A Digest of the Week’s Exclusives

9 December: On instructions from attorney general Elyakim Rubinstein, the Israeli police have begun investigating the business dealings of former Shin Beit officer Yossi Ginossar with Palestinian leaders, to determine if there are grounds for a criminal investigation.

Ginossar says his business ties with Yasser Arafat’s top officials, especially his personal financial adviser Mohammad Rashid, were public knowledge, entailed no illegal actions and were found useful by four Israeli prime ministers. “Muhammad Rashid never dealt in terrorism,” Ginossar assured weekend interviewers.

The primary allegation against him is that a company owned by Ginossar and his business partner, Ezrad Lev, advised Rashid (and therefore Arafat) on his business investments against commissions. Lev, who has turned against his partner, accused Ginossar of paying kickbacks to Rashid. He claimed that $300 million of Palestinian revenue was secretly transferred to a Swiss bank account of which $65 m had disappeared.

This missing sum has been the subject of investigations by the United States and the European donors. Rashid was singled out – not only as manager of Arafat’s secret funds, but as the senior bankroller of his terror networks and directly involved in the arms smuggling shipment aboard the Karine-A aborted last January. Detailed information on Rashid’s role in the terror movement was volunteered to the US government, according to an exclusive account from DEBKAfile‘s Washington sources, by Muhammed Dahlan, former chief of Palestinian preventive security in the Gaza Strip and currently Arafat’s national security adviser. Dahlan needs to buy immunity, according to the same sources, after American raids in Zagreb, Bosnia, turned up documents naming Dahlan as the live wire in exchanges between Arafat and Osama bin Laden that took place as early as 1995, when the al Qaeda leader was still operating out of Khartoum.

According to our sources in Washington, a decision was taken to make an example of Ginossar as a cautionary message to Israeli business interests to withdraw from dealings with the Palestinians – especially the partnerships in the monopolies supplying essential products to the Palestinian Authority that grew out of the Oslo accords. The message from Washington: Drain the money swamp that sustains Palestinian terror. Break up the Israeli-Palestinian monopolistic partnerships.

The police investigation ordered last week is aimed at getting to the bottom of how the Israeli-Palestinian monopolies system worked and who profited from them, a project that could jolt a few high-placed individuals and groups from Labor, some of whom put up Amram Mitzna’s run for the party leadership, and also in prime minister Sharon’s immediate circle.

According to DEBKAfile‘s Washington sources, the US government is particularly interested in the transactions that went on around the casino, and has begun discreetly investigating an unexplained discrepancy: While the gambling palace’s revenues totaled $50-60,000 a day, the amount banked was ten times larger, between $500,000 and $800,000. The investigation wants to find out where did the unaccounted portion of those deposits came from? And where did it go?

While the terror war raged and ravaged the Israeli economy, huge amounts of cash poured into Arafat’s war chest. Israel’s good name was marred, while the Palestinian economy was starved of investors and business entrepreneurs who were put to flight by the monopoly system and rampant corruption. Hungry and bereft of means of livelihood, many young Palestinians are easily lured into Arafat’s cycle of suicidal terror.

10 December: A distinct tilt from left to left-of-center characterized the parliamentary list Israel’s opposition Labor party picked Monday, December 9, to fight the January 28 general election. Labor, under its new leader Amram Mitzna – and a partially revamped top rank – thus signaled its readiness to take on the Israeli voter whom relentless Palestinian terrorism has rendered mistrustful of peace slogans. More subtly, the modified lineup reflected a willingness to heed the prime minister, Likud leader Ariel Sharon’s siren call for a post-election national unity government in partnership with its former partner Labor.

Sharon reissued this call Tuesday morning, December 10, before the results of the Labor ballot were fully counted.

He heard a different tune at the Likud primary on Sunday, December 8.

Sharon’s party knows that a broad coalition government weakens its leverage and cuts into the jobs available for the Likud faithful. To offset its leader’s swing to the center, Likud returned a hawkish parliamentary list, one third of which was made up of Sharon’s rival, foreign minister Binyamin Netanyahu.

Both made unexpected choices for the top slots: Likud’s parliamentary list is headed by Tzahi Hanegbi, environment minister, party veteran and hawk; Labor by Matan Vilnai, former general who served in Sharon-led coalition that broke up last month as minister of science and sports.

Neither party leader can be expected to keep at least one of his pre-election promises: Sharon’s to retain all the incumbent Likud ministers in his next administration and hand cabinet posts to his supporters who lost their Knesset seats; Mitzna’s to retire from the Labor leadership if his party comes in with less than 20 seats.

After beating Netanyahu for the top spot, Sharon is the “the old man” and Likud’s tested vote-catcher who has overcome all challengers. After the purging of several vocal peaceniks on the Labor list, DEBKAfile‘s political analysts produced a rough sketch of one possible post-election pattern at the top of the next government: Sharon – prime minister, Mitzna – deputy prime minister and finance, Shaul Mofaz (Likud) – defense, Netanyahu – foreign affairs, former defense minister Binyamin Ben Eliezer – national infrastructure, Vilnai – internal security, Shimon Peres – minister without portfolio.

11 December: The turning of a blind eye in certain, select cases has produced some strange anomalies in the global war on terror. DEBKAfile‘s counter-terror experts note some striking instances.

Prague is a case in point. President George W. Bush, in the Czech capital last month for an important NATO conference, which was dedicated inter alia to international cooperation for the stamping out terror, was prevented by a terrorist alert from going to Radio Liberty studios for a scheduled interview. The interview took place in his hotel room. Similarly, Israeli tourists flocking to Prague were cautioned last week to be on guard against an active terrorist danger.

DEBKAfile‘s counter-terror experts stress that the threat does not come from distant lands but from next door, the Balkans. The unacknowledged source of trouble is Macedonia.

All Skopje has become accustomed to seeing a 45-year old man clad in a long white robe and flak jacket pushing his cart around the food shelves of the big Vero department store almost every Wednesday or Thursday of the week. Two hand grenades are stuck in the jacket’s front pockets and a Kalashnikov automatic rifle slung across his back. Most of Vero’s customers and staff know him to be one of 30 wanted top al Qaeda and Hizballah operatives hiding in the Crna Gora Mountains north of the capital, near the Kosovo border. The Macedonian army and NATO forces policing the Kosovo Macedonia frontier have thrown out an extensive dragnet for their capture. Yet none of the hunters has ever waylaid the frequent shopper or followed him to his hideout.

The reason is simple. Those 30 terrorists are under the protection of Ali Ahmeti, formerly a key commander of the National Liberation Army (NLA), who went into national Macedonian politics by running for election on September 15 at the head of the new Albanian Democratic Party. He appears to be under European protection. The European Union-brokered Ohrid peace accord, signed in 2001 to halt ethnic Albanian insurrectionist violence, provided for its ringleader to enjoy a power sharing arrangement in Macedonia. In return, he pledged to renounce civil strife and turn his back on organized crime and his Islamist terrorist associations.

Ahmeti was also supposed to hand over the names of the 30 terror chiefs hiding in the hills.

The Albanian rebel chief, since gaining his seat in parliament, has not honored those promises. He did not disarm is militia and, while handing over 30 names, which still have to be checked, he claimed he never agreed to their detention.

Moreover, the guerrilla leader turned politician has opened the door wide to Osama bin Laden’s al Qaeda and allied terrorist groups from the Middle East. Neither Macedonian police officers nor international peacekeepers dare venture into parts of Tetovo and most of the villages strung along Macedonia’s western frontier. The coalition of Islamist terrorists who rule that area pose a rising threat of extremist Muslim penetration to other parts of former Yugoslavia and their European neighbors, while turning Macedonia into their launching pad for terrorist attacks across Europe.

However, the European governments who brokered the accord are restraining NATO and Macedonian forces from going after the al Qaeda and Hizballah leaders, fearing the Macedonian government will fall and the country revert to civil bloodshed between Macedonian Slavs and militant Albanians.