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Moshe "Bugi" Ya'alon, as of this morning the chief of staff of the Israel Defense Forces, faces very different challenges from those of his predecessors. Most learned that when it comes to the chief of staff's job, the saying "all beginnings are difficult" isn't necessarily true. Israel found itself at war, whether because of an Arab or Israeli initiative, in the chief of staff's third year (Moshe Dayan in 1956), fourth year (Yitzhak Rabin in 1967, Dan Shomron in 1991) or even the beginning of the fifth (Rafael Eitan, 1982). In the most difficult war of all, 1973, David Elazar was in his second year as chief of staff.

Ya'alon starts his term with fighting underway in the territories, but already in his first year, perhaps in the first half of it, he could be tested by two other fronts - Iraq and the Syrian-Lebanese front.

Yesterday, IDF generals were saying that Ya'alon, who at the end of his third year in office will be the oldest chief of staff ever, at 56, is well-prepared, because of his personality and his army career until now, to command an army at war. Less clear is how well he is prepared to build a fighting force. He served as deputy chief of staff, which at times of calm is the master builder's job. But he has been operations chief during ongoing hostilites with the Palestinians and did not substantially influence the IDF's future as a modern army facing difficulty preparing for a genuinely integrated battlefield, as opposed to separate land and air campaigns.

Ya'alon will have to decide, if not immediately, then after the smoke clears over the battlefields of Iraq, Syria, Lebanon, and the territories, where will be the center of gravity for investing in the future and what will he have to forgo.

When he calls in the General Staff today at 11 A.M. for its first session with him as chief of staff, he faces a juncture for decisions about operations and budgets. At least two generals say the IDF can cut a billion shekels from its budget, whether in various services or in non-critical officers (those not involved in combat or technology), training, or Army Radio, as long as the operations in the territories are not affected. It is important for that investment to continue, to create the calm climate for political progress.

A senior officer warned yesterday that the Israeli military presence in the territories could last "a year, two, or even three" if efforts fail to build a new Palestinian leadership that forsakes Yasser Arafat's policies of force and starts fighting terrorism.

Meanwhile, Military Intelligence warns that if the IDF quits the cities, except for quiet Jericho, the terror attacks will resume in days. The volume of alerts has dropped from the eight or nine a day on the eve of Operation Determined Path, when 64 Israelis were killed in 16 days, to two to three alerts a day. The level of prevention remains about the same - four out of five terror attempts are foiled. But a successful mega-attack or a particularly spectacular suicide bombing could upset what appears to be a gradual move toward a balance between relative quiet on the terror front, internal changes on the Palestinian side as they move toward a post-Arafat leadership, and political progress seen in the open comings and goings of American and Egyptian envoys to the region.

Presumably, the Military Intelligence assessment presented to Ya'alon will say that Arafat is weakening and his influence on domestic Palestinian affairs is waning. Jibril Rajoub and Mohammed Dahlan remain powerful figures. Both, together with the traditional representatives of the non-military elements in the leadership, like Abu Ala and Abu Mazen, now appear to the Palestinians to have been right when they told Arafat and Marwan Barghouti that force would not achieve Palestinian goals.

The defense establishment's experts are also attaching importance to a statement by Hamas leader Sheikh Ahmed Yassin that he is ready to consider a hudna, an Islamic cease-fire, until there is a change in the balance of forces with Israel. That attitude, the experts say, shows there has been a sobering up from the illusion that the suicide bombings could undermine Israeli solidarity to such an extent that, as Hezbollah leader Sheikh Hassan Nasrallah said a few months ago, "Palestine will get in 18 months what it took 18 years to get in Lebanon" - an Israeli withdrawal.

A joint study by Military Intelligence and the Shin Bet, analyzing suicide bombing, shows that while there is no single common denominator to all the bombers, and while many were suffering from terminal illnesses or were emotionally disturbed, there are two main motives: for some, the idea of advancing the campaign for an independent Palestinian state, and for others, to win financial support for their families. But the suicide attacks that led to Defensive Shield and Determined Path and then to the Bush speech, brought the Palestinians to the conclusion that the attacks were a mistake. The Palestinians have retreated from where they were in September 2000.

A senior General Headquarters officer, observing Damascus, said this week that Hezbollah, Syria, and Iran are trying to trap Israel in a "strategic ambush" and that Israel has to evade that ambush by setting one of its own, under circumstances convenient to it. Those circumstances could be created during or near the end of an American offensive against Iraq.