(Communicated by the Cabinet Secretariat)

At the weekly Cabinet meeting today (Tuesday), 11 January 2005:

1. Prime Minister Sharon welcomed the new cabinet ministers, and wished them luck in their new positions.

2. Regarding the Palestinian Authority (PA) elections, Prime Minister Sharon said: “After the death of the Chairman of the Palestinian Authority, the temporary Palestinian leadership announced, that according to the Palestinian constitution, they intended to hold elections for the post of Chairman of the Palestinian Authority within 60 days, and they set the 9th January 2005 as the date of the elections. With this declaration we said that we would give the Palestinian every aid needed in order to hold proper elections, including freedom of movement for candidates and voters, a different deployment of the IDF, participation of residents of eastern Jerusalem and assistance to international observers. On 26 December 2004, the Cabinet decided to adopt the arrangements that had been worked out between us and the Palestinians, and to hold the elections according to the same guidelines as the 1996 elections.

The election, which was held on Sunday, which we felt was very important that it be conducted properly, passed without any problems from our point of view. Israel fulfilled all its obligations. The elections, including Israel’s actions, were conducted under the inspection of hundreds of international observers, including the former US President, Jimmy Carter and former French Prime Minister Michel Rocard. There was ongoing communication between the international inspectors both before and during the elections, and many problems were solved accordingly. Israel was praised for the manner in which the election was held and for all the help given. This praise was a result of the combined and coordinated work of various bodies, which worked extensively and around the clock, in order that Israel would not be viewed as having caused the elections to fail.”

Prime Minister Sharon thanked the IDF and the security establishment for its operations and for the IDF’s deployment in Judea, Samaria and Gaza before and during the elections, which on the one hand assured highest security, and on the other hand allowed for the elections to take place as had been assured by Israel. Prime Minister Sharon also thanked the Foreign Ministry for planning the operations of the foreign observers and for working with the international community before and during the elections. The Foreign Ministry’s situation room was open 24 hours a day and provided direct and rapid responses to inquiries from the international community. The fact that there were no complaints from the international community on the way Israel acted during the elections demonstrates the great efforts and successful operation. Prime Minister Sharon thanked the Israel Police and especially the Jerusalem District Police for their part in the elections, which was especially sensitive and complicated. The Israel Police demonstrated the necessary sensitivity while at the same time retaining order and security for Jerusalem citizens, and acted exactly according to the principles agreed upon by the government.

The Prime Minister also thanked the Postal Authority employees and legal advisors who all assisted in the smooth conduct of the election.

Prime Minister Sharon announced that he intends to speak to the Palestinian Authority Chairman Mahmoud Abbas to congratulate him on his election victory, and to wish him luck and offer Israel’s cooperation. Prime Minister Sharon estimated that he would soon meet with Chairman Abbas in order to advance issues on the agenda, first and foremost the security issue and the Palestinians’ actions against terrorism and its infrastructure.

3. Defense Minister Shaul Mofaz, in his briefing, noted that the past week was marked by two main events that characterized the confrontation between positive elements that champion the diplomatic process and the forces that are working to wreck it. The elections were an expression of the process of change within the PA, as well as the establishment of a different leadership; in contrast was the Hizbullah attack in the north, the timing of which – on the day of the PA elections – constituted part of the comprehensive effort by both internal and external terrorist elements to wreck the positive trend in the PA. The Defense Minister briefed ministers on the security establishment’s operations ahead of – and during – the elections, which allowed freedom of movement for the candidates, voters and observers. The Defense minister emphasized that after the elections, IDF operational activities were returning to their previous formats.

Defense Minister Mofaz also discussed the continuing decline in the number of terrorist attacks and the significant decline in the number of successful suicide attacks inside Israeli territory.

Defense Minister Mofaz discussed the phenomena of refusal and violence against the security forces, and referred to the evacuation of the outpost at Yitzhar and the letter by officers of the Binyamin area brigade. He has directed the IDF to respond quickly and determinedly in order to send a sharp and unequivocal message. The Defense Minister said that there are enough legal tools in the State of Israel’s penal code to deal with the situation.

Foreign Minister Silvan Shalom discussed the PA elections and commended Foreign Ministry personnel for their responsible work and successful cooperation in doing their utmost to assist a proper election process. He said that Abu Mazen’s victory is likely to constitute a milestone for the Palestinian people, who have elected a leader with a clear mandate for change; the open question is whether he has the desire and the determination to change. The Foreign Minister noted that Abu Mazen’s elections speeches included extremist statements and declarations that Israel must not ignore. However, Abu Mazen also declared in his speeches that he opposes the way of violence. The Foreign Minister called on Abu Mazen to show the desire to change course, immediately deploy the Palestinian police in Gaza in order to bring about a halt in the firing of Kassam rockets at Sderot and Gush Katif. The test is now, the Foreign Minister emphasized.

Foreign Minister Shalom said that since Arafat’s death and in the wake of the PA elections, Israel has been inundated with high-ranking visitors from abroad. He briefed ministers on his talks regarding the flare-up in the north, during which a Hizbullah bomb killed Capt. Sharon Elmakayis, and which resulted in the death of a French soldier serving with the UN forces in Lebanon.

Foreign Minister Shalom also discussed the special session of the UN General Assembly to mark the 60th anniversary of the liberation of the camps and the recent visit to Israel by Turkish Foreign Minister Abdullah Gul.

Finance Minister Benjamin Netanyahu briefed ministers on the 2005 budget and concomitant reforms, which constitute a stage in the Government’s economic plan. He noted that in 2003 we were engaged in halting the deterioration, in 2004 we were involved in the transition to growth and in 2005 we will strengthen growth and devote attention to social issues. The Finance Minister said that the Government’s economic policies have proven themselves so far: The economy moved from negative growth to a 4.2% growth rate last year; this growth made it possible to lower taxes by billions of shekels for all strata of the population. The main points for 2005 will be: a) Continued tax reductions worth approximately NIS 2 billion; b) Maintaining the framework of Government expenditures and the deficit; and c) Continuing the reforms that are the heart of economic activity.  Considerable sums have been allocated in the 2005 budget to social issues – support payments for the elderly, school lunch programs, the health services basket, rent assistance for new immigrants living on the periphery and, of course, the Dovrat report. The foregoing is in addition to the comprehensive aid program for local authorities.  The Finance minister emphasized that the supplements that will be given in the framework of the coalition agreements will require across-the-board cuts because there is no intention of breaking the budgetary framework.

4. The Cabinet, in accordance with Article 25a of Basic Law: The Government decided to appoint the following deputy ministers:

  • MK Orit Noked will serve as Deputy Minister in Vice Premier Shimon Peres’ office;
  • MK Eli Ben Menahem will serve as Deputy Housing and Construction Minister;
  • MK Michael Melchior will serve as Deputy Education, Culture and Sports Minister.

The Knesset will be duly informed of the above appointments, as required by law.

5. The Finance Ministry Accountant-General briefed ministers on various issues regarding the privatization of Bank Leumi.

6. Education, Culture and Sports Minister Limor Livnat and Shlomo Dovrat briefed ministers the Dovrat Committee report.