While the broad, but loose-knit coalition government of Israeli Prime Minister Ehud Barak survived several tests in recent months, the current budget battle may prove the shakiest moment yet for the partnership with Shas, among others. The transfer of massive turbines on Shabbat finally led United Torah Judaism to end its half-hearted association with Barak, leaving 68 MK's in the coalition. Shas, the other ultra-Orthodox party, pushed its own ultimatum on the issue until a more pressing matter came along – funding for its insolvent school system. With its schools NIS100 million in arrears, Shas demanded the immediate disbursement of NIS 14-16 million in unpaid teachers' salaries. Education Minister Yossi Sarid (Meretz) and the Finance Ministry countered that Shas must first agree to a package of reforms, as various investigations have reported a number of "irregularities" in the system's financial management. Wanting to keep the 17 Shas MK's in his coalition, Barak intervened — but only to a point.

Enter former Shas leader and convicted felon Aryeh Deri, returning from a two-month US vacation to a jubilant welcome from 2000 party loyalists. His arrival in the midst of the prolonged dispute led to speculation he was set to orchestrate a hard-line stance behind the scenes. According to party sources, Deri left for the summer after Shas spiritual leader Rabbi Ovadia Yosef replaced him with Eli Yishai and ordered the party to join the Barak government. The unresolved dispute potentially could split Shas... and sideline Barak's peace moves.

Yisrael B'Aliyah, led by Natan Sharansky, and the National Religious Party also have defied coalition protocol by voting against Barak on a number of occasions, particularly on issues related to settlements and the peace process. Sharansky has hinted the warning light is on for his party's departure should events warrant.


If you want to know the current prospects for renewing Israel/Syria peace talks anytime soon, it is probably better to ask a doctor than the diplomats. Syrian dictator Hafez el-Assad, 68, reportedly is in failing health, while his foreign minister Farouk a-Shara is recovering from a heart attack. The ailing Assad still has firm control of his country – now in the throes of a crippling drought – having used elite forces to quell an uprising by loyalists of his exiled brother, Rifa'at, against his favored successor, son Bashar. (In a rare interview, Bashar Assad recently expressed doubts that Israeli leader Ehud Barak would agree to deliver the entire Golan, and concluded that, "peace will not necessarily mean the establishment of warm relations.")

Some Israeli analysts believe Assad has been reluctant to resume negotiations with Israel out of fear his declining condition could put Syria at a disadvantage in talks if a sudden transition of power is needed in Damascus. He thus is insisting on preconditions that are considered "non-starters" even by US officials. Damascus has not budged from its demand that, before talks can resume, Israel must acknowledge it is bound by a purported pledge made by the late Yitzhak Rabin to withdraw to the June 4, 1967 lines. Eitan Haber, Rabin's former bureau chief, joined the chorus of those totally dismissing Syria's version of events, and even arch-doves like Yossi Beilin now question whether Assad is serious about peace.

Nonetheless, Barak continues to court Assad, while also pressing on with a promised exit from south Lebanon by next July. He expects to show his cabinet soon the IDF's plans for a unilateral withdrawal, including a timetable and proposals to relocate to the Galilee South Lebanese Army soldiers and their families likely to face reprisals by Syrian and Lebanese forces. Despite Barak's personal assurances, SLA commander Gen. Antoine Lahad is nervous about the morale of his forces, and reacted strongly to leaks from Barak's office that the unilateral withdrawal may occur as early as this winter. In contrast, however, The Jerusalem Report maintains Barak has no plans for a unilateral pullback from Lebanon if peace talks with Syria fail to move forward. Indeed, Israeli security assessments view it as impossible to recast the Lebanon equation independent of a comprehensive agreement with Syria.

Meanwhile, representatives from eleven Arab nations, some who do not have formal relations with Israel, ignored Syrian objections and met with Israeli Foreign Minister David Levy at UN headquarters last month to discuss the peace process. Such a multilateral breakthrough was possible, according to long-standing projections by the US State Department, only if Israel first made peace with Damascus. US Secretary of State Madeline Albright used the occasion to call Israel's presence on the Golan "dangerous" and a threat to the stability of the region. But the peaceful Golan residents have picked up some key allies, including cabinet members like Natan Sharansky, in their renewed efforts to stay put and defeat a potential public referendum on their fate.

It has not gone unnoticed that Syria, as well as Egypt, are busy pursuing other options to peace. Israeli military analysts estimated that Syria is six months to a year away from deploying advanced Scud-C class missiles, able to deliver biological or chemical warheads anywhere in Israel. The Scud-C has garnered the highest priority in Syria's military program, with Iran providing technical and financial support. Western intelligence sources also disclosed Syria is circumventing US restrictions to acquire the M-9 medium-range ballistic missile from China, through a circuitous route involving Iran, Pakistan and North Korea. The M-9 could hit targets as far away as Ankara and carry nuclear warheads.

Israeli assessments also eyed Egypt's quiet but ambitious program to enhance its offensive capabilities and modernize its army, primarily with US funds ($1.3 billion annually). One Israeli commander described the build-up as both "amazing" and "scary." Egypt's most impressive achievement has been its airforce, which consists of 200 F-16 C's & D's, 24 Mirage 2000 interceptors and hundreds of Mig 21's and assorted aircraft, making it "very problematic" for Israel to win air superiority in any future conflict. Egypt also has purchased advanced armor piercing shells for its force of approximately 1,000 American-produced M1A1 "Abrams" main battle tanks, and has taken delivery of a PAC-3 Patriot air-defense system that even Israel has yet to receive.


One year after UN weapons inspectors left the country, Iraq has fully resumed production of its illicit arms-development programs with alarming results, according to a US intelligence report to Congress. The renewed activities under resilient dictator Saddam Hussein are now "capable of producing WMD [weapons of mass destruction] and long-range ballistic missiles." Hussein's efforts to "reconstitute" prohibited weapons programs breaches one of US president Bill Clinton's "red lines" — set following the December 1998 Anglo-American air campaign — which calls for the resumption of US military action against Iraq. Assembly of a warhead with nuclear capabilities could take just months, but testing will take longer. Britain and the US are at odds with the UN's other permanent Security Council members — France, Russia and China — over how to proceed. And just in case you were not watching, Iraq recently assumed the rotating chairmanship of the Arab League at a summit in Cairo. Palestinian Authority chairman Yasser Arafat called for reconciliation with Iraq, asking Arab countries to forget the negative past and proceed to a time of co-operation.

Lastly, in a bizarre move, Hussein asked King Abdullah II of Jordan to courier a note to Clinton that promised major policy changes in his regime, including an offer to enter peace talks with Israel.

In return, Saddam was asking Washington to drop threats to put him and other senior Iraqi leaders on trial for war crimes. The US dismissed the idea out of hand, long before the Jordanian monarch arrived in Washington with the message.


Acting on information that Hamas was compiling security information on government officials and giving arms training to activists, Jordan moved to shut down the radical Islamist terrorist group's offices in Amman. Several top Hamas figures, including Khalid Mashaal and Musa Abu-Marzouk, had fled to Iran before police raids found extensive computer files containing "serious and sensitive information on Jordan and some Jordanian personalities." Other records led authorities to arms and explosives caches in warehouses in various parts of the kingdom. Confiscated diskettes revealed that about $70 million was transferred to Hamas from abroad in the last five years. Jordan moved against Hamas after the US Congress withheld $50 million in aid, according to a leading Jordanian official. The move marked a turning point in relations between the Palestinian Authority and the Jordanian government, but is expected to have negative repercussions on relations between King Abdullah II and the Muslim Brotherhood, the largest opposition party in parliament. A Brotherhood statement stressed that the crackdown is aimed at silencing public opposition to the country's 1994 peace treaty with Israel, while another Muslim faction described Hamas as a "group undertaking jihad in its noblest and most glorified form."

Meanwhile, Jordan's anti-peace movement foamed after a Jordanian parliamentary delegation was heckled by Jewish settlers on a visit to Hebron's Tomb of the Patriarchs. The speaker of Jordan's parliament, Abdul Hadi Majali, who was leading the group, quickly returned to Amman and chaired a parliament meeting that condemned what it referred to as "an assault." The incident came shortly after a late-September meeting of 460 representatives, 12 political parties and 12 professional associations adopted a 15-point platform that rejects normalizing ties with Israel.


Fresh from economic coercion of Burger King, American Muslim organizations, backed by the Arab League, boasted of victory in their campaign to halt the world-wide Disney empire from including an exhibit describing Jerusalem as the capital of Israel in its planned Millennium Village at Disney World. Disney and Israeli officials remained coy about the real impact the threatened boycott had on the Israeli exhibit before it opened at Epcot Center. But Arab-American sources insisted Disney caved in to the pressure, citing promises made to a Saudi prince, a large shareholder in Paris-based Euro Disney. Tasting a rare defeat, American Jewish organizations launched a counter-campaign, not only in the matter of Disney, but also against any "threats, pressure and boycotts" by Arabs to separate Jerusalem from Israel.


An intense political melee erupted over the police investigation of former Prime Minister Binyamin Netanyahu and his wife, Sara, on suspicion of corruption when a trusted handyman presented the government with a questionable bill for $104,000 after Netanyahu left office. Many on the right viewed the inquiry as politically driven, while even Netanyahu's opponents on the left deplored the obvious and very distasteful police leaks to the press. In one instance, Israeli media reported in "real time" that Sara was in tears while undergoing 8 hours of questions inside a Bat Yam police station. Later, a herd of press were waiting when police raided Netanyahu's home and office to haul away cartons containing what they suspect were gifts the couple illegally retained after he left office. The Netanyahus stayed in remarkably good-humor after this latest ordeal, and are confident they will be absolved of any wrongdoing.


Rising anti-Semitism and economic woes in Russia has hastened the annual pace of Jewish immigration from the former Soviet republics, but developments in central Europe soon aroused the most concern. In Austria's recent elections, the far-right Freedom Party placed a stunning second. Party leader Joerg Haider, who ran a campaign to exclude foreigners, is best known for once praising Hitler's employment practices and depicting Waffen SS veterans as "men of character." Israeli reactions were swift and stern — Jewish Agency head Sal Meridor pledged to intensify efforts to bring Austria's 9,000 Jews to Israel, while Foreign Minister David Levy threatened to recall his ambassador to Vienna and severe relations if Haider's party was allowed into a coalition government. Austrian leaders grudgingly assured Israel the Freedom Party would not be a coalition partner. Then, Swiss elections resulted in huge gains for the Swiss People's Party, also considered right-wing, anti-immigrant in the same mold as Haider's party. Israeli leaders were less forceful in their reactions to the Swiss elections than the Austrian polls, but FM Levy noted xenophobia was clearly a "cross-Europe phenomena." With the economic situation in both countries healthy, Levy cited "an educational failure" for the results. Knesset Speaker Avraham Burg denied suggestions Jews were to blame for the Swiss outcome, following recent Jewish efforts to recoup compensation from Switzerland for Nazi-era losses. In what may be a related development, there has been a significant increase in the number of Jewish graves desecrated and other anti-Semitic incidents in Germany since the Austrian elections and the Israeli condemnations which followed.


Israeli authorities continued efforts to resolve the festering inter-religious dispute over a plot of land near the Basilica of the Annunciation in Nazareth that threatens to cancel the Millennium visit of Pope John Paul II to Israel in March 2000. A ministerial committee made limited headway selling a compromise to Muslim and Christian elements that would provide for a plaza for Millennium tourists on two-thirds of the state-owned tract, with a modest mosque to be built later on the remaining one-third. Vatican and local church leaders were lukewarm to the idea of approving a provocative mosque so close to the largest church in the Middle East, while Muslim activists balked at abandoning their protest tent and allowing an Israeli police station on the site. The one figure willing to go along with the deal, Nazareth's Christian Mayor Ramez Jeraise, was the victim of an attack by local Muslim thugs.

Meanwhile, Israel still has the "welcome mat" out for Christian pilgrims coming to observe the Millennium despite recent sensational media reports to the contrary. A group of Irish Catholics was denied entry at the Haifa port in a questionable security decision that is under review. Then, 20 foreign Christians living on the Mount of Olives were deported for flaunting passport and visa requirements and attracting possibly dangerous elements. Though non-violent, the group drew police attention after "Brother David" — a Pentecostal layman who has concealed his identity for years — sought and gained widespread media attention for his belief he had "front-row seats" for the return of Jesus in 2000 or 2001. Israeli police grew increasingly concerned about the widely-broadcasted combination of his core group's illegal status, offers of cheap housing and apocalyptic views. Interior Minister Natan Sharansky found the task of signing the deportation orders "very unpleasant," but was convinced by the "serious" police evidence against them. Even the FBI, America's top law enforcement agency, in a new report code-named "Project Megiddo," has acknowledged Israel faces a unique security challenge due to the approaching Millennium.

Finally, three days of riots in late October by angry Palestinian youths near Rachel's Tomb, on the entrance to Bethlehem, hindered access for Christian pilgrims to the Church of the Nativity and threatened to spoil the Palestinian Authority's grandiose plans for celebrations this Christmas.


Israeli Prime Minister Ehud Barak reversed his earlier decision to allow notorious Palestinian terrorist Nayef Hawatmeh, leader of the Democratic Front for the Liberation of Palestine, to enter Palestinian Authority areas, after coming under growing pressure within his own government. Opposition to Hawatmeh's entry mounted after he told a Qatari TV station "armed struggle" is legitimate as long as Jewish settlers remain on Arab land.

Hawatmeh's DFLP carried out numerous terror attacks, including the infamous 1974 Ma'alot massacre in which 25 Israelis, mostly young schoolchildren, were killed. He had been aligned with a dozen other Palestinian "rejectionist" groups headquartered in Damascus until recently, but was in search of a new home after Syria signalled he might lose his safe haven if peace talks with Israel resumed. Hawatmeh initially received Israeli permission to enter the Palestinian autonomy areas after PA chairman Yasser Arafat convinced Barak he was now a proponent of peace and was needed to solidify the Palestinian peace camp ahead of final-status talks. The current mayor of Ma'alot, Shlomo Buhbut, first challenged Barak's decision, demanding that Hawatmeh be forced to apologize for his past terrorism as a condition for entry.


Among the many luminaries paying recent visits to Israel were retired South African president Nelson Mandela and British Foreign Secretary Robin Cook. Mandela arrived via Tehran, where he laid a wreath at the tomb of the late Ayatollah Khomeini and declared "we are indebted to the Islamic revolution." Mandela's African National Congress has always maintained close ties to the PLO, and he blamed former Israeli Prime Minister Binyamin Netanyahu last year for hindering the peace process. Addressing the Palestinian legislature in October, the Nobel laureate compared the ANC and PLO liberation movements: "Our men and women with vision choose peace rather than confrontation, except in cases where we cannot get, where we cannot proceed, where we cannot move forward... Then, if the only alternative is violence, we will use violence." Palestinian lawmakers erupted in boisterous applause for a full two minutes.

Cook was on much better behavior than while touring Israel in March 1998. Cook declared, "I come as a friend of Israel, I come in peace," trying to downplay his diplomatic row with Netanyahu two years ago. "The atmosphere [now] is much more pleasant." At the time of his last visit, Great Britain held the rotating presidency of the European Union and was under increasing criticism from Arab countries for the Anglo-American bombing campaign against Iraq. Cook took several provocative steps aimed at embarrassing Netanyahu and courting Arab favor, such as breaking a pledge and normal protocol by touring the controversial Har Homa building site in southern Jerusalem accompanied by Palestinian figures. Cook also made decidedly pro-Palestinian statements and refused to visit Yad Vashem, viewed as another breach of protocol for foreign dignitaries. This time around, Cook was more accommodating, laying a wreath at Yad Vashem. His scheduled pilgrimage to Bethlehem was cancelled due to Palestinian riots near Rachel's Tomb.

SOURCES: Ha'aretz, Jerusalem Post, Jerusalem Report, Foreign Report, ABC News, Sunday Times, CNN, AP, Reuters, Arutz-7, Israel Wire, Israel-Line, Al-Ahram, IMRA, Al-Wasat, Washington Post, New York Times.
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