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Restoring the Balance: A Middle East Strategy for the Next President

Speakers: Richard N. Haass, President, Council on Foreign Relations, Co-Chair, Board of Advisors, Restoring the Balance: A Middle East Strategy for the Next President, Martin S. Indyk, Director, The Saban Center for Middle East Policy, The Brookings Institution, and Gary Samore, Vice President, Director of Studies, and Maurice R. Greenberg Chair, Council on Foreign Relations
December 2, 2008
Council on Foreign Relations



New York City, New York

GARY SAMORE:  Well, let's just go ahead and get started.  I want to thank all of you for coming.  I'm Gary Samore, director of studies here at the council, and this event is going to be discussing a new report produced by the council and the Saban Center at the Brookings Institution: Restoring the Balance.  This is on the record -- I want to remind everybody as usual, including myself, to turn off your electronic devises.  I'm going to start the meeting by saying just a few things about the production of the report and then I'm going to turn to Richard Haass and Martin Indyk to summarize some of the main conclusions and recommendations, and then we'll have a question and answer period and end up about 7:30.

This report grew out of a conversation that Martin and Richard and I had last year about the challenges that the next administration will face in the Middle East, and we are all familiar with the list of difficult and very interrelated issues, including two wars, conflicts that haven't been resolved, nuclear proliferation, terrorism -- just about all the horrible things in the world have found a home in the Middle East in a way that seems to reinforce each other in a negative way.  And we decided that, given those challenges, it made sense to pool the intellectual resources of the Council on Foreign Relations and the Saban Center and try to produce a series of recommendations for the next administration.

Overall 15 scholars and experts from the Saban Center and the council worked together to produce this report, and you'll see the names on the cover.  We split up our group into small teams to cover six issues: Iraq, Iran, the Arab-Israeli conflict, nuclear proliferation, terrorism and political and economic reform and development.  And then, to top it off, Richard Haass and Martin Indyk wrote a summary chapter that draws from those other chapters that deal in more detail with those specific issues.

Let me just say a few things about the production of these chapters.  The teams as much as possible traveled out to the Middle East to interview people and conduct field research.  In addition -- and I think this was something that really improved the quality of the product -- we established an independent and bipartisan advisory board, which included some very prominent former U.S. government officials like Brent Scowcroft and Sandy Berger, as well as leaders in the public and private sector to review the results of the research and provide us with comments on -- I'm happy to say some of those people are here in the room -- Jay Snyder, Bob Lifton, Joan Spero -- maybe I've missed a few, but I want to thank all of the board members for really putting in the time and energy to read the chapters and provide very cogent and helpful comments, which I think substantially improved the work.  Let me emphasize that the work remains the views of the scholars, and neither the board, nor the Council on Foreign Relations or the Brookings Institution as institutions endorse the conclusions and the recommendations of the report.

So with that, let me turn to Richard and Martin, who as I said wrote the overall summary chapter -- they also have an article coming out in Foreign Affairs  that covers much of the same ground, and if that isn't enough you can catch them on "Charlie Rose" tonight and on "Morning Joe" tomorrow morning.  So they're going to be all over the media talking about these very important issues.  Let's start by talking about the title: Restoring the Balance.  I'm going to ask Richard to talk a little bit about what that means in terms of the overall context of U.S. foreign policy and how the Obama administration will need to deal with the Middle East in the context of the other problems that will be on president's plate.  Richard?

RICHARD N. HAASS:  Well, thanks, Gary.  There it may be difficult in the sense that administrations can choose what it is they do -- they can't choose what it is they inherit.  And it may be a desire, for various reasons, to reduce the prominence or the amount of calories that the Middle East require or absorb, but it may not be something you can fulfill.  The Middle East has a way of inserting itself on foreign policy agendas, and as we say in the study, the Middle East is essentially not Las Vegas -- what happens there won't stay there.  And if you ignore it, it's unlikely to be -- the neglect is unlikely to be in the benign form, it's likely to be quite destabilizing.  (Inaudible) -- as much as the Obama administration might like to reduce the prominence of the Middle East, that may prove difficult.

So that type of balance might be hard to achieve, though we can talk about it later -- I do think it raises particular questions, though, for the secretary of state, the president and other about how they divide up their time and how much time they personally decide to devote to the Middle East -- to the certain aspects of it -- as opposed to delegating that to others.  And that is a strategic question, since in government often your most precious resource is time and attention.  The other balances are perhaps more obvious.  I think the biggest one that led us to the title dealt with the relationship between diplomacy and other instruments of American national security - in our view, collectively, that the diplomatic instrument had perhaps gotten something of short shrift, or not gotten the emphasis that it deserved.

Secondly, a balance between what the United States does alone unilaterally and with others.  And a big thrust of the study is not simply that we ought to place greater focus on diplomatic instruments -- but if these have any chance of being effective they've got to be much more multilateral.  That's simply a fact of life.  Certainly, a sense of balance -- which I think is quite interesting -- which is the era in which Iraq has dominated American Middle East policy like it has over the last five or so years is likely to fade.  And I think you'll see a rebalancing -- with the degree again of Iraqi dominance will go down, which will open up possibilities for placing greater attention and greater emphasis on other issues.

And lastly in the way of balance, I think we call for -- and I think you're likely to see it, so that we both give analysis and prediction -- is probably less emphasis on words like democracy or democratic transformation.  Certainly less emphasis on elections early on, and probably -- and Isobel Coleman here, who wrote thoughtfully about this -- you'll probably see a recalibration of how much we talk about it publicly, what kind of standards or goals we set for -- or guards that we set for ourselves -- the place of democracy -- of elections in the democratic process and so forth, and I think there you'll see a rebalancing as well.

SAMORE:  Martin, the term "balance" is often used to refer to U.S. policy towards the Israeli-Palestinian conflict.  I'm not sure we had in mind any change in that balance, but I want to ask you about that particular issue, because a cynic would say that president after president has tried or not tried to resolve the problem and we have very little to show for it.  And the question is:  Is there something that President Obama can do differently that might bring about a more happier result this time around, or is this just a hopeless problem from hell?

MARTIN S. INDYK:  Yes -- (laughter). -- And yes.  It's funny that you should ask that question, because that's exactly the question that Charlie Rose --

SAMORE:  Because I told him to ask it -- (laughter).

HAASS:  It's not a coincidence.

SAMORE:  Rich is giving away my secrets again.  (Laughter.)

INDYK:  Sorry.  First of all, let me just say that this is a historic occasion when the Brookings Institution and the Council on Foreign Relations actually do something together.  I think it's never happened before, so I'm very grateful to Richard and Garry for seeing the value in it -- (chuckles, inaudible) -- I think a very useful exercise, and one which came about because of the sense of the challenge that President-elect Obama is going to face in the Middle East.  That goes directly to the question of what to do about the peace process.

The balance that we're looking to restore -- really in some ways has been restored by the Bush administration in its last year in office.  For seven years it essentially decided that it didn't want to be part of trying to resolve the Israeli-Palestinian problem, or as Secretary of State Colin Powell said to me when he came out on his first visit to Israel - I was ambassador to Israel for the first six months of the Bush administration -- he said to me -- he put his hand on my arm, as his wont to do, and he said I think we're just going to park this one for awhile.  And I tried to suggest that parking it on a steep hill -- (laughter) -- without a handbrake wasn't going to work very well, but that was the prevailing view and it prevailed for a long time in the Bush administration.

And it was only in the last year, the president and the secretary of state went around to see the importance to American interest in the region to be trying to resolve this problem.  And even though I think the president made a mistake by suggesting that a peace treaty could be achieved by the end of the year, nevertheless, the effort to try to put in place a process has been, I think, to some extent, successful.  And, therefore, the handover from the Bush administration to the Obama administration is, ironically, going to be very different from the handoff of the Clinton administration, which devoted all eight years to trying to resolve this problem to the Bush administration, because, of course, we -- and I include myself in that -- handed over a process that was in flames, that had failed and in a sense it's not surprising that the Bush administration took flight and said, we're not going to deal with this.

What the Bush administration has now done this past year has been to put together a fairly credible process, an architecture, final-status negotiations, the effort to rebuild Palestinian security capabilities and the Palestinian economy in the West Bank, the effort to get both sides to live up to their roadmap commitments when it comes to freezing settlement activity and, on the other side, dismantling the infrastructure of terror and, on a fourth level, to engage the Arab states in the process.

I think what was missing and what the report advocates is a fifth level, which is Israeli-Syrian negotiations.  There I think the Bush administration was blinded by its ideological approach and missed an opportunity to create an architecture that would have given the Palestinian effort, I think, greater success.  And both the Israeli government and the Syrian government wanted the United States being involved but the Bush administration would not hear of it and the Turks took over.

And the Turks have done a credible job of basically getting the parties to the point where now they each have to answer a question.  The Syrians have to answer the Israeli question, which is, in the context of peace, what will your relationship be with Iran, Hezbollah, Hamas?  And the Israelis, of course, have to answer the age-old Syrian question, which is what will be the line of withdrawal from the Golan Heights?

That sets up a very different trade to the trade that we were trying to negotiate in the Clinton administration when we were heavily engaged in the Israeli-Syrian negotiations, which was a trade of territories for peace.  And the problem with that was, the Israelis never really believed that the Syrians were going to give them anything but the coldest of peace and the Golan Heights was a very nice strategic high ground and it could grow with (wine ?) there.  And so, Israeli prime ministers saw the strategic advantage of it but were always worried about whether they could bring the public along.

Trying to do territories of strategic realignment is attractive, first and foremost to the national security establishment in Israel, the idea that you could actually take the Syrians out of this alignment with Iran, Hezbollah and Hamas, reduce Iran's ability to threaten Israel on the ground, in the north and in the south of its borders: Gaza and Lebanon -- and, in the process, create a very different line-up in the Arab world -- that is of the Arab powers being at peace with Israel rather than at war with Israel.  So that's the kind of deal that every Israeli may even can understand, you know, because Iran is a big threat, and to adhere to it really -- which is a threat positive.

So I think there's an opportunity from that point of view.  I think there's an opportunity in terms of the Syrian desire -- going to the letter if you like -- to at least engage in a process.  And that would actually now have a beneficial effect in terms of helping the Palestinians by pressuring Hamas, Hezbollah, to make it more possible for the Palestinians to move ahead.  So if the Obama administration can create -- pick up the architecture that exists, add a level to the Syrians and finally, engage the Arabs far more actively in the process -- they are there, they have offered Israel -- that they will make peace if the Palestinians and the Syrians problems are resolved.

But it's a declaration of intent -- the Arab League Peace Initiative.  It is not a mechanism for their engagement.  The challenge is to convert that.  I don't think they trusted the Bush administration enough; there was too much water under the bridge for that to work.  But they are fearful of the Iranian attempt to spread their influence into the Arab heartland, they want to show that there is an alternative to violence, terrorism, defiance of the international community and that fear is, I think, a good motivator to turn the effort to promote a two-state solution, which is highly problematic these days, given the weakness of the Palestinian institutions of governance -- given the way it's divided demographically and politically between Fatah and Hamas.  To turn the two-state solution into a 23-state solution -- to engage the Arab states in what becomes a comprehensive approach is, I think, something that needs to be done and can, in that way, move us in a positive direction when it's proven so difficult to do in the past.  But in order to do all of that -- I'll set you up for your next question -- we need to do something about Iran.

SAMORE:  You set up our next question perfectly.  Richard, another area where the Bush administration has tried and failed is to stop Iran's nuclear program.  What do we propose -- what do you propose in this book -- Obama can do differently to be successful?

HAASS:  Let's take a step back.  It's important to recall that for several years, the Bush administration's policy towards Iran overall, including its nuclear program, just essentially hoped that regime change would solve the problem.  And various forms of quote, unquote, "engagement," including ideas like bringing Iran into the WTO, having a dialogue with them and so forth were rejected on the grounds that diplomacy itself would become something of a lifeline for a regime that we're seeing on its last legs.  I mention this because valuable time was lost.  By the time the administration realized that regime change was unlikely to be in the offering, Iran had gotten much farther down the path of its nuclear program.  And also oil prices had begun to go up.  So plus Iraq, its principal adversary, was in chaos and Saddam Hussein had been removed.  So the strategic situation had dramatically shifted in Iran's favor by the time the administration basically came to the conclusion that diplomacy, perhaps, was the best course.

We can talk about it on whatever level of detail people like but the U.S. involvement in diplomacy was largely indirect or actually through the Europeans.  Offers were made to the Iranians to essentially incentivize them to stop and get out of the uranium enrichment business.  In return, they were offered certain financial incentives or basically de-sanctioning was the principle incentive; and it hasn't worked.  Iran has progressed and it's actually gotten quite far and by the time Mr. Obama becomes president -- in under two months now -- Iran will be pretty close to having produced enough enriched uranium that could make probably a primitive device.  They're farther along, based upon the IAEA report that came out the other day, than people -- they're farther along than we thought when we actually did a lot of the writing of this.  Still, that said, we believe that diplomacy is the best path to go because there is a chance it could work and we believe the fact that oil prices are now one third what they were a year ago actually increases the possibility that diplomacy could work -- creates greater incentives for the Iranian leadership to find ways to reintegrate themselves into the international economy, to get out from under sanctions that are having greater effect.

So what we basically propose is a diplomatic package that basically tells Iran, here's what we, the international community require of you when it comes to placing significant limits, or better yet stopping their involvement in the business of uranium enrichment.  Here's all the benefits that will come your way if you were to do this and here's all the penalties that will come your way if you refuse to do this.  Now, obviously if this going to be successful, there need to be talks themselves and we suggest that the United States should be prepared to do it -- akin to what it does with North Korea -- drop the preconditions.  But it also needs to be truly multilateral -- that is the only way that you could, in particular, come together with the package of sanctions or disincentives that would impress the Iranians and this means in particular getting the Russians and the Chinese and the regional states on board.

Now, we don't know whether this would work.  We hope it would.  But as we can see it, there's only two principle alternatives to this.  One is to use military force against Iran in what would be a classical preventive military action.  There would be a -- likely would slow down the Iranian program by several years of delay.  On the other hand, it's also probably true that the Iranians would reconstitute their nuclear capability in ways that would make a second attack considerably more difficult and the Iranians would likely retaliate long before then, be it with terrorism, be it with Hezbollah, Hamas, be it in Afghanistan, be it in Iraq, what have you.  That would obviously have implications for the price of oil, the international economy -- it's not an attractive option.

The other alternative is to live with it and this is essentially what's called -- it's the management school of proliferation.  And we do things through declaratory policy, warnings to Iran about red lines, you would provide security assurances to various neighbors, you would try to discourage further proliferation, you would introduce missile defense and so forth.  And you continue diplomacy in the hope that over time, you could persuade the Iranians to roll it back.  Again, this would be costly approach.  You would have to live with an Iranian nuclear capability of either at the weapons level or close to it that would probably embolden Iranian foreign policy.

Other countries in the region could be tempted to follow suit.  And most important, we see an example of it India and Pakistan -- on the next time there's a crisis in the Middle East -- and the one thing I know for certain is there will be future crisis in the Middle East -- if you have an Iran and an Israel, each of which has a nuclear capability, think about what that would mean, potentially, for regional instability.  The temptations to go first in such a situation would be enormous.

So where we come out is -- it's a bit of the Yogi Berra approach to foreign policy -- when you reach a fork in the road, Yogi's advice to take it.  In this case, we reach a fork in the road of either using military force or acceptance of it -- we don't want to take it, which again gets us back to the diplomatic option.  So what this is, is a strong argument for trying diplomacy -- a U.S.-led diplomatic effort that's comprehensive, and as Martin pointed out, wouldn't be an isolation, but would be in a larger context of other diplomatic efforts that would be going on -- plus against the backdrop of declining U.S. involvement in Iraq, which would free up some U.S. forces, which again, I think, would send a useful message to Iran.  Again, I don't know if this would work, but given to me, the unattractiveness of the two other courses -- of either using military force or living with an Iranian nuclear capability -- it is certainly worth going down this path and seeing if it might work.

SAMORE:  Thank you.  I'd like to open it up now to the audience -- make you part of the discussion.  We've got a lot of talent here in the room.  Yes sir, you can start.  Please stand -- name and affiliation.

QUESTIONER:  Hi, Lane Greene from the economist magazine.  The question is for Martin Indyk mainly, but -- and it's about Syria.  There's a lot of reasons, we all know, that Syria shouldn't logically be allies with Shia, theocratic, so on, so on and so forth, state when it could be involved in a broader Middle East that's a lot more secure and even ensure its own survival.  The specific question is what might, in your opinion, Syria demand or expect in Lebanon?  Will it expect what the West might consider an unacceptable price in terms of domination of Lebanon?

INDYK:  You know, it's one of the reasons why I think it was a mistake for the United States -- for the Bush administration -- not to be involved in the negotiations between Israel and Syria because essentially Syrians want to reestablish their dominance in Lebanon.  And the Israelis don't really mind if that means that they're going to take care of Hezbollah.  That's the concern that Israel has in Lebanon -- who rules in Beirut.  You know, they weren't satisfied, for a long time, with the idea of the Syrian troops taking care of business.  So left to their own devices, they are likely to sacrifice Lebanon's independence -- the Israelis and Syrians -- on the altar of a peace deal.  We now -- we were quite willing to do it too, including back in the 1990s because we saw that as part of the deal -- when the Syrian troops were there, there was no Lebanese effort to get rid of them.

But now, we've taken on a commitment to Lebanon's independence and I think we need to live up to that.  And by being involved in the negotiations, we can basically say to the Israelis and the Syrians, guys -- yeah, Lebanon is not on the table.  What has to happen here is that Syria as part of the peace deal has to stop Hezbollah.  That pipeline from Iran through Damascus International Airport has to be cut and that's something that can be verified.

But on the other hand, the disarming of Hezbollah has to be a Lebanese responsibility with the international community involved.  And the second way to ensure the greater independence of Lebanon in this whole game is to restart the Israeli-Lebanese negotiations.  After all, if you put this into a comprehensive package where there's an effort on the Palestinian track and on the Syrian track, there's no reason why -- and the Arab states are involved through the Arab League Peace Initiative -- there should be an Israeli-Lebanese negation as well, and that can help the Lebanese government deal with Hezbollah's so-called justifications for retaining its arms relation to minor territorial issues and dispute.

Now, come back to -- so basically what I'm saying is that we need to stand by our commitment to Lebanon's independence.  Now, inevitably the Syrians are going to have influence in Lebanon -- they do now.  And Lebanese will say, you know, we accept a kind of thin-lined style arrangement with Syria.  But the Syrians themselves seem to accept that they're not going to go back to putting troops back in Lebanon -- I say seem because we can't really be sure of what their intentions are.  But they say that what they want out of this deal is to go on -- that they're not asking for Lebanon to be on the table.  I suspect what they also want is to be out from under the threat of the tribunal -- prosecuting the Syrian leader for the assassination of Rafik Hariri.

But essentially what I'm trying to get at to answer your question is, I don't think that Assad's legitimacy, which is ultimately what's at stake because it's a minority Alawite regime sitting on a Sunni majority population -- I don't think he sees his legitimacy as depending on regaining what he had lost -- what he's given up in Lebanon.  I think you need to see -- and I think he sees it in a different way, that if he gets the Golan back, he regains what his father lost and he compensates for what his father gained in Lebanon and he lost.  And that will legitimize him domestically and make it possible for him to shift out of this uncomfortable alliance for the reasons you've suggested -- with the Iranians.  And I think one of the reasons that the Syrians mended their relationship with Turkey and used the Turkeys to mediate -- the Turks to mediate, I should say -- was because --

HAASS:  Happy Thanksgiving.  (Laughter.)

INDYK:  The Turks give the Syrians some Sunni depth -- Sunni -- big Sunni country on their border.  It doesn't have to be Arab, but it helps, then, because they're in this awkward position as a minority regime ruling over this Sunni majority.

SAMORE:  Professor Sick.

QUESTIONER:  Hi, Gary Sick, Columbia.  Richard, there's another use of the word balance that is often referred to that you didn't mention in your talk, and that is the balance of power, the standard way in which a lot of diplomacy is actually done.  Sitting beside you is somebody who denounced the idea of balance of power in the gulf, back in 1993 in a famous speech, and that was in fact the Clinton administration's policy, was to say, we don't need it, we can do it ourselves.  And then the Bush administration came along and doubled that in spades in terms of preemptive approach and we are now the dominant power in the gulf.  Do you think, as part of your diplomatic solution, the United States would be willing and able to go back to the actual practice of balance of power in the region, rather than the United States, in effect, taking all of the responsibility upon itself?

HAASS:  I just need to challenge the premise of your question, you know, that we're as dominant as you suggest.  I actually think the United States has been one the principal strategic losers of the last half-dozen years.  I believe our strategic position in the region has dramatically deteriorated.  Anti-Americanism is high, our prestige is low.  Iran, as you know better than anyone Gary, has been a great strategic beneficiary of changes over the last few years.  Militias are -- Hezbollah is much stronger within Lebanon.  Moderate Palestinian leadership has lost control of at least half of its territory.  We're, if anything, more dependent on the decisions that governments in the region do with their dollar holdings.  I could go on, but all things being equal, I think the large -- the arrows, if you will -- have largely pointed away from American dominance.  I would think the goal is not to reestablish an Iran-Iraq balance; I don't think that's viable.

So I don't think Iraq is either able or necessarily willing to play that role, though I do not discount totally anti-Iranian Iraqi nationalism; I think it's alive and well, but I also -- akin to what Martin said a little bit about Lebanon, Iran does -- geography counts.  And Iran will have influence in Iraq, in part because of geography, in part because of other things that it's doing within the country.  I would think that in the Middle East, now, there's too many fault lines to think about it as a classic balance of power, but I think what we want to do is strengthen certain tendencies and forces.  And we want to strengthen the tendencies toward conflict resolution, which is what Martin's talking about, I think, with Syria.  We want to strengthen a Palestinian actor so the situation ripens so that, potentially, you have an interlocutor that is real to deal with.

We advocate a drawdown, not a withdrawal, from Iraq so we don't destabilize that situation.  We argue for some engagement with Iran and so forth, so I see this more as a stabilization program; I don't see the pieces for the balance of power.  We can't do it.  There's limits to what we can physically do, and we don't have partners -- it's not like we have in Europe or Asia.  We don't have partners, I believe, who can play a traditional balancing game.  The only one we have is Israel; that's a strong partner in some sense, and I believe Israel is also constrained in what it can do, given the dynamics of its relationship with its neighbors.

So rather than think in balance of power terms in the classic sense, I really think what the United States needs to do is change some of the dynamics and change some of the momentum in the region.  And I don't want -- (inaudible) -- Gary, because it's an interesting question you asked, and we haven't had this conversation, so I think that now, we can let a hundred flowers bloom here.  You can also defend yourself on that speech you gave, all those years ago.  (Laughter.)

INDYK:  Well, I gave the speech not declaring it as predictive, but declaring it as a fact.  We were the dominant power as the result of the First Gulf War, which you were responsible for.  (Laughter.)

Q:  In the positive sense, I hope you mean.

INDYK:  And right about now, again, in those places, we have become completely discredited, because first, we relied on Iran and we ended up with the resolution and then we relied on Iraq and we ended up with the invasion of Kuwait.  So it was a mugged game.  We need to go back to balancing, but in a different way, I think.  And that is that we need to reestablish the credibility of, dare I say it, the American way in the Middle East, which is the way of peace and reconciliation and compromise and hope for a peaceful and freer Middle East.  That vision is something that I think Barack Obama can paint credibly and effectively.  But in order to give it real credibility, he does need to align the forces in the Middle East and in the international community, behind that vision, and that's why pursuing comprehensive peace is a very important part of that.

But at the same time, what's different to when I gave that speech was the policy then, as you know very well, was to isolate Iran and the policy that they're recommending in this report is not to isolate Iran; it's to say to Iran, if you want to be part of this, you're welcome, but you're going to have to leave your efforts to promote violence and terrorism and to defy the international community when it comes to your obligations under the NPT -- you're going to have to leave that at the door.

But, you know, if you want your interests to be respected and you want to be part of the regional order that's not dominated by the United States, but is shared by the United States and the other powers in the region, then you're welcome.  And I think that's critical to the whole approach, is that engagement with Iran has to be tried at the same time as we're trying to promote Israeli-Syrian peace and we're trying to move the Israeli-Palestinian process forward.

HAASS:  Can I just add to that?  I had thought about it again, Gary, and so listening to your question and Martin, it seems to me one way to answer your question, and it's not a way I would support -- it's very dangerous to think out loud when you're sitting in a place like this -- but it would be that people could say that the balance of power that the United States could encourage would be a Shia-Sunni balance of power.  And I think that would be a terrible way to go because too many societies could rip apart across those fault lines, and it would at least sow the seeds for permanent conflict in the region -- much better to try to bring Iran and to integrate Iran on rules and terms that they could potentially live with and we could potentially live with, rather than trying to perpetuate some sort of the Sunni-Shia divide.  That, it seems to me, would be very short-sighted.  That said, you know, there is enough concern about Iran that I believe we could have -- to some extent, use that to promote some of the changes in the region that we'd like to see, but I do not believe establishing what would not, in any case, be a balance, but a faux balance, if you will, ought to be the goal of American foreign policy.

INDYK:  I just don't want us to come off sounding naive here in the sense that it may not work with Iran, and it probably won't work with Iran.  But if it doesn't work with Iran, trying and failing -- and -- (inaudible) -- has actually said this himself, and we make the point in the report, too -- trying and failing will make us much more credible in terms of the other things we will need to do if we have to move to a policy of containing Iran or deterring Iran because the effort to engage them sincerely failed.

SAMORE:  Yes, sir, in the front row, here?

QUESTIONER:  Good evening, Stephen Cass (ph).  I'm interested in the collaboration that you described in the breadth of the five subjects.  I wonder if there isn't a sixth that hasn't been mentioned, which is the environmental stresses in the region and the commonality of interests that the peoples, and ultimately the governments, do have in addressing that.  It is the most water-stressed part of the world; climate change is going to accelerate that markedly.  And I wonder whether, in the report or here, you have any thoughts as to the opportunities from collaboration based on that?

SAMORE:  Since we have Isabel Coleman here, who co-authored the chapter on economic and political issues, perhaps you could address that and also talk about the ticklish issue of how we try to promote democracy in the region after the Bush administration's very ambitious and, again, ultimately unsuccessful efforts?

ISABEL COLEMAN (Foreign policy analyst, Council on Foreign Relations):  We -- (chuckles) -- we didn't specifically address the issue of water, but it's an excellent question.  And when you look at a map of the Middle East, much of the water originates, actually, in Turkey, and flows, then, southwards and is siphoned off along the way.  And it will be, definitely, a real territorial issue, and it will be a friction point among the countries, particularly, in that part of the region.  And we just -- it just didn't make it into the report, but it's something to look at.

QUESTIONER:  (Inaudible, off mike.)

MS. COLEMAN:  Well, I think it's an opportunity for collaboration; it's also an opportunity for more friction, too.  I see its potential for friction more than I do for collaboration right now, particularly when you look at the huge hydro projects that are being planned and in the works, which will take water away from the downstream countries in the search for hydroelectric power.  So I see longer-term friction being set up as opposed to collaboration right now, although we can always try to turn it around and make the glass half full.

HAASS:  I think it would have to be included in any process of reconciliation.  So, beginning with Israelis and Palestinians, you're going to have to deal with aquifers and all that stuff.  Obviously, any Israeli-Syrian agreement -- there's going to have to be a water dimension.  It's inconceivable, now, that ultimately you can isolate questions of water from questions of peace.  Question on climate change more broadly -- I look forward to the day when the Middle East agenda revolves around climate change.  That would be my definition of success.  And I -- well, can you say something more broadly, since you've got the microphone, about this whole question of reform and just, sort of, about where you came out?

MS. COLEMAN:  Right, well, where we came out in writing this report on reform is that economic and political reform are still just two very critical issues that relate directly to American strategic interests.  And that's -- although the whole freedom agenda and democratization has gotten a bad name for a variety of reasons -- that you really can't throw the baby out with the bathwater on that.  It behooves the United States to continue to work with our allies in the region to push along a path of economic and political reform -- and the two are, in many ways, inseparable.  And when we're talking about reform politically, it is not a simple conflation with elections.

And we, in many ways I think, got the cart before the horse and focused too much on elections without the institution-building that needs to go along with creating an environment in which you can have a more progressive society.  And it's educational reform, it's economic reform and it's the building of institutions, whether it's a free press, media more broadly, the judiciary and other things that enable a process of political reforms to occur over time.

INDYK:  Can I just -- there's a dissenting view on the water issue, and it comes from -- of course, what Isabel described is certainly out there -- there's potential friction.  But when we were at Camp David trying to resolve these Palestinian issues, the water negotiators were down the mountain in their own negotiation and we were stuck on Jerusalem and getting absolutely nowhere, and the word came, from them, that they had resolved everything.  And, in fact, they had resolved it because the only way that they can deal with the water problem between the Israelis and the Palestinians is to borrow the water -- they have to produce more -- and the solution is desalination plants on the, you know, Mediterranean -- pipe the water in.

They, as well, mentioned Turkey, which is a very interesting point.  The only advantage of having Turkey in the Israeli-Syria negotiations -- and if we take it up, we should do it in partnership with Turkey; we should not push them out -- is precisely because part of that solution when it comes to water is to pipe -- establish a base pipeline that will pipe water from Turkey, across the Golan Heights, down into Israel, the West Bank and Jordan as well.  And Turkey has a real interest in that.  In terms of the Israeli-Syrian water negotiations, there too -- the Syrians, in Shepherdstown were very clear.  They said, we understand Israel has water concerns; we will respect Israel's water rights.  And, again, that turned out not to be the kind of source of friction that we had assumed it to be.

SAMORE:  I've got quite a long list and only about 50 minutes, so I'm going to ask everybody to be brief, including people on stage.

INDYK:  Sorry.

SAMORE:  James -- (inaudible) -- at you, Martin.  (Laughter.)

QUESTIONER:  (Inaudible, off mike) -- perhaps, Gary, you could pipe into time -- how much time, on Iran, do you think there really is to pursue a diplomatic negotiation?  Richard suggested they would have a certain amount of material that could be further enriched to a nuclear bomb level, but if you get the question, the first hard question is, how much time do we have before some threshold that everybody agrees has been crossed?

SAMORE:  Well, two things happened in the course of writing this report:  The first is that Iran has mastered centrifuge technology.  When we started this report, they were running their centrifuge machines at very low capacity -- 20 or 30 percent -- and therefore, they were not getting very much production out of them.  If you look at the IAEA reports over the last 18 months, there's steady progress in terms of the production rates, and now they're running the machines -- they're not very good machines; they're old machines; it's like a 1960 car -- but still, they're running them now at respectable 80 to 90 percent rates, so they've mastered that particular type of, you know, relatively unsophisticated centrifuge technology.  And in that sense, they've crossed that Rubicon; we can no longer talk about denying Iran the basic technological capacity to enrich uranium through, you know, these relatively primitive centrifuge machines.

The second thing, which is beginning to happen but hasn't yet been fully achieved, is numbers of centrifuge machines, because in order for Iran to have a credible nuclear weapons breakout capacity, they have to be able to transform the low-enriched uranium they're producing into weapons grade very quickly.  If there's a long delay, the IAEA or Western intelligence agencies will learn about that, and the facility will be vulnerable to a military attack before they can produce enough for a nuclear weapon.  And I would argue that the use of military force in that kind of scenario where Iran is detected trying to make a breakout, where they've expelled the inspectors or where we learn that they're producing weapons-grade uranium, I think that's relatively easy to justify to an international audience.

It's a little bit like the Syrian scenario; the Israelis bombed a secret nuclear reactor that was under construction in Syria and there was very little international condemnation, which I think sent a very good message to the region, that if you build or try to build secret nuclear facilities, then they are legitimate military targets.  That's not to say the use of military force is necessarily a wise thing to do, but it's much easier to justify under those circumstances.  Right now, Iran has 4,000 centrifuge machines that are operating, and as Richard said, they've produced 630 kilograms of low-enriched uranium, which is getting close the amount necessary for one bomb's worth of weapons-grade uranium.  But I would argue that with their existing number of centrifuge machines, it would take them at least a couple of months to produce that one bomb's worth, and I don't think that's a credible breakout capability.

At their current rate of installation of machines -- they're putting in about 3,000 -- you know, the facility's organized in units of 3,000 blocks and it's taking them about nine months to a year to finish each 3,000 block.  So if you assume they continue at the current rate, in nine months or so, they finish another 3,000 block.  I would say when they finish their current plan to produce five of these units of 3,000 each -- 15,000 centrifuges all together -- then I'd say it's a pretty respectable breakout capacity, that they'd be able to then, you know, in a couple of weeks, to produce enough weapons-grade uranium for one or two or three nuclear weapons.  But that's still a few years away.

HAASS:  Just one thing to get, to Gary:  One consequence of this conversation, though, is time, per se, doesn't help us -- gives the Iranians more time to build, get better.  So people who call for the United States to delay any initiative towards Iran 'til after the Iranian election, I think Martin and I and others would challenge.  And our feeling is, don't wait for that; we should start the process sooner rather than later.

And part of it is also -- we haven't talked about it yet -- is to make it public.  Normally, you know, people think of diplomacy as something that diplomats do privately.  Our sense is to do it very publicly and make it clear to the Iranian people what their future alternatives are: one path, integration in the region, integration of global economy, a standard of living that's quite good; as opposed to a path where Iran chooses the nuclear route and all of the direct and indirect costs that would come from that and then force this or any future Iranian government to explain why they have chosen a path that means a far lower standard of living, greater threats to Iran and so forth.

And to the extent that this can be carried out in public, I actually think it's useful because, again, so far at least, Iran just keeps doing it and time, in that sense, is not solving any problem.  So I think we all feel some sense of urgency about this and probably with the rest of the policy because, based on the argument Martin made, is there's probably leverage to be gained from progress in other dimensions in the region.

INDYK:  Can I just quickly say that I asked that question to Israeli national security officials two weeks ago, how much time will Obama have for diplomacy to work?  To my great surprise, they both went and spoke to him separately; they both said one to two years.  And that seems to be a change; they used to say six months.

SAMORE:  Yes, ma'am.

QUESTIONER:  Yeah.  I'm Radiga Dalgam al Faya (sp).  I wanted to understand -- Martin, I know you're upset with what the Bush administration did not deliver, but I think the Clinton administration -- you sat for seven years doing nothing on the Palestinian issue and then, on the seventh year, you decided, well, let's get a legacy.  So at least the focus of the Bush administration was on the Palestinian issue.

Why are you proposing right now to go back to the Syrian priority at the expense of the Palestinians?  Are you proposing that you should start by telling the Israelis we'll draw from the Golan in order to get the Syrians to cooperate on other things or the other way around?  And what indications do you have that you can really actually split Syria from Iran and -- at the push of my colleague from The Economist -- are you supposing that, just let them have another hand in Lebanon if all fails?

INDYK:  First of all, it's completely wrong, Radiga, to suggest that the Clinton administration did nothing for seven years on the Palestinian track.  We started, you know, with the Oslo Accords, which were negotiated behind our back, but we embraced and worked to try to implement.  We were focused on the Palestinians, essentially, from September 13, 1993, right through to the end of the administration, completely opposite of what the Bush administration did.

Well, they neglected it for seven years and then decided to pick it up at the end.  Yes, it's true that Bill Clinton tried to get a comprehensive peace from the Syrian track and the Palestinian track at the end of his administration and, yes, for sure, at the end of every administration, legacy becomes important.  But it wasn't as if there had been no groundwork laid for that over the previous seven years; there had been assiduous efforts to try to, first of all, make the interim process work and then to work on the final status negotiations.

So in terms of what we're suggesting, it is really not at all a return to the Syria-first policy that I, for one, advocated at the beginning of the Clinton administration; it is a Syria-also policy that is, in our view, in the view of the report, essential to be working on the Israeli-Palestinian process and to try to move that forward partly because the hope on both sides that a two-state solution can actually resolve, meet their needs, is quickly evaporating, partly because working on the Palestinian issue has beneficial effect for the United States more broadly in the Arab and Muslim world.

But also because, as I said, there is a process that can be picked up and moved forward.  On the other hand, we have to recognize, the Palestinians are deeply divided now and they are geographically divided between Gaza and the West Bank.  The Palestinian -- the Israeli political situation is one in which there is now question marks about whether there is a political coalition strong enough to implement on the Israeli side an agreement that would require the evacuation of many settlements in the heart of the West Bank.  So there's a real problem of capacity, capability, on both sides now to actually do the deal, let alone bridge the gaps on critical issues like Jerusalem and refugees.

But that's not a reason for giving up; that's a reason for trying to find creative ways to strengthen the ability of governments on both sides to make these deals.  And that's where the Arab dimension comes in; that's where the Syrian dimension comes in because, engage the Arab states and we can make progress between Israel and Syria, where it seems as if it would be easier to get the deal.  That will help to get the Palestinian deal, but one thing that I also learned during those Clinton years is that if you chase the Syrians, if you make it a Syria-first policy, they will sit back and enjoy the attention they get and all of the visits of the secretary of state to Damascus, but they will play up the game.

And why not?  Because they have to make a difficult choice.  If they're going to make peace with Israel, they cannot be in bed with those that want to destroy Israel.  And so they'd rather not make that choice.  The only way I think they will make the choice is if they feel that we're actually moving ahead on the Palestinian track and they might get left behind -- and if they feel that we're actually making some progress with the Iranians and that the Iranians might actually make a deal with us.

So, yes, there's an opportunity with the Syrians that we should exploit, but we need to basically be moving on all three initiatives at the same time to try to build the positive synergy between them because I think that's the best chance we have of achieving success.

SAMORE:  We've got time, unfortunately, for just one more very brief question or comment.  Mr. Lifton (sp)?

QUESTIONER:  Every passing day brings more bellicose statements from Israel as to what its interest in attacking Iran.  This kind of thing with Jamie's question, on time, is how are you going to plan to hold them off?  What commitments or guarantees do you feel have to be made to them?  And is this country prepared to make those commitments?

HAASS:  I would say two things.  The United States has some experience with talking with Israel about holding them off from acting militarily.  And I was involved intimately in it with the relations between the United States and Israel in January 1991; when the Iraqi missiles landed in Israel, the Israeli desire was to strike back and the United States had a set of conservations that were probably on my short list of the most extraordinary conversations I've ever heard between or participated in between two governments.

So I don't think the idea of -- it's not unprecedented to do that.  But, as we talked about before, I think the United States would have to basically argue that we have a good faith -- a serious diplomatic efforts that has a chance of working.  And that's where, among other things, Russian inclusion would be important.  We haven't talked about that here, but I think that will require, in turn, recasting U.S.-Russian relationship to some extent.  But the Israelis have to believe there's at least a decent chance that diplomacy could arrive at an acceptable outcome.

The United States would have to talk, I believe, about declaratory policy, probably agree on certain red lines to the Iranians about use, about what would be the consequences of, also about transfer, which we haven't talked about.  I'm just as concerned, if not more concerned, about transfer and accountability and the control of nuclear materials.  And I believe certain things would have to be communicated to the Iranian leadership about that.

We would want to look at missile defense in the region and possibly even formalizing aspects of the U.S.-Israeli relationship.  Do I think there would be political support for that?  Yes, I do.  What would potentially complicate it, we'd probably have to do it for several other countries in the region as well.  Now, we'd have to think about how we'd provide certain types of security assurances that would work in one context or one set of scenarios, but wouldn't necessarily work in others because we don't necessarily want to get involved in trying to guarantee every inch of everyone's territory and every conceivable scenario in the Middle East, given the history of the Middle East and its potential future.  So it's not simple.

But I think this is a legitimate set of conversations to have, just like I think it's legitimate to plan for military attacks or strikes against Iran all against the backdrop of taking a good-faith effort at diplomacy, which is clearly the most desirable of the choices.  But, coming back to your question, do I think we could design a set of our arrangements that would give people greater confidence than absent those arrangements?  Yes.  Do I think we could get congressional or domestic support for them?  Yes, I do.  But this is clearly not my preferred outcome, for all of the reasons that Martin and we discussed here today.

QUESTIONER:  Martin, do you want to add to that?

INDYK:  Well, one way of looking at this issue of time is understand that our clock ticks more slowly than the Israeli clock.  We can, as the United States, live with Iran approaching a breakout capability that Gary described.  We lived with North Korea crossing the nuclear threshold.  And, therefore, we have, in a sense, more time to try to achieve the objective, which is to prevent Iran from acquiring nuclear weapons.  I mean, that has to be the objective.  We have more time.  The Israelis have much more difficulty living with that breakout or near-breakout capacity.  And that's why you hear the kind of statements -- I'm putting everybody on notice.

How do we buy the Israelis more time?  In effect, synchronize our clocks so that, because the objective is the same, but they have to live on a hair trigger in a way that, you know, one bomb on Israel and it's gone.  So that's where I think all of the things that Richard talked about becomes important: giving Israel a stronger deterrent by a nuclear guarantee and strengthening its ballistic missile defenses at the same time so that it can feel a little more comfortable as we do our best to try to prevent Iran from acquiring nuclear capabilities.

SAMORE:  Thank you very much.  I hope this discussion will stimulate you to read the report and, in the meantime, I'd like to ask you to thank our speakers.  (Applause.)








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