(Communicated by the Cabinet Secretariat)

At the weekly Cabinet meeting today (Monday), 30 August 2004:

1. OC Intelligence Maj.-Gen. Aharon Zeevy Farkash briefed ministers on intelligence matters.

2. The Cabinet decided – in accordance with Article 31(a) of Basic Law: The Government – to change the allocation of ministerial portfolios as follows:
– Immigrant Absorption Minister Tzipi Livni will also serve as Minister of Construction and housing.
– Minister Meir Sheetrit will serve as Minister of Transportation.
– Minister Gideon Ezra will serve as Minister of Tourism in addition to his responsibilities as liaison between the Government and the Knesset.

The decision will be submitted to the Knesset next week. The decision comes in wake of the end of the period in which the aforementioned ministers served as acting ministers – in accordance with Articles 24(b) and 24(c) of Basic Law: The Government – in the ministries to which they have now been appointed.

Prime Minister Ariel Sharon added that to the extent that the composition of the coalition is changed, there would be changes in the aforementioned allocation of portfolios.

3. Education, Culture and Sports Minister Limor Livnat presented ministers with the draft law on a long school day and enrichment classes, that is due to be submitted to the Knesset tomorrow (Tuesday), 31 August 2004.  Minister Livnat detailed the substance of the draft law.

4. The Cabinet – in accordance with Article 24(b) of Basic Law: The Government – decided to appoint Justice Minister Joseph Lapid to fill in for Finance Minister Benjamin Netanyahu regarding the sale of Discount Bank (as per the 1983 Bank Shares Arrangements Law), as long as the group represented by the law firm of A.S. Shomron, Y. Molcho, Frasky and Partners participates in the process.

Prior to the submission of the candidacies of the various groups in the sale process for Israel Discount Bank, Ltd., attorney Yitzhak Molcho announced that the aforementioned firm intended to represent a group that would submit its candidacy for the purchase of the bank.  When the various groups submitted their candidacies, it was brought to Finance Minister Benjamin Netanyahu’s attention that one of the groups was represented by the aforementioned law firm.

The same firm is representing Finance Minister Netanyahu in his personal matters and attorney Molcho serves as the former’s adviser on various matters.

In light of potential conflict of interest vis-a-vis Finance Minister Netanyahu’s actions regarding the sale of Israel Discount Bank, Ltd., the Minister – in accordance with the rules for the prevention of conflicts of interest by ministers and deputy ministers – asked to transfer his authority regarding the sale of the bank to Justice Minister Lapid as long as the group represented by the law firm of A.S. Shomron, Y. Molcho, Frasky and Partners participates in the process.

Thus, Finance Minister Netanyahu will no longer be involved, in any way whatsoever, in the sale of the bank.

5. Environment Ministry Director-General Dr. Miriam Harad briefed ministers on the implementation of their May 2003 decision on sustainable development. In May 2003, the Cabinet decided that its policy would be based on the principles of sustainable development that integrates a dynamic economy, the prudent use of natural resources, the protection of ecological systems and affording equal opportunity to all, in order to respond to the needs of both current and future generations. This decision was made in the spirit of the Johannesburg summit on sustainable development. The decision specified an “Implementation Program,” which determined that each government ministry would prepare a strategic plan on sustainable development that would include – inter alia – plans for ministry action, methods of implementation, sources of financing from the ministry budget, and measurable goals and target dates for achieving them.  These strategic plans are to relate to the period up to 2020.

6. Foreign Minister Silvan Shalom briefed ministers on current diplomatic matters.  In discussing the Larry Franklin affair, he noted that Foreign Ministry checks have shown that the entire Israeli Embassy acted according to procedures and never deviated either from diplomatic norms or from the good and open dialogue between Israel and the US.  He emphasized that Embassy personnel maintain contacts with all US administration bodies and that there is no truth to the claims that Israel either spied on – or acted in any way against – its best ally, the US.

Foreign Minister Shalom referred to his diplomatic visit to France, including his meetings and the various bilateral and diplomatic issues on the agenda.  He added that in light of the upsurge in anti-Semitic incidents in France, he decided that his visit would also be in solidarity with the French Jewish community.  He discussed with his French counterparts on how to deal with anti-Semitism via education, the media and law enforcement.  The Foreign Minister warned his French interlocutors against the demonization of Israel in the French media.

Foreign Minister Shalom briefed ministers on Israeli-European relations and on his talks with his European counterparts on the need for Europe to become involved in the reconstruction of Gaza and in pressing the Palestinians to carry out the promised reforms.

Foreign Minister Shalom said that he is working with his European colleagues to change the date of Maccabi Tel Aviv’s UEFA Champion’s League match with Bayern Munich from the eve of Rosh Hashanah.  Prime Minister Sharon said that it would be unthinkable to conduct a soccer match in Israel on the eve of Rosh Hashanah and said that the date of the game must be changed.