At the weekly Cabinet meeting today (Sunday), 18 March 2007:

1. Prime Minister Ehud Olmert discussed last night’s swearing-in of the new Palestinian government. He emphasized that the platform presented by this government does not meet the criteria that have been agreed on all along by the international community – recognition of the State of Israel, the disavowal of terrorism and the dismantling of terrorist infrastructures, and the honoring of the Quartet conditions and all of the agreements that have been made with Israel, including the Roadmap. Moreover, the platform contains very problematic elements that are acceptable neither to Israel nor to the international community such as the right of opposition and the use of terrorism and the aforesaid non-recognition of the State of Israel.

ISA Director Yuval Diskin briefed ministers on the situation in the Palestinian Authority, including the unity government.

The Cabinet held a discussion and decided as follows:

A. In light of the fact that the new Palestinian government, based on the platform formulated and approved by it, does not accept the principles of the international community: recognition of Israel’s right to exist, elimination of terror and the dismantling of terrorist infrastructure, and recognition of the agreements signed with Israel including the Roadmap, Israel will not be able to work with the government or any of its ministers.

B. Israel will continue to work with Mahmoud Abbas in order to advance issues of security and issues pertaining to improving the quality of living of the Palestinian population.

C. The Palestinian government’s platform, which include, inter alia, the use of terror as a legitimate right, the acceptance of previous agreements with Israel based only in accordance with Palestinian interests, as well as limitations the Chairman of the Palestinian Authority took upon himself, including bringing any agreement with Israel to the authorization of the new Palestinian National Council and the Palestinian Diaspora, gives, in essence, a veto right to Hamas and other terrorist organizations over any agreement that would be reached with Israel, and limits the possibilities and range of topics which Israel can discuss with the Chairman of the Palestinian Authority.

D. Israel will continue to demand that the Chairman of the Palestinian Authority implement his obligations: to bring about the unconditional release of the abducted soldier Gilad Shalit, to stop Kassam missile attacks, to dismantle the terrorist organizations and their infrastructure in the Palestinian Authority and to fully implement the first stage of the Roadmap.

E. Israel expects the international community to maintain the policy it has taken over the past year of isolating the Palestinian government, until it recognizes the three principles of the Quartet.

F. Israel has not changed its position; Israel is for peace with the Palestinians according to the Roadmap. Israel stands for a two state solution. Israel is ready to initiate contacts with any government in the Palestinian Authority, whatever the composition of it may be, which fulfills the conditions of the international community, and will be willing to discuss all issues with it.

2. Prime Minister Olmert announced that he has notified Mossad Director Meir Dagan and informed him that his term as Director was being extended to 31 December 2008. The Prime Minister praised Mossad Director Dagan and expressed both his and the Cabinet’s appreciation for his work and that of those under him.

3. Interior Minister Ronnie Bar-On and Finance Minister Avraham Hirchson briefed ministers on the progress in dealing with the non-payment of local council salaries.

Prime Minister Olmert instructed them to make a major effort to resolve the issue and to act against those councils that are not providing minimal services to their residents.

4. The Cabinet discussed the five-year, NIS 4.64 billion, plan to construct 8,000 classrooms.

5. The Cabinet discussed the appointment of an interministerial team on legal counsel for Government ministries.

6. Industry, Trade and Labor Minister Eli Yishai and representatives of both the National Infrastructures Ministry and the Government Water Authority briefed ministers on water technology development ahead of World Water Day.

7. The Cabinet discussed Government efficiency and the exemption of various positions from public tender.

8. The Cabinet approved draft legislation on negative income tax, mandatory pensions and tax bracket reductions and decided to submit it to the Knesset for its first reading.

9. The Cabinet approved amendments to the Bailiff’s Law and authorized the Ministerial Committee on Legislation and Law Enforcement to approve the final draft version of the amended law..

10. The Cabinet approved draft legislation on the jurisdiction of rabbinical courts.

11. The Cabinet discussed the provision of rent payment assistance to veterans of the former South Lebanon Army and decided – in continuation of its 12 March 2006 decision – to extend current eligibility for another six months.

12. The Cabinet discussed Project MASA.

13. The Cabinet discussed preparations for the 2007-2008 shmita year (the Biblical seventh year regarding agriculture in the Land of Israel).

14. Pursuant to the 1959 Civil Service Law (Appointments), the Cabinet appointed Brig.-Gen. (res.) Pinchas Bukharis as Defense Ministry Director-General, effective 9 May 2007.

15. Pursuant to the 1965 Israel Broadcasting Authority Law, the Cabinet appointed atty. Dorit Inbar as Deputy Chairwoman of the IBA Plenum and the IBA Executive Committee, and Yaacov Naveh as a member of the IBA Executive committee.

16. Pursuant to the recommendation of Communications Minister Ariel Atias and Article 6B of the 1982 Communications Law (Bezeq and Broadcasting), the Cabinet appointed Aran Nitzan as a member of Cable and Satellite Broadcasting Council.

17. The Cabinet appointed three Jewish National Fund representatives as members of the Israel Land Administration Council.

18. Pursuant to the 1959 Civil Service Law, the Cabinet authorized the Public Security Ministry to receive funds from the Or Yarok association in order to assist in financing Israel Police traffic volunteers.

19. Pursuant to the 1959 Civil Service Law, the Cabinet decided to exempt from public tender those public sector positions designated for Project Atidim management trainees.

20. The Cabinet discussed various issues regarding Beit Hatefutsoth – the Nahum Goldmann Museum of the Jewish Diaspora.

21. Pursuant to the Knesset by-laws, the Cabinet demands that Knesset Finance Committee Chairman Yaacov Litzman convene the Committee before the Knesset recesses in order to discuss the selection of a new Committee chairman.