BLITZER: Welcome back to LATE EDITION.
This week, the United States vetoed a U.N. Security Council resolution calling on Israel to rescind its threat to, quote, "remove" Palestinian Authority President Yasser Arafat. Eleven of the council's 15 members voted in favor of the resolution. But Israel insists the Palestinian leader is the main obstacle to Middle East peace.
For some insight, we turn to three guests: Martin Indyk served as the United States ambassador of Israel and as the assistant secretary of state for Near-Eastern affairs during the Clinton administration. Daniel Pipes is the director of the Middle East Forum and was appointed by President Bush to the board of the United States Institute of Peace. And Fouad Makhzoumi is a prominent businessman and philanthropist from Lebanon visiting Washington right now.
Gentlemen, welcome to LATE EDITION.
And, Daniel Pipes, let me begin with you. What do you think of the Israeli proposal to remove Yasser Arafat one way or another?
DANIEL PIPES, DIRECTOR, MIDDLE EAST FORUM: I actually don't have much thoughts on that, because I try and stay away from the tactical issues between the Palestinians and Israelis and instead concentrate on the strategic ones, which I think are much more fundamental.
BLITZER: But don't you think that would be a strategic decision, if the Israelis got rid of Yasser Arafat?
PIPES: No, I don't, I don't think it's going to materially affect it. I don't think that's what the issue is now.
BLITZER: Don't you think it could have dramatic ramifications in the Arab world, in the Muslim world if the Israelis...
PIPES: It might, but it's not something I want to give an opinion on. I just don't think I, as an American foreign policy analyst, want to get into that particular subject.
BLITZER: Martin Indyk, what do you make? You spend a lot of time studying this situation in the Middle East. What do you make of this proposal to remove Yasser Arafat?
MARTIN INDYK, FORMER U.S. AMBASSADOR TO ISRAEL: Well, it's clearly, from a policy point of view, an attempt by the Israelis to deal with what they see as the source of the problem. But in dealing with it, they've had the actual effect of shooting themselves in the foot rather than shooting Yasser Arafat.
In effect, he has now got 133 nations around the world supporting him in the U.N. General Assembly, a resolution the United States had to veto, a Security Council resolution. And the Palestinians are demonstrating in the street, which they haven't done for years, in support of him.
BLITZER: So you would say this is a tactical and a strategic blunder on the part of the Israelis?
INDYK: Well, it would be a strategically sensible move if it were coupled with a far-reaching, credible initiative by the Israelis, designed to give the Palestinian leadership, who was left behind once Arafat was evicted, with something that they could point to in front of their people to say, "We're not traitors, we're actually representing your interests by engaging with the Israelis on this kind of initiative."
BLITZER: Fouad, what's your assessment of this Israeli threat?
FOUAD MAKHZOUMI, BUSINESSMAN/PHILANTHROPIST: I think, you know, the United States approach since President Bush made the famous, you know, speech about the Middle East last year is the principle of engagement. And by passing through the issues like this and trying to remove Yasser Arafat, I think they're killing and shooting down the principle of engagement.
Every time, you know, we attempt, or anybody attempts, to remove Yasser Arafat, we make a hero out of him. So I think it's about time that we move on with the engagement, rather than to try to settle personal feuds among the leaders.
BLITZER: But he still is, based on everything you know, the most popular Palestinian leader out there.
MAKHZOUMI: Look, you know, at the end of the day, you know, we need to give the people the right to choose their leaders. And obviously, the Palestinians have chosen him, and accept that, you know, when we started engaging him, since 1993, things were moving in the right direction. And I think the ambassador would know that. So I think what we need to do is to bring him back into the engagement, and this way I think we might get a much better outcome out of it.
BLITZER: Daniel, do you want to weigh in on that?
PIPES: Yes, I don't think bringing Yasser Arafat in is a good idea, no better than, say, bringing Saddam Hussein back into the engagement, or Mullah Omar would be a good idea, or bin Laden himself. This is clearly someone who is a supporter of terrorism, who's been engaging in it longer than anyone else I can think of, and the last thing we want to do is bring him into the negotiations.
BLITZER: So why not get rid of him?
PIPES: Well, I think it's a good idea to keep him out. Where he is living, what the state of his health is, is something that I don't think should be the focus of our attention. The focus of our attention should be, what is the state of Israeli-Palestinian affairs, and what can we usefully do to forward that?
BLITZER: And what do you think the United States should be doing now?
PIPES: I think what we should be doing is taking a look at the last 10 years and see that it didn't work. We're worse off than we were exactly 10 years ago.
And the reason we're worse off is that we made the assumption, the Israelis as well, that the Palestinians had as a body politic, as a whole, not just the leadership, but in general, come to accept the existence of Israel, and therefore the focus had to be on working out borders and armaments and water and sanctities and the rest.
I believe we should learn from the last 10 years and come to the conclusion that, in fact, we made a mistake, that that acceptance by the Palestinians of Israel's existence is not there. And we should focus on getting the Palestinians to accept Israel. We, the Arab states and so forth.
BLITZER: Well, let me let Martin—you spent eight of the last 10 years personally involved in trying to get this peace process going. It ended obviously with failure at the end of the Clinton administration. But is Daniel Pipes right, that the last 10 years has made the situation worse than it was before?
INDYK: Well, I think that the failure of the effort has certainly increased the mistrust. It's one thing to try to overcome all of the problems involved in the conflict and reach an agreement, and another thing entirely to try to start again with the agreement broken in every possible way. So it's become much more difficult.
However, I don't agree with Daniel that the hear of the problem is the lack of the Palestinian people's acceptance of Israel. I think the heart of the problem was the failure of leadership on the part of Yasser Arafat.
BLITZER: Fouad, you've spent a lot of time—you live in Lebanon, obviously. You know the Arab world. You travel around there all the time. And you know the Palestinians. Have they come around to the recognition that Israel has a right to exist as an independent Jewish state?
MAKHZOUMI: I think it was clear from October, you know, when the United States, you know, led that conference in Madrid to bring everybody there.
The principle, I would agree with the ambassador that it was made, that the strategic decision was made, but, as we went along and there was a series of failures along the way, whatever trust that was built from '93 till about '96, '97, I think it was lost. And to try to revive it, it takes a different approach than just by making a announcement for a new road map, for a new peace process.
And I think, if we can go back and try to understand why this confidence was lost among [unintelligible] start building that—and I agree, and I would disagree with Dr. Pipes, because I still think that the engagement is important, and we should not rule out anybody from bringing him down to the table.
BLITZER: All right. We're going to continue this conversation. We have a lot more to talk about. … Welcome back to LATE EDITION. We're talking about the crisis in the Middle East with three guests, the former U.S. ambassador to Israel, Martin Indyk; Daniel Pipes, he's the director of the Middle East Forum; and businessman and philanthropist Fouad Makhzoumi of Lebanon.
Fouad, what do you make of this proposal now in the U.S. Congress to impose sanctions against Syria because it's supposedly cooperating in letting terrorists infiltrate into Iraq, among other reasons, and undermining U.S. policy?
MAKHZOUMI: Let's wait to see if it will pass, because, as you know, this is round two that was introduced. Last year it was introduced, and it was pulled back.
Now, if any resolution that will be passed, in order to speed up reform in the region where by we can move on toward democracy, as was declared by the U.S. administration, then I think we're for it. But to any attempt to try to declare these things in order to use force to force, you know, regime changes, I think the experience in Iraq, I think, will take us to take a step back and analyze if this is really the right route that it should be taken.
BLITZER: Is this a good idea, to isolate Syria, Bashar al-Asad, the relatively young president, the son of Hafez al-Asad, is this a good idea for the U.S. Congress now to force sanctions against Syria?
PIPES: I think it is a good idea, and it's important to note, Mr. Makhzoumi is correct, that the first time it did not go through, because of administration hostility. The second time, the administration's indicated it's neutral, and there's now a majority both in the Senate and the House that support it, so it seems very likely it will go through. I do think it is a good idea.
We may need to make clear—we need to become consistent in our policy toward Syria, which has been ambivalent and somewhat self- contradictory over the years. With luck, the passage of this bill will create a consistent policy...
BLITZER: I thought there were some indications, Martin—and you would know this better than I do—that in the past year or two that the Syrian government was actually cooperating with the U.S. since 9/11 in fighting terrorism.
INDYK: Well, the Syrian government has been cooperating on al Qaeda, but what they've been doing—and that's actually been quite useful for us—but they've been doing that in order to relieve the pressure from us on their sponsorship of other terrorist groups, particularly the Palestinian terrorist groups and Hezbollah, operating out of Lebanon. And they've also been in bed with Saddam Hussein's regime during this period.
So they were trying to kind of buy us off with cooperation in one area while continuing policies that were deeply offensive to our interests on the other. Now we're trying to get them to clean up their act in the other areas.
BLITZER: Is this a good idea, though, to impose sanctions on them? Will they clean up their act if the U.S. Congress implements this?
INDYK: No, I doubt it. They're already under sanctions because they're a state sponsor of terror. This increases the pressure, but it's not going to make any significant difference.
The thing that will make a difference with the Syrians is if they come to understand that, on the one hand, they can have a relationship with us which is positive and includes our working with them to make peace between Israel and Syria, but they can't have it both ways. Either they stop their sponsorship of terrorism—we have to engage with them to make it clear to them, as the administration has been trying to do, but I don't think they've been effective at it, that they do have to make this choice. They've got to give up on their sponsorship of terrorism.
BLITZER: Is there any hope that Bashar al-Asad will make that choice and come to the right decision?
MAKHZOUMI: I think he would, because the issue that we've been hearing on the news now, that there have been these Sunni extremists that are allowed through the borders, I may can understand it, prior to the—you know, the war on Iraq and the regime change, because, I mean, they want to get rid of them anyway, OK?
But to tell me now, after the end of April, they would be doing that, they know very well—I mean, you have the 3rd, I think, Armed Cavalry Division regiment that's there, and I don't think it is that smart to do that. So I'm a little bit suspicious of all this situation.
BLITZER: Let's move from Syria to Saudi Arabia. This past week, the New York Democratic senator, Chuck Schumer, spoke out very strongly against the Saudis. Listen to this.
(BEGIN VIDEO CLIP)
U.S. SENATOR CHARLES SCHUMER (D-NY): If you want to know why there are so many militants in Indonesia, in Pakistan and Afghanistan that just hate us, it can be traced to Saudi funding. And the idea that they have stopped it, you know, just when Secretary Snow visited, when all the information is that they have not, is ludicrous.
(END VIDEO CLIP)
BLITZER: Senator Schumer speaking with our own Paula Zahn earlier in the week.
Now, in response—perhaps in response, but actually a day earlier, the U.S. treasury secretary, John Snow, said this, referring to the Saudis, based on a visit he had had to Riyadh: "Their close oversight of charities to guard against money laundering and terrorist financing sets an example to all countries engaged in the war against terror."
BLITZER: Daniel Pipes, Saudi Arabia setting an example in cooperating with the U.S. in the war on terror?
PIPES: I don't think so. I'm more with Senator Schumer, that there is a deep sympathy in Saudi Arabia for the sponsorship of these radical movements. They have been doing it now really for 30 years. There's an infrastructure around the world. And what we've seen is a very minor pulling back at certain areas by the government, by the monarchy in Saudi Arabia. Not nearly enough. A very small retreat.
BLITZER: What about you, have you seen a shift in the Saudi stance?
INDYK: Yeah, I think it's a start. And we should at least give them credit for starting. But it's a very big problem. The Wahhabi extremists are part of their governing system. They run the education, social welfare institutions within the government. So—and there's a pact between the royal family and the Wahhabis to stay in power. So it's very—you're talking about a really fundamental structural change that has to take place.
We're going to have to work on this. We should, on the one hand, praise them when they do something good, but make it clear there's a hell of a lot more they've got to do.
BLITZER: Fouad, last word on Saudi Arabia.
MAKHZOUMI: I think we need to differentiate between the Saudi individuals and government. There is no doubt the royal family did not mind that this funding should take place onto (ph) religious reasons, but I think after 9/11, they have been attempting, as a royal family, to take the right steps. And what we hope for is they put the right procedures so that they will stop individuals from actually sending money.
BLITZER: All right. Fouad Makhzoumi, thanks very much for joining us. Welcome to Washington.
MAKHZOUMI: Thank you.
BLITZER: Martin Indyk, you're always in Washington, never mind.
Thank you very much for coming in.
Daniel Pipes from Philadelphia, in Washington, welcome.
PIPES: Thank you.