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Defense Minister Amir Peretz - battered and bruised by the Lieberman affair, the revolt of the MKs in his Labor Party and continuing discoveries from the investigations of the war in Lebanon - is now looking for ways to win back some prestige.

The most convenient means available to him this week - the General Staff of the Israel Defense Forces - is no less worn out than he. Peretz chose an approach that would distinguish between him and Chief of Staff Dan Halutz and free him from the criticism that he had fallen captive to the "military faction." Peretz trotted out the approach twice over the last few days: when he expressed doubts about IDF plans for extensive activity along the Philadelphi Route on the Gaza-Egypt border and when he suspended his approval for the round of appointments to IDF divisions that Halutz initiated.

In the long term, it is doubtful that such actions will rehabilitate Peretz's public standing. But political and military leaders live now, from one day to the next. And Peretz has reason to be satisfied by the effect his strategy has had in the short term, of the kind measured by the nightly television news. For the first time since the war broke out, Peretz has managed to make it clear that he does not take orders from Halutz. The defense minister has rebuilt his deterrent capacity against the chief of staff, even if not against Hezbollah.

There was some confusion surrounding Peretz's doubts about the Gaza issue, since his comments were publicized on the same day the IDF began a relatively large operation, named "Autumn Clouds," in the northern Gaza town of Beit Hanun. But Peretz distinguishes between the operations along the Philadelphi Route and the southern Gaza town of Rafah, and the fighting in the northern Strip, where the struggle is primarily against the armed groups and Palestinians launching Qassam rockets.

The military plan for combating the arms-smuggling tunnels in Rafah is essentially still in its infancy. GOC Southern Command Yoav Galant has come up with an initial suggestion that will be presented to the chief of staff shortly. If Halutz approves it, the officers will go to Peretz and then to the cabinet for approval. At a cabinet meeting Wednesday, the IDF representatives made do with general recommendations; the ministers asked them to provide more detailed plans. In any case, no one plans to get entangled in a large operation in Rafah before Prime Minister Ehud Olmert's trip to Washington in 10 days.

Peretz is now sending out a message of military caution, alongside political declarations about the need to breathe life into the Syrian arena and the Saudi initiative. During the last round of escalation in Gaza, at the beginning of June, Peretz's moderate line held fast only until the Qassam fire on Sderot intensified. This time, too, if there are Israeli casualties, caution will be forgotten and troops will once again be sent to Philadelphi for a while.

Hovering in the background is the unresolved matter of captive soldier Gilad Shalit. As expected, the optimistic statements on the Palestinian side turned out to be exaggerated. However, there has been slow progress that is liable to lead to a deal within a few weeks. How does that fit in with the activity in Beit Hanun? It fits in well, according to a senior officer in the General Staff.

"Without military pressure, the kidnappers feel that they have time to continue giving us the runaround," he said. "When Hamas is losing operatives and infrastructure, it has an interest in expediting the agreement."

The military appointments, meanwhile, have brought out particularly strange behavior from Peretz and Halutz. Beyond the tension between them in light of the dubious achievements of the war in Lebanon, the day-to-day work of their bureaus is not running smoothly. Halutz did meet with Peretz on Monday afternoon and update him about what he described as "adjustments" to the appointments under consideration. But it is not clear why the chief of staff deemed it urgent to release a statement from the IDF spokesman announcing the appointments that evening, without speaking to Peretz a second time. In the 15 minutes between the appointments announcement and the beginning of the TV news shows, Peretz's bureau managed to tell the reporters that the minister does not intend to function as a rubber stamp. Since then, Peretz has delayed his approval of the appointments and racked the nerves of the officers. Thus is a crisis built out of nothing.

On Wednesday night Peretz met with Halutz, but the defense minister did not announce any plans regarding the appointments. Their offices are both located on the 14th floor of the General Staff and Defense Ministry building, separated by a single corridor and a few dozen steps. Nonetheless, every meeting related to the appointments is first reported to the media, creating a dramatic touch that appears to bolster Peretz's image as the real decision-maker.

The farce surrounding the appointment of the GOC Northern Command - which required five meetings, all of which were reported in the media, before an agreement could be reached - is repeating itself. The leaks from the IDF just complicate the situation. On Monday evening, senior officers said they thought Peretz would ultimately fold and approve the appointments - an assessment that, of course, only drives him to remain steadfast. On the other hand, if Peretz decides to cancel one of the appointments, it will lead to a whole new scandal.

PA brain drain

It was meant to be a week of decisions in domestic Palestinian politics. Associates of Palestinian Authority Chairman Mahmoud Abbas had promised over the past month that decision-making time would come right after the Muslim holiday of Id al-Fitr: If Hamas doesn't agree to a government of experts, they said, Abbas would announce a national referendum.

Senior Fatah leaders warned of a bloodbath that would result from clashes with Hamas in Gaza. Abbas, they said, would instruct all the security services under his command to act with an iron fist against the "Executive Force" of Hamas. But as this week comes to a close, one can state with a fair degree of certainty that nothing has changed. Recent newspaper headlines, in Israel and the territories, looked the same as the headlines from a month or two ago. All in all, Peretz is continuing the policy of his predecessor, Shaul Mofaz; the IDF is raiding Beit Hanun; the Palestinian organizations are shelling Sderot; and Abbas is as weak and hesitant as always. The PA chairman isn't rushing anywhere, certainly not to a direct confrontation with Hamas.

But familiarity does not make the despair in the territories any more comfortable than before. On Tuesday the director general of the Palestinian Foreign Ministry, Ahmed Sabah, said 10,000 Palestinians have left the territories over the last four months after receiving immigration visas from foreign countries, according to foreign envoys in the West Bank and Gaza. Some 45,000 additional residents have applied for visas and are awaiting a response. The actual number of emigrants and those seeking to emigrate is presumably far higher, as many people visit the Persian Gulf, Europe, the United States and Canada on tourist visas and end up settling there.

But the real threat to the Palestinian Authority lies not in the quantity of residents - the high birth rate compensates for the negative migration - but in the quality of those who remain behind. According to Sabah, most of the Palestinians leaving the territories are businessmen, academics and professionals who have found jobs abroad; the PA is sustaining a brain drain.

For educated young people, the territories are one big cemetery. Without the possibility of working or having fun, just about the only outlet for many of them is joining a terror organization and taking part in the violent struggle against Israel. It's a short path from here to one more poster of a "martyr" on the wall.

Palestinian Prime Minister Ismail Haniyeh's political adviser, Ahmed Yusuf from Hamas, wrote an op-ed for The New York Times this week that discussed the advantages of a hudna, or temporary cease-fire. In Gaza, he wrote, few dream of peace; every once in a while, most dare to dream of a situation of non-belligerence. As a result, he continued, Hamas is proposing a long-term cease-fire during which Israelis and Palestinians can try to conduct negotiations for an extended peace. He said hope is not dead and put forth the Hamas vision: 10 years of hudna during which time, God willing, we will learn anew to dream of peace.

The words are simple, logical and pleasing to the Western ear. They also completely contradict those of the foreign minister of the Hamas government, Mahmoud Zahar. A week ago, in a speech in Khan Yunis, Zahar promised "Palestine from the [Mediterranean] Sea to the [Jordan] River" and swore that "we will never relinquish the right to oppose the Zionist enemy."

And Yusuf himself did not reveal all his intentions in his message to Western readers. A few weeks ago, he told Israeli journalists that he was sure Israel would ultimately disappear from the map. "While your children dream about immigrating to the United States, my son dreams about returning to our village near Kiryat Gat, from which we were expelled in 1948," he said. Nonetheless, the data showing immigration from the territories raises the suspicion that Yusuf is wrong to view the dreams of Palestinians as being radically different from those of Israelis.

In an interview with Channel 1 television a few weeks after the war, Halutz confirmed that updated intelligence information regarding Hezbollah had not been transmitted to the units fighting in Lebanon in a timely manner. Major General (Res.) Aharon Ze'evi (Farkash), who headed Military Intelligence until about a year ago, provided some more information at a closed conference at the Jaffee Center for Strategic Studies. We had detailed intelligence, he said, but it was so sensitive that we decided not to involve the forces on the ground in advance. The Northern Command had prepared stamped boxes that were supposed to be given to the units if war broke out. I don't know how to explain why that didn't happen, said Ze'evi.

The participants at the conference were astounded. "How could it be that in the 21st century we're still stuck with boxes?" asked Major General (res.) Giora Rom. "Isn't there a faster, technological way to transmit the information?"

The intelligence information primarily related to Lebanese nature reserves near the border, where Hezbollah had built dozens of outposts. It built well-hidden bunkers where militants took cover and stored Katyusha rocket launchers. Military Intelligence knew about the nature reserves, but detailed intelligence about the bunkers was considered too confidential to transmit to the combat units or even to the leaders of Division 91.

The first IDF troops to come across a nature reserve included those from the elite Maglan unit, who entered the Shaked ridge, north of Moshav Avivim, on July 19. They encountered Hezbollah militants hiding in the nature reserve, and two IDF soldiers were killed in the first barrage. Amit Ze'evi, an officer in the reserves and the son of Aharon Ze'evi, was part of that force and took control of the battle after the two soldiers were killed.

Even before the war began, the Northern Command was concerned by the extreme tendency to compartmentalize information that Military Intelligence exhibited. However, an intelligence committee for the protection of sources determined that some of the information was too sensitive and refused to tell the operational forces about it. And this was not the only crucial information that was not transmitted. A committee headed by Brigadier General (Res.) Pinchas Buchris is examining whether, as suspected, some elements of the intelligence warnings about Hezbollah's plans to abduct soldiers at the beginning of July were not processed correctly. In the absence of that intelligence, the army decided a few days before the abduction to lower the alert level along the border. Had the higher alert been maintained, military jeeps would have been prohibited from driving on the road where Hezbollah attacked the IDF patrol and abducted soldiers Ehud Goldwasser and Eldad Regev.

The IDF continued to be worried by the nature reserves up to the end of the war. For a long time, the General Staff even banned troops from entering them and examining the Hezbollah outposts. An attempt to set the nature reserves on fire from a distance failed.

The boxes with the detailed information about the nature reserves did eventually reach Division 91 - a week after the Shaked battle. Even then, the noncommissioned intelligence officers of the division had a hard time using the information, because doing so involved a complicated process of converting the information to data on aerial photos.