(Communicated by the Cabinet Secretariat)

At the weekly Cabinet meeting today (Sunday), 16 January 2005:

1. Prime Minister Ariel Sharon said, “Over the weekend and again this morning, there has been an upsurge in Palestinian terrorism against Israeli citizens.  Regrettably, despite the change in the Palestinian leadership, we note that those at the top have not begun any action whatsoever to halt the terrorism. This situation cannot continue.

The IDF and the security forces have been instructed to step up operational activity against terrorism and they will continue to do so, without restrictions, I emphasize, without restrictions, as long as the Palestinians are not lifting a finger. The political leadership has instructed that any action, that any action, be taken that is necessary to halt terrorism.

The Israeli people have been struggling against terrorism for more than 100 years. We did not capitulate to terrorism in the past and we do not intend to do so now. These are difficult days but we have known even more
difficult days.

Our hearts are with the families of the victims and of the wounded, and with all citizens and IDF soldiers on the front lines of the war against terrorism.”

2. The Cabinet discussed the proposed reforms to the education system, (the Dovrat Committee), and thanked the Chairman, Mr. Shlomo Dovrat and members of the committee for their intensive and extensive investment in preparing the report.  The cabinet decided:

a. The Cabinet accords the highest priority to comprehensive education reform in Israel, according to the recommendations of, and budget proposed by, the committee.

b. To adopt the principles behind the recommendations of the national education plan, excluding the following two issues:

  1. Salary, conditions and work relations.
  2. Recommendations to increase the budget to include free education for kindergarten-age children.

c. To approve the budget the plan was based on, while considering the priorities of the state budget.  Budget details will be agreed on between the Finance Minister Benjamin Netanyahu and Education Minister Limor Livnat.

d. Due to the great importance and scope of the reforms in the education system, the Cabinet instructed the Finance and Education Ministers to immediately enter into continuous, sincere and genuine negotiations with the teachers unions and the Histadrut, with the aim of implementing the reforms with their complete acquiescence and cooperation.  The team will be led by the Finance Ministry Director of Wages and Labor Agreements and will also include the Education Ministry Director-General. Negotiations should be concluded no later than 31 March 2005.

e. The Cabinet appointed the Education, Finance and Interior Ministers to approach the Union of Local Authorities in an effort to advance implementing reforms in the education system including the issue of the budget.

f. A Steering Committee headed by Education Minister Livnat appointed to examine the changes needed to implement the program.  The reforms will be carried out in stages.

g. Education, Sports and Culture Minister Livnat and Finance Minister Netanyahu will prepare legislation to implement the reforms.

h. Education, Sports and Culture Minister Limor Livnat will report to the government every two months on the progress of the education reforms.

3. The Cabinet decided, in accordance with the 1959 Civil Service (Appointments) Law, to appoint Shmuel Abuhav as Director-General of the Construction and Housing Ministry (instead of Chaim Fialkopf), as soon as his resignation of the Tivon Local Council is finalized.

4. The Cabinet decided, in accordance with the 1959 Civil Service
(Appointments) Law, to appoint Ra’anan Falk as Director-General of the Public Security Ministry. (instead of Eliezer Rosenbaum).

5. The Cabinet decided, in accordance with the 1954 Bank of Israel Law, that upon the end of Bank of Israel Governor Dr. David Klein’s current term, Bank of Israel Deputy Governor Meir Sokolov will serve as Acting Governor for three months or until a permanent Governor is appointed, whichever comes earlier. Dr. Klein’s term expires on 16 January 2005 but the appointment of a new Governor has yet to be finalized.

6. The Cabinet decided to establish a team to determine a list of priorities regarding American economic assistance.  The team will include Finance Ministry Director-General Dr. Yossi Bachar, either Prime Minister’s Office Director-General Ilan Cohen or his representative, Foreign Ministry Director-General Ron Prosor, Defense Ministry Director-General Amos Yaron, National Security Council Chairman Giora Eiland, Prime Minister Sharon’s
Diplomatic Adviser Shalom Turgeman, Public Security Ministry
Director-General Ra’anan Falk and a representative of Vice Premier Shimon Peres. The team’s responsibilities will be as follows:

a) Coordinating requests by all ministries and government bodies regarding economic assistance from the US;
b) Determining a list of priorities for requests regarding the economic assistance and examining their feasibility;
c) Making recommendations to the political leadership; and d) Receiving and approving all requests for economic assistance from the US.

No request for economic assistance will be considered unless it has been examined by the team or in accordance with its instructions.

7. The Cabinet approved Prime Minister Sharon’s proposal regarding the compositions of the Ministerial Committee on National Security Affairs, the Ministerial Committee on Socio-Economic Affairs (the Socio-Economic Cabinet) and the Ministerial Committee on Legislation.

8. OC Operations Maj.-Gen. Yisrael Ziv briefed ministers on current security affairs, including the recent terrorist attacks and the increased IDF counter-terrorist activity.

9. The Cabinet began its discussion of a uniform reduction in the state budget in order to fund the implementation of education reform and social welfare programs.