India is walking a tightrope as its defense and trade ties with Israel grow, even as the Hamas victory forces a delicate accommodation of popular Indian Muslim support for the Palestinians.

58913 3/31/2006 12:48 06NEWDELHI2227 Embassy New Delhi CONFIDENTIAL 06NEWDELHI7966 "VZCZCXRO8706OO RUEHBC RUEHDBU RUEHDE RUEHKUK RUEHLH RUEHMOS RUEHPWDE RUEHNE #2227/01 0901248ZNY CCCCC ZZHO 311248Z MAR 06FM AMEMBASSY NEW DELHITO RUEHC/SECSTATE WASHDC IMMEDIATE 2044INFO RUEHTV/AMEMBASSY TEL AVIV PRIORITY 0531RUEHJM/AMCONSUL JERUSALEM PRIORITY 0138RUCNISL/ISLAMIC COLLECTIVERUEHBJ/AMEMBASSY BEIJING 1234RUEHBS/AMEMBASSY BRUSSELS 0248RUEHEG/AMEMBASSY CAIRO 0207RUEHLM/AMEMBASSY COLOMBO 4430RUEHDM/AMEMBASSY DAMASCUS 0208RUEHKA/AMEMBASSY DHAKA 4463RUEHIL/AMEMBASSY ISLAMABAD 7385RUEHBUL/AMEMBASSY KABUL 2566RUEHKT/AMEMBASSY KATHMANDU 5116RUEHLO/AMEMBASSY LONDON 9156RUEHMO/AMEMBASSY MOSCOW 7621RUEHNY/AMEMBASSY OSLO 0273RUEHKO/AMEMBASSY TOKYO 2995RUEHCI/AMCONSUL CALCUTTA 2863RUEHCG/AMCONSUL CHENNAI 2729RUEHKP/AMCONSUL KARACHI 3136RUEHLH/AMCONSUL LAHORE 2318RUEHBI/AMCONSUL MUMBAI 1975RUEHPW/AMCONSUL PESHAWAR 2978RUCNDT/USMISSION USUN NEW YORK 9966RHEHNSC/NSC WASHDCRUEIDN/DNI WASHINGTON DCRHHMUNA/CDR USPACOM HONOLULU HIRUEHGV/USMISSION GENEVA 2210RHHJJPI/PACOM IDHS HONOLULU HIRHMFISS/HQ USSOCOM MACDILL AFB FLRHMFISS/HQ USCENTCOM MACDILL AFB FLRUEKJCS/SECDEF WASHDCRUEKJCS/JOINT STAFF WASHDC" "C O N F I D E N T I A L SECTION 01 OF 04 NEW DELHI 002227

SIPDIS

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E.O. 12958: DECL: 02/22/2016 TAGS: PGOV, PREL, PTER, KISL, IN, IS SUBJECT:

REF: A. NEW DELHI 07966

B. NEW DELHI 06608

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Classified By: DCM: Robert Blake for Reasons 1.4 (B, D)

1. (SBU) Summary: India is walking a tightrope as its defense and trade ties with Israel grow, even as the Hamas victory forces a delicate accommodation of popular Indian Muslim support for the Palestinians. As an emerging global power, New Delhi recognizes that it cannot afford to alienate either the Palestinians or Israelis, as this could endanger Indian defense interests or provoke a domestic backlash. Following the Israeli elections, New Delhi hopes to avoid being forced publicly to choose between its pragmatic strategic relationship with Tel Aviv and its sentimental attachment to the Palestinians. End summary.

INDIA & ISRAEL: ATTRACTION AND CAUTION

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2. (SBU) India's bilateral relationship with Israel continues to flourish with growing defense ties, trade links and opportunities for high tech collaboration. However, with a large Muslim population that plays a critical role supporting the ruling Congress in national elections, India has historically supported Palestinians in multinational fora and considered itself a strong supporter of Palestinian self-determination. The Indian elite also sees a reflection of its own anti-colonization history in the Palestinian experience, causing New Delhi to maintain its rhetorical support for Palestinians even as its working relationship with Israel expands. While India opposes Hamas' radical ideology, the GOI puts a high value on being seen to support the legitimately elected Palestinian government. As India's strategic horizon expands there is a growing perception in New Delhi that if Arab nations like Jordan can keep their traditional ties with the Palestinians intact and at the same time build up new relations with Israel, India can do the same.

GOI SLOW TO REACT TO HAMAS VICTORY, THEN WAFFLES

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3. (C) Israeli DCM Yoed Magen told us on March 14th that the Israeli Prime Minister's office tried to contact the Indian PMO to discuss the victory of Hamas after the January election but got ""no response."" Israeli NSA Maj. Gen. (Retd.) Giora Eiland, visiting India January 31-February 2, raised the issue with his interlocutors, including Indian NSA Narayanan and GOI Middle East Envoy C. Gharekhan. Gharekhan was silent on the Quartet statement during the first meeting, Magen reported, but the next day, after an Egyptian statement of support, Gharekhan stated that the GOI did not oppose the Quartet demands and would not expect Israel to negotiate with a group whose objective was to destroy Israel. Magen added that India would be unlikely publicly to endorse any demands on the Palestinian Authority by Israel because it would

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indicate political closeness with Israel.

BUSINESS AS USUAL WITH ISRAEL

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4. (C) Despite Hamas however, the practical relationship between Israel and India continues to progress smoothly. Magen emphasized that commercial, agriculture and defense links between India and Israel were very positive. Nevertheless ""there exists a distinct gap between India's commercial and political strategies"". India and Israel plan to negotiate a preferential trade agreement starting April 2006. According to media reports on March 30, India and Israel have also agreed to hold their first joint military exercise. This exercise in India will provide Israel with access to huge air space for combat exercise. This exercise when it happens, would mark a major uptick in the public profile of the Israel-India military relationship.

HAMAS SEES AN OPENING

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5. (C) Speaking with PolCouns on March 17, special envoy Gharekhan underlined that he had made no decisions about when next to travel to the Palestinian territories. US concerns ""will be a factor in my timing,"" Gharekhan added. Indian Minister of State for External Affairs, E. Ahamed finally provided a high-level (and unhelpful) GOI response to the Palestinian elections, telling media on March 26, ""What was Likud before it came to power in Israel, Hamas is no different (sic)."" He added that the reluctance of Israel to hand over territories was proving to be a ""huge stumbling block"" on the road towards peace. Israeli Ambassador David Danieli briefed the DCM on March 27 regarding Israel's frustration with the GOI's blandishments on talking to Hamas. Israel believed that such a dialogue would be ""counterproductive,"" because it would ""ease pressure on Hamas to moderate its position."" The Israeli government had raised the issue with Additional Secretary (International Organizations) K.C. Singh, but Ambassador Danieli reported that he was in ""listening mode"" only. Hamas sees opportunity in India's waffling. Indian media on March 30 reported remarks made by Palestinian Authority Prime Minister Ismail Haniyeh urging India to play an active role in the Middle East peace process since ""India has been one of the leaders of the Non-Aligned Movement and has a sound recording of upholding democratic principles"". Press reports also stated that he thanked India for its steadfast support for the Palestinian cause.

ACADEMICS SPLIT ON NEW DELHI'S NEXT MOVE

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6. (C) Professor A.K. Pasha, Chairperson at the Center for West Asian and African studies at Jawaharlal Nehru University (JNU) told PolOff on March 20 that India still sees ""a ray of hope that Hamas would moderate its radical views."" He speculated that if Israel undertook military action it would

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be unrealistic for India to urge Hamas to refrain from violence. Although India would support cooperation between Israel and Palestine, the GOI will ""not be the first ""to endorse any moves."" Pasha added that censuring the Hamas government would do no good to India in light of the strong support for the Palestinian people in Indian society.

7. (SBU) Fellow JNU Professor of West Asian Studies P.R. Kumarswamy told PolOff on March 20 that the GOI would continue to wait until other states lay out their positions following Israeli elections before taking a position on Israeli-Palestinian relations. ""India has never been the first to take a stand on Palestine issues,"" he noted, adding that the GOI would most likely avoid any bold statements unless violence ""gets out of control."" Kumarswamy pointed out that despite widespread Indian sympathies for the Palestinians, the GOI was never close to Hamas because they were anti-Arafat. However, he noted that the Indian political Left sees Hamas as only another religious-based party analogous to the Hindu nationalist parties in India and reasons as a result that it can be similarly accommodated.

8. (C) Anticipating Ahamed's later statements, Kumarswamy speculated that if push came to shove, the GOI would rhetorically side with the Hamas government to placate domestic Muslim constituencies. However, he continued, India would more likely attempt to preserve its profitable relation with Israel by continuing to issue anodyne statements urging both sides to seek a negotiated solution to the conflict.

9. (C) Supporting Magen's observations, Kumarswamy added that New Delhi does not want to say anything that might depict India as being 'friendly to Israel in public.' Kumarswamy also suggested that India would likely continue its low-key assistance projects for Palestinians but keep interactions with Hamas to a minimum.

GOI FOLLOWING THE HERD YET AGAIN

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10. (C) Despite the results of the Israeli elections, India has so far chosen to remain silent regarding Olmert's victory in Israel. In order to avoid ruffling Muslim sentiments within the country, India does not want to be among the first nations to respond to Olmert's victory. India will wait until other nations voice their opinions and only then may decide to speak up, if forced or if advantageous to do so, a feature typical of the GOI when it comes to reacting particularly about Middle Eastern issues, given the importance of the Muslim vote bank to the ruling Congress party.

COMMENT:GUTLESS IN PUBLIC

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11. (C) New Delhi's initial reticence and Minister Ahamed's supportive statements for the Hamas government reflect the UPA's dependence on its Muslim constituency and the emotional

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resonance of the Palestinian issue here. While Ahamed's unhelpful comments highlight the GOI's weak spot on terrorism when it relates to Palestinians, Ahamed's statements should be taken in the context of his position as chief of the Kerala Muslim League as Kerala heads for state elections. The underlying straddle of meek statements about the Israeli-Palestinian conflict combined with full-steam-ahead engagement with Israel on practical and strategic matters is unlikely to change. We should not expect any public courage from India anytime soon when it comes to condemning Hamas or reacting on Olmert's recent victory. Pragmatism trumps moral clarity in Delhi's Middle East policy.

MULFORD