Communicated by the Cabinet Secretariat)

At the weekly Cabinet meeting (Sunday), 4.1.2004: 1. Prime Minister Ariel Sharon announced the appointment of Maj. Gen (res.) Giora Eiland as Chairman of the National Security Council and National Security Adviser. Maj. Gen (res.) Eiland will assume his responsibilities on 18.1.2004. Prime Minister Sharon thanked Mr. Yisrael Michaeli for filling the position over the last two months.

2. OC Intelligence Maj.-Gen. Aharon Ze’evi Farkash briefed ministers on intelligence matters regarding events in the region, including the strategic consequences of the war in Iraq, the situation in the north and Palestinian affairs. 3. The Cabinet decided that the funds which were seized during IDF operations in Gaza at Preventative Intelligence HQ will – upon the recommendation of Defense Minister Shaul Mofaz – be used for humanitarian needs of the Palestinian people and will be added to the budget of the Coordinator of Government Activities in the Territories. 4. The Cabinet approved an agreement to be signed by National Infrastructure Minister Avigdor Lieberman for the purchase of water from Turkey, in accordance with the principles laid down in the understandings signed in October 2002 by Prime Minister’s Office Director-General Avigdor Yitzhaki and the Director-General of the Turkish Ministry of Energy and Water. 5. Foreign Minister Silvan Shalom briefed ministers on current diplomatic affairs including the criticism that has been made over the lack of a Palestinian leadership capable of making a strategic decision to dismantle terrorist infrastructures. The Foreign Minister also discussed the Palestinian and general Arab effort to transfer the issue of the security fence BPI.