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You wont see Israel foreign minister Tzipi Livni and Egyptian President Hosni Mubarak at the same New Year’s Eve party. Egypt has taken exception to Livni’s justified claim that Egypt’s efforts in finding terrorist tunnels in Gaza has been pathetic. Kind of making things difficult for Defense Minister Barak who is going to Egypt tomorrow to try to close a cease fire deal…according to Debka:

Angry exchange between Livni and Cairo precedes Barak’s talks with Egyptian leaders Wednesday Egypt rejected Israeli FM Tzipi Livni’s charge that Its performance in stifling Palestinian arms smuggling to Gaza was “poor” with a negative effect on Middle East peace talks. She said arms smuggling through the Philadelphi enclave had increased. As DEBKAfile reported earlier, Israeli defense minister Ehud Barak bring Israel’s answers to the Egyptian truce-cum-prisoner-release proposal when he meets President Hosni Mubarak and intelligence minister Omar Suleiman Wednesday.Prime minister Olmert set up a ministerial committee to redefine criteria for jailed Palestinian terrorists’ release in case an Egyptian proposal for a trade to release the kidnapped Israeli soldier Gilead Shalit works out. He also invited Shalit’s parents for a briefing Sunday night, Dec. 23. Hamas has made overtures for a ceasefire since last week’s pounding of its and Jihad Islami’s missile units in Gaza by Israeli forces. Jihad is less amenable. Saturday, DEBKAfile disclosed the outline of the Egyptian proposal which is backed by Washington. Defense minister Ehud Barak will inform Egyptian president Hosni Mubarak in Cairo Wednesday, Dec. 26 whether Israel is prepared to open talks on the initiative, which was disclosed as follows: 1. Hamas will suspend its missile and mortar fire on Israeli communities across the border and make its allies comply with the ceasefire. 2. Israel must give the US and Egypt guarantees for the cancellation of its planned major ground offensive against Gaza and halt the IDF’s 2-3 km penetrations and the targeting of terrorist chiefs and missile crews.3. Egypt will invite a US military force, including engineering teams, to deploy along the Gaza-Egyptian border for a joint operation to end smuggling from Sinai.4. Gilead Shalit, the Israeli soldier kidnapped last year, will be freed in exchange for jailed Palestinian terrorists whose number is still in negotiation.5. If the deal holds up for three months, the US and Israel will not object to the Palestinian Authority’s Fatah leader Mahmoud Abbas and Hamas opening a dialogue for a Palestinian national unity government.DEBKAfile’s Washington and Jerusalem sources say there is still a way to go before a deal can be concluded. Israel objects in principle to a Hamas-Fatah reconciliation. Hamas would emerge victorious from its coup against the PA in Gaza, without having to recognize Israel or renounce its ambition to destroy the Jewish State. The siege against Gaza would fizzle out.While Washington formally supports Israel’s position, in private talks, US officials urge Israel and Egypt to consummate the deal for the sake of a positive climate to greet President George W. Bush when he arrives in the Middle East on Jan. 8. Israel is advised to be realistic and accept that in the long run the Palestinians cannot be divided between the West Bank and Gaza Strip. Neither can Israel expect Abbas to take responsibility for Gaza in peace talks if he cannot communicate with its leaders. Behind Israel’s reluctance to take Washington’s advice, DEBKAfile’s Jerusalem sources report, is a well-founded suspicion that the Americans are using the Egyptian proposal as a stepping stone for making Iran a party to an accommodation in the Gaza Strip. Already, the Bush administration has begun backtracking on Lebanon, in furtherance of its secret dialogue with Iran on regional understandings to take the place of confrontation. Through these avenues, Washington is feared to be building a rationale to justify its softening on the Iranian nuclear issue. This would be a bit much for Israel to swallow.

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