Exclusive: Gaza truce buckles, captured soldiers deal stalled

Friday morning, June 27 – Day 8 of the putative Gaza ceasefire – saw a mortar bombardment of Nahal Oz and Kfar Azza and Shear Hanegev, after five missiles on three consecutive days cut it short.
debkafile‘s military sources report that negotiations for the release of three captive Israeli soldiers are stalled after becoming entangled in the Gaza truce breakdown and Israel’s government crisis. Most of all, progress is blocked until Hizballah gains the finance ministry in the government Fouad Siniora is trying to build.
Regarding the Gaza truce, our sources report Hamas’ failure to bring fellow Palestinian groups to heel for holding their missile and mortar fire on Israel. The Iran-backed Jihad Islami wants Israel pay for every IDF counter-terror hit on the West Bank, while the Fatah armed wing is bent on undermining the authority of the rival Hamas in the Gaza Strip.
Israeli foreign minister Tzipi Livni’s call for Israel to respond to the truce violation “militarily and immediately”, echoing vice PM Haim Ramon, is seen as part of their campaign for the ruling Kadima leadership in the forthcoming primary.
In any case it falls on deaf ears. Prime minister Ehud Olmert’s authority is waning in his last weeks in office, while defense minister Ehud Barak remains immovably opposed to engaging Hamas in effective military action.
Olmert promised the families of Eldad Regev and Ehud Goldwasser, kidnapped by Hizballah two years ago, and Gilead Shalit, captured two weeks earlier by Hamas, to put Israel’s final offers to the vote in cabinet Sunday, June 29. But, although Israel’s acceptance of Hizballah’s terms has been quietly conveyed to the German mediator, it may be too late. Hizballah has had time to pile its demands for ending the Lebanese government crisis on the backs of the Israeli captives.
Gaining command of the Lebanese treasury will give Iran’s Shiite proxy broad control the country and its armed forces – a prize which makes the internal debate in Israel over whether or not to include the Nahariya murderer Samir Kuntar and 100 jailed Palestinians in the Lebanese package irrelevant.
Hizballah has made the prisoner swap a lever for imposing its will on the shape of the new Lebanese government and the French and German facilitators; pumps out teaser reports of an imminent deal to keep the pressure up.
The machinations in Beirut override any Israeli-Hizballah prisoner transaction.
The Palestinians holding Gilead Shalit in the Gaza Strip – and committed to an informal truce – are keeping an eye on Beirut. Picking up on Israel’s bargaining weakness, they will try hard to stand up to Egypt and delay their consent to release the Israeli soldier until such time as their ally, Hizballah, attains its objectives in Beirut and is ready for a deal with Israel on Regev and Goldwasser. Shalit is also now a high card in restraining the shaky Olmert government from military action against Palestinian truce violations.