Jerusalem----December 4, 2006...... The following was communicated to the Israel News Agency by the Israel Cabinet Secretariat and the Israel Government Press Office.

At the weekly Israel Cabinet meeting Israel Defense Minister Amir Peretz briefed ministers on the ceasefire agreement with the Palestinians and noted that - as a rule - the organizations were partially maintaining the ceasefire.

Fifteen rockets have been fired at Israel from the northern Gaza Strip since the ceasefire declaration; most were fired by Fatah infrastructure. This infrastructure is operating under the guidance of Islamic Jihad and Hizbullah. Defense Minister Peretz said the Palestinian initiative to halt rocket fire was, first and foremost, the result of continual military and economic pressure and the increase in activity by the Israel security forces, as a result of which, the terrorist organizations suffered heavy losses.

Palestinian security forces deployed following the ceasefire. There is coordination with those in Palestine in order to foil the firing of rockets at Israel. Defense Minister Peretz stressed that Israel views the ceasefire as a test and is interested in using it to promote measures that are likely to improve the deteriorating situation vis-a-vis the Palestinian Authority (PA).

Israel has shown restraint up until now in order to establish the ceasefire. The Palestinians must prove that they are capable of meeting their commitments. The halting of rocket fire is fragile in the absence of commitments to it by several organizations and given the lack of clarity among the organizations in regard to actions in Judea and Samaria. It is against this background that the security establishment is preparing - in terms of both operational planning and the acceleration of reinforcement efforts in communities in the area around the Gaza Strip - for the possibility that the ceasefire will fail and that fighting in the Gaza Strip will be resumed.

Israel Defense Minister Peretz also discussed the policy regarding the use of force, Egypt intelligence chief Omar Suleiman’s visit, the impasse in contacts to establish a new PA government and the situation in the north vis-a-vis Lebanon and Syria.

Defense Minister Peretz detailed the humanitarian measures that were approved last week ahead of the Christian holidays in December.

Israel Foreign Minister Tzipi Livni emphasized the need to continue international pressure on Hamas even as a diplomatic horizon is created, as was given expression in Israel Prime Minister Ehud Olmert’s speech at Sde Boker last week. The reactions to the speech have been very positive.

The recent Euro-Med conference produced the first decision in many years to which countries that do not have diplomatic relations with Israel were party - a declaration that mentioned the Roadmap and which refrained from mentioning either the 1967 borders or the Beirut initiative.

Pursuant its authority under to the 1959 Israel Civil Service Law (Appointments), the Cabinet decided to extend the tenure of Moshe Shilo as Acting Director-General of the Justice Ministry from 5.12.06 until 4.2.07 or the appointment of a permanent Director-General, whichever comes first.

Pursuant to its authority under the 1959 Israel Civil Service Law (Appointments) and in accordance with the recommendation of a search committee, the Israel Cabinet decided to appoint Naomi Ben-Ami as Director of the Nativ Liaison Bureau in the Israel Prime Minister’s Office.

Pursuant to its authority under the 1959 Israel Water Law and in accordance with the recommendation of National Infrastructures Minister Binyamin Ben-Eliezer, the Cabinet decided to appoint Dr. Uri Shani as Water Commissioner from 6.12.06 until 1.1.07, the date on which the Water and Sewage Authority will be established to succeed the Water Commission, and to appoint him as Water and Sewage Authority Director as of 1.1.07.

The Israel Cabinet discussed issues regarding counselors’ quarters at the Shikmim Field School in Nitzan.

The Cabinet appropriated an additional NIS 32 million for the preparation of agricultural land in order to establish new farms for farms that were formerly located in Gush Katif.

Pursuant to its authority under the 1960 Israel Land Administration Law and in accordance with Construction and Housing Minister Meir Shetrit’s recommendation, the Cabinet decided to appoint Eliyahu Ben Gur and Hannyah Gibstein as members of the Israel Lands Council.

Pursuant to its authority under Article 31A and 31D of Basic Law: The Israel Government, the Cabinet decided to establish a new ministry entitled the Israel Ministry for Strategic Affairs. Minister Avigdor Lieberman will serve as Strategic Affairs Minister. The foregoing will be submitted for Knesset approval. The Nativ Liaison Bureau will be transferred from the Prime Minister’s Office to the Strategic Affairs Ministry.

At the behest of Israel Finance Minister Avraham Hirchson, the Cabinet discussed the draft 2006 Alimony Law. Finance Minister Avraham Hirchson and the Israel Cabinet also discussed projected amendments to the National Health Insurance Law.

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