iran for their backing of terrorist groups, and said the two countries’ actions betrayed the true interest of the Palestinian people, THE JERUSALEM POST reported. "Today, Syria and Iran continue to harbor and assist terrorists,” Bush said. “This behavior is completely unacceptable and states that support terror will be held accountable. Supporting and harboring terrorists undermines the prospects for peace in the Middle East, and betrays the true interests of the Palestinian people. Terrorism is the greatest obstacle to the emergence of a Palestinian state." In his remarks, Bush also praised Prime Minister Ariel Sharon and Palestinian Prime Minister Mahmoud Abbas for their commitment to achieve peace in the Middle East and called on Arab countries to support the leaders’ efforts.

Minister of Foreign Affairs Silvan Shalom had warned on Monday against Iran’s attempts to produce a nuclear weapon, saying the Iranian regime "is today the biggest strategic threat to stability and peace in the Middle East."

Minister of Defense Shaul Mofaz explained that the Israeli-developed Arrow anti-missile system could provide an effective defense against Iran’s newly operational Shihab-3 missile. Iran announced Sunday the Shihab-3 was fully operational. The missile can reach targets in Israel and is capable of carrying non-conventional warheads.

"We’re taking all steps necessary to counter the threat as much as possible," Mofaz said. "Israel has the necessary means to respond defensively, as well as deterrent capability. The Shihab-3 and other projects reveal that Iran is eager to achieve non-conventional and even nuclear capability, but Israel is prepared."


Other News in Brief

* Two people from Shlomi were injured Monday from anti-aircraft rocket shrapnel after Hizbullah guerillas fired at IAF fighter jets along the northern border, HA’ARETZ reported. One of the injured was reportedly hit by a piece of shrapnel on the upper part of his body. Security forces were on high alert Tuesday in the Sharon region after receiving warnings of planned terrorist attacks in the area according to Israel Radio, KOL ISRAEL. IDF troops and police set up roadblocks along a main road leading to the West Bank Palestinian city of Tulkarm and at the entrance to Kfar Saba and the coastal city of Netanya.


Economic & Hi-Tech Briefs

* Venture capital fund Jerusalem Venture Partners (JVP) has led a $9.1 million financing round for US company Bristol, GLOBES reported. Bristol has developed a program that enables executives to receive a complete picture of the transactions in an IT system, and determine priorities, based on this picture. Bristol’s products enable enterprise managers to view the data flow, and translate it into business figures. The proceeds from the current financing round will be used to develop global marketing and distribution channels.

* The Israel Export and International Cooperation Institute will host 30 delegations in September, following Israel’s improved diplomatic and security situation, GLOBES reported. In September, delegations from Australia, Albania, Belarus, Bolivia, Bosnia and Herzegovina, Bulgaria, Cambodia, Cameroon, Chad, Chile, Costa Rica, Czech Republic, Democratic Republic of the Congo, Dominican Republic, Ecuador, El Salvador, Ethiopia, Georgia, Ghana, Italy, Ivory Coast, Kyrgyzstan, Nicaragua, the Philippines, Slovenia, Taiwan, Turkey, Ukraine, Uruguay, and Venezuela will visit Israel.

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

Israeline — Wednesday, July 23, 2003 —

** Cabinet to Decide on Fate of Hamas, Islamic Jihad Prisoners
** Two Islamic Jihad Would-Be Homicide Bombers Arrested – Soldier Reported Missing
** Poll Shows Large Majority of Settlers Believe Agreement with Palestinians Will Be Reached
** Experts See High Potential for Bilateral Trade with Iraq
** Other News in Brief
** Economic & Hi-Tech Briefs


Cabinet to Decide on Fate of Hamas, Islamic Jihad Prisoners
A special ministerial committee decided today that Israel could free some 530 Palestinian prisoners, but the release of Hamas and Islamic Jihad prisoners still depends on the final approval by the full cabinet, HA’ARETZ reported. Prime Minister Ariel Sharon decided that a final approval for Hamas and Islamic Jihad prisoners to be released – which would include only those prisoners with no terror involvement – would be postponed until a discussion and vote are held by all government ministers.

Sources in the Prime Minister’s Office were unable to say whether the issue would be raised at next Sunday’s cabinet meeting, ahead of Sharon’s visit to Washington, or whether it would be delayed until one week later, after his return. The special committee will reconvene in 11 days, to discuss further prisoner releases.

Some 400 prisoners, all of whom appear on the list that was discussed at Wednesday’s meeting, are to be freed in the coming days – after the director general of the Justice Ministry examines each prisoner on a case-by-case basis.

The detainees to be released include security prisoners, those convicted of criminal offenses and those held for being present in Israel without proper permits.


Two Islamic Jihad Would-Be Homicide Bombers Arrested – Soldier Reported Missing
The Israeli police arrested two Palestinian homicide bombers on their way to Israel overnight in the village of Rai, southwest of Jenin, HA’ARETZ reported. Military sources said the men, Azam Yusuf and Ibrahim Darsheikh, were members of Islamic Jihad and were planning to carry out terror attacks in Israel.

Police are also searching for a missing Israel Defense Force soldier, who was last seen Monday at the Ami-Ad junction in the Galilee. Superintendent Rafi Ben-David, police commander in Upper Nazareth, told ARMY RADIO that his disappearance was currently investigated. "All directions of the investigation are open, but the unexplained disappearance of a soldier increases the level of suspicion," Ben-David said.

In other news, five senior Islamic Movement members, including northern branch leader Sheikh Ra’ad Salah, will remain in custody until the end of legal proceedings against them, Haifa District Court Judge Yigal Garil decided today. The five have been held for more than two months on charges that include money laundering for Hamas, membership in a terror organization, and contact with an Iranian intelligence officer.


Poll Shows Large Majority of Settlers Believe Agreement with Palestinians Will Be Reached
According to the results of a survey by the Peace Now organization released today, 71 percent of Israelis living in the West Bank and Gaza believe a peace agreement will be reached between Israel and the Palestinians, HA’ARETZ reported. The survey – the second carried out by the organization in two years – shows that the political view of settlers is far more moderate than usually perceived.

Forty four percent of people surveyed said that Palestinians deserved their own state, while 47 percent believe this state will eventually be established on parts of the West Bank. Seventy one percent indicated, that if they were given a choice on where to live, they would stay where they were. Fourteen percent expressed the wish to live somewhere else, and 15 percent said they would rather settle abroad.

On the issue of unauthorized outposts, 66 percent of the people polled agreed with their dismantlement. Forty six percent thought that building in the West Bank should be done only in existing settlements, while 36 percent favored new outposts and 18 percent said building should be brought to a standstill.

When asked whether they would oppose the evacuation of settlements, 90 percent said they would not break the law in response to an order to evacuate settlements. Fifty four percent responded that they would oppose the decision within the legal framework.

Some 1,100 people were questioned for this survey, including Jewish residents from the West Bank and Gaza Strip and a control group of people living inside Israel proper.


Experts See High Potential for Bilateral Trade with Iraq
Economic experts assessed on Tuesday that Israeli trade with Iraq had the potential of reaching several hundred millions of dollars, THE JERUSALEM POST reported. The estimate was made a day after Minister of Finance Benjamin Netanyahu sign an order lifting a trading ban on Iraq and allowing local companies to do business with the Arab country.

According to Doron Peskin, head of research at Infoprod, an Israeli organization dedicated to providing decision makers with business information on the Middle East, the Iraqi market offers many business opportunities and Israeli companies have much to offer. "Iraq, right now, needs everything, from infrastructure to basic goods and services," Peskin said. "Israelis have enormous opportunities to benefit from this new market."

In Peskin’s view, while "Niche opportunities will probably be found in the fields of food products and the like", what Israelis really have to offer the Iraqi economy is technologies, telecommunications, and advanced techniques in agriculture.

"Iraq has ambitious plans, as well as the potential, to become a leading player in the agricultural sector," Peskin continued, "Israeli companies have an international reputation in that field, so they also have enormous potential to gain."

So far only one Israeli company, Tiberius-based Tanurgas, has publicly announced plans to trade with Iraq. However, Peskin believes that for Israeli companies to be successful in Iraq, which has a relatively hostile and anti-Israeli population, they must maintain a low profile. "A mistake Israeli companies make again and again – with Egypt after 1978 and with Jordan in 1994," he said, "was to advertise their new business relationships in hostile countries. In order to succeed, it is better to work with a third party – for example, with Turkish or Jordanian companies – who are often more than willing to do business in this manner, and for the Israeli names to keep out of the headlines."


Other News in Brief

* Palestinian Prime Minister Mahmoud Abbas will face a confidence vote by Palestinian legislators when he returns from a meeting with U.S. President George W. Bush in Washington,

the Palestinian information minister Nabil Amr said today, HA’ARETZ reported. Amr told reporters that the Palestinian legislature "intends to convene after his return from Washington to discuss his progress on the political level" and "debate again and determine whether to give him its confidence or not."

* Iran may have been aided by Pakistan in its attempt to enrich uranium as part of its ongoing nuclear weapons program, HA’ARETZ reported. The United States delivered to Pakistani President Pervez Musharraf a document that shows that the technical know-how used to manufacture the centrifuges utilized to develop the enriched uranium for nuclear weapons came from Pakistan, a close U.S. ally in its ongoing war on terror. The possibility that the deal was conducted by scientists in Pakistan, acting against the law and without informing the authorities, has not been ruled out.

* Eight bodies, including those of two Israelis, have been discovered after a group of 16 climbers from around the world went missing while attempting to scale Mount Alpamayo in Peru, HA’ARETZ reported. They died in an avalanche on Tuesday morning.


Economic & Hi-Tech Briefs

* The gross domestic product grew by annualized 3.6 percent in the first quarter of 2003, according to a revised report released by the Central Bureau of Statistics, THE JERUSALEM POST reported. The CBS had originally said that the economy expanded by 2.5 percent during the period. Based on new information, the growth was fueled by an 18.5 percent (annualized) jump in exports of goods and services – a much higher figure than the original 5.5 percent increase estimate.

"Unfortunately, these figures do not represent the arrival of spring,” Hezy Gutman, chief economist at the First International Bank of Israel, said. “The sharp rise in exports of goods and series are mainly due to pinpointed increases in certain sectors, such as acquisitions of companies or conclusions of large supply contracts."

* Comverse subsidiary Verint Systems, which provides digital video security and surveillance solutions, announced that it received a multi-million dollar order from a new government agency customer in the United States, GLOBES reported. Verint said the order was for its Reliant communications interception solution, which is designed to enable government agencies to intercept and analyze voice and data communications for a variety of investigative purposes, including gathering intelligence and establishing evidence for the conviction of criminals

* The Knesset’s socio-economic cabinet decided Tuesday afternoon to allot the Health Ministry an additional NIS 100 million in exchange for reforms and structural changes in the health system, some of which the ministry has refused to make so far, HA’ARETZ reported. The structural changes include reducing the cost of a one-day stay in the hospital and substantially increasing the money that the government research fund will transfer to Haifa’s Rambam Medical center to cover the hospital’s debt.

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

Israeline — Thursday, July 24, 2003 —


** Shalom in Washington: Security Fence Is a Counter-Terrorism Measure
** Search for Missing Soldier Still Underway – Israeli Wounded in Second Stabbing Attack in 3 Days
** IDF Intelligence Chief Provides Insight on Regional Threats to Israel
** Argentine President: Terror Attacks on Argentina’s Jews Was our 9/11
** Other News in Brief
** Economic & Hi-Tech Briefs


Shalom in Washington: Security Fence Is a Counter-Terrorism Measure
Minister of Foreign Affairs Silvan Shalom met on Wednesday with U.S. National Security Adviser Condoleezza Rice in Washington, and presented her with Israel’s position concerning the West Bank security fence, HA’ARETZ reported. Shalom said he had told his American officials that the fence was aimed at "preventing terrorists from carrying out attacks and stopping extremists who want to blow up the peace process”.

Rice told Shalom that Israel had to display greater flexibility on the release of Palestinian prisoners from Israeli jails and remove additional unauthorized outposts in the West Bank. Shalom commented today that Palestinian Prime Minister Mahmoud Abbas had "not yet internalized" the need to dismantle Palestinian terror groups. The way to keep the peace process moving forward, Shalom said, was to ensure that both sides follow through on their commitments. These commitments, he added, included dismantling the terrorist infrastructure, collecting weapons and stopping incitement.

In Israel, some senior army and internal security officers expressed growing criticism regarding the PA’s apparent refusal to act against terrorist organizations. While security cooperation with Israel has been tightened, there are no signs the PA intends to disarm terror groups or arrest key militants. A senior officer at Israel Defense Force General Headquarters said lifting the restrictions on Palestinian movement along the main north-south road in the Gaza Strip had been exploited by terror groups preparing for a renewal of violence. The groups, the officer said, were training in the use of rockets, bomb- making and infantry combat, and were moving wanted men between the two parts of the Strip and exchanging know-how. Sources said Hamas men conducted an experimental launch of two rockets this week, apparently trying to extend their range so as to reach deep inside Israel.


Search for Missing Soldier Still Underway – Israeli Wounded in Second Stabbing Attack in 3 Days
Hundreds of soldiers, police personnel and volunteers resumed this morning the search for missing soldier Oleg Sheichat, as fears were mounting that Palestinian extremists may have abducted him, Israel Radio, KOL YISRAEL reported. No clues have been discovered so far. The 20-year-old soldier from Upper Nazareth went missing Monday evening. He had called his family shortly before leaving northern command headquarters in Tsfat to say he was on his way home, and then traveled with a friend by bus to the Amiad junction where he got off.

In other news, an Israeli riding his bicycle home to Pisgat Zeev was stabbed Wednesday night in the back by four Palestinian youths at the entrance to Shuafat in northern Jerusalem. David Shilo, 40, was rushed to Hadassah Hospital, Ein Karem- the knife still protruding from his back. He suffers moderate wounds. The police are searching for the attackers. This is the second terrorist stabbing in the capital in three days. On Sunday night, Simon Itkin, 64, also from Pisgat Zeev, was moderately wounded in a stabbing attack in the Jerusalem neighborhood of Yemin Moshe.

Amir Simhon, 24, of Bat Yam was stabbed to death in Jaffa eight days ago. The Al Aksa Martyrs Brigades had claimed responsibility for the attack.

Meanwhile, border police killed today a Bedouin resident of the Negev at the Shachat junction after he failed to obey an order to stop his car at a checkpoint. An inquiry has been opened into the shooting.

Soldiers arrested Islamic Jihad commander Ahmed Shibani in the village of Arabeh. Military sources said he was directly involved in a number of terror attacks, including shooting Israelis.

Special forces have also arrested a wanted Tanzim operative in Ramallah. He was captured only a few hundred meters from the Muqata headquarters of Palestinian Authority chairman Yasser Arafat.


IDF Intelligence Chief Provides Insight on Regional Threats to Israel
IDF head of military intelligence Major-General Aharon Ze’evi Farkash, in an interview with GLOBES, predicted that in the short term the rapprochement between Israel and the Palestinians would last, and that even if Palestinian support for jihad (holy war) was still strong, popular endorsement of terror was on the decline. "The Palestinian street is beginning to realize that terrorism and suicide bombings are illegitimate,” Farkash said. “This is because the armed struggle hasn’t achieved results and because the incitement on the radio and television has greatly diminished," he added. Nevertheless Farkash warned, "the terrorist infrastructure is strengthening under the aegis of the cease-fire.”

"Unless the Palestinians deal seriously with the terrorist infrastructure, and if the conflict resumes, we’ll find ourselves in a much worse situation than before the cease-fire,” he said. “The terrorist organizations will continue the conflict because they have no alternative. They now think they must cause greater damage than they have to date. They’re therefore seeking chemical, biological, and other non-conventional material."

On the issue of the war in Iraq, Farkash said that, "Israeli intelligence had clear knowledge that the Iraqis had prepared fighter-bombers to carry biological and chemical weapons on long-range bombing missions” and that “these planes carried out at least 1-2 deep penetration type sorties a month since the summer of 2002." Commenting on the regional situation following the war, Farkash explained that "Israel’s position has strengthened and its strategic situation has improved, since it is associated with American technology and the Americans’ impressive achievement capabilities. The world and the Middle East took another step toward a situation in which the three regional powers are not Arab countries, but Iran, Turkey, and Israel."

Reacting to the news of Iran’s declaration that its Shihab-3 medium-range ballistic missile was operational, Farkash said, "the declaration hasn’t yet changed anything as far as Israel is concerned, but the combination of the Shihab-3, with a range of 1,300 km, and the ability to build an atomic bomb, if it happens, could be a serious threat in the future."

Farkash also expressed concern about the northern front against Syria and Hizbullah. "The Syrians are building an amazing firepower capacity in the north,” he said. “They have tens of thousands of artillery and thousands of ballistic missiles and ground-to-ground rockets with a range of up to 75 km. There are also reports that they’re seeking longer-range rockets. This is a real threat that we must deal with. The threats are now greater than during the rule of Hafez el-Assad."


Argentine President: Terror Attacks on Argentina’s Jews Was our 9/11
On the eve of his first official visit to Washington, the newly-elected Argentine President, Nestor Kirchner, said in an interview to HA’ARETZ that the unsolved attacks against the Israeli Embassy and a Jewish community center in Buenos Aries that killed 114 people in the early 1990s “were Argentina’s September 11”. Kirchner discussed topics ranging from the bombings to his new policy of active cooperation with Nazi hunters and those seeking justice for the years of military dictatorship in the 1970s. Kirchner said the attacks were an assault both on a specific community and on the nation, and pledged his commitment to pursuing the stalled investigation.

Kirchner, who until two-and-a-half months ago was an unknown governor of the Patagonian province of Santa Cruz, won the presidency at his first attempt after former president Carlos Saul Menem withdrew from the race.

Kirchner met with Jewish leaders at the eve of his departure to America and pledged that all relevant documents on the Jewish community center terrorist attack that were in the hands of the Federal Police, Buenos Aires’ Provincial Police, the Border Police and the Coast Guard would be declassified. Leaving the meeting, Jose Hercman, president of the Delegation of Jewish Argentina associations told HA’ARETZ not only was it the first time that a president of the Republic of Argentina had committed himself to considering the community center’s investigation a matter of state, but it was also the first time a president of the Republic was taking concrete steps to show that he was committed to solving it.

At a later meeting at the Simon Wiesenthal Center, Kirchner promised to declassify six groups of documents relating to the postwar immigration of Nazis to Argentina.


Other News in Brief

* Egyptian President Hosni Mubarak is expected to announce next month the appointment of a new ambassador to Israel, Israel Radio, KOL YISRAEL reported. It is likely to be the current charges d’affaires Doctor Hiab A Sharif.


Economic & Hi-Tech Briefs

* The First Israel Mezzanine Investors Fund (FIMI) and a group of investors are setting up a special investment fund to invest in technology companies with substantial sales that have encountered financial difficulties, GLOBES reported. The fund, First Israel Turnover Enterprise (FITE), plans to acquire control of the companies, turn them around, and enhance their value. FIMI and the investment group will have equal shares in FITE. The goal is to raise up to $100 million from institutional investors in Israel and the United States. FITE will begin operating early next year, and will focus on relatively large companies, both Nasdaq-listed and private. FIMI general manager Ishay Davidi said FITE had already received some serious investment offers.

* Israel and the Palestinian Authority signed a framework agreement on energy cooperation, in which they committed to finalizing agreements to link their power grids and to defining energy projects of common interest, HA’ARETZ reported.

Among other projects, Minister of National Infrastructure Joseph Paritzky and Palestinian Energy Minister Azzam Al-Shawwa agreed to establish a joint power station at one of the border crossings between Gaza and Israel, either Erez or Karni. The plant, which would supply power to both Israel and the Palestinian Authority would run on natural gas and would cost some $350 million to $400 million to build.

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

Israeline — Friday, July 25, 2003 —

** Israel Announces Confidence-Building Measures
** Abbas to Meet With Bush; U.S. Lawmakers Call for Crackdown on Terror Groups
** Foreign Ministry Summons Romanian Ambassador over Holocaust Remarks
** Israeli Swimmer Reach Semi-Final at World Championship
** Other News in Brief
** Economic & Hi-Tech Briefs


Israel Announces Confidence-Building Measures
Israel announced today a series of humanitarian gestures toward the Palestinians which will be implemented in the days before and after Prime Minister Ariel Sharon’s visit to Washington on Tuesday, HA’ARETZ reported. The measures include the removal of three key West Bank checkpoints, the reopening of West Bank roads to Palestinian traffic, the transfer of NIS 72 million in tax money held by Israel to the Palestinian Authority and the issuing of 8,500 permits for Palestinians to enter Israel to work. Israel is also expected to ease the rules governing the import of Palestinian produce to Israel.

The Prime Minister’s Office indicated that Chief of Staff Lt. Gen. Moshe Ya’alon would meet with the Palestinian security chief Mohammed Dahlan at the start of next week to discuss the transfer of security control of two more West Bank cities to the Palestinians.

Meanwhile, Israel has postponed its decision regarding the release of Palestinian prisoners until after Sharon returns from his trip to Washington next week. The ministerial committee set up to sort out the prisoner issue is expected to reevaluate the release criteria on August 4. The cabinet will meet afterwards and come to a final decision.

Political sources told Israel Radio, KOL YISRAEL, that Sharon would tell U.S. President George W. Bush during their meeting next week that Israel would demonstrate flexibility on releasing security prisoners as long as doing so did not damage Israel’s security interests. The list of Palestinian prisoners whom the security services deem candidates for release now stands at almost 600. Some of the prisoners reportedly belong to Hamas and Islamic Jihad.


Abbas to Meet With Bush; US Lawmakers Call for Crackdown on Terror Groups
Palestinian Prime Minister Mahmoud Abbas, during his first trip to Washington as the new Palestinian PM, will meet today with President George W. Bush, THE JERUSALEM POST reported. Abbas and Bush will discuss the road map for a two-state solution.

On Thursday, Abbas held closed-door meetings with U.S. Congressional leaders from the House International Relations Committee. Rep. Tom Lantos (D-California) called the session "interesting" and "constructive." Lantos urged Abbas to destroy terrorist organizations "otherwise the process will collapse and you will prove to be a failure,” he said. Lantos also told Abbas that he should not expect Palestinian prisoners "with blood on their hands" to be released by Israel. Abbas was accompanied by Palestinian security chief Muhammad Dahlan, Palestine Legislative Council Speaker Ahmed Korei, Foreign Minister Nabil Shaath and Finance Minister Salam Fayyad. Also on Thursday, he and Dahlan held separate meetings with National Security Adviser Condoleezza Rice and with American Jewish leaders.

During their meeting, Bush is expected to ask Abbas to do as much as he can to crack down on Palestinian terrorist organizations. Secretary of State Colin Powell said on Wednesday that it was the U.S. objective to enhance [Abbas’s] position. "What we are trying to do is to show to the Palestinian people that this man is a leader who can take them to the goal, the creation of a Palestinian state," Powell said. Powell added that he knew the Palestinians still had to do much more work with respect to rooting out any capability for terrorism.


Foreign Ministry Summons Romanian Ambassador over Holocaust Remarks
Following remarks made the Romanian president according to which the Holocaust was not unique to Jewish people, the Foreign Ministry has summoned the Romanian ambassador in Israel to find out whether the comments reflected the position of his country’s government, Israel Radio, KOL YISRAEL reported. "The Holocaust was not unique to the Jewish population in Europe,” Romanian President Jon Iliescu said in an interview to HA’ARETZ, adding that “many others, including Poles, died in the same way” and that "in the Romania of the Nazi period, Jews and communists were treated equally.” The Romanian president also indicated that the restitution suits demanding the return of Jewish property confiscated during World War II should be postponed or rejected. He acquitted the Romanian people (though not the leaders) of wrongdoing during the Holocaust.

Minister of Justice Yosef (Tommy) Lapid described Iliescu’s comments as "insensitive". Lapid, a Holocaust survivor born in Yugoslavia, said that while it is true that 350,000 Jews remained in Romania, 420,000 were killed there and in territories that the Romanian army captured. "Isn’t it worth it for Iliescu to admit the Holocaust of Romanian Jews?" he asked.


Israeli Swimmer Reach Semi-Final at World Championship
Israeli swimmer Vered Borochovsky qualified today for the semi-final of the 50-meter women’s butterfly event at the World Championships in Barcelona, Spain, HA’ARETZ reported. Borochovsky, who has already attained the minimum standard for participation in the 2004 Olympics in the 100-meter butterfly race, did the same in the 50 meters, with a time of 27.37 seconds. The time was the fifth best of all swimmers in the qualifying rounds.

Two other Israeli swimmers, Inbal Levavi and Anna Gostomelsky, both failed to progress in the heats of 200 meters backstroke, finishing respectively in 26th and 21st place.

On Thursday, Israeli swimmer Yoav Gath set a new national record for the 200-meter backstroke with a time of 1:59.22 minutes in the semifinal. Gath also set a personal record in the 100-meter backstroke Tuesday, earning a spot for the 2004 Olympic Games in Athens in the process. Other Israeli swimmers in the competition included Shilo Ayalon, who finished 10th in qualifying heats for the 800-meter freestyle, Shai Livnat, who finished 21st in the qualifying heats of the 800-meter freestyle, and Miki Halika, who finished 37th in the 200-meter individual medley qualifier.


Other News in Brief

* Jerusalem Chief Ashkenazi Rabbi Yitzhak Kollitz died Thursday night at the age of 81, Israel Radio, KOL YISRAEL reported. He had held the post of Jerusalem rabbi since 1983, and also served as a rabbinical judge in the rabbinical high court of appeals. He was buried Thursday night in Jerusalem. Jerusalem Chief Sephardic Rabbi Shalom Maashash passed away three months ago.

* The Israel Defense Force said its soldiers shot and killed a Palestinian boy and wounded his two sisters in the northern West Bank today, when a machine gun atop an armored personnel carrier accidentally fired at a passing car, HA’ARETZ reported. The IDF has expressed deep regret over the tragic incident, and has launched an investigation.

* Major General Moussa Arafat, the head of Palestinian military intelligence, survived on Thursday an apparent assassination attempt from Palestinian opponents, Israel Radio, KOL YISRAEL reported. Palestinian security sources said someone tried to fire a rocket-propelled grenade at his office and instead missed his target, hitting a nearby prison where 10 prisoners were wounded, some seriously. Palestinian sources said police arrested three suspects in connection with the attack.

* El Al Israel Airlines flight 031 to New York, packed with 518 passengers, made an emergency landing at Ben-Gurion Airport Thursday afternoon after one of its back tires exploded on takeoff from Tel Aviv, causing an hydraulic system failure, THE JERUSALEM POST reported. No passengers were hurt. "The problem occurred as soon as the plane disengaged from the runway, and from that point we decided to turn back and land in Tel Aviv," Captain Shai Eshel told the newspaper a few hours after the Boeing 747-400 safely landed.


Economic & Hi-Tech Briefs

* Israel Aircraft Industries will supply its POP (Plug-in Optronic Payload) 200 night-vision system to the Mesa, Arizona, police force, GLOBES reported. The system will be installed on Defender helicopters used in patrols and chases. IAI’s TAMAM division manufactures the system. The Mesa police also plan to use the system in missions against drug smugglers and homeland security tasks. POP 200 is an infra-red, lightweight, module designed for use in helicopters. The crew receives a color television picture. The system carries a laser that can track and monitor objects.

* Drug maker Taro Pharmaceutical Industries reported today a 51 percent increase in second quarter revenue and a 45 percent rise in profit, which reached record levels for the twentieth consecutive quarter, GLOBES reported. Net profit for the quarter was $14.8 million, or $0.50 per share, in line with consensus estimates. "The company has continued to produce excellent results in the second quarter," stated Taro chairman Dr. Barrie Levitt, "while investing in our two new divisions for proprietary products: TaroPharma, the company’s platform for direct-to-physician marketing of proprietary products, and Taro Consumer Healthcare Products, our division for marketing proprietary over-the-counter products." Currently, Taro has 32 filings at the FDA.

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