Monday, January 9, 2012

Why PNF/F!

Notwithstanding 'PNF/F's' pandering to the 'greens,' America will become a net exporter of energy. It is only a matter of time. There are a good many energy and energy related  stocks available at decent prices, paying exceptional dividends all for the looking. (See 1 below.)

Memo readers ask me what I mean by PNF/F and I tell them it is my new name for Obama who was interviewed by a CBS Analyst and when asked where he would rate himself as a president  replied he would put himself fourth even above Washington. The fore is because Obama plays a ton of golf thus - PNFour/Fore!
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Dennis Ross on how to break Mid East stalemate.  (See 2 below.)
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For more evidence of government gone wild click on:<http://www.youtube.com/watch_popup?v=xOAgT8L_BqQ&feature=player_embedded>
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Iran to test underground nuclear device?  (See 3 below.)


How to exploit split in Iran's Revolutionary  Guards? (See 3A Below.)


Israel's Iranian dilemma. (See 3b below.)
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Arab openess after Arab Spring?  (See 4 below.)
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There is always relevance when a President'sChief of Staff resigns.  (See 5 below.)
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Dick
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1) Big Fracking Deal: The Looming Takeover Boom in Oil: Investors with an appetite for risk might want to drill deeper into the oil sector to find smaller firms sitting on U.S. oil-shale riches.
By JACK HOUGH

Energy profits are booming and Big Oil shares look inexpensive. But investors with an appetite for risk might want to drill deeper into the sector to find smaller firms sitting on U.S. oil-shale riches -- which make tempting takeover targets, analysts say.

Large oil companies are riding a 25% fourth-quarter surge in Nymex crude prices. Analysts estimate that energy companies in the Standard & Poor's 500-stock index saw earnings growth of 34% in the fourth quarter -- more than twice that of any other sector, according to S&P.

Investors underestimate the strength of current oil demand, says Subash Chandra, who covers energy stocks for Jefferies, a New York investment bank.

Share prices imply a 2012 price for West Texas Intermediate crude of $80 a barrel, according to Mr. Chandra's calculations. But WTI crude recently sold at $101 a barrel, and he thinks it will average $95 in 2012.

Small U.S. energy companies are pricier than their larger brethren. Energy companies in the S&P SmallCap 600 index trade at nearly 16 times projected 2012 earnings, versus 15 for the broad index. But small oil companies might be worth their premium because of their holdings and expertise, and the role these play in a profound change in U.S. energy production.

New tactics like horizontal drilling and hydraulic fracturing are unlocking energy trapped in vast shale formations around the U.S., offsetting declines in production from conventional deposits. North Dakota's Bakken shale is expected to begin producing more oil than Alaska's mammoth Pudhoe Bay field this year.

These tactics can be used to extract both oil and natural gas, but with the former rising and the latter slumping, companies are particularly interested in oil-rich shale.

Major oil companies have had to quickly adjust course. For decades, they were net sellers of U.S. assets, because the easiest deposits had been tapped. Smaller companies moved in and became expert at extracting difficult-to-reach deposits, including shale oil. With the recent technological breakthroughs, the majors have been eager buyers of U.S. companies with shale assets and experience, says William Featherston, who covers the sector for UBS (UBS: 11.62, -0.26, -2.19%).

Exxon Mobil (XOM: 85.12, -0.64, -0.75%) bought XTO Energy in 2009, and Chevron (CVX: 108.31, -0.79, -0.72%) snapped up Chief Oil & Gas in 2010. Norway's Statoil (STO: 25.79, -0.19, -0.73%) and Italy's ENI have also spent heavily on U.S. shale assets.

Mr. Featherston sees the sector as ripe for a takeover acceleration for three reasons: The shale opportunities are "massive," major oil companies are gushing with cash to invest, and these companies want to put the knowhow of U.S. shale specialists to work in their overseas properties.

Horizontal drilling is the process of drilling deep into the ground and then gradually changing direction to drill into horizontal layers of oil- and gas-rich rock. Hydraulic fracturing, or "fracking," involves pumping a mixture of water, sand and chemicals into the well at high pressure in order to break porous rock apart and release oil and gas.

"In the past, you drilled for oil 10 times and found some maybe four of those times if you were good," says Shawn Reynolds, who manages natural-resources portfolios for Van Eck, a mutual fund company. "With shale deposits, you know where the oil is. And with the new technology you can extract it profitably."

But fracking is controversial. Critics say it could damage natural habitats and water supplies -- and even trigger earthquakes. The industry says fracking is safe and that it takes care to prevent environmental damage.

"You're going to see more regulation, but as politicians take a close look at the science, shale plays aren't going away," says Jefferies's Mr. Chandra. He points to New York Gov. Andrew Cuomo, who has recently sought to lift a ban on fracking.

For stock-pickers seeking smaller U.S. energy companies, Mr. Chandra likes Denver-based SM Energy and Houston-based Oasis Petroleum. "With independents being bought out, these two have the credentials that buyers are looking for," he says.

UBS's Mr. Featherston recently screened 40 candidates for traits including the size of idle energy deposits, the financial resources to exploit those deposits and pay packages for managers in the event of takeovers. He, too, sees SM and Oasis as attractive targets, along with Anadarko Petroleum (APC: 80.27, -0.53, -0.66%), based in The Woodlands, Texas, and Cabot Oil & Gas (COG: 80.65, -2.06, -2.49%) and Southwestern Energy (SWN: 33.20, -0.45, -1.34%), both based in Houston.

Van Eck's Mr. Reynolds prefers an indirect approach to the shale boom that favors Houston-based Halliburton (HAL: 34.98, 0.42, 1.22%) and Schlumberger (SLB: 67.78, -0.29, -0.43%) and Switzerland's Weatherford International (WFT: 15.53, -0.11, -0.70%). These service companies will be called on by major oil companies to exploit newly bought shale, he says.

For fund investors, the Powershares S&P SmallCap Energy Portfolio, an exchange-traded fund, tracks the aforementioned index of U.S. companies. It costs $29 a year per $10,000 invested.

Investors who don't like the higher stock valuations small oil companies carry might prefer the IQ Global Oil Small Cap Equity ETF, despite its higher expenses of $75 a year per $10,000 invested.

U.S. firms make up 57% of the portfolio. That proved a liability in 2011, as shares in Europe and emerging markets plunged, dragging the fund down 20% between its May 5 launch and Dec. 31. However, according to IndexIQ, creator of the index underlying the fund, the selloff has left it at just nine times portfolio earnings.

—Jack Hough is a columnist at SmartMoney.com. Email: jack.hough@dowjones.com
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2)How to break a Middle East stalemate

By Dennis Ross

Dan Meridor, one of Israel’s four deputy prime ministers, said to me years ago that “the peace process is like riding a bicycle: When you stop pedaling, you fall off.” And currently, the Israelis and Palestinians have stopped pedaling.

Palestinian President Mahmoud Abbas is convinced that this Israeli government cannot make a peace deal — or at least one he can live with — so he imposes conditions on negotiations. Israeli Prime Minister Benjamin Netanyahu sees these conditions as harsh and unprecedented, and doesn’t want to pay a steep political price just to enter talks.

The Obama administration and the other members of the Quartet — the Middle East mediating group that also includes envoys from the European Union, Russia and the United Nations — want to resume direct talks and this past week held a preparatory meeting with Israeli and Palestinian negotiators in Amman, Jordan. There may be more such meetings, and that is good, because ultimately there will be no peace without negotiations.
But there should also be no illusions about the prospects of a breakthrough any time soon. The psychological gaps between the parties make it hard to resolve their differences and have bedeviled all the work for peace talks over the past few years.

I have been intimately involved in peacemaking efforts over the past 20 years under Presidents George H.W. Bush, Bill Clinton and Obama, and I know thatAbbas and Netanyahu carry the weight of their peoples’ history and mythology, and face enormous political constraints. But those difficulties cannot be a reason to despair and accept a stalemate, particularly when those who reject peace will exploit any impasse to challenge the very idea of a two-state outcome.

While there may be no early breakthrough on holding negotiations, it is possible to overcome the stalemate. One way to do so — and to validate those Palestinian leaders, such as Abbas and Prime Minister Salam Fayyad, who believe in nonviolence and coexistence — is for the Israelis to change the realities on the ground. After all, these Palestinian leaders need to be able to show that their approach is producing a process that will, in time, end the occupation.

What could demonstrate to the Palestinians that the occupation is receding? Examples are not hard to come by. Since the interim agreement of the Oslo process was finalized in 1995, the West Bank has been divided into non-contiguous areas known as A, B and C — with the Palestinians having putative control in Area A and Israel retaining overall responsibility in the two other areas. From the fall of 1995 to the spring of 2002, the Israel Defense Forces (IDF) largely stayed out of Area A, which constitutes about 18 percent of the territory and includes all the major cities in the West Bank. According to the Oslo agreements, the Palestinians are to have civil and security responsibility in this area.


But in 2002, at the height of the second intifada and the horrendous suicide bombings that Palestinians were executing in Israel, the IDF began operating in Area A again to try to stop the attacks. Though the intifada ended in 2005 and Palestinian security forces have been generally effective in preventing terror attacks, the IDF still carries out periodic incursions into Palestinian cities to reinforce local security efforts. This grates on Palestinians, reminding them who remains in control.

So, one meaningful step would be either to stop all such incursions in Area A or, if there are continuing security concerns, to phase them out based on the security situation. Gabi Ashkenazi, former chief of staff of the IDF, has consistently said that “as the Palestinians do more on security, we will do less.” A gradual ending of incursions in Area A would certainly be consistent with that axiom.

In Area B, about 22 percent of the West Bank, Palestinian police maintain law and order but are not permitted to deal with terrorist threats. Israel could allow their presence to grow. From my discussions with Israeli Defense Minister Ehud Barak, I know that he is open to increasing the number of Palestinian police stations and broadening the areas where Palestinian security personnel operate. Now would be a good time to take these steps, as any such expansion would certainly be noticed, and welcomed, by the Palestinian public.
Finally, in Area C, which is about 60 percent of the West Bank, Palestinians’ security and police forces have no access, their economic activity is extremely limited, and Israel retains civil and security responsibilities. There is no practical reason that the Palestinians cannot be permitted dramatically more economic access and activity in this area.

To give one example, there are Palestinian stone masonry factories in Area A, but Palestinians have limited access to the rock quarries in the West Bank, which are in Area C. In a case brought against Israeli ownership of the rock quarries, the Israeli Supreme Court ruled late last month that no additional quarries should be Israeli-owned. That ruling creates an opening for private Palestinian ownership, should any new quarries be established — and there clearly is room for more.

Expanding the Palestinians’ economic opportunities in Area C would do wonders for job creation and the overall Palestinian economy. (In the West Bank, unemployment has come down in recent years but remains at about 16 percent.)
These steps should be feasible from an Israeli standpoint. First, these or similar changes could be implemented without altering the territory’s political status and could be done in a way that would not put Israeli security at risk, particularly if coordinated closely with the IDF.

Second, Netanyahu has said repeatedly that he does not want to rule over Palestinians and that the stronger their economic base, the better the prospects for peace. These steps would certainly demonstrate that the prime minister means what he says. At the same time, they would signal to Palestinians that independence is possible and that the approach from Abbas and Fayyad — not Hamas resistance or violence — can produce it.

I’m not suggesting to forgo negotiations and their focus on a two-state solution. Talks need to be pursued, and the Obama administration is rightly doing so. The administration is also continuing to assist with institution-building by providing material support for the security, judicial and other sectors of Palestinian society — steps that fit neatly with the kind of actions I am proposing to validate leaders such as Fayyad. At this point, validation of nonviolence will come less from words and more from demonstrations that the occupation is shrinking and will, eventually, end.

The rest of the Middle East is churning, with dictators being toppled and protesters still in the streets a year into the Arab Awakening. Since the demand for free and fair elections has become a symbol of credibility in the uprisings, the pressure on both Fatah and Hamas to hold elections this year is likely to become irresistible. For the past few years, Abbas has said that he would not be a candidate in new elections, but now he is saying he would like those elections to take place in May and plans to depart the political scene afterward. Even if it will not be simple to reach an agreement with Hamas on the terms of elections,Abbas will feel the need to hold them sometime in 2012.

These elections are likely to shape the Palestinians’ identity and whether they continue to accept nonviolence, peaceful coexistence with Israelis and a two-state solution. If there are clear signs that the occupation is diminishing, the positions of Palestinians such as Abbas, Fayyad and their followers who believe in nonviolence will be validated before the elections. This is essential because the alternative is Hamas, which rejects nonviolence and peace with Israel.

In the recent deal with the Israeli government to free kidnapped soldier Gilad Shalit, which gained the release of more than 1,000 prisoners, Hamas was seen as delivering political gain through an act of violence. By comparison, Abbas and Fayyad are not seen as delivering on the issues that matter to the Palestinian public, such as prisoner releases, Israeli withdrawal or a reduction of Israeli control.

For Palestinians, at least, this validation would also shrink the psychological gap between them and the Israelis, inspiring hope that negotiations could actually lead somewhere. It might, thus, also offer the best way to unstick the negotiating track. Even more important, with the changes sweeping the region and a political transition looming for the Palestinians, such a validation may be the only way to preserve support among the Palestinian and Arab public for a two-state solution.


Dennis Ross, counselor at the Washington Institute for Near East Policy, served as a special assistant to President Obama and a senior director on the National Security Council staff from July 2009 to December 2011.
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3) Iran plans one-kiloton underground nuclear test in 2012 

An underground nuclear test
Tehran is preparing an underground test of a one-kiloton nuclear device during 2012, much like the test carried out by North Korea in 2006. Underground facilities are under construction in great secrecy behind the noise and fury raised by the start of advanced uranium enrichment at Iran's fortified, subterranean Fordo site near Qom.

All the sanctions imposed so far for halting Iran's progress toward a nuclear weapon have had the reverse effect, stimulating rather than cooling its eagerness to acquire a bomb.

Yet, according to a scenario prepared by the Institute for National Security Studies (INSS) at Tel Aviv University for the day after an Iranian nuclear weapons test, Israel was resigned to a nuclear Iran and the US would offer Israel a defense pact while urging Israel not to retaliate.

As quoted by the London Times Monday, Jan. 1, INSS experts, headed by Gen. (ret.) Giora Eiland, a former head of Israel's National Security Council, deduced from a simulation study they staged last week that. Their conclusion is that neither the US nor Israel will use force to stop Iran's first nuclear test which they predicted would take place in January 2013.

Tehran does not intend to wait for the next swearing-in of a US president in January 2013,  whether Barack Obama is returned for a second term or replaced by a Republican figure, before moving on to a nuclear test.

Iran's Islamist rulers have come to the conclusion from the Bush and Obama presidencies that America is a paper tiger and sure to shrink from attacking their nuclear program – especially while the West is sunk in profound economic distress.


Both Tehran and the INSS are wrong: The Tel Aviv scenario is the work of a faction of retired Israeli security and intelligence bigwigs who, anxious to pull the Netanyahu government back from direct action against the Islamic Republic, have been lobbying for the proposition that Israel can live with a nuclear-armed Iran.

Washington sources confirm, however, President Obama considers the risk of permitting a nuclear-armed Iran to be greater than the risks of military action.
Monday, Jan. 9, top administration officials said that developing a nuclear weapon would cross a red line and precipitate a US strike. US Defense Secretary Leon Panetta: "If Iran takes the step to develop a nuclear weapon or blocking the Strait of Hormuz, they're going to be stopped." He was repeating the warnings of the past month made by himself and Chairman of the Joint US Chiefs of Staff. Gen. Martin Dempsey.

As for Israel, Dennis Ross, until recently senior adviser to President Obama, reiterated in a Bloomberg interview on Jan. 10: "No one should doubt that President Barack Obama is prepared to use military force to prevent Iran from acquiring a nuclear weapon if sanctions and diplomacy fail."

As for Israel, Ross said: "I wouldn't discount the possibility that the Israelis would act if they came to the conclusion that basically the world was prepared to live with Iran with nuclear weapons," he said. "They certainly have the capability by themselves to set back the Iranian nuclear program."

Israel's media screens and front pages are dominated these days by short-lived, parochial political sensations and devote few words to serious discourse on such weighty issues as Iran's nuclear threat.

This is a luxury that the US president cannot afford in an election year.  Iran's acquisition of a nuclear bomb and conduct of a nuclear test would hurt his chances of a second term. The race is therefore on for an American strike to beat Iran's nuclear end game before the November 2012 presidential vote.

The INSS have also wrongly assessed Russia's response to an Iranian nuclear test as "to seek an alliance with the US to prevent nuclear proliferation in the region."

This fails to take into account that Prime Minister Vladimir Putin, running himself for a third term as president in March, has already committed Moscow to a new Middle East policy which hinges on support for a nuclear Iran and any other Middle East nation seeking a nuclear program. This is part of Russia's determined plan to trump America's Arab Spring card.

3a)From an ex-CIA spy: US must exploit new split in Iran's Revolutionary Guard
By Reza Kahlili




The window is closing on a one-time opportunity. Obama must act now 

) A serious split is developing within Iran's powerful Revolutionary Guard, with one faction favoring the overthrow of the dictatorial regime. This presents a window of opportunity for the West to support regime change before the Islamic Republic successfully tests nuclear weapons. Once the regime has those nuclear bombs, that opening will be much narrower.
Iran has tried hard to show strength in the face of sanctions aimed at pressuring Tehran to quit its suspected nuclear-bomb and missile development programs. Iranian leaders are now flexing their military muscles in the strategic waterway, the Strait of Hormuz, threatening to shut it down and choking off a major part of the world's oil supply.
The regime has long tried to scare the West from taking any action against it, by threatening the world's security and stability. However, behind its mask of strength and unity, big cracks are beginning to show.



Ever since entering politics, the Iranian supreme leader, Ayatollah Ali Khamenei, has been a vengeful politician who rarely trusts anyone. Sources reveal that after the Nov. 12 explosions at the Guard's base west of Tehran, many Guard members, including commanders and even officers at the supreme leader's office, have been arrested and are under investigation.
On that day, Mr. Khamenei, along with many other high-ranking Iranian officials, was supposed to be present at a ceremony at the explosion site. The massive blast not only rattled Tehran more than 20 miles away but shocked the regime's hierarchy, which saw it as a covert operation to take out the supreme leader and his cronies.
The regime now worries about the upcoming parliamentary elections scheduled for March 2. First, there is the possibility of President Mahmoud Ahmadinejad's faction taking control of parliament, creating problems for Khamenei and his allies, as a growing rift has appeared between Mr. Ahmadinejad and the supreme leader. But the regime also worries about the possibility of another uprising by the people of Iran, as the majority of Iranians resent the totalitarian regime.
Just days ago, Ahmadi Moghadam, the top police commander of the regime, announced the "readiness" of security forces to confront possible unrest on election day for the ninth Majlis (parliament).
However, the mullahs' biggest worry is the Revolutionary Guard themselves, the very force that has been the regime's pillar of support ever since the Islamic Revolution in 1979. A letter written by one of its commanders to Mohammad Nourizad, a conservative journalist who himself continues to criticize Khamenei and the regime despite being jailed, beaten, and threatened, was recently published on Mr. Nourizad's blog.
The commander, whose name was withheld for security purposes, states that, "Like many millions of suffering Iranians, myself and hundreds of freedom-loving and free-thinking commanders of the Revolutionary Guard do think about the devastation" that Khamenei has forced on the country.
The commander continues, "I can positively assure you and announce to the dear people of Iran that a collective majority of the Revolutionary Guard absolutely despise the regime leadership, but they are stuck in an exceedingly cruel and bloodthirsty system. This authority does not tolerate an alternative approach by the so-called insiders, and so they orchestrate military courts in order to label members of the Revolutionary Guard as traitors and send them to the gallows."
The Revolutionary Guard are human too, the commander says, and contrary to their military facade, they also have democratic views and are waiting on more favorable conditions so that they can join the people in opposing the regime. He assures the Iranians that the majority of the Guard forces will not participate in any suppression of the people, and the brutality that the people have witnessed is due to those vicious members who fall under the jurisdiction of the Basij auxiliary and security forces.
In criticizing the supreme leader, the commander says that Khamenei is behind the terror machine of the Quds Forces with their assassination and terrorist activities outside the country and the Basij forces as a military and oppressive force inside the country.
The commander brazenly declares, "Without a shadow of a doubt and based on documentation and proof, many of which will be produced and presented in time, the assassinations of Kazem Rajavi, Shahpour Bakhtiar, Dr. [Abdul Rahman] Ghassemlou and the heinous murders of Dariush and Parvaneh Forouhar and many other opposition figures inside and outside of Iran were carried out under the supervision of the Guard Corps and the Intelligence Ministry."
The commander says the nation is suffering from an epidemic of hopelessness and that the possibility of an uprising like the one of 2009 is not great. He believes that now the only possibility for regime change is an attack from outside, such as the one that toppled Saddam Hussein in Iraq, but it would be highly costly for Iran and Iranians.
In a stern warning to Iranians and the world, the commander states that if the regime is not overthrown, it will soon test its first nuclear bomb, becoming essentially untouchable. It will then suppress anyone opposing it just as Stalin did in the Soviet Union.
There are steps the West, particularly the US, can take to exploit this split in the Guard and encourage regime change. It must voice support for Iranians in their aspirations for freedom and democracy. It should condemn the Iranian leaders for crimes against humanity and move to arrest and try them in international courts. It must confront the Revolutionary Guard with its terrorist activities abroad. And the West must expand its economic sanctions to the Iranian Central Bank and Iranian oil immediately.
Today the West has many allies in Iran to help bring about regime change and save the world from a dark future, but it must be aware that the window is closing. 

Reza Kahlili is a pseudonym for a former CIA operative in Iran's Revolutionary Guards and the author of the award winning book, "A Time to Betray". He is a senior Fellow with EMPact America and teaches at the US Department of Defense's Joint Counterintelligence Training Academy (JCITA).

3b)Iran's Nukes and Israel's Dilemma

Israeli Defense

By Yoaz Hendel

Editors' note: Yoaz Hendel now works in the Israeli prime minister's office. This article was written before his government service; views expressed herein are his alone.
While the Obama administration has not reconciled itself to the futility of curbing Tehran's nuclear buildup through diplomatic means, most Israelis have given up hope that the international sanctions can dissuade the Islamic Republic from acquiring the means to murder by the millions. Israel's leadership faces a stark choice—either come to terms with a nuclear Iran or launch a preemptive military strike.

The Begin Doctrine


Ahmadinejad delivers his "Wipe Israel from the map" speech at Tehran's The World without Zionism conference, October 26, 2005. Iran's genocidal intentions have been repeatedly spelled out by current and former leaders in Tehran, and it is wise for the Israeli leadership to take the rhetoric—combined as it is with the hard facts of Iran's nuclear subterfuge—seriously.
When the Israeli Air Force (IAF) decimated Iraq's Osirak nuclear reactor thirty years ago, drawing nearly universal condemnation, the government of prime minister Menachem Begin declared Israel's "determination to prevent confrontation states … from gaining access to nuclear weapons." Then-defense minister Ariel Sharon explained, "Israel cannot afford the introduction of the nuclear weapon [to the Middle East]. For us, it is not a question of balance of terror but a question of survival. We shall, therefore, have to prevent such a threat at its inception"[1]
This preventive counter-proliferation doctrine is rooted in both geostrategic logic and historical memory. A small country the size of New Jersey, with most of its inhabitants concentrated in one central area, Israel is highly vulnerable to nuclear attack. Furthermore, the depth of hostility to Israel in the Muslim Middle East is such that its enemies have been highly disposed to brinksmanship and risk-taking. Given the Jewish people's long history of horrific mass victimization, most Israelis find it deeply unsettling to face the threat of annihilation again.

While the alleged 2007 bombing of Syria's al-Kibar reactor underscored Jerusalem's willingness to take military action in preventing its enemies from developing nuclear weapons, its counter-proliferation efforts have relied heavily on diplomacy and covert operations. The raid on Osirak came only after the failure of Israeli efforts to dissuade or prevent France from providing the necessary hardware. Likewise, the Israelis have reportedly been responsible for the assassinations of several Iranian nuclear scientists in recent years.[2]They reportedly helped create the Stuxnet computer worm, dubbed by The New York Times "the most sophisticated cyber weapon ever deployed," which caused major setbacks to Iran's uranium enrichment program in 2009.[3] However, such methods can only slow Tehran's progress, not halt or reverse it.

The Iranian Threat

Tehran has already reached what Brig. Gen. (res.) Shlomo Brom has called the "point of irreversibility" at which time the proliferator "stops being dependent on external assistance" to produce the bomb.[4] Most Israeli officials believe that no combination of likely external incentives or disincentives can persuade the Iranians to verifiably abandon the effort. The Iranian regime has every reason to persevere in its pursuit of the ultimate weapon. While the world condemned North Korea's development of nuclear weapons, it was unwilling to apply sufficient penalties to dissuade Pyongyang from building the bomb.

The regime has an impressive ballistic missile program for delivering weapons of mass destruction. The Iranians began equipping themselves with SCUD missiles during the 1980-88 Iran-Iraq war.[5] Afterward, it turned to North Korea for both missiles and the technology to set up its own research and production facilities. Tehran has produced hundreds of Shahab-3 missiles, which have a range of nearly 1,000 miles and can carry a warhead weighing from 500 kilograms to one ton.[6] In 2009, Tehran successfully tested a new two-stage, solid propellant missile, the Sejil-2, which has a range of over 1,200 miles, placing parts of Europe within its reach.

There is some disagreement as to how long it will take Tehran to produce a nuclear weapon. While the government of Israel has claimed that Iran is within a year or two of this goal, in January 2011, outgoing Mossad director Meir Dagan alleged that Iran will be unable to attain it before 2015.[7]

Iranian Intentions

Much of the debate in Israel is focused on the question of Iranian intentions. The fact that Tehran has poured staggering amounts of money, human capital, and industrial might into nuclear development—at the expense of its conventional military strength, which has many gaps, not to mention the wider Iranian economy—is by itself a troubling indicator of its priorities. Prime Minister Benjamin Netanyahu and many other leading Israeli political and security figures view the Islamic Republic as so unremittingly hostile that "everything else pales" before the threat posed by its pursuit of nuclear weapons.[8]

Proponents of this view draw upon repeated threats by President Mahmoud Ahmadinejad to wipe Israel off the map[9] and Iranian support for radical Palestinian and Lebanese groups seeking its destruction. They also point to Ahmadinejad's radical millenarian strand of Shiite Islamism.[10] Shiites believe that the twelfth of a succession of imams directly descendant of the Prophet Muhammad went into hiding in the ninth century and will one day return to this world after a period of cataclysmic war to usher in an era of stability and peace.

Ahmadinejad appears to believe that this day will happen in his lifetime. In 2004, as mayor of Tehran, he ordered the construction of a grand avenue in the city center, supposedly to welcome the Mahdi on the day of his reappearance. As president, he allocated $17 million for a mosque closely associated with the Mahdi in the city of Jamkaran.[11] Rather than seeking to reassure the world about Tehran's peaceful intentions during his 2007 address before the U.N. General Assembly, Ahmadinejad embarked on a wide-eyed discourse about the wonders of the Twelfth Imam: "There will come a time when justice will prevail across the globe ... under the rule of the perfect man, the last divine source on earth, the Mahdi."[12]

The fear in Israel is that someone who firmly believes an apocalyptic showdown between good and evil is inevitable and divinely ordained will not be easily deterred by the threat of a nuclear war. "There are new calls for the extermination of the Jewish State," Netanyahu warned during a January 2010 visit to Israel's Holocaust museum, Yad Vashem. "This is certainly our concern, but it is not only our concern."[13] For Netanyahu, a nuclear Iran is a clear and present existential threat.

Those who dissent from this view point out that the Iranian people are not particularly hostile to Israelis; indeed, the two countries enjoyed close relations before the 1979 Iranian revolution. They argue that the Iranian regime's militant anti-Zionism is a vehicle for gaining influence in the predominantly Sunni Arab Middle East but not something that would drive its leaders to commit suicide. "I am not underestimating the significance of a nuclear Iran, but we should not give it Holocaust subtext like politicians try to do," said former Israel Defense Forces (IDF) chief of staff Dan Halutz, who commanded the Israeli military during the war in Lebanon in 2006.[14] Defense Minister Ehud Barak said in a widely circulated September 2009 interview that Iran was not an "existential" threat to Israel.[15]

The question of whether Iran is an existential danger is more rhetorical than substantive. Even if Iranian nuclear weapons are never fired, their mere existence would be a profound blow to most Israelis' sense of security. In one poll, 27 percent of Israelis said they would consider leaving the country if Tehran developed nuclear capabilities. Loss of investor confidence would damage the economy. This could spell the failure of Zionism's mission of providing a Jewish refuge as Jews will look to the Diaspora for safety.[16] This is precisely why Israel's enemies salivate over the
possibility of an Iranian bomb.

Even if the prospect of mutually assured destruction effectively rules out an Iranian first strike, Tehran's acquisition of nuclear weapons would still shift the balance of power greatly. Iran projects its power throughout the Middle East mainly by way of allies and proxies, such as Muqtada al-Sadr's Mahdi army in Iraq, Hamas in Gaza, the Assad regime in Syria, and Hezbollah in Lebanon. The Iranian nuclear umbrella will embolden them. The next time an Israeli soldier is abducted in a cross-border attack by Hezbollah or Hamas, Jerusalem will have to weigh the risks of a nuclear escalation before responding. There is also the possibility that Tehran could provide a nuclear device to one of its terrorist proxies.[17]

A successful Iranian bid to acquire the bomb will set off an unprecedented nuclear arms race throughout the region. Arab countries such as Egypt, Saudi Arabia, Jordan, and the United Arab Emirates will want to create their own nuclear insurance policies in the face of Tehran's belligerence and regional ambitions. Turkey has passed a bill in its parliament paving the way for the construction of three nuclear reactors by 2020.[18]

Most of Israel's decision-makers believe that Israel cannot afford the risks of living with a nuclear Iran. Those who publicly differ with Netanyahu on this score seem mainly concerned that he is exploiting popular fears for political gain, but they are likely to fall in line with public opinion at the end of the day. The large majority of Israelis support a military strike on Iran's nuclear facilities as a last resort, and a small majority (51 percent according to a 2009 poll) favor an immediate strike on Iran as a first resort.[19]

The Military Option

The general assessment is that the IDF has the ability to knock out some of Tehran's key nuclear facilities and set back its nuclear program by a couple of years but not completely destroy it—at least not in one strike.[20] Several factors make Iran's nuclear program much more difficult to incapacitate than that of Saddam Hussein's Iraq.

Whereas most of Iraq's vital nuclear assets were concentrated at Osirak, "Iran's nuclear facilities are spread out," notes former IDF chief of staff Ya'alon,[21] some of them in close proximity to population centers. The distance to targets in Iran would be considerably greater than to Osirak, and its facilities are better defended. Iran has mastered nuclear technology much more thoroughly than Iraq and can, therefore, repair much of the damage without external help.
Of the known Iranian nuclear sites, five main facilities are almost certain to be targeted in any preemptive strike. The first is the Bushehr light-water reactor, along the gulf coast of southwestern Iran. The second is the heavy-water plant under construction near the town of Arak, which would be instrumental to production of plutonium. Next is the uranium conversion facility at Isfahan. Based on satellite imagery, the facility is above ground although some reports have suggested tunneling near the complex.[22]

Fourth is the uranium enrichment facility at Qom, which the Iranians concealed from the International Atomic Energy Agency (IAEA) prior to September 2009 and well after major Western intelligence agencies knew about it. The facility, which can hold about 3,000 centrifuges, was built into a mountain, making it difficult to penetrate. Israeli defense minister Barak called it "immune to standard bombs."[23]

The fifth and most heavily fortified primary target is the main Iranian uranium enrichment facility in Natanz. The complex consists of two large halls, roughly 300,000 square feet each, dug somewhere between eight and twenty-three feet below ground and covered by several layers of concrete and metal. The walls of each hall are estimated to be approximately two feet thick. The facility is also surrounded by short-range, Russian-made TOR-M surface-to-air missiles.
Military planners may also feel compelled to attack Tehran's centrifuge fabrication sites since their destruction would hamper the efforts to reestablish its nuclear program. However, it is believed that the Iranians have dispersed some centrifuges to underground sites not declared to the IAEA. It is by no means clear that Israeli intelligence has a full accounting of where they are.
The Israelis may also choose to bomb Iranian radar stations and air bases in order to knock out Tehran's ability to defend its skies, particularly if multiple waves are required. Ya'alon estimates that Israel would need to attack a few dozen sites.[24]

The Operation

The Israeli Air Force is capable of striking the necessary targets with two to three full squadrons of fighter-bombers with escorts to shoot down enemy aircraft; however, most of the escorts will require refueling to strike the necessary targets in Iran.[25] In addition, the Israelis can make use of ballistic missiles and cruise missiles from their Dolphin-class submarines.
The IAF has carried out long-range missions in the past. In 1981, Israeli F-16s struck the Osirak reactor without midair refueling. Refueling tankers were activated for Israel's longest-range air strike to date, the 1985 bombing of the Palestine Liberation Organization's (PLO) headquarters in Tunis, 1,500 miles away. The IAF's highly publicized 2009 flyover over Gibraltar was widely perceived as a dress rehearsal for a strike against Iran.[26] In 2009, the IAF instituted a new training regimen that included refueling planes as their engines were on and sitting on the runway with fuel nozzles disconnected seconds before takeoff.
The IAF has specialized munitions designed to penetrate fortified targets, including GBU-27 and GBU-28 laser-guided bunker buster bombs and various domestically produced ordnance. Israeli pilots are skilled at using successive missile strikes to penetrate fortifications. "Even if one bomb would not suffice to penetrate, we could guide other bombs directly to the hole created by the previous ones and eventually destroy any target," explains former IAF commander Maj. Gen. Eitan Ben-Eliyahu, who participated in the strike on Osirak.[27]
Israel's advanced electronic-warfare systems are likely to be successful in suppressing Iran's air defenses although these were significantly upgraded by Moscow during the 2000s.[28] Moreover, whereas thirty years ago, Israeli pilots needed to fly directly over Osirak to drop their bombs, today they can fly at higher altitudes and launch satellite or laser-guided missiles from a safer distance. Nor are Tehran's roughly 160 operational combat aircraft, mostly antiquated U.S. and French planes, likely to pose a serious threat to Israeli pilots.

Possible Attack Routes

The main problem Jerusalem will encounter in attacking Iran's nuclear facilities results from the long distance to the main targets. Since greater distance always means that more things can go wrong, Israeli losses and efficacy will likely depend on which of three possible routes they take to Iran.
The northern route runs along the Turkish-Syrian border into Iran and is estimated to be about 1,300 miles. This route entails several risks and would need to take into account Syrian air defenses and Turkish opposition to violating its airspace. Israeli planes flew over Turkey when the IAF bombed al-Kibar in 2007 and even dropped fuel tanks in Turkish territory. However, the recent deterioration in relations between Ankara and Jerusalem makes it extremely unlikely that the Turkish government will allow such an intrusion.
The central route over Jordan and Iraq is the most direct, bringing the distance to Natanz from the IAF's Hatzerim air base down to about 1,000 miles, yet it entails serious diplomatic obstacles. Jerusalem would have to coordinate either with the Jordanians and the Americans or fly without forewarning. While Israel has a peace treaty with Jordan, Amman will not want to be perceived as cooperating with Israeli military action against Tehran and thus possibly face the brunt of an Iranian reprisal. Washington may not want to be involved either, as it needs Tehran's acquiescence to withdraw its forces from Iraq successfully. While Jerusalem could limit the risk of hostile fire by notifying its two allies of the impending attack, there would be considerable diplomatic costs.

The southern route would take Israeli planes over Saudi Arabia and then into Iran. While this is longer than the central route, there have been reports that the Saudis have given Jerusalem permission to use their airspace for such an operation.[29]

The difficulties also depend on the precise goal of the air strike. A short-term, financially costly degradation of Iran's nuclear program can be achieved in one wave of attacks, but Israeli defense analysts have estimated that a decisive blow could require hitting as many as sixty different targets with return sorties lasting up to two days.

Estimates in Israel vary regarding the losses the IAF might suffer in such an operation.[30] Some estimates claim that with their advanced, Russian-supplied air defense systems, the Iranians might be able to shoot down a small number of aircraft. But even just a few pilots shot down and captured by Iran would be a heart-wrenching tragedy for Israelis. To prepare for this, in 2009 the IAF began increasing mental training for its airmen with an emphasis on survival skills.
Many former, high-ranking generals and intelligence chiefs have cast doubt on whether Jerusalem can succeed in decisively setting back Tehran's nuclear program. Addressing an audience at the Hebrew University of Jerusalem in May 2011, Meir Dagan said that the idea of attacking Iranian nuclear sites was "the stupidest thing" he had ever heard and that such an attempt would have a near-zero chance of success.[31]

The Fallout

The strategic fallout from an Israeli attack will likely be significant. Hezbollah will probably initiate hostilities across the Lebanese-Israeli border. During the 2006 Israel-Hezbollah war, the Shiite Islamist group fired more than 4,000 rockets into Israel, causing extensive damage and killing forty-four civilians.[32] Today, its arsenal is considerably larger and includes many more rockets capable of reaching Tel Aviv. Dagan estimates that the Iranians can fire missiles at Israel for a period of months, and that Hezbollah can fire tens of thousands of rockets.[33] Hamas may also attack Israel with rockets from Gaza. It is not inconceivable that Syrian president Bashar Assad would join the fight, if still in power, in hope of diverting public anger away from his regime.

Iran has also developed an extensive overseas terrorist network, cultivated in conjunction with Hezbollah. This network was responsible for two car bombings against the Jewish community in Argentina that left 114 people dead in the early 1990s.[34]

Last year, Israel distributed gas masks to prepare for the possibility that Iran or Syria would deploy chemical or biological weapons[35] while the IDF's Home Front Command received an increased budget to prepare bomb shelters and teach the public what to do in case of emergency.[36] C4I systems were improved between early-warning missile detection systems and air sirens, including specially designed radars that can accurately predict the exact landing site of incoming missiles. Since no one is certain how accurate Iran's Shahab and Sajil missiles are, Jerusalem began strengthening defenses at its Dimona nuclear reactor in 2008.[37]
Jerusalem will not sit back and allow its citizens to be bombed mercilessly. Since Lebanon will probably be the main platform of any major Iranian attack, Israeli retaliation there is sure to be swift and expansive. Should Syria offer up any form of direct participation in the war, it too may come under Israeli attack. The Israelis may go so far as to bomb Iran's oil fields and energy infrastructure. Since oil receipts provide at least 75 percent of the Iranian regime's income and at least 80 percent of export revenues, the political shock of losing this income could lead the regime to rethink its nuclear stance, as well as erode its public support, and make it more difficult to finance the repair of damaged nuclear facilities.[38]
On the other hand, Tehran may double down by sending its own ground troops to Lebanon or Syria to join the fight against Israel. This could draw in the Persian Gulf Arab monarchies, particularly if the Alawite-led Assad regime is still facing active opposition from its majority Sunni population.

How long such a war will last is impossible to predict. Israel's defense doctrine calls for short wars, so it will likely launch a diplomatic campaign with Western backing to end the war as soon as possible. However, the Iranians may hunker down for the long haul, much as they did during the 8-year Iran-Iraq war.[39]

If a military solution cannot guarantee success at an acceptable price, some in Israel argue that the best hope for countering the threat posed by Iranian nuclear weapons is regime change. "The nuclear matter will resolve itself once there is a regime change," says Uri Lubrani, Israel's former ambassador to Iran and a senior advisor to the Israeli defense minister until last year. According to Lubrani, the highest priority for Israel and the West should be to strengthen the Iranian masses that rose up in protest following the fraudulent June 2009 elections.[40]
"A military strike will at best delay Iran's nuclear program, but what's worse, it will rally the Iranian people to the defense of the regime," says Lubrani. He argues that it is better to let sanctions eat away at the regime's legitimacy even if they do not lead to a stand down on its nuclear program.[41]

However, it is not clear whether Lubrani is correct in his assessment that war will benefit the regime. While most Iranians are generally supportive of their country's nuclear ambitions, devastating Israeli air strikes may drive home the folly of their government's reckless provocations just as they did during the later stages of the Iran-Iraq war. It is unlikely that many are willing to sacrifice their country's well-being in pursuit of the bomb.
Whether an Israeli attack will unite the public for or against President Ahmadinejad and Supreme Leader Ali Khamene'i is anyone's guess. Much will depend on whether the air strikes produce significant collateral damage. The Bushehr, Isfahan, and Natanz facilities contain uranium hexafluoride (UF6) and even some low-enriched uranium, the release of which into the environment would almost certainly raise public health concerns.

Conclusion

The Israelis will ultimately have to choose between launching an attack likely to spark a large-scale regional conflict and allowing Iran to go nuclear with dire long-term implications. Notwithstanding some disagreement about the immediacy of the threat and possible repercussions, the large majority of Israelis favor military action over living with the ubiquitous threat of nuclear annihilation.

With a U.N. vote on Palestinian statehood threatening to erode Israel's international standing still further, attacking Iran could prove dangerously isolating for Israel even with Washington's blessing—to proceed without it would be a step into the unknown. Much, therefore, depends on whether policymakers in Washington will stand by Jerusalem when push eventually comes to shove.

The American people have increasingly come to recognize the threat to world peace posed by Iran. Whereas 6 percent of Americans named Iran as the country that poses the greatest threat to the United States in 1990, in 2006, Iran led the field with 27 percent.[42] However, though Washington's official stance is that all options remain on the table, Obama is unlikely to undertake direct military action to stop Tehran from building the bomb and may prove reluctant to tacitly support Israeli action.

That is why the decision will ultimately be left to Israel, or rather to its prime minister, who will be faced with a Churchillian dilemma, unprecedented in the Jewish state's history.
Yoaz Hendel, a military historian who has lectured at Bar Ilan University and written on strategic affairs for the newspaper Yediot Aharonot, now works in the Israeli prime minister's office. This article was written before his government service; views expressed herein are his alone.
[1] Ariel Sharon, address, Government Press Office, Jerusalem, Dec. 15, 1981.
[2] The Sunday Times (London), Feb. 4, 2007; The Washington Post, Nov. 29, 2010; The Observer(London), Dec. 5, 2010.
[3] The New York Times, Jan. 16, 2011.
[4] Shlomo Brom, "Is the Begin Doctrine Still a Viable Option for Israel?" in Henry Sokolski and Patrick Clawson, eds., Getting Ready for a Nuclear-Ready Iran (Carlisle, Pa.: U.S. Army War College, Strategic Studies Institute, 2005), p. 139.
[5] Yiftah S. Shapir, "Iran"s Ballistic Missiles," Strategic Assessment INSS, Aug. 2009.
[6] Ibid.
[7] Ha'aretz (Tel Aviv), Jan. 7, 2011.
[8] Ibid., Nov. 14, 2006.
[9] Islamic Republic of Iran Broadcasting (Tehran), Oct. 27, 2005.
[10] See Mohebat Ahdiyyih, "Ahmadinejad and the Mahdi," Middle East Quarterly, Fall 2008, pp. 27-36.
[11] Charles Krauthammer, "In Iran, Arming for Armageddon," The Washington Post, Dec. 16, 2005.
[12] Islamic Republic News Agency, Sept. 26, 2007.
[13] Benjamin Netanyahu, speech, Jerusalem, Jan. 25, 2010.
[14] The Jerusalem Post, Oct. 15, 2010.
[15] Reuters, Sept. 17, 2009.
[16] Yossi Klein Halevi and Michael B. Oren, "Israel Cannot Live with a Nuclear Iran," The New Republic, Jan. 26, 2010.
[17] Chuck Freilich "The Armageddon Scenario: Israel and the Threat of Nuclear Terrorism," BESA Center Perspectives Papers (Ramat Gan), Apr. 8, 2010.
[18] See Yoel Guzansky, "The Saudi Nuclear Option," INSS Insight, Institute for National Security Studies, National Defense University, Washington, D.C., Apr. 2010; John Bolton, "Get Ready for a Nuclear Iran," The Wall Street Journal, May 2, 2010.
[19] YNet News (Tel Aviv), May 24, 2009.
[20] Whitney Raas and Austin Long, "Osirak Redux? Assessing Israeli Capabilities to Destroy Iranian Nuclear Facilities," International Security, Spring 2007, pp. 7-33.
[21] Jane's Defence Weekly (London), Mar. 10, 2006.
[22] The New York Times, Jan. 5, 2010.
[23] The Jerusalem Post, Dec. 28, 2009.
[24] Jane's Defence Weekly, Mar. 10, 2006.
[25] Raas and Long, "Osirak Redux?" pp. 7-34.
[26] Ynet NewsMar. 5, 2009.
[27] Jane's Defense Weekly, Mar. 4, 2005.
[28] Anthony H. Cordesman, "The Iran Attack Plan," The Wall Street Journal, Sept. 25, 2009.
[29] The Sunday Times, June 12, 2010.
[30] Brom, "Is the Begin Doctrine Still a Viable Option for Israel?" pp. 148-9.
[31] Ha'aretz, May 7, 2011; The Jewish Daily Forward (New York), May 20, 2011.
[32] Fox NewsMar. 27, 2008The Guardian (London), Apr. 11, 2011.
[33] Ha'aretz, May 7, 2011.
[34] BBC NewsMar. 27, 2011.
[35] Ha'aretzMay 1, 2010.
[36] Ha'aretzJune 17, 2009"Israeli Civilians Prepare for Life-Threatening Scenarios," Israel Defense Forces Spokesperson's Unit, June 22, 2011.
[37] Pakistan Daily (Lahore), Oct. 3, 2008.
[38] Patrick Clawson and Michael Eisenstadt, "The Last Resort," The Washington Institute for Near East Policy, Washington, D.C., June 2008.
[39] Moshe Vered, "Ending an Iranian-Israeli War," Mideast Security and Policy Studies, Sept. 2009.
[40] David Horovitz, "Editor's Notes: Playing Chess against Tehran," interview with Uri Lubrani, Mar. 11, 2011; The Wall Street JournalMar. 13, 2010.
[41] The Wall Street JournalMar. 13, 2010.
[42] Associated Press, July 2, 2006.



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4)The era of Arab truth?
Special: In wake of Arab Spring, Mideast journalists speak with unusual frankness at Brussels seminar
Roee Nahmias

BRUSSELS - Dozens of Arab, Turkish and Israeli journalists met in Brussels last month for a seminar that highlighted the changes sweeping the Middle East, and specifically the growing Arab openness in the wake of regional revolutions.
A short while after joining the seminar, titled "Euro-Mediterranean Relations in the Wake of the Arab Spring,” I realized that the Arab
world as I knew it was no longer the same.
Instead of the automatic reactions we've become accustomed to, such as journalists who stay away from Israelis or the constant charge that "Israel's occupation is at fault for everything," suddenly I encountered a new, frank attitude. While some participants still clung to past views and odd conspiracy theories, others had no interest in Israel or the Palestinians, instead turning their attention to an incisive, vocal process of self-reflection.
During the seminar, some Arab journalists admitted, even if quietly, that their rulers exploited the Palestinian issue for many years and blamed it for Arab distress.

Delusional times - Gaddafi (Photo: AFP)
Delusional times - Gaddafi (Photo: AFP)


"For many years, Gaddafi exacted a special tax from us – 'The Jihad tax for Palestine" – amounting to one or two percent of our salary," said Libya journalist Reda Fhelboom. ""They said this tax was for the benefit of Jihad, but we know it supported terror groups worldwide."
Fhelboom is an unusual character, who does hide his liberal, decisive views or his pride over recent events in his home country.
"At age 15 already, when I reached high school, I realized everything was nonsense and started to argue with the teacher," he said. "Even my mother, who wasn't educated, knew that it was all nonsense."

Black market for chocolate  

Yet Fhelboom isn't alone. Now that Gaddafi is gone, other Libyan journalists are willing to openly talk about the difficult, delusional existence under the longtime dictator. However, with the exception of Fhelboom, other seminar participants refused to have their names revealed.
"Gaddafi changed the names of the months of the year," Fhelboom said. "August was named 'Hannibal' in honor of his son…Gaddafi did not make do with this and changed the years too. Instead of the calendar used in the world, he set it in line with Prophet Muhammad's death. "

Revolution in Libya (Photo: Reuters)
Revolution in Libya (Photo: Reuters)


Fhelboom and his colleagues also recounted Gaddafi's decision to ban exports to Libya for nearly a decade.
"Gaddafi asserted that a state that relies on overseas exports cannot be independent and free…thereby creating a black market where only senior officials and their close associates could get chocolate," one journalist said. "Those who got chocolate from abroad were really lucky. The same applied to clothing stores, which sold the same models to everyone. This was Gaddafi's Libya."

'Israel a racist state'

Although the Israeli-Palestinian conflict played a marginal role in the seminar, and unusually so, the issue did emerge on occasion despite the new voices.
"Will you agree to recognize Israel's right to exist and establish ties with it?" a Libya journalist asked his Arab colleagues. "Now? Heaven forbid. Only when the last Palestinian will be satisfied with the rights he was given," replies a fellow journalist. "Israel is a racist state that does not comply with international law," charges another.
Fearing the future (Photo: AFP)
Fearing the future (Photo: AFP)


Nonetheless, the seminar did feature unique Arab voices, and also highlighted the journalists' concern for the future of their countries. Many of them wondered whether in a similar seminar a year from now they will be speaking with such openness too.
"The religious already won the elections in Tunisia and Morocco," an Arab female colleague told me. "They are organized; there's no way of telling what's in store."
However, many journalists were also enthusiastic and hopeful about their ability to change longtime realities in the region.
"God willing, peace will prevail and you can come for a visit," an Arab journalist told me. "Yet for the time being, we do not wish to be interviewed, and don't include our name under any circumstances."
Indeed, a revolution has taken place, but for the time being, the boundaries are still very clear.
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5)

Daley Departs as Obama Shifts Strategy to Confronting Congress

By Mike Dorning
The departure of White House Chief of Staff William Daley reflects President Barack Obama’s choice to abandon a strategy of seeking accommodation with congressional Republicans and his critics in corporate America.
Daley’s resignation a year after taking the job is a “not inevitable but logical consequence” of Obama’s movement since September toward confrontation with Congress, said William Galston, who was a domestic policy adviser to former President Bill Clinton.
Jacob Lew, currently director of the Office of Management and Budget, will succeed Daley once he has completed work on the administration’s fiscal 2013 budget proposal, due to be delivered to Congress during the first week of February.
Obama turned to Daley, a former JPMorgan Chase & Co. executive and U.S. commerce secretary, in January 2011 as the president sought to improve relations with U.S. businesses and congressional Republicans following the 2010 midterm elections in which Democrats lost their House majority and saw their margin in the Senate shrink.
He was a central player in Obama’s failed attempt to reach a long-term budget deal with Republicans last July. The president’s job approval ratings plunged after the August standoff on the debt ceiling that brought the nation to the brink of default. Congressional Democrats criticized Daley for concessions such as Medicare cuts the White House offered in its attempts to achieve a grand bargain.
Speech Scheduling
Daley also took blame for a misstep in scheduling Obama’s Sept. 8 address to a joint session of Congress to announce his jobs plan. Daley spoke by telephone with House Speaker John Boehner, an Ohio Republican, prior to the White House’s announcement of a speech and then Boehner publicly requested the speech be delayed a day.
After the $447 billion jobs bill was blocked in Congress, Obama changed course.
Going into the 2012 election, the president is seeking to portray himself as champion of middle-income Americans who is confronting Wall Street and an obstructionist Congress. He signaled his new message with a Dec. 6 address in Kansas, saying the nation is at “a make-or-break moment for the middle class.”
The strategy that Daley was supposed to implement “had hit a wall,” said Galston, now a governance analyst for the Brookings Institution in Washington. “The skill set and the relationships that he brought were much less applicable to the new White House political strategy.”
Returning to Chicago
Daley, 63, informed the president of his decision to leave when he returned to Washington last week after the holidays. Obama said yesterday that he didn’t immediately accept it, and he asked Daley to think it over. In the end, Daley said he wanted to return to his hometown of Chicago, where his family has dominated local politics for decades.
“No one in my administration has had to make more important decisions more quickly than Bill,” Obama said. “There is no question that I’m going to deeply miss having Bill by my side.”
Lew, Obama said, “has my complete trust.”
The change is occurring as the White House gears up for Obama’s re-election campaign with the economy still struggling to gain steam and the unemployment rate at 8.5 percent.
Republican National Committee Chairman Reince Priebus said in a statement that Daley’s departure “makes it even more clear every decision is being made through the lens of re-election” at the White House.
Priebus said Daley had been hired to bridge a divide between Obama and U.S. business and “found himself trying to defend the indefensible” with the administration’s policies.
New Confrontation
Obama ratcheted up tension with congressional Republicans last week by installing Richard Cordray as head of the Consumer Financial Protection Bureau and three members of the National Labor Relations Board through recess appointments. Republicans had used procedural maneuvers to block Cordray’s confirmation.
Lew will be Obama’s third chief of staff. His first, Rahm Emanuel, resigned last October to begin his successful run to succeed Daley’s older brother, longtime Chicago Mayor Richard M. Daley, who retired.
Lew brings continuity as a key member of Obama’s existing team and deep relationships from a long career in Washington that can be used either to ease negotiations with Republicans or strengthen partisan unity in battle, Galston said.
Congressional Relations
“If the name of the game politically is close coordination with the Democratic congressional leadership to respond tactically to whatever the controversies are or whatever the openings happen to be, I would expect him to be quite good at that,” Galston said.
Obama named Lew as his budget office director in July 2010. Lew, 56, previously served in the State Department and was budget chief under President Clinton. He also has experience in Congress, having served as policy director for the late House Speaker Thomas P. “Tip” O’Neill, a Massachusetts Democrat.
Lew played a role in such bipartisan deals as the 1983 Social Security Trust fund rescue and the 1997 balanced budget deal when he was Clinton’s deputy budget director. Former Clinton budget director Alice Rivlin called Lew “a very skilled negotiator.”
“He’s quiet,” she said. “He doesn’t throw his weight around, but he gets the job done.”
Judd Gregg of New Hampshire, the former top-ranking Republican on the Senate Budget Committee, said Lew is respected by both parties as “a straight shooter.”
“He’s a partisan, but he’s a fair guy,” Gregg said.
A graduate of Harvard University and Georgetown Law School, Lew’s background also includes academia, as chief operating officer at New York University for five years, and the private sector, as managing director of Citigroup Inc.’s Alternative Investments until January 2009 and chief operating officer of Citi’s Global Wealth Management before that.
--With assistance from Kate Andersen Brower and Roger Runningen in Washington. Editors: Joe Sobczyk, Jim Rubin.
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