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As the Qassams were hitting Sderot on Wednesday morning, an accident occurred at the Haifa naval base. For the Navy's top brass, this was particularly embarrassing timing. Only about three months ago a new commander, Admiral Eli Marom, took up his position and high expectations are invested in him.

The General Staff, and the navy, expects Marom to undertake a thorough spring cleaning at the shipyards after the crisis caused by the Second Lebanon War and the resignation of the previous commander, Admiral (Res.) David Ben Bashat. But only a few hours before the graduation ceremony of the first naval officers course at the Haifa base with Marom's participation, a shell exploded during routine maintenance work on a missile boat. Seven soldiers and civilian IDF employees were hurt, one of them seriously. This is yet another grave accident after a string of fatal accidents in the ground forces. Marom has appointed an internal investigative team, but the incident is relatively minor, especially in comparison to the blunder that continues to cast a huge shadow over the navy - the hit by an Iranian missile on the INS Hanit on the third day of the Second Lebanon War.

Four IDF soldiers were killed in that hit, but it was only a few centimeters and the quick response by the Hanit crew that prevented the missile boat from sinking, and taking with it its crew of more than 80 IDF personnel. The Winograd Committee, which briefly mentioned the incident in its initial report, will return to the subject in its final report, to be released on January 30. But the mere mention in the partial report sufficed to accelerate Ben Bashat's resignation.

There were three elements to the missile ship blunder: intelligence (there was no information that the Iranian missile had been transferred to Hezbollah), operational policy (the order from navy headquarters to approach the shore without a requirement to operate missile defense systems) and the conduct of the ship's crew (short circuits in communications and breaches of discipline). The gravest of the three elements is the second, on which the Winograd Committee is expected to focus in its report. But in hindsight, it is the intelligence glitch that calls for a deep and comprehensive investigation. This incident could and should have been prevented, both operationally and from the intelligence angle. The full story of the chain of events is presented here for the first time.

The first details of the affair were published by Ze'ev Schiff in Haaretz two weeks after the war ended: Intelligence had warned the navy, more than three years before the hit on the Hanit, that the C-802 missile, produced in China and upgraded by the Iranians, might be in the hands of Hezbollah. The navy looked into the matter but did not succeed in confirming the assumption and carried on with business as usual, until the missile hit the ship.

The most fascinating figure in this story is Colonel K., head of Military Intelligence's control department, who recently retired from active service and is mentioned in this context for the first time. The control department was established in the wake of the 1973 Yom Kippur War, to ensure "thinking outside the box" and to examine ideas that are ostensibly beyond the obvious range of intelligence assessment.

K.'s career in intelligence did not follow the usual path. He served as a tank commander during his compulsory service and fought in the Golan Heights during the Yom Kippur War. Upon his discharge, he reached the conclusion that he was meant to do intelligence work and, after some initial difficulties, transferred to Military Intelligence. K. served as commander of the control department for seven and a half years, adopting the view that the answer to a great many intelligence questions can be found in unconventional thinking. The greatest difficulty, he has often said, is that you don't know what you know. Over the years, Israel has set up a huge system for intelligence-gathering. At the beginning of the 1980s, an MI duty officer had to deal with dozens of reports each night. Today, there can be hundreds of reports a night. There is an inherent difficulty in filtering out the significant reports. In addition, there has been an important technological change: In the past, the reports would come in on typed pages. Those reports that could not be evaluated were put into a "tray" but not thrown away. Today, a mere mouse-click sends the report to the place it needs to be.

To K., who is profoundly conservative, you don't throw away a report you do not understand. Members of the control department became accustomed to having the department head go over the accumulated reports that had not been understood, once a month. But K. found it hard to instill his approach in those under his command. His method was based on a great deal of intuition, on the examination - and rejection - of possible assumptions. Most people like to see assumptions that are based on confirmed reports - to them K. seems like a gambler.

This gap in perception became clearly evident in the missile boat incident. On April 21, 2003, K. was invited to give a lecture to officers of the naval intelligence division and provide an example of a hypothesis he was examining. K. chose to talk about shore-to-sea missiles. We know, he said, that Iran is transferring its most effective weapons to Hezbollah. Hezbollah has already received the best of its anti-tank and steep-trajectory missiles. And we know nothing about shore-to-sea missiles. "Have the Iranians given Hezbollah nothing? This cannot be. I am telling you: They have given them a missile. I just can't tell you which one." Review the intelligence information, K. suggested, on the basis of this initial assumption. You haven't succeeded in refuting it? The answer is clear: The missile is in Hezbollah hands.

The next day, K. himself examined the information available on the matter. He then realized that he had already considered the possible scenario of a missile in Hezbollah's hands three years earlier. K. sent a letter to navy intelligence, noting five items of partial information that could indicate that the missile had been transferred to Hezbollah and suggested a thorough check be carried out. Navy intelligence did just that and found more than 20 partial reports that provided ostensible support for K.'s thesis. They suggested a possibility that a shore-to-sea missile had already been transferred to Hezbollah at the end the 1990s and had been replaced by the C-802. However, the naval intelligence analysis did not come up with an unambiguous conclusion. The document was not distributed in the navy and no further steps were taken in the matter.

For the sake of comparison, the air force acted on an unconfirmed assumption, received in 1999, that Hezbollah had SA-18 anti-aircraft missiles, and ordered its planes to take safety measures to decrease the chances of getting hit by them.

The issue of shore-to-sea missiles in Hezbollah's hands came up on the morning of Friday, July 14, 2006, less than 12 hours before the missile hit the Hanit. Three years earlier, one of naval intelligence's branch heads, Lieutenant Colonel Y., had dealt with the examination into the matter that had been conducted at the suggestion of the control department head. In a discussion with the head of naval intelligence, Colonel Ram Rotberg, Y. said the ships enforcing Israel's naval blockade on Hezbollah should take into account the possibility of a C-802 missile being fired on them. Rotberg asked whether this advice was based on a gut-feeling or on concrete information. Other participants in the discussion formed the impression that Y. was basing his statements on a gut-feeling. In retrospect, Y. claims that there was more to it but, like so many other officers in wartime, he did not put his foot down.

That afternoon Y. wrote a personal evaluation for his commanders, who failed to deal with the matter in time. Had a warning been issued, on the grounds that there was a possibility that the missile was in Hezbollah's hands, the ships would immediately have moved out of range. In retrospect, it is possible that one of the reasons for the failure lies in the overly close relationship between the intelligence and the operational bodies. The navy would have had a hard time imposing the siege from a distance; perhaps the intelligence staff took this into account when they failed to issue a decisive statement. The rest is known: The missile hit the deck that evening, at 20:42.

A year after the war, in an interview to the Al-Jazeera network, Hezbollah Secretary-General Hassan Nasrallah gave his version of the events. "On that day," he related, "we held a consultation among the brethren. We decided to use a weapon that the Israelis did not know for certain was in our hands. Had they known, this would have affected readiness on the decks. Their movements showed that they were calm and certain that we did not have a weapon like that in our hands." Hezbollah, Nasrallah explained, felt the time had come to deviate from the routine response. "During the first days [of the war] we did not do anything new. The first new thing was [the launching of the missile at] the ship. That evening I had to give a speech, so the Israelis would not think that they had killed me. We agreed - that we would time it [the attack] with the speech I was supposed to deliver during a live broadcast." Nasrallah did indeed speak - and during the speech he directed the inhabitants of Beirut to look toward the sea to observe the Hanit burning.

The navy's investigation into the matter outlined a position to the effect that the source of the mistake lay with naval intelligence, which had failed to locate the relevant information that would have aroused suspicion. The investigators ignored the letter K. wrote in 2003 - and instead focused on the internal problem in naval intelligence. At the navy conference at which the investigation was presented, K. sat in the last row of the auditorium. After Ben Bashat presented the summary, K. asked to take the floor. The responsibility, he asserted, also rests with the commanders and is not limited to the intelligence arena. In the final analysis, the navy should have taken the same approach as that of the air force: If there is any doubt, then there is no doubt - and the worst-case scenario is taken into account. Then-chief of staff Dan Halutz stopped the investigation. He ordered the navy to investigate further, this time in collaboration with K. Several months later K. consulted with naval intelligence and gained the impression that the war's lessons had been internalized.

The IDF's disciplinary treatment in the wake of the Hanit disaster was restrained. Ben Bashat resigned, but did not explicitly take responsibility. One of the last decisions taken by Halutz, who resigned one year ago this week, was to promote naval intelligence head Rotberg to the rank of brigadier general. Rotberg, formerly the commander of the naval commando, is one of the navy's most outstanding and courageous officers, but the decision - so close to the completion of the investigations - reflected an alienated attitude on the part of the army to the gravity of the disaster. Rotberg was appointed to the prestigious post of commander of the Haifa naval base. On Wednesday evening, eight hours after the shell exploded in the accident on the missile boat, he could be seen at the naval officers' course graduation ceremony, standing next to the defense minister and the chief of staff.

The firing of about 100 Qassam rockets and dozens of mortar shells - as of yesterday noon - on Sderot and its surroundings reflects a change in the policy of Hamas and in its operational capability. For the first time in about six months, it appears as though the Islamic organization is seeking a direct confrontation with Israel. It is no longer a matter of Hamas providing rockets to smaller Palestinian factions or launching an isolated barrage. What we are currently witnessing is a coordinated attack. Hamas is now able to stockpile a large quantity of rockets and fire them in huge barrages whenever it chooses.

The immediate justification for the barrage on Sderot was Tuesday's pre-dawn action by the Israel Defense Forces on the outskirts of Gaza City's Sajiya and Zeitun neighborhoods. The organization decided to avenge the 19 Palestinian dead - mostly armed Hamas members, including Hussam al-Zahar, the son of senior Hamas leader Mahmoud al-Zahar. However, beyond the desire to settle accounts with Israel, it appears that the barrage is also part of an attempt to establish a new balance of deterrence: From now on Hamas will revert to responding, by means of massive rocket fire, to any IDF action that inflicts heavy losses on it. The large number of casualties (approximately 60 Palestinians have been killed in the Gaza Strip since the start of this calendar year) has not deterred Hamas. On the contrary, it appears that the figures have only further spurred the organization to take action. As has been the norm of late, the leadership of Hamas' military wing, Iz al-Din al-Qassam, was keen to act and dictated its policy to the political echelon. The death of "one of our own," Zahar's son, certainly influenced the organization's politicians to agree to the move.

Despite the heavy barrages, as of yesterday noon the casualty rate on the Israeli side has, luckily, been relatively low. However, the IDF's "hunting" operations against the Qassam launch squads, which employ a large amount of technological means, are reaping a limited result. During the Second Lebanon War the army failed in its effort to stop the launching of Katyushas from an expanse measuring thousands of square kilometers south of the Litani River. In the case of Gaza, it turns out that even a mere 50 square kilometers of launching expanse present quite a complicated challenge. Israel is chalking up a larger success in the fight against Hamas' infantry and its anti-tank weapons. Those IDF units that invade Palestinian territory enjoy a professional advantage and furthermore coordinate their strikes with the Israel Air Force. In most cases, the armed men are injured even before they have managed to get close to the Israeli forces. The paradox is that operations like the action in Zeitun do not stop Qassams. In the short run, they even increase the rocket fire.

For the average young man, a graduate of a Gaza high school, one of the only ways to earn a living is to join Hamas' military wing or its operational force. Iz al-Din al-Qassam receives a reasonable financial allotment and this week the government has even managed to pay salaries to many of its officials, despite the tight economic siege. The large number of people killed has in fact strengthened the political support for Hamas, both in Gaza and in the West Bank, after its popularity had been on the decline for months.

The widespread perception is that Hamas and its leaders are willing to sacrifice what they hold dearest - their sons - for the sake of the struggle, whereas the Palestinian Authority's leaders are busy planting trees on the occasion of "Palestinian Tree Day" and holding barren talks with Israel. His son's death has firmly established the status of Mahmoud al-Zahar, Hamas' most extreme leader, as the organization's strongman in the Gaza Strip. Since Wednesday Zahar has been receiving hundreds of people who have come to express their condolences, including Fatah loyalists. Condolence phone calls are coming in from all over the Muslim world, including by Iranian President Mahmoud Ahmadinejad, Lebanese President Fouad Siniora and even Palestinian Authority President Mahmoud Abbas (Abu Mazen). Zahar has entered the heart of the Palestinian consensus.

Despite the suffering of the inhabitants of Sderot, members of the IDF General Staff are noting that nowadays life in Gaza is immeasurably more difficult and the number of dead is rising. The problem is that Hamas believes it is Israel that is on the verge of collapse and that the continued bombardments will bring about a tahadiyeh (temporary truce), whose terms will suit the organization. If the heavy Qassam fire continues into the weekend, the General Staff might well change its recommendation and pressure the government to allow it to up the actions in the Gaza Strip. For the moment, it seems that a more extensive operation to occupy the Strip is not on the agenda. In addition to reservations by the government, the IDF, too, prefers to wait for the spring, when the weather conditions are more convenient for such a move.

In retrospect, Israel's primal sin with respect to Gaza was not the disengagement, but its immediate aftermath. The decision by the prime minister at the time, Ariel Sharon, to ignore the post- withdrawal drizzle of Qassams has exacted a high price. When the first Qassam landed, Israel stuck its head in the sand. Now it is facing a much more complex situation. The current reality resembles a southern version of the mistake the government of Ehud Barak (now defense minister) made in the north, on the Lebanese border. After the IDF withdrew from South Lebanon in May 2000, Israel ignored the threats it had previously issued and decided to hold back when three IDF soldiers were abducted at Har Dov in October of that year. The results of that decision were felt six years later, in the Second Lebanon War.

The INS Hanit affair