VZCZCXRO4730
OO RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHRK #0099/01 0941632
ZNR UUUUU ZZH
O 041632Z APR 07
FM AMEMBASSY REYKJAVIK
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3241
INFO RUEKJCS/SECDEF WASHDC IMMEDIATE
RUEHNY/AMEMBASSY OSLO IMMEDIATE 0294
RUEHNO/USMISSION USNATO IMMEDIATE 0246
RHMFISS/HQ USEUCOM VAIHINGEN GE IMMEDIATE 0051
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 02 REYKJAVIK 000099 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
DEPT FOR P (BAME), EUR/NB (MIDDLETON, MAHER) 
SECDEF FOR OSD/P (FATA, HURSCH, CLINE), OSD/RA (COSTA) 
OSLO FOR DATT 
 
E.O. 12958: N/A 
TAGS: MARR PREL NATO IC
SUBJECT: Iceland: Pressing for movement on air defense radar issues 
 
Refs: A) 06 Reykjavik 357 
  B) J. Hursch email 23 February 2007 
  C) Hursch-Stevens-Evans emails 21 March 2007 
 
Sensitive but Unclassified -- entire text.  Not for internet 
distribution. 
 
¶1.  (SBU) Summary:  The Icelandic Government is sending ever-clearer 
messages that it wants visible progress in U.S.-Iceland discussions 
on the NATO-owned Iceland Air Defense System (IADS) radar sites, for 
which U.S. funding expires in August 2007.  In a March 30 meeting 
with the Ambassador, Jon Egil Egilsson, Head of the Ministry for 
Foreign Affairs Defense Department, pressed hard for another round 
of bilateral U.S.-Iceland talks on the system -- and specifically, 
the possibility of U.S.-funded upgrades to the system -- as soon as 
possible this month.  Egilsson noted that February 23 talks in 
Brussels between the two sides were a fruitful start, but argued 
that clarity regarding U.S. intentions was necessary before Iceland 
could properly approach NATO about the future of the system (i.e., 
ask NATO to foot the rest of the bill).  Post is highly appreciative 
of Washington efforts on this issue, which will be an extremely 
sensitive point for the host government up to and beyond the August 
15, 2007 date when current U.S. obligations to fund IADS expires. 
End Summary. 
 
¶2.  (SBU) Background:  In October 2006, concurrent with the closure 
of Naval Air Station Keflavik, Secretary Rice and Icelandic Prime 
Minister Haarde signed a "Joint Understanding" to set the future 
course for U.S.-Iceland security cooperation (Ref A).  Among other 
things, the agreement called for the cessation of US funding for the 
Iceland Air Defense System (IADS) -- a NATO-owned network of four 
radar sites used for air traffic control and airspace monitoring 
purposes -- effective 15 August 2007.  The Joint Understanding 
further expressed the intent to discuss bilaterally and with NATO 
the funding and disposition of IADS and how future operations of 
IADS might support NATO requirements.  The first bilateral 
discussion on the future of IADS took place 23 February 2007 in 
Brussels between a DOD-led U.S. delegation and an Icelandic 
delegation (Ref B).  Head of the Ministry for Foreign Affairs 
Defense Department Egilsson requested a meeting with the Ambassador 
on 30 March to discuss the state of play and push for the next round 
of talks as soon as possible. 
 
¶3.  (SBU) According to Egilsson, the critical issue for the GOI is 
upgrades to the system.  The U.S. initiated various upgrades to IADS 
prior to the closure of NAS Keflavik, but terminated these projects 
when the base closed on 30 September 2006.  Egilsson stated that it 
is Iceland's intention to maintain IADS and to integrate it into the 
NATO Integrated Air Defense System (NATINADS) with long range 
support coming from NATO.  He further stated that there are certain 
functions that Iceland cannot provide on its own, which are critical 
to the continued operation of IADS and its interoperability with 
NATO.  He considers these upgrades vital to the sustainability of 
IADS and requests feedback as to USG intent to complete the 
upgrades. Egilsson passed three documents to the Ambassador, which 
he noted were already passed to the US delegation in Brussels during 
the February discussions (copies provided via email to EUR/NB and 
OSD Hursch). 
 
¶4.  (SBU) Pressing the point, Egilsson made it clear that the GOI is 
eager to continue discussions on IADS.  Its concern is that the 15 
August 2007 cutoff date for US funding is fast approaching and that 
in the MFA's view, many issues must be resolved bilaterally with the 
U.S. before GOI can adequately express its intentions to NATO. 
Egilsson allowed, however, that not every issue arising from the 
February discussions needs to be resolved in order to make the next 
move.  For example, he stated that the cryptographic upgrades are 
not an issue that would impede GOI discussions with NATO.  In 
addition, while the GOI expressed its desire for the second round of 
discussions to take place in Reykjavik (comment:  a sure sign of the 
pressure Egilsson is under to show visible progress on IADS ahead of 
May's parliamentary elections), it did not object to another 
location if required to facilitate the discussion. 
 
¶5.  (SBU) Comment:  Egilsson is reflecting the pinch the GOI as a 
whole feels to tie up loose ends on IADS, the most prominent 
"legacy" issue remaining from the NASKEF closure last year.  This is 
particularly true given comments by the Prime Minister and Foreign 
Minister in NATO fora equating continued IADS operations with the 
importance of air policing for the Baltics.  Post is deeply 
appreciative of Washington and EUCOM efforts to bring technical and 
policy expertise to bear in resolving this issue (Ref C), which is a 
critical one for the GOI and a recurring theme in every conversation 
 
REYKJAVIK 00000099  002 OF 002 
 
 
Ambassador has on security affairs here. 
 
van Voorst