A Digest of debkafile Round-the-Clock Exclusives in Week Ending February 2, 2006

Hamas leader Khaled Mashaal promised Tehran an Iranian embassy in Ramallah very shortly after its victory – five days before the Palestinian election

28 January: debkafile Exclusive: The promise, indicating that Hamas was not surprised by its victory at the Jan 25 poll, was delivered at a secret meeting in Damascus on Jan. 20. On that day, Iranian president Mahmoud Ahmanidejad interviewed 11 Palestinian terrorist leaders based in the Syrian capital with cameras flashing. Not so, Mashaal’s half-hour absence for a secret down-to-earth discussion with the Iranian Republic Guards Corps’ al Quds division commander Gen. Qassam Suleimi, who was in the presidential party.

debkafile‘s counter-terror sources know Gen. Suleimi as the Islamic Republic’s supreme commander of Iran’s terrorist activities in Iraq, the rest of the Arab world, the Palestinian Authority and Israel. His meeting with the Hamas leader was the follow-up to their talks in Tehran last December, when Mashaal spent three weeks making the rounds of Iran’s terror executives. The Hamas leader intends arriving in Palestinian territory in the wake of the victory his movement snatched from the Fatah. One of his first plans is to hoist the Iranian flag over Ramallah’s Manara Square. If he sets foot in Israel-controlled territory, he will be arrested, but he can easily reach Gaza through Egypt.

Syrian president Bashar Assad persuades radical Palestinian groups to line up with Hamas

29 January: He received 11 terrorist chiefs based in Damascus Sunday, Jan. 29, and convinced the Popular Front for the Liberation of Palestinian to line up its 3 seats in the 132-member legislative council behind Hamas’s majority of 74. Together with 4 independents, the Hamas will control an 81-strong alliance.

A Fatal Misconception Rather than Intelligence Failure

29 January: A relatively junior intelligence officer has been mandated to establish why Israeli intelligence missed predicting the Islamist terrorist Hamas takeover of Palestinian government by the ballot. His task has been limited to an internal intelligence probe rather than a broad inquiry. Within this limit, there is no way he can truly explain how Israel came to find itself face to face with a strategic calamity on the scale of the 1973 Yom Kippur War; quite simply, there are too many questions he is not authorized to articulate. Here are a few:

1. Why did no military intelligence authority warn the government that evacuating the Gaza Strip would be present Hamas with the gift of territory and fuel its claim that Palestinian terror had Israel on the run?

2. Why did Israel pull its troops back from the Philadelphi border enclave, knowing their removal would open up the Gazan-Egyptian border to a flood terrorists, including dozens of Hizballah specialists and instructors, thousands of guns and tons of explosives – all destined for Hamas?

This was how Hamas built itself up as the dominant political, military and financial power in the eyes of Palestinian security personnel and the voting public. Was this lost on Israeli intelligence?

3. Why did no military, security or intelligence authority sound the alarm about the real motive behind the Hamas willingness to call an informal ceasefire? Did they not notice it was designed to hoodwink Israel into standing idly by as Hamas, Hizballah, Tehran and Damascus laid the groundwork for the Hamas grab of Palestinian government?

There are two answers to these questions.

The first is a conundrum. Since the Palestinian-Israel confrontation erupted five years ago, debkafile‘s sources have noted an incomprehensible dwindling of Palestinian experts at the top level of IDF intelligence, AMAN.

The second reason was Israeli security chiefs’ dogged adherence to a misconception.

All the spokesmen of Ariel Sharon’s government harped on the same theme: the Palestinian Authority under Mahmoud Abbas must be left to crack down on terror and disarm Palestinian terrorist organizations like Hamas as per his commitments. Another tenet was that any problems arising in this regard could be safely left to the international community to sort out. A large-scale Israel military operation to break up the terrorist strongholds of the Gaza Strip was therefore superfluous.

This soothing syrup poured out by Israeli officialdom during and after the evacuation of the Gaza Strip.

Palestinian financial assets begin fleeing West Bank

30 January: debkafile‘s Palestinian sources reveal that senior Palestinian Authority officials, including ministers and security chiefs, have begun transferring their West Bank assets overseas. One source estimates that some $45 million were shifted in one day, Monday, Jan. 30. Businessmen, doctors and lawyers, worried by the regime change from Fatah to Hamas, are moving their businesses and assets to Europe and Gulf emirates. This flight of funds is a symptom of how little confidence the business community and elite have in Mahmoud Abbas’ ability to limit the Hamas drive to grab full control of government and its organs. Above all, the moneyed classes fear the property of prominent figures will be impounded to make a show of the corruption and thieving practiced by the defeated Fatah.

Hamas leaders came forward Monday with an assurance that private businesses and investments would be safe under the new administration. This reassurance had the opposite effect; it stepped up the drain of money. The small Nablus Stock Exchange, the Al Quds Index, reacted to the uncertainties by slumping 2% Monday, which would be comparable to a 25% dive for regular-sized bourse.

Europe on Slippery Slope to Recognizing Hamas-ruled Palestinian Government

30 January: After a series of muddled statements and zigzags, wishful thinking prevailed in London and Brussels after all. The European Union, led by the Middle East Quartet, agreed to release financial aid to a Palestinian government taken over by a terrorist organization.

“We give them three months to assess the situation. We don’t want chaos and we want to go on with the peace process,” said EU foreign executive, Javier Solana at the end of the foreign ministers’ meeting in Brussels Monday, 30 Jan.

Hamas, which is responsible for at least 60 bombing attacks on Israelis and countless deaths, did not have to fight too hard or too long for a reversal of the short-lived boycott on funding.

The Islamist terrorists were not required to give up a single principle for the sake of Western aid. The stakes are high. The EU gave the PA $615 million last year. The US had budgeted $234 for 2006.

The West and Israel too are clearly clinging to Mahmoud Abbas, whose Fatah was trounced in the Palestinian election last week, as a fig leaf to cover the true shape of the new Palestinian government.

The Israeli position is as two-faced as the Europeans’. On the one hand, acting prime minister Ehud Olmert announced the NIS200 million ($44 million) of revenues due to the Palestinians will be frozen so that they do not reach the hands of murderous terrorists determined to destroy Israel. But then he went on to say: “At this stage, we are studying the situation and following developments.”

Moscow believes Iran has developed a large nuclear device in its “preliminary stage.”

31 January: debkafile reports exclusively: Russian FM Sergei Lavrov put this information before the five permanent UN Security Council and Germany which Tuesday night, Jan. 30, agreed for the first time to haul Iran before the UN body over its nuclear program. Until then, Moscow and Beijing had stood out against the UN nuclear watchdog’ referring the Iran dossier to the Security Council. Tehran hit back Wednesday by saying the decision was unconstructive and the end of diplomacy

According to Lavrov, Russian intelligence estimates that Iran is now capable of detonating this non-weaponized nuclear device, or in other words carrying out its first nuclear test.

debkafile sources add: This estimate which Russian president Vladimir Putin passed to President George Bush some weeks ago is challenged by US and Israeli nuclear experts, who do not believe Iran is up to the stage of a nuclear device. However, on Jan. 21, the opposition FDI claimed Iran would carry out its first nuclear test before the Iranian new year, which falls on March 20.

Two days after Chancellor Merkel’s visit, Deutsche Bank lowers its rating of the Israeli market

1 February: Deutsche Bank is reported by debkafile‘s financial analyst as having lowered its recommendation for the Israeli market on Jan. 31, advising investors to devote a smaller percentage of their portfolios to Israeli companies. They explain this by concerns over the political and security situation in Israel and the region as a whole.

In contrast, Switzerland’s UBS Bank maintained its “neutral” rating for the Israeli market and Standard & Poor left unchanged its A credit rating and stable forecast for Israel.

Deutsche Bank does not make decisions of this nature without being briefed by senior official circles in Berlin. Its decision was most probably influenced by the chancellor, Angela Merkel’s impressions from her visits to Jerusalem and Ramallah earlier this week.

Another negative indication this week was the rise of the dollar past NIS 4.65, as foreign banks bought dollars and foreign investors withdrew shekels.

Olmert in Show of Strength against Amona

1 February: Instead of letting litigation take its course and seeking common ground, the Olmert government deployed the toughest police anti-terror units in anti-riot mode to make an example of the unauthorized West Bank outpost of Amona on Wednesday, Feb. 1.

The brutality of the confrontation for demolishing nine houses was seen by all, hour by our, over live television. Four-fifths of the 250 injured were protesters, many of them minors, and three parliamentarians who joined them. One-fifth of the injuries were suffered by police officers, who were pelted with stones, mud, paint-filled balloons and eggs.

Most of the injuries – head wounds and broken limbs – were inflicted by police when they stormed the barricaded houses, drove their horses against the demonstrators and laid about them with night sticks, hitting mostly 14-15-year old boys and girls and beating them to the ground.

All the reporters present noted the police had employed excessive, often unnecessary, force.

The Supreme Court in Jerusalem could have averted this brutal showdown.

The Binyamin Council offered a compromise whereby the home-owners would dismantle their own homes and relocate them at Ofra or alternatively raze them voluntarily. It might have provided a peaceful precedent for at least some of the 100 West Bank outposts declared unauthorized. However the Supreme Court dismissed this compromise appeal and upheld the state’s case as it has done routinely since the summer evacuation of the Gaza Strip.