Jerusalem, October 12, 1997

CABINET COMMUNIQUE

(Communicated by the Cabinet Secretariat)

At the weekly Cabinet meeting today (Sunday), 12.10.97:

1. The Cabinet dedicated the greater part of the meeting to a report on the state of high-tech industries in Israel.

The Trade and Industry Minister stressed that Israel’s relative advantage in this area is due to the quality of its population their intelligence and creativity. High-tech industries are today responsible for 95% of the growth in Israel’s exports. High-tech industry is the locomotive drawing Israel’s economy out of recession, creating local employment and attracting foreign investment. The Cabinet decided that a group of the relevant ministers will examine ways of strengthening industrial research and development.

2. The Prime Minister briefed the Cabinet on his recent meeting with P.A. Chairman Arafat. He reported that the greater part of the meeting was spent discussing security issues.

The Prime Minister stated that the last few days have seen a positive start, but it will only be possible over time to examine whether a real systematic change has taken place, and the Palestinian Authority is conducting a continued fight against terror.

The Defense Minister informed the cabinet that the negotiations on the question of the airport at Dehaniya are being conducted in accordance with the guidelines set down by the Ministerial Committee on National Security.

3. The Prime Minister strongly repudiated the reports in the media, according to which he is planning to replace the head of the Mossad. The Prime Minister called such reports incorrect, and stressed that he fully supports the Mossad and its leader.

4. The Cabinet authorized the Ministerial Committee on Legislation and Law Enforcement to decide on behalf of the government on the proposed law for the implementation of the Memorandum of understandings between Israel and Jordan on the issue of joint use of the airport at Aqaba (an experimental project).

5. The Cabinet, following an initiative of Public Security Minister Avigdor Kahalani, opened a discussion on the question of the disappearance of Yemenite children. The discussion will continue at the next Cabinet meeting. Before then, the Attorney-General will hold talks with the Investigatory Commission into this area, and will brief the Prime Minister.