Israel to Weigh Egypt Plan for Cease-Fire in Gaza

July 15 (Bloomberg) -- Bloomberg’s Phil Mattingly examines the White House’s response to the cease-fire plan for Israel-Gaza presented by the Egyptian government and the state of the Middle East policy. He speaks on “Bloomberg Surveillance.”

Israeli leaders are set to discuss an Egyptian proposal for a cease-fire to end the week-long conflict in Gaza, as U.S. Secretary of State John Kerry heads for Cairo amid growing international peace efforts.

Israel’s security cabinet will consider the plan at a meeting early today, a senior official said, speaking on condition of anonymity to discuss the matter. Prime Minister Benjamin Netanyahu is in favor of accepting, Israeli newspaper Haaretz reported, citing unidentified officials.

Hamas hasn’t received any proposals, spokesman Sami Abu Zuhri said, according to Al-Mayadeen television. The group’s leader, Ismail Haniyeh, said in a televised address late yesterday that any accord will have to improve the “miserable reality” of life in Gaza.

Israeli air strikes continued yesterday, pushing the Palestinian death toll above 170, while more rockets were fired from the Gaza Strip and Lebanon at the Jewish state. The diplomatic push comes as Israel mobilized reservists for a possible ground invasion of Gaza.

The Egyptian plan envisages a cease-fire today to be followed within 48 hours by separate talks with Israeli and Palestinian delegations in Cairo, the official Middle East News Agency reported, citing Foreign Ministry documents.

Photographer: Mohammed Talatene/Anadolu Agency via Getty Images

Palestinian children inspect buildings destroyed by Israeli air attacks in Gaza City, on July 14, 2014. Close

Palestinian children inspect buildings destroyed by Israeli air attacks in Gaza City, on July 14, 2014.

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Photographer: Mohammed Talatene/Anadolu Agency via Getty Images

Palestinian children inspect buildings destroyed by Israeli air attacks in Gaza City, on July 14, 2014.

Kerry Visit

MENA also said that Kerry is due in Cairo today for meetings to advance the peace proposal. The top U.S. diplomat, who’s attending Iran nuclear talks in Vienna, has been in contact with Israeli and Egyptian leaders by phone to discuss the prospects of a truce, a U.S. official said.

“We welcome Egypt’s call for a cease-fire and hope this will lead to the restoration of calm as soon as possible,” said Jen Psaki, a U.S. State Department spokeswoman, in a statement.

U.S. President Barack Obama, speaking yesterday at a White House dinner celebrating Ramadan, said Israel “has the right to defend itself against what I consider to be inexcusable attacks.” He also said the “situation in Gaza reminds us again that the status quo is unsustainable.” Obama said the U.S. will try to facilitate a return to a 2012 cease-fire.

The Gaza Health Ministry says dozens of children and other civilians are among the dead and hundreds have been wounded since Israel intensified air raids a week ago after increased rocket attacks.

Missiles Intercepted

While Israeli homes and vehicles have been struck by the more than 1,000 rockets fired since July 8, a missile defense system has intercepted about 200 headed for built-up areas, the army said.

Gaza has become a frequent battleground since Israel evacuated it in 2005 after a 38-year occupation while imposing, together with Egypt, restrictions on the movement of people and goods to and from the coastal strip. Two major Israeli air and ground offensives in the territory since 2009 have only temporarily quashed rocket fire.

Israel hit 163 targets in Gaza yesterday while 115 rockets were fired at Israel from the Palestinian enclave, the military said. Israel, the U.S. and European Union consider Hamas a terrorist organization.

Lieutenant-Colonel Peter Lerner, a military spokesman said the army estimates that 20 percent of Hamas’s “rocket capability” has been depleted. He also said the government has authorized the mobilization of as many as 40,000 reserve troops for possible invasion to back up the air raids.

‘Demolish Them’

Within his cabinet, Netanyahu faces pressure to send the troops into Gaza and inflict heavier damage on Hamas.

“We can demolish them,” Economy Minister Naftali Bennett said in an interview with Channel 2 television news. “Hamas is isolated internationally. We have this rare opportunity to bring them to their knees.” Bennett may vote against the Egyptian truce plan, Haaretz said.

The current round of violence erupted after Israel arrested hundreds of Hamas militants in connection with the abduction of three Israeli teenagers later found dead in the West Bank. It flared further with the killing of a Palestinian youth in a suspected revenge attack.

Haniyeh said in his televised speech that Hamas is obliged “to defend our land and defend the future of the next generations,” without commenting directly on cease-fire proposals. He said Israel has imposed a “siege” on Gaza for eight years, curtailing movement of people and goods, and “all this blood that was shed has to lead to a change to this suffering.”

Proposal Welcomed

The Palestinian Authority “welcomes the Egyptian initiative,” Mohammad Shtayyeh, a senior official in President Mahmoud Abbas’s Fatah party, said by text message. “We hope that the Israeli side will accept it and start immediately implementing it.” Fatah’s recent reconciliation with Hamas has come under strain during the past week, as Abbas denounced the rocket attacks on Israel.

Market reaction to the fighting has been muted. In the past week, the benchmark Israeli stock index fell less than the MSCI World Index of developed-nation stocks and yields on domestic 10-year bonds dropped. Two companies sold 515 million shekels ($150 million) of bonds and bets on fluctuations in the shekel remained near a nine-year low.

While the reservists are being called up, it’s not clear whether Israel will send troops into Gaza and if so, how extensive the objectives of such an operation would be.

Ground Forays

“If you’re talking about a large-scale operation, imposing order on Gaza, wiping out rockets, toppling Hamas, that’s something that could take a long time,” said Efraim Kam, a senior research fellow at the Institute for National Security Studies at Tel Aviv University. “I see more risk than opportunity there,” with the possibility of entanglement, soaring casualties and international pressure to pull out, Kam said in a phone interview.

Another option would be brief ground forays to destroy rocket sites or attack Hamas leaders, he said.

“If they can think of a limited ground operation that won’t bring heavy international pressure to get out fast or heavy casualties to us and to the Palestinians, I think that’s possible,” Kam said.

To contact the reporters on this story: Caroline Alexander in London at calexander1@bloomberg.net; Jonathan Ferziger in Tel Aviv at jferziger@bloomberg.net

To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net Ben Holland, Justin Blum

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