Israeli wine exports to China skyrocket

An Israeli winery is set to build an $8 million facility in central China, hoping to take a piece of what has become one of the largest wine markets in the world. The winegrower, Hayotzer, has signed a preliminary agreement with the Pen Dun Group to build the joint project.

Hayotzer, which is owned by Arza, one of Israel’s largest wineries, will hold a 20-25 percent stake and will advise on winemaking and viticulture of the proposed venture. China is currently the world’s fourth largest wine consumer, and is set to surpass France and the United Kingdom by 2020, making them second only to the United States.

“They welcomed me like I was a Jewish Nobel Prize winner,” Guy Edri, the CEO of Hayotzer told The Media Line. “They are very enthusiastic about Jews and Jewish creativity. They say that Jewish culture is very close to Chinese culture and both are thousands of years old. They also see the kosher symbol as a mark of quality.”

China is already buying a lot of Israeli wine. When Edri met Chinese importers at a recent wine fair in China, they placed an order for 40,000 bottles. That’s the kind of market Israel, with its total population of just eight million, can only dream about.

“China is a nirvana for Israeli winemakers – it’s one of the biggest wine markets in the world,” Adam Montefiore, a wine writer for the Jerusalem Post told The Media Line. “’We joke that if we can sell wine to just one village in China, we can all retire. The Chinese have great respect for Israel’s history and its technology.”

But he said, the Chinese bureaucracy can make it difficult for new companies to succeed. And oenophiles might cringe if they saw their product being mixed with Sprite to appeal to the Chinese, who like sweet drinks.

“Drinking wine is more about status than actually liking wine,” Montefiore said.

The plan for the winery is only the latest agreement between Israel and China. This week Israel’s finance minister, Moshe Kahlon, was in Beijing for the signing of a $300 million trade agreement for “clean-tech” Israeli companies, meaning environmental-friendly energy and agricultural technology. In a statement, Israel’s foreign ministry said that the new deal, “allows the two sides to expand bilateral economic activity into other environmental-friendly technologies, including advanced agriculture technologies and smart and green energy technologies, which the Chinese government wants to implement using Israeli experience and expertise.”

China is hungry for Israeli technology and Israeli companies are happy to provide it. Press reports say that more than 1,000 Israeli companies have set up shop in China, and large delegations of Chinese businessmen visit Israel every year. China has also recently bought a controlling interest in Tnuva, an iconic Israeli food company, and Ahava Dead Sea products.

“We are looking for investment opportunities in Israel and we will help them in development and marketing,” Liu Hao Peng, of New Alliance, a Shanghai based investment fund told The Media Line. “We aim to help them settle down in China and to manufacture their product in China.”

China is Israel’s third largest trading partner after the US and the European Union. Israel’s exports to China were more than $3.2 billion last year, up from just $300 million a few years ago. In recent years, China has invested more than $15 billion in Israeli technology companies.

Israel and China established diplomatic relations in 1992, and recently marked 25 years of close ties. As criticism of Israel’s actions in the West Bank has grown in Europe, and calls to boycott Israeli products have grown, China offers an alternative market where the Palestinian issue is not seen as crucial.

President Donald Trump on April 13. Photo by Yuri Gripas/Reuters

Trump’s Jewish groupies should be nervous

The near-messianic belief in President Donald Trump held by certain pro-Israel Jews dates to the campaign, when he seemed an unshakable friend to the Jewish state, especially compared to Hillary Clinton. But the president already has reversed himself on China, North Korea, Syria, Russia and NATO. Trump’s dizzying abandonment of once-unshakable positions raises the question of whether Israel will be the next ally he decides to pass over.

In fact, the Trump administration already has sent mixed signals that should worry hard-line Zionists. During the campaign, Trump firmly supported the West Bank settlement project, but in April he said expanding settlements “does not help advance peace.” His promises to move the Israeli embassy to Jerusalem have been downgraded to getting what Vice President Mike Pence calls “serious consideration.”

Though the many Orthodox and other conservative pro-Israel supporters of the president expect the embassy to move, they should be cautious. The man whose considerable ego is built on dealmaking has called Middle East peace “the ultimate deal” — and that means compromise. In his book “The Art of the Deal,” Trump boasted of aiming very high, but “sometimes I settle for less than I sought.” Another of his principles is to “never get too attached to one deal or one approach.”

West Bank settlers and their financial and political backers in the Diaspora see every one of their positions as inalienable. They will inevitably find any Trump-style deal regarding Israel thoroughly dispiriting.

Those confident that Trump’s commitment to right-skewing positions on Israel won’t share the fate of his promises to stay out of Syria and label China a currency manipulator point to his bedrock Evangelical support and the role of Jewish family members Jared Kushner and Ivanka Trump. Neither is a slam dunk.

So far, evangelicals have followed (the steadfastly pro-life) Trump more than the other way around – most prominently on gay rights. The Family Research Council and similar groups muted their disappointment when Trump didn’t issue an anti-gay executive order and reappointed an Obama administration gay-rights diplomat. Evangelical Zionist fervor could similarly wane should the president waver on Israel.

Regarding Kushner and his wife Ivanka, true believers on the right may be overly enamored with their own extremist belief that anyone with a more accommodating position toward Palestinians is necessarily anti-Israel.

Trump’s Jewish daughter and son-in-law have never identified with the most religiously and politically conservative segments of Orthodox Judaism. The rabbi responsible for the very fact they are a Jewish family is famously on the more accommodating side of Orthodoxy, and three years ago, the school associated with their Upper East Side synagogue invited a prominent Muslim critic of Israel to speak. While the invitation was later rescinded, the controversy would be unthinkable at nearly all other Orthodox schools and congregations.

It’s true that Kushner has been close to Israeli Prime Minister Benjamin Netanyahu for many years, but Netanyahu himself is suspect in right-leaning Zionist quarters for his support of a two-state solution and supposed excessive friendliness with Palestinian leaders. As for settlements, The New York Times says Kushner’s thinking “is not well understood.”

We may be facing a “Nixon goes to China” moment for both Kushner and Trump. That expression refers to President Richard Nixon’s 1972 China trip normalizing relations between the United States and the world’s most populous country At the time, Democrats would suffer political disaster for de-escalating tensions with the communist behemoth. But as a Republican with impeccable anti-communist credentials, Nixon was able to take that bold but important step.

The Likudniks who celebrated Kushner’s appointment as Middle East envoy were reading the wrong tea leaves. What use is a negotiator who could never budge? Trump’s thinking may very well be: if even Kushner is willing to pressure Israel to make concessions on settlements, Jerusalem, and Palestinian sovereignty, the administration will appear to be an honest and fair broker.

As a resident of Jerusalem, dual citizen of the United States and Israel, and center-right Zionist, I pray the administration vigorously defends the security of the State of Israel. But recent world events underscore what I told my pro-Israel friends when I told them I was voting for Clinton. Her pro-Israel credentials may have been suspect, but her stability and predictability were better for America – and, ultimately, Israel – than a president whose positions change radically as he learns on the job and discovers that being a president is a lot harder and less fun than being a candidate.

David Benkof is a columnist for the Daily Caller, where this essay first appeared. Follow him on Twitter (@DavidBenkof) and, or E-mail him at

Why Jews should not visit China, regardless of what Israel does

Should American Jews provide tourist dollars to a regime that massacres dissidents, facilitates genocide and finances Israel’s enemies? A spate of upcoming Jewish tours of China has raised anew an old and troubling question about the conflict between tourism and human rights.

“Sukkos 2015: Beijing, China!” beckons an advertisement from Chabad of Beijing, which hopes to convince American Jewish tourists to spend the upcoming holiday in the Chinese capital, enjoying daily kosher meals and outings to a kung fu exhibition, the Great Wall and Tiananmen Square.

The Association of Reform Zionists of America, or ARZA, is also promoting a visit to Tiananmen Square in its upcoming 12-day China trip. As is the American Jewish Congress’ International Travel Program, which features a brochure promising participants that they will get to “Share in a special Shehechiyanu with Challah and wine in Beijing.”

The Hebrew word “shehechiyanu,” which is the centerpiece of a blessing recited on special occasions, means “Who has given us life.” Here it provides a bit of unintended irony, as it precedes the brochure’s reference to the site where pro-democracy protesters were massacred by government forces in 1989.

But Rabbi Arnold Belzer, who is leading the American Jewish Congress tour, will not be mentioning the massacre when he leads Jewish tourists through the square next year.

“I wouldn’t want to bother them with a topic that might take away from the tour experience for which they have paid,” Belzer told me.

Chabad won’t be talking about it on its trip either.

“We’re guests in this country,” said Dini Freundlich, who runs the Beijing Chabad with her husband, Shimon. “And we have to respect the government’s wishes.”

Besides, she added, “It’s not fully clear what happened there.”

According to human rights activists, the only thing unclear about the 1989 killings is whether the body count was in the hundreds or thousands.

Tourism has never been considered off-limits by American Jewish advocacy groups. Anti-Nazi boycotters in the 1930s opposed American tourism to Germany. Soviet Jewry activists in the 1970s urged Americans to refrain from visiting the USSR. After Mexico supported the U.N. resolution equating Zionism with racism in 1975, thousands of Jews canceled their plans to vacation there.

In the case of China, American Jewish tourists are providing support to a regime that engages in profoundly objectionable policies, of which Tiananmen Square is the most memorable example.

Beijing plays a crucial role in propping up the Sudanese government of Omar Hassan al-Bashir, who was indicted in 2009 by the International Criminal Court for allegedly organizing the Darfur genocide. China is Sudan’s single largest trading partner, importing Sudanese oil and providing Khartoum with weapons in violation of a U.N. arms embargo.

The Chinese likewise have a significant relationship with Iran, importing Iranian oil and providing Tehran with military aid, including assistance for the country’s nuclear program and help in the development of advanced missiles and combat aircraft. According to media reports, Beijing has now agreed to give Iran 24 of its J-10 jet fighters.

American Jews should also be concerned that Chinese rockets appear to have made their way into the the arsenals of Hezbollah and Hamas. Hezbollah reportedly fired a Chinese rocket at Israel in 2006. Hamas is also believed to possess rockets made in China. It would be a tragic irony if any victims helped by Chabad in the southern Israeli city of Sderot were harmed by Chinese-made rockets while Chabad of Beijing is bringing Jewish tourist dollars to the regime that manufactured those rockets.

Jewish tours to China typically cost around $5,000 per person, a minuscule number for an economy with a GDP that tops $10 trillion. It also pales compared to the trade that Israel, for its own reasons, conducts with China. But to justify American Jewish tourism to an oppressive country on the grounds that Israel does it too is to say that two wrongs make a right, which is not exactly a time-honored Jewish principle.

Moreover Israel, as a sovereign state, faces circumstances very different from those of American Jews. Israelis can argue that in order to function in this world, they sometimes have no choice but to build relations with regimes whose policies are far from democratic or peaceful.

American Jews, by contrast, do have a choice. They have the luxury of choosing among many countries in which they can enjoyably spend their tourist dollars — countries that are not linked to the genocide of black Africans or the manufacture of rockets that may have been used in attacks on Israel.

Dr. Rafael Medoff is founding director of The David S. Wyman Institute for Holocaust Studies and author of 15 books on Jewish history, the Holocaust and Zionism.

India turns to Israel for armed drones as Pakistan, China build fleets

India has accelerated plans to buy drones from Israel that can be armed, defence sources said, allowing the military to carry out strikes overseas with less risk to personnel.

The news comes weeks after long-time rival Pakistan first reported using a home-made drone in combat when it attacked militants on its soil, raising the prospect of a new front in the nuclear-armed neighbours' standoff over Kashmir that has twice spilled into war.

The plan to acquire Israeli Herons was first conceived three years ago, but in January the military wrote to the government asking for speedy delivery, the sources said, as Pakistan and China develop their own drone warfare capabilities.

India has already deployed Israeli unmanned aerial vehicles (UAVs) along the rugged mountains of Kashmir for surveillance, as well as on the disputed border with China where the two armies have faced off against each other.

In September, the Indian government approved the air force's request to acquire 10 Heron TP drones from Israel Aerospace Industries (IAI) that can be fitted with weapons to engage targets on the ground, an air force official with knowledge of the matter said.

He added that he expected the agreement to be inked soon. The Indian Defence Ministry declined to comment.

The plan to buy Herons in a deal estimated at $400 million would open the option of covert cross-border strikes.

Currently the two armies exchange fire across the de facto Kashmir border at times of tension, but do not cross the Line of Control (LoC) by land or air.

“It's risky, but armed UAVs can be used for counter insurgency operations internally as well across the borders; sneak attacks on terrorist hideouts in mountainous terrain, perhaps,” said an army officer in the defence planning staff.


Gurmeet Kanwal, a former head of the government-funded Centre for Land Warfare Studies in New Delhi, said the armed Herons due to enter Indian service by late 2016 will give the air force deep-strike capability.

The United States has carried out hundreds of drone strikes inside Pakistan, targeting al Qaeda and other militants in its northwest. Pakistan has allowed such targeted killings, even though it complains about them in public.

Indian drones, in contrast, face being shot down as soon as they show up on Pakistani radars, the army officer and Kanwal said.

Deniability would be essential in any use of armed drones by India and Pakistan across their bitterly contested border, said Pervez Hoodbhoy, a leading weapons proliferation expert in Pakistan.

“It is likely that drones would be used in a surreptitious mode close to the LoC, far away from populated areas,” he said.

In July, the Pakistan army said it had shot down a small Indian spy drone in Kashmir. India did not comment.

Michael Kugelman, South Asia specialist at the Washington D.C.-based Woodrow Wilson International Center for Scholars, said the arrival of lethal drones in the region could heighten mutual suspicion at a time when ties are strained.

“Pakistan might worry that India could use an armed drone to attack terrorist safe havens in Pakistan or to target a specific terrorist there.”

“India might worry that Pakistan will now be tempted to add drones to its repertoire of asymmetric warfare tactics it has used against India.”

Only the United States, Israel and Britain are known to have used armed drones in combat, although more than 70 countries have UAVs with surveillance capabilities, according to New America, a Washington D.C.-based think-tank.

China has no public strategy for armed drone development, but it has poured resources into UAVs and has shown them off at exhibitions. Chinese combat drones still lag far behind the Israeli-made ones in terms of capability, military experts say.


A delegation from state-owned IAI has been holding talks with the Indian defence ministry to determine the possibility of local manufacture of the Heron TP as part of the “Make-in-India” programme, IHS Jane's said.

Israel does not confirm or deny using or producing armed drones. IAI declined comment on the proposed sale of the Herons, as did Israel's Defence Ministry, which oversees such arms exports.

IAI is one of several Israeli companies manufacturing drones or related technologies.

At least one of them has sold armed drones to a foreign country other than India, a person involved in the deal said, without elaborating on the client, model or manufacturer of the aircraft.

Such deals are handled directly between the governments of Israel and the purchasing country, with mutual secrecy agreements, the person added.

It is not clear what kind of weapons will be fitted to the Heron TPs that India plans to buy.

India has been trying to develop its own combat drone, but the defence research organisation has struggled to integrate a missile onto the proposed Rustom series of UAVs.

David Harari, a retired IAI engineer and Israel Prize winner for his pioneering work in drone development, said India could mount its own weaponry on an Israeli supplied drone, helped by close technological cooperation between the two countries.

The Iran deal: getting to checkmate

The Iran nuclear deal has been likened, ad nauseam, to a game of chess. It is with that model in mind that I favor the deal — though not for the usual reasons. 

Proponents and opponents of the deal make a number of valid points. Most salient are the following: 

1) The sanctions regime is now kaput — with or without the deal; and there is no better deal to be had. 

2) After major sanctions (some $100 billion worth) are lifted, Iran will be freer to achieve all its ambitions, including nuclear. It will do so either by cheating (in the view of skeptics) or by simply interpreting ambiguous deal points in its favor (in the view of the Iranians).

3) Arguable Iranian violations of the deal (and what is not arguable?) will have no serious consequences. Most of the parties will wish to whitewash any violations to maintain the facade of success, and any objector will be left haggling with the Iranians. Also momentous, the decision to make an issue of any violation will have to be balanced against the deal provision that Iran may treat any reimposition of sanctions as relieving it of all deal obligations.

4) If the deal is not implemented, Iran will be legally excused from its contractual obligations to refrain from pursuing — and achieving in very short order — its nuclear weapon ambitions. 

Two other crucial points, however, have escaped the discussion thus far: 

First, President Barack Obama will never launch — or even condone — a military attack on Iran’s nuclear assets. His aversion to the use of force — or even the hint of threats — against Iran since taking office proves that much beyond any reasonable doubt. 

Second, no economic sanction regime or contractual deal obligations will permanently dissuade Iran from pursuing nuclear weapons. The sanctions brought negotiations, and the negotiations bought time, but that time is running out. A decade or so does not mean much to Middle Easterners with three-millennium memories.

Our old friend the shah wanted nukes, the ayatollahs want nukes, and polls have shown that most Iranians want nukes: What they all agree on is that, as heirs to the once-greatest empire on earth, Persia, they cannot be denied this modern-day ticket to great-nation status: Iran must get the bomb — and economic pain is a small price to pay. As Ayatollah Khomeini famously put it, the Iranian revolution was not about lowering the price of melons.

When Pakistan similarly pursued the bomb under threat of economic sanctions, our friend, the secular, Western-educated and -oriented liberal President Ali Bhutto proclaimed, “We will eat grass, even go hungry, but we will get one  [an atomic bomb] of our own. … We have no other choice!” 

Iran under the mullahs feels much the same way — but more intensely. Iran, too, agonizes that its detested enemy already has the bomb. But Iran also wants to re-create the hegemony of Persia as well as the religious zeal to restore Islamic supremacy, which necessitates eliminating the intolerable Jewish sovereign presence at the heart of the Islamic world. The added ingredient of martyrism inherent in Shia Islam is what makes this bellicose concoction especially terrifying. 

So why support the deal? Because it buys time. It provides limited but crucial time during which Iran still has reasons to delay its ambitions. And time until there is a new president in the White House who possesses a greater will to use force to stop Iran’s pursuit of a bomb. Most of the current crop of candidates fill that bill, some obviously more than others.

Deal defenders assert all “suspicious” Iranian sites will be inspected after 24 days’ notice — but Iran’s supreme leader has announced all “military” sites are strictly off limits. The Iranian calculation is thus quite simple: Shelter suspicious nuclear activity within your military establishment. This is the basis of the forthcoming dispute over which the entire deal is liable to collapse in failure. 

The U.N. Security Council, however, is the final arbiter of such a dispute. Russia, China and perhaps others will not vote to “snap back” sanctions (let alone stop violations). The new American president will then face a decision: Tolerate Iranian obstinacy and hope for the best, or coordinate with Israel a comprehensive set of measures, escalating to military strikes. 

If a better deal is to be had, it is then. If not, at the least, a new president will condone an Israeli attack. Equally important, a new president can be counted on to resupply Israel the day after, when the missiles will likely start flying from Lebanon. What awaits may be called a “war” — between Israel (not the U.S.) and Iran and its proxies — but at least it will not be fought with nuclear weapons. One cannot be so sanguine about such a war in a decade, give or take, barring a more realistic strategy. 

Congressional representatives and senators can vote their conscience against the deal. It is an imperfect, even bad, deal, after all. But if the no votes actually kill the deal and the additional time it provides, it could be a mistake of historic proportions.

When chess began in the Middle East, the final move was not called “checkmate.” It was “sheikh meit,” your “leader is dead.” The stakes are life itself. One doesn’t prevail in chess, politics or war by impulsively making feel-good moves. Victory is achievable only by calculating rationally and moving strategically. 

Game on.

Jon E. Drucker has a master’s degree in international affairs from Columbia University and was a legislative aide for foreign policy to former Sen. Carl Levin (D-Mich.). He now practices law in Los Angeles.

Iran deal: See dealer for details

The more I get into the Iran nuclear deal, the more it feels like the television show “Mad Men” — you know, those slick advertising geniuses who seduce you with promises but downplay the fine print.

It’s like one of those radio commercials for hot new car deals, where the announcer chokes on his breath while reading the qualifiers: “MSRP excludes taxes, title, other options and dealer charges; higher MSRP will affect lease price; dealer sets actual prices; lessee responsible for insurance; closed-end lease offered to approved customers only through participating dealers; additional charges may apply at lease end; supplies limited; offer ends March 1. See dealer for details.” 

Oh my, what a deal.

Well, it certainly reminds me of the Iran deal, which is littered with fine print, some of it quite treacherous. 

“Anytime, anywhere” was a wonderful promise … until we discovered the qualifier that Iran can delay inspections of its nuclear sites by more than 24 days. In fact, the process is so cumbersome and bureaucratic it can easily stretch out, according to The Wall Street Journal, to three months or more.

Three months or more! That’s like telling a drug dealer you’ll be busting his house next Tuesday at noon. As Jackie Mason noted, restaurants in New York City have a much tougher inspections regime than what we negotiated with Iran, because they can be inspected at any time without any notice.

This is not about partisanship or politics. It’s about something we all have in common: We hate getting ripped off, especially by slick Mad Men.

Why is this issue so critical?

Because a super-tough inspections regime was supposed to be our consolation prize for allowing Iran to keep its nuclear infrastructure. If you’ll recall, the original goal of diplomacy was pretty straightforward: The United States and its partners would make a major concession — the end of nuclear sanctions — in return for Iran making a major concession — the end of its nuclear program.

When we decided to concede to Iran the right to keep most of its nuclear infrastructure, inspections became the decisive deal point. Anything short of ironclad would seriously weaken the deal. Can anyone argue with a straight face that the inspections regime we negotiated is ironclad?

As bad as that is, though, it gets worse.

“Anytime, anywhere” came with another sexy promise: “snapback sanctions.” In combination, these two promises created an irresistible sales pitch: “We’ll surely catch Iran if it cheats, and when we do, the sanctions will snap right back!”

Irresistible, yes, but wait until you see the fine print.

Simply put, in the unlikely event that we ever do catch Iran cheating and try to “snap back” sanctions, there won’t be many sanctions left to snap back to.

Here is how Washington Institute’s Executive Director Robert Satloff explains it: “Let’s say that the U.N. Security Council does order the reimposition of sanctions. According to my read of the agreement, all contracts signed by Iran up until that point are grandfathered in and immune from sanctions. That means one can expect a stampede of state-to-state and private sector contracts — some real, many hypothetical — all designed to shield Iran from the impact of possible reimposition of sanctions.”

In other words, Iran can quickly rack up a slew of deals with Russia, China and Europe worth more than $100 billion and, even if Iran is caught building a nuclear bomb behind our back, we will have zero power to undo those deals.

I don’t care if you’re Republican or Democrat, this fine print stinks.

The grandfather loophole is especially lethal. Once the Persian mullahs make their irrevocable deals, why should they fear us? It will be difficult enough to catch them cheating — what will restrain them if they’re not even afraid to get caught?

As the emotions are heating up in our community over this deal, I’d like to suggest a less emotional reaction: Study the fine print.

I have, and that’s why I oppose the deal. It’s full of nasty surprises. There are many other examples, such as the sneaky switch from United Nations Security Council Resolution 1929, which says Iran shall not undertake any activity related to ballistic missiles; to the current deal, which says only that Iran is called upon not to undertake such activity. From the mandatory “shall not” to the permissive “called upon”— sneaky, indeed.

The Iran nuclear deal may be complex and hard to understand, but, in my book, the real danger is in the fine print. Study it closely. This is not about partisanship or politics. It’s about something we all have in common: We hate getting ripped off, especially by slick Mad Men.

David Suissa is president of TRIBE Media Corp./Jewish Journal and can be reached at

China to send two giant pandas to Israel

The Chinese government has agreed to send two giant pandas to a zoo in Israel.

The gift will be conferred on the Haifa Zoo if Chinese panda experts agree that the conditions there will be appropriate for the animals, according to Haaretz, including providing the appropriate food — a certain kind of bamboo. The zoo must also build a special habitat for the pandas.

A delegation from the Haifa Zoo must visit China to observe the rare animal, which is considered an endangered species.

Haifa and the Chinese city of Chengdu signed a sister-city agreement last week, according to Israel Hayom.

China has used “panda diplomacy” for hundreds of years to strengthen ties with other countries.


Israel’s Iron Dome makers were hit by hackers

Three Israeli defense contractors behind the Iron Dome missile shield and related systems were robbed of hundreds of documents by hackers linked to the Chinese government starting in 2011, a U.S.-based computer forensics expert said on Tuesday.

Comment Crew, as the hacking group is known, stole designs for Israeli rocket systems in a spree of attacks during 2011 and 2012, Joseph Drissel, chief executive of Cyber Engineering Services (CyberESI), said in a phone interview.

The targets of the online attacks were top military contractors Elisra Group, Israel Aerospace Industries, and Rafael Advanced Defense Systems. The companies built the system that now partially insulates Israel from rocket barrages fired from the Gaza Strip.

Israeli and U.S. officials have said Iron Dome systems are responsible for shooting down more than 90 percent of the rockets they have engaged, while ignoring missiles on a trajectory to fall wide. That accounts for about a fifth of the rockets Israel has said Palestinian militants have fired into the country during the Gaza Strip crisis.

Krebs on Security, a blog operated by former Washington Post security reporter Brian Krebs, first reported details of the intrusions on Tuesday after being briefed by Drissel on his company's findings.

Four years ago, Drissel founded CyberESI, a threat intelligence consulting firm based in Columbia, Maryland. That came after a decade in the computer forensics lab of the Defense Cyber Crime Center (DC3), an arm of the U.S. Air Force, where he was acting section chief.

His company, which includes former colleagues from his U.S. Defense Department forensic lab, traced the intrusions into Israeli contractors and identified more than 700 stolen emails, documents and manuals pertaining to development of the Iron Dome project and other missile projects.

“'Comment Crew' is so named for a very specific reason: They insert malware with hidden comments on various public Web pages they control and use those sites as command and control centers to download stolen documents,” Drissel said.

CyberESI identified these sites and was able to grab evidence of the stolen documents before Comment Crew could cover their virtual tracks, he said.

Drissel said he was disclosing the attacks only now, after years of seeking unsuccessfully to persuade the affected companies and U.S. and Israeli government authorities to address both the security issues that led to the breaches and to take stock of what specific weapon systems may have been compromised.

In May, the U.S. Justice Department indicted five Chinese military officers who allegedly belonged to Comment Crew, also known as Unit 61398 and based in Shanghai. They were accused of hacking into the networks of U.S. Steel Corp, Toshiba Corp's Westinghouse Electric unit and four other U.S. companies in order to steal trade secrets.

Allegations of hacking and other espionage have strained ties between China and the United States, with Beijing denying last year that it had set up a special military unit to conduct such activity. China retaliated by shutting down a bilateral working group on cyber security.

Two of the Israeli companies named by Drissel declined to comment on the computer security expert's revelations.

An official at the third company, Rafael Advanced Defense Systems, who declined to be identified by name, said of the report: “Rafael does not recall such an incident. Rafael's databases, including its air defense databases, are extremely well protected.”

A former senior Israeli military official said assertions that these key defense contractors had been hacked would fit with a pattern of military and industrial espionage around the globe.

“The Chinese have been doing that to all defense contractors in the West, so if this really happened, we are not alone,” said Uzi Rubin, a former head of missile defense at Israel's Defense Ministry and now head of the Rubicon consultancy firm.

Drissel said stolen materials recovered by his company included specifications for the Arrow III system and other ballistic missile defenses. Much of the technology for these systems was developed by Boeing and other contractors for use in U.S. weapons.

Rubin speculated that if the Comment Crew hacking group's purpose was to steal the missile system plans, it was likely that China wanted to obtain technology on the cheap rather that reselling it to other nations.

“If the Chinese really did it, maybe we shall see a Chinese Iron Dome in the future,” he told Reuters. “It is said that imitation is the sincerest form of a compliment.”

Chinese officials were not immediately available for comment.

Additional reporting by Dan Williams in Jerusalem, Editing by Angus MacSwan

Israel welcomes tech-hungry Chinese investors

China's purchase of a controlling stake in Israel's largest food maker reflects a broader surge in Chinese investment in an economy largely tethered to Western markets.

The deal, announced on Thursday, gives China access to Israel's high tech expertise, cachet among consumers made wary by domestic food production scandals and an alternative place to put their money amid trade obstacles from a wary United States.

In return, China offers a large market and source of funding at a time of growing calls, especially in Europe, for a boycott of Israel over its failure to make peace with the Palestinians.

Overshadowed by its high profile move into Africa, China's role in Israel as been growing fast, despite concern among Israelis that strategic assets may slip from their grasp.

Economy Ministry chief scientist Avi Hasson said the country was second last year after the United States in terms of joint projects between Israel and foreign firms backed by his office, which funds high tech start-ups and facilitates business abroad.

“In 2014 I think China will be number one,” Hasson told Reuters. “Three years ago they were at zero.”

Economy Minister Naftali Bennet said Israel was “going East”, telling a high tech conference Asia had overtaken the U.S. as Israel's second largest export destination after Europe. “We are shifting our economic resources  to Bangalore, Africa and China, China, China,” he said on Thursday.

Not everyone in Israel is delighted by the growing Chinese presence, and some argue their firms will have to pay more for direct investment than more sought-after Western or U.S. brands.

The deal to sell 56 percent of Israel's iconic dairy firm Tnuva to China's state-owned Bright Food Group Co Ltd has hit an especially raw nerve.

Founded more than 80 years ago as a farming cooperative, Tnuva is a symbol of Israel's potent agricultural past.

“What normal country puts its food security and its entire milk industry in the hands of China?” opposition member of parliament Shelly Yachimovich said on Thursday.

Israel's former spy chief Ephraim Halevy, who also opposes the deal, has called on parliament to devise ways of protecting its major assets.

Underscoring concerns of possible espionage, Israel's internal security agency Shin Bet last year advertised for fluent Chinese speakers to serve in the Tel Aviv area, and presumably keep an eye on growing numbers of Chinese visitors.

The economy ministry has played down the potential problems.

“One of the reasons that I assume people have concerns is that it's the unknown. China is still a riddle for many people,” said Ohad Cohen, head of the Israeli Economy Ministry's foreign trade department.


Unlike in many other countries, there are no 'Chinatowns' in Israeli cities to serve as a bridge, but growing contacts and trade visits should improve mutual understanding and Israeli's welcome China's reluctance to get involved in the Middle East.

“China doesn't care. The Arab-Israel conflict to them is irrelevant,” said a source who has worked on recent China-Israel deals and declined to be named.

While China has become the manufacturing centre of the world, it has not made such progress in innovation and technology. Israel, by comparison, lacks production muscle but prides itself on its high-tech inventiveness.

The Economy Ministry's Cohen estimates Chinese investment in Israel in the past three years has grown from zero to $4 billion. Foreign direct investment in Israel in 2011-2013 totalled $32 billion.

China says two-way trade has increased more than 200-fold in two decades, reaching more than $10.8 billion in 2013, making China Israel's third-largest trading partner after the European Union and the United States.

“The government of Israel has put the promotion of economic ties with China as a priority,” said Cohen, pointing to visits to China over the past year by both Prime Minister Benjamin Netanyahu and President Shimon Peres.

Amir Gal-Or, Beijing-based managing partner of Israel-China investment firm Infinity, believes there will be a 20-30 percent annual rise in the number of Chinese acquisitions of Israeli firms in coming years, while investments in Israeli firms could double annually.

The only way China can balance between its rising global power and increasing cost structure is through innovation, which they are partly seeking in Israel, said Gal-Or.


Earlier this week, Tel Aviv University and Tsinghua University of Beijing launched a $300 million joint centre for innovative research and education, with Chinese Vice Premier Liu Yandong coming to Israel to mark the event.

“China has full confidence in the prospects for our relations,” she told a Tel Aviv conference that attracted over 350 delegates from China. “We believe we have a lot to learn from Israel, which is well-known for its innovation.”

Three agreements were signed this week between Israel and China promoting bilateral research and Israeli companies' participation in innovation parks in China.

Adam Fisher, an Israel-based partner at U.S. VC Bessemer Venture Partners who has worked in Beijing, said Chinese investors were looking for alternatives to U.S. markets.

At the same time, he said: “There's a void of investors in Israel. Israeli companies never get access to enough capital and don't raise nearly as much as their U.S. counterparts.”

But while Fisher expects Israeli venture capital firms to continue to raise money in China, he said direct Chinese investment in Israeli start-ups might be more difficult.

“It's not the same cachet as a U.S. brand or even a European brand, so there will always be a tremendous discount on Chinese direct investments in Israeli companies,” said Fisher, who has not raised money in China for his portfolio companies.


China's appearance on the Israeli financial stage started in earnest in late 2011, with the sale of 60 percent of generic agrochemical maker MA Industries – now called Adama – to China National Chemical Corp (ChemChina) for $1.44 billion.

The following year, Zohar Dayan, CEO of start-up Wibbitz, was scrolling through an email account he rarely checked when he came across a contact form filled out by Horizons Ventures, the venture capital firm of Hong Kong billionaire Li Ka-shing.

Dayan, like many in Israel's U.S.-focused tech sector, was not familiar with Horizons at the time, but the email led to a $2 million investment in his firm, which has developed a technology that can turn text articles into short videos.

Today, Horizons is the single-biggest investor in Wibbitz, and the third most active VC fund in Israel in 2013.

At a modern building in downtown Tel Aviv with views of the Mediterranean, high-tech firm ironSource in April received a Chinese delegation led by Xu Xiaoping, founder of the ZhenFund seed fund and New Oriental Education & Technology Group.

“We are seriously considering investing in a few Israeli companies,” said Xu during his first visit to Israel. “The idea is to bring Israeli technology, innovation … into the bigger Chinese market and develop the technology there.”

China was particularly interested in mobile, Internet, biotech, medical and agricultural technology, he said.

The interest in Chinese investments is reciprocal.

“We are more active in seeking investments and China is now open, the awareness is there, we are on their radar,” said Gidi Sturlesi, CEO of biosurgical products maker LifeBond, which expects to raise money from China by early next year.

Editing by Crispian Balmer and Philippa Fletcher

Israeli scientists shoot for the moon with dishwasher-sized spacecraft

It's only the size of a dishwasher and weighs as much as giant panda, but its inventors are hoping this spacecraft will go where no other Israeli vessel has gone before – to the moon.

Working on a shoestring budget, the Israeli scientists and engineers building the shuttle – temporarily named “Sparrow” – believe it will land on the moon by the end of 2015, a feat only the United States, Russia and China have managed so far.

The landing will be the toughest task in the Sparrow's mission, not least because of the moon's many mountains and craters, said Yariv Bash, an electronic engineer and the founder of SpaceIL, the group building the spacecraft.

“(Landing) is going to be either 15 minutes of horror or 15 minutes of fame, depending on the outcome,” he told Reuters.

SpaceIL, which is backed mainly by philanthropists, was founded to compete for Google's LunarX Prize, unveiled in 2007. The $20 million prize will go to the first team to land a spacecraft on the moon, make it jump 500 metres and transmit images and video back to earth.

Thirty-three teams started out in the running and they are now down to 18, including competitors from the United States, Italy, Japan, Germany, Brazil, Canada, India and Chile.

SpaceIL believes it has an advantage because the unmanned craft is comparatively small – the size of a dishwasher with legs – and weighs just 140 kg (300 pounds).

Most of the craft's weight is its fuel and propulsion system. By the time it lands on the moon, it will weigh a mere 40 kg.

“The smaller you are, the less it will cost to go to space,” Bash said.

The grey, six-sided shuttle will be fitted with nine computers and eight cameras, making it the smartest and smallest spacecraft to have landed on the moon, according to Bash.

At the moment there is just a prototype, with plans to start building the real machine later this year, a process that should take 12-18 months.


SpaceIL has raised $21 million in donations out of a total budget of $36 million it believes is needed to build and land the craft. It plans a crowd-funding event to secure the rest of the financing.

The group estimates other teams' budgets at $50-$100 million.

Unlike some of the other competitors in the space race, SpaceIL – which has a team of 250 people of mainly volunteers – is a nonprofit organisation and does not need to show investors a return.

“It's a harder sell to private investors,” said Daniel Saat, SpaceIL's head of business development. “We have to convince investors we are doing something of impact for Israel that inspires and changes the country.”

Even if it does not win, SpaceIL hopes to create an “Apollo effect” that will lead to a new wave of space engineers and scientists in the way Neil Armstrong's 1969 moon walk did, and turn space exploration into Israel's next start-up industry.

“For $36 million, we are going to show the world that there is no longer this glass ceiling in outer space exploration,” Saat said.

Israel, which has experience in sending spy satellites to the lower orbit, does not have capabilities to launch into space, although the Israeli Space Agency is looking to develop a civilian space programme.

SpaceIL said it was close to signing a launch agreement and was considering sites in the United States, Europe, Russia and Kazakhstan.

The Israeli craft will remain on the moon indefinitely and SpaceIL is mulling doing a scientific experiment in studying the magnetic core of the moon.

Should SpaceIL win the prize, they plan to invest the money into new projects, which may include a probe to Mars.

Reporting by Steven Scheer; Editing by Maayan Lubell and Raissa Kasolowsky

China offers to broker Abbas-Netanyahu meeting

China offered to broker a meeting between Israeli and Palestinian leaders.

Israeli Prime Minister Benjamin Netanyahu and Palestinian Authority President Mahmoud Abbas will both be in Beijing next week on separate visits.

“If the leaders of Palestine and Israel have the will to meet in China, China is willing to offer necessary assistance,” Hua Chunying, the spokesperson for China's Foreign Ministry, was quoted as saying Friday by Xinhua news agency.

The United States is pressing the sides to revive peace talks and has asked the international community to facilitate such a meeting.

Abbas has made a settlement freeze a precondition for talks, a condition Netanyahu rejects.

The party-run People's Daily noted that Netanyahu's visit marked the first time an Israeli prime minister chose China as his first foreign post-election trip. Netanyahu was re-elected prime minister in elections in January.

Wanted: Diamond polishers in Israel. Piety not a problem

Diamond manufacturing is a dwindling trade in Israel. The country has one of the world's hottest diamond exchanges, but polishers and cutters of the precious stones have been replaced by cheaper workers in newer hubs like India and China.

Israel wants to bring them back. To do so, it plans on recruiting a legion of ultra-Orthodox Jews, who because of their dedication to prayer and study, have been unable or unwilling to join the work force, putting a heavy weight on the economy.

The job of a diamond polisher, however, is unique, said Bumi Traub, president of the Israel Diamond Manufacturers Association. It need not disrupt their pious lifestyle.

“The profession is fitting. You deal with the rock, and if you need to go pray, no one will bother you,” he said.

The door to Traub's office requires a fingerprint scan. Security is tight in the four-building exchange where annual turnover of trade reaches $25 billion.

About a third of rough diamonds produced in the world each year pass through the Jewish state and diamonds account for more than a fifth of the country's industrial exports.

It was a natural sector to develop when Israel was founded 64 years ago, since the small stones have been choice merchandise for generations of Jews who had to quickly flee from riots and persecution.

The plan to revitalise manufacturing will cost millions of dollars and the diamond sector, for the first time, is turning to the government for help. The government, eager to get as many ultra-Orthodox working as possible, is on board.


The global financial crisis has taken a toll on the diamond trade, and Israel was not spared. Turnover was nearly halved at the outset in 2009, though in 2011 it returned to pre-crisis levels. A smaller drop is again expected for 2012.

The damage has been moderate compared to other major hubs such as India, according to Yair Sahar, president of the Israel Diamond Exchange.

“In other centres the leverage was tremendous, as opposed to here where we were much more conservative,” he said, referring to the low level of debt among Israeli firms. “We entered the crisis more prepared, so to speak.”

There have, however, been other problems.

The price for raw material has risen faster than that of the final product, eating away at profits. And a money laundering and tax evasion scandal at the start of 2012 scared away some customers. The investigations have ended and, so far, no one has been charged.

The diamond trading floor in Ramat Gan, a suburb of Tel Aviv, is the biggest in the world. Armed guards escort non-members and on one wall are mug shots of problematic dealers whom customers are urged to avoid.

Diamonds change hands freely across the rows of long dark tables that line the hall. On one side a seller could be local. A buyer across the way could represent some anonymous client on a different continent.

They scrutinise the stones under a magnifying glass, weigh them on sensitive scales and when a deal is reached they say “mazal ubracha”, a Hebrew phrase recognised in centres around the world meaning “luck and blessings”.

In 2011, rough diamond imports to Israel topped $4.4 billion and $7.2 billion in polished diamonds were exported. Every second diamond sold in the United States, according to value, came from Israel.

But only $1.5 billion of the stones were cut and polished locally, a much lower percentage than a decade ago. The rest were sent abroad to foreign firms or Israeli-owned factories.

“Once, everyone who sat in this room was a manufacturer,” billionaire dealer Lev Leviev said at the opening of a Gemological Institute of America (GIA) laboratory in September. “There was not a diamantaire who was not a manufacturer, and over the years we lost it.”

Salaries were just too cheap to compete with, he said, first in India, the world's biggest importer of rough diamonds, and later in China.

Israel has subsisted on larger, high-end stones whose owners pay more to have them manufactured close to home. But industry leaders hope to change that, in part because polishers in developing countries are demanding more money.

“I think we are there, more or less. With rocks of one carat plus, I think we are in a place where the (wage) gap doesn't justify running to manufacture abroad,” said Sahar.

The GIA decision to open its lab in Israel was a first step. Manufacturers can now have their diamonds graded and evaluated in Israel rather than sending them to the United States.

“It's critical for the growth, for the international branding of the export business, and we think that we're a good partner to help the manufacturing grow,” GIA President and CEO Donna Baker told Reuters when the lab opened.

By cutting costs and allowing increased turnover, it will add between $30 million and $50 million a year to the industry.


At the peak of manufacturing in the 1980s, there were 20,000 people cutting and polishing diamonds in Israel. That has dropped to about 2,000.

“There is no new manpower. Most polishers are 50 years old and up,” said Roy Fuchs, who owns a factory a few minutes walk from the exchange. “If they don't invest and bring in new blood, there simply won't be manufacturing.”

To make it happen, the industry realises it needs help, and for the first time, it is looking for assistance.

“It's not easy. You need cooperation with the government,” said Udi Sheintal, the Israel Diamond Institute's managing director. “Here in the middle of Ramat Gan, you don't get incentives. There are only incentives for certain populations, like the haredi.”

The term haredi, which in Hebrew means “those who tremble before God”, refers to people who strictly observe Jewish law. They dress in traditional black outfits, the men do not shave their beards and they spend their days in study and prayer.

Some 8-10 percent of Israelis are haredi. For the most part they live in insular communities, are exempt from mandatory military service and, according to the Bank of Israel, less than half of ultra-Orthodox men work.

The issue has created a rift in the mostly secular Israeli society and put a strain on an otherwise robust economy. The government has already earmarked $200 million over the next five years to encourage haredi integration in the work force.

Many in the new generation of ultra-Orthodox are open to the idea of getting jobs. The key is finding one that fits, said Bezalel Cohen, 38, who has worked for years to promote employment among his fellow haredis.

“The diamond industry's initiative (to hire ultra-Orthodox)has potential to really succeed,” he said. “As long as the pay and training is proper, it should take off.”

Aside from helping to pay the salaries for newly hired haredis, the government will offer grants to small exporters and marketing support.


The Trade Ministry's diamond controller, Shmuel Mordechai, said the government backs the idea and has funded similar programs in other financial sectors. It would have helped even earlier, he said, but the diamond industry was never interested.

“They lived in their bubble, they said, 'Don't bother us, don't help us'. In recent years, because of difficulties in the industry and because we opened up our tools to them, they understand,” he said.

One of the more advanced plans Mordechai described is that of an independent service plant where dealers bring their rough diamonds. Such a plant would cost $1-$2 million and employ 30-40 workers. The government will help recruit the ultra-Orthodox.

“In any plant they set up here and bring employment, we will give help with salaries and other incentives,” he said. “If two or three are set up, it will catch on. If the first one succeeds, others will follow.”

Traub, from the manufacturer's association, intends to create dozens of new private factories. He has already spoken to leading rabbis in the community to win their support.

“I'm speaking of starting with hundreds and going to thousands of haredi workers,” he said. “Manufacturing attracts clients. Barring a global crisis, I think we will grow at least 10 percent a year in export.”

Editing by Mark Heinrich

‘Robust’ EU sanctions no match for Tehran’s tricks, experts say

With embargoes on Iranian gas and oil firmly in place, the European Union seems determined to tighten a net of sanctions around Iran, as even longtime critics of Europe's trade relations with Iran acknowledge.

In a second round of sanctions this year, the European Union announced that it was prohibiting some transactions between European companies and Iranian banks and limit areas of trade “in order to choke off revenue that Iran is using for its nuclear program,” as British Foreign Secretary William Hague put it last month.

The Israeli Foreign Ministry called the EU’s new package, which slapped a fresh embargo on gas to complement July’s oil embargo, “an important step” and “strong message.”

Still, critics say that the EU’s net has large holes that allow Iran to penetrate Europe through Turkey, China and even Lebanon-based Hezbollah, among other entities. Only blanket sanctions, they say, will prevent Iran from using money from Europe to fuel its nuclear program.

In the EU process, companies suspected of being Iranian fronts can be blacklisted only after review and based on hard evidence. Obtaining such evidence requires much time and effort by intelligence agencies.

“By the time one such company is blacklisted, the Iranians have set up 10 new ones,” said Emanuele Ottolenghi of the Foundation for the Defense of Democracies in Washington.

Ottolenghi says that only an American-style trade embargo on Iran can allow the EU to catch up with Iran’s speedy turnarounds. The U.S. has had a near ban on trade with Iran since the 1980s — its trade volume of less than $200 million with the Islamic Republic consists largely of grain exports. By contrast, the EU’s volume of trade with Iran was $15 billion in 2011, which marks a 60 percent decline from 2005.

The latest EU sanctions proscribe all import of petrochemical products from Iran; export and import of weapons; nuclear and telecommunications equipment; investment in Iran’s oil industry; and trade in gold with Iran, among other measures.

Certain assets of Iran’s central bank have been seized, but transactions “related to foodstuffs, health care, medical equipment, agricultural or humanitarian purposes, personal remittances and a specific trade contract” are permitted. In total, the EU has blacklisted 471 Iranian entities.

Ottolenghi, the Italian-born former director of the American Jewish Committee’s Transatlantic Institute in Brussels, says that European companies are abiding by the EU sanctions. He expects a third round of European sanctions to be announced in the coming months.

But the Iranian workarounds to the European sanctions are numerous and ingenious, Ottolenghi says, noting a relatively simple Iranian trick: trading with Europe through Turkey, a preferred trade partner of the EU and a country that Iranians may enter without a travel visa.

As Iran’s trade with the EU plummets, its trade with Turkey is reaching record levels: $17.52 billion in the first eight months of 2012 compared to $15 billion in 2011. It stood at a mere $1 billion in 2000, according to the Turkish Statistical Institute. Iran is now Turkey’s third-largest trade partner and main country for exports.

Part of the exports may be proscribed European goods that Iran is buying from Europe through Turkish front companies that are set up and run by Iranians with Turkish nationality on behalf of the Iranian government, Ottolenghi says.

In response to EU sanctions, he says, Iran is transferring business to companies in Ukraine, Taiwan and Japan, among other countries.

“If the U.S. and the EU are serious about sanctions, they need to squeeze these countries about ties with Iran,” he said.

Just as European sanctions may be encouraging Turkey-Iran trade relations, they also may drive Iran increasingly to rely on Hezbollah for money laundering and purchases. Hezbollah is not blacklisted anywhere in Europe except in the Netherlands.

“By sanctioning Iran and not Hezbollah, the European Union is virtually inviting Iran to do business through hundreds if not thousands of Hezbollah-affiliated proxies all over the continent,” said Wim Kortenoeven, a former Dutch lawmaker and ex-Middle East researcher for the Center for Information and Documentation on Israel in The Hague.

Claude Moniquet, a former researcher for France’s foreign intelligence service and co-founder of the Brussels-based European Strategic Intelligence and Security Center, said that Hezbollah has a “very large money-laundering operation in Europe,” but added that he does not know whether Hezbollah had the capacity to handle any extra business for the Iranians in Europe.

France reportedly is resisting calls to blacklist Hezbollah in order to preserve relations with its former colony, Lebanon. Hezbollah is a powerful player in Lebanese politics.

Selective sanctions against Iran are doomed to fail, said Moniquet, “because Iran is completely opaque and there’s no way of knowing where the money goes once it reaches Iran.”

Iran’s bilateral trade with China, meanwhile, stands at $45 billion, according to the Iran-China Chamber of Commerce. Neutral Switzerland, which is resisting U.S. and EU pressure to comply with sanctions, is exporting about $330 million’s worth of machinery and pharmaceuticals per year to Iran.

Like many other countries, Turkey, China and Switzerland adhere — publicly, at least — to U.N. Security Council resolutions on Iran, but those target only Iranian entities directly involved in nuclear proliferation and human rights violations.

Nikzad Rahbar, an Iranian government spokesman, called European sanctions “a mere propaganda campaign.”

Considering Iran’s booming trade in Asia and elsewhere, the link between sanctions and Iran’s spiraling inflation and rising food prices may not be as straightforward as presented by international media coverage, some argue.

“There is no way to break down how much of it is caused by sanctions and how much is the effect of economical incompetence, corruption and grafting that is so intrinsically a part of the Iranian economical system,” Ottolenghi said.

Kortenoeven says that with Iran’s decades of experience of getting by as a pariah nation, its economy cannot be neutralized by European sanctions. Though sanctions may be compounding the troubles, the economic woes in Iran ultimately are “connected to many internal issues,” he said.

Moniquet cites poor management and a centralist, government-controlled market that discourages growth as the root of Iran’s recent financial woes.

“The sanctions are only making it harder for Iran to transcend its internal problems, but not to the point of collapse,” he said.

Simone Dinah Hartmann of the Vienna-based European coalition Stop the Bomb says the current sanctions make it more difficult for the Iranian regime to obtain nuclear weapons.

But, she said, “The goal should be making it impossible for them. We are clearly not there yet.”

Opinion: Obama has made Israel stronger than ever

A famous scholar of American Jewish life once observed that we “earn like Episcopalians and vote like Puerto Ricans”.  We are committed to building a just and compassionate society and want our nation to provide a safety net with basic social services, even if we might not personally benefit from such programs.

We also know that on women’s issues, on gay rights, on Medicare, and on making sound investments in our economic future there is simply no comparison between the parties.  Between President Obama’s humane values and the Republican dog-eat-dog vision for society.

The Republicans know that they cannot hope to appeal to Jewish voters when domestic issues are what’s on the table.  Rather than offering a sensible domestic program that our community might support, they have therefore courted our votes the only way they know how: on foreign policy.  But try as they might, the GOP cannot obliterate the fact that President Obama has spent four years making our ally Israel stronger than ever before.

Faced with this daunting situation, Mitt Romney and the GOP have built a campaign for Jewish votes on rumor and innuendo, suggesting that we have somehow thrown Israel “under the bus”.  They have used Super PACs and unfettered secret money to fuel a massive negative advertising campaign targeted at Jewish voters.  But they keep coming up against an inconvenient obstacle: the truth.

President Obama has demonstrated a very serious commitment to defending Israel against Iran.  He has rejected a policy of merely trying to contain and deter an Iran armed with nuclear weapons.  Instead, he has vowed he will never permit Iran to get to that point.  And he has made clear he will not shy away from using force to stop Iran’s nuclear program should it get that far.

The Republicans advocate taking a risky gamble on Mitt Romney’s lofty promises, but only President Obama has a proven track record on this issue.   He has imposed more severe unilateral sanctions than ever before and leveraged America’s restored prestige to convince our European allies to embargo Iranian oil.  As a result, Iran’s currency has crashed and its leaders are panicking.

Meanwhile, it seems we learn more information every day about how Mitt Romney has invested hundreds of thousands of dollars from his own fortune in Russian, Chinese, and other foreign companies that do sensitive business with the regime in Iran.  How can we trust Romney’s public promises when his own behavior says otherwise?

Nor can the GOP hide Governor Romney’s repeated gaffes on the campaign trail, which betray a dangerous misunderstanding of Israel’s strategic challenges.  In private settings, not only does he suggest that 47% percent of Americans should be abandoned by their government, but he also mistakenly claims that the West Bank shares a border with Syria and argues that helping Israel seek peace would not be worth his while if elected president.

Many Republican advertisements have even twisted the words of Israeli leaders for domestic political gain. Yet we know that treating Israel like a partisan football is bad for America and bad for Israel.

Far from abandoning Israel, President Obama has helped make the Jewish State stronger than ever before, delivering more military assistance than any prior Republican or Democratic administration.

President Obama has also  provided critical support for Israel’s protection against missile attacks or rockets, doubling our funding for the Arrow and David’s Sling defense systems.  He pioneered the idea of providing U.S. funding for the Iron Dome anti-rocket program that has already begun to save Israeli lives.

Obama secretly gave Israel “bunker buster” bombs in 2009, which Bush repeatedly refused to do, constraining Israel’s capabilities versus Iran. Obama expanded American efforts to sabotage Iran’s nuclear program in secret, and those efforts – including the Stuxnet computer virus – have slowed Iran’s ambitions considerably.

Israel’s leaders know the truth of the President’s record. That’s why Netanyahu told AIPAC that “our security cooperation is unprecedented.” and soon afterwards suggested Obama deserves a “badge of honor” for his defense of Israel at the UN.

Israeli Defense Minister Ehud Barak has praised the President for Washington’s “wide, all-encompassing, and unprecedented” security cooperation under his watch.  He observed that, “honestly this administration under President Obama is doing in regard to our security more than anything I can remember in the past.”

Put simply, even if he and Netanyahu are not exactly the best of buddies, when it comes to Israel’s security President Obama never says one thing in public and does another in private.  He is a president who feels a visceral, personal commitment and then follows through.  A commitment to Israel’s defense.  A commitment to fighting nuclear proliferation, starting with Iran.  As journalist Jeffrey Goldberg describes it, a leader who really feels it in his kishkes.

President Barack Obama has passed the kishke test.  Now, there’s one more problem for Republicans: can we really say the same about Mitt Romney?

Dr. Weinberg is a Non-Resident Fellow at the UCLA Center for Middle East Development and formerly served as a Mideast advisor to the late Representative Tom Lantos.

Obama faces tough call on Iran oil sanctions

Just weeks after the election, President Barack Obama will be faced with a pivotal decision on oil sanctions on Iran, in which he will have to balance the need to stay tough on Tehran without pushing oil prices too high.

In considering whether to extend a new series of six-month exemptions to Washington's oil sanctions, the administration must decide whether China, India, South Korea and other nations have done enough to wean themselves from Iranian oil.

Forcing cuts that are too aggressive could fuel a new rally in oil prices, benefiting Iran and hurting allies. Accepting meager cuts risks criticism from Congress and Israel.

The sanctions are aimed at slashing Iran's oil revenues to pressure it to stop efforts to enrich uranium to levels that could be used in weapons. Tehran has said its nuclear program is strictly for civilian purposes.

On paper, the sanctions require Washington to continuously tighten the screws on Iran's exports “toward a complete cessation” of purchases, forcing importers to make deeper and deeper price and volume cuts in order to win “exceptions,” or waivers.

But the law allows the administration latitude to chart a middle ground in the sanctions, which have already proven more effective than some experts had forecast.

The sanctions require that importers must demonstrate that they are making “significant” reductions every six months, as measured by volume and price. What constitutes a “significant” reduction is at the administration's discretion.

“The point of this is that we would like to see a consistent and gradual reduction. That is the goal,” said a U.S. government official, who spoke on condition of anonymity.

Iran's oil exports hit a low of 860,000 barrels per day last month, down from 2.2 million bpd at the end of 2011. That reduction is already greater than some experts had forecast.

Critics are keeping close watch. Obama is expected to face questions about whether he has been tough enough on Iran later on Monday during a foreign policy debate with Republican candidate Mitt Romney, their last debate before the Nov. 6 presidential election.

The New York Times reported on Sunday that the United States and Iran have agreed in principle to private, bilateral negotiations on Iran's nuclear program, but both nations denied the report.


For countries including China, India and South Korea, the deadline for new waivers is December.

Even a key proponent of sanctions said he wonders about the need to force dramatically deeper cuts.

“We've probably reached the point of diminishing returns with respect to Iran's oil exports,” said Mark Dubowitz, the head of the Foundation for Defense of Democracies, who has pushed for stronger sanctions on Iran.

Dubowitz said it would take a great deal of work to cut global imports of Iranian oil much below 800,000 bpd. Lawmakers are now turning their attention to new types of sanctions that could more quickly hit Tehran's foreign reserves.


So far, all major oil importers have been granted the exceptions. Without the waivers, the United States has the power to blacklist foreign banks handling the oil transactions from the U.S. financial system.

Precisely what qualifies as “significant” is kept confidential, however, and may vary from buyer to buyer.

“The law is remarkably vague about what the baseline is,” said Jeff Colgan, a professor at American University in Washington.

Japan had cut imports by 15-22 percent by the time it received its first waiver in March. It subsequently cut imports by more than a quarter each month except June, and won a second six-month waiver for the U.S. oil sanctions in September.

Senators Robert Menendez and Mark Kirk who co-authored the oil sanctions law last year have told the administration they believe a minimum cut should be about 18 percent for any nation seeking a waiver renewal, achieved through price discounts or volume reductions, a point Menendez underscored in a recent interview.

“We must make it clear – this is a big must – that absent some extraordinary circumstance, that we will not grant waivers to any nation that doesn't make our reduction benchmarks,” Menendez told Reuters earlier this month.


The administration is likely to carefully weigh the cuts required against the impact on prices, since price gains help Iran, hurt allies, and harm the global economy, said Trevor Houser, a partner with Rhodium Group, a New York-based policy and economic consultancy.

“If you tighten the screws too hard and it causes oil prices to spike, then you both undermine the effectiveness of the sanctions and you erode support for the sanctions from other countries,” said Houser, a former State Department adviser.

Houser questioned how far Washington could push the sanctions while also keeping oil markets relatively stable.

Saudi Arabia, which has been pumping oil at its fastest rate in 30 years in order to make up for the diminishing exports from fellow OPEC member Iran, has limited additional capacity to tap if shipments fall further, analysts say.

The administration likely will face the most political scrutiny for its decision on a renewed waiver for China. China officially opposes the U.S. sanctions, but secured a waiver in June after a contract dispute resulted in steep import cuts in the first half.

Although its imports of Iranian oil rose in June to an 11-month high, they dropped in July and August to 25 percent below the same months in 2011, the most recent months for which data is available. China's first-half imports from Iran were down 20 percent from a year ago.

“China is a very different story and that's where we fear the administration will cook the books to give China a 'get-out-of-jail-free' card in order to avoid a showdown with America's largest creditor,” a senior Congressional aide said, on condition of anonymity.

With much bigger trade issues at stake, American University's Colgan believes a waiver for China is likely. “The trade consequences are unknown and potentially very bad if they start a trade war over this,” he said.

Ex-Malaysian PM reasserts Israel ‘rules world by proxy’

Former Malaysian Prime Minister Mahathir Mohamad said there is substance to allegations that he made nearly a decade ago that Israel rules the world by proxy.

Mohamad wrote in his blog at that American candidates must pledge loyalty to Israel or risk losing the elections, the Malaysian national news agency Bernama reported Monday.

“I wonder whether people notice it or not, but presidential candidates of the United States of America, the sole superpower, all have to seek approval from Israel,” Mohamad said on the blog. “Mitt Romney, the Republican candidate for president, has just made the pilgrimage, and he has made a public pledge that he will be even tougher against the Palestinians and Iran than Obama.”

Mohamad said he believes that Obama will soon make this pilgrimage and make more promises to fight for Israel, Bernama reported.

“It is not what is good for the United States which counts,” Mohamad said. “One can imagine the policies that will be adopted by whichever government or president wins, and it is clear the United States cannot ignore Israel’s views when reacting to anything of concern to Israel.”

Mohamad, long known for his anti-Semitic views and avid support for the Palestinian cause, said during a summit for the Organization of the Islamic Conference in 2003 that “the Nazis killed 6 million Jews out of 12 million [during the Holocaust]. But today the Jews rule the world by proxy. They get others to fight and die for them.”

The Jews of Kaifeng, China

Jewish liturgy and ritual frequently remind us that the Israelites were scattered to the “four corners of the earth,” as symbolized by the four fringes of the tallit, or prayer shawl. The extent of the geographic dispersion of the Jews over millennia has been vast, ranging from Baghdad to Burma, Marrakesh to Melbourne, Jerusalem to Los Angeles. 

But it wasn’t until I arrived in China for a two-and-a-half week stint to teach Jewish history that I realized just how dispersed these “four corners” are.

In Kaifeng, where Jews once lived — and still do — I witnessed the past and present of one of those dispersed “corners.” I also learned what it is like to teach Jewish history in China, where the field of Jewish studies is undergoing a surprising growth spurt.

The absence of a firm trail of historical evidence leads some to maintain that reports of a medieval Jewish presence in China are unfounded. I tend to agree with another group of scholars, who believe that there was such a presence — and that Kaifeng (pronounced “Ky fung”), in Henan province, is the oldest known Jewish community. This group argues that Jewish merchants, most likely originating in the Middle East, traveled along the vaunted Silk Road and made their way to and through China as early as the seventh century C.E. A document written in Judeo-Persian detailing business activity dates Jews in China to the early eighth century. Meanwhile, scholars surmise that sometime between the 10th and 12th centuries C.E., Jewish traders — likely of Persian origin — laid roots in Kaifeng. Kaifeng was no mere station along the Silk Road, and surely no backwater. It was one of the “Seven Ancient Capitals of China,” serving as the administrative center for five dynasties. Even more remarkably, Kaifeng was reputed to be the largest city in the world in the 11th and 12th centuries, with a population estimated at between 700,000 to 1.5 million. The list of other leading urban population centers in this period includes Córdoba (Spain), Constantinople (Istanbul), Cairo and Baghdad, all of which were or would become home to large populations of Jews. In fact, the Jewish romance with the city was not a modern invention. In a city, one could find a spirit of openness, new ideas and, of course, abundant commercial opportunities. In this sense, it would be no surprise that Jews made their way to medieval Kaifeng.

Kaifeng in its golden age was a masterfully designed city, with three sets of city walls, at the center of which was the elaborate Forbidden City where the emperor and his court were located. The Jewish community lived within the city walls, dwelling in close proximity to the community’s first synagogue, built in 1163, whose construction was commemorated in a stele dated to 1489. Unlike many of their medieval co-religionists, the Jews of Kaifeng, it appears, were largely unscathed by discrimination or persecution. The Song Emperors, based in Kaifeng, held the Jews in high esteem. And the Jews maintained good relations with their local Chinese neighbors. 

It is reasonable to assume that amiable relations hastened the pace of cultural integration. Within several hundred years, many of Kaifeng’s Jews, who at their peak numbered several thousand (some estimate as high as five thousand), lost knowledge of the Hebrew language. And yet, a key feature of traditional Jewish life remained throughout the entire existence of the community, even up to today: Jews in Kaifeng abstained from eating pork. Another distinctive feature of the Kaifeng community also survived: One of the Song Emperors, who could not pronounce the Hebrew names of the Jews in his realm, bestowed on them seven Chinese family names that are still in use today.

The existence of this community was unknown to the West until 1605, when the intrepid Jesuit scholar and missionary in China, Matteo Ricci, received a visit from a Kaifeng Jew in Beijing. After an initial confusion in which the two thought they belonged to the same religion, Ricci recognized that he was dealing with a previously unknown phenomenon: a native Jewish community in China. This well preceded the later communities established in the late 19th century in Shanghai and Harbin. 

A model of the Kaifeng synagogue at Beit Hatfutsot – The Museum of the Jewish People, Tel Aviv. Photo courtesy Wikimedia Commons

Some decades later, the city of Kaifeng, including its Jewish community, confronted a major disaster. In 1642, a devastating flood of the Yellow River wreaked massive destruction upon the city, killing large numbers of residents, including Jews, and laying waste to much of the city’s infrastructure, including the synagogue. The glory days of Kaifeng as a world center of commerce were over.

After the flood, the Jews did manage to rebuild their synagogue, distinguished, like the original one, by a large Chinese-style roof, along with a number of other distinctive Chinese features. But the community’s best days were past. Fewer and fewer Jews attended the synagogue or had familiarity with Jewish ritual. In 1841, another major flood hit Kaifeng, again destroying much of the city, including the second synagogue. And this time, no communal institutions were available afterward to provide support or services to Kaifeng Jews. 

One might assume, on the basis of this story, that the history of Kaifeng Jewry has come to an end, a victim not of anti-Semitism but of Chinese hospitality. My visit to Kaifeng suggests otherwise. My host in China, professor Xu Xin, one of the founding figures of Jewish studies in China (about whom more later), took me to visit Esther Guo Yan, a woman of about 25 or 30 who preserves one of the seven Jewish family names. Esther is the granddaughter of the last renowned Jewish notable from Kaifeng, and she runs a tiny, rough-hewn shrine to the history of Kaifeng Jewry. She waits for the occasional tourist to find her home, which is located in the historic Jewish quarter. Her interests are both to recall the old Jewish community and to bring knowledge about Chinese culture to what she refers to as her “hometown,” Jerusalem.

Indeed, a strong connection to Israel marks the larger group of Jewish descendants whom I met in Kaifeng. I first visited them at the end of their weekly four-hour study session of English and Hebrew with their ebullient, chain-smoking Israeli teacher, Shulamit Gershovich, who had been sent by Shavei Israel, an international group that seeks out lost Jews. She is concluding a six-month stint teaching the Kaifeng group and lives in one of the two rooms that now serve as a kind of community center under the name Beit HaTikvah (House of Hope). This name was bestowed by the center’s founder, a young American Jew named Eric Rothberg, who began to work with and teach the group two years ago. 

On a Thursday evening, I met with a group of eight students, some of them bearing the ancient names of Kaifeng Jews who, thus, are “descendants,” and others who have no Jewish blood but are married to descendants. Here in Kaifeng, as in post-Soviet Eastern Europe, the most important criterion of Jewishness is not the rabbinic standard of matrilineal descent. Rather, it is the willingness and desire to be a Jew. Against remarkable odds, the members of Beit HaTikvah are assiduously studying what it means to be a Jew. Though a small number of younger family members have been sent off to Israel or the United States to study and undergo formal conversion, the majority of the 25 or so attendees at Beit HaTikvah are on their own path of Jewish self-discovery in China, where they likely will remain. (I should add that, in the ancient and venerable ways of the Jews, there is another group of a similar size studying at a different locale in Kaifeng with a Messianic Jew named Tim Lerner, though I did not get to meet them.)

Without a doubt, the highlight of my time in Kaifeng, and a reflection of the group’s indomitable spirit, was the Shabbat I spent at Beit HaTikvah. I was brought to the Friday night gathering by Ari Schaffer, an Orthodox undergraduate at Johns Hopkins University, who is conducting research on the community. The small, nondescript room was filled with some 25 people, ranging in age from 16 to 75. On one wall was an unusual array of symbols: the flag of the State of Israel on the right, the flag of the People’s Republic of China on the left, and in the middle, the Shema prayer flanked by a pair of Hebrew words, shemesh and kamon.  

Shemesh means sun. Kamon’s meaning is a matter of dispute; some scholars believe it refers to an angel, while others maintain that it connotes moon. In any case, this pair of words seems to have served a sort talismanic function for the community.

After candlelighting, Gao Chao, the leader of the small community, began to sing “Yedid Nefesh,” the medieval poem sung at the outset of Kabbalat Shabbat. Typically enough for this community, Gao Chao is not of Jewish descent. He is married to a descendent, but has taken on the responsibility of learning Hebrew and Jewish prayers so as to serve as the prayer leader on Friday nights. He led the community through Kabbalat Shabbat, with members joining in in their Chinese-inflected Hebrew (which was rendered into Chinese characters for them to follow). The degree of ritual fluency for a community that does not include a single halachic Jew and has been studying Hebrew intensely for only two years was remarkable. The community chanted with gusto and competency many of the standards of Jewish liturgy and custom on Friday night: “Lechah Dodi,” “Ve-shamru,” and “Shalom Aleichem.” It was particularly moving when the congregation joined with Gao Chao to sing the penultimate line of the Friday night Kiddush: “For You have chosen us and sanctified us from among all the nations, and with love and good will given us Your holy Shabbat as a heritage.”

After services, the entire group sat down to a potluck vegetarian Shabbat dinner, my first with chopsticks as the utensil of choice. Dinner was tasty and spirited, but a mere prelude to the memorable post-meal singing. We sang the grace after meals and then spent several hours singing zemirot and other Hebrew and Israeli songs at the top of our lungs — aided, it must be said, by a potent Arak-like beverage native to the region. One member of the community — not herself a Jewish descendant, but married to one — had assumed the Hebrew name Netta. She seemed to know virtually every Hebrew song sung. She had an infectious smile, beautiful voice and a true sense of oneg Shabbat — the joy of the Sabbath. Other members did not know many of the songs, but added their own enthusiastic and well-timed rhythm by clapping and pounding the table.

The one song that all knew was the one whose name adorns the current Kaifeng community: HaTikvah. At a certain point in the midst of the cacophonous frivolity, the group rose as one to offer a sonorous version of “Hatikvah” — in Chinese! Those of us who knew followed in Hebrew. It was another stunning moment in an evening of stunning moments. Few of the community members are likely to make aliyah, but somehow they have managed to develop a strong bond with and sense of pride for Israel. There was also a strong sense among all of us present of the past and future shared by Jews. Assembled at a long Shabbat table in Kaifeng, we experienced, in the rawest and purest form I’ve ever witnessed, the unbroken spirit that links Jews scattered over the four corners of the world, from California to China.

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Wave of Chinese tourists expected

Over 100 million Chinese tourists are expected to be traveling annually by 2020 and one of their preferred destinations is turning out to be the Middle East.

Countries in the region are scrambling to meet the boon as the tourism trade moves to get back on its feet after the lull brought on by the turmoil of the Arab Spring.

At the recent ATM Dubai Tourism Fair it was announced that just last year some 70 million Chinese went abroad. Tourism professionals at the conference emphasized the significance of having tourism industry workers with Chinese language skills, as well as the food and kitchen quality and culture to lure Chinese tourists.

Lucy Chuang, managing director of Global Sino said the Chinese outbound market was being helped by countries being given “approved destination” status by Chinese authorities. The coveted status allows Chinese nationals to travel in groups rather than as individuals.

The UAE received approved destination status in 2009 and more than 300,000 Chinese visited there the following year, spending $334 million, according to MasterCard survey figures. Chuang said Chinese visitors to the UAE have since grown 50 percent annually.

Chuang stated a typical Chinese leisure preference was a three-night package with a different quality hotel for each night and she urged the region to promote this tiered concept to the market, particularly during the off-peak summer season.

Arab Spring unrest took a heavy toll on Middle Eastern tourism last year as unrest erupted in major regional tourism destinations like Tunisia and Egypt as well as Libya, Syria, Yemen and Bahrain. While international tourist arrivals grew by 4% worldwide in 2011, in the Middle East and North Africa (MENA) region they dropped 8.8%, with the worst-hit countries reporting double-digit drops, according to the United Nations World Tourism Organization (UNWTO).

Egypt’s Tourism Minister Mounir Fakhry Abdul Noor said this week that airport fees would be cut and new tourism projects such as eco-tourism were being launched to lure Chinese, as well as Indians, Russians and Japanese.

In Israel, there has been a remarkable increase in the number of Chinese tourists. Last year alone saw a 29% increase over the previous year. While that number was just 17,157 out of over 3 million incoming tourists to Israel, it is growing. In the first quarter of this year, 6,000 Chinese tourists visited Israel, an increase of 14% over last year, Israel’s Tourism Ministry figures show.

“Two years ago we opened an office in Beijing where all it is doing is promoting Israel as a destination,” Pini Shani the head of the Overseas Department at Israel’s Tourism Ministry told The Media Line.

Shani said guides were being trained who spoke to the Chinese in their own language. He said hotels and airport staff were also briefed on how to accommodate and host the Far East visitors.

“It is natural that the Chinese will start to travel. The income in China is growing. They see what is happening in the West and their curiosity is growing to see the outside world,” Shani said.

The UNWTO has predicted that within the next five years China, with a population of some 1.3 billion, will be the number one country in terms of both sending and receiving tourists.

Professionals at the conference in Dubai said that desert safaris and shopping were priorities with designer goods high on the shopping list of the brand-conscious Chinese travelers. They added that while twin-bedded rooms were the number one request, an essential in that room was a kettle to facilitate the preparation of hot instant noodles or rice.

With nearly 485 million Chinese with access to the Internet, they also suggested that effective use of social media and the Internet was essential to tap into the potential Chinese tourist market.

Dubai announced on Monday that it would also be issuing multiple entry visas for Chinese and other tourists who were arriving by cruise ship, thus reducing fees and encouraging more arrivals.

Sean Staunton, vice chairman of Dubai Duty Free, said that while Chinese travelers made up less than 4 percent of the total numbers of visitors, they accounted for 18 percent of the duty-free company’s annual turnover of $1.46 billion. This included 42 percent of watch sales, 32 percent of cosmetics and 20 percent of sunglasses.

The China Tourism Academy said they expected Chinese will spend as much as $80 billion abroad this year. This is amazing considering that outbound Chinese tourists were virtually non-existent just two decades ago. Thanks to their massive population and rising incomes the number of Chinese traveling abroad is expected to continue its rise.

While the bulk of Chinese tourism is headed to the Far East, the Middle East is expected to attract quite a few.

“Israel can offer many things that can’t be found elsewhere,” Shani said, citing the Dead Sea, Christian holy sites and a swank Tel Aviv.

“The Chinese are also very curious of the Jewish brain and can find many examples of it in Israel and we know that their satisfaction rate is very high for tourists that come from China to Israel,” Shani said. “China is one of the sources of growth of tourism to Israel and we will see the results in the coming years.”

Iran talks show common ground, disagreement

A first day of talks between Iran and world powers about a nuclear program that the West suspects is aimed at nuclear bomb research showed a “fair amount of disagreement” but also areas of common ground, a senior U.S. official said.

“I believe we have the beginning of a negotiation,” the official said of the talks, which opened on Wednesday and lasted late into the evening. “But still we have to come to closure…about what are the next appropriate steps.”

Iran was “engaged” in the discussions, and the meeting would continue into a second day on Thursday, the official said, adding that there was “plenty to go on” for a potential further round of talks.

Earlier on Wednesday, envoys for Iran and the United States, Russia, China, France, Britain and Germany exchanged unusually detailed proposals at the talks in Baghdad in hopes of defusing a long standoff over suspicions Tehran’s atomic energy program may be a disguised quest for nuclear weapons.

Both sides have been publicly upbeat about the scope for an outline deal following a 15-month diplomatic freeze and exploratory talks in Istanbul last month.

Reporting by Andrew Quinn; Editing by Michael Roddy

Iran nuclear concession would test big power unity

Facing an imminent toughening of sanctions, Iran is hinting at a readiness to give some ground in its long nuclear stand-off with world powers, but any flexibility could split their ranks and lead to protracted uncertainty about how to respond.

The stakes are high, for the longer the impasse goes on, the closer Iran will get to the technological threshold of capability to develop atomic bombs, raising the odds of last-ditch Israeli military strikes on its arch-foe and the risk of a new Middle East war a troubled global economy cannot afford.

A succession of optimistic statements by Iranian officials and academics has raised speculation that Tehran may offer concessions to its six main negotiating partners in talks scheduled for May 23 in Baghdad, a move that could ease regional tensions and soothe fears of a fresh spike in oil prices.

Such an offer would also be closely studied by Israel, which has threatened to use force to destroy nuclear installations the Islamic Republic says are purely civilian in nature but the West suspects are geared to gaining a weapons capability.

Any talk of a diplomatic breakthrough, though, is almost certainly premature.

Whatever concrete gestures are tabled by Iran would test anew the cohesiveness of joint Western, Russian and Chinese efforts to prevent an Iranian atom bomb capability, and might simply lead to months of inconclusive consultations among its interlocutors about how to answer Tehran’s move, analysts say.

Differences in how best to match an Iranian offer – for example by suspending some sanctions in return for Iran shelving enrichment of uranium to 20 percent purity, a level that worries U.N. nuclear experts – could snag efforts to turn any such initiative into meaningful movement towards negotiations.

“Don’t expect a ‘Kumbaya’ (celebratory) moment. It’s going to be a poker play” between Iran and the major powers, French analyst Bruno Tertrais said. “I would be surprised if what happens in Baghdad was more than an agreement on interim steps.”


There is “no doubt ” that Iran’s policy would be to split the six, known as the P5+1, says Dennis Ross, until November a chief Middle East strategy adviser at the White House.

“I also have no doubt that they probably will put something on the table that they think will be attractive to some of the members of the P5+1,” Ross told an audience at the Bipartisan Policy Center in Washington.

He said one such move could be Iranian assurances on a halt to stockpiling of 20 percent enriched uranium.

That level, well beyond the 5 percent of fissile purity suitable for running civilian nuclear power plants, is intended only to replenish the fuel stocks of a medical isotope reactor, Iran says. But it also moves Iran farther down the road towards the highly enriched grade of uranium usable in bombs.

One Western government assessment is that it would take Iran two to three years to manufacture a usable nuclear weapon in the event that authorities in Tehran decided to attempt that task.

Analysts and some diplomats have said Iran and the global powers must compromise for any chance of a long-term settlement, suggesting Tehran could be allowed to continue limited low-level enrichment if it accepts more intrusive U.N. inspections.

But Iran has often managed to limit its diplomatic and economic isolation by sowing rifts among the six states spearheading international efforts to rein in Iran’s nuclear program, leading to a watering-down of U.N. sanctions.

Western analysts are on alert for any new such gambit now.

A united front among Russia, China, the United States, France, Germany and Britain is the most powerful leverage the outside world has in ensuring Iranian compliance with international safeguards intended to curb the proliferation of nuclear weapons, Western analysts say.

And yet that unity has always been fragile.

Russia and China, which both have strong trade ties to Iran, have supported four rounds of U.N. sanctions imposed since 2006 on Iran over its refusal to suspend enrichment-related activity and grant unfettered U.N. inspections to resolve suspicions of military dimensions to its nuclear program.

But Moscow and Beijing criticized the United States and the European Union last year for meting out extra unilateral sanctions against Iran. Russia has made clear its opposition to any further U.N. Security Council measures against Tehran.

“I think P5+1 will have significant problems whenever it comes to Iran actually moving and how they respond,” a European diplomat told Reuters. “At this moment in time it is easy and nothing has been promised by Iran … but I think it will become very difficult and very tense on the P5+1 side once they have to start reacting to an Iranian step.”


Mark Fitzpatrick of London’s International Institute for Strategic Studies said an Iranian demand for an easing of sanctions in return for its concessions “will present an early test of P5+1 unity. For the West, any lifting of sanctions would require significant limitations on the enrichment program.”

There is little debate about what may be encouraging Iran to indicate new flexibility: Iran, analysts say, wishes to stave off the planned July 1 start to a European Union ban on imports of Iranian oil, a significant measure since the EU takes a fifth of the country’s petroleum shipments.

But there is plenty of speculation about the extent to which Russia and China are prepared to reward any Iranian shift.

Shashank Joshi of the Royal United Services Institute said divergence between Russia and China and its other partners would likely emerge on the price the world should demand for dropping the insistence, enshrined in the Security Council resolutions, that Iran cease any enrichment whatsoever.

He said the United States would want to see the dismantling of an enrichment plant buried deep under a mountain at Fordow south of Tehran, the Iranian nuclear site best sheltered from any possible air strike.

“The Russians and Chinese may recognize that this is unlikely, and may accept Iranian offers short of this,” he said.

“So we should expect to see Iran attempt to split the Russians and Chinese from the others by offering something concrete and significant, but short of dismantlement.”

Tehran has ruled out closing the bunkered Fordow site.


Diplomats and analysts say an agreement is still far off, but the signs are growing that Iran’s leaders are changing their approach and preparing public opinion for a potential shift.

Tehran’s former chief nuclear negotiator, Hossein Mousavian, now a visiting scholar at Princeton University in the United States, said last month Iran and major nations had a “historic opportunity” to settle their decade-old nuclear dispute.

On May 2, Deputy Foreign Minister Mohammad Mahdi Akhondzadehhe said in a speech in Vienna: “We continue to be optimistic about upcoming negotiations.”

In April, Foreign Minister Ali Akbar Salehi said Iran was “ready to resolve all issues very quickly and simply”.

Editing by Mark Heinrich

Obama responds to Netanyahu’s Iran ‘freebie’ comment

President Obama responded to Israeli Prime Minister Benjamin Netanyahu’s claim that world powers gave Iran a “freebie” by agreeing to hold more talks.

“We’re going to keep on seeing if we make progress. Now, the clocking is ticking and I’ve been very clear to Iran and to our negotiating partners that we’re not going to have these talks just drag out in a stalling process. But so far at least we haven’t given away anything,” Obama said late Sunday during a news conference in Cartagena, Colombia.

“The notion that somehow we’ve given something away or a ‘freebie’ would indicate Iran has gotten something. In fact, they’ve got some of the toughest sanctions that they’re going to be facing coming up in just a few months if they don’t take advantage of these talks,” Obama added.

Talks between Iran and the six world powers – the United States, Britain, France, China, Russia, and Germany – on Iran’s nuclear program resumed on April 14 after more than a year’s hiatus. The sides agreed to meet again on May 23 in Baghdad.

“My initial impression is that Iran has been given a freebie. It’s got five weeks to continue enrichment without any limitation, any inhibition,” Netanyahu said Sunday in Israel.

Iran says its nuclear program is for peaceful purposes; the Western world fears that Iran may be enriching uranium in order to produce a nuclear bomb. Netanyahu has called on the international community to halt Iran’s nuclear production by force if necessary, and has warned that the window in which to prevent Iran’s production of a nuclear bomb is rapidly closing.

Israel takes concerns about Iran to key partner China

Israel on Friday took its concern about Iran’s nuclear programme to one of Iran’s main partners, China, and hinted it could launch a preemptive attack on the Islamic Republic despite repeated calls by China to allow diplomacy to take its course.

China, which has close energy and trade ties with Iran, has urged a negotiated solution to the dispute over Iran’s nuclear ambitions and long opposed unilateral sanctions on Iran.

Iran insists its nuclear energy programme is purely non-military and has been adamant it will not abandon it under external pressure.

“For us, it’s crucial to explain our position to our Chinese partners,” Israeli Foreign Minister Avigdor Lieberman told reporters on a visit to Beijing.

“It’s crucial to clarify our position to China in the hope they understand our concerns, our problems,” he said, adding that Israel would “continue the dialogue” with China.

Chinese Premier Wen Jiabao warned Iran in January against any effort to acquire nuclear weapons but apart from that, China has shied away from speaking out strongly against Iran.

That position on Iran underscores the tricky path China is trying to steer between pressure from the United States and its allies and, on the other hand, expectations from Iran, which looks to China as a sympathetic power and a big oil customer.

But an increasingly tough-talking Israel is threatening to take military action, with or without U.S. support, if Iran is deemed to be continuing to defy pressure to curb its nuclear projects.

Speculation is growing that Israel could launch some form of strike against Iranian nuclear installations, which Israel sees as a threat to its existence.

“We prefer that the international community will resolve the Iranian issue through talks, P5+1, through some negotiations, sanctions etcetera,” Lieberman said.

“But if not, I think it’s our right to protect ourselves, to defend ourselves,” he added. “As I mentioned, we keep all options on the table.”

The P5+1 group, made up of the United States, Britain, France, Russia, China and Germany, accepted an offer last week from Iran for new talks on its nuclear energy programme.

Lieberman said Israel was hopeful of “positive progress” at the talks.

But despite Western sanctions inflicting increasing damage on Iran’s oil-based economy, Israel had not seen “readiness from the Iranian side to give up their nuclear ambitions or to stop their enrichment”, he said.

China has also resisted Western efforts to exert pressure on Iran by imposing sanctions on its oil exports, much of which flows to China.

Editing by Ben Blanchard and Robert Birsel

Netanyahu sees expansion of ties with China

Israeli Prime Minister Benjamin Netanyahu said on Tuesday he envisaged a dramatic expansion of Israel’s diplomatic ties with China, including a possible role for Beijing in Middle East diplomacy.

Speaking in Tel Aviv at a celebration marking 20 years since the two nations forged relations, Netanyahu said: “I think we’ve barely scratched the surface of Israeli-Chinese relations. I have no doubt that in the coming years we’ll see a dramatic expansion of these ties.

Israeli government figures estimate bilateral trade as having totalled some $8 billion in 2011, up from $6.7 billion in 2010.

Netanyahu also saw Beijing as playing a role in European and U.S.-mediated diplomacy between Israel and the Palestinians.

Under Communist rule, China was a main backer of Palestinian struggle for statehood but later lowered its profile on the conflict after forging ties with the Jewish state in the early 1990s.

“I think we can also work together to address the challenges of securing Middle East peace,” Netanyahu said at the gathering attended by Chinese and Israeli diplomats.

Chinese billionaire invests $30 million in Israeli startup

An Israeli startup company has received a $30 million investment from China’s richest man.

Billionaire Li Ka Shing has invested in the navigation technology firm Waze, which will put the money into supporting its application’s more than 7 million drivers and launch a traffic-reporting platform in China, the Israeli business daily Gloves reported.

The Waze free mobile application helps drivers find the shortest route to their destination and provides data on traffic conditions provided by its users. The company also has a social network allowing drivers to report directly to each other on road conditions. Its users live in 45 countries.

Other shareholders include Microsoft and Qualcomm.

Video courtesy of WazeGPS1.

Israel studies program set for China

An Israel studies program will open at a Chinese university for the first time.

The program, offering undergraduate and graduate courses, extracurricular activities and options for study in Israel, will launch at the Sichuan International Studies University in Chongqing for the 2012 spring semester. It is being started in cooperation with the Israel-based Sino-Israel Global Network and Academic Leadership.

Two of the university’s lecturers will study for this fall semester at Bar-Ilan University to prepare them to teach Israeli history, culture and politics to Chinese students. Their studies are funded by a grant from the Diane & Guilford Glazer Foundation.

The university has invited lecturers from Israel, the United States and Australia to give introductory seminars, lectures and workshops on Israeli history, culture and literature. During the fall semester this year, the university will organize a series of forums to discuss Israel-related topics.

In addition, the Washington-based American Jewish Committee’s Asia Pacific Institute pledged to donate more than 100 new and used books on Israel and the Middle East to the university’s new Israel studies library.

Chinese military chief to visit Israel

The head of China’s military will visit Israel for the first time.

Chen Bingde, chief of staff of the People’s Liberation Army, will be hosted next week by his Israeli counterpart, Lt. Gen. Benny Gantz, the Israeli military said Monday.

The visit follows Defense Minister Ehud Barak’s trip to China two months ago.

Although China and Israel have had an occasionally frayed relationship, most recently over China’s ties to Iran, bilateral trade reached $6.7 billion in 2010.

Avrum Ehrlich, director of the Israel-China Institute, told The Associated Press that China’s Middle East policy is changing in the wake of unrest in the Arab world.

“The most important driving factors of Chinese foreign policy are its oil and securing its transport routes,” Ehrlich said, adding that the upcoming visit reflects China’s desire to use Israel as a gateway to the Mediterranean and Europe instead of Syria.

Israel Project adds China desk

The Israel Project has set up a China desk.

The Washington-based group, which promotes Israel in the international media, announced the addition of veteran China expert Alex Pevzner to its staff on Wednesday as Chinese President Hu Jintao arrived in Washington for meetings with President Obama.

With a staff of about 60, the Israel Project targets media in the United States, Latin America, Europe and the Arab world.

VIDEO: Chinese Jewish father from Kaifeng visits daughter Jin Jin in Israel

From New Tang Dynasty TV (

And on a lighter note… How does it feel to be both Chinese and Jewish? Our Israeli team talks to a young woman from Kaifeng, China who belongs to both of these ancient cultures. Here’s her story.

We caught up with Jin Jin and her father, Mr. Jing, at the airport. He spent the holidays with her, here in Israel, and now he is returning to China.

[Jin Jin, Kaifeng Jew]:
“When I was a little child, my father always told me, ‘you are Jewish, you should go back to Israel,’ so I said, ‘ok, I am Jewish, I should go back to Israel.’”

Jin Jin has been living in Israel for the past two years and learned to speak Hebrew. She can now translate Jewish scri ptures into Chinese, to help the Jewish community in Kaifeng.

[Jin Jin, Kaifeng Jew]:
In Israel it’s according to the mother, but in China it’s according to father. So, since my grandfather’s grandfather’s grandfather is Jewish, so my father is Jewish and I am Jewish.”

Like all religious Jews ,Mr. Jing wears a Tsisit under his shirt and a Kippa on his head. He shows us his Kippaand explains.

[Mr. Jing, Jin Jin’s Father]:
“Here it says Kaifeng in Hebrew. Here it says Kaifeng in English. It’s handmade!”

So how is it possible that Jin Jins ancestors were Jewish? We went to see Michael Freund to find out. He specializes in locating descendants of Jews around the world and helps them return to Israel.

[Michael Freund, Chairman, Shavei Israel]:
“There was a Jewish community in Kaifeng for over a thousand years. Jews first arrived there around the eighth of the ninth century, along the silk route. They settled in Kaifeng which at the time was one of the imperial capitals of China. And over the centuries, a Jewish community in every respect, took root there.”

Back at the airport, it’s time to say goodbye.

[Jin Jin, Kaifeng Jews]:
“I think my father is right, there is a land that God promised to us. Yes, it is our home.”

NTD, Ben Gurion Airport, Israel.
Category:  People & Blogs
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Sunday wrapup from Beijing: U.S. swimmer Torres wins two silvers; Israelis lag

BEIJING (JTA)—United States’ swimmer Dara Torres won two more silver medals in Beijing.

Torres won the medals Sunday in the Women’s 50m Freestyle and the Women’s 4x100m Medley Relay.

Jewish-American swimmers Jason Lezak and Garret Weber-Gale both added another gold medal to their collection, joining Michael Phelps and teammates to win the Men’s 4 x 100m Medley Relay.

Israeli athletes did not fare as well Sunday. Alex Shatilov finished last in the Men’s Floor Exercise final, the only apparatus final the Israeli gymnast qualified for in the Beijing Games.

Shatilov fell on his final landing, and received a score of 14.125 after a .400 penalty. The gold medalist in the event was Zou Kai of China, with a total score of 16.050.

Shooter Doron Egozi finished 36th, while Gil Simkovitch finished 38th, in the Men’s 50m Rifle 3 Positions event. Shooters Guy Starik and Simkovich also competed Friday in the Men’s 50m Rifle Prone qualification round, but neither advanced to the final. Starik came in 12th with a score of 594, while Simkovich came in 22nd with 592 points. This finish was an improvement on Starik’s Athens finish of 16th. He joins sailor Yoel Selais as the only Israelis to compete in four Olympics.

Israeli windsurfer Shahar Zubari, who was leading in first place after five races, slipped to third place after his seventh race in the Men’s RS:X competition. Zubari finished 17th in race 5, sixth in race 6, and 19th in race 7. He was able to maintain a first place position after race 5 because he is allowed to drop his worst performance, but after continuing to perform outside of first place, he no longer retains his top rank.

Israeli windsurfer Maayan Davidovitch is 14th in the Women’s RS:X competition after seven races.

Israeli sailing duo Nike Kornecky and Vered Bouskila finished their eighth race in first place, and moved up to number three in the ranking of the Women’s 470 two-person dinghy event. With two more races until the top ten boats in the fleet qualify for the medal race on Monday, the Israeli pair looks solid for advancement.

Net losses for Israelis at Olympics

BEIJING (JTA)—Israel’s tennis players were eliminated from the Beijing Olympics.

Jonathan Erlich and Andy Ram, the third-seeded men’s doubles team with perhaps the best chance at a medal among the Israelis on the court, were upset Tuesday by the unseeded tandem of Arnaud Clement and Llodra Michael of France, 6-4, 6-4, in their first-round match.

Erlich and Ram had beaten the Frenchmen in January in the Australian Open final to give Israel its first Grand Slam title.

Also Tuesday, Tzipora Obziler fell to Mariya Koryttseva of Ukraine, 5-7, 7-5, 6-4, in a grueling three-hour women’s singles match. The deciding set lasted an hour, 6 minutes.

That same evening, Obziler and Shahar Peer dropped a women’s double match, 6-3, 6-2, to Gisela Dulko and Betina Jozami of Argentina.

Peer, the 24th seed in women’s singles, was eliminated in the second round Monday by Russia’s Vera Zvonareva, 6-3, 7-6. The second set took 1:11.

Peer had won her first-round match, 6-3, 5-7, 6-0, over Sorana Cirstea of Romania.