With news of the financial crisis continuing to dominate the Israeli press, Yediot Ahronot leads with a forecast that the central bank
is likely to up the basic interest rate still further to keep the shekel-dollar rate from deteriorating beyond the 5-to-1 point that it has almost reached, and to keep a lid on inflation.
Maariv headlines the fact that Prime Minister Ariel Sharon is about to intervene in the crisis, and that his first move on returning from Washington was to schedule an economic summit with Finance Minister Silvan Shalom and Bank of Israel Governor David Klein, where the latter is likely to press for further budget cuts.
The major diplomatic news is US Secretary of State Colin Powell’s statement that the United States is considering support for a “provisional” or “interim” Palestinian state in the territories already under Palestinian Authority (PA) control. Yediot Ahronot highlights the item on its front page and reports that although Sharon expressed opposition to the idea at his meeting with US President George W. Bush earlier this week, the president is likely to include the proposal in his upcoming policy statement.
Maariv carries the diplomatic story on an inside page, but finds room on its front page for a report on the latest betting game thought up by Israel’s widespread illegal gambling industry: Bets can now be placed on where the next terrorist attack will take place. The longest odds are on Eilat (17-1) and the shortest on Jerusalem (2-1), the paper reports, under the subhead, There’s No Limit to Bad Taste.
Both newspapers also run front-page reports and photographs on the extradition from Romania of Ofer Maximov, an Israeli gambler whose sister, Etti Allon, has been charged with embezzling more than $40 million from the bank where she worked to pay off loan sharks to whom he was in debt. Allon’s father and several alleged leading figures in the Israeli underworld have also been indicted in the case.
In a news analysis on American policy toward Palestinian statehood, Yediot Ahronot’s Washington correspondent, Orly Azoulai-Katz, says that Bush’s aides have been busy trying to calm the Arab world, after the president appeared to have adopted Israel’s positions that Arab leaders deem obstructive to peace. Powell’s interview in the pan-Arab daily Al-Hayat, where he aired the idea of an interim Palestinian state, was part of this effort, as were remarks by a White House spokesman indicating that Bush was considering the proposal favorably.
“Atmosphere isn’t everything,” Azoulai-Katz asserts, and she warns against presuming that because Bush and Sharon get along so well, and because Bush sympathizes with Israel’s struggle against terror, that America has swallowed Israel’s position. The fact is that Bush okayed Powell’s advancing the idea of a Palestinian state, despite the fact that the despised Yasser Arafat is the partner in the enterprise.
“The American tactics were laid out in advance: public hugs and pats on the head for Sharon, but pressure behind the scenes. And the real pressure is still ahead, when Bush announces his vision of a solution for the Middle East, and also his timetable for achieving it. “Bush needs Arab support for his mission in life ­ getting rid of Iraq’s Saddam Hussein ­ and he will never gain that support unless he listens to what the Arabs are saying about the Palestinian issue. And when Bush makes his statement, he’ll be reading from a written text. He is walking a high tightrope, and both sides will closely scrutinize every word he says. He’ll repeat his call for a Palestinian state, an end to the occupation, and the cessation of settlement activity. Sharon may have succeeded in winning the president’s sympathy, but he can’t change the fact that America’s interest is the establishment of the state of Palestine.”
In another viewpoint from Washington, veteran columnist and long-time Sharon associate Uri Dan asserts on Maariv’s opinion page that Bush and Sharon “have only strengthened the understanding between themselves. The unbroken process of exchanges between the two takes place far from the eyes of the ‘analysts’ and ‘experts’ who love reporting about ‘new American pressure on Sharon’ that exists nowhere but in their own feverish minds.
“For weeks, the State Department’s Arabists, together with the governments of Saudi Arabia and Egypt, and abetted by the Israeli leftists and their Jewish American backers, had been plotting an ambush against Sharon,” Dan writes. “This whole mighty camp was expecting Bush to foist upon Sharon a plan calling for a return to the 1967 borders, the uprooting of settlements, and an early proclamation of a Palestinian state. But none of this even came up between Sharon and Bush, for the simple reason that the president and his closest advisers realize that Israel is really fighting for its existence against suicide terrorism, the same war that the United States itself is fighting.
“Arafat’s admirers can feel only disappointment,” he writes, “at the fact that what Bush and Sharon discussed was what is to be done after the Arafat era, because nothing positive can flourish while he is present, neither in stopping terror nor in diplomatic negotiations, which Sharon is ready to begin when a suitable partner appears on the Palestinian side.”
In another column on Maariv’s opinion page, Yael Paz-Melamed discusses the dynamics of the unofficial expansion of settlements in the West Bank, “where a caravan set up on a hilltop outside an existing settlement can soon become a settlement itself, requiring dozens of reservists to be mobilized to protect it from attacks, and when that doesn’t work, the invasion of Palestinian cities to find the perpetrators of the attacks.”
Paz-Melamed bemoans the lack of official action or widespread public condemnation against “the way that a tiny minority of fanatical settlers affect all of our lives. We are all hostages to this extremist group lacking in all restraint and democratic values, and to who the legitimate government of Israel is at best a foreign government and at worst the enemy. The quicksand in which we have been sinking for years is becoming even more dangerous than ever.
“Beyond the scandal implicit in the situation where the government is cheated, or allows itself to be cheated in this manner and beyond the political damage and the security burden, there are also economic repercussions,” Paz-Melamed writes. “As soon as those four caravans become a settlement, the people of Israel begin paying for it, for the security, for the roads, for permanent housing, endless amounts of money poured into a bottomless pit, for those pitiful little settlements, sitting there exposed on the hilltops.
“As long as there’s a war going on and there’s no political horizon, we’ll never get out of the worst recession to hit us since 1966,” he warns. “The settlements are obstacles to the political solution that will also heal our economic ailments. Two-thirds of the public are ready to give
up even the legally established settlements, let alone the illegal ones, and return
to the 1967 borders, in order to achieve a peace agreement. But the illegal settlers don’t care. They know Sharon and Defense Minister Binyamin Ben-Eliezer too well. As long as those two are running the country, they can sit securely on their misappropriated lands.”

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