8.9.2003 HA’ARETZ 1. ARAFAT APPOINTS HIS CONFIDANT ABU ALA TO FORM GOVERNMENT. 2. TREASURY: FULL TAX ON THOSE WHO TAKE EARLY RETIREMENT. 3. AVERAGE SALARY DROPS AGAIN: NIS 6,936. 4. Sharon’s visit: Talks on operations against kidnappings. DISCUSSIONS ON ISRAELI-INDIAN STRUGGLE AGAINST TERROR AHEAD OF SHARON’S VISIT. HATZOFEH 1. Powell: We will not negotiate with Arafat. Rice: Arafat to blame for problems in Abu Mazen’s government. ARAFAT’S CANDIDATE ABU ALA TO REPLACE ABU MAZEN. Fatah Central Committee elects Abu Ala as Palestinian Authority Prime Minister. Decision requires Palestinian Legislative Council approval. Dahlan: Even if they ask me, I will not join new government not led by Abu Mazen. US administration critical of Arafat. High alert levels over fear of terror attacks to continue today as well.

2. THREE SOLDIERS INJURED IN EXPLOSION IN KISUFIM AREA. 3. ISA WARNS GOVERNMENT MINISTER OF HAMAS ASSASSINATION PLANS. 4. SECURITY FORCES THWARTED 57 TERROR ATTACKS IN LAST TWO MONTHS. 5. LIEBERMAN: ECONOMIC DAMAGE FROM AUTO ACCIDENTS – NIS 10 BILLION PER ANNUM. 6. 7.2% DROP IN AVERAGE SALARY. 7. Despite poor opening at European Championship: ISRAELI NATIONAL BASKETBALL TEAM ADVANCES TO NEXT STAGE. Israeli players defeat Latvia 91-75. (…). Crucial game tonight against Slovenia. MA’ARIV 1. TARGET: MINISTERS. Government ministers warned: You are Hamas targets. Police to Egged and Dan: Long buses – death trap. 2. Successor: Abu Ala “MAY HEAVEN HELP YOU.” Arafat blesses Prime Minister-elect. 3. Quitting: Dahlan “YOU COULD HAVE DONE MORE” (…). 4. SHARON FIRES BACK AT EPHRAIM HALEVY. In closed conversation, PM described outgoing National Security Council Chairman: “Pursuing honour, with expanded ego” and “Advocates illusory and dangerous ideas.” YEDIOT AHRONOT 1. Ministers: We are concerned for our lives; ISA tells ministers to travel in bulletproof cars. Goal: To reduce number of injured; recommendation to stop using long buses on dangerous routes. ON ALERT. Security forces on full over fear of attacks. Sheik Yassin: Israel will pay. Arafat decides: Abu Ala instead of Abu Mazen. 2. LAYOFFS AND CUTBACKS. Cuts on the way: 2,000 to be laid off in public sector, municipal taxes to be raised, welfare cuts to continue. IDF cutbacks: Two major generals, 12 brigadier-generals, 46 colonels and 240 lieutenant colonels to be dismissed. Salary freeze: Average salary dropped 6.4% in one year. Education salaries dropped 10%. Due to tensions: Sharp drop in stock market. Dollar stronger. 3. PASSAGE TO INDIA. Sharon leaving this morning on first official visit. ______________________________ SUMMARY OF EDITORIALS FROM THE HEBREW PRESS Yediot Ahronot notes that whereas most Israelis would say that Abu Mazen did not survive because, “Arafat didn’t let him,” and would add that, “The Rais…won’t allow any chance for a settlement or normalization,” most Palestinians would say that Abu Mazen failed because, “He simply didn’t supply the goods.” The editors refer to a Palestinian opinion poll which indicates that support for Hamas and other rejectionist groups increased as support for Abu Mazen’s government decreased and assert that, “This, if you like, is the true infrastructure of terror, born out of Palestinian desperation, and impervious to any American or Israeli pressure. The real war on it is not fought with helicopters, but with opening a ray of hope for a people that lives in poverty and humiliation. True assistance to Abu Mazen isn’t bombing Sheikh Yassin, as the security establishment argues, but proving to the Palestinians that his way is to their benefit. Arafat can best be neutralized not by expelling him, but by generosity to those who constitute an alternative.” Hatzofeh suggests that Abu Mazen, “also disappointed those who didn’t expect very much from him in the first place,” and adds that he, Israel and the US all know that it was Yasser Arafat who undermined him. The editors declare that, “The time has come to remove Arafat from the scene and simply expel him from the region,” because, “He leads the Palestinian terror machine,” “prevents any possibility of diplomatic progress by the Palestinians,” and, “is torpedoing any attempt to stop the wave of terror and violence.” BPI.