(Communicated by the Cabinet Secretariat)

At the weekly Cabinet meeting today (Sunday), 24 December 2006:

1. Prime Minister Ehud Olmert briefed ministers on his meeting with Palestinian Authority (PA) Chairman Abu Mazen, last night (Saturday), 23 December 2006, at his Jerusalem residence. The Prime Minister hosted the PA Chairman and his delegation for dinner and, during the meal, they arrived at several agreements. The meeting had been planned for some time; since his first day in office, Prime Minister Olmert has expressed his willingness to meet with the PA Chairman. To this end, he sent him messages by various channels, including special emissaries, in order to make it clear that he (the Prime Minister) was ready to meet him without pre-conditions – in order to advance the chance for negotiations.  For a long time, there were difficulties and problems, internal struggles and pressures that sabotaged the possibility that the PA Chairman could accept the invitation.

During the meeting, Prime Minister Olmert agreed – in consultation with other ministers – to unfreeze $100 million in tax revenues held by Israel in order to extend humanitarian assistance to Palestinian residents who are suffering – inter alia – from the failed management of their government, which is not part of the accepted international community. This assistance will be given via a special mechanism that will be established in order to supervise the transfer of funds and to ensure that they meet humanitarian needs as has been agreed between Israel and the PA.  Israel will make an effort to ease restrictions on the quality of life – and on the daily lives – of residents of Judea and Samaria, especially in regards to crossings. To this end, the Prime minister has consulted with Defense Minister Amir Peretz; appropriate instructions will be issued to the security establishment and IDF soldiers.

Prime Minister Olmert said: “This was a good meeting. It was held in a good atmosphere. It was agreed that that it will have continuations and the intention is to start a process of continuous dialogue with the PA in order to advance the diplomatic agenda that we are so interested in and which this government has wanted since its first day in office.”

Following Prime Minister Olmert’s briefing, the government decided as follows:

“In wake of the Prime Minister’s meeting last night (Saturday), 23 December 2006, with the Palestinian Authority Chairman and given the desire to assist moderate elements in the Palestinian Authority, it has been decided to transfer $100 million in Palestinian tax revenues held by Israel, to humanitarian needs in the Palestinian Authority, via the office of the Palestinian Authority Chairman, and according to his goals, as he announced them during his meeting with the Prime Minister.”

Prime Minister Olmert discussed UN Security Council Resolution 1737 that imposed sanctions on Iran and emphasized that an analysis of the decision makes it clear that there are many more options for action that – correctly used and enforced by the international community – will enable the attainment of better results in blocking Iran’s nuclear option.  The Prime Minister noted that Foreign Minister Tzipi Livni and her ministry, including the Israeli Mission to the UN, fully participated in the diplomatic efforts that were involved in formulating the broad agreement that led to the unanimous decision.

Prime Minister Olmert discussed the War on Drugs and Alcohol Week, which began today.

On both his and the Government’s behalf, Prime Minister Olmert wished Israel’s Christian citizens in particular and the Christian community in general a peaceful and Merry Christmas.

2. Israel Security Agency Director Yuval Diskin briefed ministers on current security affairs and discussed the situation in the Gaza Strip and in Judea and Samaria.

3. Industry, Trade and Labor Minister Eli Yishai briefed ministers on his recent trip to India.  Industry, Trade and Labor Ministry Director-General Gavriel Maimon briefed ministers on Israel’s 2002-2006 trade figures.

4. Environmental Protection Minister Gideon Ezra and Environmental Protection Ministry Director-General Shai Avital briefed ministers on various issues being dealt with their ministry.

5. Pursuant to its authority under the 1959 Civil Service Law (Appointments), the Cabinet appointed Yarom Ariav as Finance Ministry Director-General, in place of Yossi Bechar, as of 1 July 2007.

6. The Cabinet appointed several members to the Natural Gas Authority Council.

7. The Cabinet appointed Public Security Minister Avi Dichter to be responsible for cooperation with the US Department of Homeland Security (US-DHS). The Cabinet also appointed Public Security Ministry Director-General Ra’anan Falk to chair an inter-ministerial steering committee to coordinate cooperation with the US-DHS.  Minister Dichter will report to the Cabinet every six months on the progress of cooperation with the US-DHS.

The State of Israel ascribes strategic importance to operational, technological research and development, and other cooperation with the US-DHS in the fields of domestic security and the struggle against terrorism.

8. The Cabinet decided to approve an order providing various rights and immunities to the European Investment Bank.

9. The Cabinet discussed the participation of local councils in supporting recognized educational institutions.

10. The Cabinet discussed the status of the hotels at Ein Bokek
 on the Dead Sea.

11. The Cabinet amended laws dealing with the designation of development towns and areas.

12. The Cabinet discussed Finance Minister Avraham Hirchson appeal against the decision of the Ministerial Committee on Legislation and Law Enforcement not to approve certain items of tax legislation.

13. The Cabinet bid farewell to Col. Yaakov Vilan, the Prime Minister’s Deputy Military Secretary for the past eight years.