Jerusalem, January 11, 1998

CABINET COMMUNIQUE

(Communicated by the Cabinet Secretariat)

At the weekly Cabinet meeting today (Sunday), 11.1.98:

1. The Health Minister briefed the Cabinet on reforms in the import of pharmaceuticals. The Minister expects that the completion of the reforms will bring about a significant decrease in the cost of imported pharmaceuticals, which currently account for almost half the cost of all medications in Israel.

2. At the start of the political debate, the Prime Minister referred to threats emanating from the Palestinians. The Prime Minister said that statements about an intifada and violence will have no affect on us, and that they do not serve the cause of real peace. Israel insists that the negotiations be conducted in a peaceful fashion, and we will not alter our positions as a result of threatened violence.

The Cabinet held a political discussion on the framework of Palestinian commitments in their agreements with Israel. The document on this matter details the list of Palestinian commitments derived from the "Note for the Record" which accompanies the January 1997 Hebron Agreement. The Palestinian commitments include four main areas:

1) The completion of the process to revise the Palestinian National Covenant,

2) The war on terrorism and the prevention of violence,

3) The size of the Palestinian police,

4) The restriction of Palestinian governmental activities to areas under their authority.

The Cabinet will continue discussion of this issue at its next meeting.

3. The Prime Minister clarified that there is no truth to the item according to which a dialogue is underway, with the knowledge of the Government of Israel, between Israeli and Iranian clerics. The Prime Minister said that the Government has not charged anyone to conduct such a dialogue on its behalf.

4. The Cabinet decided to create a Directors’-General committee on the issue of Bedouin communities in the north to be headed by the Director-General of the Prime Minister’s Office, and including the Directors-General of various other ministries. The committee will devise a multi-year program to address infrastructure and development issues.

5. The Defense Minister briefed the Cabinet on his trip to Turkey and on the various aspects of the security contacts between Israel and Turkey, as well as on the joint American-Israeli-Turkish naval exercise.