JULY 5, 1993

We wanted to sum up the first year of the present government on the main issues, and we feel that we did make some headway in implementing our plan namely, changing the national priorities, investing less in the territories, instead opening the territories both for investment and negotiations, and then again emphasizing the social and economic needs of the country. Money that was saved from being invested in the West Bank and Gaza were directed to education, to infrastructure I think everybody can feel the emphasis that we are giving on building new roads, on overcoming bottlenecks in our transportation system; in encouraging the development of the country in accordance with geographic lines, not political lines, namely the far-away north, the far-away south; and absorbing as much as we can the new immigration. Last year we had 70,000 new immigrants, largely from the Soviet Union. This year we expect an additional 80,000.

We didn’t solve all of the problems. There are clearly more jobs for the new immigrants, there is a slight decline in the unemployment, and we are continuing with the market economy replacing the previous policies of Israel. This year we shall privatize different governmental enterprises. In the budget we thought that this would be something like NIS 1.5 billion; in fact we are going to sell this year for NIS 3.75 billion banks, companies, services and other things and we shall continue to minimize the governmental intervention in the economic life of the country and to maximize a free and open market.

We feel that our foreign relations are being developed correctly. We are very happy with newly established contact with very important countries in Asia, in Africa, in Europe as well. Politically speaking, we would like to enlarge the foreign aid of Israel in knowhow and otherwise particularly in two domains: in agriculture and in health. We think that we can spare experts and help other countries who are deeply interested in these two domains of agricultural development, basically fighting the desertification, and in promoting a better health system in any country that will be interested. Among the immigration we have had from the former Soviet Union countries, we have something like 12,000 doctors. It has doubled the number of physicians in this country, and clearly we are not going to double the number of sick people. So we can really be of great help to other countries who may be interested, and we shall do it willingly.

We are not competing with any superpower. We are too small to do so. We know our limitations. We are not out to conquer lands or markets. At best, what we would like to conquer is the hearts of some people, wherever we can, and we feel that we can do it, really, in those two major domains. We are building now a sort of a peace corps for medical help, and we are also trying to enlarge, in response to countries which may be interested in a greater knowhow proposal, in the domain of agriculture.

On the peace process, there was the third round of the multilateral negotiations. We sum up the third round as a rather successful one. We have had the participation of twelve Arab countries, a Palestinian delegation and an Israeli one, and it went over smoothly. I do believe this is also the feeling of the European countries and the United States of America, Russia and Japan, who were very active in it. While we were dealing with extremely sensitive and touchy issues, like arms control, refugees, we really didn’t encounter any crisis, and I think we made some progress on all five accounts, in the all the five committees we have had. We feel also that we went over from an air of seminars down to the earth of feasibility studies, and in addition to the formal meetings there are the intersessional connections to which we attach great importance. The steering committee of the multilateral negotiations will meet tomorrow in Moscow, and we hope to continue in all the five domains.

On the bilateral negotiations, there is an air of crisis. I don’t share this overly pessimistic approach, for the following reasons: To the best of my knowledge, none of the participants, to this moment, has decided to cancel its participation in the negotiations. To the best I know, all parties, including the Palestinians, understand that we have to continue to negotiations. So while we may have a crisis, we do not have an end to those negotiations, which shows that all parties are really interested to continue the negotiations.

We are dealing with four different parties. There is no comparison between the mentality or the problems that we are facing in our negotiations with the Jordanians and the Palestinians, or the Palestinians and the Syrians, and the Syrians and the Lebanese. Each is a case in its own right. Though there is a linkage, there is no similarity between the four negotiations.

On the Jordanian side, actually the Jordanians said what we did, that we have had an agreement on the agenda. In our judgment, the Jordanians are not signing on the agreed agenda simply because they don’t want to be first and remain alone.

With the Syrians, we continue this very sophisticated exchange on the three core issues, which are peace, security and withdrawal. Occasionally the Syrians are coming up with very interesting innovations, like for example distinguishing between the peace and the results of the peace. They say: ‘If you will withdraw, we shall offer you peace, but the results of this peace this is a different story.’ Well, our reply was: ‘We can offer you withdrawal, but we have to separate between withdrawal and the result of withdrawal.’ So, we are a little bit here getting ourselves engaged in a typical Mediterranean sophistication that leads to nowhere, but to the waste of words.

But in spite of all these uneasy exchanges, we feel that both parties are looking either for a bridge or a ladder a bridge to overcome the gaps, or a ladder to go down from the first positions. I must say that our impression is that the Syrians came to these negotiations without any sense of hurry, because the head of the Syrian delegation simply says: ‘Well, we said ahead of time that it may take a year, a year and a half, before we shall reach an agreement.’ So it looks like he’s not surprised by the slow pace of the negotiations.

With the Palestinians and ourselves, let me make the following, and may I say sobering, remarks, as far as I am concerned. I think all of us appreciate very much the American role. We appreciate the fact that the United States under the present administration has declared that they are interested in playing a greater part in the negotiations. But we became so enthusiastic about it that we forgot the limitations of the American role in the negotiations. I think the Palestinians were living under the illusion that the United States can deliver Israel. Actually, some of them thought that maybe what they have to do is to make peace with the United States, and then they will have peace with Israel. I think every responsible person understands that the United States is unwilling, and I believe unable, to twist the arm of Israel. They don’t want to do so, and I don’t think they intend to do so.

I can say, for the sake of symmetry, the other way around: We must understand, too, that the United States cannot twist the arms of the Palestinians. What I am saying about us, I can say about them. The United States cannot impose a solution, and surely the United States cannot replace any partner. Basically, the negotiations are between them and us, where the United States is playing the noble role of a bridge-maker, but not a successor to one of the parties or two of the parties. I believe the fact that the U.S. document was so much criticized shows that, maybe for the time being, the proper bridging definitions were not yet found but they may be found.

I think also the Palestinian side, and our side, must understand the limitation of the Arab world’s support. I think basically there are countries, most of them, were supportive in having the Palestinians coming back to the negotiations. We appreciate it very much. We clearly appreciate the role of the Egyptians. I think President Mubarak and his team played a very constructive role, and we appreciate it. We would like to see them playing more. But one of the very touchy problems of the Palestinian delegation was not really answered properly by either side, and that is the financial crisis in which the Palestinian party found itself both from an administrative point of view and from the needs in the territories themselves.

That may be another addition to the sobering situation, and that is that the Palestinians, as well as us, traditionally ignored the economic side of the political situation when it came to the Palestinian problem. We were so much politically minded, that we almost ignored the real need for economic improvement, or at least a relation to the economic side of the problem. It is true about Gaza, it is true about the West Bank. Here, too, we have to look for new ways and means how to handle it. If you should really come to the issue of Gaza, economy may play an equal role to politics in looking for solution to this part of the land.

Actually, what we have learned, all of us, in the tenth round, is that while having the good offices of the United States, or Russia who is also one of the two parties that are providing the auspices for those negotiations, basically the give and take must be between the Palestinians and us. I do expect that in the next round, wherever it may take place and in whichever form it may be developed, we shall have to have a good look more at the pragmatic side of the story.

We have engaged ourselves so much in written definitions, that almost one could get the feeling that we are writing a new Bible or a new Koran. I feel there is a limit to the investment one should put in the small print of a ticket. You know, when a person goes to the airport and buys an air ticket, I think normally he would embark on the plane. But if instead he will sit in the waiting room and try to read the small print of the ticket, he may never fly, as a protest to what is written in the ticket. So I think, in that case too, we have to put less emphasis on the small print and more emphasis on the need to have a take-off in the right direction.

I know the Palestinians are disappointed. We, too, would like to achieve more. But it is neither the end of the negotiations nor the end of the story, and we shall continue and we shall remain as previously very serious in our attempt to push the negotiations ahead.

I want to thank members of the European Community, the United States, Russia, Japan, Candad, other countries, who partook in the multilateral negotiations and the bilateral negotiations. I think that if we didn’t achieve yet a complete agreement, I hope that we are drawing the right lessons and maybe we are nearer to have some achievements nearer than most of us believe or think.

Q: The efforts of the government to shift financial resources to the West Bank and Gaza do you think this could help the situation and the atmosphere in the territories, to make them more inclined to show a willingness towards negotiations?

A: Thank you for the question. I shall give some numbers about the situation after the closure of the territories. Right now the government has issued 50,000 permits. At the beginning there were 100,000 people who came from the West Bank and Gaza to work in Israel. Atter the closure, when it was almost stopped, we have renewed the issue of permits to provide jobs for the people and prevent any economic difficulty or very serious economic difficulty in the territories. Instead of the 100,000 or so, we have issued 50,000. In addition, we have created new jobs in the West Bank and Gaza, in the vicinity of 25,000-30,000, most of it public jobs, with a special allocation by the government. So there are today 75,000-80,000 people being employed.

We are trying also to encourage the construction of industrial enterprises, building roads. We call for investment in the territories. The government itself has allocated 100 million dollars as a special allocation to the territories, to awaken the local economy there. By the way, we have suggested to the Palestinians that if they are ready to take over what we call the ‘early empowerment’, namely to take over some of the domains even before we shall reach a full agreement on the autonomy, they can be party in the allocation of those 100 million dollars, how to spend it. The European Community has allocated something like 80 million dollars. Until now, 30 million dollars are in implementation, basically in contructing houses. There is a growth of construction going on, particularly in the West Bank. For example, the construction in Nablus went up five times, from 50,000 meters to 250,000 meters this year. And we intend to continue to do so.

Clearly, the economic situation in the territories does have effect upon the mood of the Palestinian negotiators in Washington, and we feel ourselves responsible for the economic situation there. As long as we are the government of the day, we shall continue to try and do our very best to improve the economy, both in Gaza and the West Bank.

Q: The tenth round of bilateral negotiations does not seem to have resulted in any agreement. What steps will be taken after it?

A: The peace team of the State Department is coming to the area. Mr. Dennis Ross and his collaborators will arrive in Israel on the 8th, which is Thursday this week. They will stay here for a couple of days and then they will continue to the Arab countries. So, there will be an attempt to touch ground in between the next round, and I think there will also be an attempt to fix a date for the next round, for the eleventh round. But in the meantime, there will be a search for bridging definitions, because the United States has said that the draft they have suggested is not a gospel. The parties can suggest changes in it, and I am sure that they two parties, Palestinians and us, will introduce or suggest changes to it.

Q: Yesterday, five cabinet ministers, including one from the Labor Party, advocated that the government of Israel hold direct negotiations with the PLO, with Yasser Arafat. Where do you stand on that question?

A: Well, if five were for, 13 were against don’t forget it and 13 is a majority.

Q: And you are with the 13?

A: Yes.

Q: Are there any ideas for changes for the eleventh round to break the deadlock?

A: I hope that the parties will try to introduce some flexibility in the definitions yes.

I want to say about recognizing the PLO: The situation is that there is a Palestinian delegation which is empowered to negotiate, and we said publicly that we are not going to intervene with whom this delegation is in consultation. For the time being, I do not feel there is a need for a change. On the negotiations itself, I think, we have to look at the issues and we have to look at the definitions.

Without any sense of polemic, I think that the Palestinian side must understand that when it comes to Jerusalem, they must return to the initial idea, which also prevailed in Madrid, that the issue of Jerusalem should be last on the list and not first on the list. Because on Jerusalem, I do not believe that there is an Israeli government that is empowered to negotiate on autonomy. That’s our position. The Palestinians, from what I can see, have raised to a very high altitude the issue of Jerusalem and jurisdiction.

Actually, what Israel has said and agreed on the negotiations, is that we should look upon the territories as one piece of land, and what we meant is not the territories during the autonomy but what we meant is the authorities of the territories. The different parts of the territories will have, will enjoy or be restricted by different legislation or authorities.

Let’s not forget that, but for Jerusalem, neither the West Bank nor Gaza was formally annexed to Israel. From the point of view of sovereignty, it’s an open-ended territory, and it will remain so, at least until we shall have a permanent solution. So for the five years to come, the issue of jurisdiction is a little bit an artificial one, because when it comes for example to land, we do not deny the private ownership of land or the right of the Arab people, Palestinians, to manage the land upon which they live. More than 60 percent of the land, in the case of autonomy, will be in fact under their management. But when it comes to security, when it comes to Israeli settlements, there will be a different authority. It’s one piece of land. So instead of mapping the land, we suggested to map the rights of the usage of the map. That’s the situation.

Q: One of the delights of serving as a diplomat in Israel is that you get to read about what was said in the cabinet meeting the day before with our morning coffee. We of course don’t know whether these conversations are accurate or not, but assuming they are, the 13 to 5 alignment on this issue might have been different, that what was preoccupying some of the 13 was the question of the PLO raising the right of return, or raising the issue of Jerusalem in the interim stage, and skipping the interim stage and going directly to the final status negotiations. Do you see some kind of a deal where the PLO could be the signatory on a deal that was well within the framework of Madrid?

A: To answer you honestly, I would like to see first the signature and then the signatories, not the other way around. Namely, if you can reach an agreement, I would say that the party that we shall agree with will be the party that will sign. But to start by the question of who will sign is simply to take an extra political burden, totally unnecessary for the time being, upon the shoulders of the government. Because there is clearly a team that we can negotiate with, and we know exactly with whom the team is in touch. Maybe there is an element of vagueness in it, but who says that vagueness is unnecessary during negotiations?

There are still problems with the PLO. They want to represent the Palestinian diaspora, whereas we want to negotiate with the Palestinians who reside here. We do not have a solution for the Palestinian diaspora. By the way, we have even our own distinction between the Jewish diaspora and the Jewish community in Israel. It is not the same. Then, the PLO did not denounce clearly the issue of terror, which is an additional problem for us. I must say that Haider Abdel Shafi, for the first time, condemned the shooting in Jerusalem. He condemned the violence, but justified the reasons in a way. And then there is still the PLO covenant. But we don’t feel that we are short of air to negotiate. We have enough air.

Q: Could you comment on the time factor? We know that Israel has a government that is willing to negotiate, we know that you have counterparts. But time is running, and there are still no tangible results, in spite of all those efforts being made, and I think it would be interesting to hear from you, how you see the situation from that point of view, from the time perspective. Is time working in favor of this negotiating effort or is time running out? Is it becoming more difficult because of lack of results?

A: To say that the time is running out is a pessimistic phenomenon for all of us. Every day we lose is a lost day. I do believe that time is running out for all of us. I think there are many Arabs who begin to understand that their problem is not Israel but Iran, and their problem is not Zionism but fundamentalism, and that may endanger the stability of life in many Arab countries. Then, again, I think there is a feeling that the world is beginning to be tired of this issue. On the other hand, I do not believe that by postponing, we are winning. When I think, say, should we wait another year, will any party be able to get something more than today, I will say no. On the contrary, it will be more difficult, because there is the demographic development which doesn’t make the situation easier.

On the timetable: I wouldn’t like to guess, but in my judgment it may be shorter than most people think, because I do not believe that we have explored all the possibilities. In addition to the written definitions, there are some pragmatic options, like for example, to try and start with Gaza first, that can really prompt the negotiations in a very important manner. I do not believe that all the possible options are already known to all of us, and I believe that some of the solutions may be different from the ones that are today put on the table. For that reason, I am quite willing to believe that it may occur earlier than most of us would think.

Q: Yesterday Secretary of State Warren Christopher went on record saying that the United States may take a low profile in negotiations and may leave the parties to get on by themselves. What is your reaction to that?

A: I think there is a need for the American bridging role. When you look around, from an international point of view, still the United States is the best equipped country to handle this sort of negotiations in the Middle East. As far as we are concerned, we believe in the sincerity of the United States, which is trying to play really the role of a bridge-maker, of bridge-builder. It permits the parties to criticize the United States, and the United States has the right to criticize us. I do hope they will continue to play their role.