The assessment, which will be presented next month to the Israeli Cabinet, makes some far-reaching preemptive recommendations: developing a credible military option against Iran, making peace with Syria and preventing Palestinian elections, even at the cost of a collision with the United States.
The NSC foresees two possible Iran-related diplomatic developments that could hurt Israel: a U.S.-initiated dialogue leading to rapprochement between Iran, the United States and the Arab world, or the United States building a wide international coalition against Iran -- for which Israel might be forced to pay a price.
To preempt these developments, the NSC urges the Israeli government to work closely with the incoming U.S. administration to mobilize the international community against Iran and to prevent an American deal with Tehran that undermines Israeli interests.
However, Israel's various intelligence agencies appear to have differences of opinion on the Iran issue.
Military intelligence seems to have more faith in President-elect Barack Obama's plan to stop Iran from going nuclear by using diplomacy backed by the threat of stiffer economic sanctions. Intelligence Chief Maj.-Gen. Amos Yadlin argues that Iran is now more vulnerable to sanctions as a result of the plummeting price of oil.
After conducting a bona fide dialogue with Tehran, Yadlin says, Obama will be in a position to build a strong international coalition for tighter sanctions if the Iranians refuse to drop their nuclear plans.
The NSC, however, is skeptical. Its members believe the only way to stop Iran will be through the threat or use of force. It maintains that Israel only has a small window of opportunity for action and urges the government to work discreetly on contingency plans, while building a realistic military option. In the NSC's view, a nuclear Iran would constitute by far the biggest threat to Israel's existence.
But Israel is seriously threatened, as well, by massive rocket buildups in southern Lebanon and, to a lesser extent, in the Gaza Strip. According to Defense Minister Ehud Barak, Hezbollah now has approximately 42,000 rockets in Lebanon -- more than three times the number it had during the 2006 Lebanon War.
Hamas, too, apparently has been using its truce with Israel to smuggle in huge quantities of weaponry into Gaza from Egypt. The NSC suggests that in the event of a provocation from Lebanon or Gaza, the Israel Defense Forces at all costs should avoid being sucked into a long war of attrition. If the IDF fails to contain the trouble quickly, it should consider launching a wide-scale operation, hitting the other side hard and bringing the fighting to an abrupt end, with as clear cut a result as possible.
The NSC sees in peace with Syria a major strategic advantage in the battle against Iran and its proxies, because peace with Syria likely would lead to peace with Lebanon and significantly weaken the Iran-Syria-Hezbollah-Hamas axis.
For this gain, Israel should be prepared to pay the heavy price of returning the Golan Heights to Syria, the NSC says. Israel also should try to harness the incoming U.S. administration to this end, because Syria would be unlikely to come aboard without U.S. economic and diplomatic assurances. The intelligence agencies seem to be in accord on Syria, although there are differences of nuance here, too.
Yadlin says there are encouraging signs that Syrian President Bashar Assad really wants a deal with Israel, but that it would have to be on his terms: getting back the Golan and receiving the same kind of significant U.S. investment in Syria as Egypt received after it made peace with Israel in 1979.
The NSC believes that the price is worthwhile for both Israel and the United States, as long as Syria detaches itself from the Iranian axis. Yadlin, however, is not sure whether Syria really would cut its ties with Iran and pro-Iranian terrorist groups like Hezbollah.
To shore up its position against Shiite-run Iran, the NSC says Israel should strengthen its ties with moderate Sunni Arab states, especially Saudi Arabia. Israel also should stabilize and strengthen its ties with Jordan. But the NSC does not say how this or strengthening the Saudi connection could be achieved.
One of the bleaker scenarios the NSC posits for 2009 is the collapse of the Palestinian Authority. Hamas is insisting on new elections for the Palestinian presidency and Parliament in January; Palestinian Authority President Mahmoud Abbas wants to extend his term for another year without new elections.
The NSC fears that Abbas might retire from public life if he fails to get his way, possibly leading to the disintegration of the Palestinian Authority. Alternatively, Abbas could compete in the elections and lose to the fundamentalist Hamas.
Either way, chances for a negotiated two-state solution would evaporate if Abbas' moderate-led Palestinian Authority were replaced with Hamas. Israel would be left in the West Bank without a partner to negotiate an end to the occupation.
To keep Abbas in power and the two-state solution alive, the NSC recommends that Israel prevent Palestinian elections, even at the cost of a showdown with the United States and the international community.
Whatever happens, the NSC says, Israel must continue to pressure and weaken Hamas. If the current Hamas-Israel truce in Gaza breaks down, the NSC recommends that Israel launch a wide-ranging operation to topple Hamas in Gaza. Whether that would mean reoccupying Gaza, and if so, for how long, the NSC does not say.
The NSC's thinking is based on the assumption that Israel can do business with Abbas and moderate Palestinians but not with Hamas. But the assessment fails to address the question of whether the moderates can deliver on Israel's security needs and whether the moderate Palestinian leadership has the grass-roots support to stay in power over time.
The NSC analysis and recommendations may not win universal Cabinet approval when presented next month, but they do show very clearly just how complex and dangerous the security issues Israel faces in 2009 will be.
Compounding the uncertainty, the big decisions of '09 will be taken by new and untried governments in both Jerusalem and Washington.
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