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From Gaza to Beirut and Tehran [Rush Transcript; Federal News Service]

Speaker: Sallai Meridor, Israeli Ambassador to the United States
Presider: Martin S. Indyk, Director, the Saban Center for Middle East Policy, and Senior Fellow, Foreign Policy Studies, the Brookings Institution
June 6, 2007
Council on Foreign Relations

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M.ARTIN S. INDYK:  (In progress) -- highly distinguished record of public service in Israel, most notably as the chairman of the Jewish Agency for Israel and the World Zionist Organization, a job and a challenge that he took on for six years, from 1999 to 2005.

I say it was a challenge because running a Jewish bureaucracy is a real challenge to anybody's managerial skills.  But Sallai not only managed to provide leadership at a very important time in the process of Jewish immigration to Israel, but also managed to reform that bureaucracy at the same time.

Prior to that, Sallai served as an adviser to Moshe Arens, whom many of you will remember as the Israeli ambassador here during the time of Menachem Begin's government.  But after that, he became minister of Foreign Affairs and minister of Defense, and Sallai was his closest adviser in those days in both capacities.

I had the opportunity to work with him and was always deeply impressed, as I believe you will be, by his analytical skills, his understanding of the nuances, and his ability to represent his country in a very sophisticated way.

Sallai was born and educated in Jerusalem.  He earned his bachelor's degree at Hebrew University in Jerusalem.  He served as an intelligence officer in the Israeli Defense Forces.  His home in Israel is in Kfar Adumim and he is married to the wonderful No'a.  Is No'a here?  No.  Too bad -- his better half.  And they have three beautiful daughters.

Sallai, we're very glad to have you here.  He's going to give us a formal address that is going to be concise, and then we'll have a chance to go to Q&A.

SALLAI MERIDOR:  Thank you, Martin.  It's a great honor to be here at the Council on Foreign Relations; a pleasure to be with Martin again.

I will talk today about a lot of problems and issues.  And I'll use Martin's American term, "challenges."  But before I jump into this, I would just like to bring you some perspective.

I saw that the Council on Foreign Relations was established sometime in the early '20s.  And I was thinking about dealing with all the problems that I am going to be sharing with you with the perspective of where we were in 1920 and where we are today.

How many Jews were in the then-Palestine in 1920?  Where were the Jewish people in 1920?  Where were we in 1940, and where we are today, with all the difficulties and problems and challenges and opportunities, with a strong state, with a strong army, with more than 7 million people living in Israel, with a vibrant society, with sometimes too-vibrant democracy, with an economy that, in a year of war, is growing 5 percent and this year is going hopefully to grow again more than 5 percent, with Israeli young people in any high-tech, biotech, nanotech, any tech that you can think of.

I've just been to Silicon Valley.  I met with a few companies.  I met with Intel and was shocked to hear -- positively, I'd say -- that more than 50 percent of the $40 billion sales of Intel annually are based largely on Israeli development.  So I'm going to share with you difficulties and problems, but please do me a favor; see them in this context of a great success.

And those years, one can see from the '20s -- one can go even before -- were years where Jews were looking and Israel was looking for any opportunity to make peace with their neighbors.  And I could go year by year, event by event, but I would not take too much of our time for history.

I would just like to make this clear.  There is nothing that Israelis want more than reaching peace with our neighbors.  It's for us a core value.  It's what we educate our children about.  It's more than an interest.  It's largely what we are all about.

And we've made a major decision for a two-state solution.  We know it's going to be painful, but this is where Israel wants to go.

This desire for peace is facing some major negative trends in the region.  And I think where you look at every theater, you should not separate it from general trends that take place in the region, from rise of extremism and religious fanaticism to the appearance of non-state actors with asymmetric threats, with the rise of terror, with the decline of deterrence against terrorists already willing, desiring to kill themselves while killing others, with some serious negative implications of -- (inaudible) -- with regimes that are not getting stronger and with the imminent threat of a combination of fanaticism, terrorism and nuclear military capacity.

So when we are trying to move for peace, on the one hand, we should realize that we are doing it in a very, very troubling environment.

Iran is, to a large extent, a reflection of those trends, a contributor to those trends, and the beneficiary of those trends.  And you see them today playing in different regional theaters -- I assume in Afghanistan; we all know in Iraq, in Lebanon, with the Palestinians, in Syria.

And we see in Gaza a buildup of a terrorist state built by Iran.  We see in Lebanon a rearming of Hezbollah, again, backed by Iran. Just to make sure that they cannot quote me, loudly, at least.

We see military buildup in Syria, we assume backed by Iran, which we have not seen since '73.  And at the same time, Iran is moving on with their military nuclear program, which, if not stopped, we believe would create a nightmare to Israel, to the region and to the entire world.

I would like to try and briefly share with you some thoughts about how we look at some of those challenges and the choices that we have.  And there are many, but we have short time, so I'll really try to talk about two or three.  And I know that Martin will ask me about the third or fourth.

First, Iran.  I'd say, if you told me you had one issue to talk about, I'd say Iran, Iran, Iran.  I think I don't have to explain to you the essence of the threat.  There are those who question whether there is still time on belief that they have not yet crossed the threshold of mustering the technology.  They are moving there.  There is still very little time, but there is still time to prevent and stop.

The question is, what are the necessary elements, the necessary conditions for having a significant chance of the Iranians to reconsider their program?  And I'd say these are mainly three, all necessary, hopefully sufficient.

One is dramatically increase the pressure, especially in the economic field.  They seem to be significantly vulnerable economically, living on oil exports, buying the people by heavy subsidies, having difficulties in maintaining the level of oil production, having internal consumption growing because they sell, for example, gasoline for 40 cents a gallon; and then have less that they are left with in order to buy the people to keep -- to buy quiet.

And they are so much dependent on world investments in order to improve the infrastructure of their oil industry.  And they are -- (inaudible) -- gathering, if you want.  Their nuclear scientists are driving every morning to work on imported gasoline.  And the world continues to fund this madness.

So one major necessary condition is to dramatically increase the pressure.

Second, they should assess that this pressure is sustainable, that this is not a matter of a few months or a matter of a year and a half that America is united around the issue of not letting Iran go nuclear militarily and that parts of the world are joining with America in this effort.  And here, too, I hope that they do listen to the debates in different places in America, because they would hear some messages that are very important.  I doubt that they see today in the world what they need to see if they have to (reconsider ?).

And thirdly, they should know that if the above fails, all options are on the table and that they would not be allowed to have nuclear weapons.

At the same time, just one comment.  While building up the pressure, I think it's as important -- Shalom, Congresswoman -- it is as important to send a clear message to the Iranian people that this is not an anti-Iran campaign, that Iran is a welcome nation in the family of nations, that this issue that the world has a problem with, to prevent them from being manipulated by the regime as if this was a campaign of the world against Iran or against Islam.

Second issue is, is there something to do, against this background, with the Arab world?  Seemingly, there is a convergence, maybe unprecedented convergence, of interests between Israel and Arab countries.  When they talk to you, I assume, sometimes even on the record, but mainly off the record, if they tell you what we hear, you will see pretty much the same analysis of developments in the world.

Their concern about Iran is, in many cases, as deep as ours.  And the question is whether this coalition of concern -- some may call it the coalition of fear -- can this be transformed into a coalition for peace?  Is the fact that we share an enemy can make us getting closer to being friends?

We are trying our best in order to explore this possibility.  This is why our statements with regard to the Saudi initiative are focusing on their positive elements rather than on the other elements.  This is why, when the Arab League decided to send us a delegation, even though we hoped Saudi Arabia and other countries would be included in dialogue with Israel, and they decided to send only Egypt and Jordan, our response was, "Come."  They said, "You come."  We came.  We asked them to continue the dialogue.

This is why our prime minister issued a statement calling upon all Arab leaders who are interested in peace to get together.  He said, "I'm going to go any time, anywhere, to sit together with you in order to see how we can together work towards peace."

We're not sure if it's doable or not.  We don't want to miss the opportunity if it exists, not only to better confront Iran, but to widen the circle of peace and to help the moderates amongst the Palestinians reverse their choice.

And that's my last point before Martin kills me, which has to do with the Palestinian situation.  There have been major setbacks, from the rejection of Camp David to four years of terror to, after disengagement, using Gaza as a terror base rather than as a beginning of statehood, to freely electing a terror government to having a unity government based on not recognizing Israel to the reality on the ground, which is very, very troubling -- very, very troubling.

And it's really so tragic, because you have an Israel that is ready for the compromise.  I know that we will argue some issues, but on the principle, which is you cannot understand how difficult it is even to say that we are ready to go to our children and say, "We are going to divide the land; we are going to give up forever on areas of the land of Israel that were promised to us in the Bible for peace," and it's so tragic that when this is the situation on our side, that there isn't such a situation on the other side.

And the question is what to do?  So one could suggest, you know, "There is nothing you can do.  It's their choice; let them make the choice -- change the choice.  When they wake up, let them call us and we'll be ready to talk."  Not an option for us.  We are not bystanders watching this theater.  We are players on the stage.  We are impacted by the events.  We have to tell them and we have to tell our children that we are trying everything in order to change the situation, as limited as our possibilities are.

Second would be, "You know what?  Forget about Fatah and President Abbas.  Let's talk to the Mafia.  You have weak police.  Let's strike a deal with the Mafia.  Let's talk to Hamas."  We believe we could have short-term gain with a tragic strategic loss, for us, for the Palestinians, for the region.

Another suggestion could be, "Let's jump to what is referred to as final-status negotiations."  "No, let's bypass reality.  Let's create a dream and then pull everybody from the reality to the dreamland."

We think that the chances are very limited for that to succeed.  And the risks of failure are very high.  So we are trying to do something that we believe is responsible and constructive, which is, on the one hand, trying to prevent things from deteriorating, and at the same time, participate in an effort to facilitate for a change.  We cannot make the change.

To prevent things from deteriorating would take sealing the border from Egypt to Gaza, which is the 14 kilometers which are the basis for the Iranian-backed Hamas buildup.  It would take keeping the pressure on Hamas locally and internationally, and it would mean preventing temptation that would end up exporting terror from Gaza to the West Bank and building and creating in the West Bank a second Hamas -- (inaudible).

Moving forward, creating horizons, would include trying to strengthen the forces that are related to the moderates, would include trying to improve, under difficult conditions, quality of lives of Palestinians in ways that the credit would go to the moderates and not to the extremists.

It would hopefully include much more people-to-people engagements to deal with stereotypes and demonization.  Hopefully it could include working on the young generation and educating, to try and stop the hatred or education for hatred and bring some messages of hope, of peace to young people, not of jihad and istishad; at the same time, projecting in the horizon by constantly repeating our readiness, willingness, desire to have a two-state solution, two states living in security, peace and dignity, one next to the other, that nobody can manipulate the Palestinian people, that Israel doesn't mean that this is what we want to get to.

One may consider building an international fund that would wait there for the Palestinians; if you want, a Marshall Plan for the future Palestinian state, that they know that the world and the Arabs and everybody else is serious about giving them a fair chance; and as I said, working with the Arabs to try and bring them to the point that they help Palestinians make the compromise, giving them the legitimacy and the context of making compromise.

So as you see, Martin, I'm going to close my remarks at this stage.  I would just add one sentence.  We cannot overlook a threat.  And at the same time, we cannot miss an opportunity.  We have to drive carefully with open eyes, but with a constant attempt to drive forward.

Thank you.  (Applause.)

INDYK:  Thank you very much, Sallai.  That was an excellent way to kick off the discussion.

While they're miking you up, I wanted to talk strategy for a moment, since you made the argument that Iran was your primary threat and challenge.  There are really two points that emerge from your analysis, in my mind, and I wondered if you would respond to both of them.

The first is that a strategy of sanctions as a way of putting economic pressure on Iran depends more than anything else on cooperation from Russia.  Without Russian cooperation, the Security Council cannot get the kinds of sanctions that you are talking about as the preferred way of heading the Iranian nuclear program off at the pass.

And yet today, yet again, we have headlines in which the tensions between Russia and the United States have been ratcheted up over an issue that is apparently related to Iran.

And so the question is, what's the priority here?  Is it to defend Poland against the potential threat of Iranian missiles or to prevent those missiles from getting nuclear weapons through cooperation with Russia in the Security Council?

The second issue is one that's being discussed in Israel these days as we talk, which is this notion that if you want to put increased pressure on Iran, you need to try to increase its isolation.  And one way to do that would be to engage Syria in negotiations on the basis that you could somehow split Syria from Iraq and that that would advantage your overall strategy of pressure on Iran.

So I wonder if you would respond to those two suggestions.

MERIDOR:  Okay.  First of all, the assumption that economic pressure is largely dependent on U.N. Security Council resolution is not certain.  Much, much, much can be done by like-minded states who would just act responsibly, like the United States has acted.  If allies of the United States were to stop funding the Iranian economy -- worse, the Iranian oil industry -- big time, with credits from European governments -- basically to an extent offsetting the American pressure.  The risk is going high and they are providing security for the investments.  So much can be achieved by the American economy, as has been the case in previous instances in the past, and much can be done with cooperation with countries that are heavily investing today in the Iranian oil sector, and they should stop if they're really serious about protecting their own children, which may take me to the other part of your question -- their own children -- because the Iranians are talking openly about their concerns, so to speak, to the standing and the status and the rights of the Muslim minorities in Europe, and one can guess what Ahmadinejad may mean when he speaks about his concern about those minorities, and because they're developing missiles that would cover at least Europe. 

Russia is very important and much effort, we believe, should be made in order to get Russia to cooperate in this area.  They're not so important economically as much they're -- as they are important in other fields.  The fact that they sell arms, for example, for -- to Iran is definitely -- doesn't send the right message to the Iranian military in terms of the price of the nuclear program.  I don't want to make the calculation for America about strategic defense in Poland.  My assumption, by the way, that this is not in order to defend Poland but in order to defend the entire Europe and America with a second opportunity for (it ?) against missiles that can come out of this troubled region.  Unfortunately, this is general, not related to this issue.  With this threat you cannot say, "Okay, only about attack or only about defense or only about deterrence."  We don't have good solutions on any of the fronts, and only a mix of different elements can provide a degree of success and not necessarily 100 percent degree. 

On your second question, if it is possible to separate Syria from Iran I think it is important.  Again, I would not suggest that Iranians' potential to make troubles in the region is only exclusively dependent on Syria's cooperation with Iran.  They have today the relationship in Lebanon that are not dependent on Syria, and interest in Lebanon and groups that are together with and the same as with the Palestinian Authority let alone the trouble that they're doing in Iraq.  So I -- again, I said I'm for it if it's possible.  Still, I would keep the expectations at the realistic level, and still, if they could be separated from Iran it is -- could be an important positive step.  The big question is whether this is possible.  Their behavior indicates just the opposite.  You, Martin, are a much better expert than me in Syria and with much more experience.  If one has to assess their intentions by their behavior, the outcome is very negative.  They're doing this rearming, which we don't know the purpose of.  They're heavily investing in strengthening Hezbollah and trying to undermine senior government.  They're making Hamas an Islamic jihad -- hosting their headquarters.  They are trying to kill every movement towards peace.  They are probably sharing much responsibility for the fact that our abducted soldiers are still abducted and the families have no news about the whereabouts and their fate.  They do not miss an opportunity to do something bad. 

What we are looking for, and we are looking for in different ways, is an indication from the Syrians that they're ready to change course.  If you want a la Sadat, which on the one hand said no more war, period -- he didn't say on condition of ABC -- he said no more war.  Was -- came to Jerusalem, was ready for peace, broke his relationship there then with the Soviet Union, realigned with America.  We need to see not a la Sadat behavior.  We don't expect that exactly.  We would suffice with much less, but some indication -- some indication there is a movement in a direction that would result in the strategic outcome that you are looking for, which I share the view would be positive if achieved.

INDYK:  Thank you, Sallai.

Let's go to the audience.  I would ask people when they want to speak and ask a question to wait for the microphone and then to clearly identify themselves please.  Yes -- up the back.

QUESTIONER:  Thank you.  Elise Labott with CNN.  Hello, Ambassador.

MERIDOR:  Hello again.

QUESTIONER:  I was wondering -- this talk about strengthening the forces of Abbas and the moderates in the Palestinian territory.  It seems to be that that's only further fueling the tensions between the Palestinians and Gaza, and even seems to be arming Fatah for an ultimate showdown or a civil war even with Hamas, and do you think that he's ready and prepared to do that?  Do you think that there's the political will to seriously crack down on extremists and his -- I'm not sure if it's a lack of capability or a lack of political will.  And in this instance do you think that in some way the international community is enabling him to continue to use his weakness as a strength?  Thank you.

MERIDOR:  First of all, we are not strengthening or help strengthen or allow the strengthening of such forces because we think it's something that is good and the Palestinians don't want it.  It's clearly a desire by the Palestinian chairperson to have his own security forces being strengthened.  Are there risks involved in that?  Yes.  Are we taking some of those risks?  Yes.  We don't know what will be the endgame in terms of the usage of those elements that are being given to him.  But still, we think that given the entire picture it is right to take a measured risk on our part based on his desire to have his forces being strengthened and, again, with open eyes -- with open eyes.  Is it worth doing on his part? 

Now, I'm advisor here -- not representing him.  If you look at what happened in the last round of clashes and fighting and strife between Hamas and Fatah, you'd see how in a mafia-like style Hamas basically showed everybody in the neighborhood who is the godfather, and they were getting into a presidential (God base ?) like the jewel of Abbas forces killed eight people, then went to the home of the head of the Internal Security Service of Abbas -- and as you can understand, in these regimes the head of the internal security is not less important than in our democracies -- and they knew he wasn't at home, but they killed his five bodyguards in his living room, like leaving a head of the horse in the bed, and that was it.  If he's not getting stronger, I doubt that he would ever be able to do anything.  It is not sufficient to have a military buildup. 

By the way, why I think so is somewhat supported by the way Hamas is reacting to it.  This is -- when they started with this buildup before Mecca, they brought inner fighting that led to Mecca because they wanted to stop it because they understood the threat on their part, and this was the second round yet where the Dayton plan started to initially work, and they kind of said, "Forget about it."  Is it a necessary element?  I believe yes.  Is it sufficient?  I'm sure not.  Without a political will it won't happen.  Is there a political will?  I don't know.  We are trying to create the conditions for a political will if it exists to manifest itself.  But we cannot make the choice for the Palestinians.  We can only try to help create conditions for them to make another choice. 

INDYK:  Thank you.

Congresswoman Jane Harman, we're very glad to have you here today.  You have the next question when the microphone comes to here in the front.

REPRESENTATIVE JANE HARMAN (D-CA):  Thank you very much.  I just want to observe how lucky our government is to have had you in public roles, Martin, and now to have you at the Saban Center, and how lucky the government of Israel is to have the Meridor family in various public roles.  I returned two weeks ago from my seventeenth trip to the Middle East as a member of Congress, and at the World Economic Forum at the Dead Sea I had a long conversation with His Majesty, King Abdullah, about Israel and Palestine.  He said that -- and we've heard this from Jordan before -- the moment is ripe -- now is the time -- both sides are exhausted, but that the new element -- there were two new elements, at least to me, in what he said. 

One, he said that the Arab neighborhood is definitely ready to step up and play a major role in helping get to peace.  I hadn't heard that before, and certainly part of the motivator for that is the enemy of my enemy is my friend.  That means that Iran has pushed them together and pushed them to think, I believe, that making peace now is critical in terms of protecting everybody from Iran.  But at any rate, he said what would be crucial is for President Bush personally -- not just through his secretary of State -- to make clear that he personally wants the parties to come together in the next months.  Abdullah's point was is if this year goes by and we are into the '08 election season in America that will never happen.  It has to happen this year and presumably in the next few months, and he also thought that could have a positive impact on Iraq, because if all these neighbors come together and they're focused on this and this maybe resolves the impact of that, could be positive on Iraq.  So my question is have you heard this?  What do you think would be the impact of President Bush personally taking some action here?

MERIDOR:  Well, first of all, we are I'd say very privileged and appreciative of the positions of King Abdullah in terms of responsible leadership for peace.  We share many of his concerns and we cooperate in many ways in order to deal with threats and promote chances of some progress towards peace.  Secondly, I go to the latter part of your question -- in my view, America can be very helpful in different ways, and it is helpful in many ways.  I think that President Bush with his '02 two-state solution made a major leap in terms of giving the Palestinians and the Arabs what they were looking for America for many, many years.

And at the same time, nobody from the outside can replace the parties.  And the problem that we're all facing is that we don't have in the Palestinian camp leadership that is empowered to make a compromise.  When they went to the ballots they vote for the -- voted lately for the opposite.  When they created the unity government, they basically agreed not to recognize Israel by refusing to accept this notion.  When they signed their platform for the government, they gave a veto power on any future agreement between Israel and Palestinians to different ways to the extremists.

So this is not about what we want or what America wants.  You need two -- plus one, if you want -- for this tango.  The "plus one" is America, but you cannot do it without the two.

Now, the Arabs could be of immense importance if they were to support the moderates in an unequivocal way and not hedge their bets.  And I mentioned before what -- for example, Egypt could do more in terms of just stopping the smuggling, which makes all the efforts -- and it doesn't matter who does the effort -- if it's Dayton or Secretary Rice or Bush or an Israeli general or prime minister.  This is all futile if at the same time Iran continues to build Hamas -- maybe even much more.

So this is a contribution that the Arabs would make.  The Arabs could make a contribution by front-loading readiness for compromise.  If I were Abbas and if I were ready for compromise, I would be very concerned not to be left alone and not just promises that we'll approve of a compromise.  They could say now, "You know, we understand that there needs to be a compromise on the issue of refugees, that we need -- we understand, and this is a fair compromise.  The Jews would only be able to return to their part of the land of Israel, which would be the state of Israel -- would not be returned to the other part of the land of Israel.  Palestinians would be able to return to their part of -- they call Palestine, not into the state of Israel."

They could front-load it, make it much easier for him to then make the compromise.  They could say, "We have Arab, Muslim interests in Jerusalem, but we recognize at the same time the Jewish people have interests in Jerusalem, and we believe that we will have to compromise."  If they said so, it could change the discussion in the Palestinian society.  It could have made it much easier for every Palestinian leader who is ready to make the compromise to make the compromise.

So there is much the Arabs could do.  And as I said, we are trying to engage with them in order to see if we can create some movement and some support on their part -- not only on the bilateral level, Israeli-Arab, but in helping the Palestinians reverse their choice.

INDYK:  Barry Schweid, please.

QUESTIONER:  Wow - that was very provocative.  It sounds like you're looking for an Arab license for Israel to retain part of Jerusalem.  But I don't want to go down that track.  It's a little early.

Want to understand, what are you doing literally -- besides cheering for him, calling him a moderate and a partner -- what can you tell us explicitly that Israel is doing to strengthen Mahmoud Abbas's hand?  And where -- I assume you think it's logical, but by -- what impact do you think this has among the Palestinian people?  In other words, do you think they will be pleased and supportive of Abbas because he's working with Israel,

who for 50 years they haven't seen as -- really as their best buddy?

MERIDOR:  Okay.  Maybe your second question should advise me that

I don't need to give you specifics on your first one -- (laughter) -- because if it is counterproductive, maybe I should just keep it vague.  (Laughter.)

QUESTIONER:  (Off mike) -- get into that.  But what are you doing -- you keep calling him a moderate, your partner -- you obviously prefer him to -- you know, to Hamas and these new groups that are -- that are emerging every day, like the new group in Lebanon.  What is it -- what is Israel doing -- it's doing a lot to say you support him and you see him as a man of peace.  That's support.  But are you doing anything literally to help him overcome a very popular

resistance?

MERIDOR:  Okay.  We are doing different things -- some of them I would mention here.  One has to do with unbelievable restraint we have kept so far in order not to play into the hands of the more extremists in the Palestinian society by trying to export internal strife into terror against Israel with great difficulty and pain.  And I don't know for how long we'll be able to do it.  But we have our towns in the south under a barrage of

rockets.  I don't know what anybody would do if any city in the United States had to receive 300 rockets over three weeks -- how much restraint any society could have kept.  So first of all, keeping restraint to the best extent possible.  And I say I don't know for how long we'll be able to be so measured in our responses.

Secondly, keeping the pressure on Hamas in every way we can, both directly and indirectly.  And indeed the international community has a major role to play in a positive or a negative direction.  But for the Palestinians or for Abbas, I believe it's critical that the Palestinians understand that if there is another option, it is through him.

Thirdly, we were as cooperative as our security allows us with the plans to strengthen his forces.  I wouldn't get into details more than that.  We -- we're working with him to improve quality of life for Palestinians in areas where he believed very important to him and we believed we could cooperate with.  And we'll continue to do so.

We -- regardless of the fact that terror continues on an hourly basis, we want to continue and engage with him on a regular basis, first to further make sure that we assist in every way possible for him to bring a positive message to his own people and take care of improving their conditions, and in assuring that through him the Palestinians understand that they have a bright horizon, with a state, living next to Israel.

Unfortunately, by the way, a meeting that was scheduled for tomorrow between him and Prime Minister Olmert, for the moment has been postponed.

INDYK:  By?

MERIDOR:  By Abbas.  But a previous meeting that was supposed to take place has been postponed to tomorrow's meeting that a few hours ago has been postponed for a later date, and we are pushing for having the later date as soon as possible because we believe that this is of help to him.  I hope it is.

You know, we're doing what we can without endangering severely our security.  But as I said before, outside players can help.  They can do the opposite.  We are trying to be as helpful as possible.  They cannot replace the Palestinians in the decision.  We cannot draw on the both of them.  They have to make the decision that they want peace, that they are ready for compromise, that they're ready to give up victimhood, which is a commodity that they fully own, for statehood, which comes with great responsibility.  We can help; we cannot make it for them. 

INDYK:  Okay, we only have 10 minutes left.  A lot of people want to ask questions.  So I'm going to take them two at a time, if that's okay with you -- quick questions and quick answers. 

Two over here first.  Jonathan?

QUESTIONER:  Hi.

INDYK:  Please identify yourself.

QUESTIONER:  Jonathan Paris, a former Middle East fellow here at the Council and currently a senior advisor to an Arab businessman in London. 

I want to get back to the Iran brief, in particular that Iran calendar.  You mentioned that Iran is getting close to mastering the technology for making nuclear arms.  What is the red line for Israel?  Is it that date when they master technology, or is it when they produce sufficient amount of enriched uranium to make a few bombs, or is it some later date?  In another way of putting it, is it in your interest not to give me a clear answer there, but to keep that kind of hazy so as not to force you into a position ahead of time?

INDYK:  Yes, please.

QUESTIONER:  Hi, James Sosnicky from Small Enterprise Assistance Fund. 

To follow up on this question, you talked about removing or to stop demonizing the other side.  And you know, Iran is a country that my president has literally called evil.  So to take that off for a second, if you were advising the Iranian government and sitting in Tehran looking that you've got a NATO army on your eastern border, you've got the entire American Army on your western border, you've got an open-secret nuclear-armed Israel, you know, on -- you know, a little further away.  You've got a nuclear-powered Russia, you've got nuclear-powered Pakistan.  And you've got a country in the U.S. that hasn't always acted in the Iranians' best interest, like when we overthrew Mossadeq.  So what would you advise?  What is -- and the one country -- and on that Axis of Evil list, the one guy that didn't have any nuclear deterrence was invaded; the North Koreans are still in place.  So what would you advise from purely an Iranian self-interest point of view, a security point of view?  What is the rational course of action, given all of these threats that surround them, for them to proceed?

INDYK:  Okay. 

MR. MERIDOR:  Okay.  About the timeline with Iran, first of all, I have to make a caveat to my previous statement.  All that I say is based on what we know and is not based on what we may not know.

And based on what we know, we believe that they are not there yet.  If this is the case, it means that there is still some time until they ride bicycles, if you want again.  And then it's a matter of their decision, and only a matter of quantity not a matter of quality.  And we believe they are doing different things in parallel, so what would have taken them, maybe three to four years could take them a year or two from that very moment.  This is why many people today in the intelligence communities believe that the worst-case scenario is early 2009 for a bomb, which would be between one and two years -- let's say a year and a half -- from now should they cross the threshold now.  I cannot tell you where -- when they will cross the threshold.

This moment of crossing the threshold is a critical moment for Israel, but for the world as well, because then it's only in their hands.  What Israel will do, when Israel will do, I hope you'll forgive me for not sharing. 

On the issue of -- where I am advisor to the Iranian leadership, when I was younger it was -- we heard the -- if I were a Rothschild -- (laughter) -- that's even a more realistic assumption or suggestion than the Iranians would like to see me as their advisor -- I cannot get into their head in the sense of what -- how they see the world.  I can tell you how I see their situation:  I don't see any significant threats to Iran.  Were Iran to withdraw their military nuclear plan, I think that the world is even ready to accept that Iran would have a civilian nuclear capability without the fuel cycle.  So even on that between serious issue and (mental ?) issue, I think there is a readiness to engage.

I don't see how they advance the future of Iranians in going this route.  But it's really not for me to give them advice.

INDYK:  Okay.  Barbara Slavin, please.

QUESTIONER:  Hi.  Barbara Slavin from USA Today. 

Another Iran-related question in terms of the sanctions.  You spoke about Russia.  What about China?  Is it possible to isolate the Iranians, to put real pressure on their economy and on their oil industry without dealing with China?  I'd also add India, perhaps in that regard.  Is there anything that Israel is doing to try to convince them?  And given the energy needs of those two countries, is it possible to convince them not to do business with Iran?  Thanks.

INDYK:  Okay.

And we'll take the last question.

QUESTIONER:  Robert Gard.

No one's mentioned the settlements, which I gather is a main sticking point to the Palestinians and other Arabs.  Would you address that issue?

MR. MERIDOR:  Okay, maybe I'll start with the second one then move to Iran.

I think that the perception that settlements were/are the major issue should be revised or be given a second look.  Not only there isn't any significant settlement activity are taking place in Judea and Somalia or the West Bank, but whoever looks at the issue from -- I think objectively from the Arab side, should see two precedents:  one, that when Israel made a peace deal with Egypt, it dismantled its settlements in the Sinai; second, when Israel decided to do disengagement, it uprooted some 8,000 people from Gaza and left not only no soldier, but no civilian in Gaza.

And when they hear two statements made by the leaders of Israel, it is clear that in the context of peace with security Israel will have to make yet another very painful -- very, very, very -- I cannot even hardly talk about it and perceive because we're talking about different numbers -- and by the way different areas; we're talking from the heart of the individual.  But it's clear to everybody who listens to the statements made by the leadership of Israel.  The sad thing is that, after having withdrawn from Gaza, after having destroyed 25 or 27 settlements, after having removed every settler until the last one, the Palestinians, instead of using their territory at least, which was left Jew-free -- Israeli free -- for starting to build their sovereignty and exercise independence and build for prosperity for the people, chose to use it as a terror base against Israel.  So given what they have done when we removed settlers and given what we did in terms of trying to promote peace, I think that the issue of whether settlements are the sticking point or not deserves a second look.

Last, on the issue of economy in Iran, well, you know, the best scenario would be that everybody in the world would act responsibly on this issue.  And I use this term "responsibly," and I would say that acting differently is utterly irresponsible.  So the best -- the best scenario would be that everybody -- and we should try to get everybody to cooperate to the best extent possible.  But if you ask me, is full cooperation of all the partners is a necessary condition to apply very meaningful pressure on Iran, I'd say no.  I'd say the American economy is playing and can play a much bigger role.  The same is true for Europe.  There are some things that are irreplaceable or with no substitute.  They need both technology and money. 

But more should be done in order to convince the Chinese and the Indians and others -- and by the way, in this case, the Gulf countries could play -- I think Jane asked before, what could the Arabs do?   It's one thing to say that there is a threat, and it's another thing to confront this threat.  And they have -- take the Saudis -- a major ability to, first, if they want to, satisfy the Chinese needs or much of the Chinese needs.  If the Chinese decided to take certain actions, they have the capacity to increase their production significantly.  And at the same time, they could tell countries, you know, we are ready to substitute, and if you are not ready to make a responsible choice -- it's your choice, but you cannot do business both with Iran and with us.  So the Gulf countries who are rightly making much quiet noise in their way on the Iranian issue, could do much better to help America get more partners to participate. 

But just to go back to what I said, responsible and irresponsible, I really think that we are on the verge of -- not one genie; so many genies getting out of the bottle because it's not going to be only Iran -- that we are running the risk of leaving our children with a world, a situation, a nightmare, with no recipe in mind or in dream how these genies could be brought back to the bottle.  And this is now that the genies are about to get out of the bottle, not three years from now.

INDYK:  Well, on that dire warning, I want to thank the audience very much for some very stimulating questions.

Especially thank you to you, Sallai for an excellent presentation.  Thank you very much.  (Applause.)

MR. MERIDOR:  Thank you.

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