Israel’s newspapers lead with Sunday’s dramatic intervention by the governor of the Bank of Israel, David Klein, to stop the rampant devaluation of the shekel against the dollar. Maariv calls it a “credibility test for the shekel,” and states that, “when the dollar crossed the 5 shekel mark, Klein raised interest rates by 1.5 percent, and the dollar started going down.”
The papers also speculate on the scheduled meeting later in the day between US President George W. Bush and Prime Minister Ariel Sharon in Washington. Maariv says Bush will demand that “Israel stop all building in the settlements,” while Sharon will insist that “Israel won’t go back to the 1967 lines, won’t agree to divide Jerusalem, and won’t give up its right to defendable borders.”
Yediot Ahronot says Sharon will tell Bush that there can be no negotiations with the current Palestinian Authority (PA), and he will propose long-term interim agreements. But Bush, the paper reports, will make it clear that he intends to work intensively for the establishment of a Palestinian state.
On the Maariv opinion pages, political analyst Chemi Shalev predicts: “Sharon will probably return to Israel with good reason to be pleased. He will ensure that any American proposal (if there is one) will have little chance of being accepted by the Arab side; and he will retain the option of massive escalation, including expelling PA Chairman Yasser Arafat, if the terror attacks continue.”
Shalev writes that Sharon’s only message is perpetuation of the status quo. “He wants to wear down the PA until it disintegrates. He has reservations about an American political horizon that will be seen as a Palestinian victory, and, as such, as a victory for terror. Sharon is against effective American involvement, because he knows it will lead to a head-on confrontation, given the differences between Jerusalem and Washington on substance. Sharon believes that as long as Arafat is around, an American initiative might strengthen his standing as a ‘partner’ who must be negotiated with.”
Shalev says the prime minister “rejects the thesis that, without a light at the end of the political tunnel, Arafat’s rivals will find it difficult to take any initiative to depose him. Unlike most of the public, Sharon does not think things can’t get worse. He is fighting against any dramatic change in American policy, so that what was, will be; and for that, amazingly, he wins plaudits from the Israeli public.”
In a front-page analysis in Yediot Ahronot, Nahum Barnea agrees that Sharon doesn’t really want any movement. “Sharon,” he writes, “is protecting himself against a political process with a three-layered bulletproof jacket. His first condition is an end to terror. His second, is Arafat’s removal. Third, the world must understand at the outset that there will be no return to the 1967 borders. Most Israelis will see those demands as reasonable, especially after the terrorist intifada of the past two years.”
“But in diplomatic terms, they stifle any chance of a breakthrough. What is the point of taking the risk of expelling Arafat when, even if his replacement is a saint, the gaps between him and Israel will remain equally unbridgeable?” Barnea wonders.
Maariv’s Ben Caspit reports that, at his meeting with Arafat in Ramallah last week, CIA Director George Tenet “made it clear that the United States insists the PA chairman agree to set up an Interior Ministry under a strong leader, not Arafat himself. All national security agencies and the police would fall under this ministry’s authority. All other elements ­ Fatah, Tanzeem, Hamas and Islamic Jihad ­ would be disarmed. And the establishment of such a ministry was indeed announced by the PA on Sunday.”
According to Caspit, the demands Tenet submitted to Arafat stipulated there will be only one armed PA agency. Overseeing the whole arrangement would be a supervisory council, with representatives of the United States, Egypt, Jordan and Saudi Arabia, headed by a senior adviser who would be located in the Interior Ministry. Arafat acceded to the demands after a 48-hour delay. The United States, after checking with the chairman’s aides, believes his agreement is genuine.
“Sharon will reluctantly accept the PA reform,” Caspit writes, “but will adamantly reject everything to do with the establishment of a Palestinian state. He will try to exploit the differences between the State Department on the one hand, and the president, the vice-president, the Pentagon and the National Security Council on the other. The Israelis assume that in his upcoming Middle East policy statement, President Bush will include a declaration of two states for two nations by the end of his term or the end of 2003. This way, the Americans will have set a time frame, without calling it that.”
In a column headlined, “Arafat will continue to lead,” Maariv’s Arab affairs analyst Oded Granot says: “There is reason to believe that none of the anticipated reforms in the PA are going to happen. The new Finance Minister, Dr. Salam Fayyad, although he is a serious economist, will not be able to stop the bribery and the flow of aid funds into private accounts, unless there is thorough reorganization of the entire governmental structure of the PA.
“And the new Interior Minister, 73-year-old retired General Abdel-Razzak al-Yehia, an Arafat loyalist, will not be able to exercise firm authority over the security services and lead them to combat terror, as Israel and America expect. Yehia will obey Arafat in all matters. Arafat will continue to steer the ship, as he has done so far. Anyone who believed he would clip his own wings and strengthen others at his own expense simply does not know the man.”
Roni Shaked, Granot’s counterpart in Yediot Ahronot, is similarly skeptical: “The Palestinian reform heralds neither a new strategy nor a ‘war on terror.’ At best, it is a cosmetic change carried out to satisfy the US and Europe. It is a government of technocrats, devoid of influence on the street, and whose only commitment is loyalty to Arafat. They will allow Arafat to carry out his polices without supervision or opposition.”

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