Defining the Road Map: Ways to Emerge from the Israeli-Palestinian Crisis

Transcript

MR. INDYK: Welcome to the Saban Center for Middle East Policy at The Brookings Institution. I'm Martin Indyk the Director of the Saban Center. We're very happy to welcome you here for the inaugural symposium at the Center on the Israeli-Palestinian crisis. Just now another bomb has gone off and apparently three Israeli's were killed in a West Bank settlement, which I think serves to underscore, unfortunately, the point of the this symposium. The Israeli-Palestinian crisis has now gone on for close to two years in this violent form. The task today is to see if we can find some useful ways to help get Israelis and Palestinians out of it. We are very glad to have Haim Saban here, the Chairman of the Center's International Advisory Council. I also welcome Cheryl Saban, his wife and his father-in-law. Its not easy to see beyond the river of blood and the sea of tears to find a road map out of this crisis, but as I said that's the challenge before us today. We've brought together Israelis, Palestinians and Americans, officials, former officials and experts to try to come up with approaches that will help the parties emerge from this crisis. I have to tell you that it was not easy to pull this program together. In fact we're still pulling it together at this minute, as I'll explain to you in a moment. In many ways, the problems we face are symptomatic of the depth of the crisis that now afflicts Israelis and Palestinians alike. We've worked very hard to bring here a variety of new Palestinian faces, here to Washington, new ministers and new voices for reform. But in each case, acceptance of the invitation turned into an unwillingness or inability to turn up for fear of the consequences.

To give you a flavor of this I wanted to read from a fax I received over the weekend from one of these people. He said, "Against the advice of my many friends, I was going to join you. Almost all tell me that President Bush's remarks on the need to remove Arafat and elect new leadership have lead to widespread rumors that the CIA is preparing the new leadership. There are some names already in circulation and these people are condemned and suspect. Whoever would dare now put his name as a contender is doomed. I am joined by a group of people to form a list of candidates for the new elections. All pleaded with me not to go to Washington, because it would put our list into heightened risk of being accused and then lose the elections all together."

As a result we have reorganized our program. We will deal with the political- security nexus first. We have here Jacob Perry. We're very glad to welcome him and I'll introduce him in a moment. We have Mohammed Dahlan, a virtual Mohammed Dahlan, who is, or will be with us today via satellite. He is five minutes from the studio in Ramallah, but moving between the apartment that he's in and the studio where he will come to us is causing some last minute problems and that's what we're working on. He wasn't able to join us today because he was recalled to Ramallah by Chairman Arafat to discuss his nomination as national security advisor. He will hopefully join us by video conference or by telephone after Jacob's presentation.

Jacob Perry is the president and CEO of Cellcom Israel, but it's not in that capacity that he's addressing us today. He is the former head of Israel's General Security Services, the Shin Bet or the Shabak as it's known. Jacob has served a lifetime in the GSS, assuming its leadership in 1988 and presiding over it for the next seven years, a period in which relations between Israel's General Security Services and the PLO. Those relations were transformed from bitter adversaries to partners in the effort to build a security foundation for the political edifice that Chairman Arafat and Prime Minister Rabin were, at the time, trying to construct through the Oslo Accords. He, like Muhammed Dahlan, has been involved in the best of times and the worst of times in Israeli-Palestinian security relationship.

So both men are uniquely placed to explain, from a security perspective, how we got into this mess and how the hell Israelis and Palestinians, with American help, might now get out of it. Jacob, we're very glad that you were able to join us.

MR. PERRY:: Thank you, Martin, for inviting us—me. I'm really sorry that Mr. Dahlan cannot join us, and thank you to Mr. Saban for this wonderful opportunity.

Two weeks ago, ladies and gentlemen, the picture of a toddler appeared in the world media. The baby was dressed like a suicide bomber, with a belt almost identical to the belts worn by real suicide bombers. The photo was found in Hebron by an Israeli officer during the recent military operation intended to root out the terrorist infrastructure in Palestinian cities. At first Palestinian sources dismissed the picture as a crude Israeli forgery. Eventually the child's own parents confirmed it authenticity; however, they and official Palestinian sources claimed the picture was a joke. I'm sorry, but I do not find this very funny.

Quite the contrary, to me this picture is a sad and painful sign of the deep hatred that exists today between Israelis and Palestinians.

The Australian Daily Telegraph is right to regard this as the most horrible picture published in the foreign world between us and the Palestinians. I truly hope that this child will grow up to be a doctor, a farmer or a teacher, that he will raise a family and that he will live to ripe-old age. But the very fact that his parents raised him with suicide bombers for role models can hardly be seen as a reason for optimism, to put it mildly. It is indeed sad to see that we have come to this only nine years after the historic venture between the late Yitzhak Rabin and Yasser Arafat, the signatories of the Oslo Agreement in the Rose Garden not far from here.

I believe that the Oslo agreements were in fact barter agreements. Where one party, Israel, expressed its willingness to receive some security "goods", namely, the destruction of terrorism and the Palestinian agreement to deal with Israel only through peace and negotiations. In return, the Palestinians will receive political and territorial "goods", namely, the gradual establishment of a Palestinian state and an Israeli withdrawl from most of the territories of the West Bank and Gaza. By signing the Oslo agreement the Palestinians signaled their willingness to accept this political "barter" agreement.

By definition any deal is based on mutual trust. I can hardly pretend to be a neutral observer with respect to the Israeli-Palestinian conflict. Still, I think that even the Palestinians will accept my analysis, namely, that since the signing of the Oslo agreements there have been a series of complaints from both sides, each side blaming the other for failing to deliver the promised goods. This breakdown is the reason for the present violence.

In my view, accpeting this as a staring point for dicussion is extermely important, perhaps even critical. The reason for this is that the basis for successful negotiations can only take place if each party can put itself in the place of the other and understand its needs and its complaints.

Lately, we in Israel talk about unilateral separation between us and the Palestinians as the solution to the problem of terrorism. This has become a slogan to which politicians of various political parties cling to, as if it were a new and sophisticated solution. But professionals who have dealt, and continue to deal with this issue, always realized that terror in our region cannot be prevented by simply building fences and barriers.

I am defintely in favor of establishing a security broder with fences, barriers and mines. These will hamper to some extent those who undertake acts of terror. But those who present this as a new and ultimate solution to the problem fool themselves, and mislead the rest of the world. Terror is like water, when blocked it quickly finds another channel.

The border between the territories of Israel and the Palestinians is long, winding and even fragmented. Even today, at the height of violence, with security measures at their peak and the Palestinians under curfew many Palestinians, manage to cross from the PA's territories into Israel. The vast majority of them come to find work or trade, a few come to commit acts of terror. Moreover, everyday life in the Palestinian Authority is totally dependent on Israel. Basic commodities such as fuel, medicines, cement and others cannot reach the Palestinians if Israel chooses to block their way.

Until the signing of the Oslo agreements, Israel relied solely and totally on istelf in all aspects of its war against terrorism. The General Security Services spearheaded the war together with the military, the police and other services. The product we obtained at the time was known as "blue and white," a reference to our national flag.

The Oslo agreements radically changed this situation. In fact, the Palestinians' main commitment according to this agreement was to do what Israel had been doing by means of the security services, operating under the auspices of the Palestinian Authority. From then on, instead of relying on ourselves, we had to depend on an ally, the Palestinians, to mobilize for the war against terror and to do everything necessary to prevent and fight terrorism.

Having served as the director of the GSS at the time of signing of the Oslo agreements, I can attest to the fact that Israel, starting with prime minister, the late, Yitzhak Rabin and the majority of Israelis took the Oslo agreements seriously, regarded them honorably, sincerely and with the honest intention of carrying them out, as part of the process of reconciliation between us and the Palestinians.

This approach was expressed by the Israeli side in a number of different ways. The appointment of liaison officers, the District Coordination Office, joint patrols, special treatment of Palestinians VIPs, cooperation in various sensitive issues between the security services of the two sides, and so on down the line. It should be noted that in order to increase trust and goodwill, we did not block channels of access to the Palestinians, despite the fact that it was clear to us that this might create security problems.

Regrettably, the Palestinians did not reciprocate and today we know this to be an absolute, irrefutable truth. From the first moment of the establishment of the Palestinian Authority over part of the territories, they engaged systematically and purposefully in arms smuggling, the building of military capacity and the establishment of terrorist infrastructure, by cynically taking advantage of the means and capacity that we had placed at their disposal, out of trust and good will.

We know from the current interrogations of suspected terrorists arrested during the course of the two recent military operations and from documents gathered, that the Palestinian knowingly and maliciously breeched our trust and cooperation. The best example that confirms this is what we are calling the revolving door approach to people arrested under suspicion of involvement in terrorism.

I am not saying that all of the excuses made by the Palestinians are total fabrications. However, this is not the point. The point is that the large majority of Palestinians leaders never had to come to terms unwillingly with terrorism. Instead the Palestinian leadership cooperated with the terrorists quite willingly as part of its strategic view that the threat of terror will play an important part in the coming conflict with Israel.

Here I would like to dwell a little on the phenomena of suicide bombers. The phenomena was first seen in our region in the early '80s. It can be traced back to the attacks of the Hizbollah in Lebanon. We, together with the U.S. intelligence community, made the assessment at that time that the phenomena was confined to the Shi'ia sect.

The events of the '90s forced us to recognize our error. However, even after both Hamas and Islamic Jihad began to carry out suicide attacks, we still believed that this phenomena occurred only among religious fanatics. This assessment was also mistaken.

As you will see, the secular Fatah's share of suicide bombing attacks is increasing. Even organizations with the Marxist ideology, such as the National Front for the Liberation of Palestine, have carried such attacks. Another dimension of the suicide attacks over the last two years is the shorter period of the perpetrators recruitment and training. During the first half of the '90s, most of these attacks were organized by an activist, Yahia Ayyash, known as the "Engineer". That period of recruitment, interrogation, preparation and training was relatively long—three months on the average. Today, matters are totally different. Those responsible for suicide attacks are able to identify and recruit the candidate, train him or her, and arrange the implementation of the terrorist act itself within a matter of days, if not hours.

Obviously the situation greatly impedes our ability to gather intelligence and to prevent or preempt the suicide attacks. Anyone involved in this war knows that the lone suicide bomber is the nightmare of intelligence organizations, precisely because identifying and locating him is so difficult. I must admit that the sheer number of suicide bombing acts over the course of the last year overwhelms me and many like me. Even if one tries to take an objective, analytical approach to terror and to remember that terror is the conventional weapon of national liberation organizations, there is no denying that suicide bombing remains a unique, unprecedented phenomena that defies any reasonable explanation.

Is there a solution to this problem? A difficult question. Some bizarre ideas have been expressed recently, such as wrapping the suicide body in a pigskin to prevent him from being admitted to paradise and enjoying the 70 maidens who supposedly are waiting for him there. Other suggestions such as punishing his family or village would not withstand any judicial tests. I tend to believe that the most effective course of action is to identify, locate and attack those members of the organizational establishment who enable the suicide bomber to act. These are the people who recruit him, give him an explosive belt to wear and organize his mission. It is a clear that these people only send others to commit suicide, without doing so themselves. Efforts in this direction are made all the time and must be intensified.Still, I do not think that we will be able to drastically diminish this phenomena solely with our resources.

The only chance for a real solution to this problem in the long run is by making sure that the Palestinian security organization, launch a genuine fight against the phenomena. Indeed, there was a reasonable level of cooperation between us and these organizations between the end of 1996 and the middle of 2000. As a result, the incidence of terror attacks, generally, and suicide bombings, in particular, decreased considerably. Of course terror cannot be viewed separately from acts of commission or omissions in the political sphere, which I leave to Dan Meridor, Minister Dan Meridor, which will refer to the political side.

But I have to say two sentences—maybe more than two sentences—about the last issue, which is one of the main questions that has occupied Israel for a long time and recently has concerned the U.S. administration as well and relates it to the personality of Mr. Yasser Arafat. What are his true intentions? To what extent does he effectively wield power? Can he and should he be replaced and so on? Most of us, at least Israelis, tend to present Arafat as a master schemer a superb tactician, the king of survival. While this may have been justified in the past, in my view, and here I lean on recent findings and analyses, this is no longer correct.

From the start, the main motive that guided Arafat over the years has been his desire to avoid internal conflict. This desire is what permitted his survival as head of the PLO from 1965 to the present day, a unique and noteworthy achievement indeed. Therefore, there is no reason to assume that he will change his ways. Quite the contrary, he will keep doing everything to prevent the outbreak of open warfare between the various factions. This approach has always guided Arafat. This is why, since his arrival to Gaza in 1994 and the establishment of the Palestinian Authority, Arafat never took any resolute action against Hamas, Islamic Jihad or rejectionist organizations, such as the Popular Front.

This substantive problem was compounded by the fact that, unlike wine, Arafat does not improve with age. He has been ill in recent years. He has trouble moving and speaking and apparently may have serious problems in grasping reality.

As I noted, at present there is a total lack of trust between Israel and the Palestinians. Arafat himself constantly contributes to this growing lack of trust. True, he never gives any direct orders to commit terror acts, but he continuously sends belligerent messages, knowing that these will be received and be interpreted as calls, on his part, for such actions. Despite the medical and mental problems that I mentioned, there is no doubt that when Arafat calls for a "march of one million shahids on Jerusalem" he knows, full well, that declarations such as these provides fuel for more terror.

Apart from a brief pause during the second half of 1996, Arafat never ordered his men to stop the terror. He knowingly created a political atmosphere that permits terrorist attacks, though he never personally took part in arms purchases. His reactions on the Karine A arm ship, left no doubt that he welcomed arms purchases and regretted the seizure of the ship. This is not the way a responsible leader should behave if he wants to lead his people to a state that progresses to reconciliation with Israel and, which is supported by the international community.

It is obvious that Arafat's behavior can only further increase the lack of trust toward the Palestinian Authority, not only on the part of Prime Minister Ariel Sharon, to him Arafat has always been the source of all evil, but also to the majority of the Israeli leadership and people, who before had been quite willing to give the process of reconciliation a chance. To me, this lack of trust is the main obstacle to any attempt to ease the situation. This problem is far more serious than, for example, the number of security and intelligence organizations under the auspices of the Palestinian Authority.

In the Arab world, the fragmentation and isolation of security and intelligence organization serve as tool for the ruler to ensure the stability of his regime. This is true in Egypt, in Syria and there is certainly no reason to assume that Arafat, who is much weaker than Bashar Assad, and even more so than Hosni Mubarak, is willing and able to carry out extensive reforms in the security establishment that would, in his eyes, threaten the stability of his regime. In my view, it is best that the American efforts to reform the Palestinian Authority, which is to be implemented in close coordination with Egypt and Saudi Arabia, should focus on two main areas. First, separation of powers into legislative, executive and judiciary as practiced by democratic and even semi-democratic countries. And second, which may be even more important, accountability and transparency with respect to financial resources.

So far, Arafat has done everything to defy any reform. Even when he fired five ministers from his cabinet, all of them were swiftly restored to other senior positions because of their threat that if they will not return, they would undermine his position and incite the masses against him. The appointment of General Abd el-Razek Yehia to the post of minister of internal security, though announced with great fanfare, was nothing but a meaningless appointment, a big show. The man has no authority and probably will not be given any.

What can be done then?

I will start with the U.S. first. It should focus on the original influences on the Palestinians: Iran, Syria, and Hizbollah. These parties have no small part in feeding the fire and the U.S. has the means of exerting pressure on them by word and by deed. As for the reforms, which were a very significant part of President Bush's recent speech, I have indicated the two areas of reform of greatest importance in my view: separation of powers and transparency and accountability concerning financial matters.

The U.S. should not be satisfied with a one-time speech by its president. It must undertake intensive and continuous diplomatic action in cooperation with Egypt, Saudi Arabia, as well as with the European Union and some European states that contribute money to the Palestinian Authority in order to enforce the introduction of vital reform even if only partial ones.

As for Israel, so far it has been long on responses, but short on initiatives. From many professional viewpoints, our security services are doing an excellent job in terms of preemptive action, specific warnings and the quality of its intelligence. But in view of the successes of terror attacks in recent weeks, we must improve and strengthen our military operations, including field security and special operation in order to limit terror even more. At the same time, I would advise the Israeli government to think about confidence-building measures, some of which can be implemented gradually in the near future. Because the present composition of Israel's coalition government, leaves little chance of a freeze on settlements, even though many would agree with me that this would be justified in the presence of genuine action by Palestinians against terrorism. But we can and should initiate steps aimed at improving the economic situation in the territories.

And as for the Palestinians, they constantly claim that Israeli military operations have destroyed their security infrastructure and therefore, even if they wanted to, they could not resume the security cooperation with us. I suggest that we should not be seduced by this claim. Some buildings have been destroyed and there are some casualties mainly people who had cooperated with terrorist organizations. However, the war on terror is based mainly on intelligence gatherings. The organizations engaged in intelligence gathering are alive and well. If the Palestinians indeed want to restrict terrorist activities from their territory, they could do this starting tomorrow morning. In such a case, the U.S. will have to think about implementing the Tenet and Mitchell Plans, including a freeze on the settlements. Though not simple, it is not impossible.

All this, of course, in the best of the circumstances, are only temporary, interim solutions. The real long-term solution is in the resumption of the political negotiations, possibly with some elements of the Saudi initiative, not as abinding condition, but rather as a basis for creative thinking. Thank you very much.

(Applause.)

MR. INDYK: Thank you very much, Jacob. We'll have a chance to get into discussion after we've heard from Mohammed Dahlan. According the message I've just received, he has not been able to move to the studio so we're going to have him join us via telephone, at least for the time being. I gather he's on the line and the way we're going to do this is - since he's going to address his remarks in Arabic, those of you who don't speak Arabic are going to need to put on the earphones and

Hopefully he will be able to hear us as well. Can he hear us? Okay, while we try that, let's go to some discussion of Jacob's presentation. I might begin, Jacob, by asking you to elaborate a little bit on one aspect that you moved over quickly, which was the period in which the Palestinian security services were cooperating with the Israeli security services and the period in which they were confronting the terrorist organizations. Can you explain to us why it worked at the particular time?

MR. PERRY: Following the Oslo agreements, one of the, I would say, most important agreements was a security agreement, which was discussed in Europe between, at that time, the deputy chief of staff, Amnon Lipkin Shahak and myself. We used to meet Mohammed Dahlan and Jibril Rajoub in Europe and we have set a series of points to cooperate: of meetings of changing intelligence. And after the signing of the agreement, we used to meet sometimes on a daily basis, these two gentlemen, together with Amin al-Hindi at that time.

And it wasn't easy. I mean, there was still a big amount of suspicion and difficulties, but we felt at that time that we are building an infrastructure, which will allow both parties to roll on fighting terrorism. The Israelis, gave the Palestinians not only the authority, they didn't need authority, but the means and some intelligence in order to fight terrorism, and to take preventative measures. There were two periods, I would say. One was in February/March 1996 and there was one before that that, in which the Palestinian security organization took initiatives. They brought intelligence, they arrested people, they interrogated them, they made some kind of a judicial system and placed people in jail and as a result the amount of acts of terror decreased dramatically.

Then it stopped. It stopped probably after February or March 1996 and since that time, almost nothing has happened. Now looking, based on intelligence gathered after the two army operations and looking at the documents, we can understand that the Palestinian Authority, and I am of course generalizing, didn't mean to do it. They prepared the war, the violence, and it was led by the chairman and, as I mentioned, in order to avoid conflict between the factions in the West Bank and Gaza. I mean, let's face it, if you are not intending to fight the Hamas and the Islamic Jihad and the Popular Front, I mean not the whole organization but those in these organizations that are planning and recruiting terrorists, nothing will go—nothing will move. And that's what happened.

MR. INDYK: Thank you. Hopefully we have Mohammed Dahlan on the line. Mohammed, can you hear us? Well, hopefully they will sort this out. I'm going to do an introduction of Mohammed while they sort this out. He can hear? It's on channel six, you should just need to turn it on. Mohammed, can you hear us? You'll all need to put your earphones on.

MOHAMMED DAHLAN: (NOTE: Mr. Dahlan's remarks are through interpreter.)

First of all I would like to thank all those at the Brookings Institution. Espcially Martin Indyk who allowed me to particpate in this dicussion. I especially regret that I was not able to reach the studio because of the closure that was imposed by the Israelis, in spite of the permission that was given to me by the Israelis allowing me to move. However, they have stepped back from doing that. Could you now imagine a woman who is pregnant and is about to bear a child and cannot reach the hospital there areso many instances like that which we have had to face.

As a result of the past 20 months of violent confrontation between the Israelis and Palestinians, something has happened to the U.S. understanding of our 50-year old conflict. Somewhere along the way it has been reduced to an issue of security. Not security for both peoples, but for Israelis aloneAnd somewhere along the way, resolution of that problem has been reduced to an issue of political will and institutional reform - the will among Palestinian leaders to track down on violence—to reform it's institutions and asking the Palestinian people to put a stop to violent groups and to reform the Palestinian institutions. I personally believe that this a way to run away from the the real problemand this would leave the Israeli-Palestinian conflict in a much worse state..

In order to understand the security dimension, it is important to understand what it was meant to be at the beginning, when we started the Oslo process, what it has meant since the onset of the intifada and what it means for the future. The bargain struck at Oslo was simple. Israel would receive security while Palestinians would see the beginning of the end of the occupation. One could not go without the other because Palestinian armed resistance and the years before Oslo did not emerge in a vacuum. It was a reflection of the conflictual relationship between Israelis and Palestinians and the Palestinians' conviction that only through resistance could they get the far-more powerful Israeli occupier to change it's stand. In Palestinian eyes, periods of quiescence in the years leading up to the Oslo accords had meant periods during which Israel felt free to deepen its control of the territories, and the world did not move an inch. In other words, only if the Palestinian people lost an alternative way to ending the occupation could we not ask them to relinquish their right to resist. Oslo was supposed to provide that alternative to path and to be the alternative to violence.

Through that period there were ups and downs and some quite unfortunate incidents took place that cost the lives of many innocent Israelis and Palestinians. In many cases Palestinian, during that period, Palestinians stayed faithful to their part of the bargain. During the Oslo period, we took some very serious steps to stop those types of attacks. It was the Palestinians Authority's duty to implement our part of the agreements and we have done that for many years with ordinary Palestinians supporting us, because they still had hope in the peace process.

However, successive Israeli governments have clearly failed to keep their part of the bargain. They pressed ahead with settlements, closures and land expropriation. And they have harmed the daily lives of Palestinians. And Palestinians kept feeling the actual presence of the Israeli occupation, becoming more vivid and harsher after Oslo. In late 2000 about seven years after Oslo, Israel still held partial or full control of over 80 percent of the West Bank and Gaza and the number of settlers and settlements increased, in fact doubled since Oslo began. With a few honorable exceptions, the Israeli political and military establishment continued to behave, in the post-Oslo period, as it did during the long years before Oslo. Problems that should have taken weeks or months to resolve dragged on for years.

Besides arrogance and short-sightedness, how else can we explain a seven-year delay in reaching a full agreement on a safe passage between Gaza and the West Bank? Or the fact that Israel continued to hold Palestinians who have supported the peace process, and for offences committed before Oslo, but not after Oslo. As if only one party had used violent struggle as the way to keep going..

How else can we explain the Israeli readiness to disdain agreements and forego understandings and for not having Israeli governments respect their part of the agreement and having every successive Israeli government seek to renegotiate what its predecessor government had already agreed to.

In 1994, an agreement was signed with Mr. Rabin. A part of that agreement was implemented, and then after he was assassinated at the hands of Israeli extremists, Mr. Peres refused the redeployment in Hebron and left Netanyahu to deal with it as part of the Hebron agreement of 1997. That went on for two years until we reached Wye River Agreements with Mr. Netanyahu when we started renegotiating the Oslo agreements, and that stayed on till 1999, when a small part of the agreement was implemented. Then in May 1999, when Ehud Barak came back to power., we started renegotiating Wye River and this is what took place in Sharm el-Sheikh, which took place in September. And everybody kept Rabin's saying that there are no sacred dates, and there are no sacred texts.

And we were told, in spite of that, that the Palestinian Authority had to control extremist groups in order to ensure the safety of the Israeli people. And indeed, during that period, we deepened our security cooperation with Israel because we knew the devastating impact on the Israeli people and Palestinians those acts of terror had done and because we continued to believe that we would achieve our legitimate aspirations. But think about how all this looked like to the average Palestinian; their security services -incapable of providing basic safety to its own people, incapable of protecting its own lands, its own homes, and sometimes even the lives of its own people. Those were definitely in contradiction with what was being done by the powerful Israeli occupier, and gradually, people started looking at us and perceiving us as working for Israel and not for peace.

In short, and from the very start, Israel saw Oslo as being more of a means to establish a Palestinian proxy force to relieve Israel of the day-to-day burdens of occupation and less as a political process that would lead to an end to the occupation. As Palestinians, we saw that security was part of a much wider package that included not only a cessation of hostilities but also an irreversible series of moves that we would not go back in order to reach our freedom and independence. As for Israel, the interim process was stoppable and could be reversible without having a final outcome, and everything would be decided by Israel. For the Palestinians, the entire notion of an interim settlement does not make sense unless it was clearly moving towards a determinable goal and clear goal, and by that, a Palestinian state based on the borders of 1967 with East Jerusalem as its capital and with a fair resolution to the refugee problem on 22 percent of historical Palestine, and Israel would have the right to live on 78 percent where the Israeli people would live in peace, in security, and with honor. I

In reviewing the post-Oslo record on security, in light of the terrible violence, let us really remind you of some important facts since late 2000. With very few exceptions, the Palestinian Authority and all its security agencies very clearly refrained from any armed action against civilian or military targets throughout the Oslo period.

This restraint was not matched by the Israeli army nor the Israeli settlers, who continued to operate with their customary disdain of Palestinian life, and up until late September 2000, 330 Palestinians were killed. This was before the intifada, and hundreds and hundreds were wounded by actions taken by the Israeli army and settlers, and please, allow me here to give you some examples.

The first major terrorist attack committed against civilian Palestinians since Oslo was in Hebron in 1994 it is quite sad that the Israeli army responded to that massacre, by killing more Palestinians who had demonstrated in protest to what had taken place, instead of putting on trial those who had committed and perpetrated the act. Then, a closure, a siege was imposed on the Hebron area and has continued and persisted until this day whether in full or partial type of siege.

Second, I would mention the violent events of 1996. They were neither sought nor initiated by the Palestinian Authority, but they were really the result of the foolhardy decision of the Netanyahu government to open the tunnel in Jerusalem which led to subsequent violence in which Palestinian and Israeli lives were lost.

Do not get us wrong. Do not misunderstand us. We are definitely here. We have a responsibility to preserve lives on both sides, and when we, in 1996, arrested so many people, we did this, of course, in accordance with our part of the agreement. We are ready to do this once again and to do anything to protect both of our peoples. However, the contradiction that was taking place between, what the Palestinian Authority was doing to provide security for Israelis and what was unable to be provided for the Palestinian Authority is something that isuntenable. We are told today that Palestinians were offered a real chance to have an independent state in Camp David in July 2000, and that the uprising that had followed had nothing to do with ending the occupation, but that its aim was to destroy Israel. There are many other pernicious myths that have been perpetrated. I really find them quite strange and those analyses strange because their aim is to really run away and not face the reality and not have the courage to come up with what is historically needed.

I took part in the Camp David talks, and I was one of those who fought very hard to reach an agreement, and I was accused by others in the Palestinian delegation that I was too keen to reach a deal. But I say that I was the first to refuse what was offered, because after all the efforts that I had exerted in order to reach a deal, the deal was not a written proposal. Nothing that was proposed was fixed. Nothing offered was detailed, and until this instance, we still do not know what part of territories would be annexed to the settlements and what areas or territories we would get and what the status of Jerusalem would be, and what would happen to the refugees. Contrary to subsequent claims, I say with courage that there was no serious proposal offered in Camp David, there were deep negotiations and serious negotiations, but there was no agreement that we could see at the end of the tunnel that we could regret not signing.

There were many attempts by Israel to measure how much of the occupation we could be forced to accept. Extending it so that we would be forced to accept losing ten percent of our land, or giving Israel the right to enter our sovereign territory in the future, or having Israel control our skies, our borders, our water, and even our own future. This was merely an extension of what has been the Israeli vision of the interim period. All along the Israeli side persisted in the belief that the terms for a final settlement were open and could be revisited over and over again, and that what the Palestinian leadership had said in public was somehow open to private or behind the scenes compromise. Indeed, the Israelis behaved as if the "real" terms for a settlement were a matter for domestic Israeli debate and not for bona fide negotiations with their Palestinian interlocutors.

The Israeli side wasnever able to understand that in accepting Israel within the 1967 borders, it was the Palestinians who made the historic compromise and that what remained of their homeland was simply not up for barter or further compromise. This allowed successive Israeli governments to delude themselves into believing that the Palestinian Authority's readiness to uphold its end of the security-for-land bargain was unqualified and that to a great extent the Palestinian Authority's readiness and ability to tackle an active opposition to the Oslo Accord was the sole criterion by which the whole Oslo experiment could be measured.

If you fail to understand this background, then you fail to understand the dynamics that led to the intifada in September 2000. The initfada is against the occupation, against the construction of settlements, against closures, economic deprivation, frustration with the Oslo process and the conviction that in the absence of armed resistance, Israel would feel free to dictate the terms of any settlement that would coincide with the extreme right in Israel.

Here too, it is vital to dispel another popular myth. The intifada was not the choice of the Palestinian Authority, and the idea that the Palestinian leadership had planned the uprising is a laughable matter, and everyone knows that the Palestinian Authority is incapable of doing and planning something like that. And anyone who knows anything about Palestinian politics, or even those who don't know anything about how Palestinian politics work—or don't work- knows this. They are aware that the Palestinian Authority is unable to plan such tremendous and great work.

Something like the intifada came as a natural response to all this frustration. Whether we agree with it or not, this is the reality. Three days before Sharon went to the Haram al-Sharif, I was in Washington where I told the Israeli foreign minister, Shlomo Ben Ami as well as the U.S. peace team that there was a risk of a new confrontation. We were at the Ritz Carlton Hotel, and I explained to them all the details. I tried to make them understand that the situation may get out of hand and that the people will take to the streets against everyone, not only against Israel.

Even then, if Israel had not carried out those operations of large-scale killings, if they had not done that to the demonstrators in the wake of the visit, things could have been contained today. Today, Mr. Barak and others claim that the Palestinian Authority responded to the failureof Camp David with a wave of suicide bombings. This is not true, and this is really a mistreatment of history. Just look at the facts. The first period of the conflict, was basically a response by the Palestinians that was unarmed, facing the intensive firepower of the Israelis, and in spite of the fact that Israel possessed non-lethal means of dispersal, it chose not to use those, and resorted, instead, to using lethal means. In short, they chose to deal with the events as if they were a military matter and not a policing matter.

Terrorism and the abhorrent use of bombs, of suicide bombing, occurred much later, after the disproportionate Israeli use of violence against Palestinians by the Barak government. About 25 percent of Palestinian casualties were kids. Terrorism began once Palestinians felt they could not oppose, when they felt that the Palestinian Authority was wrong; that it had failed to meet the aspirations of the people. In the first two days, seven Palestinians, stone throwers, were killed, who did not carry any firearms, and 80 others were wounded. On the following day, 12 others were killed, and I had warned at that time, both Ben Ami as well as the Israeli Chief of Staff Shaul Mofaz, not to resort to killing as a solution to the problem. However, Mofaz told me that he would not repeat the Hizbollah experience as if he were trying to avenge his failure in Lebanon, and by doing that, of course, at the expense of the Palestinian people.

Since then, both Barak and Sharon have considered that the way to deal with Palestinians was through force, overwhelming force, and this demonstrates how little they understood and understand of the security equation in this conflict. Collateral damage is to be expected, but in this case, security concerns rapidly became collateral, and the damage became central. Israel sought through its actions to break the will of the Palestinians, but instead of achieving that, every Palestinian death made the situation more complex and complicated. Every Israeli military operation had basically boosted the anger and helped those groups that were radical to increase in extremism.

And here, it is important to mention some other facts, truths. In this overall balance of pain, the Palestinians are the ones who have suffered the most at the hands of the army. The violence that the Palestinians are witnessing today is not new, but historic. It may be easy to forget that what is happening today is really a continuation of a sustained history of violence exercised by Israelis that goes back over 35 years and during which thousands of people were killed and maimed.

Mr. Sharon has also decided to deal with the Palestinian Authority as an enemy. When he and we fail to deal with extremism, they have destroyed our offices and our records, and they have killed or arrested the majority of our officers. I am not talking about those who had participated in operations. I am talking about those who have not at all participated in any such operations. After such destruction, they demanded that we stop any type of attacks, which of course, adds to the irony of this whole situation that had existed since Oslo. In such a situation, honestly and simply, we cannot do much.

As for the allegation that the Palestinian Authority had planned suicide attacks, it is preposterous. Those operations were not a result of political decisions. They are a product of indiscriminate collective punishments, the killing of children of all ages and the humiliations of daily life that are so difficult to even explain. We condemn them, and I condemn them not only because they are indefensible, morally and politically, but because they are also counterproductive and they deprive our people of their precious youth. But there is little our arguments can do. Revenge is on the minds of both peoples, especially when you see an entire family completely wiped out in a refugee camp, including women and children. The remaining and surviving child do not need an outside motive to go and carry out a suicide attack, and as I have said, the military force cannot stop those suicide bombings attacks. In the past, terrorist organizations were looking for individuals to become suicide bombers.

Unfortunately today, those people who want revenge for their families are the ones looking for organizations. This is the danger today. All of which is to say that security in the Israeli-Palestinian context cannot be viewed in isolation of the political situation. It is a political matter, above and beyond all; the important thing is keeping the hopes and the despair of the people in mind. This is what we can do as Palestinians. It is a product, also of what Israel has done and what Israel should stop doing. The freedom of action by the Palestinian Authority against the opponents of Oslo was highest when the political process was so promising and when we had the hope and the belief in the fruits of peace. But, during the bleak Netanyahu years, even then, the PA was able to hold the opposition in check, because popular Palestinian faith in the political process was still alive, and ultimate deliverance from occupation still seemed like a real possibility. No amount of lecturing from the United States or from Israel can change that simple fact.

Based on my long experience in working with security matters in Gaza, after 1996, I tried throughout the years, and everyone knows, including the Israelis and Mr. Perry who is present here among you that we succeeded in preventing a number of operations because I strongly believed that such operations were bad to both Israelis and Palestinians alike. What observers know and Israelis know are how many operations were stopped during those four years, but what I have also learned is that security could not be achieved without a political process, a meaningful political process. The attempt to submit our people without giving them any hope that would allow them to fulfill their aspirations, legitimate aspirationsthrough other means, is beyond the capacity of the most powerful armies. This does not mean that we as Palestinians are not responsible for dealing with the security issues, this does not mean that we will not carry out our duties in order to get out of this bleak situation. We are ready to face our commitments and to implement them in order to save both peoples, the Israelis and the Palestinians, through Palestinian-Israeli security measures against the opposition, but we'd like the hope of having free Palestinian lives. I thank you very much, and I apologize for having taken so long.

MR. INDYK: Thank you very much, Mohammed. I am sorry that we weren't able to see you. We'll move straight to questions now.

MR. DAHLAN: Hopefully, the Israelis will solve this issue in the future.

MR. INDYK: That's what we're here to talk about -- security cooperation.

I'm going to ask Mohammed if there are any questions for you. I would ask whoever was going to ask a question to make sure to turn on your microphone so that Mohammed will be able to hear you.

Q: I have a question. May I?

MR. INDYK: Go ahead, please.

Q: Mohammed, this is Haim Saban speaking. We met briefly at the Hilton Hotel with President Clinton and Saeb Erekat and Ambassador Indyk when Clinton was visiting the region. We heard Jacob Perry express the Israeli point of view on the past. We heard your point of view on the past, and it's a question really directed both at you and at Jacob Perry.

What do you suggest we do moving forward?

MR. DAHLAN: I will start by answering. Do you want me to start?

Q: Yes, please.

MR. DAHLAN: First of all, I know Mr. Haim and I'm happy to meet you again over the telephone.

Q: Hi. Same here.

MR. DAHLAN: And I know we talked about the past in order to educate, to explain the issue, because without understanding the past, we cannot move forward. However, I will not be heavy here on you. I can tell you that the Authority and the Palestinian people now are more ready to reach a ceasefire and to move forward after this common tragedy. I believe that the measures for security reforms are going to be a basis for a renewal of the situation on the Palestinian domestic side, and I oppose what my friend Jacob has mentioned about those reforms being basically cosmetic. I oppose that. I say, that from being in the security area. I say that there are drastic and fundamental changes, reforms being carried out and the appointment of one individual in charge of security is a positive step. All security agencies will work clearly, and about two days ago, the Palestinian Authority put together the Palestinian security plan expressed by Chairman Arafat. We hope that Israel would allow us to implement this plan by taking off the siege and allowing Palestinians to move.

Israel will find some very concrete measures and results in spite of the difficult circumstances that we are under. In addition to that, there's got to be some political action on the Palestinian side in order for this mission to succeed. This requires the involvement of a third party, like the United States of America, in order to bring the Israeli security establishment, as well as the Palestinian one, to work together side by side to bring back calm in a relatively short period of time in a measurable way. This would also require Israel to take some serious steps in order to allow the Palestinian security establishment to succeed. It would not be perceived to work only for the interests of Israel or be a proxy for Israel and so the Palestinian security establishment would not be perceived as part of the Israeli security establishment.

We have to be able to offer this as basically a domestic Palestinian interest. I believe that Palestinian citizens, if they were offered a way out, the situation will go back to what it was like in '96. When a father would bring his son, who may have thought about carrying out any operation, and would bring him, take him over to a security establishment of the Palestinians and would tell them, "please, stop him, arrest him. We don't want him to do that." We will have a comprehensive and a full program that we cannot, of course, describe to you over the phone, but I do hope that you trust us that we have the desire to move forward looking to the future. We do have the desire to bring both people away from hatred to working in cooperation and peace.

MR. INDYK: Thank you, Mohammed. Jacob is going to respond shortly.

MR. PERRY: First of all, I'm really glad that we are finalizing or coming to a final discussion in a very optimistic way, but I tend to be less optimistic because, of course, and I am not an official spokesman of the Israeli government. But I think a ceasefire is very welcomed, but what does a ceasefire mean? A Ceasefire means a stop to acts of terror against Israelis, and in order to stop them, some action has to be taken by the Palestinian Authority, by the organizations, by those people -- Mohammed Habibi ["my friend" in Arabic], that you are heading them, that you know them. You and Jibril and Amin and Tawfik Tirawi and the rest of you, so I didn't hear in the whole speech any action items. I heard all kinds of complaints, and I'm not going to sit here and to defend every step that Israel has taken or not taken. Sure, Israel has made all kinds of mistakes as well, but from 1996, there is not a sole action by any Palestinian organization, intelligence, police, whatever, and you have enough of them, that is trying to prevent terror.

And, we didn't ask, not in the Oslo accords, and we are not asking today that the Palestinians be our proxy. Do it for yourself. If you'll do it for yourself, for your sake and for your people, we will be more than satisfied. We will be more than glad, and we will always be happy to help if you want our help, and if you don't need it, it's okay with us. But Mohammed, my friend, you brought all kinds of arguments, which I'm not going to repeat because it was a long political-security analysis, which to my sorrow, I don't accept 80 percent of it. But, that's not the point now.

We'll not take the actions to gather intelligence, to fight Islamic fractions that are initiating terrorist acts, to fight rejectionists, and to deal with conflict as a state or a semi-state or as an authority has to deal with, and it's not difficult. We are doing it in Israel. You are doing it in the United States. It's done all over the world, and the Palestinian Authority has to start and do it. As soon as you will do it, things will be for sure much better, and Israel has to initiate all kinds of building measures of reconciliation, including settlements and other issues. But I am not going to go into this arena, and we are not going to provide or to ask for all kinds of promises, but as soon as you'll begin, I think things will go the right direction. I wish with all my heart that your optimistic view will come through.

MR. INDYK: Thank you, Jacob. We have time for a few questions from the floor if anybody would like to participate. Go ahead, Marvin.

MR. DAHLAN: I would like to comment on what Mr. Jacob has mentioned.

MR. INDYK: Please

MR. DAHLAN: I am not optimistic. I am realistic, and I believe that it is possible to reach an agreement to achieve a ceasefire. When Mr. Perry talks, and he knows, he's an expert in this area and he's quite awarethat when he says that we have not done anything since 1996, this is not fair and not true. I have declarations made by Israeli governments and Israeli officials and acknowledgments, official acknowledgments, by Israeli officials in official talk. I am talking after 1996, following the operation when Peres was there. We have adopted for three and a half years measures. If you don't see these things, what positive things do you want us to do that you can see? I don't want to list all the examples here. However, I would like to bring only one that has to do with you, Mr. Perry: When I stopped an operation that was going to take place in the headquarters, in your own headquarters, and you personally are aware of that. I am not going to reveal now the information on that. If you deny that we had a positive effort in the past, we will not get out of this dilemma, but what can we do now? You're speaking as if you don't know the reality.

I could not reach the studio, which is only two minutes away. For more than six months now, Palestinians do not have the freedom of movement. You speak about General Yahia who has been appointed as minister of interior, and he cannot leave his home, and the Israeli army invaded his home twice. You do not know. You're not aware of how serious the situation is. You mentioned you can do that. Can we? How can we do this over the phone? How can we call the suicide bomber in Ramallah and tell him, listen, stay in your home? Don't we need to be able to move as Palestinian forces and to have Palestinian security agents to follow people, to track them, to establish surveillance? Doesn't this require us to have jails so we can imprison those people, detain them?

MR. PERRY: Come on. Let me one sentence please -- one sentence. You brought it on yourself because you are sitting in a curfew. You are sitting in a curfew because of what has happened, and don't bring me stories about you being unable to gather intelligence because you are under curfew. The curfew was called because and Mohammed knows, Mohammed knows that I knew every step, but since 1996, nothing happened. Sorry for the interruption.

MR. INDYK: Mohammed—

MR. DAHLAN: You mentioned at the beginning that we could do something. However, please Mr. Perry, to deny the facts to the truth, this will not lead us to any solution. Successive Israeli governments, including Netanyahu's, acknowledged that we did a sizable security effort. You are looking at the situation from only one prism.

MR. INDYK: Mohammed, I'm going to interrupt here.

MR. DAHLAN: We will never get anywhere if we continue to exchange charges about what happened in the past, but I wanted to ask you, just follow up on what you said. Are you saying that if the Israelis were to lift the curfew, the security services would act immediately in ways that they haven't been prepared to act up till now?

MR. INDYK: I can say for sure, but not I mean only the curfew. They should also withdraw their forces from the A area not more. We're not asking for any more than that, from area A.

MR. DAHLAN: And what is Israel supposed to do when another suicide attack occurs?

MR. INDYK: I'm sorry. Ambassador Indyk, you were saying?

MR. DAHLAN: What is Israel then supposed to do if there's another suicide attack?

MR. INDYK: This is a kind of discussion that will not lead to any solution. Ninety-nine percent of the operations took place while closures were imposed. Eighty percent of the operations were taking place during the preventive measures that were adopted by Israel and following that, Operation Defensive Shield, and we have to really face the difficult situation here. We have to be able to move jointly. I believe that a withdrawal from region A will encourage Palestinians to fulfill the commitment and will push the Palestinian Authority to carry out some important measures and to step-by-step build trust and reach stability. However, let us not forget that the political horizon is the final solution.

Q: Thank you. Questions from the floor. Robin Wright, could you make sure you press the microphone?

MR. PERRY: I want to change the focus for just a little bit. Mr. Dahlan, your name is often referred to as one possible candidate to succeed Mr. Arafat. If the system were changed in a way that introduced a prime ministership, would you be prepared to engage in a political career? And to Mr. Perry, would the Israelis be prepared to accept a new Palestinian leadership from the old security apparatus?

MR. INDYK: Please, Mohammed.

MR. DAHLAN: First, I thank Mr. Perry to give me the opportunity, but I can say with all confidence that the situation or the issue for the American administration and Israel regarding Chairman Arafat is really a very superficial if one looks at it their way. They are thinking about their position and the position of the U.S. administration as if there is no Palestinian people in the equation. It is a mistake to think with such a rationale. Maybe at one point or another, the popularity of Chairman Arafat went down, but when he's attacked by Israel and the United States, there's no question that his popularity increases. It's only in Jerusalem, which Jacob Perry knows very well that probably nine out ten people support Arafat now.

I don't believe that the problem is Mr. Arafat.Of course, that does not mean he is not responsible. I believe that everyone, everyone is at fault. Israel, the United State and the Authority. I believe that looking for an alternative leadership here is really wasting time. We must focus on our internal domestic reforms, and I feel a lot of responsiveness on behalf of President Arafat towards these efforts, especially on the financial issues and the security issues.

MR. INDYK: There are other questions? Please. Identify yourself.

Q:.: Earlier, Mr. Perry mentioned the idea of using the Saudi initiative only for creative thinking, and the Saudi initiative is, I believe, now seen as being the Arab initiative, so which part of it do you disagree with and how is it only for creative thinking?

MR. PERRY: I think that the Saudi initiative and what the response, by the foreign ministers was it or by the Arab League, in the Beirut conference, -- is a very positive step forward. It's the first time that the Arab world said, "we are ready to accept Israel and the boundaries of 1967." There are components in the initiative, which I wouldn't accept, and I wouldn't take time now to analyze it. Personally, I think that the government of Israel made a mistake not welcoming the initiative and when it said, "we are ready to sit, to hear, to negotiate." I think it's the first time that such an initiative took place between the Arab world and Israel as a whole, and I think our response, the Israel response, was too weak to say the least, and I think -- that's enough for now. I wouldn't analyze all the parameters in the initiative now, but I will say that . part of of it I wouldn't accept, and part of it I would, but nonetheless, I think it's a good start.

MR. INDYK: Thank you. Is there a question for Muhammed Dahlan? Yes, please.

Q: My name is Karen DeYoung . I'm with the Washington Post. I would like to ask Mr. Dahlan, as someone that we know here is very respected in the region and in this city. We've heard lots of things about his position in terms of the future security forces, and I would like to know what his current position is and the job that he is discussing now. How does that factor into the reforms that he's been discussing, and what will his role be, and how will that improve the situation?

MR. DAHLAN: Thank you very much for your question. I came back from the outside in order to help President Arafat in continuing the reform of security establishment as well as civilian organizations, and I believe that we have done a great deal in reforming most of the ministries specifically, the Ministry of Finance. Headed by Salem Fayad who is quite a respected person, and first-grade professional of the highest degree, and who made fundamental decisions that have started to be implemented, concerning the unification of the appropriation process, as well as the revenue process. We listen daily to President Arafat urging us to continue and to persevere in that.

The same thing on the security level. Some of the security leaders were changed, replaced, and new faces were appointed, and this is considered a move forward. In addition, there was a security plan that was put into place, and we hope that it would be immediately implemented at the moment Israel withdraws its forces from region A. In addition, also, specific responsibilities were developed for each of the security agencies, which have now all been consolidated. Those agencies have been consolidated into three instead of having multiple agencies and ways of dealing with the security situation. So, we, in the future, will rely on a small number of agencies and individuals, which will have great action and impact.

MR. INDYK: Thank you, Mohammed. We're going to have to finish this session now. Senator Mitchell has arrived. We're going to take a short coffee break for ten minutes, but before we break, I first of all want to thank Mohammed Dahlan very much for his efforts to be with us and for persevering with the telephone. We have a translation of Mohammed Dahlan's speech, which we will make copies of, and we will hand out. Mohammed, your complete speech will be available to all of the participants, and we will also post it on the Web.

I also want to thank Mr. Jacob Perry very much for his presentation this morning and to thank you all for persevering with these difficult technical circumstances that are a reflection of the current state of Israeli-Palestinian relations.

Thank you very much, and we'll take a break for ten minutes.

(End of Session One.)

HAIM SABAN: Good afternoon everyone. I'm delighted to be here and to have an opportunity to see with my own eyes how The Saban Center at Brookings is able to contribute to the debate on U.S. policy toward the Israeli-Palestinian crisis. It is also a great honor for me to have the opportunity to introduce the symposium's keynote speaker, Senator George Mitchell.

There is probably no one who is more able to provide us with a road map out of this crisis; simply because he has written that road map already. The Mitchell report, more exactly, "The Final Report on the Sharm el-Sheikh Fact Finding Committee," was an extraordinary testimony to the consummate diplomatic skills for which Senator Mitchell has become renowned.

The committee's task was a real hot potato: To look into the origins of the violence and to come up with recommendations for ending it. Its report was drafted in the midst of some of the worst violence Israelis and Palestinians have ever experienced, and an international committee, comprised of strong personalities had to agree to it, what a task. Yet the report was not only endorsed by the entire international community, it was accepted without reservations by both Prime Minister Sharon and Chairman Arafat.

Tragically, it was never implemented. But had Senator Mitchell been given responsibility for its implementation, I am confident we would already be on our way out of this impasse. Why am I so confident? Because Senator Mitchellhas an extraordinary track record. For 14 years he played a leadership role in the U.S. Senate, crafting and passing legislation that has had a profoundly positive impact on the lives of all Americans. From the Clean Air Act to the child care bill, the Americans With Disabilities Act, the North America Free Trade Agreement, and the creation of the World Trade Organization, Senator Mitchell was truly a great legislator.

Fortunately for the world, Senator Mitchell's talents were not wasted once he left the Senate. He was drafted by President Clinton to lead the effort to negotiate a solution to the seemingly unending conflict in Northern Ireland. As we know, he did an extraordinary job. In over two years of sustained engagement, Senator George Mitchell demonstrated an ironclad determination combined with a deft diplomatic hand. He subscribed to the Churchillian injunction "never, ever, ever give up." His will and his skill produced what most thought impossible: A peace agreement that would end Ireland's strife.

For his outstanding contribution to peace in Northern Ireland, Senator Mitchell was awarded this nation's highest civilian honor, the Presidential Medal of Freedom.

Senator Mitchell's record demonstrates that he understands the critical role of American leadership, determination and engagement in affecting the course of history. We're very privileged that he has agreed to share his knowledge and experience with us today, and to show Israelis and Palestinians alike how to emerge from this long, dark tunnel of despair and bloodshed. Ladies and gentlemen, it is my honor to welcome Senator George Mitchell. (Applause.)

SENATOR MITCHELL: Thank you, Haim, for that very generous introduction. Thank you, ladies and gentlemen, for being here and for giving me the opportunity to participate with you in this extraordinary conference.

When Martin called me and asked if I would come here today, I inquired as to who would be in the audience. And when he told me, I realized that almost everyone here knew more about the subject than I did and it was a little intimidating. But I recalled my first day in the United States Senate. I was serving as a federal judge in Maine when my predecessor, Senator Muskie, resigned to become secretary of State. And out of the blue, the governor of Maine called me and offered to appoint me to the Senate. Within less than 24 hours, I was sworn in as a United States senator.

I went back to my office, and a young man who had been in charge of Senator Muskie's staff and was now in charge of mine delivered to me my instructions on what I was to do that day. And he concluded by saying, "Senator, we have an interesting invitation here for you."

I said, "What is it?" He said, "There are 3,000 certified public accountants holding their annual meeting here in Washington, and they've called to see if you'll deliver the keynote address to them this evening."

I said, "Gosh, that's amazing. Until yesterday, I myself didn't know I was going to be here. How could they have known that I was going to be here?"

He said, "Oh, Senator." He said, "It's not like that." He said, "They've had four cancellations." (Laughter.) "You are the only public official they could think of who might not have anything to do tonight." (Laughter.) "And they want to know if you could come and speak."

I said, "What do they want me to talk about?"

He said, "The tax code."

I said, "You want me to go and talk to 3,000 CPA's about the tax code, each of whom knows more about it than I do."

And this young man drew himself up to his full height, looked down at me -- I was seated at my desk -- and with a very officious air said, "Senator, with that attitude, you'll never get anywhere in politics." (Laughter.)

So, I went to talk to the CPA's about the tax code and here I am to tell you about the Middle East. I thank you for indulging me.

It is a serious subject, of course, a place where the conflict seems so intractable that it's easy to become discouraged and to turn away. But all who hope and pray for an early and just resolution to the conflict must resist that temptation.

I commend the Brookings Institution, Haim Saban, Martin Indyk, all who helped organize and all who are participating in this conference. Even as we acknowledge the difficulty of the situation, we must do all we can to encourage that just resolution is achieved. Today, at Martin's request, I will discuss my work with the international fact-finding committee and my prior experience in Northern Ireland.

Since the committee released its report 14 months ago, many questions have been asked about it. Is it still relevant? Has it been overtaken by events? Would I change it? If so, how? Is there anything anyone can say or do to encourage an end to violence and a return to negotiation? And so on.

I'll try to answer some of these and other questions before I take your questions. Except when I refer to the report itself, I speak as an individual, not for the other members of the committee.

Before I begin, an apology is necessary. I spent 14 years in the United States Senate, which has the rule of unlimited debate. And then I spent five years in Northern Ireland, which doesn't have the rule, but which has unlimited debate anyway. So, I'm accustomed to very long speeches, both to listening to them and giving them. But I'll try not to inflict one on you today, even at the risk of omission and over-simplification. If, as is likely, I don't cover some subject that you think important, I apologize in advance.

I begin by briefly recounting the origin and the work of the fact-finding committee. In October, 2000, leaders of the government of Israel, the Palestinian Authority, the United Nations, the European Union, and the governments of Egypt, Jordan and the United States met in a summit at Sharm el-Sheikh, Egypt. They agreed that an international committee should be formed to look into the then-recent outbreak of violence between Israelis and Palestinians. Following consultations with the other leaders, President Clinton asked me to chair the committee. The other members were former Senator Warren Rudman, former President Suleyman Demirel of Turkey, Thorbjoern Jagland, minister of foreign affairs of Norway, and Javier Solana, the European Union high representative for foreign and security policy. After President Bush took office, Secretary Powell asked me to continue as chairman and asked the committee to continue and to complete its work.

At the summit, the participants hoped that a neutral report on the origins of the violence might help the parties take steps to end it. Unfortunately, as we are all aware, the violence and the terrorism did not end, but rather increased. In light of the ongoing violence, we focused our recommendations on three objectives: ending the violence, rebuilding confidence, and resuming meaningful negotiations.

We were heartened by the initial response to our report. The government of Israel and the Palestinian Authority both praised it and accepted its recommendations. President Bush has said many times that implementation of the report is an objective of U.S. policy in the region. The report was endorsed by the 15 member nations of the European Union, by the secretary-general of the United Nations, by a large number of other governments, including Japan, Russia, Canada and Australia. To the best of my knowledge, no government has opposed it.

That broad international support has made the failure to implement its recommendations profoundly disappointing. There have been unsuccessful efforts to obtain a cease-fire and a resumption of security cooperation. That was, of course, our first recommendation. Then, as we said, there must be prompt movement on the other steps we recommended. If there is not, a cessation of violence cannot be sustained.

Among those steps are a cooling-off period, the renunciation of violence and the arrest of terrorists by the Palestinian Authority, the withdrawal of Israeli Defense Forces to their pre-intifada positions, and the freezing of all settlement activity. Then, of course, there must be a prompt resumption of negotiations to achieve a two-state solution.

Whether it's our report or some other report is not important. What is important is that the parties recognize that there is no military solution to this conflict, that they end the violence and return to negotiations. If they are to succeed, they must give up some of their illusions. Some Palestinians and other Arabs continue to believe that they can destroy Israel and rid the Middle East of a Jewish state. That cannot and will not happen. It is a fantasy that will only generate more misery and suffering on both sides.

Some Israelis believe that all of the Palestinians can be physically uprooted and moved to another country. That cannot and will not happen. It, too, is a fantasy. The reality is that two proud peoples share a land and a destiny. Their competing claims and religious differences have led to a grinding, dehumanizing, demoralizing conflict. They can continue in conflict, or they can negotiate to live side by side in peace. Those are the alternatives.

Contributing to the difficulty of finding a peaceful resolution is the fact that the circumstances and the objectives of the two sides are different. The Israelis have a state; what they want is security. That is their overriding objective. The Palestinians don't have a state, and they want one. They want an end to the occupation and the establishment of an independent, economically viable, geographically contiguous state. That is their overriding objective.

I believe that neither party can attain its objective by denying the other's objective. The Palestinians will not achieve their state if Israel does not have security. Israel will not have sustainable security if the Palestinians don't have a state. I know there are some in both societies, perhaps in this room, who disagree with this assertion. But for me, it has been validated by the events of the past two years.

Our report was very tough on terrorism. We branded it reprehensible and unacceptable. It is also counter-productive. If that wasn't clear when we issued our report, it should have been four months later in the wake of September 11th. Even the most zealous foe of Israel should have seen the immorality and the futility of the deliberate murder of civilians, including children and women, as part of an effort to terrorize an entire society.

Rather than achieve its objective, it accomplishes the opposite. With each suicide bomb attack, the prospect of a Palestinian state is delayed. Such tactics are also destructive to Palestinian civil society and the reputation of the Palestinian people worldwide.

In this respect, our report remains relevant, as does our conclusion that a cessation of violence cannot be sustained unless there is prompt movement on other steps, including a return to negotiations. There must be available to Palestinians the clear alternative of a non-violent path to the objective of a Palestinian state living in peace alongside a Jewish state, the two-state solution that a majority on both sides say they support. Palestinians in turn must accept that the Israeli demand for security is as real and as necessary as is their demand for a state. Both are more likely to occur if reciprocal steps are taken to create a context in which meaningful negotiation can be conducted.

Since our report was issued, there have been many other proposals. Most have substantial merit. All share in common the objective of encouraging an end to conflict and a return to negotiation. I hope that one or more of them will succeed in engaging the parties., which one or which combination is not important. What is important is that Israelis and Palestinians recognize that there is no lasting military solution to this conflict, although they may be some short-term illusions of success. But in the end, Palestinians must recognize and accept Israel's right to exist and its citizens' need for security. Israelis must end the occupation and recognize and accept the Palestinians' right to a state. Even if that recognition was instantly to occur, a plan of action by which it can be translated into reality is necessary. Some call it a road map, others a process or a timetable. Whatever it's called, it means a way to get from the current status to the desired result.

It can't be developed by the parties themselves. Their mutual mistrust is total. The culture of peace, so carefully nurtured over the past decade, has been shattered. In its place there is a sense of futility and despair of the inevitability of conflict. Yet, public opinion polls on both sides show consistent majorities in support of a two-state solution and a political process that could bring it about. But because of the impact of the prolonged violence, a strong majority of Palestinians support the suicide bombings of Israelis, and a strong majority of Israelis support the use of whatever force is deemed necessary to suppress these attacks.

In other words, majorities of the publics on both sides agree on the solution, but they no longer trust the other side's intentions to reach it. The violence and terrorism has led them into a zero-sum game in which each is inflicting suffering on the other side. That is why American leadership is so essential to the establishment and implementation of a plan of action to help move the parties away from conflict and to negotiation. We must, of course, work with the Arab states, with the European Union, with Russia, and with the United Nations. But no entity, individually or in the aggregate, can be a substitute for American involvement and leadership. I believe the administration is sensitive to this need and is working to meet it.

Any plan must involve reciprocal steps to reverse the downward spiral that has taken hold. No one will take a first step on trust because there is no trust. There will have to be some assurance that each gesture is met by one from the other side. That already is the pattern for acts of violence; it must become the pattern for acts of peace.

Our report suggested several steps that the parties could take, and we said that the timing and sequence of these steps can be decided only by the parties. In retrospect, I would change that. It is now obvious that the parties alone cannot reach agreement on these or any other steps. The president's recent call for elections highlights this point. Palestinians say there can be no elections prior to an Israeli withdrawal from land occupied since September 2000. Israelis say there can be no withdrawal prior to free and fair elections. It is apparent that the international community, and the United States in particular, must work with the parties to obtain assurances that if one side takes a necessary step towards peace, it can do so with total confidence that the other side will respond.

Now, to keep my promise not to filibuster you, I cannot repeat the long list of our recommendations. Some may have been overtaken by events, but most remain relevant.

We did not link any of the recommendations, and we did not weight them in terms of importance. But the parties, the press and many analysts have. Most attention has been given to the cessation and renunciation of violence by the Palestinians and the freeze on all settlement activity by the Israelis. I have already condemned and commented extensively on the failure of terror to advance the Palestinian cause. As to settlements, I will quote from our report:

"During the half-century of its existence, Israel has had the strong support of the United States. In international forums, the U.S. has at times cast the only vote on Israel's behalf. Yet even in such a close relationship, there are some differences.

Prominent among those differences is the U.S. government's long-standing opposition to the government of Israel's policies and practices regarding settlement. As then, Secretary of State James Baker said in 1991, I don't think there is any bigger obstacle to peace than the settlement activity that continues not only unabated, but at an enhanced pace."

The policy described by Secretary Baker on behalf of the administration of President George H.W. Bush has been, in essence, the policy of every American administration over the past quarter-century -- of Jimmy Carter to George W. Bush. The circumstances in the region are much changed from those which existed 20 years ago, yet President Ronald Reagan's words of September 1, 1982, remain relevant. He said, and I quote, "The immediate adoption of a settlements freeze by Israel, more than any other action could create the necessary confidence."

In his recent speech on June 24th, President Bush emphasized the need for reform of Palestinian institutions, including a change of leadership. These matters were not within our committee's mandate, and for that reason, were not raised with us, or by either of the parties. But the subject is timely. Reform is essential to progress -- not just because of the president's demand. The entire international community wants a responsible, accountable Palestinian leadership. Most importantly, the Palestinian people themselves demand it and deserve it. A plan of action that includes a nonviolent path for Palestinians to achieve a peaceful democratic state, hopefully with an effective market economy, is the right way forward for Palestinians and for the entire region.

The President's demands on the Palestinians receive most of the media attention, but he made demands on the Israelis, as well. He called for "an end to the Israeli occupation that began in 1967." Those were his words. He was explicit in his insistence, and I quote, "that Israeli settlement activity in the occupied territories must stop, consistent with the recommendations of the Mitchell Committee." And he restated his vision of two states living side-by-side in peace and security. Taken in context, the president's statement can lend support to the approach of creating a context in which meaningful negotiation can take place.

There's been much discussion about the state of relations between the United States and the Arab nations. That, too, was outside our committee's mandate, but I'd like to make a brief comment about it, because it's an important part of the picture.

The current hostility to the United States by many of the Arab peoples is not historically inevitable. What we now call the Middle East was part of the Ottoman Empire for four centuries. When that empire collapsed in the wake of the First World War, the victorious powers deliberated on whom would govern the region. Britain and France competed for the mandate, but they did not seriously consult the Arab inhabitants of the region. The Arabs wanted an American mandate. The nation they most trusted by an overwhelming margin was the United States. But in the aftermath of the First World War, we turned inward again and Britain and France divided up the region.

Obviously, much has changed since then. As the world's dominant power, the U.S. is directly and deeply involved in the Middle East. Our vital interests are engaged there.

Within the Arab states, there are ambivalent feelings toward the U.S. The leaders repeatedly ask us to become more involved while many of the people don't want us there at all. But public attitudes can change again and I believe that there is an underlying residue of goodwill toward Americans and that those attitudes will change again if, with American help, the conflict is resolved.

With young, rapidly growing populations, the Arab countries need the modernization of their societies, the expansion of democratic institutions, improved education, economic growth and job creation. Good relations with the U.S., with the world's largest economy, will be crucial to that effort.

I don't underestimate the difficulties, but I believe an end to this conflict is possible. Unfortunately, it is unrealistic to expect that the process toward a final status agreement will be entirely free of violence, even if there is a genuine, good-faith political dialogue aimed at resolving the issues. What's needed is strong leadership from the parties and from the United States, and a lot of patience and perseverance, all of which were present in Northern Ireland.

I'd like to briefly mention my experience there, in part because it enables me to end on a positive note. The pessimism that prevails in the Middle East today existed when the negotiations began in Northern Ireland in 1996.

To their credit, the governments of the United Kingdom and Ireland had worked for more than a decade to organize inclusive negotiations to end the bitter sectarian conflict that had raged for more than a quarter of a century. Those negotiations, which I chaired, lasted two years. Until the very end, there was no progress. In a real sense, we had 700 days of failure and one day of success.

Just a few days before an agreement was reached, opinion polls reported that the vast majority of people, 83 percent, believed no agreement was possible. But Prime Ministers Blair and Ahern, President Clinton and the political leaders of Northern Ireland persevered through violence, through setbacks, through delays and disappointments.

In the last months, there was a surge of sectarian violence. Nationalist and unionist leaders were under pressure from some of their constituents, who asked why they remained in failed talks while the killing continued. Those leaders knew that their political futures, even their lives and the safety of their families, were on the line.

The expedient course would have been to walk away, blaming the other side for its recalcitrance, pointing to the violence as proof that the other side was not serious about a resolution. A few did that. Most did not. They persevered because they knew that the vast majority of their constituents wanted peace, stability and security. Despite their differences, most unionists and nationalists share a vision of a stable, peaceful and prosperous future for themselves and for their children.

The leaders of Northern Ireland showed the world the meaning of political courage. They are ordinary men and women, often scorned in their own society for being politicians, but they summoned extraordinary courage to lead their constituents through a difficult process of compromise, despite violence and political turbulence, ultimately to agreement.

Just over four years ago, a historic accord was reached. By itself it does not provide or guarantee peace and stability, but it makes them possible. There have been many frustrations and setbacks in its implementation, and they continue to this day. But overall, impressive progress has been made. The rate of killing is way down. Commerce and growth are up. The borders are open. The local government, created pursuant to the agreement, is functioning. Recently the Irish Republican Army engaged in a second act of decommissioning weapons.

Last week marked the height of the so-called marching season in Northern Ireland -- always a tense and difficult time. The small minority who want to destroy the peace process were active, but my hope is that the political leadership and the vast, peaceful majority will remain calm and steady on the path to a durable peace and political stability.

I am convinced that there's no such thing as a conflict that can't be ended. Conflicts are created, conducted and sustained by human beings. They can be ended by human beings. I saw it happen in Northern Ireland. I know it can happen in the Middle East, and I hope and pray that it soon will.

Thank you very much for having me here today. (Applause.)

MR. INDYK: Thank you very much, Senator Mitchell, for a very powerful exposition.

Before you spoke this morning, we were treated to Israeli and Palestinian perspectives that focused on the zero-sum game nature of the conflict that they're engaged in at the moment, with both sides inevitably admitting that there was a bargain that was broken but accusing the other side of doing and of not fulfilling their responsibilities.

I wonder if you could, picking up from your speech, shed some light on this from the Northern Ireland experience and tell us, perhaps, how did you, when you went into that situation, which I think was probably quite similar to what the Israelis and Palestinians are facing today, how did you get it going? What did you do in those two years to create the environment in which it became possible to reach an agreement?

SENATOR MITCHELL: The first thing I did was to tell the assembled delegates that I did not have with me an American plan; there was no Clinton plan or Mitchell plan. I told them that any agreement they reached would be the product of their efforts. And two years later, when we reached an agreement and I had the responsibility of preparing the draft, I delivered it to them and pointed out that it came from them in that two-year period. Now, it is true that I did play a role toward the end of mediation, and there are always judgments to be made about what goes in and what stays out, which are substantial.

The second thing I told them is that I was a product of the U.S. Senate where there is the rule of unlimited debate, and that I would never cut anybody off. Little did I realize what I was getting myself in for when I made that comment. But the reality is they had to have their say, as you heard this morning, and they had it. And it took a long time for them to get it out. I stayed and listened. I learned early that it is a common tactic in Northern Ireland to have a dramatic walkout. You make a statement, you insult the other side, and then you throw down your papers, walk out and slam the door. So usually there was only me to listen as each side walked in and out just to make their speeches, to make the talk. But there was someone to listen. And over time, I could see gradually that we were moving toward serious discussion.

A second point, which is really relevant to the immediate situation. The agreement was reached in April of 1998. Fourteen months later, in July of 1999, it collapsed. The Assembly of Northern Ireland dissolved in furious dispute and bickering. Prime Minister Blair, Prime Minister Ahern and President Clinton called and asked me if I would go back and to try to put it together. I went back and I spent three and a half months. It took me only two days to figure out what had to be done; it took three and a half months to get the parties to agree. But it was a step-by-step process negotiated painstakingly as to 18 steps that were to occur over a three-week period. And it was so precisely choreographed that when the first person got up at 9:00 a.m. on November 27th of 1999 to make his statement, every one of the parties knew what he would say, and he knew everything that would happen over the next three weeks in each of the 18 steps. There was total mistrust and there was a paralyzing fear that if, "I do anything that is or looks like a concession, it will not be reciprocated and I will be branded as weak or selling out on my side." I think that something like that, it can't be identical because the two situations, while similar in some respects, are maybe different in others, has to occur now. There is total mistrust, as I said. And as everyone here knows, and I wasn't here, but, I guess you heard that this morning.

There also is in both places an enormous tendency, even a compulsion, to re-debate the past. I think that is very common in these conflict situations. It's extremely hard for people who feel with justification that they have suffered at the hands of another to be able to turn away and look forward. Indeed, I'll say to you that the most difficult and controversial part of the Northern Ireland peace agreement focused on the release of prisoners who had been convicted of what they regarded as acts of patriotism, but which the victims regarded as criminal. And it is -- to this moment it remains extremely difficult for the members of that society to turn away from the past and look forward. And I think that's where an intermediary role has to be played. And I think it has to be by the United States.

MR. INDYK: Thank you. Questions or comments from the floor. Jim Klurfeld from Newsday?

Q: In his speech a few weeks ago, President Bush added a new condition, clearly, which is that there'd have to be a change in the Palestinian leadership, that Chairman Arafat should no longer be the Palestinian leader. A, do you agree with that? B, how do you think that plays out?

SENATOR MITCHELL: Well, it is obviously difficult to ask for free and fair elections and then to prescribe the result of the election. And that difficulty has been noted and much commented on since the speech was given.

At the same time, I think we all recognize -- and, most importantly, the Palestinians present and throughout the world recognize -- that there should be a more accountable, transparent and effective leadership. The question is how and when that can be accomplished without being seen to be the result of American or Israeli dictation. The Palestinians are no different from others in this respect. If you go and tell them "You must do this", they are likely to get their backs up and respond in a negative way, even if it's something that they themselves would like to do. There are Israelis, Americans, and probably others here thatwould react exactly the same way. There is a tendency to rally around the leadership in time of external threat. But I think that some accommodation is possible.

Now, a very wise person said to me recently that in the Arab world they have leaders who are either in complete control or they're dead. Well, the fact is, there has to be widespread democracy in the Arab world. So there has to be modernization and movement. And I think that a change in that paradigm is possible. But in the end, it must be decided by the Palestinian people themselves.

The United States stands for, symbolizes and advocates democracy. The very essence of democracy is self-determination. It is, in fact, the meaning of the word itself. "Democracy" is the combination of two Greek words: "demos," the people; "cracy," the rule or reign. The literal definition of democracy is "the rule of the people." Therefore, I think it is they who must and will decide. I think under the current circumstances, with the proper leadership, there can perhaps be an evolutionary process in which there is, at the very least, a broadening of leadership to create an entity capable of entering into the steps and the negotiations which I've earlier described.

MR. INDYK: Thank you. David Makovsky from the Washington Institute for Near East Policy.

Q: Senator Mitchell, in your moving remarks, you spoke about the commonalities of these different conflicts[Northern Ireland and Israel-Palestine]: the total mistrust, re-debating the past, the prisoner issue, your sense you think the publics ultimately want peace. I'd like to ask you if you could talk a little bit about the differences that you see between the two. I was struck, I think, in the last speech that President Clinton gave before he left office, when he talked about the Northern Ireland conflict and the Middle East. And he said sir, I'm not taking away from your achievement in any way. He said, "I'm very much more optimistic about Northern Ireland. I think it's a much more manageable situation, the region doesn't hinge on this one issue, there's economic development in Western Europe," and he went through, I don't know, it seemed like eight or nine points why he thought this was much easier to do, and how the Irish prime minister and the British prime minister were working hand in hand. I'd like to know if you could focus a little bit on the differences in these two different regions.

SENATOR MITCHELL: The differences are greater than the similarities. Before I went to Northern Ireland and while I was in the Senate, I spent a great deal of time in the Balkans, as well. And my impression is that, unfortunately, there is no formula which, once discovered, can be transferred from one conflict to another. There are values and practices and processes, but the differences very much outweigh the similarities. Some of them you described President Clinton as stating, and I think they're obvious to everyone.

The most important thing, I believe, for an external participant is to become very deeply involved in the life of the region of the people involved, because when I first went to Northern Ireland, I had never been there. I'd only been to the Republic of Ireland once in my life, for two days, as a tourist, and I had only a superficial appreciation. And I had an impression that there were a large number of irrational people performing irrational acts. But once I came to meet them, to know them, to listen to them for thousands and thousands of hours, I came to understand that in the mind and shoes of the perpetrator of the acts, they were not irrational, given the beliefs that they held. And I think that's critical in this situation as well, and I don't think having been in Northern Ireland or the Balkans or anyplace else makes any difference in that respect.

MR. INDYK: John Parker from The Economist.

Q: Thank you. Senator, I wonder if you could take us through your views of the road map before it begins? What is your view of the relationship between Palestinian reform and Israeli behavior over the next few months? What in your view could Israel reasonably expect of the Palestinians without any Israeli response? What could the Palestinians reasonably expect of Israel by way of response to their reform? Thank you.

SENATOR MITCHELL: Yes. In our report, we listed about a dozen and a half specific steps that we thought the parties could take in a sequence and under timing that they themselves determine in an effort to reverse the disastrous decline in confidence that has occurred over the past two years. First to halt it, then to reverse it. In addition, I think the circumstances that now exist, which did not exist at the time when we prepared our report, would enable one to add a dozen more to that list.

I cannot here dictate what that will be. That has to be done through participation by the parties under or with American assistance and the assistance of others. But it's quite clear that you can see a sequence -- each of us here could take 30 steps and could, within an hour, write down what we think would be an appropriate sequence. The problem always is the first step. And it's clear in my view that they have to be relatively simultaneous, that they have to be relatively reciprocal, that they must be of equal, relatively equal, weight. You can't ask someone to take a step of 10 yards in response to a step of 10 inches. These are all matters of judgment that are certainly within the capability of the parties under the appropriate circumstances.

In Northern Ireland, I literally sat down with a legal pad and I wrote out in my hand the 18 steps in consultation with the parties. And we negotiated each one of them, the precise words that were to be spoken, the precise actions that were to be taken. I don't have such a list now, and I don't think one can or should be prepared in the absence of the parties.

MR. INDYK: Can I just follow up on that, Senator Mitchell, asking you what kind of monitoring mechanism did you have in place or do you think would be needed now to make sure that the parties actually fulfill all of these steps? And what happens if they don't?

SENATOR MITCHELL: Well, in fact, in Northern Ireland, they didn't. And while the process came together, it then met another crisis a few months later, and the process of getting together and trying to patch it up repeated itself and so on. I'm embarrassed to tell you, Martin. When the British and Irish governments handed me their proposed draft of the agreement, this is back when we were negotiating, and I asked each of the parties to give me a written proposal of what they wanted in the agreement. Essentially what I did with my colleagues General de Chastelain from Canada and Prime Minister Holkeri from Finland was to integrate them into a single document. The British and Irish governments without notifying me in advance put in a provision that there would be a monitoring committee, which I would chair. That was the first thing I deleted from the draft of the agreement.

I think that was one of the weaknesses of the process, and one of the conclusions I've reached is that for its own reasons and because of that experience, there should be and must be in the Middle East a mechanism for monitoring, a mechanism for ensuring compliance. Otherwise, you're going to get into the same back-and-forth that you heard this morning -- "You didn't keep your word; you broke this," and it's impossible to then make a judgment.

MR. INDYK: Thank you. Khalil Shikaki

Q: Thank you. My question, actually, is a follow-up to those two other questions that have just been asked. In the report you recognized three facts: One, the two sides simply do not trust each other; secondly, that the Palestinian Authority has been weakened -- it lacks the capacity to do a lot of things as a result of the violence; thirdly, that the Intifada interrupted the backdrop of a political stalemate.

Yet in the report, there was no sequencing, as you just said, and no timetable. There was no monitoring. The Palestinians were asked to take the initiative. It was very clear that the focus is on giving the Israelis the part of the bargain that they wanted, which was security. And therefore, there was no simultaneous steps to be taken. Palestinians must first provide security, even though the PA has been just weakened.

And thirdly, even after all this is done and after the confidence-building measures are put in place, then you go to negotiations. What happens in between, given the fact that this Intifada erupted on the backdrop of a political stalemate? The report didn't provide any clear guidelines as to what rules will govern the relationship while they're waiting for a settlement. As I said, it did give the Israelis what they wanted, in terms of security.

What kind of incentives are there now for the Israelis to actually fulfill their obligations under existing agreement? The prisoners, for example, that were so important in Northern Ireland; the redeployment, which was certainly the most important aspect of the Palestinians, what led you then to avoid these issues? And do you think that today these same conditions that forced you to avoid them still exist and we can't really adopt these issues anymore?

SENATOR MITCHELL: Right. First, we were specifically instructed in our mandate not to consider final-status issues; to limit ourselves to those issues that dealt with the questions of violence, how to bring it to an end and how to get back to negotiations, not to conduct the negotiations. In fact, one of the criticisms made of our report by several of our Israeli interlocutors was that by including settlements, we violated that mandate. Our conclusion was that we could not address the issue of violence without addressing the issue of settlements, and so we did so. But that's the first point.

The second point is that I have already stated in my remark that I would change that if we were to do it again, that we believed at the time that the parties had the capacity to reach agreement on the timing and sequence of steps. We were impressed by the fact that both sides told us repeatedly that they believed that the security cooperation that had taken place previously was meaningful, effective, and they wanted it to be restored. And we thought that as a starting point, that could lead to the other steps. In retrospect, as I've said, that was not the case.

Third, in your question, you are including events which have occurred since the time we were there, which obviously create a different prism for looking back to what we said.

The statement in our report was that the Palestinian Authority does not have complete control but has not made a 100 percent effort to exercise the authority that it does have. Clearly, its authority has been much weakened by the events of the past 14 months, and it is entirely possible, although purely speculative on my part, because we never discussed it, that were the current situation to have existed at the time we wrote the report, we might have made a different recommendation.

MR. INDYK: George Hishmeh Jordan Times

Q: The administration is criticized widely, overseas and at home --

SENATOR MITCHELL: The administration is -- I'm sorry -- what?

Q: Is criticized widely for its policies on the Middle East --

SENATOR MITCHELL: Yes.

Q: -- at home and overseas. Even Senator Kerry was quoted last week as saying that the president's speech was only half the loaf. What's the problem? Is the administration missing the point? Do you have any ideas on what's going on? Can you help us in this?

SENATOR MITCHELL: I'm not a part of the administration. (Laughter.)

Q: I know. I know. That's why I asked you.

SENATOR MITCHELL: Well, so I don't have an answer. I read the same newspapers you do and listen to the same -- approximately, I assume, the same -- televised reports that you do. My only contacts have been with Secretary Powell and with Richard Haass, and they have not been extensive. We've had periodic meetings and discussions.

As I said in my remarks, I believe the administration is obviously aware of what you've said and of the need to devise a plan of action. And in my statement, I made clear my view that I believe the president's statement, taken in full context, is supportive of the view that you have to engage in a step-by-step process to get to it.

The question is, of course, the degree of commitment and energy and intensity which one is willing to put into it. And my hope is that the administration does have that energy and will have that intensity. I believe certainly from my discussions with Secretary Powell, know that he is well aware of that and very much committed to dealing with the problem.

That is probably the least satisfactory answer you could expect from that question. (Laughter.)

MR. INDYK: But it does show why you're such a good diplomat. (Laughter.)

Phil Gordon, from the Brookings Institution.

Q: Senator, you expressed your conviction that the international community has to get deeply engaged, that if you just leave it to the parties themselves, they can't do it. Do you have any thoughts on who the international community is, and how it can represent itself in this regard? I mean, sometimes we like to think that it means the U.S., but, of course, the president has put forward some ideas which are not necessarily accepted by everyone else, the Europeans, the Arab world, the U.N. and so on.

SENATOR MITCHELL: Our committee included three Europeans and two Americans. We did not have a single substantive disagreement. We were fully in accord in every aspect of our report.

I confess to you that in a wider context, I am deeply concerned about the deterioration of relations between the United States and Europe, of which this is only one part. And I believe that condescending and unfair criticism, which is heard on both sides of the Atlantic, is unwise and unproductive.

I believe that we can work with our European allies. I have the very highest regard for Javier Solana. He is a personal friend and someone who I think has good judgment and can be helpful. I don't think the United States should be fearful of losing status or stature or primacy by deeply involving our European allies and others who wish to participate. There is much that we can learn and much help we can obtain from them.

Genuine consultation is difficult. It does limit unilateral action. In every human relationship, starting with your marriage and going on from there, if you were free to do everything exactly as you wanted to do it without any discussion or constraint at all, you would lead a very different life from what you do now, but it would probably be less effective and less fulfilling. And I think the same is true in international relations.

I think that the North Atlantic alliance is arguably the most successful political and military alliance in all of human history. And I think we should build on it, not fear it.

MR. INDYK: Said Arakat from Al-Quds newspaper.

Q: Senator Mitchell, you emphasized that, you know, for the past 25 years it's been over and over again stated that the settlements are the biggest obstacle to peace. And you've dealt a great deal with the prime minister of Israel, Ariel Sharon. Is there any -- do you conceive ever that Ariel Sharon would stop the building of settlements, let alone reverse the process and, you know, dismantle them without, really, an American heavy hand in this process? And in the absence of that, what incentives do the Palestinians have to go along with the security requirement that is asked of them?

SENATOR MITCHELL: Well, first I will say that the government of Israel praised our report and accepted it. And Prime Minister Sharon was prime minister at the time that the government accepted our report. Now, unless you believe that that is a total sham, without any serious intention and was intended merely to deceive, then what I would say to you and to the Palestinian Authority is, "if you believe that, put them to the test."

Q: But haven't there been more settlements built in the last few months?

SENATOR MITCHELL: Yes, there have been. Yes, there have been. But what you're suggesting -- (laughs) -- is that they should have accepted that part of the report in isolation in the absence of anything else being done, and both sides are going to have to do what's to be done before anything is being done. I mean, your question is like an Israeli asking, Why haven't you done everything that you are asked before we commit to anything else? It's got to be a reciprocal action.

Now, I missed the second part of your question.

Q: What incentives` do the Palestinians have to really fulfill their part of the bargain on the security issue?

SENATOR MITCHELL: I think there is a very clear incentive. And it was expressed to me by Chairman Arafat in my last meeting with him when, as I left, he took me by the arm and said, "Senator, this must stop, because life has become unbearable for the Palestinian people." By huge irony, just 24 hours earlier, Prime Minister Sharon had said the same thing to me regarding the Israelis.

But let me say this to you. Since 1948, the options available to the Palestinian people have become fewer and less attractive. And there is -- (short audio break). And life is unbearable for Palestinians. We had all of the security and all of the government protection that one could possibly get, American, Israeli, Palestinian, and we traveled around at the rate of about three miles an hour through the West Bank and Gaza. And it is with extreme difficulty that someone in our position can even conceive of the humiliation and difficulty, which ordinary Palestinians live with day after day. And to me, you can't have a greater incentive to try to do something to break that chain.

It is manifest that the current policy being pursued is not successful. It has not achieved its objective. And, as I said in my remarks, with each suicide bomb attack, the objective recedes further into the distance. And at some point there must be a judgment that must be made. We must accept the best we can, less than what we want, and build on it with the tremendous energy, ingenuity, intelligence and entrepreneurship that I know exists among the Palestinian people.

The Israelis have repeatedly accepted proposals that included much they didn't like, including in 1948, and built upon it. You can argue with that, and many can, and there's a huge debate that can be conducted upon it, which I won't open up here. But I will say to you that the greatest incentive for doing something to move this process forward, to me, exists by simply walking down the streets of Gaza, through Ramallah, through Hebron and the other cities that I went through, and with which you are even much, much more familiar.

MR. INDYK: On that sobering note, Senator Mitchell, we're going to bring this session to a conclusion.

I just want to express on behalf of all of us our deep appreciation to you for a very profound and sobering presentation. And, I speak for myself here, but I suspect there are a lot of people in the audience who would agree with me, if only we could get you to play the role that you played in Northern Ireland, I have a feeling that the Israeli-Palestinian conflict would be on its way to some form of resolution.

Thank you very much for coming to be with us.

SENATOR MITCHELL: Thank you.

(Applause and end of keynote.)

(Start Session Three)

MR. TELHAMI: If you can please take your seats and enjoy your lunch, we're going to go ahead and start this session. Since we're short on time, we'd like to go ahead and get started as you're eating.

It's my pleasure to introduce the next round of speakers to discuss the issue of reviving the political process and pursuing the reform process. It is certainly clear from President Bush's speech, from the current American position that reform is seen as a precondition for political progress. And, it is at the same time clear that many Palestinians and analysts see that it's very difficult to imagine a genuine and profound reform in the environment that prevails.

And so the real question is, is there space between the requirement of reform and the need to pursue a political process? Are there any kind of realistic steps that the Palestinians can undertake with the help of the international community that would constitute sufficient steps to meet American conditions, or is this really, in essence, a situation where we can't move forward because of these preconditions. I think it would be very helpful to talk about this space, if it exists, and if it does, can we specify it?

We have three outstanding speakers with us this afternoon. The first is a very distinguished Israeli politician, Minister Dan Meridor, who is a Minister without Portfolio in the Government of Israel. Mr. Meridor has been a member of the Knesset since 1984, and he's currently the head of the Center Party. A lawyer by profession, Mr. Meridor began his distinguished career in public service as a cabinet secretary to Prime Minister Menachem Begin. He served as Justice Minister in the Shamir government, and as Minister of Finance in the Netanyahu government. Before assuming his current position, he served as Chairman of the Knesset's Foreign Affairs and Defense Committee. He was a member of the Israeli delegation to the Camp David negotiations in July 2000.

Also with us is Brookings own Khalil Shikaki. Khalil is currently a visiting fellow at the Saban Center at the Brookings Institution. He is a distinguished Palestinian political scientist, very known to this community. He is the director of the Palestinian Center for Policy and Survey Research in Ramallah and joined the Saban Center a few months ago and will be here through the summer. He's considered the preeminent expert on Palestinian public opinion, he has conducted dozens of surveys since 1993 on Palestinian public opinion, and has really been sort of the reference point for measuring the public perceptions in the West Bank and Gaza. He's currently conducting research for a monograph on peacemaking and reform in Palestinian society. Many of you may have seen his most recent article in Foreign Affairs on Palestinians Divided, which came out in the January/February issue of Foreign Affairs.

And then, finally, we have Richard Haass. Ambassador Haass is certainly known to this crowd, a former colleague, a man I miss, with whom I did a lot of sessions from this very platform in this very room before he joined the government again as Director of Policy Planning appointed by Secretary of State Powell, and also confirmed as ambassador by the U.S. Senate. In this capacity, he has been the lead U.S. government official in support of the Northern Ireland peace process. He also served as U.S. coordinator for policy toward the future of Afghanistan. Previously, Ambassador Haass was vice president and director of foreign policy studies here at Brookings, where he held the Sidney Stein Chair in international security. During the previous Bush administration, he served as special assistant to the president, and Syria director of Near East and South Asia in the National Security Council. He is also a very accomplished author with several important books, including "The Reluctant Sheriff: The United States After the Cold War;" and "Honey and Vinegar: Incentives, Sanctions and Foreign Policy;" and "The Bureaucratic Entrepreneur."

So it is indeed a pleasure to introduce these three speakers. What we're going to do is, we'll start with Mr. Meridor, then proceed with Mr. Shikaki, have Mr. Haass serve as respondent, and then we'll open it up for discussion.

Mr. Meridor.

MR. MERIDOR: Thank you. It's good to be here. I want to thank Haim Saban for the Center, and Martin Indyk for inviting us all here. So far you've heard problems, now we're about to give you the solution. It'll take some minutes, but you'll know how to solve the problem.

On a more serious note, you know the characteristic of a Greek tragedy is that the end is very bad, it's a catastrophe. The heroes can't do anything. It's unavoidable. In the end, Oedipus is going to kill his father and sleep with his mother; he can't do anything about it.

In our situation, it's a tragedy of a different kind. Everyone of good sense knows what the solution looks like, everyone wants a solution. And it's a good one, which we can live with. But the tragedy is that we can't move from here to there, which maybe makes it even more tragic than the Greek classical definition of tragedy.

I think that Israel has changed quite substantially politically and socially, in the recent nine years since the Oslo Agreement was signed. For many years we have been divided, starting from the 1967Six Day War there have been two camps, the right wing and left wing, the hawks and the doves. More or less in the middle of the society, where one part wanted to retain the entire land saying, "it's all ours, we'll be able to retain it and still be a democracy;" and the other said, "no, we have to give up mostly all of it." Things have changed quite dramatically, now I would say that 80 percent of the Israelis have awakened from the very sweet dreams that they had. They now center around the main idea that we are going to end up with a two-state solution, the borders are to be negotiated, but we know more or less what they would look like. And this is a major shift in Israeli public opinion.

I think that the hawkish side woke up from the dream that they hadafter the signature of the Oslo Agreement and the demographic developments, knowing that they cannot hold the entire land and still be Israel. So, we need to go for a division of the land. And even the Likud Party accepted the Oslo Agreement post facto. Before the election of '96, Netanyahu declared, "we will honor the agreement, both as a fact that we swore on the ground, and as a commitment of Israel." This was a major departure from the historic view of one-half of the Israeli public opinion. So the awakening might have been quite difficult and painful as all people awakening from a dream find it difficult.

Then came the other parts. And I want to spend a minute or two on these parts. Exactly two years ago, in July 2000, we spent two weeks at Camp David. Some people present here were with us there. This was an unprecedented heroic attempt to put an end to the conflict, and as you know it ended up in a fiasco, but I would say that it was quite clear to most of us there that we almost reached an agreement on most of the issues that were at stake. The security issue was practically agreed upon. The land issue, territory, was not far from agreement. I could go on , but I was not present at the meeting between Arafat and Clinton, of which I heard a report that an agreement was very close to being signed. Even Jerusalem, against my best advice was offered, and there was almost an agreement on it, but the Temple Mount issue and the issue of the refugees were not advanced.

But, when the last day came and the Palestinian leader was faced with the decision that, if this is what we get, that this is the end of the story, the end of conflict, no more claims, he could not bring himself to accept it. Now, this was not a mistake of one night, an emotional reaction, it was 14 days and 14 nights. And all the world, America, Israel, Palestinians who were present there, we saw the results which were quite agonizing and this dream shattered.

Now, for the Israelis, I would say that Prime Minister Barak took the theories and the ideas and the ideology of the peace camp, or the left wing, and took it down to the lab and held an experiment. And got the wrong results, and people find it difficult to read them, but they must read them, because to ignore what we saw would be a mistake.

What was offered there, was an end of occupation, a Palestinian state, even a shared Jerusalem, $10 billion was offered by the American president to the refugees, a lot of money even for the Palestinians. And the answer was not only, it's not good enough, but it's not even a basis for negotiations.

Of course, this ruined the Israeli peace camp entirely. This brought about a change of government in which Barak lost his political career. I don't want you to tell him that I said it, but this is what I think. He is at home. And Arafat's only success I think, was the bringing of a new government to Israel, Sharon and terrorists together, which is something only he could have brought. One should remember that all this happened in the most dovish of all Israeli governments, with the most far reaching offers ever given by Israel, in the presence of the American president and his team, some of whom are present here.

Now, I have to say that when I heard Mohammad Dahlan speaking today, I couldn't see him, but I heard him, I must say that with all respect, the Dahlan I saw at the end of Camp David was a different Dahlan than the one I saw today. I don't want to list names, because it may be risky to people's lives there, but I could detect, and I think I'm not the only one, that in the Palestinian groups there were several people -- some people call them the young guard—that were there for an agreement. They wanted an agreement, they were very frustrated and angry when there was no agreement.

All the stories here claim that it was not written, it was not clear, well, he is now complaining there may be an open post in the coming future, President Bush said, so he's complaining. But, it's not the truth. We could have had an agreement. Some Palestinians wanted it very much, Dahlan I think was one of them. One of them said to us, "I remember this very clearly, on the last day of Camp David—it's 1947 again." In other words he said, it's a big mistake again we've made, we're offered something and we said no, who knows what will happen. Then came October 2000, and the beginning of the wave of violence, of which all of us have suffered for the last 18-19 months.

I want to say something not about the suffering, which is awful. People are killed in the streets, in their houses, in restaurants, in hotels, and with our response sometimes, not intentionally, civilians are killed. The other side is bad, as well. There's no moral equivalency, if people get killed it's awful. I want to say something more. You see it's not only the killing of people, and the maiming of people, and the awful situation. The Oslo Agreement, which started the move in 1993, was based on a premise. We gave Arafat the respectability he never had before this. Who could have dreamt of Arafat being at the White House before this? And we gave him the access to our homes. He brought 20,000-30,000 soldiers, terrorists and warriors with weapons to our doorstep. And in the first phase he got territory from us, while we knew there were outstanding issues to be resolved.

It was not a secret. So what do you do? And Rabin said, I'm not going to sign this agreement unless Arafat signs a collateral letter that whatever the differences, whatever the problems, whatever time it may take, he will never use weapons against us. Violence is out. The only way to resolve the conflict is with a peaceful resolution of the conflict. This was, if you may, the main, if not the only major commitment asked of Arafat. And now, with this violence, we have what we lawyers call, a fundamental breach of the fundamental commitment .

We heard Mohammad Dahlan ask, "how can we ask the people not to resist if they don't get enough?" This is to say terror becomes a tool, a legitimate tool in the fight. But terror had to be eliminated by Oslo. We wouldn't have brought Arafat otherwise, who would have heard of Arafat in this land? We brought him and the rest to the land, with the premise and the condition that he would only use the weapons peacefully. .

So it's not only that it's bad and ugly; it's difficult because the only way to get out of the conflict is by agreement, but if these agreements are not fundamentally kept, then where do we go for leadership from this point? I think that if I analyze President Bush's speech, he may have said to himself, "how come, after we have tried so intensely -- the Clinton administration, my administration here today, and previous administrations -- we never got anywhere?"

I remember General Zinni coming to Jerusalem for the first time. I met him the day after he came, at the King David Hotel for breakfast with Aaron Miller .General Zinni came with a very genuine intent to stop terror and to build a Palestinian state. He said those things to us and to them. A month later, when he returned home, you could have heard what he really thought of the other side. He used to speak to Arafat and then he used to get the American intelligence reports telling him what happened after he left. I think what he said was very clear, "maybe we made a mistake in the assumption underlying Oslo, presuming Arafat belonged to the good guy's side and that he only needs to be given a vision and opportunity."

And even after the big attack on us a vision was given in Secretary Powell's speech, in President Bush?s speech, in the United Nations Security Council resolution 397. It's very clear what they're going to get if they stop the violence and go for a political resolution. But this didn't happen, and it hasn't happened to this very day. So I think that the simple way, in which the President of the United States has looked upon a very complex situation, may be an important one. Forget all the details, here we are, here we have tried all sorts of ways and something or somebody is not moving. Both the Mitchell report and the Tenet report couldn't move anything.. In the end the terror goes on. Today seven Israelis were killed, and about 20 or more were admitted to hospital in Samaria in the West Bank.

It's a tough conclusion. What do we do now? To overlook the fact that we have a very big problem, not with the plan, the plans are there; not with the prospect or the vision, they are there, but with the partner. Why did he say no at Camp David? I can't give an authoritative answer. One, by the way, was given by the ex-president of Indonesia, the largest Muslim country. He said to a newspaper recently, I think an Israeli newspaper, that when he asked Arafat why he said no at Camp David, Arafat said, "it may take 100 years but in the end there will be no Israel."

We may underestimate Arafat's commitment to the ideology that no Jewish state should exist. "As long as it's interim agreements, we're okay, we don't give up on our dreams, we still have time. We have maneuverability. But when I am to sign an agreement saying no more claims, an end to conflict that means Israel is there to exist." Whether this is the reason or not I don't know, but the fact is, waiting for him to reform himself may be too expensive in terms of the life lost by both the Jews and Arabs of the land.

Now, the situation is bad. In recent weeks we've been able to calm the wave of terror down substantially, but not entirelyand at a very high cost. A lot of Palestinians, many of them are under curfew most hours of the day. This cannot persist. I warn even my own people against the illusion that we have a steady state now, because we don't have a steady state. We need to move to a more reasonable situation. I'll come to this in a minute. But, be it what it may, there is a call not only by President Bush to change the leadership of the Palestinian camp. The response, or the reaction of President Mubarak on television to the Bush speech in which he dramatically said, "Arafat go home," meant that Mubarak found Bush's speech balanced, which is quite interesting from an Arab leader like Mubarak. I don't want to mention other Arab leaders, but none were shattered by what President Bush said.

And had it been possible for me to tell you what I know Palestinian leaders say about Mr. Arafat, not only secretly, but even to us, or to Americans, or to Europeans, you'll hear that there is a big question mark raised. Not on the symbol of what Arafat is, but on the way he has led the Palestinian people for the last two years. They were really there, they saw the promised land, literally speaking. It was there, but where are they now? Where are we now, all of us? Are we here because Arafat does not want to make the decision, because he can't make the decision, because he's not powerful enough, because his ideology doesn't let him. This is besides the point. I don't think we have time for many more experiments, with such heavy costs for all sides.

What now? I think that the Israelis need to find a way, as quickly as possible, to get out of the territories they conquered in the center of the cities and move the responsibility from their shoulders to the Palestinian shoulders. Gradually, and step by step, because I don't want Israeli's to have to return because of another suicide bomb, or another attack in Tel Aviv, or Jerusalem, or Haifa, as by Beer Sheva as the case was in the past. But we need to actively look for a way to shift the responsibility to the Palestinians' security forces and see to it that they don't kill us. I think it's important because to continue the way it is now, is very costly to them and to us. It's not right, it's an illusion, we can't continue like this.

It's true that if we don't have a partner on the other side it's going to be more difficult. The quicker there is a partner, the quicker we can get out. A partner doesn't mean a total change in the Palestinian Authority, but people we can talk to, be it in Nablus, or in Jenin, or in Hebron. My opinion and I'm not speaking the official position of the government, because we did not discuss this in the Cabinet, but my opinion is that we need to find a way to relieve ourselves of the burden of dealing with the population and the territory and give the Palestinians the responsibility. Let them build the best they can with reforms. They were offered the promise by the Americans, by their own people, it's okay with us.

The rest of the reforms will have to come subsequently. I think that they are good, they are promising, but they aren't easy to implement. They are taken from the context of a free, democratic society. No insult meant but we are not yet there. And it will take time to reform them into what was described in the president's speech some time ago.

This of course is not enough. I think we need to find ways to alleviate the economic situation there. Again, the problem is the following, it has been found and substantiated that some of the money that goes to the authority, finds its way to finance terror. We have the evidence, we showed it to the Americans, they know it themselves, we showed it to the Europeans, we showed it to some Arab countries. We need to find a way where the money can go and help the people start to work again., Unemployment is very high, and this needs to be corrected to start moving towards a better future. But, even this will not be enough. I think Israel has reached a point where we need to change our formula.

We said for many years, 35 years, no movement without peace. We did it with Egypt, Begin and Sadat and it succeeded. I'm afraid that if we wait for the Palestinians to make a full peace with us, at least with the present leadership, the performance that we have seen so far may make us stay in an untenable situation for too long a time. So maybe we need to set a target, some people call it suppression, or division, or border, or fence, to separate the two populations and build a Palestinian state, ven if it's not on the entire land required by them, but on part of it. We must move from there either to negotiations, hopefully leading to peace, or to conflict, but from a two-state situation, not from the situation that we've had now for 35 years.

If you look at the options that we face as Israel, you could think of four options. The first, the best one, is a full comprehensive peace, putting an end to all outstanding claims. This is the best, but I am afraid that by judging our past performance and experience, it doesn't seem to be likely to me that the Arabs understand, or the Palestinians understand what the basic requirements of Israel are and will have to be met. And some would say the opposite on us, but I think the gap is still wide. Nevertheless, this is the best solution.

The second option is to move to an agreement that does not include all the details that need final agreement on. People may call it, again, a partial agreement, interim agreement, whatever name you call it will suit me. In this situation we'll build a Palestinian state, which they will build on and we'll allow it to be built and leave the questions of final border status, Jerusalem and refugees, open for later negotiations.

The third option is do it unilaterally. They don't agree, they say either give us all or we're ready to live like this for another ten years, century, who knows. Some Israelis offer we should do it unilaterally, and state, "this as our border, if you don't like it, all right, your problem, this is where Israel is, and you have the entire rest of the territory, which is from 15 percent to 20 percent depending on which Israeli you talk to. And if you want to fight us, fight us, we'll fight you, but not in an agreement."

The fourth, which is to me the worst, is the one usually chosen, is doing nothing, maintaining the status quo and speaking this and speaking that, but continuing the track we're on now, being engaged as we are, embracing each other from the Jordan to the sea, with no border and with no line. I think this would be devastating for both societies, for both countries, and I speak of us, because I care primarily about our cause.

So there is a call for leadership decisions on that issue. I believe of all the four options, the one that is most likely to take place if we make a decision is the second one. That is to say, if we move now on what we can agree upon, an interim situation, for a year, 10 years, 20, it depends on when the Palestinians come and we come to grips with the problems and solve them we canchange radically what we have on the ground. The last 35 years are a long time, we Jews are ancient people, we have a lot of patience, 35 years is a long time for a situation that is so turbulent and not steady. But, the Arabs are not less impatient, and they have time. If we have time and they have time we will never come to a solution. We can drag on like this with bloodshed every day, every week. All the other options have been tried and didn't work. The forthcoming one, giving everything away, is not good enough, said Arafat.

There are two issues that I want to speak of here, which have to do with the final status issues. These issues have to do with the resolution of the conflict, and they have come up again and again and more intensively in recent months. These are our inability to reach an agreement quickly and to put an end to the entire conflict, especially with regard to Jerusalem and the refugees. I can't add much on Jerusalem,what Jerusalem is to the Jewish people, I don't want to go into it, because I'm not going to solve it here on this table. I would rather stress the importance of the refugees issue, and say something that I think should be said.

If we go together, Palestinians and Israelis, for a solution that is not a division of the land, what do we do from here? We Jews say, "all land is ours, Bethlehem and Hebron are no more Jewish than Nazareth or Abu-Ghosh , or for that matter the whole land is my land." The Arabs will say the same thing, "the whole land is my land, Haifa is no less sacred than Jenin."

But we painfully agree to divide the land because we know we can't live together. We tried it, it doesn't work, we need to cut it. So we divide the land. This is the logic where the Palestinians would be on that side, on this side, on these sides, I should say, Gaza here, the West Bank here, and the last part of it there, and we, Israel, would be here. Once we do this, we have to divide one more thing, we have to divide what people call the issue of return.

If I agree to the division of the land, I give up in the name of all Jews their right to return to their homeland in Jericho, Bethlehem or Nablus. If they want to return they'll come back to Jerusalem, Haifa, Tel Aviv, wherever they want, not to the other part of the land, which is going to be Palestine. The same token, if there are Palestinians who want to go to Palestine and live there now will be able to go to Palestine, not to Israel. Everyone shrinks, limits, the return to his own part the Jews to Israel, the Palestinians who wish to do so, to Palestine. The idea that after we have withdrawn and divided the land, people will be coming to the Jewish land rather than the Arab land means there is no agreement and it's all a mockery and they want a continuation of the struggle.

So to achieve the most forthcoming way, I would say, we want the right to return, return wherever you like to in your state. This is why we divided the land. I would not say that Arabs cannot live within Israel, as some people say about settlements, because there are a million more Arabs who live in Israel—and that's fine with me. They're Israelis, they should be treated equally, they are basically treated equally and we should do more about this, but I don't want to go into this now. But a return, or coming back to Israel after they have a state of their own means they never meant the end of the conflict, they meant another stage that will continue. With the beginning numbers, only 100,000 wives and husbands—no, it's the beginning of an ongoing struggle that will never end.

I think this should be put very clearly on the table. Now it calls for a decision in the leadership level, which is not easy, for us and for them. I'm not a supporter of Prime Minister Barak, but I must say that he had this courage, he went all the way. Arafat uses the phrase, "peace of the brave," this is a word he likes to use, he took it from, I think, De Gaulle, who might have said it not in Arabic, but in French. But he says something very true: You need courage as a leader in order to make a decision of historic magnitude. The leaders needs to take a decision of courage here, not courage against the enemy, that is easy. It's the courage to stand up against your own people and say, that's all we can get, like Anwar Sadat and Menachem Begin did in Egypt, like Rabin and King Hussein, may they all rest in peace, did in the Jordan case. It's a difficult decision to make, I had more dreams, I had wonderful claims, I had historic perception, but I give up on part of it in for the sake of the living and the ability to live together. And I do give up on this.

This is the courage needed. I think that Arafat either never meant it, or meant it but didn't have the courage to do it. But the test was there and he was put to it, and he failed quite remarkably in the last nine years since the Oslo Agreement was signed. But I see a way out. I think some of it is not dependent on a change of leadership some of it depends on our actions. But if we need to resolve the problem, and I think we know it's not going to be resolved militarily alone. But we know that without military force, we are dead. The use is needed sometimes, but it will not resolve the whole conflict. It will allow us to survive, but you can't bring peace on the sword. It can never be done, it has never been done in the past and we don't intend to do it. In order to bring peace by agreement, you need a partner, which is something we failed in the last nine years.

We had a dream, an illusion, some of us thought it was smart, some of us thought it was too risky, but it seems to have been an illusion. A partner to end the conflict, we did not find on the other side. A partner to more interim agreements, gaining more land, we got. Not good enough today.

Before I end my remarks I want to put these things in perspective with one danger that I want to point at, and then point to a more positive perspective, because it's quite customary to end up with an upbeat note, as Senator Mitchell took us to Ireland, but I'll not go that far. The danger is what I may call the Northern Front. In the north of Israel an accumulation of arms, rockets, Katushas, missiles, mainly supplied by the Iranians, some by the Syrians, have been deployed in a part of Lebanon known as South Lebanon. Of these 10,000 rockets a substantial number are capable of reaching 50-70 kilometers into Israel.

Nowwe have been out of Lebanon for the last two years, May of 2000 was the date, and we are recently attacked almost on a daily basis from Lebanon. The Hizbollah is doing most of the job, some of it by Ahmed Jibril's people, some of it by other groups. Hizbollah is taking Palestinians and training them to have deniability, but they are behind it. And behind all this stands Iran, Iranian intelligence, Iranian revolutionary guards, and the Syrians, who allow it, and supply, and help.

Now, how do we connect this to the Palestinians? We were on the verge of reacting militarily several times in the recent half year. we stopped short of reacting because although there was every justification that they have killed six Israelis in penetrating to Israel some months ago, the Americans went to President Assad and told him, don't play games here, and there was some reduction in the tension. But, it's still there.

And I mention it here, because if with God's help, and with our help together, we have progress in the Palestinian track, I'm afraid the Syrians may make a point and arrange to stop it by igniting fire in the north of Israel. So one has to look at the north of Israel, and see to it by diplomatic means, and other means—maybe diplomatic, maybe by Europe, America, Russia -- that this is not happening to us, if we have progress.

The last comment I want to make is to try to put these things in perspective. You know, if you look at the history of the Arab-Israeli conflict, or the 35 years since '67, 54 years of Israel, from 1967, we are, or we have been on a positive track, protracted, difficult, agonizing, nerve wracking, but quite positive. Until '67, let me remind you, when there were no occupied territories, not one Arab ruler was ready to speak, not one. Jerusalem was in their hands, all of Judea-Samaria, Gaza was in their hands, nobody spoke with us. And the government of the day said, we're ready to make peace now, as it is. And the answer was no.

Then '67 changed the balance of power in the Middle East quite dramatically and the political approach to the fact that Israel exists began. And there was a gradual positive approach that I want you to remember, as you focus, or zoom in on what we have today or yesterday. The first one to acknowledge the new reality was King Hussein of Jordan, who after the attempt by the PLO and Syria to take him down in '70, in September, Black September, became our best ally. It was not official, but on the table, it was very meaningful. From 1970 on we had the first Arab country outside the real cycle of war.

The second was, of course, President Sadat of Egypt, and Prime Minister Begin of Israel, '77 to '79, we got Egypt out of the cycle of war. It's not that we have a love story with Egypt, we'd wish for more, but we have peace with Egypt. Strategically, it's a different Middle East, the danger of war is entirely differently. Jordan is outside the cycle of war, Egypt is outside the cycle of war. Then came '91, the Madrid conference, after the collapse of the government, or the attempt of Saddam Hussein to conquer Kuwait, and the American redemption campaign in Kuwait, and the support of Yasser Arafat, the Saddam Hussein issue, and he very well remembers. And the high hopes that here comes Salahadeen the son, Salahadeen the Second, will rid the area of Jews here. The end was such a collapse that there was, six seven months later in the Madrid conference in November of '91. For the first time Syria came to talk with Israel—Syria of Hafiz al Assad with Israel of Yitzhak Shamir. And the Palestinians for the first time, not the PLO officially, Mr. Ashaf [the PLO] was behind the scenes in a way. So it's a positive trend here. Not that I have an illusion that they saw the light, and said yes, you were right, you have a share in this land. No, but the real politik as Metternich or Bizmarck used to put it, is that Israel is strong enough it will survive.

Then came '93 with the Oslo agreement, '94 with the full peace treaty with Israel and Jordan, we had Morocco in relationship with us, Tunisia, some Gulf States, to this very day in peace with us. So we have a very positive trend. Only when we reach the end of the road, the most sensitive issues come, and they're difficult to resolve for both sides. So it's not surprising in a way that we have a difficult time. But, if you take the long range view, and you see, so to speak, in the American simple way, the good guys and the bad guys. If you help the good guys continue, and contain the bad guys from having their impact, there is still hope. I believe there is still hope, that if we all focus on that target we may get out of this terrible mess that all of us are stuck in now, which is bad for us, and worse for them. It's not a zero sum game, everybody loses, and everybody can gain. From that solution that we all know will exist, if we want a solution, we need to move. I think we can do it.

KHALIL SHIKAKI: Thank you very much. We should have had a Palestinian minister to speak to present the counter argument for the Palestinian side. I'm certainly not going to be presenting the official Palestinian side in any way. And I'm very critical of the official Palestinian position. And my remarks should be taken in that context. I want to make four basic points. These are my conclusions. One, the Palestinian reform process is going to continue. It's not going to continue because the President of the United States wanted it, but because there is tremendous demand for it among Palestinians.

It is the only remaining means of giving the Palestinian national movement any legitimacy. If it's not done, we face either anarchy, or an Islamist takeover. While an Islamist takeover is not eminent, I believe it is inevitable if the Palestinian national movement does not reform. The demand for reform is articulated by Palestinians, it is there. The current move on reform, I believe, is motivated mostly by Palestinian demand, and therefore it will remain there. But, it has limits. And I don't believe it will cross these limits, and I will describe what these limits are. For the most part, these limits are internal, but there are external limits, as well.

A second point I want to make is that this conflict, unfortunately, and I agree with Minister Meridor, is not about to be resolved. I think the process of escalation is the dominant process, and it will continue to be so. I believe thirdly, that the new U.S. policy has made it more difficult to continue the process of reform in the Palestinian authority on the one hand, but also made it certain that the process of escalation will remain the dominant process, or the dominant dynamic.

Fourthly, again, I agree with Minister Meridor, it's very clear what needs to be done. The vision is out there, and I think most Palestinians and Israelis realize what price they would have to pay, and I believe they are willing to pay it. However, I think the Palestinian Authority is too weak to lead the Palestinians in that path, and I believe the Israeli leadership is too right wing to lead the Israeli people in that path. And I think the American leadership is too weak and too constrained by its own domestic right wing elements. It has tied its own hands behind its back and will not lead us there. Therefore, I believe this conflict is going to continue, and the worst is yet to come.

Let me begin with the reform issue. Palestinians have four basic demands from their own leadership and from themselves. They've learned from the past that the PLO legacy has led them, when it comes to issues of state building, to the creation of a very authoritarian and dysfunctional political system. They want to change that. As long as the debate is about governance, effective governance, there is absolutely nothing wrong with the Palestinians debating the issue. This debate has been welcomed by almost everybody, perhaps with some exceptions including our president, who has not always liked it. But, in a survey that I have done in May, 90 percent of the Palestinians support it and want it, and will continue to push for it, I believe.

We want a strong judiciary. We want financial accountability. We want civil control over the security services. We want stronger public administration. We want a smaller public sector, and a smaller public payroll. All these things are things that most Palestinians want. There is no reason, no political reason, why we should not have them.

On the constitutional front, most Palestinians would like to see the issue of the authoritarian nature of the system being addressed, the issue of separation of power, and the issue of the limits of the veto power of the presidency. Many ideas have been put on the table, right now, the Palestinians are debating the issue of the creation of a parliamentary system that would allow for a stronger Prime Minister, and for a more or less ceremonial position for the presidency. I believe this is the most effective means of addressing the legacy of the PLO. You cannot have a non-democratic person to be able to run a democratic process. It is extremely difficult. And I think most Palestinians realize that this is the case today, we have to move on constitutional reform as quickly as possible and I believe this is the direction we are taking.

This is not a result of the demand from the United States, by the way. The demand for a Prime Minister has been there for a long time. In 1998, when I and my friend were working on strengthening Palestinian public institutions, there was almost a unanimous demand from all the Palestinian academics, experts, institutional lawyers that we had consulted with that there must be a Prime Minister in the political system. That this was the only way we can address the legacy of the PLO. Eventually, it actually did not contain this demand, not because the Palestinians didn't want it, but actually because the international task force felt this was too much intervention in the business of the Palestinians.

Just after the Israeli reoccupation of Ramallah, the April incursion was ended The Fatah Revolutionary Council presented the president with a list of demands, six pages, which contained the demand for the appointment of a Prime Minister. Again, this was before the U.S. actually took interest in the issue of reform, before the president began to speak about reform in May. This was the end of April.

The Palestinian Legislative Council debating this issue again proposed to the president the appointment of a Prime Minister. The speaker of the Palestinian Legislative Council went to the president, presented him with the demand, having removed from the written document the call for a Prime Minister, he asked the president to appoint a Prime Minister, again. The draft constitution that is being worked out right now has extended the mandate of the constitution committee, the president didn't need to do that, but the fact that he did, I believe, indicates he is sending a signal to the committee and to the international community, but also to everybody else who have been asking him for a prime minister, that he will support such a language in the draft constitution.

On the question of leadership, there are two levels here. This is a question of Arafat, and whether the president himself will be willing to concede some of his own powers and jurisdiction to a Prime Minister. There is also the question of the young guard versus the old guard. The young guard wanting to be able to be integrated into the political system, in particular the focus is on Fatah as a political faction and organization; and the demand by the young guard in Fatah to be able to become members of the institutions of Fatah. For the most part, the institutions of Fatah are controlled by the old guard. Arafat has conceded to Fatah Revolutionary Council that Fatah will have new elections. If and when they do happen, and I believe they will in the near future, the new institutions of Fatah, I believe, will be staffed by young guard. I believe this is going to be a very important development when it happens. But I don't see any other way of addressing the leadership question. Any other way of addressing the leadership issue, I believe, is going to backfire.

Arafat has to appoint a Prime Minister. He cannot be replaced by a Prime Minister. He will have to concede power to the Prime Minister. But, I believe it's important for the system to have a Prime Minister, to change it from a presidential one to a parliamentary one, and that must be a constitutional issue.

Finally on the reform agenda, we have the elections. Again, the issue of elections has been one of the most significant demands by Palestinians for a very long time. Since the end of the term of the parliament and the president, the demand for elections of all sorts have been made. Under the present conditions, if elections are to be held, however, I don't believe they will be held under the current conditions, not in January, not any time soon. Certainly, you will have to change a lot of things before elections do take place. So, I don't expect to see elections in January. In fact, I don't expect to see elections, period. But if we do have elections today, these elections will only reward the forces that have, in fact, been calling for continuation of the violence. They have benefited tremendously from the violence, and they will gain from it. Elections will only consolidate their gains. And so, before we get to elections, I believe the issue of timing is going to be an extremely important issue to address, and we need to make sure that as we get closer to elections conditions are created so that the gains that have been made by those who wanted the violence to continue would actually be balanced by gains made by forces that also want reform and end to violence and end to occupation.

On the issue of what the president, before I get to this issue, let me say why I believe that the process of escalation is the dominant dynamic here. While most societies, most people in most societies do accept the conclusions that I've reached, and that Minister Meridor has reached as well, that the two sides have to live together, and that it is very clear that what the ultimate contours of a deal are going to be. Both societies, I believe, do accept that. However, both societies are extremely angry, and I, of course, don't blame them. I'm from the Palestinian side. In April, I was under full curfew, 24-hour curfew, and sometimes you spend a week, eight days, Nablus spent eight days under the curfew. Let me tell you, spending eight days under curfew makes you crazy, simple as that. This is the factory that makes all the violence, this is the factory that creates crazy people who want to commit suicide. It's as simple as that. If you don't really get it, you have a problem. There is no rational reason for suicide attacks, it is what you do to people to make them reach that point. And if Israel doesn't want to take responsibility for suicide attacks, it is its problem, because if it doesn't take responsibility, it will never be able to address this issue. So people are very angry, and as long as they are angry, they will continue to support violence, including suicide attacks. They will also continue to oppose any crackdown on those who commit the violence, which makes it extremely difficult for everybody to be able to crackdown on any violence among the Palestinians.

The security services do not work in a vacuum. They have been able to work in the past because there was a political context. That political context defines their mission. As long as their mission was to build a state and end occupation, they were willing to do their job, even though it was difficult at times, as happened in 1996, for example. Today, the security services, our security services, have absolutely no mission. Their mission, in fact, if they were to sit down and really agree on a definition of mission, it will be, I believe inevitably, to fight against the Israeli Army, not in cooperation with the Israeli Army. You have to give a political context. If you want a new definition of mission for the security services, it cannot happen in a vacuum. Well, that means political context first before you can get security. But Israelis won't talk politics until they have security, and both societies are very angry, and they will continue to support violence. In the absence of a political context, the default dynamic then is violence, a continuation of the violence.

We're not doing anything about it, by the way. Nothing is being done about it on the Palestinian side. Certainly, I do not expect anything to do be done about it anytime soon. And the Israelis think they're doing something about, again, I think they need to rethink again. Whatever they're doing now, it is in fact the breeding ground for more violence. The next wave of violence is going to be even more lethal and more dramatic than what we have seen so far.

This dynamic, I believe, can only be changed if we are to provide the Palestinian security services with a political context, and if we are to begin to address the threat perception of Palestinians, and Israelis as well, of course. But we need to address these two issues. We can begin to do that if we are to embark on a political process, which I will come to later. For now, my conclusion is, the dynamics, the most important dynamics here is escalation, it is predictable. We know where it is leading us. And it is here to stay, and we're not doing anything about it. And that includes the Americans as well.

Thirdly, I believe the new U.S. policy that has been enunciated by the president on June 24 has done more damage than good. It has made it extremely difficult for reformers to be bold and to move forward. The fact that I'm the only Palestinian here, in fact, if I was to come from the West Bank, I probably would not have come because I would have been under the same constraints that every Palestinian is under today. We couldn't get any Palestinian to come here, not because they didn't want to come, not because they didn't think it's important to be here, they all agree it's extremely important and vital to be here and wanted to come. But the president, the speech of the president made it impossible for them to come. He created a context in which the issue of reform is no longer framed by good governance and the needs of good governance, but rather by the needs of Israel and the needs of the United States. So, anybody who comes here at this time is seen as serving American and Israeli needs not Palestinian needs. Regardless of how misperceived this is, it is the outcome of something that the president of this country has started.

Look at what happened at the reform process, for example, from Arafat's perspective, he already sensed long ago that he is a target. The process of reform is taking place, but he's allowing weak Palestinian figures to carry out the reform process. These are people who do not pose a threat to him. He certainly is not opposed to every single dimension of reform, and he's supportive of some of these reform steps. There is no sort of political will on his part for the reform at any time previous before the new drive for reform among Palestinians, so he's allowing a lot of reform. And I believe that a lot of things will happen.

But he certainly is still the dominant figure in reform, he is doing reform. Reform isn't happening because he is creating conditions to allow it, no, he is, in fact, issuing decrees to reform. Reform doesn't come this way. You don't issue decrees for reform because then you can issue decrees not to reform, this is I believe the irony of the situation that we find ourselves in because of the political threat posed to his own leadership. The two men who could have posed such a threat to him in his own perception are Jibril Rajoub and Mohammed Dahlan not because these two men are very articulate and creative, they are actually, but that's not why he removed them, I believe, but because they had operational control. Under conditions of emergency, these two men can be counted on to act. No other Palestinian in Palestinian politics today wields as much power as these two men did. And now they don't have it. In reality, of course, they still have a lot of influence, but I believe that as part of his reform measures. He has, as a response to the fractures in his own leadership because he has become so insecure, and because he is vulnerable, decided to weaken those who might be seen by him or others as potential American candidates. So the process of reform is going further, but the issue of succession has just become more difficult.

Secondly, on the peace process, I think the president has basically told the Israelis that when and if they make up their mind as to whether they want to keep him or take him away, it is now up to them. The United States is not going to have much opposition to any decision by the Israeli government. I tell you, even though most of the Israeli security officials today oppose killing Mr. Arafat, assassinating him, or deporting him, there is tremendous pressure from the right, and in Israeli public opinion to do exactly that. This is a new development. This has not always been the case. But the focus on Arafat and his own role in all of this has led the Israeli public, I believe, to buy into this. And the Israeli public thinks, well, if he is the problem, then why can't we get rid of him.

I don't know whether as response to today's terror attack we will see the removal of Araf

What needs to be done? I think, as I said earlier, we need to stabilize the situation. I don't think that stabilizing the situation can be done by simply asking the Palestinian security services to do their job. We have to create a political context, which will define their mission, and their mission will be accomplished if they are given the tools to do it. It's as simple as that.at, his expulsion or his assassination, but I believe this is the next element in the process of escalation. I believe it is almost inevitable that Arafat will be expelled or killed. As a result, I believe there will be a major surge in violence, perhaps something of what some Americans call mega-terror, as a response to any attempt to kill or expel Arafat. And as a result, I believe Israel will find itself in a situation in which the issue of continued occupation of the West Bank and Gaza and perhaps bringing back the civil administration, or perhaps the issue of expulsion of Palestinians to Jordan and elsewhere will become an important issue of debate in Israel, and I believe things could deteriorate even further if, at the regional level, Hizbollah, Syria, Iran, et cetera, become involved in all of this. So, again, I believe the president made a mistake in giving the Israelis the free hand to act against Mr. Arafat.

And how do we do that? I believe I share the same concern with Minister Meridor. I'm not sure that we can today reach a permanent status agreement, certainly not with Sharon, even if I believe that Arafat is capable of reaching one, I don't believe Sharon is capable of reaching a permanent status agreement. And, therefore, I believe we need to move forward, even though we may not necessarily do that through a permanent status agreement.

We can get at it through a combination of things. Having a clear vision of where we are going, I believe, is going to be an essential component of that. There must be a vision of where we are heading. This is not only important for the Palestinians, it's also important, I believe, for the majority of Israelis. They need to know what will be the end game. Do we give the Palestinians something today, and what happens tomorrow when they keep asking for more? They need to know what will be the end results.

Similarly, the Palestinians don't want to see occupation continuing forever, and they want to understand what happens if they decide to take this experiment, if you wish, and they have the right to know where they're heading. And since it is very clear almost to everybody where we're heading, it makes no sense to keep hiding away from it. I believe it's important to articulate exactly where we're heading, and I believe the United States government is the only one capable of doing it, but I believe it won't do it. Not this administration, not this president. I don't think he is strong enough, or capable enough of articulating such a position because of his own domestic constraints, because he's tied his own hands with his own domestic constraints. I believe this is essential. If we are able to move, we must have a clear vision that both publics can buy into. I believe it's there, but it needs somebody to articulate it and to present it to them.

Secondly, we need to move on a more do-able plan, something that can, in fact, be sold again to both publics. And that should include, I believe, early things. Early statehood for Palestinians, early evacuation of Israeli settlements, early Arab confidence building measures, and certainly a lot of security for both. The early statehood that the president has spoken about, I believe, isn't something that Palestinians can buy into. The only way he's spoken about this state, provisional state, in his speech was in the negative. The state that will not have borders, the state that will not have sovereign powers, the state that will not have a capital. What would it have? Why didn't the president simply say a single thing of what is good about this state? Why didn't he use positive terms to describe the state? It's not clear to me, and I believe this must be done. We must tell the Palestinians that it is a real state. It's not a make-believe state. It's genuine. If it is to be genuine then it must have contiguity; Palestinians must have control over more land than we do today. And that means the Israelis must evacuate a lot of these settlements that are impeding contiguity today.

You have to remove isolated settlements that are deep inside Palestinian territories. Is Sharon capable of doing it? I don't know. But if he's not capable of doing this, then he's not capable of doing anything. And you also need to have sovereign powers. The state has to be a real state, again, and the only question Palestinians will ask, what happens if I now want to go to Jordan? Do I need permission from the Israelis? If yes then it's not a state.

Now, most Palestinians understand that this is not yet a full state in the full meaning of the word, and they will accept such constraints, but it must be a state that people can see as introducing very, serious, substantial, and real changes in their life. Anything else I'm afraid is not going to fly.

As I said, there must be a lot of security, and I believe this can be done. This can be done because there is a political context now. There is a vision, and there is early statehood. So, it can be done. But it can't be done unless we begin to prepare for it now.

What is the vision the president has articulated about security? It's not clear to me. What will happen? Jordan and Egypt will come to the West Bank and Gaza and provide security? Forget it, I don't believe there is a chance that this will happen. And I think if it does, if somebody is crazy enough to think about it, then they must rethink. This is the quickest way for total regional destabilization. It has to be the Palestinians. If it is the Palestinians, then the Americans need to engage them now. They need to begin now to rebuild the security services. But how are they going to engage them if the president has said he does not want to talk to this leadership, wait until elections. What elections? How can we have elections if there is no security in the meanwhile? How can we have elections if the army does not redeploy out of the areas and allow the Palestinians free movement?

Security, therefore, begins with the rebuilding of the security services, which begins now with the American government engaging the current leadership in order to rebuild the security services. And this country is not doing it.

As part of these early things, I believe it is also important for the Arab world, since the vision that I've described is one that, in fact, is more or less, the vision of the Saudi plan and the vision of the Arab summit. And since we are talking about early things from that vision, then I think it's also important for the Arab world as part of their contribution, to engage in early confidence building measures. As the state is established, as security is provided, as settlements are evacuated, the Arabs need to take confidence building measures that will assure the Israelis about the ultimate intentions of the Arab world. This could begin immediately once these steps are taken in synchronization, simultaneously, in parallel, and this could include recognition of the Israeli passport, for example, allowing El Al flights, et cetera. Things along these lines, I believe, could be very important in sending positive signals to the Israelis.

These are the elements of political context. If we are able to put them together, I believe we can sell them, and I believe this is the way to get to the ultimate settlement that we all agree is there, and we know what it is, but it needs leadership. This leadership is not going to come from Arafat, I believe, because he's too weak. It's not going to come from Sharon, because he's too right wing. And I'm afraid it is not going to come from this country, although it must because there is no other alternative.

Thank you.

MR. TELHAMI: Thanks, Khalil. I think enough has been said about American foreign policy to warrant a longer than expected, perhaps, from Richard, response.

Thank you, Richard.

RICHARD HAASS: It was Dan Meridor who said Americans like things simple. My reaction to that is, he's right, because only a simple American who worked for the government would be here today, given the nature of the issues, and the fact that my boss is up in New York doing meetings on this today. That said, I'll do my best. Shibley asked if there was any space where this process could go forward, and having listened to both the two previous speakers, Dan Meridor, and Khalil Shikaki, I can discern some space. I can discern some area where I think things can go forward. Let me just go through them, and I'll talk for a lot less time so you can relax on that. And we can open it up, or however Shibley wants to run it. And I've got about ten points that I just put together as I was listening to them.

One is clearly that the status quo, the occupation is bad for both sides, whether you're an occupier, or one of the occupied, the status quo is not serving the interests of either Israel or Palestinians. Whether it's casualties, or the cost in fear and lifestyle, the economic costs, the human costs, again, not simply casualties, but the statistics coming out on the Palestinian side about things like child malnutrition, and so forth, the human costs, as well as the financial costs of the status quo, of the occupation, I think, are extraordinarily high. And the fact that there is consensus about this creates at least a foundation for things that might move forward.

Secondly, it's curious sitting up here, just how everyone asserts, and I think it's right, but it doesn't make it any less curious, that there's broad recognition, or broad acceptance of the notion of where we're headed. The two-state solution, what President Bush described as his vision of a state of Palestine living next door to the state of Israel. And the idea that both speakers spoke about it as increasingly, if not quite a given, at least widely accepted and acknowledged and the problem that it is not so much where it is, though obviously details need filling in, but it's getting from here to there.

Thirdly, and this is in no particular order, one of the advantages of being a discussant is you don't have to be particularly structured or logical. The idea that Palestinian reform is not something that's simply being hoisted on the Palestinians by the Americans or by anybody else. I think the desire for Palestinian reform is real. And, indeed, that's what makes it something to take into account, that there is something of a ground swell. I think it reflects the fact that Palestinians understand they've not been terribly well served by their own leadership. Indeed, anyone who doubts what I just said need only look at what the Palestinian reality has been reduced to. And I think there really is a yearning for significant political reform, economic reform and what have you. And I think this yearning will go on.

It's one of the areas I somewhat disagree, and I always disagree with Khalil Shikaki with some reluctance, because I find him one of the wise people in this business. But, I do think that the effort, or the interest in Palestinian reform will continue. And it's interesting how many times people are wrong in predicting the affect of presidential pronouncements. And, indeed, in recent months and years I'd say the Middle East is littered with wrong predictions about the consequence of presidential pronouncements. And one of the things I would say here is that I think the presidential pronouncement will actually stimulate Palestinian reform, because people will see that this is now part of the reality. If Palestinians want to ultimately realize what it is they want, they do need to become an acceptable interlocutor, they will only become an acceptable interlocutor, not only for the United States, but for Israel, through reform. That's simply a fact of life. And I don't think that's going to change.

I've lost count, but the next point I was making is something that wasn't highlighted by either speaker, so here I will be a somewhat creative, if you will, discussant. I think one of the biggest strategic changes that bears remarking on is the change in thinking and behavior in some parts of the Arab world. Palestinians are not alone, or certainly not as alone as they were at Camp David, or anywhere else. The fact that Crown Prince Abdullah put forth the initiative that he did, the fact the 22 Arab governments signed off on it at the Arab League meeting in Beirut means that you now have a context for Palestinian political compromise that is different than what you had before. So I do think if one were to take a step back, and look at all the strategic trends, and yes, we've heard a lot of the negative ones, and I'm not quarreling with most of those, but I do think this is one of the positive ones that bears more than we heard here this afternoon.

Another is the greater degree of international cooperation, again, we meet here today in Washington, at a time when in New York you have the Secretary of State meeting with the Secretary General of the U.N., the high representative of the E.U., the Foreign Minister of Russia, you have the Foreign Ministers of Jordan and Egypt, you also in a couple of days are going to have the Foreign Minister of Saudi Arabia, you've got this international task force to help promote reform, including the IMF, and the World Bank, Norway, Japan. If I've left out anyone I apologize. But, we've come a long way since the United States and Europe and others were at loggerheads over the peace process. This is not to say we see eye to eye on every detail, but there really is, again, I think, quite a degree of consensus and quite a degree of joint effort. And I think this is something we have going for us.

I agree on the fact that we need a political context. I think it exists more than it did before. Not simply the fact that there's widespread acceptance by the Palestinians and Israelis about the desirability, or the inevitability of a two-state solution, but the fact that you had a President of the United States articulate what he did on June 24th. A lot of people have focused on what you might call the front half of the speech, on the reform half of the speech, fair enough. But, the back half of the speech and what it says about where we are trying to drive this process, about the idea of bringing an end to the occupation that began in '67, about bringing about a final settlement in 3 years, and so forth is no less important.

These elements of the speech are no less important. Indeed, it's important people not read the speech selectively or it becomes some kind of a Rorschach test, where people find in it things that either support or reject their particular preferences or interests. And again, I think it's important to read it as a whole, from front to back, or I guess in the Middle East from back to front, but that it should be taken as a whole. And I think we do have, to use Khalil Shikaki's phrase, a vision of the end game. It is there, and arguably more than it ever has been, at least from the American perspective.

Reform in all this is obviously central as well. We've talked about political reform, again, if I'm right there's quite a lot of interest in it, and quite a lot of imaginative ideas are bubbling out there. Institutional reform is important. We've already seen, I think, significant institutional reform on the economic side, on the Palestinian side. I think we will see more, which should then allow, among other things, the transfer of tax revenues, which have been withheld, once we have an accountable, transparent system, which I think we're getting closer to. You'll also have institutional reform more broadly, things like constitutions and judiciaries, and the rest. But, ultimately, in many cases driven by the NGO world, or by efforts by the E.U., and so forth, and these are ultimately the elements of a future Palestine state.

And then obviously you've got security reform. Some work on that has been done. George Tenet and others have taken the lead in it, and obviously that's the priority. If that happens it creates a context where much else can, and I hope, will happen. That remains a priority, and as you will see in coming weeks and months it is just that, it's a priority, because we understand the relationship between security reform and other dimensions of this.

I was intrigued by both speakers talking about the desirability of some sort of early progress, to use one phrase, some sort of weight stations before you would get to a final settlement. It's what we talked about, and the president talked about in his speech, is a state with provisional borders. Obviously, the details of this have to be discussed to fill out some of the positive things that Khalil talked about.

But I think we are seeing a process that does have, again, way stations. It's not simply where we are now, and then in one jump one gets to where we want to be in three years. Obviously steps are going to have to go hand-in-hand. One of them will ultimately lead, I would hope, to a state with provisional borders, but also there will be other dimensions of intermediate progress. And we talked about this, the president talked about it in his speech, the Secretary of State has talked about it many times. I've already mentioned one, which is the transfer of tax revenues, freer movement for Palestinians, a reduction and ultimately an end to closures, Israeli pull back to the September 28th lines, cessation of settlement activity consistent with the Mitchell Commission. This is not all one-sided. But, again, movement is going to have to go hand-in-hand in many of these areas.

I would just add two last points, and then I'll stop. I thought Khalil made an interesting point towards the end about the importance that this not simply be an Israel-Palestinian process, and that consistent with, I would suggest, Crown Prince Abdullah's initiative, and the Arab League decision, that the Palestinians not be the only ones expected to act here. There must be elements of normalization that be introduced in this, again, as way stations or as milestones, call them rewards, call them incentives, simply confidence building measures. But this cannot be, to use an American metaphor, like a balloon mortgage, where everything only happens at the end of the process. Things have to happen along the way to reach the end.

And lastly, and I think events like this are useful, if I may praise my former institution without triggering one of the conflict of interest laws that govern my life these days, there's got to be a public dimension to this process as we go along. One of the lessons I take from our predecessors is that it's never enough to run a peace negotiation privately or secretly. You can do a lot at the table in secret, but at the end of the day leaders have to not simply be willing, but they have to be able to sell compromises publicly. And you're in trouble in most cases in a peace process if it's all done in private, it's all done in secret, and there's been no public preparation.

One of the things I think we're going to need to see here are public statements along the way. We've tried some already, the Secretary of State in Louisville, the president most recently on June 24, but it's also going to be incumbent upon this Israeli government and on the Palestinians to speak not simply to one another but also to themselves, to prepare themselves for the necessary tradeoffs, because obviously in this process as in any other, people are going to have to give as well as get. The compromises are going to be inevitable, and we've heard several of the potential ones discussed here quite imaginatively this afternoon.

I would just lastly say, as if anyone needed to hear it from me or anyone else, just how extraordinarily difficult this is going to be. And this morning was another reminder of it. If this took place in a vacuum it would be tough enough, but it doesn't take place in a vacuum, it takes place against a backdrop, not simply of occupation but also obviously of continuing terrorism and we saw some of it this morning.

And on one hand, it's an argu0ment for the resilience of diplomacy, but on the other hand it's just as much an argument for the necessity to emphasize the importance of getting the security situation right, because without getting a fundamental improvement in the security situation, you simply will not have a situation where diplomacy can survive, much less thrive.

I'm going to leave it at that.

MR. TELHAMI: Thanks very much. What I would like to do is open it for questions and answers and end promptly at 2:30. So we have about 25 minutes. I would like to just put one question on the table for both of our main speakers. On the idea of this interim step toward a common vision, first, it was suggested that there is such a thing as a shared vision. Everyone knows where we're going. I would like to know what you mean, because that's not absolutely clear. We hear that often, but it would be very good to hear what you mean by a common vision.

And, two, if, in fact, Khalil is right, and I think to some extent Dan made this suggestion, that the parties aren't really ready, certainly not these parties, not Mr. Arafat, not Mr. Sharon, are not ready for a final settlement deal, that it's not something in the cards with these two in power, if that is the case, then how is it possible for them to agree on the vision, which obviously is essentially to shape a permanent solution. What is the vision other than the articulation of a shape of a final settlement? And is it possible then to contemplate that there could be a linkage between an interim agreement and a final vision which has to be agreed and articulated before you begin implementing interim agreements. So those are the contradictions that I see, and I would like each one to possibly speak about these issues.

MR. MERIDOR: When I speak of shared vision, I said that if we want an agreement then we'll have a shared vision. And I added that I suspect that maybe some people in both camps, I expressed my doubts about Arafat, do not share this vision. The vision basically as I can try to outline it here is: We have two states, a Jewish state with a substantial 80 percent Jewish majority and Arab minority of Israeli citizens in it, a state called Palestine alongside Israel made largely by part of Judea-Sameria and the Gaza Strip, with borders to be agreed by negotiations. They are not going to be the seven lines that I think Barak offered at Camp David. And I can say it was not rejected, but I wouldn't say more than that. I can say more than that, but not rejected could be the outline on which negotiations could be held.

I think that the idea of refugees, those of '48, or the descendants who defused the establishment of the State of Israel and attacked us and fled or were kicked out or whatever the situation was, the idea that they will return is okay as long as it's in the State of Palestine, not in the State of Israel.

These and compensation offered by Clinton or something of the sort, with the international community, or the rich Arab countries helping. But all these are detailsI think this is basically what we think of.

I'm only saying, and this I think is important, had you come to Israel 16 years ago, there would be one small party of three or five citizens who would support what I'm saying now. Now it's about 80 percent of the Israelis. I'm not sure we had the same process on the Palestinian side, but this is more or less the vision. Now, the details are important. Jerusalem is a detail or the detail, and some other details, like exact delineation.

Now, the other question is, if they don't agree on the final deal, how can they make an interim deal? I think that they, or the leaders of the two sides, may not agree on the final deal. I think there is more readiness in the people. I read Khalil Shikaki's polls in the Palestinian camp, and I think there is more of a readiness there to accept an agreement than what is projected by the leadership. For me it's very clear, the Israeli government is a very open government, and everyone has his own opinion, and what I've said now is my opinion, not the government's opinion. I think there is a vast majority in Israel that share my opinion. Will the government go for it or not? I leave it open, I cannot say with sincerity that I know what the government will do. And even an interim agreement is not something the government, as such, loves to do.

But I take three elements, one, Sharon's statements made about eight months ago of a temporary Palestinian state and a temporary agreement. Peres never offered a Palestinian state unless it was in a final agreement, or Rabin, or Barak, or anybody. He said, let's have an interim agreement. It's a new material that has never been touched before.

And he introduced just recently in a letter to parliament just some days ago, and in a speech at a Jerusalem conference four or five days ago that he accepts the principles in the president's speech, which spoke of a two-state solution. So there is something there. He speaks of a Palestinian state interim agreement.

Now, if you take the Oslo Agreement, if it's still alive, I'm not sure, but there is a third further redeployment still owed by us to them. If we give it, and you create, how can they say, no, we won't take it? So, I don't see a way that they will say no if this is offered in the right way. Will it bring peace? I'm not sure. If we do it in a good way, will it bring a temporary border? It may. It may it depends how we do it.

So, I think there is a genuine way to bring about an interim agreement leaving the difficult issues aside. I don't want to close the door on a final agreement. I have to say to Khalil, I have to assess things in the probability test. My judgment of what I saw is that it's not highly probable we could reach an agreement, but won't say we can't, I don't say no. If tomorrow morning the Palestinian leadership comes to us and says, yes, all this was a joke, we mean seriously that you have a right to be here, we don't want to take Jerusalem from you, refugees will not come to you but to us, let's agree on this percentage, I'm for it. I would love to do it tonight. I only think that a responsible leadership cannot build its assessments on such a low probability. Which is why I said, let's move step by step, and each will have a good stability created later. And negotiation will lead to a final agreement. Wonderful. But if I'm wrong and the conflict will continue, it's better for us, I speak as an Israeli, to live in this situation rather than the unclear situation of the last 35 years.

MR. SHIKAKI: I think the vision has been that both publics have accepted is deemed something along the Clinton parameters, and which essentially is also what the Saudis are saying more or less. Israelis in surveys have indicated, almost 60 percent of the Israelis, have indicated that they would accept the Saudi initiative, and 66 percent of the Palestinians said they accept it. And what was presented to both publics was two states, 1967 borders, full peace and normalization. These were the three basic elements of the initiative that represented to both publics, and it's very clear that there is a majority in support for it, and I believe that this is essentially the vision that we're talking about.

Whether in fact we will be able to sell this vision to the two leaders who will then buy into it, and then go back and allow for early implementation of some of the components is a difficult question. It will not happen without a very determined, strong American leadership. And since my conclusion is this leadership is not there, my conclusion was that the process of escalation is a more dominant one, and it will win. But if and when there is such a leadership on the American side, I believe it has a very good chance of being accepted by both current leaderships.

MR. TELHAMI: Okay. We'll open it up. I have first Ibrahim Karawan.

Q: Thank you very much. A few decades ago, we in Egypt and in the Arab world had this discussion about the Arab-Israeli conflict but with a focus on the element of time. The issue of on whose side did time work, and of course it was comforting for us at that time to believe that time is going to work on our side because quantity will be turned into quality, and all the things that led to enormous disasters down the road.

But my question is, what is your reading, our speakers, of the assessment of the parties if there is a logic of time at work here in one direction or the other, and what it is? I realize there are differences in that regard, but the future and your assessment of that dimension of the elite perceptions in particular, I would be grateful.

MR. MERIDOR: Well, I think you touch upon a very important element of the negotiations. When I sell my car or buy my house, time is dominant. If I know that if I don't sell now, I'll get less money in the future, I'll sell now. I think if I wait I will get more, I will not sell now. So, I think the Arab-Israeli conflict in many ways is characterized by the perception of time on both sides. It is true that the dominant Arab perception is time is on their side because of the basic asymmetry between the big Arab world and the small Israel. I understand it and I think it's very logical. I think it was not illogical and was not irrational. I hoped they were wrong, but it wasn't logic. If you take it from Morocco to Iraq, and what is Israel? Nothing. So, basically, in the long-run, we'll have the upper-hand, the number of people, and territory, and oil, and what-have-you. And this was the dominant Arab thinking. You could hear it by the way in Hafez Assad's speeches every year in March on their independence day. He used to say the comprehensive thing we have is time.

I think that from my perspective, from our perspective, we have done quite well with time. We have strengthened Israel in many ways, economically, the number of Jews in Israel with the immigration to Israel, politically, militarily and strengthened large components that have led up to the strength of the country. And this might have shown to some Arab rulers that time does not always play to their interest, although they thought it would.

This could play why Assad came to talk to us in '91, when, after the collapse of the Soviet Union, the collapse of the Gulf War. So you saw timing, you found a stronger Israel in time. This is why we have time. The late Moshe Dayan used to say I have a phone, let them phone me. If they don't phone me, I'll sit like this for generations.

I have to admit now that I was one of those who said, we don't have to rush. If they don't come to reason, we can stand the way we are. I have to say that because of one element, and I say it openly, the numbers of population and the clarity of the Jewish state, that I don't think time runs only for us. It has different elements and some of them run for us. Time is an objective thing and if you do in time the right things, good. Now for example, the demography of that land made me change my political views over time. And I admit it publicly. It was not a simple thing for me to do, but I say, "I cannot have my vision, because I'll end up with no Jewish state, I cannot live with that. We will not have anything like it." So I needed to change.

This is why I say I can't wait, I will even cut it without a final agreement, because I don't want to continue this situation that I have. But it's not only this, I think that time is very difficult to assess. It's the future, we don't know. But take the present, the suffering of people now, the heavy cost economically, morally, socially, culturally, educationally, and every aspect of life is very, very heavy. I agree it's heavier on the Palestinian side now. Now that we are to blame, I think they are to blame, but I'm not going to go to the blame business here. It's bad, nobody gains. It's not a zero sum gain, everybody loses with time, which is why I think we need it quicker rather than slower, and sooner rather than later approach.

I think it can be done. I think we see it, whether the U.S. does it right or not. I'm not going to debate now what has been said here, or the quartet meeting now in New York.

This quartet thing is very interesting. People came to me several times, they wanted me to listen to the Europeans, and I said to them as a music lover, which is what I really love, not politics, that the one thing I will not advise you to do, is to pay even one dollar to listen to a chamber music quartet that doesn't play the same music. They all need to play the same music. I have a suspicion that the Americans want to be the first violin in that quartet. But, once the Americans set the music, if they all play together fine, wonderful. If everybody plays his own thing, don't listen to them.

MR. SHIKAKI: I'll speak about Palestinians, I think among Palestinians there's a tension, I would say most believe that time is on their side, but I think they realize there's a certain tension. On the one hand there's a tension between land and demography. On the one hand settlements continue to grow and eat up part of what they want to be their own state, on the other hand, as it becomes more impractical for the sides to separate, the issue becomes what do you do. And since Israel puts a much higher value on the Jewish character of the state, Palestinians believe that if Israel does not want to cut a deal now then it will end up as an outcome, not because Palestinians want it, but as an outcome with a two-state solution forced on it, even if it is apartheid. As we become more and more of an international community opposing such things, it will be difficult for Israel to sustain apartheid for long.

On the other hand there is also that kind of fear of radicalization, that with time we become radicalized, our society becomes radicalized, and theirs becomes radicalized, because in the vacuum there is violence, and the violence keeps radicalizing both societies. The Palestinian fear of Islamist control at one time in the future may make it impossible for the Palestinian National Movement to continue to lead towards a state. And on the other side, the radicalization could lead to radical forces in Israel taking over, and the issue of expulsion of Palestinians to Jordan, et cetera, could also become a subject of serious debate.

So that tension I believe exists. And while I would say that most people would still say that time is on our side, I think there is a realization that if we can cut a deal now, let's do it.

MR. HAASS: Just as an observer I find it extraordinary that anyone involved in this dispute thinks in any way that time is on his side. It's hard for me to see how either party is in any advantaged by the passage of time. And no matter what metric you use, each side is paying an extraordinary price for what's going on right now on the ground. Again, whether you measure it financially in terms of lost GDP, in terms of casualties, in terms of the psychology of living with this kind of fear all the time, we can't even calculate the long term consequences yet, and the implications on lost education, nutrition and so forth. So it's what in part gives me a sense of urgency here. People always have this sense, it's an American aphorism, that things have to get worse before they get better. I only have two rules about the Middle East, and one is that things have to get worse before they get even worse. And the idea that somehow people are just going to wake up after things continue to deteriorate, and suddenly that's going to give them the motivation to do what they could, and should have done earlier, shall I say, is a view that's not in any way buttressed by history. So I would really jettison the idea that the passage of time, in any way, to use, again, one of my favorite words, won't in any way ripen this dispute.

MR. TELHAMI: Let me say that I have five names on my list, and we have seven minutes. So I'm going to take the next two together, and then the last three. I have Haim Saban, Mohammed Wahby, David Makovsky, and Marvin Kalb

Q: I have a question for Mr. Shikaki, it's a two pronged question. If Chairman Arafat were to decide, I've had it, that's it, I'm going to do what Ben-Gurion did, I'm going to retire to a farm, maybe to Sharon's farm, I don't know. I'm out of here, I've had it. What do the polls show as far as succession goes? That's question number one. Question number two is, with this 32 percent rate of approval, where does Arafat get all his power to appoint, disappoint, take out, put in, where does it come from?

MR. TELHAMI: And we'll also take Mohammed's question. And then we'll have both of your answers.

Q: Actually, the first question is for Mr. Merridor. Just two quick questions, one for --

MR. TELHAMI: It's never one with Mohammed, you have to understand that.

A: These are quick ones, not comments. He has mentioned that the transition stage, or the interim state, would take from 1 year to 20 years. I would like him to tell me, what will be the Israeli obligation during this interim period? We know what should be the obligations on the Palestinian side, to stop violence. What will be the Israeli obligations during this time? Are they going to continue settlements as they are? Second question, which is I think more constructive than most of the other things, yesterday Minister Ben-Eliezer was in Cairo and he met Mubarak. And they arrived at a formula. I would like to know whether the reaction of this panel to this formula, leave aside President Arafat, don't touch him now, leave it for some time. He is, after all, as quite a number of international people have said, the father the Palestinian people. But, why not jump start the process by having other representatives of the Palestinian people meeting with the Israeli people. At least you have a process underway in which you can alleviate the suffering of the Palestinians on one hand, and on the other, do something serious about violence, instead of wringing our hands, and saying it's a hopeless situation.

MR. TELHAMI: Okay. Thanks.

MR. SHIKAKI: It's difficult to answer your question, we don't know what dynamics Arafat's sudden disappearance will create. I must admit, nobody knows what would happen , if he goes, he has been central in Palestinian politics for so long that we don't know if the disappearance is sudden what might happen.

Q: I'm assuming Arafat chooses to retire.

MR. SHIKAKI: A sudden retirement by Arafat is a question that if we look at what the dynamics are, which is that the old guard has been weakened, and the young guard has been strengthened. People like Marwan Barghouti, for example, one of the leaders of the young guard is now the most prominent, he's in an Israeli jail. But, he gets a 20 percent approval rating, and that's very impressive. I mean, I haven't seen any 20 percent gains by anyone, and he did that in less than a year. I think that's very impressive, and he has the potential of becoming a prominent figure within the young guard. In the old guard there is still the debate about Abu Mazen and Abu Ala . If the process of reform, when Arafat decides to retire, has reached a point where the rules of the game are clarified, and the young guard has found a way in which they can be integrated into the political system, I believe under these conditions we will see a combination of young and old, where one becomes the president and one becomes the prime minister, or something along these lines, in which they can share power.

If he goes without this, if he goes suddenly, and the rules of the game are not yet in place, I believe the outcome is likely to be completely different, and I believe there is likely to be more radicalization, and no agreement on any specific figure, and the fragmentation of the Palestinian National Movement, and militias, rather than a single leader emerging. His power comes from the fact that there is no alternative to him. The young guard is still weak and they do not yet have the capacity to put somebody against him. They still look at him as the embodiment of the Palestinian National Movement, even thought they disagree with him on a lot of things. And the old guard look at him as a source of legitimacy, and therefore they're not likely to really say no to him. And the issue of Arafat, when it comes to Israeli-Palestinian issues, peace process related issues, is different from Arafat when it comes to building a state and good governance.

A lot of people are very critical of him when it comes to good governance, building a state. But, under the current radicalization a lot of people, in fact, think he's too soft on the Israelis, and therefore if he can, and when he succeeds, as has happened after the president's speech, to shift the focus on his role, not in governance and state building, but on Israeli-Palestinian issues, and this is what happened, all of a sudden popularity is up, people forget about his bad record on good governance. And if you're successful in bringing it back to good governance through details, then he begins to lose his popularity.

MR. MERIDOR: I can't predict Arafat's successor, but I know the people there are preparing themselves for an eventuality, of a sort. Not that he will be eliminated, or die all of a sudden. I think the Bush speech made a difference, and Mubarak's attitude and others, that it's not something that people don't even consider anymore. So there are coalitions being built there. I don't think anybody will admit it, of course, but I'm not sure that Mr. Dahlan, and Mr. Rajoubmaybe with some backing from Abu Mazen have never thought of this idea. There are all sorts of coalitions that are building up, but very cautiously, because the man is very deeply criticized, not to his face, but behind his back. But, nobody raises a finger, or says things to him openly. Still, there's this deference to him. He is held quite high.

I must tell you about Arafat, just a story that I need to tell you. I will not mention the name. I was in Egypt some time ago, in a meeting with several people. And in one of the meetings with an important man, we spoke about all sorts of issues, and at the end of the meeting he started pressing me saying, you know, Arafat made big mistakes in the past, but now he's serious, you need to trust him. And I didn't want to quarrel with him, because we had a nice meeting, and we knew each other, so I sort of evaded the issue. And he returned and reiterated, you need to trust him. At the last minute of the meeting, I said, Mr. So and So, you want us to trust him like you do or more? He said, more, more. And then he burst into laughter, and this was the end of the meeting.

MR. TELHAMI: I'm afraid we've run out of time. I apologize to David Makovsky, and Marvin Kalb, and others who had questions to ask. I know that Richard has to run back to the State Department. I just want to take a moment to ask my colleague Martin Indyk to make some final remarks.

MR. INDYK: Thank you very much, Shibley. I wanted to first of all thank the speakers, Dan, Khalil, and Richard, for what was a very thought provoking, fascinating session. We're very grateful to all of you.

Thank you all for joining us today, and for participating in this symposium. I want to thank especially the people who made it possible, from the new staff at the Saban Center, to the Brookings technical people. Much appreciation to all of them for the huge efforts they went to.

Thank you all, and we hope we'll see you again soon.

(Applause at end of the event.)