Netanyahu speaking at the Herzliya Conference yesterday. (AP Photo/Rauvan Kastro, pool)

February 4, 2010, 7:35 a.m.: Israelis are a tough audience. They expected Prime Minster Benjamin Netanyahu to make a major policy announcement last night, in keeping with what has become a kind of tradition on the final night of the annual four-day national security conference in Herzliya, where Israel’s establishment and foreign guests gather each year. It was here, for example, that former Prime Minister Ariel Sharon disclosed that Israel would be leaving Gaza.

So when Bibi Netanyahu began his speech to the packed auditorium in prime television time by saying that he believed peace talks with the Palestinians, without preconditions, would begin in the next few weeks, participants perked up. But he did not elaborate. Instead, he delivered a rambling ode to the joys of rediscovering one’s Jewish roots and heritage. The government, he said, would soon begin building walking paths to link the hundreds of biblical sites throughout Israel. “Education begins first of all with the bible,” he said. “So get to know the land,” he counseled, urging Israelis to take to the roads with their children in tow to visit the country’s historic Jewish sites.

This being Israel, the jokes soon followed. Bibi’s oration quickly became known as the “mushroom speech,” as one of the student volunteers who had shepherded foreign guests through the conference called it.

“Sarah wrote it,” quipped another irate Israeli, referring to recent press reports about the prime minister’s wife, which accuse her of alleged undue influence over her husband’s policy and personnel choices and allege she demands free meals at some of the country’s best restaurants.

“Take a Hike, Israel!” screamed the first-edition headline of Yedioth Ahronoth, Israel’s largest-circulation daily paper.

While foreigners at the conference were puzzled by the prime minister’s choice of topics, Israeli participants were furious. For four days, guests had held wide-ranging, brutally frank, often hair-raising discussions about the myriad challenges facing the Jewish state. Conferees were told, for instance, that Israel might soon have to confront not only a historically unprecedented threat from a nuclearized, unstable, and militant Iran, but also a historic decision about whether to return territory Israel has occupied since the 1967 war to the Palestinians. And Hezbollah is said to have replenished its conventional arsenal with some 40,000 rockets and missiles and has proven willing to use them to overcome Israel’s overwhelming air superiority.

At home, participants here were told, domestic violence is increasing and questions are being raised about whether Israel’s strong economic growth can be sustained. For the first time, this conference expanded the definition of national security to include Israel’s social welfare and educational systems and its treatment of the elderly and Arab Israelis, who constitute almost 20 percent of the population.

“Yet Bibi picked this moment to tell us that we should reconnect with our heritage and take our sons on hikes?” said one angry Israeli.

Netanyahu’s limp performance and sophomoric lecture on the need for Jewish patriotism was particularly resented in light of the fact that Israeli prime ministers have often used the Herzliya gathering to deliver major national-security news. The prime minister’s own office, moreover, had spent days raising expectations about the speech, telling Israeli reporters that Netanyahu would deliver a major policy statement here. “We were expecting Churchill,” said one veteran commentator. “And Bibi was no Churchill.”

A more charitable interpretation of the speech was that, however ineptly, Bibi was trying to reconnect Israelis with their Zionist roots at a time when he may soon ask fellow Israelis to relinquish what many of them consider the sacred biblical land of Israel.

But there was little charity in the lobby of the auditorium after the conference’s close. It had been an intense week, participants agreed. Discussions here included the most varied program and some of the highest quality debate that the Herzliya Conference, now celebrating its 10th year, had ever staged.

The prime minister never once mentioned the topic that had dominated so much of the informal discussion here—the threat posed by a militant, nuclearized Iran. Earlier in the day, however, Israel’s vice prime minister, Moshe Yaalon, argued that to persuade Iran to end or suspend its nuclear weapons program, Iranian leaders would have to conclude that their own survival was at stake. The Iranian regime had suspended its nuclear program at least once before, he said—in 2003, when the United States invaded Iraq in response to allegation that Saddam Hussein was developing weapons of mass destruction. The program had been suspended for at least three years, he told conferees. It resumed only in 2006 after the U.S. war effort in Iraq seemed on the verge of failure and Israel faced withering internal and foreign criticism for its incursion in Lebanon.

Yaalon, a retired chief of Israel’s armed forces, seemed eager to keep Iran guessing about what Israel, which is widely believed to have the Middle East’s only nuclear arsenal, would or would not do if Teheran’s mullahs do not stop their own nuclear enrichment program and advanced to a nuclear-bomb threshold. “It is important to continue to make clear to the extremist Iranian regime that all options are still on the table,” he said, “and that ignoring the international demands can end in the worst way.”

Fayyad speaking at the Herzliya Conference.

Fayyad speaking at the Herzliya Conference.
CREDIT: Jack Guez/AFP/Getty Images

February 2, 11:20 p.m. ET: Israel’s favorite Palestinian showed up at the Herzliya Conference today. In an appearance many called courageous, Palestinian Prime Minister Salaam Fayyad, surrounded by a phalanx of Israeli and Palestinian bodyguards, accepted an invitation to be a keynote speaker at the annual gathering of Israel’s establishment, where he appealed for peace.

Ignoring threats and condemnations by his rivals in Hamas for his decision to appear here in the packed auditorium, Fayyad called upon Israel to stop expanding settlements on the land of the future Palestinian state.

His message was not particularly new. Nor was that of Defense Minister Ehud Barak, who also appeared to restate Israel’s official position. But both men made gestures that went beyond what the stalled peace process would seem to allow. Fayyad did that simply by showing up on Tuesday night, rather than canceling, as he has done before. And Barak delivered a shot across the bow of his fractious coalition government by warning that unless progress on the peace front occurred now, Israel would either become a “bi-national” or an “apartheid state” headed inexorably into global isolation.

A few participants gasped to hear the defense minister in Prime Minister Benjamin Netanyahu’s government use the language of Israel’s most virulent critics. Apartheid state? One of the panels here at Herzliya had described the effort to paint Israel’s occupation policies in the West Bank as analogous to South African apartheid as part of a “soft war” against the Jewish state.

One veteran European diplomat called the dueling appearances by Barak and Fayyad at the highly charged conference a “mood-changing moment.” “Both sides were signaling what they really wanted to do,” the diplomat said. Now they just have to figure out how to do it.

But some participants were decidedly less impressed. “An investment banker trying to calm a skittish board” is how Fayyad came across to Berel Rodal, the entrepreneur and former Canadian government official. But many here seemed willing to give Fayyad, the soft-spoken, articulate technician in a grey banker’s suit, the benefit of the doubt. “He was laying his cards on the table and in effect negotiating in public, saying what he would say if there were negotiations,” said Richard Gordon, president of the American Jewish Congress. But there aren’t any negotiations, of course—for reasons that both sides seem eager to blame on everyone but themselves.

A veteran Israeli official noted that both Barak and Fayyad were uttering the right words about the need for peace and compromise and to battle extremism and establish security and prosperity for both peoples. But while Barak, given his subordinate status in Bibi’s government, was unable to do anything to implement his strongly-stated opinions, Fayyad was working hard on the West Bank.

Fayyad stressed his determination to prepare the Palestinian people for statehood by building the civic and physical infrastructure of a state. He spoke of the accomplishments of his “bottom-up” strategy—the West Bank’s 7 percent growth rate and the more than 1,000 development projects completed under his administration. He alluded to the American-sponsored training for the Palestinian police and security forces that have helped stem terror and establish Palestinian law and order in West Bank towns long overrun by gangs and corruption.

Isabel Maxwell, an activist and philanthropist who has devoted enormous time and energy to understanding the dual narratives that have shaped the Israel-Palestinian struggle, said that Ramallah and parts of the West Bank were being transformed under Fayyad’s administration. Recently, for instance, Bashar Masri, a Palestinian developer, broke ground on Rawabi, a new community just north of Bir Zeit that’s designed to accommodate 750,000 Palestinians. New business ventures were springing up throughout Ramallah, she said. For the first time, the West Bank has a Yellow Pages.

Fayyad predicted that Palestinians would be more than ready for statehood by 2011, within two years. But Palestinians also had to believe that the occupation was ending and that the political, or “top-down” peace talks would ultimately deliver the two-state solution that both the Palestine Authority and Israel have endorsed. Yet the political track has failed to keep pace with bottom-up nation-building, he said, despite U.S envoy George Mitchell’s repeated trips here, and the efforts by Britain, France, and others to revive the negotiations.

The most obvious problem with imagining a true two-state solution of the kind that Fayyad expects is Gaza, mired in its misery under militant Islamic rule. Hamas refuses to accept a two-state solution or any Jewish presence in what it refers to as historic Palestine. Fayyad paid the requisite lip-service to ending the “separation” between the Palestine Authority and Iranian-supported Hamas, which needed less than five hours to evict its Fatah rivals from Gaza in 2007. But Hamas and Fatah are unlikely to reconcile anytime soon. Nor is Bibi, who is scheduled to close the conference Wednesday night, likely to yield to the Obama administration’s demands that Israel stop expanding settlements.

The Obama adminstration’s anger over Netanyahu’s recalcitrant behavior has prompted Washington to stage something of a no-show at the conference. While a deputy assistant secretary of defense is participating in several panels, the White House did not send its usual suspects here. Vice President Joseph Biden, Secretary of State Hillary Clinton, veteran diplomat Dennis Ross, and other senior officials involved in setting Middle East policy were all invited, along with others, but none accepted. Several leaders of American Jewish groups insisted on Tuesday that relations between Israel and the United States are perfectly fine, but the strains between the two allies seemed all too evident.

Dagan, at left, celebrating his appointment as Mossad chief with then-Prime Minister Ariel Sharon and outgoing Mossad chief Ephraim Halevy on October 30, 2002

Iran’s Sejil-2 surface-to-surface missile, prior to its test-firing on May 20, 2009.

February 1, 10:55 p.m. ET: The Herzliya Conference is not for the faint-hearted or weak of tongue. From 8:30 in the morning to 11 at night, Israeli and foreign participants at this national-security marathon talk, question, opine, challenge, decry, quip, assert, and rant. And, of course, complain: about the failing peace process, the strains in the U.S.-Israeli partnership, and Israel’s frustrations with the Arabs, radical Islamists, and their “moderate” Arab alternatives—if, as opposition leader and former Foreign Minister Tzipi Livni observed, one can use that term to describe people who “chop off the hands of thieves.”

On buses, over sack lunches, and in corridors, Israelis and their guests at this prestigious gathering engage in non-stop gab. But near the end of the second day of this four-day conference, several participants began to notice as Berel Rodal, a former Canadian defense official and an entrepreneur, astutely noticed, much of the talk was about not talking.

The elephant in all of the rooms at Herzliya is Iran. Yes, there is endless talk about the challenge that a nuclearized, militant Iran will pose not only to Israel but also to the stability of the region and the world. There is talk about what the United States might, or should, or is likely to do, and there is worry about what Obama is unlikely to do.

But there is precious little discussion about Israel’s actual strategic thinking and plans. Uzi Arad, the prime minster’s national security adviser, explained in Sunday night’s opening speech the reasons for Israeli officials’ uncharacteristic opaqueness. “More is happening than meets the eye,” said Arad, a man with backgrounds in both scholarship and the Mossad, who not incidentally was the founder of the Herzliya Conference a decade ago.

Arad stressed the need for patience, a posture not always associated with a man who has never been known for a shy, retiring style. Talk is sometimes cheap, he suggested. Not talking about things should not be interpreted to mean that nothing was happening on the Iranian front. Not talking did not mean that there was nothing to talk about. When he was not talking, he continued, we could assume that there might be things happening that he could not and would not talk about. “And that’s all I want to say about that,” he concluded.

Known for his acute analyses and blunt talk, Arad stressed the need for “prudence” and to avoid “noise and threats.”

There has been no talk by officials at Herzliya about Israel’s “red lines”—the points that Iran will reach in its nuclear program at which Israel may feel compelled to take military action. What constitutes a strategic threat to Israel, participants wondered. Would Iran’s possession of enough low-enriched uranium (which can be enriched to bomb levels within six months) be considered a red line? If so, that line has probably been crossed. Must Iran actually test a device to be considered a strategic threat to Israel? What will Israel do if Iran adopts the “Japanese model”—acquires the capability and material to build a bomb at any point, but refrains from actually building a weapon or testing one? Would Israel act without U.S. assistance or approval? Does it have the ability to destroy enough of Iran’s nuclear facilities to justify military action—and the political will and military ability to withstand Iranian retaliation? How would action absent American blessing affect the fate of Israel’s sometimes-tense relationship with Washington, the country’s most important strategic partner?

Israel’s relationship with Washington can still be talked about. Indeed, the morning’s keynote panel was entitled “U.S.-Israeli Relations: Still Special?” The panelists agreed that the ties between the two states and U.S. support for Israel remain strong, despite Israel’s refusal to yield to President Barack Obama’s demand that it suspend expanding settlements on occupied Palestinian land. Tzipi Livni argued that the relationship remained crucial, despite diplomatic strains. Pursuing peace with the Palestinians and challenging militant Iran were not favors Israel did for Washington, she asserted, but in both countries’ strategic interests.

There is a discouraging consensus that the peace process with the Palestinians is going nowhere, the result, many participants argued, of the disarray within Palestinian ranks, the domination of Gaza, or “Hamastan,” as one Israeli participant called it, by militant Islamic Hamas, and a weak Palestinian leadership on the West Bank, which more conservative Israelis, and all Israeli officials, continue to call by its biblical name, Judea and Samaria. Only Daniel C. Kurtzer, a former U.S. ambassador to Israel and Egypt now at Princeton, warned that it was unreasonable and self-defeating for Israel to insist that the Palestinians come to the negotiating table to discuss the fate of land that Israel continued to seize.

Tuesday’s schedule features very little talk about the irksome Palestinians and much more talk about Israel’s energy requirements and oil addition, its Jewish identity and heritage, the treatment of its elderly, and the quest for “effective governance.”

But the issue of what to do about Iran is likely to continue to dominate the corridor chatter, if not official speeches.

One Israeli official warned me not to expect too much enlightenment on the questions that are most likely to keep conference participants at Herzliya up at night. “Those who are talking don’t know,” he explained. “And those who know aren’t talking.”

Dagan, at left, celebrating his appointment as Mossad chief with then-Prime Minister Ariel Sharon and outgoing Mossad chief Ephraim Halevy on October 30, 2002

Dagan, at left, celebrating his appointment as Mossad chief with then-Prime Minister Ariel Sharon and outgoing Mossad chief Ephraim Halevy on October 30, 2002.
CREDIT: Yaakov Saar/GPO/Getty Images

Feburary 1, 1:00 p.m. ET: For the tenth year in a row, anyone who is anyone in Israel can be found in this Tel Aviv suburb by the sea for the annual Herzliya Conference, the theme of which this year is the “Balance of Israel’s National Security.” The three-day conference features Israel’s political and intellectual movers and shakers—from Prime Minister Benjamin Netanyahu to the country’s irrepressibly energetic octogenarian president, Shimon Peres, from Defense Minister Ehud Barak to his fading political rival, Foreign Minister Tzipi Livni, from academic superstars like the Nobel Prize-winning economist Thomas Schelling to American billionaire real estate magnate and publisher Mort Zuckerman.

As heavy-duty keynote speakers from around the world address the roughly 800 invitees in the Herzliya Center’s vast auditorium and panelists debate the state of Israel’s soul and its political and economic fortunes at invitation-only breakout sessions in classrooms, participants conduct the conference’s real business—the informal schmoozing and exchanges of embossed business cards—over coffee and in the corridors.

But this year, all of Israel is focused on a man who isn’t here. The man who is so vital to Israel’s security never comes to this prestigious event, even though his predecessors, acolytes, associates, and protégés are everywhere at this gathering: Meir Dagan hates small talk, but his name this week is on all of Israel’s lips.

Meir Dagan is the head of the Mossad, Israel’s secret security service, which struck again in January in Dubai with devastating precision in a raid whose details are only now dribbling out past Israel’s press censors. Israel, as is its custom, has neither confirmed nor denied a role in the death of Mahmoud al-Mabhouh, a senior Hamas operative and founder of the group’s military wing, in a hotel room near Dubai’s international airport on January 20. But his family and Hamas are blaming Israel for Mabhouh’s demise.

Smadar Perry, the Arab-affairs correspondent for Yedioth Ahronoth, revealed more details of the astonishing operation in an article today as the participants gathered for Herzliya’s opening ceremony.

The strike was vintage Mossad—precise, without fingerprints, and deniable, the kind of operation in which Dagan has specialized since becoming chief of the spy agency seven years ago.

According to the newspaper, al-Mabhouh was in Dubai for Hamas to arrange a shipment of arms from Iran, having entered under a false name with a phony passport. There are varying accounts of precisely what happened in al-Mabhouh’s room at the Al Bustan Rotana Hotel, where his body was discovered by hotel staff. But somehow, four Mossad agents, having entered Dubai with false passports, gained entry to his room, although Al-Mahbouh, no stranger to assassination attempts, had supposedly taken the precaution of propping a huge arm chair against his hotel door to prevent unauthorized entry. The paper reported that he was electrocuted by an unknown device and then strangled. The agents left a “Do not Disturb” sign on his door to ensure that the body would not be discovered for several hours, to give themselves sufficient time for a clean getaway.

Al-Mahbouh had been on Israel’s hit list for years. On the run since 1989, when he helped kidnap and kill two Israeli soldiers on leave, he and eventually his family moved to Damascus, where Hamas’ more radical wing under Khaled Mishal is based. According to The Times of London, al-Mabhouh traveled to Dubai on January 18 on an Emirates flight from Damascus using a false passport. Upon his arrival in Dubai, he was followed by two men who were described by local police as “Europeans traveling on European passports.” Yedioth Ahronoth reported yesterday that one member of the team was a woman.

Dubai police chief Dhafi Khalfan told the Agence France-Presse on Sunday that the apparent operation to kill the Hamas kingpin was perpetrated by “seven or more people holding passports from different European countries” and that the police are currently in contact with the countries in question to figure out who the passport-holders are.

The killing of al-Mahbouh is the latest in a string of assassinations and operations that are commonly believed to be part of the campaign to stop the flow of arms and other contraband to Gaza since Hamas seized control of the Fatah-led government there in June 2007. While questions have been raised internationally about the extent of arms shipments from Iran to Gaza, weapons apparently destined for Gaza have been captured at sea. In a recent interview on Hamas’ English-language website, movement official Dr. Khalil al-Hayah praised Iranian support for Hamas and did not deny that this support included weapons. “Iran supports us financially, politically and morally,” he said, “and stands beside the Palestinian people and his [sic] resistance, without going into unimportant details.”

In December, two Hamas officials were killed in a mysterious blast in Beirut. And last year, Sudan, which is allied with Iran and openly hosts Hamas, accused Israel of attacking a convoy in a remote mountainous region in the northeastern part of the country. The Associated Press and other media reports said the strikes were aimed at convoys allegedly filled with weapons bound for Gaza.

Israel has also been linked to the disappearance of Iranian nuclear officials, though it is unclear whether they were killed or have defected to the West. And most famously, the Mossad has been accused of having assassinated Imad Mughnieh, the senior Hezbollah official responsible for the bombing of the U.S. Marine compound in Beirut in 1983, soon after he attended a gathering at the home of the Iranian cultural attaché in Damascus.

Dagan, a 65-year-old military officer who was born in Novosibirsk, Siberia, and emigrated to Israel as a young child, does not give interviews and is known to despise the media. It goes without saying that he would not be comfortable or happy at the Herzliya conference, where he is everyone’s favorite subject of conversation.

And somewhere nearby, away from the reporters and politicians, a small group of men and women who work for Israel’s top spy may be gathering to celebrate their latest accomplishment with a glass of champagne.

Judith Miller is an adjunct fellow at the Manhattan Institute whose writings focus on the Middle East and counterterrorism. As an investigative reporter for The New York Times, she was part of a small team that earned a 2002 Pulitzer Prize for reporting on global terrorism. Her book God Has Ninety-Nine Names explored the spread of Islamic extremism in ten Middle Eastern countries, including Israel and Iran.