(Communicated by the Cabinet Secretariat)

1. Defense Minister Amir Peretz, Foreign Minister Tzipi Livni, the IDF Intelligence Corps Director of Research and the Deputy Director of the Israel Security Agency briefed ministers on various security and diplomatic issues, including – inter alia – the goals of Operation Summer Rain: The return of Cpl. Gilad Shalit to his home, the cessation of Kassam rocket fire, and the determination of new rules of conduct vis-a-vis the Palestinian Authority and the Hamas government. The concept regarding use of force includes limited-duration ground operations, the continuation of aerial attacks against various targets (such as rocket cells), artillery fire and other actions. Ministers were briefed on IDF data regarding strikes against terrorists and infrastructure and the implementation of the humanitarian plan regarding the entrance of basic goods into the Gaza Strip, especially merchandise and humanitarian equipment through the Karni crossing and the transfer of fuels via the Nahal Oz terminal. Ministers were also briefed on developments in the Palestinian sphere.

Foreign Minister Livni briefed ministers on Israel’s diplomatic moves regarding the current crisis and reactions around the world to what is happening in our region. In this context, she briefed ministers on her recent visit to Russia and Finland. She also said that in the last two days she has received telephone calls from her German, British, Norwegian and Jordanian counterparts. The Foreign Minister said that it was clear to all that Israel’s right to defend itself includes actions against the firing of Kassam rockets and that Israel has a legitimate and uncontested right to act to bring about the release of Cpl. Shalit.

Prime Minister Ehud Olmert summarized the Cabinet discussion as follows:

A. The main goals of Operation Summer Rains are as they were presented to the Cabinet last week. The IDF was deployed for operational activity against Kassam rocket fire even before Cpl. Shalit’s abduction; the abduction added a dimension that required special attention.

B. Everything that could have been done has been done in order to gain information and prevent Cpl. Shalit from being moved. While the goal is to restore Cpl. Shalit to his family safe and sound, action in his regard must be left to those who are dealing with this issue since it involves human life.

C. Regarding the conduct of military operations, there is no intention and no planning to reoccupy the Gaza Strip in order to remain there; ground actions are in order to achieve certain goals within a defined period.

D. A timetable cannot be set for the above operation in advance. However, it does have an international dimension; the IDF has been fighting for almost two weeks and the international response to the results of the fighting has been low-key. The actions initiated by Defense Minister Peretz, and the Foreign Ministry’s international activity, are being carried out in the proper measure and at the proper pace, thus allowing Israel military freedom of action and maintaining its ability to receive international backing.

E. Israel’s position on the prisoner issue is clear and unequivocal: “We will not negotiate with Hamas regarding an exchange of prisoners.”

F. The various security services merit the Cabinet’s fullest appreciation for their determination in carrying out their missions.

2. The Cabinet approved certain amendments to the 2002 Capital Investments Encouragement Ordinance to the effect that all minority communities will – until 14 October 2006 – be considered “A” development areas and preferred tourism enterprise areas.

In accordance with Government policy and its commitment to reducing gaps between the Jewish sector and the minorities sector, and in light of the depressed employment situation, the low rate of capital investment and the level of economic development in the minorities sector, it was proposed that the all minority communities enjoy “A” development status regardless of their geographic location and that the rules regarding the granting of benefits apply to them.

3. The Cabinet approved assistance to poultry farmers following the closure of the goose liver sector.

4. Pursuant to its authority under the 1959 Civil Service Law (Political Activity and Fundraising), the Cabinet authorized the Supreme Court to accept a NIS 270,000 donation from the American Friends of the Israeli Supreme Court in order to upgrade the Supreme Court library’s computers, maintain them for one year and purchase a bar-code scanner in order to improve its level of services.

5. The Cabinet accepted Science, Technology, Culture and Sports Minister Ophir Pines-Paz’s proposal to rename his ministry as the Science, Culture and Sports Ministry, and to change his title accordingly.

6. Pursuant to its authority under the 1961 Cadi Law, the Cabinet chose Housing and Construction Minister Meir Shetrit to join Justice Minister Haim Ramon as a member of the Cadi Appointment Committee.

7. Pursuant to its authority under the 1962 Druze Religious Courts Law, the Cabinet chose Education Minister Yuli Tamir to join Justice Minister Haim Ramon as a member of the Druze Religious Court Judge Appointment Committee.