Geopolitics Weekly

Vague low-carbon language and climate change negotiations in Copenhagen in December were relegated to two paragraphs at the communique's end.

Some critics also pointed out that the summit failed to produce a co-ordinated plan to purge the global banking system of billions of dollars of toxic assets, and suggested that regulation of the financial industry should have gone further.

Brown said that the existing agreed fiscal stimulus will amount to $5tn by 2010, and the measures will raise world output by 4% by the end of next year.

The prime minister also won agreement from other G20 world leaders that the International Monetary Fund will monitor the existing stimulus,

Overall, the resources of the IMF will be trebled from $250bn to $700bn, following the lifting by the US of years of opposition. In a sign of the shift in world power, China agreed to provide $40bn of the new loans given to the IMF, with more to come from Saudi Arabia.

At the centre of the deal was a six-point plan:• Reform of the global banking system, with controls on hedge funds, better accounting standards, tighter rules for credit rating agencies, and immediate naming-and-shaming of tax havens that fail to share information.• A global common approach to dealing with toxic assets that impair the ability of banks to lend.• A $1.1tn package to supplement the $5tn stimulus to the global economy by individual countries. The $1.1tn will allow the IMF, the World Bank and others to increase lending to vulnerable countries. There will be a tenfold increase to $250bn in the IMF's facility allowing members to borrow from other countries' foreign currency reserves.• More power for leading developing countries within the IMF and World Bank, to end the stranglehold of the US and Europe on their top jobs.• $200bn of trade finance over two years to help reverse the steepest decline in world trade since 1945, with cash from a range of public and private sources.• A pledge that the fiscal stimulus, including the sale of gold by the IMF due to raise $6bn, will give help to the poorest nations and create green jobs.

Nicolas Sarkozy said the summit meant that the era of secrecy by banks was over; "great progress" had been made, he said, and the page had been turned on the economic model which had dominated since Bretton Woods in 1944 created the world's institutional framework."Since Bretton Woods, the world has been living on a financial model, the Anglo-Saxon model. It's not my place to criticise it, it has its advantages [but] clearly today a page has been turned," he said.

The summit's biggest loser may have been the fight against climate change. Diplomatic sources said China led the opposition to green language in the final communique. David Norman, the WWF campaigns director, claimed that the summit had been "a huge missed opportunity".

Lieberman has taken the idea of two states for two peoples to an extreme. He seeks an Israel that effectively is not only predominantly Jewish, but one that is almost entirely Jewish. Lieberman imagines a transfer of some Israeli cities with Arab populations bordering the 1967 green line out of the Israeli polity, but to where? His prime minister has ruled out the creation of a Palestinian state in the West Bank and the Gaza Strip. 

More broadly, the mix of official government opposition to Palestinian independence, open discussion of ethnic separation, and the almost apocalyptic discourse being promoted by Israeli academics such as Benny Morris are creating a Balkan-like situation within Israel proper that could quickly eclipse the situation in the occupied territories as a threat to international peace and stability if allowed to continue.

sraeli leaders and their advocates have already promoted a full-court blitz demanding that the United States "stop" Iran, or Israel will be forced to do so on its own. In part, this is bluster, as few analysts believe Israel is able to attack Iran on its own, and no one believes that Iran wouldn't retaliate, which would force the United States into the middle of the conflict. However, this emphasis on Iran serves another useful purpose for Netanyahu and Lieberman: Not only does it remove Palestinian independence and potential Israeli peace treaties with the Arab world from U.S. focus, but it sets the agenda for the U.S.-Israeli talks that are to take place this May.

Dealing with a hostile and recalcitrant enemy in Afghanistan and Pakistan is hard enough, but the Obama administration may find that dealing with a hostile and recalcitrant ally brings its own set of challenges.

The BBC's Jo Floto in Jerusalem says Mr Lieberman's supporters are unlikely to be troubled by the police interest in him.

"The right always says that we don't have a partner on the Palestinian side, as an excuse for the lack of progress. Now we are not a partner," Livni said.

She added that Kadima would have joined a unity government had Lieberman been prevented from joining.

In an interview Wednesday with Israel's Channel 2 TV, Lieberman went beyond his criticism of peace talks with the Palestinians and said he opposed any withdrawal from the Golan Heights in return for a peace deal with Syria.

"I am very much in favor of peace with Syria, but only on one basis - peace in return for peace," he said, adding there would be "no withdrawals from the Golan during my time and hopefully not at any time."

Former Prime Minister Ehud Olmert's government held indirect peace talks last year with Syria, which demands that Israel return the Golan as a condition for any deal. Erdan said Lieberman's statement conformed with the government's platform. "We said during the election campaign that we oppose concessions on the Golan Heights," he said. "You have to get used to it - this is the position of most of the public."

A source in Prime Minister Benjamin Netanyahu's party confirmed Wednesday that his new government intended to distance itself from U.S.-sponsored understandings on working towards a Palestinian state.

Asked about ultra-nationalist Lieberman's remark that Israel was no longer bound by the 2007 framework, the source replied: "There is no problem here. He [Lieberman] is distancing himself from the Annapolis label, as the government intends to do."

Hadash MK Afu Aghbaria, meanwhile, urged the international community to impose a diplomatic embargo on Israel in the wake of Lieberman;s statements. "It isn't surprising that a racist foreign minister would produce such vehement suggestions, only a day after the new government was formed," Aghbaria said.

Palestinian President Mahmoud Abbas responded to the swearing-in of Benjamin Netanyahu's government by saying: "We want to tell the world that this man doesn't believe in peace and therefore we cannot deal with him... the world should put pressure on him."

After the dinner he told a Czech newspaper that a decision had been made to cancel a summit between the Israeli prime minister and EU leaders planned for late May or early June.

One communique expressed the impression of one guest at the dinner, who spoke of an atmosphere of "ganging up on Israel," and that terms were imposed "on a government that had not yet been formed."

The message also indicated that several ministers spoke of the "need to teach Israel a lesson about its treatment of the Palestinians."

The central issue discussed at the dinner was the future of Israel-EU relations. Many ministers demanded that Israel be presented with an ultimatum stating that an upgrade of those relations be carried out only with an Israeli government explicitly committing itself to the two-state solution.

Speaking to what the Associated Press describes as a roomful of "cringing diplomats", the new foreign minister said Israel was not bound by the Annapolis peace talks. These were initiated in November 2007 to solve the Israeli-Palestinian conflict and involved around 40 countries.

"The Israeli government never ratified Annapolis; nor did [the] Knesset," said Lieberman, promising to honour only the US-initiated "road map" of 2002, which has long been in stalemate amid accusations from both sides.

In today's speech, Lieberman was more amiable towards Egypt, which he described as an "important element in the Arab world". This is an improvement on a few weeks ago, when he said the Egyptian president, Hosni Mubarak, could "go to hell".

The new posture of the Israeli government is certain to complicate the already tenuous position of Palestinian moderates, foremost among them President Mahmoud Abbas, who has staked everything on the two-state solution. "This minister is an obstacle to peace," said Yasser Abed Rabbo, an aide to Mr Abbas. "Nothing obliges us to deal with a racist person hostile to peace."

Tzipi Livni, who in the previous government oversaw the final status negotiations and was present in the Foreign Ministry yesterday, told Mr Lieberman that "your speech has proven to me that I did the right thing by not joining [a national unity government]".

As the new prime minister, Mr. Netanyahu has tried to strike a more conciliatory tone, promising to hold negotiations with the Palestinian Authority toward a permanent accord. But he has also stopped short of endorsing the two-state solution, putting the new government at odds with the United States and the European Union.

Tony Blair, the special envoy of the so-called quartet of Middle East peacemakers, which consists of the United States, the European Union, the United Nations and Russia, said Wednesday that the peace process was in “very great jeopardy.”

He once advocated bombing the Aswan dam in the event of a war with Egypt, and last year he suggested that Egypt’s president should “go to hell” if he did not want to visit Israel.

Often contradictory and contrary in his positions, Mr. Lieberman, a resident of a Jewish settlement in the West Bank, has said that he advocates the creation of a viable Palestinian state. Yet in January 2008 he pulled his party out of the last governing coalition, led by Ehud Olmert and the centrist Kadima Party, in protest against the Annapolis-inspired talks.

Mr. Lieberman said on Wednesday that instead of Annapolis, Israel was committed to the “road map,” a 2003 American-backed performance-based peace plan that made the creation of a Palestinian state contingent on the Palestinians ending all violence and dismantling terrorist networks.Mr. Erekat, the Palestinian negotiator, noted that the plan also called for Israel to freeze all settlement construction. “I’d really like to know, are we going to see a settlement freeze?” Mr. Erekat said.

Stiglitz: The banks that survived 80 years ago continued to lend money. Today many banks aren't lending money anymore, above all the large investment banks. This will deepen the crisis.

SPIEGEL: The US government's emergency plan is supposed to prevent this, though. The banks receive money from the state so they can continue to give loans. Stiglitz: That's the idea, but it doesn't work. We're just throwing money at them and they pay billions of it out in bonuses and dividends. We taxpayers are being robbed for all intents and purposes in order to reduce the losses that some wealthy people bear. This has to be changed.

SPIEGEL: … and let them go bankrupt? Stiglitz: No, they have to be saved, because the consequences to the monetary system would be incalculable. But as a countermeasure, these institutions have to be nationalized, which even Alan Greenspan is now demanding. Then the government can close those business segments that have nothing to do with lending and make sure that the banks no longer organize esoteric stock deals that they themselves do not understand.

SPIEGEL: Washington sees it that way, too. In particular, it wants countries with strong exports, like Germany, to offer further economic stimulus packages. Do you think that's justified?

Absolutely. Export surpluses are counterproductive in times of economic crisis. They have to be reduced through economic stimulus programs, for example.

I propose that countries with a positive trade balance should stream part of their surplus to the International Monetary Fund. This can then stimulate the economy in developing countries or prevent the economy from collapsing in Eastern Europe.

The Americans have always been masters at changing a supposed regulation measure into further deregulation.

They want to focus on tougher regulation of the financial community. They want the summit to start re-writing the global rulebook on capitalism.

The intriguing thing is that the economic crisis and Brown's lining up with Obama, who has proclaimed his belief in the enduring "special relationship" with Britain, has revived the Franco-German alliance which used to dominate EU affairs and which had seemed to wither under Merkel and Sarkozy. She doesn't like his touchy-feely ways, he finds her incremental style of politics frustrating. They had drifted apart, but they are back sharing a political tent.

The big question on the fiscal stimulus front is: What will China do?

Brown's hope is that China, worried about the safety of its money invested in the U.S., will be ready to commit extra funds to fighting the world recession. But if he agrees to do so, President Hu Jintao will surely exact a price.

If China comes up with the money to help, it will need assurances that it will in the future enjoy greater power within such multilateral institutions as the IMF and the World Bank. The U.S. and Europe, who have dominated the G-8, now have little option too but to accept a new world order.

Whatever the outcome in London it is unlikely now that the G-8 alone will ever carry the same sway. And not surprisingly, Italian Prime Minister Silvio Berlusconi, who hosts this summer's G-8 in Sardinia, has proposed that its gathering should be immediately followed by one of the G-20.

Mrs. Clinton also said the United States handed the Iranian delegation a letter requesting its intercession in the cases of two American citizens who are being held in Iran and another who is missing.

Some officials, including Mrs. Clinton, are skeptical that Iran’s leaders will ever embrace the American overtures. But reaching out, analysts say, keeps Iran on the defensive by demonstrating to the Europeans, the Russians and others that the United States is sincerely trying. And talking about Afghanistan is easier than confronting more divisive issues, especially Iran’s nuclear ambitions.

Mrs. Clinton also reacted warmly to remarks delivered by Mr. Akhondzadeh about what Iran would do to aid reconstruction in Afghanistan and to cooperate in regional efforts to crack down on the booming Afghan drug trade, which is spilling across the Iranian border.

“The fact that they came today, that they intervened today, is a promising sign that there will be future cooperation,” she said. “The Iranian representative set forth some very clear ideas that we will all be pursuing together.”

Iran cooperated with the United States on Afghanistan in the days after the 2001 terrorist attacks, and administration officials still view it as one of the most promising avenues for a reconciliation. Mrs. Clinton had pushed for Iran to be included on the invitation list for the United Nations-sponsored conference.

Iran, which was a no-show at the last Afghanistan conference, in Paris, did not send an official of Mrs. Clinton’s level, unlike most participants. But by sending Mr. Akhondzadeh, a former ambassador to the International Atomic Energy Agency, it was clearly not trying to avoid contact.

At the conference, Iran offered support and criticism of the Obama administration’s new policy on Afghanistan. It praised the focus on regional cooperation, but it argued that sending more foreign troops to Afghanistan would be ineffective.

Clinton had pressed for Iranian participation in The Hague conference, stressing the importance of finding a regional solution to the insurgency in Afghanistan and Pakistan, and western officials were encouraged that Akhundzadeh, a deputy foreign minister and former charge d'affaires in London, was sent by Tehran.

Akhundzadeh told ministers from more than 70 countries at the meeting: "Welcoming the proposals for joint co-operation offered by the countries contributing to Afghanistan, the Islamic Republic of Iran is fully prepared to participate in the projects aimed at combating drug trafficking and plans in line with developing and reconstructing Afghanistan."

He repeated Tehran's criticism of the Nato role in Afghanistan, but used relatively moderate language, saying: "The presence of foreign forces has not improved things and it seems that an increase in the number of foreign forces will prove ineffective, too."

Akhundzadeh added: "The military expenses need to be redirected to the training of the Afghan police and army and Afghanisation should lead the government building process" - an apparent nod towards the Obama administration's decision to send 4,000 more American military trainers.

Western officials expressed hopes that the west and Iran could return to the close co-operation over Afghanistan that took place in the months after the 9/11 attacks. Iranian officials even helped the US target the Taliban, but the relationship cooled after Bush's "axis of evil" speech.

"There is a meeting of minds on drugs, development issues and the [August Afghan] elections, though not on foreign troops, on which they made clear their objections."

Malloch Brown acknowledged that Iran had done some "bad things" in both Afghanistan and Iraq, supplying weaponry to insurgents that had been used against British soldiers.But he argued: "This is Iran supporting its proxies because of a lack of diplomatic partnership around Iraq and Afghanistan. If this is a rapprochement, whether it is overall rapprochement or just aimed at stabilising Afghanistan, it offers the prospect of this behaviour getting moderated and hopefully stopping."

Mr Netanyahu has said in the past that he sees no need for the Palestinians to have full separate statehood.

Analysts say the nuclear ambitions of Iran are likely to top the new cabinet's security agenda. In an apparent reference to that effect, Mr Netanyahu said the biggest threat to Israel and the world came from "the possibility of a radical regime armed with nuclear weapons". He further stressed the issue in comments given to a US magazine shortly before he was sworn in. "You don't want a messianic apocalyptic cult controlling atomic bombs," he said , in reference to Iranian President Mahmoud Ahmadinejad's belief in the imminent return of a Shia Islamic messianic figure, the Mehdi.

The investigation was initiated by the Military Advocate General after reviewing claims made during a conference at the Rabin Military Preparation Center at which soldiers who participated in Operation Cast Lead were present.

The investigation concluded, based on evidence from the soldiers that participated in the conference, that the stories told were purposely exaggerated and hyperbolic in order to reinforce a point amongst the conference participants.

For example, one story made the claim that a soldier was allegedly given orders to fire at an elderly woman. However, upon investigation, it was found that the soldier witnessed no such thing, and was only repeating a rumor that he had heard from an unknown source.

No evidence to justify further legal procedures was discovered in this context. When the case did not offer sufficient evidence, it was decided that the case should be closed.”

This same soldier admitted that he had not witnessed the additional disrespectful and immoral incidents he had described during the conference and that they were based on rumors.

A claim made by a different soldier who had supposedly been ordered to open fire at a woman and two children was also determined to be an incident that he had not witnessed. After checking the claim, it was found that during this incident, a force had opened fire in a different direction—specifically, towards two suspicious men who were unrelated to the civilians in question.

During the aforementioned investigations, the participants at the Rabin Center explicitly stated that they had based their claims relating to the use of phosphorous munitions on what they had heard in the media and not on their own personal knowledge.

In an unrelated investigation, it was found that in a similar incident, a woman, suspected of being a suicide bomber, approached IDF forces. After trying to convince her to cease all movement and to stop advancing toward the forces, they then opened fire.

The Military Advocate General, Brig. Gen. Avichai Mendelblit, concluded the findings of the Military Police investigation: "It is unfortunate that none of the speakers at the conference was careful to be accurate in the depiction of his claims, and even more so that they chose to present various incidents of a severe nature, despite not personally witnessing and knowing much about them. It seems that it will be difficult to evaluate the damage done to the image and morals of the IDF and its soldiers, who had participated in Operation Cast Lead, in Israel and the world."