Israel is a relatively stable rock in the financial storm thrashing world markets, and the country is in good economic shape, Bank of Israel Governor Stanley Fischer said. "Certainly, Israel will be hit," he told Globes business news service. "We live in the world, and we're not an island, but our situation is relatively good, and better than I expected."
Our situation is relatively good, and better than I expected.
 

Fischer led the world last week in slashing the local prime interest rate by half percent, a move that European banks imitated in an effort to pump more money into their economies and stave off a threatening deep and long recession.

Like other central bank directors, Fischer fought against cutting rates while inflation surged, mainly as a result of soaring prices in crude oil. A lower interest rate usually fuels inflation even further because it encourages spending, which in turn increases demand and places an upward pressure on prices.

However, the crash in the crude oil market that has accompanied the crash in stock markets enabled Fischer more flexibility to act.  

"The decision to cut interest rates arose from the need to act to strengthen the economy's ability to deal with the challenges facing it," Fischer said in the interview.

He emphasized that the Israeli banking system does not face the disasters that have swept the United States, partly because of tighter regulations stemming from the shares fiasco three decades ago.

Fischer jointed out that the danger of a financial collapse in Israel ostensibly seems greater because of the ongoing political crisis but added, "The government's fiscal policy has remained fairly stable, and in the past six years, the results have been good."

He suggested that the shekel will strengthen in the near future and that the proposed 2009 budget is not totally realistic in light of projections of lower growth.

Israeli markets will be closed Monday, the eve of Sukkot and on the following day, but early indications in world markets Monday indicate that the free-fall has hit bottom, at least for the time being.

Foreign exchange trading will continue Monday morning, and the shekel-dollar rate is expected to revolve around the 3.60 level, with possible downward pressure if investors spend dollars in order to buy back American stocks.

The municipality of Jerusalem has erected the country's largest Sukkah, built from recycled materials. It will be open to guests until the end of the holiday of Sukkot (Feast of Tabernacles), celebrated in Israel seven days beginning Monday evening. Last year's Sukkah of the Jerusalem Municipality was made out of candies and sweets. The opening ceremony took place Sunday evening.

The "Green Revolution" inspired this year's Sukkah, with surrounding events including children's workshops, films on environmental issues, Klezmer performances, cartoonists and drummer circles.

The schedule of events includes the Pirkhei Yerushalayim Choir at 8:30 p.m. Tuesday night, after the conclusion of the first night of the seven-day holiday, on which Jews are commanded to rejoice.

A Klezmer performance will take place at 5:00 p.m. on Wednesday and 8:30 p.m. Thursday and Saturday nights.

Elsewhere in Jerusalem, the once-in-seven-years Hakhel ("Gather the people together") ceremony will take place in Tekuma Park, near the Jewish Quarter in  the Old City, at 4:30 p.m. on Wednesday.

More Sukkot events can be seen in the Israel National News Holiday Activities scroller.

Kadima party leader Tzipi Livni sent a partial draft coalition agreement to Labor party leader Ehud Barak on Sunday afternoon, with an eye to concluding coalition talks by Monday. A deal with Labor is seen as a prerequisite to talks with the hareidi-religious Shas and United Torah Judaism parties, the left wing Meretz party and the Gil Pensioners' party. Livni told several cabinet ministers, "It's not healthy that these negotiations are taking so long."

Under the agreement, Barak would be named a senior deputy prime minister in a Kadima-led coalition and play a significant role in negotiations with Syria. According to Channel 10 television, Livni has denied Barak's demand to personally oversee those negotiations. Justice Minister Daniel Friedmann's initiative to limit Supreme Court powers would also be curbed and an agreement would be reached on supplemental benefits to pensioners and college students without expanding the budget.

Sources in Kadima said Sunday morning that a deal between the two parties was expected shortly, despite Barak's having canceled a meeting scheduled with Livni. Following the cancellation, Kadima central committee chairman Tzachi Hanegbi approached him and the two agreed to continue working on the draft.

Barak told Labor ministers on Sunday that he was acting "with an open mind to complete the conditions for a new government." A Barak associate said that ordered Labor negotiators "to complete the negotiations tonight."

Transportation and Road Safety Minister Shaul Mofaz, who announced Saturday night that he was not leaving politics, told a meeting of the Kadima party governing committee Sunday night "My place is in public service. It's where I've always been happiest and where I will stay." Following a narrow loss to Livni in last month's race for leadership of Kadima, Mofaz had said he was taking a break from politics and that he would not continue as a minister in the new government that Livni is trying to build. On Sunday night he said, "After much deliberation, I have come to the conclusion that this is the place from which I can continue to contribute." He received thunderous applause when he said, "As one with a central role in the movement, I will help as much as I am asked."

The Tel Aviv Stock Exchange dropped sharply early Sunday but regained much of the lost ground by day's end. The Tel Aviv 100 Index was down 4.6% to 683.5, after trading as low as 645. The Tel Aviv 25 Index was down 3.8% to 767.6, after dropping as low as 728 (8.6% less than the starting figure) during the day.

The Tel Tech Index was down 11.8% to 150, and the Tel Bond 20 was up 0.3% to 199, after reaching a loss of more than 3% earlier in the day.

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Prof. Shmuel Hauser of the Kiryat Ono Academic Center cautioned against hysteria: "Even if we expect the market condition to be worse than it is now," he said, "we should not panic. It's part of the cycle that we've had over the years." He estimated that growth will go down and, inflation will go up as part of the long-term effect of the financial crisis, but stressed that "panic will make things worse."

Trading in options was halted.

Israel Chemicals, which fell 19.1% last week, rose 6.6% by late afternoon Sunday. International fertilizer stocks rose by an average of 5% in the last three sessions.

Uncertainty in the international financial sector also affected trading in Israel's banks, with Bank Hapoalim down 1.18% and Bank Leumi off 2.16% in the late afternoon.

MK Yisrael Hasson (Israel Beiteinu), who was the Deputy Commander of the Shin Bet (Israel Security Agency) in the past, said Sunday that the events in Akko were the result of the fact that the police no longer have a deterrent effect on the Arab population.

Speaking on Israel National News radio in Hebrew, Hasson told of the Yom Kippur attack by Arabs on a Jewish neighborhood, as he heard it described by Jewish residents when his faction toured the neighborhood Friday. For four and a half hours, he said, the Arab mob armed with axes and sticks roamed the Jewish neighborhood at will, smashing cars and house windows, while Jews cowered in their homes. Through all this time, the police did not interfere.

The police's hands are tied and it has lost its deterrence," Hasson said. He added that the res
"The feeling of helplessness and the searing humiliation were very clear."
ult of this "catastrophe" could be seen in the way the Arab population and the organized criminal elements see the police.

He mentioned the Orr Commission as one of the catalysts of this process. The commission was established to investigate the circumstances of the 2000 Arab insurrection and terminated the careers of several police officers for what it claimed was use of excessive force against the Arab rioters.

Besides the loss of police deterrence, another process taking place is that "the Israeli Arab population is undergoing an accelerated process of separatism, which is nurtured and maintained by the Israeli-Arab leadership. This is the leadership's agenda," Hasson said.

Asked to explain why the police claimed that Jews were behind most of the violence in Akko, Hasson said it was quite possible that this was true, but offered a reason:

"During our tour Friday, the feeling of helplessness and the searing humiliation that this populace had experienced were very clear," he said. "For four and a half hours, the axe is swinging above your head, and you hide your wife and children in the security room, when the marauder is just a few inches away from you. It's insanity," he said.

The solution, he said, could only come from leadership. This leadership is lacking, he said, and the Arabs recognize this fact.

Thousands of Jews, perhaps more than 10,000, will likely visit the Me'arat HaMachpelah (where 6 Patriarchs and Matriarchs are buried) on Sukkot.
Security sources confirmed on Sunday that an agreement is being worked out by which Israel would allow the Palestinian Authority (PA) to field an additional 700 paramilitary PA security personel in Hevron.  It could happen by the end of the week, but Israeli sources indicated it might not happen that quickly.

The additional PA troops would work to maintain law and order among the city's Arab population.

PA sources claimed that the new troops would move into Hevron-area barracks this coming Friday.

Friday falls during the Intermediate Days of the Sukkot holiday, just after thousands of Jews, perhaps more than 10,000, are scheduled to visit the Me'arat HaMachpelah (the cave where six Jewish forefathers and foremothers are buried).

Israel retains sovereignty of the Hevron area.

Commander of the PA security forces Samih al-Sifi acknowledged that although the PA troops might be stationed there sooner, they would not begin large-scale security efforts until after the Sukkot holiday is over.

The PA troops in question were trained by U.S. troops, in Jordan. Their arrival would approximately double the number of PA troops operating in the Hevron area. They will also bring one vehicle for each four para-soldiers.

While the international community continues to pressure the Israeli government to surrender territory to the Palestinian Authority, Yaakov “Katzaleh” Katz, a Yom Kippur War hero and leader of the Jewish towns in Judea and Samaria (Yesha), is optimistic about the continued Jewish growth in Judea and Samaria.

In a New Year's interview with Israel National Radio’s Yehuda HaKohen, Katzaleh spoke at length of his experiences in an elite commando unit during the 1973 Yom Kippur War, and as a leader in the Gush Emunim movement building Jewish communities in the lands liberated by the Israel Defense Forces during the 1967 Six Day War.

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Can't see the audio player? Click here the listen to the interview with "Katzaleh."

While listing the many thriving cities and towns in Judea and Samaria, Katzaleh expressed certainty that despite the enormous pressure from world leaders to destroy these communities, the process of Jewish settlement in these areas is irreversible.

Katzaleh spoke of his relationship with former Prime Minister Ariel Sharon and how the two men worked together from 1990-1992 to multiply Jewish housing in Israel’s heartland - Yesha.

Katzaleh (left) with Ariel Sharon in the early days of Beit El

At the outset of those two years, then-Prime Minister Yitzhak Shamir appointed Sharon housing minister who, in turn, appointed Katzaleh to be one of his close deputies. According to Katzaleh, the fact that American satellites were busy over Iraq monitoring the Gulf War gave Israel an opportunity to expand Jewish housing in Yesha.

While Katzaleh acknowledged that Sharon later betrayed the Land of Israel and the two fell out of touch, Katzaleh insisted on still giving Sharon credit for the good that he did, both for the Jewish nation and for Katzaleh personally. When Katzaleh was wounded by a direct hit from an Egyptian RPG (rocket-propelled grenade) during the Yom Kippur War, it was Sharon who sent his personal helicopter to rescue his soldier and get him to a hospital in time to be saved.

When asked what advice he would give to the Jewish youth who are eager to participate in the struggle for the Land of Israel but whose efforts are constantly thwarted by the authorities, Katzaleh answered:

“It won’t take too long before this regime is replaced…  Right now we have some problems, but we continue. We have so many towns and cities which we are continuing to build. And in the new outlying neighborhoods, we are continuing and they cannot stop us in most of the places… The Peace Now movement and other extremist groups are busy with the outlying neighborhoods but meanwhile we are building in the main cities… When you look at the end of the year and see that the growth was over 35,000 Jews, we can be proud. They are always in shock when they see that no matter what kind of problems they do to us, they don’t succeed because the growth is continuing and every few years we have another 100,000 Jews in Yesha.”

Katzaleh’s overall message on the radio interview was one of deep faith and optimism. Drawing from his experience as a participant in many of the most significant events and political battles of modern Israeli history, he offered a bracing view of where the State of Israel is headed despite the many problems and temporary setbacks that overwhelm the Jewish towns in Yesha on a day-to-day level.

Yakir Segev, the bareheaded man behind Judea and Samaria's new PR campaign, says, "To re-define our 'national cultural anchor' we must remember the place from where we all once came."

The Yesha Council of Jewish Communities in Judea and Samaria is waging a new public relations information campaign, emphasizing the Jewish Nation's historic, cultural and religious ties to the Biblical areas of Judea and Samaria.   The name of the campaign: "Judea and Samaria - Every Jew's Story."

Themes such as the Maccabees, King David, the Matriarch Rachel and Joseph and his brothers are highlighted in dramatic photographs, with a smiling child in historic Biblical garb, on billboards throughout the country.  Additional activities are planned.

In addition, the campaign website - www.jstory.co.il - includes a page the story of each Biblical incident featured in the campaign, an explanation of its connection to the Land of Israel, and links to more in-depth articles on questions related to the subject matter.  For instance, the page on Jacob and his vision of angels ascending and descending the ladder, which took place in Beit El, includes articles on the long-standing fraternal tensions between Jacob and Esau, the "theft" of Esav's blessing by Jacob, the exact location of the ladder, and more.

Links for information on hikes and trips that are available in Judea and Samaria are easily accessible throughout the website.

Praise from Opponents
Betzalel Smotritz, an ideological opponent of what he perceives as the Yesha Council's weak-kneed approach to government plans for retreat from the Land of Israel, has only praise for the new campaign.  "As people who sharply criticize the Yesha Council for its approach to the current struggle, to the 'outposts agreements' it has made, and its over-patronization of the settlement enterprise, we must also congratulate the Council on this important and necessary step," Smutrich wrote in a pamphlet distributed in synagogues this week. 

Smotritz singled out Council chief Danny Dayan for praise: "He has succeeded very well in fulfilling his pledge to replace the usual public dialogue about 'security' as the justification for the settlement enterprise, with talk of 'Jewish values' as its justification instead."

Societal Crisis in Israel: Problem and Solution
Yakir Segev - a non-religious Jew who became a top combat soldier despite the fact that he has only one hand - is one of the men behind Judea and Samaria's new PR campaign.  He writes that he has come to understand that the crisis of leadership Israel is undergoing "stems from a deep and long process of loss of values in Israeli society. I sense that the values that are the basis for our existence and our identity - Judaism, Zionism, settlement - have ceased being formative values."

"It could be said," Segev continues, "that the young generation, of which I am a part, looks around and does not find that 'anchor of values' that enables it to live its life with a deep sense of belonging and pride... It was only natural for me to find allies in my search for a positive re-definition of our national values among the pioneer settlers in Judea and Samaria. The settlement and education enterprises that they have established, and their enlistment in the IDF and for other national causes, inspire me and arouse hope... We must again remember the place from which we all came, as the cultural basis for the Nation of Israel. Our land, including Judea, Binyamin, Jerusalem and the Shomron, is an inextricable part of our history and culture, and of who we are."

Other Biblical stories elucidated and featured in the campaign are those of:

* Joseph, his dreams, brothers and multi-colored cloak (Dotan, near Shechem);
* the crowning of King David in Bethlehem;
* Rachel (the Gush Etzion-Jerusalem highway);
* Avraham and the Three Visitors (Hevron);
* Judah the Maccabee (Beit Horon);
* Ruth and her kindness (Bethlehem);
* Deborah the Prophetess (Mount Ephraim);
* and the Holy Ark, which resided for a time in Shilo.

The Yesha Council plans to upgrade the campaign in the coming weeks with activities in schools and other institutions.  The overall goal, as Smutrich explains, is to "present to Israeli society its fundamental connecting links with Judea and Samaria, and to thus bring about a deep-seated, long-rang change in the nation's approach to these areas."