"It is essential that Israel continue its occupation of the West Bank, which serves our interests by preventing Israel from forging closer military and political ties with its Arab neighbors, isolates Israel morally from the international community and weakens Israel militarily. Rather than preparing for war, the Israel Defense Forces spend precious resources protecting the settlements, controlling a hostile Palestinian population and pursuing a largely futile effort to periodically uproot settlers. Hezbollah's success in 2006 is a measure of how the occupation has promoted our interests by diminishing Israel’s fighting capacity. As Israel pursues policies that minimize diplomatic and financial risks for the Islamic Republic of Iran, ultimately benefiting us, our approach to Israel should continue along the path laid out two years ago. We should continue provoking Israel by denying the Holocaust. Shaped by the most destructive event in the history of the Jewish people, Israel believes that its enemies, whether considered to be Nasser, Arafat, or Hussein, and now His Excellency Ahmadinejad, are modern-day Hitlers, bent on exterminating the Jews. Threats, whether great or small, real or imagined, are always characterized as existential in which their very existence is at stake, resulting in rash actions that ultimately have advanced our interests. For example, the invasion of Lebanon in 1982 gave rise to our Shia brothers, Hezbollah. Financial support of the Muslim Brotherhood as an alternative to Arafat led to the rise of our Sunni brothers in Hamas. And most recently, the disproportionate response to a border incursion along the Lebanese border in 2006 enhanced the standing of Hezbollah, strengthening our influence all the way to the edge of the eastern Mediterranean. We should continue supporting Hamas. The financial cost is small and promises great rewards. Funding of arms to Hamas will hopefully provoke Israel into another costly occupation of Gaza, which will tie down a significant military force, will kill the Annapolis peace process, and prolong Israel's occupation of the West Bank. Though efforts so far have failed to bring Israel back into Gaza, it has shaped Israeli public opinion in our favor. Israelis feel the Gaza withdrawal brought no benefits and are fearful that a similar move in the West Bank will lead to rockets raining down on their cities. In sum, we should let Israel continue do what it has done in the past to block the creation of a Palestinian state. A ‘successful’ peace process will require Israel to fulfill its Road Map commitments, such as removing restrictions on the movement of persons and goods, reopening Palestinian institutions in East Jerusalem, freezing all settlement activity and dismantling illegal outposts. We don’t expect Israel to do any of these things. The settlement enterprise, while bad for the Palestinians, is good for us. Settlements and accompanying bypass roads fragment the West Bank into uneconomical enclaves, undermining the creation of an economically viable Palestinian state. However, as Moshe Dayan and Ariel Sharon said, protecting settlers keeps the IDF in the West Bank. And as noted above, tying the IDF down in the West Bank weakens its capacity to fight armed forces such as Hezbollah. As the World Bank noted, there is a ‘clear correlation between access restrictions and the protection and expansion of Israeli settlement activity in the West Bank.’ Restrictions on movement have severely weakened the Palestinian economy and nurtured a hostile Palestinian population. The settlements have shaped the route of the ‘separation wall’, causing further damage to the Palestinian economy. The continuation of settlement activity indicates that Israel, left to its own devices, will do what it did with Oslo--undermine the legitimacy of the peace process, and weaken the credibility of the Palestinian leadership. While there is not much we need to do to support the settlement enterprise, this does not mean there is nothing we can’t do. We might secretly finance Jewish organizations and neo-Conservative think tanks in the United States which promote the universally rejected idea that settlements are legal under international law and are good for Israel’s security. We should also find ways to support prominent Americans, such as Abe Dersowitz (sic) and Allen Foxman (sic), who attempt to silence critics of Israel’s occupation by calling them anti-Semitic. We are optimistic that in the upcoming year, with little cost to ourselves, our interests will continue to be advanced by the actions of our enemy."