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The Challenges Ahead for Livni

Interviewee: Martin S. Indyk, Director of the Saban Center for Middle East Policy, Brookings Institution
Interviewer: Bernard Gwertzman, Consulting Editor
September 19, 2008

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On September 18, Israel's ruling Kadima party elected the country's Foreign Minister, Tzipi Livni, to be its new leader. Martin S. Indyk, who served two separate tours as U.S. ambassador to Israel in the Clinton administration, says Livni will try to put together a coalition government to avoid an early election. He adds that she will seek to step up negotiations with the Palestinians based on a trade off-a separate Palestinian state in return for Palestinians dropping their demand for a "right of return" to Israel.

Tzipi Livni won Kadima's leadership elections by a very narrow margin. What is the likelihood of Ms. Livni pulling together a coalition?

It's very hard to tell because it depends not so much on her desire to form a government, but rather on the calculations of the potential coalition partners. She started out talking to the Shas leadership, which is made up primarily of  Sephardic Jews largely from the Middle East and Central Asia, which is a critical member of the coalition, with twelve seats. They have some very clear demands. One is to reinstate child allowances which had been eliminated by this government. This has a direct impact on their community of religious Jews who have large families and depends on government handouts. They also want an assurance that [the final status of] Jerusalem will not be dealt with in negotiations with the Palestinians.

Can she agree to those conditions?

It's not going to be easy for her to agree to either condition. She has presented herself as a clean candidate and I don't think she wants to have her hands soiled by making these crude deals to get Shas participation. As far as Jerusalem is concerned, Jerusalem is an issue that is already on the table and  is being negotiated. And, of course, Livni was one of the lead negotiators since last November. It's difficult to know how important those requirements are. But more importantly, [it's difficult to know] whether Shas wants elections now or to hold them off for another year or so.

In the current coalition led by Kadima, the Labor Party has the second largest contingent of seats, at nineteen. Will Labor stay in a Livni-led coalition?

She has a much better chance with the Labor Party even though its leader is saying that they would prefer to go to an election. But I suspect they are maneuvering. If elections are held in the next ninety days, Labor would probably diminish to the fourth largest party, according to the top polls. I suspect that at the end of the day, Livni will try to start a government if Shas is on board. She needs to show them that she is not going to be blackmailed into concessions. Then there are a large number of smaller parties that she needs to bring in as coalition partners and she has thirty days to try to put this together and another twelve days extension beyond that. Basically, in the next six weeks, we won't know for sure if she is going to be able to put it together. Some of her advisers will be telling her to go to an election now with her narrow victory and her clean credentials to try to defeat Benjamin Netanyahu, the leader of Likud. It's a risky strategy because he is ahead in the polls and she may, in the end, prefer the bargain with Shas, that would enable her to rule for a year, a year and a half, and establish her credentials as Prime Minister rather than taking the gamble of running against Netanyahu and losing.

Of course if she agreed on the Jerusalem condition, that would seem to be a major setback on any hope of negotiations with the Palestinians.

Yes, but nothing's what it seems to be in these negotiations. I don't think that is a deal breaker or a constraint for the negotiations, which will be conducted in secret. If they actually get a deal, Shas might leave the government when it is put on the table.

Let me come back to a few basics. Tell us something about Ms. Livni. What kind of a person is she? Is she well grounded in foreign affairs? What is her background?

Well she has had a meteoric rise in Israeli politics which is why many people aren't really familiar with her. Her parents were members of Irgun, the organization which gave birth to the Herut party, which in turn gave birth to the Likud party. So she comes from this right-winged aristocracy of Israeli politics.

She was born in Israel, I take it.

Yes, she was born in Tel Aviv. She is a secular Israeli. When she talks about herself, she says what she is doing would make her father turn in his grave. I think that what she is referring to is that on his tombstone is the famous saying by Jabotinski that God gave the Jewish peoples both sides of the Jordan. One of the reasons that she has risen to prominence is because she joined Ariel Sharon in recent years in breaking with Likud on giving up West Bank territory. And she believes that it's imperative for the survival of the Jewish democratic state that Israel rid itself of much of the occupation and the West Bank, which is a real departure from right-winged orthodoxy. She has been engaged in negotiations intensively over the last year trying to work out a deal which would create a Palestinian state in the West Bank and Gaza. She worked in the Mossad [Israeli intelligence] in Europe, but not much is known of what exactly she did over there. After going to law school, she was taken on by Netanyahu when he became Prime Minister to handle the privatization of government-owned companies, and that's when I first met her, when I was serving as U.S. ambassador in Israel. She did a very impressive job, which involved complicated negotiations to downsize Israel's public sector and to sell off some of the key companies.

She was generally recognized as having done a good job, and she moved from there to become a Knesset member in 1999 and pretty quickly, she became a junior minister, then the Minister of Justice, then the Minister of Foreign Affairs. I mean all of that has happened in the last nine years. So, I think that the reason for her rise is in large part because of her competence and her seriousness, and because of political skills that put her in the right place at the right time. That said, compared to Olmert, who spent his whole life in politics, she doesn't have a lot of experience with the brutal game of coalition politics. This effort to put together her government will be her first real test.

What is her personal relationship with Netanyahu who you said brought her into government?

I think that they have respect for each other, and he hasn't seen her as a threat until now, so I don't think there has been political fallout between them. Obviously Likud is dismissing her whole party as not serious, but he will only start to focus on her now politically because she is ahead of him in the polls, even though her party is well behind in the polls. Up until now, the one who has gone after her politically is Ehud Barak of Labor, who has been defense minister in Olmert's government. He sees her as taking votes away from the Labor party. Ironically, of course, Barak will probably end up as her coalition partner as the Minister of Defense.

Talk a little bit about Netanyahu. Americans are more familiar with him. You say he is not as personally popular in the polls as Livni is, but his party is very popular. Why is that?

Well he's neck and neck with Livni, but Livni is a new face and Netanyahu is a known quantity, much like Barak. In the view of the Israeli public, neither Barak nor Netanyahu had distinguished themselves as Prime Minister, so both of them must convince voters that it will be different this time around. Netanyahu has done a better job of this than Barak because he has worked as finance minister and has turned the economy around and he was very effective, following the American recipe of deregulation and lowering taxes. It really made a big difference to the country's economic growth, which has been really robust in the last few years, despite the uncertain political situation and the war in Lebanon. So Netanyahu is doing better in that regard than Barak, but he is still seen as an old politician, compared to Livni who is a fresh face. And Livni has presented herself as a change candidate, as opposed to an experienced candidate,  at a time when people have become alienated from politics because of a sense of corruption in the government.

What impact would a Livni-led government have on war and peace issues?

I think that Livni is driven by a sense of mission in terms of making peace with the Palestinians. She is a lawyer by training and she approaches things with a legal mind set. Her particular concern is that over time, Palestinian statehood has been taken for granted. The international community supports it, Palestinians expect it, certain Israeli governments have endorsed the idea, and what she is concerned about is that when the Palestine state is created, logically, according to her argument, the right of return should be guaranteed to the Palestine state. But it cannot be "return" to Israel. From her point of view, the trade-off in peace making is the Palestinian state in return for the Palestinians dropping the right of return to Israel. And she feels that this is getting lost in the historic process of coming to a state solution. So she is really driven by the need for an agreement to get the Palestinians to agree to give up their claim to right of return to Israel, which she sees as very much a part of the demographic threat to the Jewish people.

I keep seeing proposals that come up in the public eye, like that 6,000 Palestinians could come back to what is now Israel, or that there would be compensation. Are there alternatives?

I think that her feeling is that no Palestinian can return under a title in the agreement "Right of Return." There would be no recognition of a Palestinian right of return to Israel. Israel takes back a few thousand Palestinians a year under family reunion arrangements. That could continue, presumably, but compensation, resettlement, all of those are not likely to be implemented. They are thought to be part of the refugee issue, but she is very strong on the removal of the right of return to Israel agreement. That is also driving her to reach an agreement. She is less convinced about the need to make peace with Syria. This puts her somewhat at odds with the national security establishment in Israel. It has a very clean picture of a Syrian deal as a way of splitting Syria from Iran. The national security establishment sees Iran as a threat to Israel. Because of the situation in Iran, she is going to have to focus on the concerns of the national security establishment, and I think that she will pick up the Israeli-Syrian negotiations for that reason.

You've met with the various Palestinian negotiators well. How crucial is the "right of return" to them in the negotiations? Can any Palestinian leader sign an agreement that doesn't have that?

That remains to be seen. Certainly they say two different things that are somewhat contradictory. One is that the words need to be in the agreement, and they can negotiate the meaning through various arrangements. I don't believe that that will be acceptable to Tzipi Livni. The other thing that they say is that they will give it up, but they know it's not realistic to expect a "right of return" to Israel as well as a "right of return" to Palestine, but they will only play it as their last card, after they are satisfied with all of the other arrangements in terms of other territories, water, security and of course, Jerusalem.

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