The Cable

Israeli Amb.: Palestinian statehood vote could end all PA agreements with Israel and the U.S.

If the Palestinians go forward with their drive to seek recognition as a state at the U.N. General Assembly next month, all agreements governing Israeli-Palestinian and U.S.-Palestinian cooperation could become null and void, according to Israel's ambassador to the United States.

"We have a lot of agreements with the Palestinian Authority, we have no agreements with a ‘Government of Palestine,'" Israel's ambassador to the United States, Michael Oren, told The Cable in an exclusive interview on Tuesday. "It's just a fact, we have no agreements with a ‘Government of Palestine.' It puts us in a different realm."

Oren said that agreements covering all sorts of fields, such as import-export, water sharing, and Israel-Palestinian security forces cooperation, would become invalid if the Palestinians declare statehood unilaterally, based on a vote at the U.N. -- rather than by negotiating statehood with the government of Israel via the stalled peace process.

"It's not just our agreements with the Palestinian Authority, it's America's agreements with the Palestinian Authority (that are at risk)," Oren said. "America is a cosignatory to the Oslo Accord and this would seriously undermine it.... Unilateral steps would have legal, economic, and political ramifications for us and for America as a cosignatory."

The current strategy by the Obama administration is to continue to push the Middle East Quartet -- the United States, European Union, United Nations, and Russia -- to agree on a statement that would affirm the 1967 borders with agreed swaps and recognize Israel's identity as a Jewish state as the basis for moving forward with negotiations. The "Jewish state" clause was the roadblock that prevented the Quartet from agreeing to a statement during their meeting last month in Washington. But Oren said that effort won't solve the problem.

"There is no guarantee that even if the Quartet members succeed in putting out a common position on negotiations that that will in any way divert the Palestinians from their intention of declaring a Palestinian state unilaterally," Oren said.

Oren said that the U.S. and Israeli governments are coordinating on the issue in a "daily and intensive manner" and "we see very much eye to eye."

In fact, the Obama administration has said often that it opposes the Palestinian drive for a U.N. vote on statehood and sees no alternative to direct negotiations. The question is whether the Obama administration is doing everything it can to convince other countries not to support the U.N. vote.

"I think they understand what needs to be done," Oren said. "We're working for similar goals."

But when pressed Oren didn't say whether or not the Obama administration is doing everything it can on the diplomatic front.

Some pro-Israel supporters in Washington think the administration needs to do more. "The United States must begin a vigorous public effort to lobby other countries, large and small, to oppose the Palestinian effort and join President Barack Obama in pressuring the PA to call it off," former AIPAC spokesman Josh Block wrote in a recent op-ed.

Oren said the PA is planning to use the statehood declaration to prosecute never-ending "lawfare" against Israel in international forums, which will lessen the chances for a negotiated solution.

"We want to be able to negotiate but we won't be able to negotiate if they are attacking our legitimacy in every international court. We're not going to negotiate under fire and it's a mistake for the Palestinians to think that we would," Oren said.

The Israeli government is publicly supporting the creation of a Palestinian state, the Palestinian economy is growing steadily, and Israel is cooperating logistically every day with Palestinian security forces, Oren said, but that could all be lost.

"The Palestinians have achieved a tremendous amount over the last 18 years and all of that could be at risk," Oren said. "The Palestinians risk all that has been achieved if they go forward with this ... and that would be a great tragedy."

AFP/Getty Images

The Cable

Libyan NTC can now do business in the U.S.

The U.S. government has issued a new policy that allows the Libyan National Transitional Council (NTC) to do business with U.S. organizations and financial institutions, one more step in helping the country establish a new government.

The United Nations agreed last week to let the United States release $1.5 billion of the $37 billion of frozen Qaddafi assets. The State and Treasury Departments are working with the United Nations on thawing more of the Qaddafi money, but that might take a while. In the meantime, the Treasury Department's Office of Foreign Assets Control (OFAC) has issued a general license that would nullify the part of the executive order that prevents U.S. institutions from dealing with the "Libyan government," in order to allow the NTC to conduct new business with those institutions.

"All transactions involving the TNC are authorized," reads the new General License, signed Aug. 19. (The U.S. government still uses TNC to refer to the new Libyan leadership, though the rebel leadership council has officially changed its name to NTC.)The license explains that this new policy does not affect the frozen Qaddafi assets, but simply allows U.S. institutions conduct future transaction with the NTC.

"It was necessary because the executive order blocks all transactions with the ‘Government of Libya,' and now could impact the TNC" said Treasury Undersecretary David S. Cohen. "So we wanted to clear away that inadvertent technical problem by issuing this license, which says that any interactions with the TNC or any entity the TNC controls is permitted."

Recently, at least one transaction between the NTC and a U.S. institution was blocked, Cohen said.

Of course, the NTC's main goal -- to get its hands on the rest of the frozen Qaddafi assets -- is still a work in progress. The United Nations needs to take action to amend the U.N. Security Council's resolutions to unfreeze those funds, and the U.S. mission at the U.N. is working that issue hard now.

"The general license addresses new transactions, not the frozen assets," Cohen added, pointing out that some of the frozen assets are personal assets of the Qaddafi family and some are the assets of the Libyan government.

"We're going to continue to work through the issues with our  colleagues at State and our allies both through the U.N. and the contact group to figure out whether there are additional funds that will be unfrozen and delivered up to the TNC, but that's the next step," said Cohen. "Right now we're focused on transferring over the $1.5 billion that's already been approved for release."