Quote from below article:
"Many in Naftali Bennett's new party think this way, as do many in (Lieberman's) Yisrael Beiteinu and (Netanyahu's) Likud, also.
"I think the majority of members of the next Knesset will be of this view. So Netanyahu, even if he doesn't believe it himself, knows he has to accommodate these views if he wants to achieve anything."
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War on the home front
JOHN LYONS, MIDDLE EAST CORRESPONDENT
Housing under construction in the West Bank Jewish settlement of Ariel. Israel plans to build 3000 settler homes in East Jerusalem and the West Bank. Source: Getty Images
ON Tuesday last week, two days before the UN voted on whether to upgrade Palestine to non-member observer status, Israel's leading diplomatic journalists found themselves summoned to a private meeting in Jerusalem by Avigdor Lieberman - Foreign Minister and the likely successor to Benjamin Netanyahu as prime minister.
Before the 1.30pm briefing, the feisty Lieberman, the new face of the Right in Israel, told the journalists a condition applied to their attendance: that he not be quoted by name but as "a senior government official who is taking part in the relevant discussions at the highest levels".
For four years Lieberman, an ultra-nationalist and former bouncer from Moldova in eastern Europe, has led attacks on Palestinian leader Mahmoud Abbas, accusing him of being an illegitimate leader who privately supported Israel in its 2009 war against his rival, Hamas, in Gaza.
So the 15 journalists fully expected the Foreign Minister had called the meeting to tell them that Israel would be responding to the Palestinians' bid at the UN with the withholding of taxes from the Palestinian Authority and the announcement of new settlements.
Instead, he told them that even if the Palestinians were upgraded there would no punishment.
The following day Israel's Maariv newspaper reported: "Israel most likely will not freeze the PA tax money or hurt its cashflow either." The paper reported: "A senior government official who is taking part in the relevant discussions at the highest level said: 'We will not cancel any agreements. We will respond in a measured way at the right time'."
The tone was exactly what Washington wanted. US Secretary of State Hillary Clinton had told Israelis they were unlikely to get more than 20 votes and urged a moderate response from Israel.
And so it was Lieberman's turn to be surprised when at a cabinet meeting following the vote - which saw 138 countries vote in favour of the Palestinians - "talking points", obtained by The Australian, were handed out by the Prime Minister's advisers revealing the national response: "Israel has decided to authorise the building of 3000 residential units in Jerusalem and Judea and Samaria." And the bombshell: "In addition, plans for the construction of thousands of additional residential units in Jerusalem and settlement blocs are being advanced, including the area between Maaleh Adumim and Jerusalem (known as the E1)."
Lieberman wasn't the only one taken by surprise.
"This is the worst decision I have seen any government take since I moved here 20 years ago," a US-born executive says.
"It says that settlements are punishment, yet for years we've been arguing they are for security or religious reasons."
For 45 years, since Israel began its occupation of the West Bank in 1967, Israel has provided incentives for hundreds of thousands of settlers to move to the West Bank, or Palestinian territories - settlements regarded as illegal under international law.
But despite international condemnation, in particular from the US, the settlements have multiplied, and with E1 Netanyahu has crossed one of Washington's red lines. Only 12sq km, the E1 is between Jerusalem and the Jewish settlement of Maaleh Adumim. Settling it would cut the West Bank in half.
The E1 would mean a two-state solution - an Arab state alongside a Jewish state, as outlined by the UN's Partition Plan of 1947 - was dead.
"The E1 would kill the idea of two states," Alon Liel, former head of Israel's Foreign Ministry and former ambassador to South Africa, tells The Australian.
"The strategic location of the E1 is going to cut Palestine into three geographic units: Gaza, the north West Bank and the south West Bank. This is also playing into the hands of the enemies of Israel who are saying Israel is developing a Bantustan (African black homeland) system."
Israel could not have expected the response to the E1 announcement: its ambassadors in Australia, Britain, France, Sweden, Brazil, Ireland, Finland, Denmark, Egypt and Spain were summoned, while Russia and Japan protested.
But, according to Liel, "the international community has changed the rules ... The UN vote expressed the anger and frustration of the international community that we have not had any peace process for a long time.
"The Israeli government in its response said: 'Who is the international community? We don't recognise the international community.' The Israeli reaction this time is not just in the Israeli-Palestinian context but in the Israel versus international community context."
Netanyahu's E1 announcement comes amid an intriguing political struggle in which three men - Netanyahu, Lieberman and Naftali Bennett, the leader of the new pro-settler Jewish Home party - battle for supremacy on the Right.
For now, Netanyahu and Lieberman need each other - they have joined forces for the election on January 22.
But Lieberman has been out-flanking Netanyahu on the Right flank, appealing to a constituency that does not, in any circumstances, want to "give up" land to the Palestinians.
In Israel alternatives to a two-state solution are increasingly mooted. Says the retired Liel: "Some believe we have another model ... We annexed East Jerusalem and the Palestinians there are inhabitants, but not citizens.
"They can vote in municipal elections but not national elections, and many in the Right think if we feed them and give them a reasonable standard of living they will be quiet.
"Many in Naftali Bennett's new party think this way, as do many in (Lieberman's) Yisrael Beiteinu and (Netanyahu's) Likud, also.
"I think the majority of members of the next Knesset will be of this view. So Netanyahu, even if he doesn't believe it himself, knows he has to accommodate these views if he wants to achieve anything."
Israel found itself at the centre of a storm since Sunday's announcement on the E1 because the gulf between public opinion and international opinion is growing.
"We're all depressed," one serving diplomat says. "The E1 is what has really upset us. It's saying to the world that we use settlements as punishment."
The diplomat says there is a growing suspicion in Israel that while Britain and France are leading the diplomatic offensive, the Obama administration is "signing off on it".
On Thursday, Netanyahu, on a trip to Europe, replied to the criticism. "In our history, including on the soil of Europe, we had a regular pattern," he told Die Welt newspaper. "First the Jewish people were maligned, then they were attacked."
He specifically addressed this week's controversy: "This is the land in which the Jewish people have been for close to 4000 years."
He spoke as Israeli officials remained surprised that despite a massive international lobbying campaign they convinced only eight countries to vote against a Palestinian upgrading: the US, Canada, Panama, the Czech Republic, Palau, Micronesia, Marshall Islands and Nauru.
"We lost Europe," one official was reported as saying.
As Israel's former top diplomat, Liel notes Australia's change from supporting Israel at the UN to abstaining.
"I think the feeling in Australia was the same as the feeling in Europe, that a Palestinian state is something that should happen not only for the Palestinians but also for Israel," he says. "I don't think those who supported a Palestinian state are anti-Israel. I think many countries have realised that if there is no Palestine, there will be no Israel in its current form.
"Many Israelis feel this way, too. It was expressed by former prime minister Ehud Olmert."
So remote are half of Israel's supporters that Netanyahu's "talking points" had to explain where they were.
"These are small island states, situated fairly close to one another in the Pacific Ocean, have very close ties to the US and vote with Israel in the General Assembly," says the document.
Commentator Shalom Yerushalmi echoes concerns that Israel has become isolated. "Sometimes, nightmares come true," he wrote in Maariv.
"For years they've been warning us that we cannot stand alone against the world, that the creeping annexation of Judea and Samaria isn't acceptable to any country barring Micronesia, and that it will turn Israel into an apartheid state.
"For years on end they've been telling us that the two-state solution is the only viable solution, but we killed it with our own two hands, defying everyone.
"The world, which granted (non-member) state status to the Palestinians a week ago, is now fleeing from Israel as from a fire."
A black humour has begun among Israel's diplomats. "There's a joke that if all else fails we have two guaranteed votes: the US and Micronesia," one says.
Asked about Israel's South Pacific efforts, the diplomat replies: "A vote's a vote. Micronesia's vote is worth as much as America's."
Meanwhile, the man credited with "winning" half of Israel's votes - Michael Ronen, the Foreign Ministry's director of Pacific affairs - rejects any suggestion Israel used its aid to win votes.
"We're not trying to buy people," he tells The Australian.
"Some countries we give more technical assistance to, in Africa or Latin America, vote against us on a regular basis."
On the other side of the conflict, Palestinians are feeling a new confidence since the vote. Hind Khoury, former head of the Palestinian delegation to Paris, says "Palestinians have finally learned how to play the diplomatic game.
"The major obstacle to criticising Israel in the past was that it was seen as anti-Semitism," Khoury says. "That is changing. In the past when foreign leaders such as (US Vice-President) Joe Biden or Hillary Clinton visited, Israel would announce a new settlement expansion. But announcing the E1 the day after the UN vote was one provocation too many."
The Israel media has been growing louder in its warnings. Even Israel Today, the free newspaper begun by Las Vegas casino billionaire Sheldon Adelson, which supports Netanyahu, has expressed concerns.
In May columnist Dan Margalit referred to "the last remnants of Israel's good name in the democratic world".
Although used to conflicts, it is doubtful that when Netanyahu watched his advisers handing out his "talking points" on Sunday he would have realised it would unleash such a storm.
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