[Senate Hearing 108-459]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-459

                THE MIDDLE EAST: RETHINKING THE ROAD MAP

=======================================================================

                                HEARING

                               BEFORE THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                            FEBRUARY 24, 2004

                               __________

       Printed for the use of the Committee on Foreign Relations


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                     COMMITTEE ON FOREIGN RELATIONS

                  RICHARD G. LUGAR, Indiana, Chairman
CHUCK HAGEL, Nebraska                JOSEPH R. BIDEN, Jr., Delaware
LINCOLN CHAFEE, Rhode Island         PAUL S. SARBANES, Maryland
GEORGE ALLEN, Virginia               CHRISTOPHER J. DODD, Connecticut
SAM BROWNBACK, Kansas                JOHN F. KERRY, Massachusetts
MICHAEL B. ENZI, Wyoming             RUSSELL D. FEINGOLD, Wisconsin
GEORGE V. VOINOVICH, Ohio            BARBARA BOXER, California
LAMAR ALEXANDER, Tennessee           BILL NELSON, Florida
NORM COLEMAN, Minnesota              JOHN D. ROCKEFELLER IV, West 
JOHN E. SUNUNU, New Hampshire            Virginia
                                     JON S. CORZINE, New Jersey

                 Kenneth A. Myers, Jr., Staff Director
              Antony J. Blinken, Democratic Staff Director

                                  (ii)

  
?

                            C O N T E N T S

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                                                                   Page

Biden, Hon. Joseph R., Jr., U.S. Senator from Delaware, opening 
  statement......................................................     3
Finegold, Hon. Russell D., U.S. Senator from Wisconsin, statement 
  submitted for the record.......................................    64
Indyk, Hon. Martin, director, the Saban Center for Middle East 
  Policy, the Brookings Institution, Washington, DC..............    44
    Prepared statement...........................................    47
Kissinger, Dr. Henry A., former Secretary of State,..............     6
    Prepared statement...........................................     9
Lugar, Hon. Richard G., U.S. Senator from Indiana, opening 
  statement......................................................     1
Malley, Mr. Robert, Middle East and North Africa Program 
  Director, International Crisis Group, Washington, DC...........    31
    Prepared statement...........................................    36
Ross, Hon. Dennis, director and Ziegler Distinguished Fellow, the 
  Washington Institute for Near East Policy, Washington, DC......    25
    Prepared statement...........................................    30

                                 (iii)

  

 
                    THE MIDDLE EAST: RETHINKING THE
                                ROAD MAP

                              ----------                              


                       TUESDAY, FEBRUARY 24, 2004

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met at 2:35 p.m., in room SR-325, Russell 
Senate Office Building, Hon. Richard G. Lugar (chairman of the 
committee), presiding.
    Present: Senators Lugar, Hagel, Chafee, Sununu, Biden, 
Feingold, and Bill Nelson.


          OPENING STATEMENT OF HON. RICHARD G. LUGAR, CHAIRMAN


    The Chairman. The Senate Foreign Relations Committee is 
called to order.
    Conflict in the Middle East is one of our most intractable 
foreign policy problems. It has brought not only bloodshed and 
suffering to the people of Israel and Palestine, it has 
contributed to the poisoned ideology of radical Islamic 
extremists who have perpetuated terrorist acts on people in 
countries all over the world. American national security would 
be dramatically improved by the achievement of an Arab-Israeli 
peace agreement.
    Today the Senate Foreign Relations Committee welcomes 
former Secretary of State, Dr. Henry Kissinger, to help us 
rethink prospects for the Middle East Road Map and to consider 
new ideas to stop the cycle of violence. We look forward to 
having the benefit of his extraordinary expertise as we analyze 
United States options.
    We are also pleased to welcome our second panel of experts: 
Ambassador Dennis Ross, director and Ziegler Distinguished 
Fellow of the Washington Institute for Near East Policy; Mr. 
Rob Malley, Middle East program director of the International 
Crisis Group; and Ambassador Martin Indyk, director of the 
Saban Center for Middle East Policy at the Brookings 
Institution.
    We have asked our distinguished experts to help us 
challenge the prevailing pessimism, that as we enter this 
election year, no progress can be made toward peace in the 
Middle East. Despite election year politics, the United States 
must remain engaged in the Middle East peace process. We must 
take advantage of any opportunities to promote new strategies 
that might lead to a viable settlement.
    The United States should explore with our partners in the 
quartet--the United Nations, Russia, and the European Union--
whether the momentum of the Road Map can be restored.
    We also must encourage Arab nations to take on greater 
responsibility for moving the Palestinians toward decisive 
actions to stop terrorism.
    In addition, as I mentioned in a speech at the Wehrkunde 
Conference in Munich a few weeks ago, NATO should consider how 
expanding alliance intervention in Middle East security could 
improve the climate for a Middle East peace settlement.
    Accepted last summer by the Israelis and Palestinians as a 
route to a comprehensive and permanent two-state settlement, 
the Road Map appears to have reached a dead end. A 6-week 
cease-fire last fall bolstered optimism that the violence could 
be stopped through the steps in the Road Map. Over the past few 
months, however, these hopes have been shattered by suicide 
bombings, targeted killings, and charges of deceit and bad 
faith. Egypt's effort to reestablish the cease-fire have been 
stymied.
    Palestinian Prime Minister Abu Qureia has yet to meet with 
Israeli Prime Minister Sharon to discuss the Road Map. The 
divided Palestinian leadership appears unable or unwilling to 
control the extremist and terrorist factions that continue to 
undermine the peace efforts.
    Claiming that progress through negotiations is impossible 
under present circumstances, Israel has announced plans to 
unilaterally withdraw from 17 of 21 settlements in Gaza and 
disengage from further talks. These moves have been viewed by 
some as imposing a unilateral settlement. Others worry that 
Israel's move will harden Palestinian positions.
    Terrorist groups such as Hamas and the Palestinian Islamic 
Jihad may attempt to portray the withdraw as a sign of Israel's 
weakness that vindicates their use of violence. Others consider 
Israel's move an opportunity to create a new opening for a 
stalled peace process.
    Whether Israel's unilateral approach can reinvigorate the 
peace process depends on the details of the plan on how the 
Palestinians, other Arab nations, the United States, and the 
international community respond. As Secretary of State Colin 
Powell stated before our committee just 2 weeks ago--and I 
quote--``we want the settlements closed, but we want to know 
exactly how that is going to be done and where those settlers 
will go and how does it affect settlement activity in the West 
Bank. We have to understand the total picture.'' The end of 
quote from Secretary Powell.
    At the same hearing, Secretary Powell underscored that the 
administration is closely following Prime Minister Sharon's 
proposals and pressing the Palestinians to come forward with a 
plan to control terrorism. He added--and I quote--``I would do 
anything to find a magic bullet to solve this one, but the 
problem is terrorism, terrorism that emanates from Hamas, from 
Palestinian Islamic Jihad, and other organizations that are not 
interested in peace, not interested in a state for the 
Palestinian people. They are interested in the destruction of 
Israel. Until the Palestinian leadership and authority goes 
after those organizations that feel that way, it will be 
difficult to get the kind of progress we need moving down the 
Road Map.'' The end of quote from Secretary Powell.
    Now, despite these difficulties, I believe that the broader 
context of events in the Middle East can improve the chances 
for a peace agreement. The United States and the coalition 
forces are working to bring new freedoms, economic growth, and 
political change to Iraq and Afghanistan. If we can succeed in 
stabilizing those countries, the political calculations of 
leaders and populations in the Middle East will change.
    In a recent New York Times editorial, Thomas Friedman cites 
numerous examples of leading Arab opinion-makers arguing for 
political reform in the Middle East in the wake of Saddam 
Hussein's downfall. Already, Libya has opened its weapons of 
mass destruction program to international inspectors. Syria has 
sent messages to Israel it is ready to restart peace talks. 
Moderate Arab nations increasingly are focused on their own 
internal economic and security problems, many of which would be 
improved by an Arab-Israeli settlement. There are indications 
that both the Israelis and the Palestinians have had enough of 
violence.
    The United States and our allies must be prepared to take 
advantage of these trends. Given the new dynamics in the 
region, what additional steps can the administration take now 
to move the peace process forward? Are there alternatives to 
the Road Map or detours that should be considered?
    This committee looks forward to our experts' discussion of 
these questions this afternoon and their assessments of the way 
ahead in the Middle East.
    I call now upon the distinguished ranking member of our 
committee, Senator Biden, for his opening statement.


     OPENING STATEMENT OF HON. JOSEPH R. BIDEN, JR., RANKING MEMBER


    Senator Biden. Thank you, Mr. Chairman.
    Mr. Secretary, it is an honor to have you back. Thank you. 
It is great to see you. I have never been at a hearing--and 
they began as early as 1973--with you that I have not learned 
something, and I mean that sincerely. I am happy to have you 
here.
    Mr. Chairman, I want to thank you for calling this meeting 
and join you in welcoming Dr. Kissinger. I am also eager to 
hear from our experts on the second panel as well, all of whom 
have devoted many years, collectively more than they probably 
want to have me add up, to the cause of peace.
    We have assembled a wealth of experience to help us grapple 
with one of the most vexing enduring conflicts of our time. 
Secretary Kissinger, much has changed in the three decades 
since your well-known peacemaking efforts in the Middle East. 
Today Israel no longer faces the existential military threat 
from the Arab world that it once did. But it faces a more 
insidious enemy in my view, one that we share in common, that 
is, terrorism. It also is seized with a changing demography 
which threatens its very survival as a Jewish state. As the old 
phrase goes, Jonah has swallowed the whale. So while Israel has 
never been in a stronger position relative to the Arab world 
militarily, it still suffers from a very pervasive sense of 
insecurity.
    Another paradox is that while we have never been closer to 
a consensus on the details of a solution, the solution on the 
ground seems increasingly distant. A solution is as obvious as 
it is elusive. We all know that any viable peace agreement will 
have to have a few key components. Israel will have to abandon 
the vast majority of its settlements and trade territory for 
those they wish to retain. The Palestinians will have to 
exercise the right of return to Palestine, but not to Israel. 
It seems to me these two factors are the core of any bargain.
    And interestingly enough, more than two-thirds of the 
people on both sides, Israelis and Palestinians, consistently 
say that they favor a two-state solution. The problem is that 
neither believes the other side means it, and that has 
permeated the people as well as the leadership.
    One issue which I cannot dance around is the absence of 
responsibility on the part of the present Palestinian 
leadership, and here, Mr. Chairman, I think our country should 
accept its share of blame for not having lent more support to 
Prime Minister Abu Mazen, who we hosted here more than once, 
and who made it clear why he resigned. And I believe Israel 
could and should have done more as well. Giving Abu Mazen so 
little to deliver to his people played directly into Arafat's 
hands, and I am not sure when we will get another opportunity 
as significant as the one that presented.
    But as the saying goes we are where we are. The world does 
not stop turning. In fact, it only seems to turn ever faster 
when we talk about the Middle East.
    We are facing an unprecedented set of challenges in a 
region that has become our primary strategic focus of late. We 
are struggling to help Iraq move in the direction of stability, 
unity, and a representative government. We are facing an Arab 
world seething with discontent and badly in need of political 
and economic transformation, and we have not yet achieved a 
meeting of the minds with our traditional allies in Europe on 
an overreaching strategy for the Middle East beyond Israel and 
the Palestinians. The Arab-Israeli conflict must be viewed in 
the context of this volatile strategic climate and it explains 
why making progress, in my view, has never been more important 
than now.
    But some problems do not lend themselves to immediate 
solutions. Secretary Kissinger, I am intrigued by your argument 
which essentially boils down to the view that the best we may 
be able to do now is to help create the circumstances that 
might allow for a solution later.
    Israel's Prime Minister Ariel Sharon is considering a pull 
out of the settlements and military installations in Gaza. If 
the move is carefully coordinated with the United States to 
ensure a peaceful transition, it could--it could--create the 
conditions for a future ``rapid breakthrough'' that you mention 
in your written testimony. I am referring to the rapid 
breakthrough.
    I deeply sympathize with the Israeli predicament, but I am 
concerned, as are many Israelis, including some of the 
leadership in the opposition party, with whom I have recently 
met here, that absent a buy-in from both sides, no lasting 
settlement is possible. Indeed, a unilaterally improvised 
solution runs the risk of boosting rejectionists in the 
Palestinian camp and giving them an excuse to perpetuate 
violence.
    While the new Palestinian Prime Minister has shown no 
inclination to confront Yasser Arafat, there are signs of 
ferment among the next generation of Palestinian leaders, 
evidenced by the writings of Tom Friedman and others. Those of 
us who have visited the region can feel it and see it and taste 
it in the young Palestinians with whom we have met. 
Strengthening these reformers is not going to be easy, but it 
is essential if we are to help the Palestinians achieve the 
responsible leadership they deserve and do not now have in my 
view.
    We must also demand more from the Arab world at large. I 
agree with you that among the chief obstacles to peace is the 
Arab world's failure to demonstrably accept Israel's existence. 
I have suggested to Arab leaders who I have met with throughout 
the region and re3cent and not-so-recent visits--including one 
with my friends Senator Lugar, the chairman, and Senator Hagel, 
and one alone with Senator Hagel--that Arab leaders have to do 
something more demonstrable than they have done so far. They 
cannot just have a peace plan that they write in another 
country and let it be known and, at the same time, not do 
anything to normalize relations with Israel. Arab leaders 
proclaim support for the Geneva Accord. Yet, they will not 
entertain the idea of inviting Geneva's Israelis signatories to 
places like Riyadh.
    Finally, Mr. Secretary, I want to underscore a point in 
your testimony when you say, ``the American role is central.'' 
Quite frankly, Mr. Secretary--and I do not mean to draw you 
into this but to make it clear--I am not at all certain the 
White House understands that point. Promoting peace and 
securing Israel requires a whole lot of hard work, day in and 
day out, the willingness to risk serious amounts of political 
capital. And as our next panel can attest to, all of those 
things were required in the past, as you know, and are required 
in the future.
    Benign neglect, punctuated by episodic engagement, imperils 
America's strategic interest in the region in my view. We have 
no choice but to be involved. Each of us has put forward 
thought-provoking ideas on how best to move forward. No one has 
any monopoly on the truth and no one suggests that if the Lord 
Almighty came down and sat in the middle of these tables and 
told us the path, that we would still have much more than a 60 
percent chance of succeeding.
    This is not to suggest this is not incredibly difficult. It 
is like that phrase attributed to G.K. Chesterson who said, 
``it is not that Christianity has been tried and found wanting, 
it has been found difficult and left untried.'' I think that is 
where we are right now in terms of the peace agreement. And to 
use a Christian metaphor is absolutely ironic.
    But at any rate, I will cease and desist. Thank you for 
being here. I am anxious to hear your testimony, Mr. Secretary.
    The Chairman. Well, thank you very much, Senator Biden.
    Dr. Kissinger, you, as a person who covers a comprehensive 
diet of subjects every day, would appreciate the vigor of our 
committee today. We commenced with a classified briefing on 
Haiti, which was timely. We had a visit from the new President 
of Georgia and six members of his cabinet, a very engaging and 
terrific group. We broke a while for our party caucuses and 
this afternoon have the climax, an appearance by yourself 
before our committee and three distinguished friends who have 
meant so much to American history.
    So we look forward to your testimony. I would encourage you 
to take the time that you require to give the full statement. 
It will be put in the record in full in any event, and I would 
allow you to proceed as you wish.

 STATEMENT OF DR. HENRY A. KISSINGER, FORMER SECRETARY OF STATE

    Dr. Kissinger. Mr. Chairman, Senator Biden, it is always a 
great pleasure for me to appear here and especially under 
circumstances where I substantially agree with the two opening 
statements that have been made, with the one proviso that I 
believe the White House has done as much as can be done. But on 
the general philosophy of the two statements, I am in general 
agreement.
    I have submitted a rather lengthy statement, and I will 
summarize my views so that we can get to the question period as 
efficiently as possible.
    The major problem in bringing the conflict to a conclusion 
is that the two sides are talking about incommensurable issues, 
producing a psychological crisis between them.
    The Israelis, living in a state that has never been 
recognized by its neighbors in its history and dealing with 
countries that consider recognition a concession, are, above 
all, concerned with questions of survival. They are militarily 
overwhelmingly strong, but their margin of safety is very 
narrow. In 1973, they came close to defeat in a surprise 
attack, and with the nature of their territory and the nature 
of modern technology, they consider their existence inherently 
precarious.
    For some period, the Israeli peace movement believed in the 
possibility of trading land for peace. This belief has been 
destroyed by the intifada, and so much of the Israeli 
population want victory and the defeat of their Arab 
adversaries.
    At the same time, they are a middle class society, and the 
open-endedness of a terrorist conflict produces a sense of 
resignation and a sort of undifferentiated desire for peace, 
which is difficult to express for them in concrete conditions.
    On the Arab side, I believe there is one overwhelming 
obstacle which is the psychological reluctance of the 
Palestinians to accept the permanence of the state of Israel.
    I had a personal experience of this on the day the Oslo 
agreement was signed, and I spoke to one of Arafat's deputies 
who said to me that he was returning to Palestine for the first 
time in 40 years, and that was a tremendous experience. And I 
asked him how would he feel once he got there if he saw the 
lights of some Israeli citizens. And he said, the lights I can 
see are not what bothers me. What bothers me is that if you ask 
me where my home is, I have to tell you it is in Jaffa. And if 
you ask my children where their home is--and they have never 
been there--they will tell you it is in Jaffa. It is this 
psychological undercurrent that, for many Palestinians, if not 
most Palestinians, these negotiations are stages in a process 
toward the gradual elimination of Israel. The Palestinians have 
not yet found it possible to generate a gesture like President 
Sadat when he visited Israel in 1977 and produced a 
psychological breakthrough that led to a settlement.
    On the other hand, despite the stalemate, one has to note 
some significant progress. The Israeli Government under Prime 
Minister Sharon has agreed to the creation of a Palestinian 
state with contiguous territory. The Likud Party had never done 
that before. And contiguous territory is the code word for the 
elimination of some settlements that stand in the way of 
contiguity. Sharon has now announced the unilateral withdrawal 
of all the settlements in Gaza, and as I also point out, I 
think the fence implies the dispensability of some of the 
settlements on the other side of that.
    On the Arab side too there have been movements toward 
negotiations. Crown Prince Abdullah made a formal proposal for 
normalization of relations with Israel after return to the 1967 
border.
    So some of the preconditions for a solution in my view 
exist. The question is, how does one define a solution? And can 
one achieve the solution in one step?
    The solution that is generally put forward by our allies is 
a return by Israel to the 1967 border, the abandonment of its 
settlements, and partition of Jerusalem in return for 
normalization and some sort of international guarantees. I have 
two difficulties with this particular formula.
    The first is I have never met an Israeli Prime Minister or 
chief of staff who considers the 1967 border defensible. This 
is going back over a period longer than I care to admit, but 
shall we say over 40 years. I probably could cite a longer 
period if I were less vain.
    Second, I do not believe that international guarantees are 
very meaningful. I had, of course, a personal experience with 
the international guarantees that accompanied the Vietnam 
treaty in which the guaranteeing powers never even answered our 
requests calling attention to the invasion of South Vietnam by 
the entire North Vietnamese army. Obviously, this is a separate 
case, but I find it difficult to imagine that the European 
nations would go to war over the issues that are likely to 
threaten Israel's security. And above all, the most serious of 
those are terrorism, and to terrorism, the deployment of 
guaranteeing troops is not an adequate answer. If the Israeli 
army which has a maximum incentive to prevent the terrorist 
acts cannot stop them, I do not see how the deployment of an 
international force can be relevant to the terrorist problem.
    Third, there are some aspects to the negotiations that seem 
to me to guarantee a protracted negotiation such as the return 
of refugees. I do not believe that any Arab leader can today 
sign an agreement that does not provide for the return of 
refugees, and I cannot imagine an Israeli leader who will sign 
an agreement that provides for anything less. Therefore, this 
guarantees in itself a protracted stalemate.
    The Road Map is useful as a consensus statement of general 
principles. It has some similarities to Resolution 242, and 
these general principles usually have the quality that they 
have a lot of adjectives that each side defines in a different 
manner. For example, with respect to refugees, the Road Map 
calls for an agreed just, fair, and realistic settlement. To 
the Palestinians, fair and just means the return of most 
refugees. To the Israelis, realistic means, at most, a token 
return of refugees. So the Road Map is useful in calling 
attention to terrorism, in setting up a schedule by which 
agreement could be reached, but I do not think that in itself 
it can provide us the guide for a breakthrough.
    I am agnostic on the issue of whether one should negotiate 
an overall settlement immediately or a series of partial 
settlements, and I would be open-minded to either approach.
    My instinct is that a negotiation for an overall settlement 
will have two problems. One, it will be extremely protracted, 
and second, at its end, it would still have to have some 
interim stages. I cannot believe that Israel would withdraw in 
one move to whatever final borders are negotiated before there 
is a demonstrated end to the terrorist apparatus on the 
Palestinian side and to a demonstrated interval without 
terrorist activities. And this cannot happen in a very brief 
period of time.
    I believe that the security fence that Israel is building 
may be a means to accelerate negotiations, and therefore I have 
advocated that the United States take a positive attitude, 
provided that it is placed in a relationship that defines a 
strategic necessity and not simply another form of territorial 
expansion.
    So what we need is a negotiation on final borders. These 
final borders should recognize strategic necessities and 
demographic realities. It cannot be in Israel's interest to 
acquire additional Arab populations. Indeed, if one were 
dealing with a really serious effort at a permanent solution, 
one would look for territory that is today an undisputed part 
of Israel that is heavily populated by Arab populations that 
could be traded for territory of strategic importance to Israel 
and perhaps including some of the settlements that are close to 
the Israeli border. That would take care of the strategic and 
political necessities.
    In principle, I agree with the statements that have been 
made that the United States must play a major role at the right 
moment. Our European allies could make a significant 
contribution if they would suspend the flood of paper plans, by 
which they seek to improve their position in the Arab world, 
and help us in the major problem in which we use our influence 
with Israel and they help bring the Arab countries to a 
recognition of the importance of putting an end to terrorism 
and a genuine normalization of relations with Israel.
    I also favor the Mideast Initiative that has been put 
forward recently by the German Foreign Minister that is trying 
to develop an Atlantic concept of Middle East development 
within which the evolution of a Palestinian state could be 
placed and within which a specific commitment could be made to 
the development of a Palestinian state.
    In my view, the overwhelming problem we face now is not so 
much to define the word peace as to define a pattern of 
coexistence. If one could create a Palestinian state side by 
side with an Israeli state, if those borders reflected 
demographic and strategic realities, and if a normal life could 
develop in such a framework, then one could think that a 
fundamental breakthrough has been made. And I think with all 
the difficulties that we see, the opportunities for such a 
breakthrough objectively exist.
    Thank you very much.
    [The prepared statement of Dr. Kissinger follows:]

              Prepared Statement of Dr. Henry A. Kissinger

    Mr. Chairman: The Arab-Israeli conflict has proved so resistant to 
diplomacy because the obstacles to a solution are in some respects more 
psychological than diplomatic.
    Israel is militarily stronger than any conceivable Arab adversary; 
it is clearly able to inflict heavy losses on Palestinian terrorist 
groups. But it has also evolved into a middle-class advanced society 
and, as such, the strain of guerrilla warfare is psychologically 
draining, generating an ambivalent rigidity in Israeli society. Prior 
to the Oslo agreement, the Israeli peace movement viewed reconciliation 
with the Arab world primarily in terms of psychological reassurance; 
land would be traded for peace and recognition even though Israeli 
concessions were permanent and the Arab quid pro quo would be 
revocable. But since the intifada, the vast majority of Israelis no 
longer believe in reconciliation; they want victory and the crushing of 
their Arab adversaries.
    At the same time, there is growing uneasiness over the open-
endedness of the enterprise. With the apparent endlessness of the 
intifada and the stalemate in the peace process, a sense of resignation 
is growing. The desire to turn on the tormentors is beginning to be 
offset by signs of a hunger for peace at almost any price.
    Israel finds itself facing the classic dynamic of guerrilla warfare 
as it has played out for two generations now. The terrorists not only 
do not recoil from terrorism but practice an egregious form of it 
because a violent, emotional, (and to bystanders) excessive retaliation 
serves their purpose: it may trigger intervention by the international 
community, especially the United States, to end the conflict by 
imposing a peace. That process gradually reduces Israel's sense of 
security even while the world's media and diplomats bewail its alleged 
excesses. Torn between a recognition of strategic necessities and the 
pull of emotional imperatives, Israel runs the risk of sliding into 
institutionalized ambivalence.
    On the Palestinian side, expulsion from a territory for centuries 
considered Arab is an open wound; accepting the perceived Israeli 
intrusion has thus far been beyond Palestinian emotional and 
psychological capacities. The internal Palestinian debate is 
essentially over how to overcome the Jewish state; one group is arguing 
for permanent confrontation, while moderates are willing to move toward 
the same objective in stages. Only a tiny minority considers permanent 
coexistence desirable.
    In the half-century of Israel's existence, no Palestinian leader 
has fully recognized Israel or renounced the right of refugees to 
return. Even the Palestinian signatories of the Geneva Accord went no 
further than to relate the return of refugees to a proportion of 
refugees accepted by third-party countries. Government-sponsored public 
assaults on the very concept of a Jewish state are unremitting.
    The breakthrough in Egyptian-Israeli negotiations took place in 
1977, when President Anwar Sadat made his historic trip to Jerusalem 
and, among other gestures, laid a wreath on the Tomb of the Unknown 
Soldier. There has never occurred a similar act of grace on the part of 
Palestinian leaders.
    When so little confidence exists, it is difficult to move in one 
step from impasse to a final solution. At the same time, there are some 
hopeful signs. The formal deadlock may be obscuring the possibility 
that, almost imperceptibly, a framework for an agreement is emerging. 
In Israel, Prime Minister Ariel Sharon's recent pronouncements suggest 
that the dominant Likud party is undergoing soul-searching based on the 
recognition that the biblical claim to all of Palestine involves a 
demographic time bomb as Arabs become a majority and demand control of 
the entire land. This change of attitude implies a willingness to give 
up much of what Israel gained in the 1967 war in return for Palestinian 
acceptance of the 1948 defeat and the division of the land of 
Palestine.
    At the same time, the Palestinians may be in the process of 
learning that they have no military option and that, at least for 
tactical reasons, coexistence with Israel is unavoidable. An increasing 
number of Arab states would settle for any terms acceptable to 
Palestinians.
    A forthcoming proposal has come from Crown Prince Abdullah of Saudi 
Arabia. According to its imprecise outline, Israel would return to the 
dividing lines of 1967 in exchange for the normalization of relations 
with the Arab states. Literally, this would imply Israeli abandonment 
of all settlements and Arab control of the Old City of Jerusalem, 
including the holy places. The Abdullah plan does not define what is 
meant by normalization, and is silent about such issues as the return 
of refugees which would surely be insisted on in an actual negotiation.
    This first engagement in the peace process by an Arab state not 
having a direct national conflict with Israel nevertheless includes 
positions that have produced the existing deadlock. The 1967 ``border'' 
in Palestine--unlike the Egyptian, Syrian, or Jordanian frontiers with 
Israel--was never an international frontier but a ceasefire line 
established at the end of the 1948 war. It was never recognized by any 
Arab state until after the 1967 war and has been grudgingly accepted 
recently by states that do not yet recognize the legitimacy of Israel. 
I have never encountered an Israeli prime minister or chief of staff 
who considered the '67 borders defensible.
    Despite all these obstacles, both sides may be in the process of 
reconsidering previous attitudes. The Palestinians have suffered vast 
losses and the total disruption of their economy. Israel has learned 
that demography threatens its existence; a large and rapidly growing 
Arab population undermines the prospects for a state at once Jewish and 
democratic. Annexation of significant portions of the West Bank can no 
longer be considered a national Israeli interest.
    This may be why all the parties have endorsed--with varying degrees 
of conviction--a document listing forty simultaneous steps to be 
carried out in three stages. Drafted by the United States, Russia, the 
European Union, and a representative of the Secretary-General of the 
United Nations, and labeled the ``Road Map,'' its implementation is 
supposed to be supervised by the quartet that drafted it.
    Nevertheless, we must be careful not to exaggerate what the Road 
Map stands for. It is not a recipe for resolving the Middle East 
deadlock. Rather, it represents a reasonable compromise on rather 
general objectives. These goals are stated as if they could be achieved 
simultaneously by each side acting more or less autonomously.
    The Road Map does not establish criteria for verification, 
consequences of violation, or the sequence of acts within each stage. 
The language veers toward truisms. For example, with respect to 
refugees, the Road Map calls for an agreed ``just, fair, and realistic 
settlement.'' To the Palestinian ``fair and just'' means a return of 
most refugees, and to the Israeli ``realistic'' means, at most, a token 
return of refugees.
    The negotiators working their way through these generalities have 
some positive elements to sustain them. The new impetus to diplomacy 
reflects the revolutionary changes wrought by American policy in the 
Middle East. The elimination of Iraq as a significant military force 
has removed for a considerable period the possibility of an Arab-
Israeli war fought by regular armies. The American insistence that the 
Palestinian Authority produce a more representative and responsible 
negotiating partner than Arafat has provided the framework to weaken 
the terrorist structure on the West Bank.
    A combination of these factors has encouraged Prime Minister Sharon 
to offer the elimination of settlements established in violation of 
Israeli law, to proceed to dismantle the settlements in Gaza, and to 
acquiesce in the concept of the creation of a Palestinian state with 
``contiguous'' territory--the code word for opening a discussion over 
the future of settlements that impede this objective.
    If this were a negotiation unencumbered by historical and 
psychological legacies, one could note the respect in which the parties 
have approached each other: on the creation of a Palestinian state; on 
ending the occupation in the greatest part of the West Bank; on the 
principle of abandoning at least settlements beyond the dividing line; 
on the need to end terrorism. What is lacking is even the minimum of 
trust to negotiate the implementation of these principles.
    The Palestinians believe that Israel seeks to reduce the 
Palestinian state to a series of enclaves surrounded by Israeli 
territory and pierced by an Israeli road network--in short, a state 
virtually indistinguishable from limited internal autonomy. Most 
Israelis are convinced that for the Palestinians any agreement 
represents only a stage in an ultimate war of extermination. Arab and 
Palestinian newspapers and schoolbooks and Arab and Palestinian 
television treat the state of Israel as an illegitimate interloper that 
must be removed from the Arab world.
    Allied divisions have compounded the problem. Critics attack U.S. 
policy for what they consider one-sided support of Israeli policy. At 
the same time, almost all European leaders have advocated a solution 
which does not meet the realities of the moment or of historical 
experience: the return of Israel to the '67 borders with only the most 
minor modifications; the consequent abandonment by Israel of all (or 
nearly all) of the Israeli settlements established since; partition of 
Jerusalem; some accommodation to the Palestinian view on return of 
refugees, all this to be imposed by the U.S.
    The quid pro quo is an undefined ``normalization'' and perhaps an 
international guaranteeing force. The quid pro quo of normalization is 
a special characteristic of the Arab-Israeli negotiations. In almost 
all other negotiations, mutual recognition of the parties is taken for 
granted, not treated as a concession. In fact, nonrecognition implies 
the legal nonexistence of the other state, which, in the context of the 
Middle East, is tantamount to an option to destroy it. Israel was 
established by a U.N. resolution in 1948. No other members of the 
United Nations have been asked to pay a premium for recognition.
    Nor is an international guaranteeing force a solution. For what 
precisely does an international guarantee mean? Against what danger 
does it protect and by what means? The historical record of 
multilateral guarantees is dismal, especially in the Middle East.
    International guarantees are likely to prove empty against 
terrorism. If Israel's armed forces with a vast stake in the outcome 
could not prevent infiltrations, how is an international or even an 
American force going to do it? It is much more likely to prove a 
barrier against Israeli retaliation than against Palestinian terrorism. 
The probable outcome is that an international force would become 
hostages who will either purchase their safety by turning their backs 
on violations or, if they risk their lives by serious efforts, they 
will incur casualties at which point the governments supplying the 
forces will be under pressure to withdraw them.
    No progress is possible without a major diplomatic effort by 
America. But America should not be asked to break Israel's 
psychological back and jeopardize its existence as an independent 
state. Having lived unrecognized by its neighbors for most of its 
history, subjected to systematic terrorism, surrounded by states 
technically at war with it, and aware of an essentially unopposed 
publicity campaign against its existence throughout the Islamic world, 
Israel will not base its survival on assurances and guarantees without 
a clear assurance regarding its security requirements. It needs 
defensible frontiers and a strategy that gives it a plausible 
opportunity to withstand the most likely dangers.
    The end of terrorism must go beyond a cease-fire, which keeps the 
threat alive, to the dismantling of the terrorist supporting structure. 
Even if dismantling the terror apparatus proves difficult to do 
quickly, ending the systematic rejection of Israeli legitimacy and 
incitement to terror in the media are within the scope of immediate 
Palestinian decision. Above all, Palestinian and Arab leaders must find 
a way to convey that they have accepted the permanence of Israel's 
existence.
    At the same time, Israel needs to take American advocacy of a 
contiguous Palestinian state seriously. It implies not only an end of 
new settlements but a reduction of the existing ones that impede the 
promised contiguous Palestinian state, and the new strategic frontier 
must reflect genuine security needs.
    The practical implication is that the Road Map's goal of a 
comprehensive settlement by 2005 is unachievable. It is unimaginable 
that a new Palestinian prime minister precariously extracted from 
Yasser Arafat will be in a position to renounce the right of 
Palestinians to return to their place of origin in the early stages of 
the Road Map process. It is inconceivable that Israel would make a 
final agreement that does not contain such a clause or that it would 
entertain transfers of populations without a tested period without 
terrorism--if then. Thus even if a comprehensive agreement is the 
ultimate goal, it must contain within it a prolonged interim period for 
testing the commitment to peaceful coexistence.
    But if comprehensive peace is not achievable within the time frame 
established by the Road Map, the establishment of a provisional 
Palestinian state as envisaged in Stage II can be realized. The goal 
will not be comprehensive peace, which is a legal concept, but 
coexistence, which reflects the absolute precondition for peace.
    A ``coexistence agreement'' could be helped rather than hindered by 
the fence Israel is in the process of creating, though not in the 
present location. A physical barrier is more effective than an 
international guaranteeing force. It would facilitate Israeli 
withdrawal from the Palestinian cities and the abandonment of 
checkpoints that deprive so much of Palestinian life of dignity. By the 
same token, Israel must be serious about leaving the territories and 
the settlements beyond the security fence to Arab jurisdiction. A 
security barrier would provide a line on the other side of which 
settlements would have to live under Palestinian rule or be abandoned. 
Is the Palestinian objection primarily to the fence, in principle, or 
to the ratification of the permanence of Israel that the fence 
represents?
    The intrusion of the fence beyond the 1967 borders should be kept 
to a strategically necessary minimum. But the principle of it is 
important: It should not be discouraged by the United States; rather, 
the United States should try to shape it to contribute to what seems 
the best way to a rapid breakthrough. The alternative of some sort of 
imposition conceived by conventional wisdom might well bring peace at 
the price of encouraging continued irredentism and turning the 
agreement into a prelude for another round of confrontation.
    An interim agreement may be the only way to keep the refugee issue 
from blocking a settlement. Any agreement deserving the appellation 
``final'' must resolve the refugee question. No Israeli government can 
settle for less; no Palestinian leader has yet been found to renounce 
unambiguously the right of return.
    If that problem should prove insoluble, the security fence could 
provide a provisional dividing line that makes possible a Palestinian 
state even before a final settlement. The territorial adjustments could 
be balanced by returning some portions of Israeli territory to 
Palestinian rule. Particular attention should be paid to areas where a 
return of Arab population would ease the demographic problem. In that 
context, a provisional arrangement for Palestinian government in Arab 
sections of Jerusalem can be discussed.
    Such an approach requires freeing Middle East diplomacy from some 
of its formalistic, almost doctrinaire, constraints. Our partners in 
the quartet need to view Middle East peace as something more complex 
than a device for using the United States to extract concessions from 
Israel for little more than the word ``peace.'' The Palestinians must 
make a choice between the requirements of genuine acceptance of the 
Jewish state and an interim solution that creates a Palestinian state 
immediately and marks a major step toward dealing with the settlement 
issue, even if it falls short of the entire range of their aspirations. 
Israel must abandon a diplomacy designed to exhaust its negotiating 
partners and instead concentrate, in close coordination with the United 
States, on the essentials of its requirements.
    A comprehensive diplomacy to achieve these objectives should have 
the following components:

   The United States would play a principal mediating role in 
        the negotiation of an interim agreement, buttressed by a 
        general statement of objectives for the overall goals, 
        providing a link between an interim and a comprehensive 
        settlement. Our European allies could contribute by suspending 
        the flood of plans by which they seek to improve their position 
        in the Arab world but in reality radicalize it by raising 
        unfulfillable expectations:

   A major contribution could be the Mideast initiative put 
        forward by German Foreign Minister Joschka Fischer and in the 
        process of being discussed by European and American Leaders. A 
        concept of a Middle East development and political reform 
        project jointly undertaken by the Atlantic and Middle Eastern 
        nations would create a context defined by positive goals rather 
        than inherited hatreds. Any lasting settlement implies ultimate 
        reconciliation, and a major international effort should be 
        undertaken to help restore civilian life in the Palestinian 
        state. Once confidence is restored and true coexistence 
        evolves, the incentive to maintain the security fence may well 
        disappear.

   The Palestinian Authority needs to reinstitute itself along 
        more representative lines. The moderate Arab states should 
        facilitate the negotiations by encouraging adjustments in the 
        Palestinian position they would not dare on their own.

   Europe and the United Nations, backed by the United Sates, 
        could generate an international commitment to assist in the 
        creation of a viable Palestinian entity, at first under an 
        interim agreement and later on when a permanent settlement is 
        reached. That commitment would imply a level of assistance that 
        could be effective only in the context of a new set of 
        institutions.

    For both sides, a resolution will be traumatic. For many in Israel, 
the abandonment of settlements and the partition of Jerusalem will be 
perceived as a repudiation of much of the history of the Jewish state. 
For the Palestinians, it will be an end to the myth by which their 
society has lived. America's role is central: It needs to overcome the 
illusion that America can impose some paper plan and, at the same time, 
to move the parties with determination toward a goal that seems, at 
last, conceptually within reach.

    The Chairman. Thank you very much, Dr. Kissinger.
    I will suggest that the committee have 8 minutes per 
Senator in the first round of questioning, and then we shall 
see if there are additional questions of Senators.
    I will begin by asking this question, Dr. Kissinger. You 
have mentioned that the refugee issue is deep-seated, perhaps 
insoluble in the short run. There is a feeling of place and 
possession by many people, which may be perhaps coupled with a 
fairly general feeling. It is hard to tell, I suppose, how 
pervasive such feelings may be on the part of many 
Palestinians. Perhaps some Arab states might feel that Israel 
might not be permanent after all, that at some point it might 
go away.
    And third, some persons in the situation express themselves 
through terrorist acts. The call of the United States and 
others who are friends of Israel has been for the terrorism to 
cease. Someone must be responsible for bringing that to 
conclusion. But it is not at all clear how and when.
    You are suggesting that perhaps the best we can hope for in 
the present issue, may be perhaps utilizing the fence. You have 
guided the direction of where the fence ought to go. This 
offers at least some basis for, as you say, coexistence of the 
parties. Maybe a generation has to pass before the denial of 
the permanence of Israel, or the refugee yearnings, or even the 
terrorism all pass.
    Are you testifying essentially that there could be a degree 
of coexistence, and that the United States might be able to 
support meaningful talks and negotiations among parties who 
might find it possible to coexist? As you have expressed, 
perhaps in a greater Middle East strategy in which more 
commerce, more wealth, more political and economic prospects 
for people who have not had very much finally accrue, that some 
of the discontent might be ameliorated. Will you guide me 
through that?
    Dr. Kissinger. Well, start with the refugees, Mr. Chairman. 
I cannot conceive of a negotiation in the immediate future 
under which Israel will permit the return of any refugees or of 
any number except a number so token as not possibly meeting the 
problem. I can understand the Arab position that they cannot 
sign an agreement in which they renounce the return of 
refugees. If they were willing to do that, of course, the 
problem would go away. But that is probably the hardest of all 
the steps for the Palestinians to take, and this may have to 
wait an evolution as was the case in the German Polish refugee 
problem where this was not put at the very beginning of the 
process.
    So on the other hand, what fuels the terrorism, it seems to 
me, is not so much the refugee problem as a general condition 
in which there is no normal life whatever on the Palestinian 
side. Therefore, the beginning of an effective way toward peace 
is to create conditions in which honorable people can coexist. 
So if one could come to some agreement about borders, the 
future of settlements, the demographic adjustments that I have 
suggested, and create a Palestinian state, this would be major 
progress.
    Now, if in the course of such a negotiation, it suddenly 
appeared that the desire for peace had grown so great that the 
other issues can be settled too, I would surely not oppose 
this. But I would think the immediate objective of the 
negotiations should be to see how the Middle East can be moved 
from the present condition of inherent terrorism as part of the 
political expression on one side and reprisals on the other to 
a concept by which the two societies could begin coexisting 
with each other, and then let coexistence produce a process.
    The Chairman. If a border agreement could be made, a 
Palestinian state defined, what are the prospects that the 
Palestinian state or the people living in that area might be 
able to improve economically? In other words, might their 
prospects improve materially enough that they might begin to 
like the idea? What is feared, on occasion, even with the fence 
idea, is that the commerce between Palestinians and Israelis 
might be thwarted, might be stopped, and that the difficulties 
therefore for income for the Palestinians might be rather dim 
under those prospects.
    Dr. Kissinger. I am not suggesting, Mr. Chairman, sort of 
buying off the Palestinians and making them happy with whatever 
exists today. I believe that a serious effort at defining a 
final border between Israel and a Palestinian state should 
accompany the creation of a Palestinian state, but that should 
take into account the special nature of the 1967 border between 
Israel and the Palestinians as compared to that between Israel 
and Egypt and Syria and Lebanon.
    The other three were international borders that had been 
recognized internationally and established through some process 
of negotiation that had been given international sanction by 
practice. The 1967 border is a more or less accidental cease-
fire line that reflected military conditions as they existed in 
1948, and they were not drawn with any idea of being a 
permanent border.
    So if these two states are to coexist effectively, I think 
it is important that the border is drawn in such a way that it 
takes care of reasonable Israeli security concerns and, at the 
same time, makes adjustments in favor of the Palestinians that 
such an approach would generate.
    Now, I have advocated the movement, even out of existing 
Israel, of Arab populations that are contiguous to the 
territory. And when I say movement of the populations, I mean 
moving the border so that the populations would be part of a 
Palestinian state. This concept is resisted today because 
Palestinians do not want to accept yet the notion of the 
separation on that basis. But the realities that have produced 
terrorism, under which people live, makes it in my view 
desirable to make the demographic adjustments of that nature 
and to trade them for Israeli settlements that enhance the 
security of Israel strategically.
    Now, I have also stressed repeatedly in my public 
statements that once such a border is drawn, either by 
recognizing the security fence or through negotiation, the 
Israeli settlements on the other side of that border become 
subject to Arab jurisdiction or to Palestinian jurisdiction so 
that that border has to be drawn with the consciousness that 
the Israeli populations in those settlements may prefer to 
return to Israel.
    The Chairman. Thank you.
    Senator Biden.
    Senator Biden. Thank you very much.
    Mr. Secretary, I am going to ask a couple of specific 
questions. Then I would like you to--in my lifetime I have 
known of no one who could do it better--talk to us about some 
strategic notions here about the whole region, if you will.
    But, first, let me ask you. With regard to the notion of 
settling on borders now that would--nothing guaranteed--have 
reasonable Israeli security built in, since the days I watched 
you actively as National Security Advisor and then as Secretary 
of State as a young Senator the peace process has always been 
talked about in terms of land for peace. And peace, defined by 
most Israeli leaders, both Likud and Labor, over the years, has 
meant security as it relates to the right of return. In other 
words, they attach this notion of right of return, which you 
pointed out is the most difficult for Palestinians to deal 
with. And I agree with you intellectually that the only way 
that may get solved is if there are conditions of coexistence 
and a maturation of both societies over a period of time that 
allow that to be addressed and both peoples get their arms 
around it.
    But in establishing borders, is that not a hard call for 
the Israelis? Because part of this rationale is their 
bargaining chip to get these other serious divisive issues 
addressed and settled and that bargaining chip is the land. 
Once they give the land, once the border is set, even though it 
may not be cast in stone and be an internationally recognized 
border--or maybe that is what you have in mind--they are not 
likely to get the kinds of concessions they believe they need 
from the Palestinians specifically, and Arabs generally. Could 
you speak to that for a moment? Maybe I am misunderstanding 
your initial proposal.
    Dr. Kissinger. Yes. Historically the Israelis have thought 
of this as bargaining chips, and the late Prime Minister Rabin 
used to say, ``a little bit of land for a little of peace.'' 
One trouble with that is that peace is not so easily divisible 
and another problem is also that almost everything that the 
Arab side gives is revocable and almost everything the Israelis 
give is irrevocable. They give land and they get----
    Senator Biden. A promise.
    Dr. Kissinger. But your fundamental question is if one 
pursues the course that I have suggested of settling the border 
and creating a Palestinian state and leave refugees, does that 
not create a situation in which that refugee issue will forever 
disturb the relationship.
    Well, I think there is another issue that is also not fully 
settleable now. That is Jerusalem. There too one can make an 
interim arrangement, but the ultimate arrangement--and I think 
one would have to decide to what extent these two issues will 
be kept open--will balance each other.
    Finally, I would not object if, in the course of a 
negotiation, they would prove to be resolvable.
    Senator Biden. And I understand that.
    Dr. Kissinger. It is a very good point you make, that the 
dilemma of what I put forward is that if you leave something 
open, do you give a pretext for reopening hostilities. And one 
has to analyze that in terms of the people who want to reopen 
hostilities are really opposed to the existence of Israel and 
not to any specific condition.
    Senator Biden. Precisely.
    Dr. Kissinger. And can one create a pattern of life in 
which those who want to destroy Israel itself are marginalized 
and therefore a general atmosphere develops? That's the open 
question.
    Senator Biden. I understand now better what you are saying. 
I happen to agree with you. It is easy. You know that old joke 
they used to tell about the chicken and the pig in the barnyard 
saying they are going to give Farmer Brown a birthday gift, and 
the chicken says, let's give him a steak and egg breakfasts. 
The cow says, for you it is a contribution. For me it is a 
total commitment. Well, it is a little bit like what we ask of 
the Israelis.
    The point I want to make sure I understood is that it would 
require a mind-set change on the part of the Israelis to go the 
route you are going, which, easy for me to say, were I an 
Israeli leader, I would find worth taking the chance. It is not 
my job to tell them their business, but I just wanted to make 
sure I understood it.
    Dr. Kissinger. I think it requires a mind-set change on 
both sides.
    Senator Biden. Yes. And by the way, I think that is the 
context in which it would happen.
    Dr. Kissinger. I think we are beginning to head in that 
direction.
    Senator Biden. What I am worried about is that we are going 
to head in a direction in which Israel is going to be 
increasingly at a disadvantage. This is a case where I think 
time does not work on the side of the Israelis. What I am 
worried about is moving from a point of a two-stage solution to 
the acceptance of a notion on both sides that there is only a 
one-stage solution, that there is no possibility of a two-stage 
solution. And that is a path I would rather not go down at the 
moment.
    I would like in the few minutes I have remaining--because I 
know of no one else who is able to speak to these kinds of 
issues better than you. I have been at a loss to understand the 
official position of the EU or individual nation states within 
Europe because there is no single European view--with respect 
to Israel and what solutions they find most appropriate. I 
realize they signed onto the Road Map, but I still am not 
convinced they share our view. And I would like you to try to 
explain to me what I thought in your statement you indicated is 
that some of our European allies are using--maybe I misheard 
you--Israel to better their position in the Arab world. That is 
what I think, but I do not know if that is what you said.
    Dr. Kissinger. I did not understand the sentence.
    Senator Biden. That the Europeans use their attitude toward 
Israel, their position toward Israel to better their European 
position in the Arab world.
    Dr. Kissinger. Absolutely.
    Senator Biden. That is my view. Is that what you said?
    Dr. Kissinger. No, I did not say that, but I agree with it.
    Senator Biden. Well, I am smarter than I thought I was.
    Dr. Kissinger. I said it in a longer sentence.
    Senator Biden. What I would like to do for a moment is kind 
of explore that because it seems to me that there are really 
five parties to any ultimate settlement in the Middle East. The 
two critical parties are the Palestinians and the Israelis. The 
indispensable party is the United States. But the other parties 
are, quote, the Europeans and the Arabs, the Arab leadership.
    I have been at a loss to understand why there is not anyone 
in the Arab world since Sadat with the possible exception of 
the King of Jordan, who has a more strategic vision of Arab 
interests, and the interests of a particular Arab country, 
whether it be Saudi Arabia or Egypt today or anyone else.
    The idea that if the Arab leadership in these countries 
were literally willing to recognize the peace process in a 
tangible way--that is, invite Israeli diplomats to their 
capitals, to visit Israel--that, coupled with a change in 
attitude of the Israelis and the Europeans, creates an 
environment that is fundamentally different than the one that 
exists now.
    And I just wondered if you would talk with us for a few 
minutes. My time has been up about 2 minutes and 5 seconds. 
Maybe on the second round you could tell me what you think they 
are thinking. Tell me what the European perspective is, why 
they are not being more progressive, for lack of a better word, 
and why, beyond the obvious issue of fearing their own 
populations in a backlash, Arab leadership has shown so little 
imagination out of their own naked self-interest, unless I am 
miscalculating what I think they have not done. That is an 
awful broad question, but if you could speak to any of that.
    Dr. Kissinger. On Europe, what the Europeans mean when they 
put forward their proposal is that the United States should 
impose it. And if the United States would only impose it, they 
think that then the problem would go away, the parties would 
live happily together, Europe would furnish some sort of 
guarantees, which on the basis of history cannot be credible. 
So I think this is an abdication of statesmanship, and it 
appeals to anti-Americanism for one thing so that if there is 
no progress in the Middle East, it is by definition America's 
fault despite the fact that every progress that has been made 
in the Middle East historically has come through American 
participation in the process. Even the Oslo agreement grew out 
of the Madrid Conference.
    So part of it is domestic politics. Part of it is the view 
that Europe can establish a special relationship in the Arab 
world by taking this position.
    I do not believe that either of these approaches are in the 
long-term interests even of Europe. Europe would make a much 
greater contribution if it convinced the moderate Arabs that 
this is a problem not only for a small group of Palestinians, 
but for all those who want to prevent a fundamentalist or 
radical outcome in the Islamic world and, more than that, who 
want to give the Islamic world a modern direction in which the 
aspirations of the people can be met.
    So if this were some seminar at a university, I would say 
an ideal outcome would be if the Europeans and we could develop 
a common approach that took into account the psychological and 
strategic necessities of both sides and presented it with some 
degree of understanding, even compassion to both sides.
    As for the moderate Arabs, I had the honor of working 
closely with President Sadat. When I first met him, I had a 
very ambivalent attitude, but one of the very first things he 
said to me is this is, above all, a psychological problem and 
my contribution to it has to be to show that we genuinely want 
peace. He also added, the Israelis have to see to it that they 
do not humiliate our people that are dealing with them. That is 
a fair request.
    So I believe that it may be impossible for Palestinian 
leaders by themselves to jump the psychological hurdle that has 
to be jumped. And it would be highly desirable, probably 
necessary, for the moderate Arab leaders to say this frontier 
is one we consider reasonable and you are not traitors if you 
accept it. This, of course, means there have to be reasonable 
compensations.
    Therefore, I agree with the presentation you will hear by 
Dennis Ross that even in the process of unilateral withdrawal 
of the Israelis, they would be wise to engage the Egyptians and 
other moderate Arabs to create a sense of Arab participation in 
this as a process. And one of the roles of American diplomacy 
should be, and I believe attempts to be, is to bring the 
moderate Arabs and the Europeans to a less tactical approach 
and to take a more far-sighted look at it.
    I did not answer the chairman's question. Is it possible, 
you asked me, to bring the Palestinians to a point where they 
are prepared to coexist? I think within such a framework and if 
we could come up with a Middle East initiative in which the 
Atlantic nations were to put before the peoples in the Middle 
East what peace can bring through collaboration of the Middle 
East nations with the Atlantic nations and under conditions of 
peace with Israel, I think one can at least imagine what a 
structure would look like.
    Senator Biden. My time is up. I will just close with this 
comment.
    I cannot imagine, Mr. Secretary, notwithstanding the 
existence of these young Palestinians we have talked to and 
know--I cannot fathom how a solution to the Arab-Israeli 
conflict, as it relates to the Palestinian question, could be 
accomplished at the hands of these new leaders alone, for them 
alone to do it. I do not see how it can happen absent the 
leadership in the Arab world, Egypt and Saudi Arabia, saying 
first it is OK because I do not know how--I think we approached 
this the wrong way.
    We have to get the Arab world to say under conditions that 
are in this shape and form, you go ahead. We will bless you if 
you do it. You are not only not a traitor, you are helping us 
all. Right now, that psychological leap that was referenced by 
Sadat is so high on the part of any Palestinian leadership, I 
do not know how it gets accomplished.
    Dr. Kissinger. The most important aspect of Middle East 
policy is to understand that one has to deal with all these 
four or five issues simultaneously, with the moderate Arabs, 
the Europeans, the two parties, and other interested groups. 
But those are the key elements that one has to move toward this 
process.
    Senator Biden. Thank you very much, Mr. Secretary.
    I thank my colleagues for letting me go over.
    The Chairman. Senator Hagel.
    Senator Hagel. Mr. Chairman, thank you. And welcome, Dr. 
Kissinger.
    Picking up on the theme of your conversation with Senator 
Biden, you mentioned in your opening statement the proposal put 
forward by Saudi Arabia and Crown Prince Abdullah. I take it 
from your comments that you thought there was some substance, 
some opening, some hope, and it seems to me it reflects a bit 
on what you and Senator Biden were talking about, the moderate 
Arab leadership of the Middle East becoming involved. And I 
happen to agree with the assessment that to place this on the 
Palestinian limited, fractured leadership, as it is, will not 
get us where we need to go. And in light of your statement 
here, as you note on page 5 of your testimony, no progress is 
possible without a major diplomatic effort by America.
    So my first question is what do you believe happened to 
Crown Prince Abdullah's proposal? Why did it not ever get the 
attention that some thought it would?
    Dr. Kissinger. The importance of the proposal of the Crown 
Prince was that it was the first proposal by an Arab country 
that did not have a direct national conflict with Israel. So it 
was not one of the neighboring states, and therefore it was an 
approach in the name of moderation and peace by a country that 
did not have a direct issue with Israel. That was important.
    Second, the fact that he spoke of normalization was an 
important contribution.
    On the negative side of the proposal or on the incomplete 
side of the proposal, I do not believe that the 1967 border, 
for the reason I gave, can be the dividing line and I think 
there has to be a negotiation on that subject.
    Second, the concept of normalization needs to be fleshed 
out because the way it is defined now, it is something like 
diplomatic recognition. Now, diplomatic recognition is the way 
most negotiations begin, not how they end. It is a peculiarity 
of the Middle East situation that wars break out between 
countries that are technically at war with each other and that 
the chief nations do not recognize each other's existence, 
which has the implication that if the recognition is withdrawn, 
the right to existence is questioned. So the normalization 
point is something that would have to be elaborated.
    So I do not think it can be negotiated just as it is, but 
one can take the positive elements in it and from that point of 
view, I think it was a contribution. I believe that in a 
comprehensive approach it should be taken seriously with the 
qualifications I gave.
    Senator Hagel. How do you believe we should handle Arafat? 
We have obviously tried to marginalize him, not deal with him. 
That apparently has not been very effective. What is your 
suggestion as to how we deal with Arafat?
    Dr. Kissinger. The problem about Arafat is, does he create 
the Palestinian mood or does he reflect the Palestinian mood? 
Is he a cause or a symptom? Surely he has spent all of his life 
as a revolutionary leader, and therefore settling down to civil 
administration does not hold a great attraction for him. And 
probably he believes that his legitimacy derives from the fact 
that he has been an uncompromising opponent, in effect, of 
Israel's existence.
    The challenge we have put to the Palestinians to come up 
with a responsible leadership is a valid request. It is not 
clear whether the Palestinians by themselves can generate this 
or whether, at a minimum, the other moderate Arab states should 
play a role in legitimizing a leadership that deals with the 
issue of terrorism and final borders.
    Senator Hagel. In your opinion--and you held two of the 
most significant, important responsible offices in the 
Government of the United States at one time actually--with all 
of the responsibilities, commitments that America has today 
that consume the time of the President, the Vice President, the 
Secretary of State, the National Security Advisor--and the 
agenda is long and we know the items, Afghanistan, Iraq, North 
Korea, Pakistan, India, Haiti now, others, in addition to the 
Israeli-Palestinian issue--are we stretched too thin in having 
enough focus of leadership, of resource base, of commitment to 
do the things that apparently are not being done in the Middle 
East in trying to forge some kind of a process, the Road Map 
you spoke of? You talked about a protracted stalemate. We have 
not been able to break that stalemate. Is it in any way related 
to too many commitments, or does that not have anything to do 
with this elusive effort that we have been at since 1948?
    Dr. Kissinger. The question has two parts. One is are these 
issues so complex that they cannot possibly be dealt with in a 
comprehensive way, and the second is can the U.S. Government be 
organized to deal with them in a comprehensive way.
    With respect to the first question, I would argue that if 
they are not dealt with in a comprehensive way, they will not 
be dealt with at all effectively because then one always takes 
a piece of it and there will be some part that is not--that 
disturbs whatever progress you have made.
    I believe that it will be seen that what we did in Iraq--
that American actions in Iraq are contributing to an atmosphere 
in which peace can be negotiated more effectively between the 
Israelis and the Palestinians if only because it removes the 
possibility of a conventional war for the foreseeable future 
between Arab-organized armies and the Israelis.
    It is, however, a fact that in a world in turmoil, in which 
you not only have the Middle East but one has to think about 
North Korea, how to put China into an international system, 
what to do with a Russia that is redefining itself and 
reemerging, plus the European integration, that the management 
of a comprehensive foreign policy becomes a huge task.
    It is inherent in the nature of the governmental process 
that the urgent may have priority over the important. If you 
ask yourself where do I want America to be 5 years from now, 
that is a question you can defer until tomorrow. How to deal 
with the latest crisis in Baghdad or a suicide bomber is 
something to which you have to respond immediately and that 
will absorb your energy. This is a question that any 
administration has to deal with, and I believe we are dealing 
with it, but it is something that one always has to look at 
carefully.
    Senator Hagel. Thank you. Mr. Chairman, thank you.
    The Chairman. Thank you very much, Senator Hagel.
    Senator Nelson.
    Senator Nelson. Thank you, Mr. Chairman.
    Mr. Secretary, last year Deputy Prime Minister Olmert 
dropped the equivalent of a political earthquake when he said 
that major portions of the West Bank settlements should be 
disbanded, withdrawn from. This was a political earthquake 
because he had been one that had been articulating the whole 
Israel, followed by 2 or 3 months with the Prime Minister 
making a statement that he thought that some settlements should 
be withdrawn, and then when he went in front of the Likud 
Central Committee, he was booed for that position. And Prime 
Minister Sharon continues to talk about a one-party solution 
instead of a two-party solution.
    Where do you think that is taking us?
    Dr. Kissinger. Prime Minister Sharon, to go back to the 
question of Senator Biden, is vilified in Europe as a hard-
liner, as somebody similar to some of the totalitarian types. 
But it is not adequately recognized that he has made huge 
changes in the Israeli perception of the world. Whatever one 
thinks of the settlements, for an Israeli Prime Minister to 
announce the possibility of their being abandoned goes against 
the whole history of the Zionist movement for which settlement 
was a part of the Israeli identity. So I think it is not just a 
political move, it is a spiritual move, even though it is not 
put in those terms, and for this to become part of the Israeli 
internal discussion, however limited it is put forward in its 
initial stages.
    Now, it is also important, it seems to me, for Sharon and 
also for the peace process, that this come about as expression 
of Israeli security policy and not as something extorted from 
them through American pressure. So it seems to me that the 
combination of the security fence and the unilateral 
withdrawal, provided the security fence is brought into a 
rational relationship with Israeli strategic necessities, it is 
a major step toward an ultimate negotiation.
    Senator Nelson. If you overlaid in that if the Israeli 
policy was to pull out of the Gaza, does that create the 
circumstances where then, in your opinion, there would be such 
an atmosphere for a settlement?
    Dr. Kissinger. I think the objective conditions for a 
breakthrough in negotiations exists not necessarily in the next 
6 months but, say, within the next 2 years or the next 18 
months. Once all the parties recognize, which I think actually 
the Israelis have recognized, that there is no deus ex machina, 
there is nobody going to hand it all to them, the Americans 
will not be able to deliver everything, and the Europeans 
recognize that it does not do any good to keep stirring up 
unfulfillable hopes, and if we then keep heading toward the 
implications of what is almost inherent in some of the 
processes that have started, I could imagine a breakthrough, 
provided we can find one moderate Arab leader who is willing to 
take some responsibility for it. It cannot be done simply by 
outside countries.
    Senator Nelson. I agree.
    What if President Assad of Syria were to suddenly seize the 
moment and come forth and say we are going to stop all of the 
international terrorist activity that is harbored in Syria? 
Would that not be a cataclysmic change that could suddenly 
cause a shifting of the tables toward peace?
    Dr. Kissinger. Well, I have written in an article about 6 
weeks ago commenting on President Assad's interview with the 
New York Times, that this is an initiative that should be 
explored. If he means that the negotiations can start where 
they left off--if he really means that--all that was left in 
these negotiations was a strip of land along the Sea of Galilee 
of a few hundred yards wide. That, of course, raises questions 
of riparian rights and it is not a simple question, but it is a 
definable question.
    And also, if President Assad were prepared to make a 
genuine peace agreement with Israel, while the Palestinian 
question still is unsettled, that would create a major 
incentive for the Palestinians.
    On the other hand, for Sharon to engage in a final status 
negotiation with Syria involving settlements on the Golan 
Heights at a moment that he is dealing with settlements in Gaza 
and the potential settlements beyond the security fence, that 
is a really tough domestic question in Israel. And for the 
United States to promote a negotiation with Syria and let 
Syria, with respect to terrorism, take the step, similar to 
Libya's with respect to nuclear weapons, is an important 
challenge. If Assad were prepared to get rid of the Hizbollah 
in the Bekka Valley and the headquarters of terrorist groups in 
Damascus, I think it would be an important step toward peace if 
they explored the Syrian option.
    Senator Nelson. He told me that he would not cause any 
preconditions, and I have asked that question nine ways to 
Sunday to make sure that I was hearing what he was saying.

    Dr. Kissinger. He would not cause any?
    Senator Nelson. He was saying he would not impose any 
preconditions. Now, you hear a different opinion, whoever is 
speaking, but that is what he said to me eyeball to eyeball 
with our U.S. Ambassador sitting there and with his Foreign 
Minister sitting there. But, oh, it is a tortuous path.
    Thank you.
    Dr. Kissinger. I think it is something that should be 
explored, always keeping in mind that we must insist on the end 
of the terrorist activities from Syrian soil.
    The Chairman. Thank you very much, Senator Nelson.
    Senator Chafee.
    Senator Chafee. Thank you, Mr. Chairman. Welcome, 
Ambassador.
    This arguably is the darkest period of Israel's existence, 
this 4-year intifada, and certainly the chaos and the violence 
we read about every morning in the papers we condemn. As Robert 
Malley said, who will testify in the second panel, the Road 
Map, embraced but all but believed by none, as the only route 
we have out of this except, as you said, a deus ex machina, is 
the Geneva Accords. This in detail addresses all the issues, 
the Palestinian right of return, the recognition of Israel as a 
state for the Jewish people, Jerusalem, the Temple Mount, the 
settlements, and of course, very importantly the disarmament of 
militias and their renunciation of terror. This is signed by 
Israelis and Palestinians.
    And my question is why would members of our administration, 
such as Secretary Powell testify 2 weeks ago that he took heat 
for meeting with the signatories of the Geneva Accords? And 
Secretary Wolfowitz publicly announced some support for the 
Geneva Accords, and he took some heat for it from the 
administration. Why is that and out of this darkness is some 
light that this administration would condemn or renounce?
    Dr. Kissinger. The Geneva Accords are a negotiation between 
an Israeli who has made important contributions in the past but 
who is totally marginalized in Israeli politics and a PLO 
representative. If the Israeli Government and Arab governments 
came to such a conclusion, I do not think it would be vetoed by 
the United States.
    There are aspects of it that, looking at, seem improbable 
to me. I find it hard to imagine that Israel can live with an 
outcome in which access to the Wailing Wall has to go through 
some Arab territory no matter what the international guarantee 
is. But this gets into fine points that would take us too far.
    I am not saying it is not possible for private groups to 
get together and draw up paper plans. Governments have not been 
able to do that.
    But the refugee part of the Geneva Accords I think is 
extremely dangerous. The refugee part of the Geneva Accord 
establishes a right of return in some proportion to those 
returning to other countries, and second, they reopen the 
question that the decision will be left to Israel, subjecting 
Israel to constant pressure to adjust its attitudes. It is not 
definitive from that point of view. But I do not know whether 
it is useful to discuss details of an accord made between 
private people.
    Senator Chafee. I guess that would be my point. As I said, 
Mr. Malley will say the Road Map, embraced by all but believed 
in by none----
    Dr. Kissinger. I do not quarrel with the Road Map.
    Senator Chafee. We might quibble about the language on the 
right of return. My reading of it is that the Palestinians do 
concede the right of return, and it is very specific about----
    Dr. Kissinger. The trouble with the Road Map--it is not a 
trouble. It is----
    Senator Chafee. If I could just finish.
    Dr. Kissinger. Oh, excuse me.
    Senator Chafee. So my question is, why is this not more 
closely looked at as a vehicle of peace if that is our goal?
    Dr. Kissinger. There is no reason not to use the Road Map 
in a serious negotiation. The Road Map is a good, general 
statement of what should be settled in a negotiation. Once one 
had a serious negotiation, the Road Map would be one of the 
documents one would take very seriously.
    Senator Chafee. More so than the outline of Geneva.
    Dr. Kissinger. More than?
    Senator Chafee. You are saying the Road Map has more 
potential than the outlines from Geneva. Do I hear you right?
    Dr. Kissinger. The acoustics or my hearing is failing me. 
More serious than what?
    Senator Chafee. More potential for a resolution of the 
various issues, that sticking to the Road Map has more 
potential--am I hearing you correctly--than the very, very 
specific agreements reached in Geneva?
    Dr. Kissinger. I think the Road Map has more potential than 
the Geneva Accords.
    Senator Chafee. I do not have any other questions.
    The Chairman. Thank you very much, Senator Chafee.
    Senator Sununu.
    Senator Sununu. Thank you, Mr. Chairman.
    Dr. Kissinger, I think in answering a previous question, 
you talked about the potential for withdrawal from certain 
Israeli settlements, and you said that even as they withdraw, 
Israel should engage Egypt. In what way should they engage 
Egypt?
    Dr. Kissinger. Dennis Ross has submitted a paper to you on 
that subject. He thinks that as Israel withdraws, it is going 
to create potentials for all kinds of adjustments that need to 
be made and that it would be a wise Israeli course to discuss 
with Egypt a way by which territory that is begin abandoned or 
settlements that are being abandoned, on the one hand, do not 
begin a new terrorist wave and, second, can be used in a 
constructive way for the development of the Gaza. But I think 
you should ask Dennis Ross this question when he testifies 
here.
    Senator Sununu. I will do my best to do so, but I wanted to 
get your assessment of what kind of steps or approaches on the 
part of Israel could make a substantive difference.
    Dr. Kissinger. What he says and what I believe too--let me 
speak for myself and let him speak for himself. What I believe 
is that as Israeli settlements are given up, this is such a 
significant change in Israeli policy of such major consequence 
for the Arab world, that Israel should do it unilaterally where 
it can, but it should simultaneously indicate to the Arab world 
that the change in Arab conditions is something they would be 
prepared to discuss with them and in which the moderate Arab 
countries could make an important contribution.
    Senator Sununu. In your testimony you suggested that the 
security wall facilitates the abandonment of obstacles that 
deprive so much of Palestinian life of its dignity. I think 
those are pretty accurately your words. But much of the 
complaint about the practical implementation, the construction 
of the wall is that it has created a new set of barriers, a new 
set of obstacles, division in villages, division of farmland, 
and division of families. So does that not in part defeat the 
purpose or the value that you were describing?
    Dr. Kissinger. We are talking really about two walls, one 
that may be built unilaterally on the basis of whatever 
security needs Israel thinks it has. I do not necessarily 
endorse the line for that. The second one is one which is 
either parallel or close to what will be the final border. 
That, if it is intelligently drawn and thoughtfully drawn, 
should minimize the obstacles.
    What is now happening, as I understand, in the occupied 
territories is that there is plethora of checkpoints and great 
impediments to movement. One could imagine that once that wall 
exists, the movement on the Palestinian side of the wall would 
be essentially unimpeded or much less impeded.
    Senator Sununu. But it would seem to me that the situation 
you described, the one is a hypothetical and one that might 
have the benefits you describe, and the other is the practical 
or the real, at least in parts, that is again creating these 
divisions.
    Dr. Kissinger. I think it is very important to have a 
comprehensive effort of development and progress in the Middle 
East along the lines that I have described. If it is proved 
impossible to do this, then I think Israel is entitled to take 
unilateral actions, and we should use our influence--and I 
believe we are using our influence in this team that is now in 
Israel--to get the wall placed in a way that it reduces the 
impediments to Arab dignity.
    Senator Sununu. Well, along those very lines, you talk 
about American opposition to the wall. I do not know if it was 
in your testimony. It might be in the op-ed that you wrote at 
the end of last year. But you suggest that America should 
reconsider its opposition to the wall, but to the extent that 
the U.S. has expressed concerns or opposition, it is along the 
lines that you just described having to do with the placement 
for just these reasons.
    Dr. Kissinger. I think the administration is very close to 
the position that I have indicated now.
    Senator Sununu. I appreciate that clarification.
    Dr. Kissinger. I have not discussed this with the 
administration. When I wrote this article, there was opposition 
to any concept of a wall. I think now the administration's 
view, as I have understood it, is very close to what I have 
described here.
    Senator Sununu. So you do not believe that the work that is 
being done now to address the concerns of the routing, the 
division, the obstacles----
    Dr. Kissinger. I believe that the mission of Assistant 
Secretary Abrams and of Deputy Security Advisor Hadley is 
meeting the concerns that I have expressed here.
    Senator Sununu. I appreciate that clarification. It seems 
to me that that is the difference between the potential of this 
being constructive in the ways that you describe or you hope or 
the wall being as divisive and as counterproductive as anything 
that has been done. It seems to me that the issue of land 
ownership, land confiscation is as visceral and inflammatory as 
anything that is happening in the Middle East right now.
    Dr. Kissinger. I look at the wall as a contribution to 
coexistence, not as a means of supporting new settlement 
policy.
    Senator Sununu. Thank you very much.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Sununu, and 
thank you very much, Dr. Kissinger, for coming to us, and for 
being so forthcoming and comprehensive in your answers. We 
appreciate, as always, your attendance at our meetings and the 
leadership that you bring.
    The chair would like to now recognize the next panel, and 
that will include the Honorable Dennis Ross, director and 
Ziegler Distinguished Fellow, the Washington Institute for Near 
East Policy; Mr. Robert Malley, Middle East program director of 
the International Crisis Group; the Honorable Martin Indyk, 
director of the Saban Center for Middle East Policy, The 
Brookings Institution.
    Gentlemen, we thank you very much for coming today. Your 
full statements will be placed in the record. Let me ask you to 
testify in the order that I introduced you which would be, 
first of all, Mr. Ross, then Mr. Malley, and then Mr. Indyk. 
Please take a reasonable amount of time. I would suggest 
perhaps 10 minutes at least at the first go so we can have 
questions. It appears we will have a rollcall vote at about 5 
o'clock. That need not end the hearing, but it will punctuate 
it at that point as Senators go to vote. Mr. Ross.

      STATEMENT OF HON. DENNIS ROSS, DIRECTOR AND ZIEGLER 
 DISTINGUISHED FELLOW, THE WASHINGTON INSTITUTE FOR NEAR EAST 
                             POLICY

    Ambassador Ross. Thank you, Mr. Chairman. I will take 10 
minutes and I want to basically offer a perspective on why I 
think we are not at a point where we can achieve what is a 
comprehensive solution to the problem, but that does not mean 
you do not make the effort to transform the situation. I think 
what I will do is focus on why we are at that point, why we 
need a way station and what the options are for producing a way 
station.
    But before I get into that, let me offer one observation on 
the exchange between Senator Biden and Secretary Kissinger, and 
that was really on the role of the Arab states and what they 
can do. I am a believer that we do have to see Arab 
responsibility, which is something we have not seen. I am a 
believer that that is critical for making it easier for 
Palestinians both to compromise on issues where, in fact, there 
is not a context that has been created for compromise, as well 
as to be able to confront groups like Hamas and Islamic Jihad. 
Having an Arab umbrella would make it much easier to do that.
    The problem is we have not seen that up until now, and I 
would say the reason we have not seen it is because even though 
I think there is a desire on the part of many of the Arab 
leaders to see peace, the price they are willing to pay for it 
is not that high. The price they see in effectively having to 
condition for compromise and confront the Islamists is greater 
in their eyes than the price of continuing to face the risk of 
ongoing conflict between Israelis and Palestinians.
    We will have to affect that calculus if we want Arab 
leaders to begin to play a very different kind of role. I think 
we should. I think it has to be part of what should be the 
broader efforts we make in the region, but I think to 
understand the context we are in and the exchange that you had, 
that is the way one has to look at it.
    Let me explain why I think we are not at a point where we 
can produce a solution. For the last 3 years, we have had a war 
process. We have not had a peace process. There is a legacy 
from those 3 years on both sides, on the side of the Israelis 
and on the side of the Palestinians. The vast majority of the 
Israeli public today do not believe that Palestinians are 
prepared to live in peace with Israelis. They do not believe 
they accept the idea of a Jewish state next to them. The vast 
majority of Palestinians believe the Israelis are not prepared 
to surrender control over them.
    You cannot go from the current situation to a solution. In 
the current context, both sides need a kind of freedom. The 
Israelis need a freedom from fear and insecurity, and the 
Palestinians need a freedom from the Israelis. You cannot go 
from a situation like that to the end result because you don't 
have the right context.
    So the question is how do you create that context, and I 
think you need what I call a way station to get there. Now, 
there are really two options for how to do it.
    One option is a limited deal, a limited deal that would be 
between the Israeli Government and the Palestinian Authority 
today. It is a deal that basically would be what I would call 
the first serious implementation of the Road Map. Up until now, 
the Road Map has never really been implemented, but then again, 
the approach of the Road Map was fine as being an umbrella, it 
was fine as being a point of departure, it was fine as 
providing a set of guidelines. But the Road Map was not 
negotiated with the Israelis or the Palestinians, the two 
parties who had to carry it out. So if you were going to 
implement it, you had to have an agreement where they, in 
effect, bought on to the specific obligations, defined them the 
same way, understood them the same way, and you could have some 
accountability.
    A limited deal right now would look something like a 
variation of the Road Map, not in fact its precise 
implementation, even in terms of the guidelines. It would be a 
comprehensive cease-fire. No Israelis would be attacked by 
Palestinians on either side of the Green Line for a simple 
reason. If Palestinians want to draw a distinction between the 
Green Line, what is in and what is out, and they will attack 
Israelis outside the Green Line, then the IDF will continue to 
carry out targeted killings and it will continue to carry out 
arrest sweeps. So if you want to see a comprehensive cease-
fire, the Palestinians in fact have to be prepared, on the one 
hand, to stop all attacks against Israelis wherever they are 
and the Israelis, in return, would stop the targeted killings 
and the arrest sweeps.
    Now, to ensure that that could endure for a while, you have 
to have some enforcement of the cease-fire. On the Palestinian 
side, what that means is they would have to arrest those who 
violate it, and it would mean they would have to begin to go 
after what I would call parts of infrastructure. The Road Map 
called for a dismantling of terrorist infrastructure. The 
Palestinians today are probably not capable, certainly not 
willing to do that. But there are things they could do if in 
fact you were talking about a limited deal, and that would 
involve closing down the smuggling tunnels, especially those 
that run from Egypt into Gaza. It would mean closing down the 
Qassam rocket workshops. It would mean closing down the bomb-
making labs.
    Senator Biden. I am sorry. You said smuggling and then 
what? I did not hear the next word.
    Ambassador Ross. Closing down the Qassam rockets. They are 
crude rockets that are made in the Gaza and then fired into 
Israel. Closing down those workshops. Closing down the bomb-
making laboratories and arresting those who carry their weapons 
in the open as a way of enforcing law and order.
    Now, the Palestinians would require something in return for 
that. They would require a lifting of the Israeli siege. That 
means a lifting of the checkpoints. They would probably also 
press for a freeze at least on what they call the wall, what 
the Israelis call the fence, what I prefer to call the barrier. 
They would require a freeze on working on that, and they would 
probably require a freeze on settlement activity.
    Now, that is a deal that I can tell you in December, having 
been out in the area and having talked to both sides, I thought 
was at least something they could talk about, not that they had 
agreed to, but it was a basis for discussion. What has been 
very clear since December is that Yasser Arafat will simply not 
allow that to take place.
    A limited deal is a deal that may be done between Prime 
Minister Sharon and Prime Minister Abu Ala, Ahmed Qureia, but 
it is with Arafat standing behind the curtain. Well, Arafat 
does not want to stand behind the curtain. Arafat wants to be a 
part of it, and even then, it is not clear for how long such a 
limited deal would last.
    If you are trying to use this as a basis on which to 
implement the Road Map, you will not get to phase two of the 
Road Map which calls for a state with provisional borders 
because the Israelis are not going to accept the creation of 
such a state if the infrastructure for groups like Hamas and 
Islamic Jihad still exists. How can you have a state when you 
still have independent militias able to operate? And that is 
the point where Arafat will draw the line because Arafat is 
someone who always preserves an option. He never closes the 
door, and he has made it clear, in my judgment anyway, he will 
not close down these groups.
    Still, you might be able, through a limited deal, to get 
real calm for a year or two, and given the current situation, 
that could be dramatically better than what we face. I do not 
rule it out at this point, but I do not have a high expectation 
that it will take place.
    And that I think leads you to option two, which is the path 
that we begin to see emerging right now, which is a unilateral 
pathway, at least in terms of the Israeli declarations. What 
Dr. Kissinger said about Prime Minister Sharon should be 
reemphasized. He has said things that no other Israeli Prime 
Minister has said. They represent revolutionary statements. It 
is not just statehood for Palestinians. It is the whole idea of 
partition and disengagement. The unilateral withdrawal from 
Gaza, the evacuation of settlements. With those statements, 
there is not much meaning left to the traditional Likud 
ideology. So these are revolutionary statements.
    I think, again, we have to put this in a context. Why do we 
see a move in this direction? The Palestinians, if they cannot 
do a limited deal, if they cannot fulfill obligations under the 
Road Map as it relates to dealing with terrorist groups, if 
they cannot fulfill their security responsibilities, they leave 
the Israelis two choices to handle security. One is a siege. 
That is what we have today. In the West Bank alone, you have 
anywhere from 140 to 160 Israeli checkpoints. Normal life is an 
impossibility in such circumstances. So if you want commerce, 
very difficult to carry out. If you want to get your kids to 
school, plan on a couple extra hours in the morning and in the 
evening. If you want to get medical care, you better hope it is 
not an emergency.
    Now, do the Israelis impose the siege because they simply 
want to inflict punishment on the Palestinians? Many 
Palestinians might perceive that or believe it, but the reality 
is the siege is there because the siege is designed to prevent 
the killing of Israelis. Today the Israelis probably stop 90 to 
95 percent of the attempts against Israelis because of the 
siege.
    The problem with the siege from the Israeli standpoint now, 
not a Palestinian standpoint, is a year from now or 2 years 
from now, they will still have to stop the same number of 
attacks because what the siege does is preserve anger on the 
Palestinian side. What the siege does is ensure there is 
continuing resentment on the Palestinian side. Israelis can go 
after the Hamas operatives and they can stop them or kill them, 
but they are going to have a pool of ready new recruits unless 
they end the siege.
    From an Israeli standpoint, the siege is a bad idea. You 
have a current situation where the IDF is put in the position 
where they have large numbers of soldiers to protect small 
numbers of settlers, not the optimum way to structure your 
forces. You have a guaranteed pool of anger and resentment on 
the Palestinian side. And from the standpoint of the 
demographic issue--Dr. Kissinger referred to it as well--there 
is no way, given the demographic trends that Israel can stay in 
the territories and be a Jewish democratic state, which is what 
Deputy Prime Minister Ehud Olmert was talking about and that is 
why he called for unilateral withdrawal.
    So the siege from a Palestinian standpoint is a devastation 
and from the Israeli standpoint, it obviously does not serve 
their interests. And that is what leads you to what you are 
seeing now, what is the idea of a pull-back out of Gaza and at 
least a new security line in the West Bank.
    Now, the real challenge is how to make this a way station 
that creates a new environment for peace-making, how to ensure 
that as the Israelis get out, you do not leave something worse 
behind, how to ensure that as the Israelis pull out, you can 
reach some kind of coordination so you do it in a way that 
actually benefits those Palestinians who would be most 
committed to a transformation of the situation.
    That is why, in effect, what I have called for is a 
coordinated unilateralism. If the Israelis and the Palestinians 
cannot do it directly, then it is our role. And there are 
several different focal points for us.
    One is what we do with the Israelis. When we approach the 
Israelis, it should be guided by a series of criteria. For 
example, when you are dealing with the issue of the barrier, 
focus on the issue of a security line that makes it difficult 
to infiltrate, focus on the importance of not absorbing 
Palestinians, focus on the importance of the humanitarian 
considerations, and focus on the Israelis getting out of 
Palestinian life.
    We do have a reason to be asking the Israelis questions 
about what the Prime Minister has said because it is more a 
concept than a plan at this point. But it is a revolutionary 
statement and it would be a mistake to subject it to every 
microscopic question we can think of because you will, in a 
sense, drown that revolutionary idea in what may be a lot of 
very small questions.
    With the Palestinians, what we should be doing is talking 
to Abu Ala, talking to the Legislative Council people. We 
should be focused on the very issue of what happens when the 
Israelis go. How can the Israelis do it in a way that benefits 
you, but what responsibilities will you absorb as they get out? 
We, the United States, might be prepared to recognize 
sovereignty provided you fulfill your security 
responsibilities. We might lead the world in terms of 
emphasizing investment and assistance, again, if you assume 
your responsibilities.
    I would go to the other members of the quartet and have 
them go to the Palestinians with the same very clear position. 
We can work with you. Here is what we can provide you. I would 
have the United States, as well as the other members of the 
quartet, even in the area of security, say we are prepared to 
provide you the kind of support that you would need. You tell 
us what you would need, but you have to be in the lead. One 
thing about the history of the Palestinian movement is there 
has never been a tendency to assume responsibility, to make 
decisions, to be accountable, to have consequences. If others 
are going to assume the responsibilities, we are going to 
perpetuate that psychology. We should be there in a supportive 
position and it could even involve an international presence, 
as long as we are backing them up and reinforcing them not 
taking their place.
    Finally, I will make the point--and then I will close--that 
Dr. Kissinger was emphasizing about what I had written. If we 
are talking about a Gaza first withdrawal, not a Gaza only 
withdrawal, Egypt, being a neighbor of Gaza, has more 
capability to affect that than anybody else. They can certainly 
help those Palestinians who are prepared to assume 
responsibilities materially and otherwise. They can do 
something even today. The smuggling that goes from the Sinai 
into Gaza is smuggling that goes in one direction. It does not 
come from Gaza into the Sinai. They can do a lot more on their 
side of the border to stop the smuggling. They can make it 
clear that the Palestinians have an opportunity before the 
world to show that they are ready for statehood by succeeding 
in this area.
    I would like the administration now to be focused not only 
on talking to the Israelis about what it is they have in mind, 
which we should be doing, but also talking to the Egyptians now 
about the opportunity and what can be lost, talking to the 
Palestinians now, not later, about the kinds of 
responsibilities they would have to absorb and what can be 
gained, which, by the way, in my judgment would also make many 
of the Palestinian reformers see it as an opportunity where 
they can do more than they are doing today, and talking with 
the other members of the quartet as well about how to take 
advantage of what can be a moment. This is a moment. If there 
is one thing that characterizes Middle Eastern moments, they do 
not last long, and when you lose them, you are worse off.
    Thank you.
    [The prepared statement of Ambassador Ross follows:]

     Prepared Statement of Amb. Dennis Ross, Director and Ziegler 
  Distinguished Fellow, The Washington Institute for Near East Policy

    As the prospects for even limited bilateral Israeli-Palestinian 
agreements have grown increasingly more remote, Prime Minister Ariel 
Sharon has announced his intention to withdraw nearly all the Israeli 
settlements from the Gaza strip. It is a revolutionary move that 
creates the possibility of change at a time when Israeli-Palestinian 
relations are frozen in a pattern of terror, siege, and hopelessness.
    Efforts to fill the diplomatic vacuum created by the violence of 
the last three years, whether official like the roadmap to peace or 
unofficial like the Geneva Accords, have done little to transform the 
situation. Moreover, it is hard to find anyone at this point who 
believes that Yasir Arafat, who presently controls the Palestinian 
security organizations, is prepared to fulfill Palestinian security 
responsibilities.
    In the meantime, the Palestinian reform movement that seemed so 
hopeful last spring withers under the weight of the Israeli siege and 
the chaos that Arafat cultivates. Pervasive Israeli control, the 
Israeli response to the Palestinian Authority's unwillingness to do 
anything to stop acts of terror, produces deep anger among Palestinians 
and keeps the reformers on the defensive. Something has to change, and 
perhaps it can now that Ariel Sharon, the architect of settlement 
construction over the last twenty five years, has declared his 
readiness to evacuate settlements.
    But if the Israeli withdrawal from Gaza and at least partial 
withdrawal to a new security line in the West Bank are to create a new 
opening, they must be done the right way. They must be done in a 
coordinated fashion. Israeli moves can be done unilaterally but not 
without an effort to shape Palestinian, Egyptian, and European 
responses. They must be part of a strategic effort to create a new way 
station to eventual agreement, not a tactical response to pressures of 
the moment.
    For the Palestinians, the Gaza withdrawal is a moment to 
demonstrate that Israeli withdrawals will lead to greater calm, not 
greater instability. It is a moment for reformers to reassert 
themselves, rightfully claiming that Palestinians cannot afford to miss 
another opportunity to advance the cause of statehood. Indeed, it can 
be their moment to prove to the world that they are ready for 
independence and statehood, and that what they are building in Gaza can 
also be applied to the West Bank.
    Some have argued that it is best for the international community to 
run Gaza after Israeli withdrawal. Leaving aside whether this is 
feasible given the American preoccupation with Iraq, I would argue that 
it is probably unwise. If the Palestinians are absolved of 
responsibility of running their own affairs, the lessons of the past 
will never be learned. There will always be someone else to blame, 
someone else who should be held accountable, someone else who will have 
to take the difficult decisions. Even with all the internal 
difficulties that Palestinian security services face today, they know 
better than any multinational force how to combat Hamas. True, they are 
likely to need help in carrying out their mission and that should be 
forthcoming from the outside. But the essential point is that 
Palestinians must be in the lead in taking on this responsibility. Will 
Yasir Arafat seek to block the Palestinian Authority from confronting 
Hamas, Islamic Jihad and the al Aqsa Martyrs' Brigade after an Israeli 
withdrawal if it means that Palestinians demonstrate to the world that 
they are not ready for statehood? Can he succeed in doing so in such 
circumstances? If nothing else, now is a time to be making clear to 
Palestinians what is at stake and what can be gained but also what is 
expected of them after withdrawal.
    Palestinians may fear that Gaza First is Gaza Last, but the 
combination of having set the precedent of evacuating settlements and 
completing the security barrier in the West Bank will inevitably 
produce at least a partial pull-back there as well. The issue is not 
whether there will be a partial withdrawal in the West Bank. Rather, it 
is whether the security barrier, while not being a border, may remain 
the new separation line for a long time to come. Once again, it will be 
up to the Palestinians to choose. If Israelis in both Gaza and the West 
Bank are getting out of Palestinian lives and Palestinians are assuming 
their security responsibilities, peace making will be resumed and a 
permanent border can be negotiated relatively soon. If the Palestinians 
are not prepared to assume their responsibilities, then the 
Palestinians may be looking at a reality that will remain unchanged for 
the foreseeable future with little prospect of Palestinian statehood 
any time soon.
    Egypt should see that it too can help in this situation. An Israeli 
pull-out from Gaza creates a challenge and an opportunity for the 
Egyptians. A challenge because Egypt cannot be happy about the prospect 
of a Hamas dominated entity on its border. An opportunity because the 
Egyptians can help the Palestinians show the world they are ready for 
statehood--and bordering Gaza they are in a strong position to assist 
in their doing so. They can certainly do much more to prevent smuggling 
of potentially dangerous weaponry into Gaza, assist Palestinian 
security forces, and publicly declare that continued terror by Hamas 
and Islamic Jihad will threaten the Palestinian cause.
    Egypt's stature in the Arab world and its own policy of peace with 
Israel certainly would be vindicated by showing that the Palestinians 
can succeed. No one is better positioned than President Mubarak to tell 
Yasir Arafat that he will be held accountable if he now tries to impede 
this opportunity.
    For the Europeans, too, who have often been vocal critics of the 
Israelis, Israeli evacuation of settlements and withdrawal from Gaza 
can only be welcomed. They must not sit on the sidelines. They have 
credibility with the Palestinians and it should be clear what European 
expectations are. They can provide material help both on security and 
economically, provided the Palestinians are prepared to do their part.
    In particular, the Europeans should join the U.S. and others in 
spearheading a broad construction effort with strict financial 
oversight. They should target assistance and investment to create a 
successful counterweight to Hamas's social welfare Dawa network. If 
there is a targeted infusion of funds and Palestinians see their lives 
improve, it is the people and not Hamas ideology that will gain.
    Who can pull this coordinated effort together? Only the United 
States can do so. If Israeli withdrawal from Gaza is to create a way-
station to eventual peace, the U.S. must fashion a strategy of 
``coordinated unilateralism'' and marshal support from an array of 
parties in the Middle East and beyond to make it happen. One lesson is 
clear from the past: initiatives in the Middle East are never self-
implementing. The Israeli impulse to withdraw from Gaza requires a 
major effort from the U.S. to shape it, legislate it, and produce 
international support for carrying it out.

    The Chairman. Thank you very much, Mr. Ross.
    Mr. Malley.

   STATEMENT OF ROBERT MALLEY, MIDDLE EAST PROGRAM DIRECTOR, 
                   INTERNATIONAL CRISIS GROUP

    Mr. Malley. Thank you, Mr. Chairman, and thank you for 
holding this hearing at what I think is a critical time where 
not only the Road Map, but many of the traditional tools of 
peace-making in the Middle East have to be rethought in a 
fresh, creative, and bold way if we do not want the Israeli and 
Palestinian people to be further harmed, if we do not want the 
two-state solution to be further jeopardized, and if we do not 
want our own national interest to be further at risk.
    In these brief remarks, I just want to emphasize three 
points. The first is why trying to resolve the Israeli-
Palestinian conflict is central and vital to our national 
interest. The second is why the methods we have tried up till 
now to do so have failed, and the third is what options exist 
in the future.
    It used to be conventional wisdom that resolution of the 
Arab-Israeli conflict and the Israeli-Palestinian conflict in 
particular was a central vital national interest. Not so 
anymore. After the failure of Camp David and the peace process 
in 2000-2001, the outbreak of the intifada, and particularly 
the events of September 11, it took a back seat to other 
issues, fighting terrorism and radicalism in the Middle East, 
promoting reform and democracy in the Middle East.
    Paradoxically, however, I am convinced--and I think Senator 
Biden made that point earlier--that resolving that seemingly 
narrow conflict, the Israeli-Palestinian conflict, has never 
been more important now that we have broadened our stake and 
broadened the issues that we are preoccupied by in the Middle 
East, and that an integral part of our efforts to fight 
terrorism and to fight extremism is precisely to resolve or 
seek to resolve the Israeli-Palestinian conflict.
    It is our lack of engagement, our lack of resolve that is 
hurting us, not the contrary. And I think one hears it anytime 
you travel to the Middle East and most of all that those very 
reformers and democrats who are so burdened by the fact of the 
perpetuation of the Israeli-Palestinian conflict and the 
perpetuation of the perception, right or wrong, of excessive 
U.S. disengagement and excessive U.S. bias. And I think that if 
we want to help those people, it is vital that we come to the 
core and we try to, once again, resolve the issue because 
nothing hurts us more than the current situation, and nothing 
would help us more, particularly in the fight against 
terrorism, than a successful effort to resolve it.
    Now, if we all agree on the fact that it is a vital 
interest to try to resolve it, the question is how to do so. 
The first answer I think is not the way it has been done 
before. And I was part of the way it was done before, and I do 
not have any regrets about what we did, but I think that one 
has to learn from the past and learn that what has been tried 
now for over 10 years has failed and failed and failed again 
and it is the situation we are in today.
    The recipe of the past was an incremental step-by-step 
approach in which Israelis and Palestinians were each asked to 
take very sensible, rational steps to lead somewhere as a 
mutual confidence-building process, but without really ever 
telling either side with any precision what the final outcome 
would be. So each side was basically asked to take steps, asked 
to take difficult and painful political steps vis-a-vis their 
own constituencies without a clear end in sight and without 
knowing whether the outcome would justify the steps they are 
being asked to take in the interim.
    Now, the usual response, each time one of these efforts 
fails, whether it is the Mitchell report or the Tenet plan or 
now the Road Map, is to say we have to try harder and try 
better, and in particular, the United States needs to try 
harder and try better, but basically try more of the same. And 
in the case of the Road Map, one can say, indeed, that the 
Palestinians did not do enough on the security side, that the 
Israelis did too much on the military side, that the U.S. stood 
on the side lines and Arafat stood in the way. And all that is 
very likely to be true, but at some point it is probably wise 
to stop blaming the actors and to take a step back and look 
again at the script. And the script they were handed is a 
script again in which there is no precision as to the outcome 
they are being asked to take painful steps to achieve.
    And if it was hard in the past through this step-by-step 
approach, I would suggest that it is far harder today, in fact, 
practically impossible if we look at the 3 years of what Dennis 
began to describe, atrocious violence, suicide bombs, 
devastating military reprisals on the Israeli part, the 
collapse of those very security institutions on the Palestinian 
side that are expected to take on the radical extremist groups, 
the dwindling of the authority of Fatah, the backbone of the 
Palestinian national movement, and the strengthening of Hamas 
and Islamic Jihad and other radical groups, a Palestinian 
national authority that is no longer national and barely 
exercises any authority anymore, the leader of the Palestinian 
national movement who is virtually isolated and therefore, for 
better or for worse, incapable of making decisions.
    And so this notion that today Israel is going to hand over 
to the Palestinians responsibility for its security in this 
kind of step-by-step approach appears to be completely 
fanciful, again more so today than it was in the past. And the 
notion that today the Palestinian national authority and Fatah, 
weakened as they are today, disorganized, fragmented 
geographically and organizationally, are going to be capable or 
willing to take on Hamas or Islamic Jihad, particularly at a 
time when they have no faith that the Israeli Prime Minister 
currently in position, Ariel Sharon, could even come close to 
meeting their needs, their basic expectation in terms of a 
national movement, seems to me equally fanciful. So I think 
that the notion of trying to revive the Road Map as it exists 
today is an illusion that was costly in the past and will be 
even more costly in the future.
    Now, the most obvious manifestations of the collapse of the 
Road Map are the actions of Prime Minister Sharon. And I may 
not agree with much of what he does, but I do believe he has 
foresight and I think that his announcement about taking steps 
unilaterally, disengaging Israel from the Palestinians is a 
manifestation of an understanding of having reached the 
conclusion that the ways of the past will not work, that 
bilateral step-by-step negotiations are a thing of the past, 
and not a thing of the future, at least in the current context.
    We are now at a crossroads in terms of what we do. We can 
follow what the Prime Minister has done--and I agree with 
Dennis that it is revolutionary and it does have potential, 
good potential and bad potential--and follow the path of 
Israeli unilateral disengagement. And that is the most likely 
outcome, and I will spend some time discussing it. The other is 
what I would suggest would be far preferable which would be a 
U.S.-led international engagement, and I will get to that in a 
minute.
    Sharon's ideas at this point are much more of a puzzle than 
a plan. He has not said much about how many settlements he 
would withdraw from, when, under what circumstances, whether 
the IDF would be left behind or not, whether it would be done 
in one fell swoop or whether it would be prolonged and over a 
period of time, who he would hand authority over of the 
settlements that he has evacuated, question after question 
after question. But he has broken out of the box, the box of 
the Road Map, and I think it needs to be taken seriously. He 
has triggered movement and potential movement more than 
anything else in the last 3 years.
    One cannot predict, again because of the uncertainties, 
what will happen when he takes an action. The action itself is 
ill-defined and even if we knew what he wanted to do, it is 
very unclear how the Palestinians are going to react, in part 
because of the picture I painted earlier. There is no 
Palestinian Authority to speak of and there is no Palestinian 
national movement to speak of. So it is unclear to know how 
they and who they are will react. It is also unclear to know 
what the Israeli political system will do and what kind of 
obstacles it might put on the path of this plan.
    But assuming the general outlines, in terms of what Dennis 
described, I think one could see potential benefits and 
drawbacks, and in many ways, they touch exactly the same areas. 
Potential security benefit. Israel's security could be 
strengthened if it shortens its lines of defense, if it 
evacuates settlements that today are populated by small numbers 
of settlers that require a large Israeli military force to 
defend.
    On the other hand, it could be a security drawback if the 
lesson, the message that comes out of this is that violence is 
what gets Israel out of the territories and if Hamas and 
Islamic Jihad manage to turn it into their victory and to say 
violence is what got Israel out of Gaza today, it is what will 
get Israel out of the West Bank tomorrow. So, look to what 
happens in the West Bank not only in Gaza after an Israeli 
withdrawal.
    One other potential benefit: strengthening the PA, 
strengthening Palestinian security services, again along the 
lines of what Dennis suggested. One could imagine a scenario 
whereby the settlements are handed over to the Palestinian 
Authority, that they use this to give them momentum to rebuild 
the Palestinian Authority, to rebuild Palestinian security 
services. Flip side: it is handed over to no one. There is 
chaos. Hamas is strengthened. Hamas takes over Gaza. Hamas 
takes over the settlements.
    The third potential benefit. This could be a precursor to 
much broader withdrawals in the West Bank itself, and it is 
true that the Prime Minister has broken a taboo and he has 
delinked these two intertwined concepts of security and 
settlements. He, a Likud Prime Minister, has said implicitly 
settlements do not bring Israel security, they bring Israel 
insecurity. And therefore, one could imagine after Gaza and a 
few isolated settlements in the West Bank a broader withdrawal. 
Flip side. If in fact this is just a plan to get out of Gaza 
and to consolidate Israel's hold on the West Bank by thickening 
some of the settlements, by taking more action in east 
Jerusalem, by building a fence in certain ways, and by 
retaining control over the Jordan Valley.
    Both of these scenarios on all three fronts are possible, 
and I think the U.S. objective, if it takes the reactive 
approach of reacting to the Prime Minister's decision, needs to 
simply try to focus on two issues: No. 1, making sure that this 
is Gaza first but not Gaza last, which means putting pressure 
on Israel not to take action in the West Bank or at least 
telling Israel that it will not acquiesce in actions in the 
West Bank that will foreclose a two-state solution, and 
promoting the kind of coordinated actions that Dennis spoke 
about to make sure that whatever is withdrawn from is handed 
over to the Palestinian Authority and not to Hamas.
    Now, I think it is very clear that even though this is a 
revolutionary option and it could have ground-breaking 
consequences, it is a limited one because ultimately in its 
wake it will leave untouched the fundamental ingredients of the 
conflict. Occupation will remain. The Palestinians will still 
want to fight Israel, and even if there is a fence, one could 
count on the Palestinians to find more lethal ways to 
circumvent the fence and to try to attack the Israelis, and we 
are reading it in the press even today.
    There is another option which is to replace the 
incremental, step-by-step approach by an end game strategy. 
Three points to describe it very briefly.
    No. 1, the United States, together with moderate Arab 
leaders, together with the European Union, together with the 
United Nations, would put forward a suggested comprehensive 
resolution of the Israeli-Palestinian conflict, a blueprint, 
not to impose it, to suggest it, to put it out there publicly 
with Arabs there, the moderate Arabs that we have all said need 
to be involved in this, and only do it once the Arabs have 
committed beforehand that they will back the President in this 
effort, publicly back him and publicly put pressure on the 
Palestinians to accept it. No. 1.
    No. 2, as part of this plan, suggest the establishment of a 
U.S.-led trusteeship over the territories that ultimately would 
become Palestine, to give security guarantees to Israel, to 
give guarantees to Israel that those who will govern these 
Palestinian territories will not be what I have called the 
dwindling forces of the Palestinian Authority, but the 
international forces. It also responds to Dr. Kissinger's valid 
point that Israel will not withdraw from one day to the next 
and give all territories to the Palestinians. No. It would hand 
over the territory to this trusteeship, to the United States-
led trusteeship, which in time, as the Palestinians took the 
actions they need to take, would be turned over to the 
Palestinians.
    And third, to maximize the prospects of public acceptance 
on both sides, suggest that this proposal be submitted to 
referendum. We have seen this idea not only in Prime Minister 
Sharon's suggestion of a referendum on the withdrawal from 
Gaza, but also in another intractable conflict such as Cyprus 
as a way to make it easier for leaders to accept a solution 
that they know their publics will accept but that is hard, 
given their harder line constituencies, to sign onto.
    Senator Biden. Excuse me. Is that referendum you are 
suggesting only in Israel or in both----
    Mr. Malley. Oh, absolutely in both. And I would say it is 
probably more important on the Palestinian side. Absolutely.
    I am going to concede up front that I was not born 
yesterday, that I do not hold any particular hope that this 
plan will be taken up tomorrow by the administration. And I do 
not think this is a partisan issue. I think for any Democratic 
or Republican administration, this would be considered a risky 
endeavor. I know Dennis has said he does not think the 
conditions are right. I think Dr. Kissinger said the same 
thing, and many people would say that we are in this position 
now where we have to be realistic.
    I wonder sometimes, though, where is the realism in 
pursuing a path that has failed us so often in the past. Where 
is the realism in counting suddenly on a change of heart of 
leaders who have not changed hearts over all these years for 
good political reasons, not because they are stubborn? Where is 
the realism in thinking that we have uncounted time in front of 
us to salvage a two-state solution? And where is the realism in 
thinking that suddenly the conditions for peace are going to 
emerge?
    I think that is all a surreal realism and the genuinely 
realistic approach is the one that I put forward here, and 
particularly if you can get the Arab countries--and I think it 
is a precondition--to say up front they would accept it so that 
you corner those extremists, you isolate the extremists, and 
you give voice to the moderate forces that exist today, 
submerged but exist today, in the Arab world.
    So I would want to leave this committee with three 
questions to ponder.
    The first is, has the current policy been working? I think 
the answer is pretty clear.
    The second is, would this alternative approach have a 
better chance of succeeding? Again, I think the answer is more 
likely yes than no.
    And third, if we do not try something different, how long 
before the two-state solution becomes a thing of the past and 
we will come back here and the next session that you will hold 
will not be rethinking the Middle East Road Map, but rethinking 
the two-state solution?
    Thank you.
    [The prepared statement of Mr. Malley follows:]

   Prepared Statement of Robert Malley, Middle East and North Africa 
              Program Director, International Crisis Group

    Mr. Chairman: First, let me express my appreciation to you for the 
invitation to testify before the Senate Foreign Relations Committee. 
This hearing comes at a critical time: the traditional tools of peace-
making in the Middle East have all but exhausted their utility. From 
the Mitchell Plan to the Road Map, the U.S. has led various attempts to 
end the violent confrontation. Yet, for the past three years, the 
Israeli and Palestinian people have been consistently and repeatedly 
robbed of a normal life, with the daily cost in pain and bloodshed 
reaching unprecedented heights. U.S. national security interests also 
have been jeopardized as, rightly or wrongly, the perpetuation of the 
Israeli-Palestinian conflict and the perception of U.S. disengagement 
harm both our image in the Moslem world and, crucially, our struggle 
against terrorism. Fresh, creative and bold thinking is vital, lest the 
current situation continue or deteriorate further, and lest any 
prospect for a viable and sustainable peace vanish for the foreseeable 
future.
    The International Crisis Group (ICG) has been working in the Middle 
East and on the Israeli-Palestinian conflict in particular for over two 
years. Here, as we do in some 40 countries around the world, our field-
based analysis identifies the drivers of conflict and, based on that 
analysis, we define policy responses for specific countries and the 
international community to prevent or mitigate deadly conflict.

                                   I.

    Mr. Chairman, when the Road Map was first presented, ICG cautioned 
in its report, ``A Middle East Road Map to Where?'' that the plan 
``adheres to a gradualist and sequential logic to Israeli-Palestinian 
peacemaking, a throwback to the approach that has failed both Israelis 
and Palestinians in the past. Its various elements lack definition, and 
each step is likely to give rise to interminable disputes between the 
two sides. There is no enforcement mechanism, nor any indication of 
what is to happen if the timetable significantly slips. Even more 
importantly, it fails to provide a detailed, fleshed out definition of 
a permanent status agreement.'' Unless the presentation of the Road Map 
somehow served as a catalyst for fundamentally new political momentum 
in Jerusalem, Ramallah and Washington, we warned, it would rapidly 
prove futile. Unfortunately, that is the situation in which we find 
ourselves today. The Road Map may be resuscitated in one form or 
another and its core ingredients--a call for a two state solution, for 
Palestinian security, institutional and economic reform and for an end 
to the occupation--will remain. But for now, its role as a political 
tool to advance Israeli-Palestinian peace is over, and it is best to 
recognize it. If the goal is to break out of the status quo, there is a 
need to come up with a new or significantly modified approach.
    At the outset, it is important to understand why the Road Map 
failed in order to avoid duplicating past errors in the future.
    The broad vision put forward, first in President Bush's 24 June 
2002 speech, next in the Road Map, was welcome. But in its belief in a 
series of mutual, incremental steps and in its lack of a clear and 
detailed vision of the ultimate settlement, it repeated what Oslo and 
its variants over the years had attempted, always with the same 
dispiriting results: agreements not reached or not implemented, 
accompanied by an erosion in mutual trust and, in this case, ongoing 
violence.
    The idea that only incremental steps can resolve the current crisis 
flies in the face of the experience of the last decade. With each 
successive turn there are renewed calls to try better, try harder, but 
basically try more of the same: interim agreements designed to boost 
confidence and gradually pave the way for negotiations over a final 
deal. True, one can always attribute failure to the shortcomings or 
mistakes of the various parties. In the case of the Road Map, some 
legitimately lament that the Palestinians did too little on the 
security front; that Israel did too much on the military one; that the 
U.S. stood on the sidelines and that Arafat stood in the way. But that 
this has become an old refrain ought to tell us something about the 
process itself--namely, that the setbacks, skirted obligations, clear-
cut violations and violence are not deviations from the process as 
currently defined, but its natural and inevitable outgrowth. And that 
there is no reason to believe that what has failed before will suddenly 
work now, that what the parties have stubbornly resisted doing in the 
past they can--with a little additional pressure or persuasion--be 
brought to do in the present.
    What was missing from Oslo and now from the Road Map is a clear and 
well-defined vision of the ultimate goal. Israelis and Palestinians 
were reluctant to take difficult interim steps not knowing whether they 
would lead to a desired end-result. As a result, they treated the 
interim period as a time to shape the final deal through unilateral 
steps rather than realize it through joint effort. Both sides were 
determined to hold on to their assets (territory in Israel's case; the 
threat of violence in the Palestinians') as bargaining chips to be 
deployed in the endgame. Because the objective remained vague, neither 
side had a sufficiently powerful incentive to carry out its 
obligations, the goal always being appeasement of the U.S. rather than 
pursuit of desired purpose. And so, each interim step became an 
opportunity for a misstep and the logic behind the Oslo process--that 
interim measures would gradually boost mutual confidence--was turned on 
its head as each incremental violation further deepened the existing 
mistrust.
    In response, it is often argued that movement toward a resolution 
of the conflict should not take place unless and until the Palestinian 
Authority dismantles violent groups and reforms its leadership. This is 
a highly appealing logic. But it has not worked. And its main victims 
are and have been the Israeli and Palestinian people. The Palestinian 
people and their leadership undoubtedly need to clamp down on radical 
groups within their rank who resort to terrorist attacks against 
Israeli civilians. But it is hard to conceive that they will do so, 
morally necessary and politically imperative as it is, so long as it 
cannot be justified as being required for a clear and desired end-
game--so long, in other words, as these groups are viewed as resisting 
the occupier. To maximize prospects that Palestinians will take such 
action, they need to see an end to the most brutal Israeli military 
actions and be proposed a genuine alternative path to ending the 
occupation.
    Temporary lulls may be achieved. But the political dynamics of this 
conflict inexorably will lead to more violence and counter-violence 
until its resolution is in sight. Israelis cannot afford to be giving 
in to fear, and see no choice but to respond to every act of 
Palestinian violence. Each Palestinian attack both underscores the 
relative futility of Israeli military action and makes it all the more 
inevitable. For their part, Palestinians cannot afford to appear to be 
surrendering to force or to resign themselves to continued occupation, 
particularly when they have no faith in the political process that 
would follow a cease-fire. Each Israeli operation both takes a toll on 
radical Palestinian groups and swells their ranks.
    As a result, partial security relaxation on the Israeli side is 
likely to lead to renewed Palestinian violence which will trigger 
tougher security measures, often with devastating impact on Palestinian 
civilians, and which, in turn, will provoke more desperate violence. We 
have seen that pattern play itself repeatedly during the past year. In 
the current atmosphere, the anticipated virtuous cycle--in which good 
will gestures by one side are reciprocated by good will gestures by the 
other--is much more likely to turn into a vicious one. Ending the 
violence is absolutely vital. But it should not be a precondition for 
taking the political step--moving to resolve the underlying conflict--
that has the best chance of achieving that goal. Cases as varied as 
Algeria, Cambodia and South Africa illustrate that successful peace 
initiatives can and often do take place amidst violence.
    For its part, Israel must take steps to dismantle the vast majority 
of its settlements, not just in Gaza but in the West Bank as well, and 
allow Palestinians to realize their legitimate aspirations. But it is 
difficult to imagine it will do so, however counterproductive the 
settlement enterprise has turned out to be, before it is provided with 
security and persuaded that Palestinians are prepared to accept 
Israel's right to exist as a Jewish state, free from violence and the 
threat of massive refugee return.
    Ultimately, until they know what the endgame basically will be, 
Palestinians are unlikely to provide Israelis with the security they 
need. And until they are provided with that security and with an 
assurance that their needs will be met, Israelis are unlikely to carry 
out the political steps the Palestinians require. Put differently, 
Palestinians fear that what is portrayed as an interim solution 
(partial withdrawals in exchange for an end to violence) will become 
final and Israelis fear that what is portrayed as a final settlement (a 
two state solution) will only be interim. The mutual suspicion 
incrementalism it is designed to remove is precisely the reason why it 
cannot work.
    Likewise on the issue of Palestinian political reform. Its 
necessity is not in doubt, and Palestinians themselves would be first 
to agree. But to make a change in Palestinian leadership a precondition 
for movement toward a political settlement may well have succeeded in 
both preventing political progress and hindering institutional reform 
by portraying both as externally-driven diktats designed to promote 
U.S. and Israeli interests rather than Palestinian ones. Indeed, 
insistence on a change in leadership as a precondition for decisive 
movement on the political front de-legitimizes the concept of reform 
and undermines those Palestinian activists who have long led the fight 
for domestic change. Besides, as experience has shown, efforts to 
marginalize Arafat may well weaken his institutional power, but he 
retains unparalleled status and legitimacy in the eyes of the 
Palestinian people for whom he remains the embodiment of their cause. 
Despite his diminished popularity and the at times disastrous mistakes 
he has committed, Palestinians will rally around him in times of crisis 
and no rival will stand a chance. There is a profound psychological, 
emotive component to the Palestinian struggle in which Arafat and the 
symbolism that surrounds him plays a central part.
    If the incremental and conditional approach was questionable in the 
past, it has become far more so today. There have been over three years 
of horrendous suicide bombs and devastating Israeli military actions. 
Anger and bitterness on both sides is at an all-time high. Trust has 
virtually disappeared and the very Palestinian institutions expected to 
restore order and clamp down on violent groups have either been 
destroyed or collapsed. Radical Palestinian groups, far from being 
weakened by repeated Israeli attacks, have become both stronger and 
more popular, making all the more unlikely Palestinian efforts to take 
them on. Yasser Arafat's virtual isolation has guaranteed that he will 
exercise his still considerable influence to thwart any progress that 
does not give him a role. Plus, the Palestinian National Authority is 
no longer national and it barely exercises authority. Under what logic 
would Israel entrust it with its security? For their part, not a single 
Palestinian believes that Prime Minister Sharon will be prepared to 
reach a settlement even remotely approaching their minimum goal. With 
that in mind, and with Hamas, Islamic Jihad and other radical groups 
emboldened and empowered, can a Palestinian leader realistically be 
expected to take the political risk of confronting them or negotiating 
yet another interim deal with Israel?
    Under these circumstances, it is very hard to be confident that 
Prime Minister Sharon and Prime Minister Abu Alaa will be able to agree 
on much or for very long, let alone negotiate their way out of the 
current violence. Even if they do succeed, their agreement will be at 
the mercy of the first act of violence.
    Two alternative ways exist to break the stalemate and make up for 
the lack of trust and the parties' inability to move bilaterally. The 
first is for one of the two parties to act alone. The second is for a 
third party to step in.

                                  II.

    A few weeks ago, Prime Minister Sharon announced his intention to 
unilaterally disengage, including unilaterally withdrawal from many of 
the Gaza settlements and, possibly, some isolated ones in the West Bank 
if, within six months, it became clear that the Palestinians will not 
fulfill their responsibilities under the Road Map. Sharon's stated 
logic is clear: if the Palestinians are not prepared to take steps to 
clamp down on violent groups, if they do not have a leadership trusted 
by Israel, Israel cannot afford to wait. It will do what it must to 
maximize its security and separate demographically from the Palestinian 
population. Withdrawing from these settlements will shorten Israeli 
lines of defense, remove the burden of protecting small numbers of 
settlers with large military forces and, by disengaging from populated 
Palestinian areas, reduce friction with the Palestinians. It would be 
complemented by completion of the physical barrier or fence intended to 
radically restrict movement of Palestinians into Israel. The decision, 
should it be implemented, would amount to recognition that the path 
laid out in the Road Map is no more, for the time being at least.
    It is important at the outset to recognize what Prime Minister 
Sharon's suggestion is and what it is not. It is not a long-term 
solution but a temporary stopgap. It is not at this point a detailed 
plan but a very vague concept. It would not entail merely a unilateral 
withdrawal but most probably a series of unilateral steps. But of the 
two alternative paths we have laid out--unilateral disengagement or 
forceful international engagement--it is by far the more probable and, 
as such, deserves careful scrutiny.
    Evacuation of settlements is essential, a step called for by the 
Palestinians and the international community as a whole. No Israeli 
leader has seriously contemplated taking such an initiative in the 
absence of a comprehensive agreement--not Rabin, not Peres, and not 
Barak. And no Israeli leader has enjoyed the kind of political capital 
Sharon has in order to do this. For these reasons, a decision to 
evacuate settlements would clearly be welcome. Besides potential 
security benefits for Israel, it can lead to greater freedom of 
movement for Palestinians in Gaza and set the precedent of larger-scale 
settlement evacuation--including in the West Bank--by formally de-
linking settlements from security. Under the right circumstances, it 
can serve as a pilot case for the rebuilding of Palestinian Authority 
security services and reassertion of law and order, for Palestinian 
elections (for the PA as well as for Fatah), Palestinian reform and for 
greater international involvement. Should the PA be able to restore 
quiet in Gaza, in fact, a unilateral withdrawal could theoretically 
help rekindle Israeli-Palestinian negotiations. In short, if done 
right, what would begin as a consequence of failed diplomacy could 
become a forerunner to renewed diplomacy.
    But there are considerable risks for all sides, of which the U.S. 
in particular needs to be fully cognizant if it wants to avoid them.
    First, a unilateral withdrawal may well be read by Palestinians as 
a victory for those who believe that Israel can be forced through 
violence to pull out. It will be hard for them to see it otherwise: 
even a modest withdrawal was not forthcoming during the premiership of 
Mahmoud Abbas--who was committed to a peaceful resolution of the 
conflict; now it is being openly considered not as a confidence-
building measure for a courageous Palestinian Prime Minister but as a 
defensive reaction to continued armed attacks. Coming atop the Israeli 
decision to release hundreds of prisoners (again, a concession that was 
not granted to Abbas) in a deal with Hizbollah, this could embolden and 
strengthen the more radical Palestinian groups. In this context, some 
have evoked Gaza's potential ``Lebanonisation''--a reference to 
Israel's decision to withdraw from South Lebanon. While that earlier 
withdrawal almost certainly was the right thing to do, images of a 
retreating Israeli army carried wide-ranging implications, not least of 
all by inspiring Palestinians to launch the intifada.
    A related peril is that areas from which Israel withdraws, rather 
than fall under the PA's control, could descend into chaos and anarchy 
or into Hamas' hands, further radicalizing the Palestinian side, 
weakening the PA and reducing the chances of renewed negotiations. 
Should Israel--as is anticipated--leave behind either IDF forces or 
some settlements in Gaza, these quickly could become the targets of 
continued violence as Palestinian organizations claim that armed 
struggle is both what got Israel to begin its withdrawal and what will 
get Israel to complete it.
    There also are potential threats to the Palestinians and to their 
future ability to build a viable state. As some Israeli officials point 
out, unilateral disengagement would not be a unilateral withdrawal 
alone but rather a series of unilateral steps intended to consolidate 
Israel's position by refocusing on the West Bank and separating from 
populated Palestinian areas. In addition, the Prime Minister may well 
be required (if only to placate his harder-line right wing partners 
that have threatened to bolt from the coalition) to take 
``compensatory'' measures in the West Bank. Under this scenario, the 
partial withdrawal from Gaza and perhaps from some isolated West Bank 
settlements abutting Palestinian cities, thickening of settlement blocs 
alongside the Green Line, strengthening control over strategic areas 
such as Jerusalem, the Jordan Valley and other border areas, and 
completion of the separation fence encroaching into the West Bank would 
all become part of a broader plan to force long-term, de facto borders 
upon the Palestinians. Altogether, these could deal a fatal blow to 
President Bush's vision of a viable Palestinian state, condemning the 
Palestinians to isolated, non-contiguous cantons or enclaves and, at 
best, a non-viable statelet that they will be free to call a state.
    In other words, while some Israelis worry that this could be a road 
to more violence, Palestinians worry that it could be the end of their 
road to genuine independence.
    At this point, the Prime Minister's suggestions constitute far more 
a question mark than a plan. Among the significant unknowns are the 
following:

   When would the withdrawal/settlement evacuation take place? 
        Over what time period? If it is done in one fell swoop, it 
        might bolster the impression of a hurried Israeli retreat in 
        the face of Palestinian violence; if spread out over time, it 
        might increase the likelihood both of resistance by settlers 
        and of Palestinian attacks against them.

   Will there be a security handoff with Palestinian forces or 
        will it be wholly uncoordinated?

   Will Israel proceed in the face of escalating Palestinian 
        attacks on the eve of the evacuation?

   Will Israel proceed if it asks but fails to obtain U.S. 
        guarantees--e.g., regarding financial assistance to help 
        relocate the settlers; acquiescence in the route of the 
        separation fence or in additional settlement construction in 
        the West Bank; a commitment not to pressure Israel on a final 
        status deal?

   How many settlements will remain in Gaza?

   Will the settlements that are evacuated be destroyed? 
        Maintained intact? Turned over to the PA?

   Will the IDF remain in Gaza and, if so, for how long?

   How will Israel react if attacks emanate from Gaza after the 
        withdrawal--aimed either at remaining settlements, at the IDF 
        or at Israel proper?

   What simultaneous steps will Israel take in the West Bank?

   Who will control the Rafah border with Egypt? The Gaza 
        airport? The seaport? The crossing into Israel?

   Will Palestinian workers from Gaza be allowed into Israel? 
        Will goods be allowed in and out? In particular, what 
        provisions will be made for the supply of water, electricity, 
        medical equipment or food in Gaza?

    Until answers to these and other important questions are known, it 
will be extremely difficult to anticipate the impact of an Israeli 
action along the lines suggested by the Prime Minister. Even then, 
there will be considerable unknowns as to the Palestinian reaction, 
given the vast political changes undergone on their side during this 
latest period.
    Given those uncertainties, the best course for the United States 
would be to maximize the prospect that a process of unilateral 
disengagement strengthens Israel's security without jeopardizing the 
possibility of a viable Palestinian state or inflicting undue harm to 
the Palestinian population.
    First, the U.S. should see to it that Israel coordinate any 
settlement evacuation with the PA. Coordination does not require 
negotiating or even cooperation, and this is an important distinction. 
If he ultimately opts for the unilateral route, it will mean that Prime 
Minister Sharon has concluded that negotiations with the PA are futile. 
It therefore would make little sense from his perspective to sit down 
and discuss with the Palestinians the implementation of his move. But 
to withdraw without giving the PA any advance notification and the 
opportunity to operate a smooth hand-off of any evacuated areas would 
be a recipe for chaos and for strengthening radical organizations at 
the PA's expense. Conversely, Israel-PA coordination could minimize the 
appearance of a hurried and disorderly Israeli retreat, helping both 
parties. This may not require direct Israeli-Palestinian discussions, 
although they would be preferable, and could instead be done through 
back-to-back talks with Washington.
    Second, the U.S. and others in the international community should 
press the PA to exercise maximum security control over evacuated areas 
and assist it in this task. In particular, the PA's security 
organizations should take measures to try to prevent violent actions 
originating from Gaza.
    Third. the U.S. should make clear to Israel that it will not 
acquiesce in harmful compensatory measures in the West Bank. These 
include settlement construction, activity in East Jerusalem and 
building the separation fence in ways that hurt Palestinians and depart 
in any meaningful way from the 1967 lines. Movement in Gaza ought to 
facilitate future progress in the West Bank, not condemn it. Ensuring 
that Gaza first will not mean Gaza last is critical if the U.S. wants 
to preserve the possibility of a two state solution.
    Fourth, the U.S. should ask Israel to minimize any hardships on the 
Palestinian population of Gaza, consistent with legitimate security 
concerns. It is hard to imagine Israel allowing free movement for the 
Palestinians, either across the border with Egypt, by air or sea, let 
alone into Israel. But suffocating the population in Gaza by denying 
them basic economic opportunities would be a humanitarian catastrophe 
for the Palestinians and--by generating an even more embittered and 
radicalized Palestinian people--a political catastrophe for Israel.
    Fifth, to the degree possible. the international community as a 
whole should provide assistance to Gaza. This could take the form of 
economic help, security training to the PA and oversight of reform--the 
goal being to turn Gaza into a successful model of international 
engagement to be replicated some day in the West Bank. Some have gone 
further in this respect and suggested the establishment of an 
international trusteeship over Gaza, including the dispatch of foreign 
troops. There is reason for caution, however. In the absence of an 
overall territorial agreement--which an enduring if reduced Israeli 
presence in Gaza and the West Bank would preclude--Palestinians are 
likely to continue to resist and the trusteeship therefore will operate 
in a hostile environment. How many nations will agree to send troops 
under such circumstances? How would the multinational force interact 
with the remaining Israeli presence in Gaza, assuming as one must a 
less-than-total withdrawal?
    Ultimately, it is important to bear in mind the limitations 
inherent in any unilateral disengagement however well-implemented it 
turns out to be. Once accomplished, most of the underlying ingredients 
of the conflict will remain and some may even be exacerbated. 
Disentanglement from Gaza and erection of the separation fence may well 
limit Israeli exposure to attacks by Palestinians; but at least so long 
as the occupation endures, Palestinian militants will have the 
motivation to look for other, perhaps more sophisticated and deadly 
means to strike. While some have suggested that Israel's suggestion of 
a withdrawal from Gazan settlements could pave the way for a broader 
bilateral agreement on security and territorial issues, the outlook in 
this regard is bleak. To repeat: a unilateral initiative will be taken 
if and when Israel concludes that the Road Map process has failed, not 
in order to revive it; it will be taken if and when Israel concludes it 
has no partner, not as an opportunity to negotiate with one. It is 
hard, therefore, to imagine Israelis and Palestinians reaching a 
genuine agreement on a withdrawal from Gaza insofar as negotiations 
inevitably would put on the table other highly contentious issues: 
control over Gaza border areas, the sea and airport, freedom of 
movement for Arafat, together with Israeli actions in the West Bank, 
such as the construction of the separation fence, to mention but a few.
    Imprecise as to its scope or character, unpredictable as to its 
effects, unilateral Israeli steps are not and cannot be a substitute 
for a political solution. They might well set in motion a process even 
its initiators did not have in mind.

                                  III.

    ICG has repeatedly argued for replacing the incremental, step by 
step strategy of the Road Map with an endgame strategy involving 
forceful international presentation, led by the U.S., of a clear, 
detailed and comprehensive blueprint for a permanent Israeli-
Palestinian settlement. Both the plan and the means of promoting and 
implementing it are described in detail in ICG's three-part report, 
``Middle East Endgame.'' In our view, it remains the best and surest 
option to produce a fair and sustainable peace and one that, far from 
being inconsistent with the Road Map, can most effectively produce its 
desired results: an end to violence and to the settlement enterprise, 
reform of the PA, and a viable two-state solution. It is at once the 
most ambitious and pragmatic process available.
    First, the U.S. should present a detailed, comprehensive Israeli-
Palestinian settlement plan. in coordination with, and with the full 
backing of other key members of the international community--including 
Arab and Moslem states. The U.S. would precondition presentation of the 
plan on strong commitments from others, particularly in the Arab world, 
to back it, take concrete steps to normalize relations with Israel once 
peace has been achieved and take immediate steps to curb any aid to 
groups that resort to violence. For Arab states that have been 
clamoring for U.S. involvement, the quid pro quo would be clear: commit 
to supporting the plan in word and deed, commit to cracking down on 
violent groups and to pressing the PA to take action to end the 
violence, and the U.S. will present a fair, comprehensive settlement 
plan.
    It is clear by now, based on the parties' negotiations from Oslo 
onward, that a plan that protects the two sides' vital interests can be 
put together. Accordingly, the plan would not require either party to 
forsake what it considers its fundamental rights or aspirations. 
Rather, it would propose a practical solution to the problems they 
confront so that they can live in peace and security.
    To be clear: an Israeli-Palestinian peace plan cannot be imposed 
and this ought to be neither an imposition nor an ultimatum. An imposed 
solution would trigger an immediate nationalistic backlash on both 
sides, and, from Israel, cries of unfair treatment at the hands of a 
trusted ally. Rather, the plan would represent the international 
community's best judgment of what a fair, final and comprehensive 
settlement should look like and would appeal to the leaderships and 
peoples of both sides to embrace it. In other words, regardless of 
whether the leaders initially reject the plan, the U.S. and its 
partners would continue to promote them.
    Second, and as part of this plan, the international community would 
propose a U.S.-led international mandate to administer the territory 
that will make up the Palestinian state, verify compliance, help 
provide security and take control of land turned over by Israel. 
Several members of this Committee have evoked the notion of NATO troops 
monitoring the birth of a Palestinian state; ICG fully endorses such an 
idea in the context of a comprehensive settlement. The mandatory powers 
would be the ultimate arbiters, transferring land and full sovereignty 
to the Palestinians when appropriate. In other words, Israel initially 
will be turning over territory to NATO or some other U.S.-led 
multinational force--not to the Palestinians, and the force will help 
strengthen Israel's security by patrolling the Israeli-Palestinian 
border and Palestine's other international borders and crossing points. 
Israel could be offered membership in NATO and a U.S. defense treaty, 
and U.S. and European security guarantees would be extended to the 
Palestinian state.
    As a means of maximizing the prospects of acceptance, Israeli and 
Palestinian leaders could submit it directly to their people for them 
to approve or reject. This is the very idea Prime Minister Sharon has 
suggested as a means of side-stepping resistance by some members of his 
coalition to his Gaza withdrawal proposal and to give them political 
cover to remain in the government in the event of popular approval. It 
also is the concept accepted in the context of efforts to resolve the 
issue of Cyprus. A vigorous campaign in which the U.S., but also Arab 
and Moslem countries would play a significant part, would build 
tremendous pressure for the referendum and affect political dynamics on 
both sides. There is no doubt that, if it could be achieved, the most 
powerful impact of all would be made by the joint appearance of 
President Bush, King Abdullah of Jordan, Crown Prince Abdullah of Saudi 
Arabia and President Mubarak of Egypt to address the Israeli Knesset 
and the Palestinian parliament and call on both sides to accept the 
comprehensive peace proposal. Given the virtually complete breakdown in 
trust, if the peace process is to be jumpstarted, it may well need such 
a bold diplomatic move--the contemporary equivalent of President 
Sadat's visit to Jerusalem. Overall, the goal should be to generate so 
much domestic and international support for the referendum that 
opposition would become increasingly hard to sustain and the momentum 
for change gradually would become irresistible. As opinion polls among 
both Israelis and Palestinians indicate, there is every reason to 
believe that the referendums would yield the desired outcomes.
    Putting forward a comprehensive deal will provide the clarity that 
has so far been missing, creating genuine incentives for Israelis 
(security) and Palestinians (the end of the occupation) to confront 
extremists within their ranks and depriving them of their current 
legitimacy. Proposing a U.S.-led mandate will make up for the lack of 
trust and provide Israel with the assurance it needs that the 
Palestinian state it leaves behind will be stable, and well-governed. 
Submitting the plan to a referendum would endow the process with 
homegrown, popular legitimacy, while shifting the locus of decision-
making to an arena where the balance of power is far more favorable to 
proponents of an agreement.
    What is most illogical and tragic about the past three years is 
that majorities on both sides appear ready now to accept a final deal 
that will end their conflict. Postponing the final outcome--with the 
all too certain accompanying risk of major further death, injury, 
destruction and misery, not to mention the emergence of an embittered 
and vengeful Palestinian youth--cannot be the right answer. Instead, a 
process must be devised whereby the latent aspiration on both sides to 
end the conflict can be given practical and political expression.
    Historical precedent suggests that such an approach can work. To 
unlock difficult diplomatic predicaments. In Northern Ireland, in 
March/April 1998, the British and Irish governments together worked out 
a peace agreement and the U.S. mediator, former Senator George 
Mitchell, presented it to the parties. Likewise, in Macedonia, in 2001, 
the basics of the Ohrid Agreement had been drawn up before the end of 
June by the U.S. and EU negotiators. In both cases, as a result of the 
international community presenting the actors with a game plan for the 
final outcome, the debate rapidly became a haggling over details rather 
than a debate over fundamentals.
    Of all the arguments raised against such a proposal, the most 
salient is the lack of political willpower in Washington.
    For now, U.S. policy has been reduced to the oft-repeated position 
that no progress will be made unless and until the Palestinian 
leadership takes decisive steps to end the violence. But waiting for a 
``reliable Palestinian partner'' to emerge is a recipe for paralysis: 
only a credible political process can produce an effective Palestinian 
leadership, not the other way around. It is difficult to imagine this 
administration--or any other for that matter--taking on the risk of 
promoting an overall solution absent the most exigent of circumstances. 
The administration has been unwilling to put its muscle behind the far 
less ambitious Road Map, it is said. How could it possibly be expected 
to do significantly more?
    The point, of course, lies precisely there: the U.S. has been 
deeply engaged in Israeli-Palestinian affairs for a long time. Year 
after year, it has expended precious energy as well as political and 
economic capital on behalf of a process that promised little and 
yielded even less. Any type of engagement involves risks and costs. 
These only ought to be borne for the sake of an enterprise that merits 
them. Here, the cost-benefit calculus is clear: a successful U.S.-led 
effort along the lines described here would dramatically change our 
posture in the region, isolate radical forces, mute the anti-
Americanism that has become so widespread and reassert our position as 
defenders of Israel's vital interests without being oblivious to Arab 
concerns. Nor would the international forces deployed to the region 
face significant risks. In Iraq, the United States is seen to have 
initiated an occupation. In Palestine, we would be seen to have ended 
one.
    It is lack of U.S. action in the Israeli-Palestinian conflict, not 
its leadership, that damages its credibility. To quote Chairman Lugar, 
``The search for stability in the Greater Middle East must proceed hand 
in hand with the resolution of the Israeli-Palestinian conflict. Too 
many Muslims in the region judge the U.S. solely by its perceived 
unwavering support for Israel.'' A more dynamic approach such as 
suggested here would dry up support for radical groups and greatly 
enhance America's capacity to win international support and 
cooperation--not least from the Islamic world--in waging its struggle 
against terrorism.
    The irony is that a solution likely to be embraced by those from 
whom the hardest concessions are being asked (the Israeli and 
Palestinian people) and that would serve U.S. strategic interests in 
the Middle East perhaps more dramatically than any other step it could 
undertake, is unlikely to occur at this point because of resistance 
from within the United States itself.
    For now, the public debate should narrow down to two simple 
questions: is the current process working and would the one suggested 
stand a fair chance to succeed? The answer to the former is a definite 
``no'' and to the latter a possible ``yes.'' Given that, broad pressure 
should begin to build in the U.S. as elsewhere to lay the groundwork 
for the pursuit of this realistic approach rather than of the costly 
illusions for which we and others have paid so dearly over the years.
    Some have argued that pushing for a political solution at this 
point would be an unwarranted and dangerous reward for terror. But 
those responsible for terrorist attacks don't want a negotiated peace; 
they call for the elimination of Israel. They do not want refugees 
resettled in Palestine. They want them to return to Israel. They do not 
want to share Jerusalem. They want it for themselves alone. How can a 
peace agreement gratify terrorists when their goal is to destroy any 
chance of a just peace?

                                  IV.

    Mr. Chairman, for some time now ICG along with many others has 
argued that the world knows what the solution to the Israeli-
Palestinian conflict ultimately will be. An amendment now appears in 
order: what the world knows is what the solution ought to be. For 
events on the ground are making a fair two-state solution increasingly 
remote. Israeli settlements, despite recent suggestions floated by 
Prime Minister Sharon, have continued to spread throughout the West 
Bank. The West Bank is being cantonised and fragmented. The PA's power 
has eroded, with its most useful purpose today being to distribute 
salaries. The traditionally dominant Fatah is breaking apart 
geographically and organizationally. Hamas is becoming stronger, 
alongside a plethora of armed gangs, break-away groups and militias 
that do not respond to any central command. Arafat, the only 
Palestinian figure with a national constituency and legitimacy, and 
arguably the only figure still capable of selling a permanent status 
deal to his people, is being shunned by Israel and the U.S. Indeed, it 
is something of a polite fiction to imagine that an alternative leader 
with the requisite authority and legitimacy somehow will emerge. 
Reaching a Palestinian consensus that eschews further violence and 
clearly accepts the principles inherent in a two state solution 
therefore is becoming increasingly difficult and the very existence of 
centralized, national institutions, of a Palestinian polity able to 
make decisions and make them stick is in doubt.
    The shelf-life of the two state solution is not eternal. 
Ironically, Palestinian territorial realities, politics and psychology 
are drifting away from the two state solution just at the time when 
Israel and the U.S. appear to have come to terms with it. A page in the 
history of the conflict may be turning before our eyes. The United 
States should act now if it wants the notion of an Israel and Palestine 
living side by side in peace to become tomorrow's reality rather than 
yesterday's unfulfilled dream.

    The Chairman. Thank you very much, Mr. Malley.
    Mr. Indyk.

STATEMENT OF HON. MARTIN INDYK, DIRECTOR, THE SABAN CENTER FOR 
         MIDDLE EAST POLICY, THE BROOKINGS INSTITUTION

    Ambassador Indyk. Thank you very much, Mr. Chairman, 
Senator Biden, Senator Lugar, Senator Chafee. I am very 
grateful for the opportunity to address you on this occasion 
and for your patience while we make all these presentations. I 
will, given the lateness of the hour and the inevitability of a 
rollcall vote, be very brief and hope that my longer statement 
will be submitted for the record.
    I wanted to pick up quickly on something that I heard 
Secretary Kissinger say, and I wonder whether you heard it too, 
that basically he feels that both sides are moving much more 
closely and much more rapidly toward a final status kind of 
deal. It is precisely that conclusion which I too have reached. 
As a result of three important factors that have developed over 
the last 3 or 4 years of the intifada, the exhaustion factor, 
the demographic factor, and the shift in the balance of power 
that has occurred, we see both sides now, I believe, moving at 
least in terms of their publics, substantial majorities on both 
sides now supporting what would, in effect, be a two-state 
solution, based more or less on the Clinton parameters that the 
three of us all worked on at the close of the Clinton 
administration.
    I will not go into great details about these three factors. 
I do in my testimony, but I think it is important just to 
recognize that exhaustion on the Israeli side has led the 
Israeli people to want action from their government, but they 
do not believe in a negotiated solution at the moment because 
they do not see a Palestinian partner that is reliable enough 
to negotiate with. They are impatient. They want a better 
future for their children, and they therefore are the 
motivation behind Prime Minister Sharon's revolutionary 
statement about a unilateral withdrawal and evacuation of 
almost all the settlements in Gaza and some of the outlying 
ones in the West Bank. It is that impatience and that 
exhaustion which I think we need to take careful note of.
    On the Palestinian side, there is also an exhaustion factor 
at work. The Palestinian Authority is collapsing, as Rob Malley 
has pointed out. The Palestinians themselves are, I think, 
disillusioned with the corrupt and failed leadership of Yasser 
Arafat. But unlike the Israelis who are insisting that their 
government change the approach, the Palestinians seem to be 
incapable of insisting on serious change from their government 
and seem rather to be prepared to play a waiting game.
    Part of the reason for their willingness to play a waiting 
game is the second factor, the demographic factor, which is 
playing a very substantial role in Israeli calculations. The 
fear that within this decade Jews will no longer be a majority 
in the state, in the land of Israel that Israel controls 
between the Jordan River and the Mediterranean, is leading 
Israelis to want to separate from the Palestinians. Since they 
have concluded there is no hope of negotiating the separation, 
that too is what fuels their demand for a unilateral step from 
their government.
    The Palestinians see this demographic factor at work, see 
the Israelis pushing their government to withdraw, and that I 
think is another reason why they are prepared to play a waiting 
game. Consoled by the belief that time is on their side, that 
either Israel will leave the West Bank and Gaza to rid itself 
of the demographic threat or they will become a majority in the 
land of Israel and then be able to demand their equal rights.
    Finally, the balance of power factor, which I think is 
really important but little recognized. This is the fact that 
as a result of a combination of the toppling of Saddam Hussein 
and the evaporation of the Iraqi army, Israel no longer faces a 
potential eastern front coalition. And the balance of power in 
conventional, even nonconventional terms has shifted so 
dramatically in Israel's favor, also as a result of our own 
military presence on Syria's border, which is the only country 
with a much weakened army that remains on Israel's borders in a 
position to have any kind of conventional conflict with Israel, 
that this shift in the balance of power makes Israelis more 
prepared to take on this idea of a unilateral step that would 
even advantage its worst enemies, Hamas, Hizbollah, who will 
claim that they were the ones who forced Israel to withdraw 
through violence and terrorism. But because the Israelis feel 
that their deterrent power has overall increased significantly, 
I suspect that they are prepared to allow a weakening of their 
deterrent power in order to meet their needs for separating 
from the Palestinians.
    On the Palestinian side and on the Arab side more 
generally, I think this shift in the balance of power have 
reinforced a trend that has developed for some time of Arab 
states now willing to end the conflict with Israel, as they 
have expressed in the Arab League initiative, to normalize 
relations with Israel in return for a full withdrawal. And the 
Arab states are, I believe, moving more and more rapidly to, in 
effect, abandon the Palestinian cause as they focus more on 
their own pressing needs and are engaging more and more with 
Israel on the side and being prepared to settle with it, even 
at the expense of the Palestinians. The Syrian overtures to 
Israel for peace make no mention of the need to settle the 
Palestinian problem, and that is just one example.
    So as a result of all of these changes, I think what we 
have now is a situation in which Israelis are demanding a 
change from their government and are even willing to give up 
territories they have held for 36 years and evacuate 
settlements without receiving any commitments from the 
Palestinian side. But they are, Mr. Chairman, acting out of 
despair of the alternatives rather than out of hope for peace. 
Arab states are more willing than ever to end the conflict with 
Israel but unfortunately unwilling to take any serious 
initiative to do so. The Palestinians have exhausted themselves 
but seem incapable of producing a new leadership that could 
enter negotiations with Israel, preferring instead to sit, 
wait, and wallow in their misery.
    What is to be done? Unfortunately, the challenge here lies 
not in defining the end game, as Rob Malley has suggested, but 
rather in overcoming the structural impediments that prevent 
the parties from getting there. And that is, I think the issue 
that we need to deal with and come up with solutions for.
    The single most important structural impediment is the lack 
of a capable, responsible, and accountable Palestinian 
leadership, and therefore any attempts to get a modified Road 
Map off the ground are simply not going to work. Therefore, any 
attempts to resolve the problem with an end game solution are 
not going to work because of the absence of this responsible, 
capable, accountable Palestinian partner.
    So the question is, how can we take the current confluence 
of events, the way in which these factors are driving the 
parties to consider things that they would not otherwise 
consider, take advantage of that to deal with this fundamental 
structural impediment?
    In essence, what I am suggesting here is that given the 
Government of Israel's Prime Minister's decision to take a 
unilateral initiative, we need to get behind that, as the other 
speakers have suggested, and shape that initiative. And we can 
do this in two ways.
    One is to try to turn it into a negotiation process, that 
is, take the willingness to evacuate settlements, withdraw from 
Gaza and significant parts of the West Bank, and use that to 
shape a more effective Palestinian leadership that could 
respond to it. And I go through, Mr. Chairman, in my prepared 
testimony a number of steps that we would need to take.
    It would need to be a U.S.-led intervention with the 
quartet in the first instance to demand that Yasser Arafat give 
up control of the security services. If the Palestinians are to 
take control of the areas that Israel evacuates, they must 
retrain and reunify the security services. We must make it 
clear to him that there will be no more support for the 
Palestinian Authority, no financial support for the Palestinian 
Authority unless he does so.
    Then to have the quartet supervise the implementation of a 
political and economic reform process that essentially we have 
given up on, even though we started it in the first phase of 
the Road Map. And in that way, Senator Biden, to oversee a 
process in which the young guard and the reformers could form a 
new leadership.
    And in that context, what I would suggest is that we do it 
as a modification of the Road Map. With a new Palestinian 
leadership in which Arafat has stood aside and we have overseen 
a reformed leadership come about, have them negotiate with 
Israel phase two of the Road Map, a state with provisional 
borders. But that would not be implemented until their phase 
one obligations of confronting the terrorists would be 
fulfilled. In other words, they would have the ability to go to 
their people and tell them we have a viable state with 
provisional borders agreed on, but we will not be able to 
implement it until we deal with the terrorists.
    And, of course, I agree with Dennis Ross on this, that we 
do need Arab state endorsement for such a process. The essence 
of this option is to restructure the Palestinian Authority in 
ways that would give it credibility with Israelis and 
Palestinians.
    The second one is what I would call a modified trusteeship 
option. I would call it a receivership option. In effect, we 
would get in behind Israel's unilateral withdrawal and lead an 
international intervention to take control of the territories 
that Israel withdraws from, essentially put the Palestinian 
Authority in receivership--it is almost bankrupt at this very 
moment--and take on responsibility, using the shell of the 
Palestinian Authority to start to restructure the Palestinian 
leadership, implement the reform ideas, restructure the 
security services, and thereby create a credible Palestinian 
leadership that could then take control in the territories 
Israel evacuates and also then begin the final status 
negotiation that Rob Malley has suggested is the way to solve 
the problem.
    Either way, Mr. Chairman, we do not have the option 
anymore, if Israel is in fact going to take unilateral steps, 
of sitting back and doing nothing because that option will, I 
believe, surely lead to a failed Hamas-controlled, terrorist 
state on Israel's borders in the heartland of the Middle East. 
If we want to prevent that, we either have to shape Israel's 
urge to unilateralism to create a more available Palestinian 
leadership that can negotiate with Israel or get in behind that 
withdrawal and do the same thing under our own auspices.
    Thank you.
    [The prepared statement of Ambassador Indyk follows:]

  Prepared Statement of Hon. Martin Indyk, Director, Saban Center for 
             Middle East Policy, The Brookings Institution

        ``GETTING THE ARAB-ISRAELI PEACE PROCESS BACK ON TRACK''

    Thank you Mr. Chairman for this opportunity to address your 
distinguished Committee on an issue of great importance to the people 
of the Middle East, Israeli and Arab alike.
    For more than three years a conflict has raged between Israelis and 
Palestinians, claiming over 900 Israeli lives and over 3,000 
Palestinian lives and causing great human suffering on both sides. For 
most of that time, the United States has stood idly by, unwilling to 
invest the resources, diplomatic energy and Presidential prestige 
necessary to helping the parties end this bloody and unnecessary 
conflict. I say ``unnecessary'' because the broad outlines of a 
settlement of the Israeli-Palestinian conflict are known and are 
acceptable to substantial majorities on both sides. President Clinton 
first defined those parameters in December 2000 after lengthy and 
detailed negotiations with Israeli and Palestinian officials. The 
failure of the Palestinian leadership under Yasser Arafat to accept 
those parameters at that time is now broadly recognized on the 
Palestinian side, and in the Arab world, as a tragic mistake.
    Arafat himself is now trying to recoup what he lost back then 
through the vehicle of the Geneva Accords, negotiated by his close 
adviser Yasser Abed Rabbo with former Israeli Minister of Justice, 
Yossi Beilin. Even Hamas, the Islamic terrorist organization which 
preaches the destruction of Israel has recently acknowledged the 
pressure of Palestinian public opinion by declaring that it too would 
now be prepared to accept a Palestinian state in the West Bank and 
Gaza, albeit as an interim solution.
    On the Israeli side, the Likud-led right wing government of Ariel 
Sharon has already formally accepted the two-state solution outlined in 
the U.S.-adopted, and UNSC-endorsed, Road Map. Its Deputy Prime 
Minister, Ehud Olmert, has also declared that if Israel is to retain 
its nature as a democratic and Jewish state it will need to withdraw 
from most of the West Bank. And now the Prime Minister himself has 
expressed a willingness to withdraw almost all settlements in Gaza and 
some outlying settlements in the West Bank, which could serve as the 
necessary catalyst to the jump-starting of a new negotiating process.
    All these developments are a product of three critical factors that 
now dominate the calculations of Israelis and Palestinians: exhaustion, 
demography, and the balance of power.
    The exhaustion factor: After three years of bloody violence and 
terrorism, both sides have had enough. Israelis were prepared to stand 
by their government while the terrorism raged. However, now that the 
terror is subsiding the economic hardships of a deep recession are more 
keenly felt and Israelis are growing impatient. They are looking for a 
ray of hope, a sense of a safer and more productive future for their 
children. As a consequence, the ground is shaking under the feet of the 
Israeli government as the people demand a political initiative.
    On the Palestinian side, people are also exhausted by the economic 
hardship and the prolonged presence and often heavy hand of the Israeli 
army. They too want a way out of the conflict but no longer see the 
Palestinian Authority as capable of leading them there. There is 
widespread disillusionment with the corrupt and failed leadership of 
Yasser Arafat and considerable concern about the way warlords are now 
holding sway in the northern sector of the West Bank and the southern 
sector of Gaza. The Palestinian Authority is in an advanced stage of 
collapse. Only the PA's monthly payments to teachers, health workers, 
municipal workers and security personnel are keeping the economy moving 
and the PA relevant. But with Arab states growing weary too and the EU 
unhappy with Arafat's abuse of its largesse, funds for these monthly 
payments are drying up.
    The demographic factor: As Israelis worry more about their future 
with the Palestinians, they have come to focus on the fact that by the 
beginning of the next decade at the latest, if Israel retains control 
of the West Bank, Jews will become a minority in the state of Israel. 
Israel will then have to choose between maintaining the Jewish 
character of the state and its democratic institutions. This concern, 
combined with the violence of the Palestinian intifadah and the 
participation in it of some of Israel's own Arab citizens, has led the 
bulk of Jews in Israel to want to separate physically from the 
Palestinians. Since they have concluded that there is no hope for 
negotiating this separation as long as Arafat is in control on the 
Palestinian side, they are insisting that their government take 
unilateral steps to enforce the separation. The controversial security 
barrier and Prime Minister Sharon's plan for unilateral disengagement 
from Gaza and parts of the West Bank are both direct consequences of 
this Israeli urge to seek protection from the demographic threat.
    Unfortunately, many Palestinians watching these developments in 
Israeli public opinion seem to have concluded that their timeworn 
strategy of playing the victim is gaining a new lease on life. Instead 
of taking the initiative to change their leadership and reform their 
institutions of governance, Palestinians are increasingly opting for a 
waiting game consoled by the belief that time is on their side: either 
Israel will leave the West Bank and Gaza to rid itself of the 
demographic threat; or they will become a majority in the land of 
Israel and then be able to demand their equal rights.
    The balance of power factor: The toppling of Saddam Hussein and the 
evaporation of the Iraqi army, the disarmament of Libya, and the 
renewed dominance of the United States in the region, have left Israel 
in an immeasurably strengthened position vis-a-vis its Arab neighbors. 
This is having profound consequences on the way Israelis view their 
security environment. First, the long-feared emergence of an eastern-
front coalition has vanished, leaving in its wake a weak Syrian 
adversary that poses no serious threat to Israel (especially with the 
U.S. military on Syria's eastern border). That means that Israel's 
security justification for holding onto the Jordan Valley and the high 
ground in the West Bank has become much less compelling. Second, since 
Israel's overall deterrent capability has been significantly 
strengthened, Israelis are less concerned about the consequences for 
their deterrent power of a unilateral withdrawal in the face of 
Palestinian violence.
    On the Palestinian side, the balance of power factor cuts both 
ways. It strengthens popular support for suicide bombing as the short-
term Palestinian answer to Israel's conventional strength and increases 
dependence on the demographic threat as a longer-term strategy. But it 
also weakens Arab support for the Palestinian cause as Arab states 
reach the inevitable conclusion that they have no military option 
against Israel and turn away from the Palestinians to focus on their 
own more pressing concerns. One consequence is a greater Arab 
willingness to come to terms with Israel despite the absence of a 
Palestinian solution. The Saudi and Arab League Initiatives (which 
offers Israel full peace and normalization of relations in return for 
full withdrawal), Syrian peace overtures, and Libyan meetings with 
Israeli officials are all indications of this new trend towards gradual 
Arab abandonment of the Palestinian cause.
    Mr. Chairman, these three factors are clearly having a dramatic 
impact on the environment for Arab-Israeli peacemaking. Israelis are 
demanding change from their government and are even willing to give up 
territories they have held for 36 years and evacuate settlements 
without receiving any commitments from the Palestinian side. But they 
are acting out of despair of the alternatives rather than out of hope 
for peace. Arab states are more willing than ever before to end their 
conflict with Israel but are unwilling to take any serious initiative 
to do so. The Palestinians have exhausted themselves but seem incapable 
of producing a new leadership that could enter negotiations with 
Israel, preferring instead to sit, wait and wallow in their misery.
    It would be easy to suggest that all the United States needs to do 
in this situation is to intervene with its own Clinton-like parameters 
for a two-state solution and use its influence to get both sides to 
accept it. Unfortunately, the challenge lies not in defining the 
endgame that is now more or less acceptable to majorities on both 
sides, but rather in overcoming the structural impediments that prevent 
the parties from getting there.
    Today, the single most important structural impediment is the lack 
of a capable, responsible, and accountable Palestinian leadership. If 
the Palestinian Authority were willing and able today to fulfill its 
Road Map commitments to stop Palestinian terror and violence and uproot 
its infrastructure, a meaningful negotiating process could easily take 
the place of Israeli unilateralism. But the PA cannot and will not take 
on these responsibilities.
    What should the United States do in these circumstances? The Bush 
Administration's stated preference is to blame Yasser Arafat and the 
Palestinian Authority and do nothing. But if Prime Minister Sharon 
decides to implement his plan for unilateral disengagement from Gaza 
and parts of the West Bank--as he seems determined to do--the 
administration's hand will be forced. If it does not intervene to shape 
this Israeli initiative, the vacuum left by Israel's withdrawal will be 
filled by Hamas-led extremist elements that could turn the territories 
Israel evacuates into a failed Palestinian terrorist state in the heart 
of the Middle East.
    If non-involvement is no longer an option, then the United States 
should choose between two other options designed to overcome the 
structural impediment of the absence of an effective Palestinian 
negotiating partner.
    The Negotiations Option: Sharon's willingness to evacuate almost 
all the Gaza settlements and some outlying West Bank settlements could 
be used by the United States to justify an active international 
intervention on the Palestinian side to reform the Palestinian 
Authority and turn it into a capable negotiating partner. Such a U.S.-
led intervention would need to involve the following elements:

   A Quartet demand that Yasser Arafat finally relinquish 
        control of the security services, enabling a serious U.S.-led 
        effort to unify and retrain them as a force capable of 
        controlling and disarming the terrorist organizations.

   A credible threat that if Arafat does not comply funding 
        will be cut to the Palestinian Authority (alternative methods 
        for providing humanitarian assistance would have to be 
        utilized).

   A Quartet-supervised implementation of political and 
        economic reform of the Palestinian Authority.

   A U.S.-sponsored Israeli-Palestinian negotiation to create a 
        Palestinian state with provisional borders as provided for in 
        Phase II of the Road Map. However, implementation would only 
        take place after the Palestinians fulfill their Phase I 
        commitments to uproot the infrastructure of terror.

   Arab state endorsement and support for all these elements.

    The essence of this option is to restructure the Palestinian 
Authority in ways that would give it credibility with Israelis and 
Palestinians. On the Israeli side its credibility would come from its 
ability and willingness to fight terror and violence; for the 
Palestinians its credibility would come from being seen to be 
responsible for an agreement that would lead to the evacuation of 
settlements, the withdrawal of the Israeli army and the creation of a 
Palestinian state with provisional borders.
    The Receivership Option: The alternative to intervening to reshape 
Sharon's initiative into a negotiating process is to make arrangements 
for intervening after Israel has implemented its unilateral 
disengagement. To fill the vacuum left by Israel's withdrawal, the 
Palestinian Authority would be put into a ``receivership'' in which the 
corporation would still exist but its authorities would be assumed by a 
U.S.-led, UNSC-approved, international consortium. The ``receivership'' 
would need to involve the following elements:

   A UNSC commitment to the Palestinian people that the purpose 
        of the ``receivership'' is to forestall the PA's collapse and 
        replace it in the shortest time possible with a Palestinian 
        state with provisional borders run by an accountable and 
        transparent government.

   An intensive effort to restructure the Palestinian security 
        services to provide them with the capability to enforce law and 
        order in the territories evacuated by Israel.

   A small component of international forces (perhaps NATO 
        forces) to take control of key security nodes (such as 
        Netzarim, and the crossing points at Erez, Karni and Rafah) and 
        to provide back-up for the Palestinian security services.

   Oversight of a Palestinian reform process that would 
        generate democratic political institutions, transparent 
        economic institutions and an independent judiciary to replace 
        the failed institutions of the Palestinian Authority.

   Arab state endorsement of the ``receivership'' and 
        involvement in some of its aspects (e.g. Egyptian and Jordanian 
        training for the Palestinian security services).

   Sponsorship of negotiations with Israel to finalize the 
        borders of the Palestinian state.

    Mr. Chairman, neither of these options provides a simple, risk-free 
way forward for the United States. And in an election year, with the 
demands of Iraq and other hot spots consuming the attention of the 
Administration, they may both prove to be bridges too far. But sitting 
back and doing nothing is no longer a viable option either. Israeli and 
Palestinian exhaustion, the demographic threat and a dramatic shift in 
the balance of power have created new conditions that make U.S. 
intervention much more likely to succeed. If the choice therefore is 
between a failed, terrorist state in the Middle East heartland and U.S. 
intervention to restructure the Palestinian Authority, it seems to be 
no longer a matter of choice.

    The Chairman. Well, thank you very much, Mr. Indyk.
    Let me just say that we will have a rollcall vote, as I 
have predicted, and it may come almost anytime. But Senators 
have stayed with this hearing, as you can tell, and we 
appreciate your staying with us. So we would like to proceed 
with questions. I will try again for the 8-minute limit, 
knowing that there is some liberal ruling as required. One of 
us may disappear to vote and return. Whoever is here will serve 
as chairman while he is here so we can have continuity of the 
hearing.
    Senator Biden. I may stay just to get that feeling again.
    Senator Nelson. Mr. Chairman, you can be assured I will 
stay.
    The Chairman. Well, there is an incentive for you.
    Now, let me just say, listening to the last testimony of 
Dr. Indyk, one thought that comes to mind is that, as I think 
all three of you suggested perhaps, Prime Minister Sharon or 
other Israeli leaders have come to this demographic conclusion 
that Israel wants to continue to be a Jewish state. To have 
people coming and going in great numbers might jeopardize that 
at some point, quite apart from how the negotiations come out. 
Given the fact that things have not worked out very well, one 
way of bringing about some guarantee of that state is to put 
the fence up, hopefully in the right places so that it does not 
exacerbate the situation, and then let the Palestinians do the 
best they can.
    Now, given the end of all of the checkpoints that Dennis 
Ross suggested, the commerce obviously slows. As a matter of 
fact, if the economy is weak now, to use your term, Mr. Indyk, 
they really do head into receivership, or however you described 
that situation. Furthermore, there is some territory being 
given up. There are some assets there that are floating.
    Depending upon how the Palestinians look at it, an 
international receivership might be created in which we might 
be involved. Our European allies and maybe NATO are taking more 
of an interest in this, as we heard at Wehrkunde. Maybe even 
some Arab states might be interested under the right 
circumstances. Under those circumstances, perhaps the 
Palestinian state becomes a reality with new leadership in due 
course.
    The thing I want to query, though, is that one thing that 
has always seemed to have stopped each of the situations is 
that some persons involved in all of this are not cooperative. 
They create terror. It could be five young men who suddenly got 
the idea one night, leaving aside all of the high state craft 
that we are discussing. Now, maybe these acts are going to 
continue anyway. Perhaps Israelis and Palestinians say it is 
just the price of living in the area. We are going to have a 
number of unstable people for whatever psychological reasons, 
and perhaps we just have to understand that and weather through 
the storm.
    On the other hand, conceivably out of this receivership 
does come some type of constructive organization which has 
grabbed the interests of the United States, the Western 
Europeans, the Arabs. In other words, some economic vitality 
might conceivably come to people who are very poor and have 
very little prospect.
    Earlier on, the suggestion of Dr. Kissinger was that even 
if we effect all of that, there will be a psychological 
yearning of some Palestinians or others to resettle where they 
used to be. The thought is that they are not coming back. Once 
the fence goes up and that is it and you circumscribe Israel, 
Israel is going to remain a Jewish state unless strange things 
happen. Therefore, maybe it takes a generation for this to pass 
away. Maybe it passes away. Maybe it does not. Still it is a 
factor there.
    Likewise, even some of the Palestinians, if they are 
restored to some prosperity, still may deeply resent for a long 
time the fact, that there is an Israeli state there. They just 
do not like the idea. That may be true of a lot of people. Once 
again, a generational problem.
    Maybe some people still cannot give up terrorism. After 
all, in many states all over the world, they have not done so.
    But still, I see a formation here of something to work with 
that we, that is, the United States, and others could get our 
teeth into. The problem will be determining whether countries, 
the U.S. included, Europe, Arabs, will be willing to take 
casualties. If the terrorists strike now, the Israeli fence may 
be up. Now, maybe as you say, they would devise ways of getting 
around it anyway, but this is going to be more difficult. The 
garden-variety terrorists will probably be doing the terrorism 
with whoever is trying to effect this new state in the 
Palestinian area in receivership or a guardianship or whatever. 
You have a situation almost like the insurgency movement in 
Iraq. They are not exactly analogous, but still people are 
killing people, sometimes us, and the American people say, 
well, now, hang on here. That is not exactly what we signed up 
for. You have to go in with eyes wide open.
    For the moment, we are not near that stage, but still, 
given the circumstances you are describing today, if the Road 
Map is not really going to work and if the old plan did not 
work and if there are risks in just letting it go forever, then 
we have to begin to take a look at the risks. A potential 
pragmatic solution in this case may be impelled by Israeli 
action. They make a choice. The theological statement that you 
have to have the settlements out there for a biblical reason or 
so forth may be valid, but abandoned. You come back and you 
have something else out there, a trusteeship these days, in 
return for a Jewish state in essence. That is a unilateral 
decision, but it is a very big one.
    On the other hand, the Palestinians perhaps have already 
come to recognize that they cannot govern themselves. I do not 
see any possibility of their being able to enforce a dictum 
against Hamas or anybody else. They are going to need help. 
They may or may not want the help now. But eventually they will 
because they do not want to starve. The economic conditions 
will be rigorous there.
    I would ask any of you to comment on this in the short 
period of time that I have in my 8 minutes.
    Ambassador Indyk. Mr. Chairman, I think you have outlined 
very well a lot of the difficulties and dilemmas, conundrums 
that would confront us with these kinds of ideas. I will try to 
respond to some of them.
    I think, first of all, the context in which a U.S.-led 
intervention takes place is very important. It needs to be 
clear that the purpose of this intervention is to create a 
viable Palestinian state with provisional borders. I am not 
suggesting we should give up on the Road Map in that regard. 
Phase two of the Road Map provides for such a thing. Then once 
the state, with its democratic political institutions and its 
transparent economic institutions and its capable security 
service and its independent judiciary, once those institutions 
of better governance are established and the economic 
component, which you point to which is very important, there 
will be a final status negotiation, that the provisional 
borders will not be the final borders. But that is the context 
in which the Palestinians can buy into it and see that their 
future is not going to be taken away from them by a different 
kind of occupation. So that is, I think, point No. 1.
    Point No. 2 I will just say is that, yes, you are right 
about the problem of how do you deal with the terrorists. Why I 
came up with this concept of receivership or trusteeship or 
whatever is precisely because we do not have on the Palestinian 
side an authority, a leadership that is capable of dealing with 
this terrorist threat. But the point is not to take on that 
responsibility for ourselves leading the international 
community, but rather to get behind a Palestinian security 
force that would have that responsibility because it would be, 
in the process, helping to build the Palestinian state.
    It is in that context not doing Israel's bidding--Israel 
will have already withdrawn--not doing the international 
community's bidding, but doing the bidding of the Palestinian 
people who have an interest in a Palestinian state. And our 
role would be to retrain, restructure, and give them the 
backing, and if necessary, that might require some special 
forces on the ground, but it is the Palestinians who are the 
lead component in this.
    It is easier to do if you are dealing with Gaza first in 
this context. There you have greater Palestinian security 
capabilities now still in existence that could be reorganized 
and supported for that purpose. That also would give the 
Israelis some confidence, if it worked, that there was a way to 
deal with the terrorism problem.
    The Chairman. I thank you for that.
    I want to yield to my distinguished friend. Now, let me say 
that having begun the day listening to people talking about the 
need for a political context before we do anything in Haiti, 
this situation happens elsewhere in the world. I appreciate the 
creativity of the three of you in trying to formulate some 
sense of how that context might ever come about. We could wait 
for quite a while in Haiti right now for the context to happen. 
And that is a good point. What do you deal with if there is no 
context of this sort? On the other hand, that is a part of our 
dilemma today. We feel we cannot just wait indefinitely for 
something to happen fortuitously. The structuring, or the 
suggestion, of how we do come in, preferably with others, is 
very important.
    Senator Biden.
    Senator Biden. Thank you, Mr. Chairman.
    This has been a privilege today. No fooling, fellows. To 
hear from the three of you sitting here today is--you talk 
about assets. You guys are national assets. For real. I have 
always been impressed with at least two of you. I have bugged 
you for the last 15 years for ideas, and I have read a great 
deal about what the third one of you has said. I truly want to 
thank you. I consider it an honor that you are here.
    As a staffer behind me suggested, I feel like I have 
listened to a concert of the three tenors with the basso 
perfundo having gone first.
    But I tell you what.
    The Chairman. You are the chairman for the moment.
    Senator Biden [presiding]. Yes, thank you. I am chairman 
for a moment.
    Let me say two things and then I have a specific question 
for each of you.
    Ironically I find two or three extremely consistent threads 
that run through all your testimony, including Dr. Kissinger's, 
and that is that, Martin, notwithstanding the fact I put such 
emphasis on the need to have a circumstance that requires the 
Arab states to take some leadership to give leverage to the 
blossoming of this Palestinian leadership I think we all think 
is there, the truth of the matter is each of you have basically 
said the same thing in slightly different ways.
    Each of you, with your different approach as to how to 
proceed next, acknowledge what we did not use to emphasize as 
much before, and that is the active participation of the Arab 
states in some way and the active coordination of the European 
community and that probably will be the vehicle. So having done 
this for as long as you guys have with the degree of expertise 
and focus as you have had, that is a change. That is a change 
in what we have considered to be the essential elements to 
anything moving forward.
    Am I correct that in generic terms, there is a recognition 
on all of our parts that there is a need for the Arab states, 
main Arab states, at a minimum signing off on this and at a 
maximum being engaging more and that the Europeans have to be 
on the same page for any one of your approaches to have a 
chance of working? Am I correct?
    Ambassador Ross. Yes.
    Ambassador Indyk. Yes.
    Senator Biden. The second point I would like to make is 
that there is a recognition on everyone's part of the four 
witnesses today, as I understood the testimony, that to steal a 
line from one of Yates' poems, Easter Sunday 1916 about another 
dilemma that still has not been resolved, Northern Ireland and 
Ireland, that the world has changed. It has changed utterly. A 
terrible beauty has been born. The Middle East has changed in 
the last 4 years not because of the intifada alone but because 
the world has changed. The world has changed in the meantime 
while this internecine war has been going on. The surrounding 
circumstances have changed, Martin, as you have laid out in 
terms of the region.
    The first question I have--and I would like you to take a 
quick crack at it, Martin, and each of you to speak to it, if 
you would like. You point out why the Israelis are willing to 
take a new approach, that they want action and they do not have 
anybody to deal with, so they take it unilaterally. They feel 
both more and less secure. They are willing to take, at least 
in broad strokes, more of a risk because the existential threat 
from Arab states is much diminished, notwithstanding the fact 
the threat from individual terrorists has increased 
considerably, but nonetheless, that sets a condition. And you 
went through others.
    Martin, my question is, when is, to use a Christian term, 
that epiphany going to take place in Europe? When is a similar 
epiphany going to take place among the Arab states? I am not 
trying to be humorous, but the world has changed. Therefore, 
their approach to what they are willing to risk and not risk--
that calculus is able to change too. I do not see it changing 
in those other two pieces. So for me, this really crass 
syllogism I am putting together is this: the basic premise is 
that to get any of these options underway, we need European and 
Arab state involvement to some greater degree than we have now. 
Circumstances have changed to allow the Palestinians and the 
Arabs to maybe be prepared to take chances or a different 
approach. But the condition, it seems to me, is there has to be 
something that happens to get the Arab states and the Europeans 
invested in one of these approaches.
    Am I making any sense by my question? Could you speak to 
that for a minute?
    Ambassador Indyk. Sure. If I might make just one comment. I 
thought that you were going to identify three trends that we 
were all agreed on.
    Senator Biden. Well, there were. I did not go through them 
all.
    Ambassador Indyk. But the other thing that we are all 
agreed on is that there needs to be active U.S. participation. 
I think you would agree with that.
    Senator Biden. Yes.
    Ambassador Indyk. As far as the Europeans, I think they 
have actually already got it, or at least the key ones. What I 
mean by that is that the critical epiphany that they needed to 
reach was that the only way in which they could become helpful 
and relevant on the political level was if they had a strong 
and close relationship with Israel. That is what gave us such 
leverage in this situation because we could take, whether it 
was Sadat or King Hussain or Arafat in an earlier life, their 
willingness to make peace with Israel and use our influence 
with Israel to work out a deal. The Europeans saw it in their 
interest to side with the Arabs and therefore ruined their 
relationships with Israel, had no relationship of trust, and 
therefore could not play an influential role.
    I think that what we see with the British, the Germans, and 
believe it or not, the French in recent days is an 
understanding. That is their epiphany that they have got. Even 
though they do not like Sharon, they have got to find a way to 
deal with him.
    Senator Biden. Quite frankly, I am more optimistic, as 
bizarre as this sounds, about the French epiphany than I am the 
British and the German, but that is a different question.
    Since time is running out, maybe I will not ask each of you 
to comment. Rob, let me ask you a question.
    This notion of a total plan--if we had a European consensus 
and an Arab state willingness, I think there are conditions 
upon which that circumstance becomes much more likely.
    For example, I go back to a very crude analogy of a very 
important political event in American domestic politics. Back 
some 15-20 years ago, I was in a room with Bob Dole and the 
Democratic leadership and Republican leaders when I used a 
phrase to Bob Dole, we all got to jump in the same boat and 
know that if any one person starts to cut a hole in the boat, 
we all sink. And that was a compromise we reached, which was 
very painful, on Social Security to keep it solvent at the 
time. We all agreed literally we would not criticize the other 
for engaging in this agreement. As a party we would not as 
parties use it in our elections.
    In a sense, do we not have to get to the same place with 
our European friends and our Arab state friends that we are all 
in the same boat where we say, OK, we are all signing on to the 
same deal in order to create the condition for that Palestinian 
leadership to be able to become viable? Because, Martin, as you 
talk about it, setting up that circumstance requires, in your 
analogy, you've still got to have the Arab states signing off 
and you've got to have us getting in.
    So, Rob, my question is, is that sort of a condition 
precedent to being able to go the route you are suggesting?
    Mr. Malley. Absolutely. I think what needs to be done--and 
I think you are putting your finger on one of the main pieces 
of the puzzle which is the United States cannot do it alone. 
One of the lessons we learned from the past--and I think it is 
one of the lessons of Camp David--was we did try to do it 
alone. I am not saying that had we involved the EU or the 
Arabs, who probably were not ready at the time in any event, we 
would have succeeded, but certainly alone makes it much harder.
    I think we have reached this point. I think this 
administration is working much more closely with Arabs and 
Europeans, and I think the Europeans and the Arabs too for 
their own self-interest, in particular the moderate Arab 
states, are much more willing today to sign on to anything the 
U.S. does, even things they may not believe in, let alone 
things that they would believe in.
    I think the kind of plan I put on the table--and I would 
not go public with it until you get Arab leaders and European 
leaders publicly committed.
    Senator Biden. You have just answered my next question. It 
increases my respect for your judgment beyond what it already 
was.
    I am serious.
    Look, if I was sitting down in Bush's position, and we just 
took over an administration--I would literally split the three 
of you up and say, I want you heading to Europe, I want you 
heading to the Arab states, and I want you heading to the 
region. And I need you to get me a deal with the Arab states 
first, and you got to get me a deal with the Europeans. We have 
not in earnest, I believe--we have not been in much negotiation 
at all of late. And this is not a criticism of the effort the 
three of you made in the last administration. I mean it. I was 
right there following you guys.
    A guy who ran my staff for years and years has more wisdom 
than any man that I have ever met. His name is Ted Kaufman. For 
real. He does. Every time I would say something about 
negotiating our way through something, trying to get to a 
solution, I would say, my God, we are wasting a lot of time. 
And he said, you know, I had a professor at the Wharton School 
who used to talk about a quote that John Wanamaker, the famous 
retailer back at the turn of the century, said. John Wanamaker 
allegedly said, I know that 50 percent of my advertising is a 
waste of time. My problem is I just do not know which 50 
percent.
    The truth of the matter is that we had to go through 
everything we have gone through so far in my view in order to 
get to the place where we may be able to set the conditions for 
doing what we do now. So none of what I am asking or saying is 
in any way even an implied criticism of anything that you guys 
in your former roles and present roles as public citizens have 
attempted to do. This is an evolving process.
    But having said that, can I ask you--and I am going to have 
to go vote--whether or not you sense that there is any 
inclination on the part of this administration, to use a trite 
Washington expression, to think outside of the box right now, 
or is it basically live and let live for the time being and 
eventually something else is going to have to change on the 
ground before we, the United States, are able to react? It 
seems counterintuitive to say that because something is 
changing on the ground. Something significant is changing on 
the ground. Something potentially massive is changing on the 
ground with this unilateral movement on the part of the Sharon 
government.
    So can you give me a sense? I'm looking for how we get--if 
the chairman and I agreed fully precisely and signed on to one 
of the three approaches you said and we are going to do 
everything we can, do we have anybody to talk to in your view?
    Ambassador Ross. I think that the administration realizes 
there is something that is profound that is happening, but I 
would say at this point, at least for my tastes, they are still 
too cautious in terms of how they are approaching it from 
several standpoints.
    One, as I said a little earlier, when you have a 
revolutionary move, as is the case on Sharon's part, it is 
entirely appropriate to try to get your questions answered and 
to be sure that what is there is, in fact, for real and it is 
something. But do not bury it with 1,000 questions. There are 
maybe 10 questions that are critical and strategic, and you 
focus on those, No. 1.
    No. 2, do not wait to be satisfied on every answer before 
you start working with the others. I am very much concerned 
that if the only discussion is with the Israelis, then the 
implication is the only responsibility is on the Israeli side 
and it is not only on the Israeli side. Ironically it is the 
Israelis who are creating the moment by being prepared to take 
a step.
    Senator Biden. Right.
    Ambassador Ross. So do not fortify the sense somehow that 
it is only up to the Israelis.
    Third, you are going to have to engage in what amounts to 
very active diplomacy with the others. With the Europeans, 
focus on the fact that there is an opportunity here and here is 
the kind of role that we can play together to make something of 
it. With the Egyptians, as I said, the last thing that Egypt 
wants is for Gaza to become a Hamas stronghold led by Hamas.
    Senator Biden. The last time I had a conversation with the 
President of Egypt, who is an old buddy of a lot of us 
personally here, there was no inclination to talk to anybody. 
There is nobody to talk to here.
    Ambassador Ross. The critical question right now is if you 
have a revolutionary move and if we cannot on our own make sure 
that it comes out a certain way, what are the assets we have 
available? What are every one of the potential resources that 
give us a chance to take advantage of this? We have to talk to 
the Palestinians.
    By the way, everything that Rob and Martin have said about 
the fragmentation I see all the time when I am over there, but 
I also see something else. I see reformers. I see a move with 
the new guard within Fatah who in the siege environment are on 
the defensive, but in an environment where it is clear an 
opportunity is coming, they will become much more assertive and 
aggressive. And we should be working with them.
    We can also make it more difficult for Arafat to block it. 
If it is clear there is something profound to be gained, is he 
going to stand in the way of that, when it is much clearer that 
that can be the case?
    But then, again, it is not just us with them. It should be 
the quartet members with them. It should be Egypt. We should 
try to engage the other Arabs as well. Maybe as a collective 
they can do more than they have in the past.
    The issue you were raising before about the Europeans and 
the Arabs, I think the Europeans are coming to the point of 
view of realizing maybe there is something here.
    I think with the Arabs, I do not think they see it yet. I 
think they still reflect the mythologies. Even the terminology 
of what is used, the wall was used today. There are 87 miles 
that have been built. Three miles are wall. Eighty-four are 
not. There is a mythology that has built up around that. They 
have not broken through the mythology to realize what if the 
Israelis are getting out of a percentage of the West Bank, what 
if they are getting out of all of Gaza? Well, that is an 
opportunity. Now, what is your role going to be? How can you 
make sure that those who gain from it on the Palestinian side 
are those who believe in peace, not those who do not?
    So there is a lot that can be done here, but then you have 
to be prepared to step up to the plate and do it.
    Senator Biden. Guys, I only have a minute left to go vote. 
I just want to tell you again with all sincerity how much I 
appreciate your contributions not here in this committee today. 
We are so used to calling on your time, that we almost take it 
for granted.
    I hope people are listening not only here but on both ends 
of the street. I think there is a great opportunity. I think we 
have a chance, to vastly overstate it, to make the 21st century 
the century of hope, not one of doom like we are starting it 
off. I think what you guys have suggested with the threads that 
are the same here, there is real possibility.
    Anyway, I thank you. Mr. Chairman, thank you for allowing 
me to be chairman for 10 minutes. It was a nice feeling, but I 
am very comfortable with you as chairman as well.
    I am going to go vote. Thank you, fellows. I appreciate it.
    The Chairman. You did very well.
    Senator Biden. Thank you.
    The Chairman. But back to normal now.
    I call upon Senator Nelson.
    Senator Nelson. Thank you, Mr. Chairman.
    Since it certainly seems the case now that Arafat will not 
cooperate and that there will not be any viable Palestinian 
security, it seems like until something changes there that it 
is almost hopeless. So what should the United States do? And 
let me preface that by just telling you a story.
    I had met with the leaders in Egypt before going to Israel, 
and General Soliman had told me that he had just had a meeting 
with Arafat and Arafat had said--now, this is back in early 
January--that within 2 weeks he was going to name a new 
Palestinian security chief. So in the next day or so when I was 
meeting with the Palestinian Authority, the Prime Minister 
Qureia, I said this to him. I said is that going to happen in 2 
weeks as General Soliman said. And he smiled and he said, maybe 
in 10 weeks, maybe in 52 weeks.
    So is it hopeless unless we can get Arafat to cooperate?
    Ambassador Indyk. Well, what I have tried to suggest, 
Senator Nelson, is the short answer to your question is yes, 
that you will not get Arafat to cooperate. Therefore, I think 
it is about time that not just the United States, but the 
Europeans as well who have been funding the Palestinian 
Authority simply go to him with an offer he cannot refuse, to 
say that there will be no more money for the Palestinian 
Authority unless he gives up his control over the security 
services. Period. Take that control away from him and vest it 
in the Prime Minister and a security minister and come in and 
do what we committed to do in phase one of the Road Map. The 
United States took on the responsibility of restructuring and 
retraining those security services. If it is done in the 
context of an Israeli withdrawal from Gaza, then that security 
service and that Prime Minister will have an incentive to take 
control because the alternative is that Hamas will take 
control. So they will, in a sense, have to confront Hamas, but 
you have got to give them the ability to do so.
    Left to his own devices, Yasser Arafat will do a deal with 
Hamas. He is so weak that he will--that is his classic style--
align himself with Hamas and allow them to take over in Gaza. 
So in the context of an Israeli unilateral move, I believe it 
is an urgent priority to end this game that he is able to play 
by simply taking the authority over the security services in 
the first instance away from him. And it is not just the United 
States. The Europeans have a critical role to play in that 
regard and the U.N. and the Russians.
    Ambassador Ross. One thing about Arafat, Arafat always 
wants to demonstrate that nothing can be done without him, and 
he has not much demonstrated that a whole lot can be done with 
him.
    Now, to followup on what Martin was saying, I think also 
here if it is only us, it will not work because then he will 
make it a case of us trying to humiliate the Palestinians. It 
is the equivalent of the siege which if you humiliate Arafat, 
in those circumstances you create the sense of humiliation for 
all Palestinians. So there is a coalescence around him. We 
would need everybody to accept it.
    And here again, I would say we have to have some Arab 
support to do it too. There has to be a kind of consensus that 
can be presented that says, look, if you do not give this up, 
you are destroying the Palestinian cause. This is something 
that the Arabs have never been willing to do. They have always 
been willing to go to him in private and put pressure on him. 
They have never been willing to say it in public. The only 
thing he is going to respect is if it is done in public. So you 
are going to have to cross that threshold if you are going to 
succeed in that fashion.
    Mr. Malley. I think we have all had our time dealing with 
Chairman Arafat over the years. I think one thing that is true, 
as Dennis just said, what is critical for him is to remain 
relevant, and I think he is now in a position--whether he would 
act differently in other situations or not is a matter that we 
could discuss, but he is clearly now put in a position where 
the only way he can show his relevance is by being an 
obstruction, an obstacle. He has no incentive to be anything 
else and the only way he shows that he still is playing a role 
is by blocking whatever else is happening.
    I personally am not convinced that if he had put before him 
the kind of threat that Martin discussed, that it would change 
that much for several reasons, one, because his incentive 
structure would not be any different, and second of all, 
because I think it is more complicated than simply him wanting 
to hold onto the security services. I think the Palestinian 
political system as a whole, I think Palestinian society as a 
whole has invested in him a role that he is only too happy to 
play, but that will not simply be removed by transferring 
authority, nominal authority, to the Prime Minister.
    I also think that if one wants to reach an agreement, 
whether it is the kind of agreement I have in mind or others, 
one will need his blessing. And if I were an Israeli in 
particular, I would want his blessing for that agreement. 
Otherwise, the notion of it being a viable, stable agreement 
would be merely an illusion.
    Now, part of my answer to your question, Senator, is to say 
we have to bypass the Palestinian leadership as a whole and 
that is why the notion of a trusteeship is one that I put on 
the table. But I think again the only way it is a credible 
alternative is if it is not a partial trusteeship over Gaza, 
for example, but a trusteeship over all the lands that 
ultimately will become the Palestinian state and will then be 
handed over to leadership that is credible.
    Senator Nelson. What do you all think about the Olmert 
plan? This is where he had proposed an elimination of 85 
percent of the settlements in the West Bank.
    Ambassador Indyk. I think two things about Olmert's 
statement is important. First of all, that he is giving voice 
to what he understands to be a broad Israeli sentiment that 
Israel does not have a reason to be in the West Bank and has 
very good reason to get out of the West Bank because of the 
demographic factors, which he himself cites in this interview. 
So I think that that is a very important acknowledgement by the 
Deputy Prime Minister of something that now runs quite deeply 
through Israeli society.
    But beyond that, the fact that he came out when he did with 
that statement, the fact that all other contenders for the 
Likud leadership find it necessary to stake out a position that 
goes against the fundamental ideology of Likud and the other 
right wing parties in the government is an indication of how 
much the political ground is shifting underneath the feet of 
the government and of the politicians. And that is why the 
Prime Minister himself is now giving voice to something that he 
would never have.
    I mean, I feel like I have policy whiplash here, as 
Ambassador to Israel, having heard Prime Minister Sharon--you 
may have heard it too, Mr. Chairman, also--give you his lecture 
about the critical importance to the survival and security of 
the state of Israel of the settlements in Gaza, of Netzarim and 
Kfar Darom, and one day he stands up and says ``I have come to 
the conclusion that those settlements should be evacuated and 
then in a final agreement no Jew''--I am quoting him--``will 
live in Gaza.'' This is an amazing epiphany, if I can use that 
word. But it is because the political reality on the ground in 
Israel is shifting dramatically, and that is driving the 
leadership to take unilateral steps. The challenge, as I think 
we all agree, is to take advantage of that, to shape it in a 
way that can be productive for a final agreement.
    Ambassador Ross. Just to followup on that, I agree 
completely with what Martin said. I would just add the 
following, and it gets back to a point you were raising, Mr. 
Chairman.
    The Israelis are going to ensure that they maintain at 
least the Jewish state of Israel, not a one-state solution, but 
maybe somewhere down the road, if you cannot get a Palestinian 
state soon, maybe there will be one later. But the whole idea 
of the fence and the barrier is to guarantee that there will at 
least be the Jewish state of Israel, and that is what is 
driving it. That is what guarantees it. What Olmert says is a 
reflection of that.
    And not only does it embody the profound political change 
within Israel, but it also reflects something else. When you 
build the barrier, as he is putting it, basically on 15 percent 
of the territory or less than that in the West Bank, it means 
whatever is on the other side of the fence, whatever is to the 
east of the fence, sooner or later is not going to be there any 
longer in terms of Israeli settlements. And he also said that. 
So it has implications very clearly for how Israel will 
preserve itself and it has implications as well for the kinds 
of settlements that will remain.
    Understand one thing. When we were at Camp David and again 
afterwards, we knew, when we looked at the configuration of 
where the settlements are, that even if you build a fence in, 
say, 12 percent of the territory, you can capture more than 
three-quarters of all the settlers where they are in that area. 
In the Clinton ideas, we talked about 4 to 6 percent annexation 
for 3 blocks. That would have accommodated 80 percent of the 
settlers, not of the settlements. So you can absorb that, but 
the rest of the territory goes. And what Olmert is saying, in 
effect, is whatever is to the east is not going to be part of 
Israel.
    Senator Nelson. Thank you.
    The Chairman. Thank you very much, Senator Nelson.
    Let me just raise one more question. It has been several 
months since Prime Minister Sharon visited the United States. 
He made another visit here subsequently, but at that time he 
was here for 2 or 3 days. As part of that visit, he invited 
Senator Biden and me, among a few others, to come to the 10th 
floor of the Mayflower Hotel. It was quite an excursion just 
getting there through the security, as the hotel was 
reconfigured, into a very small room where we finally found the 
Prime Minister.
    I had the impression, as he described the fence that 
evening--because he had been admonished by our administration 
to not do it, and there had been a public reference I think by 
President Bush, in their joint press conference--that he wanted 
to affirm at least to Senator Biden and to me that he was going 
to do it anyway.
    Furthermore, I had the feeling that he was expressing at 
least subtly, and maybe even more overtly, that the security or 
the strategic situation had changed after the war in Iraq and 
that in fact Israel is fully capable of defending itself. In 
other words, he was going to make certain that there was a 
Jewish state, and that the demographic problem would not 
overtake Jews in Israel. Furthermore, if there were a lot of 
contra-attempts around, Israel militarily was prepared to deal 
with it.
    Therefore, his visit to us was really to explain the facts. 
It was not a supplication for aid. He did not request us to get 
heavily involved in negotiations or to work out two states or 
what have you. It was really much more direct. I do not think 
that has changed, whatever the rhetoric may be.
    This leads me to a question. I will play the devil's 
advocate for the moment because you have heard today from 
Senators, all of whom want to get involved, who are engaging 
you. What do we do next? What do we advise the administration 
or anyone else to do? What if there had been Senators here at 
the hearing today who said, given this context, that it is a 
miserable predicament for the Palestinians and very sad for 
Arabs who complain about this and are aggrieved and do not like 
us? On the other hand, Israel may very well be able to take 
care of the problem. At some point, in the event that there are 
Palestinians who want some support from somewhere else, they 
may ask for it. They may ask Arabs, first of all, but that 
might not be forthcoming. So they might ask Europeans. They 
might ask the United States. In other words, you sort of turn 
the tables, as opposed to our worrying day by day how we impose 
ourselves there, or our allies wonder how we get a context for 
coming into the picture. We do not get into the picture for a 
while.
    There are a good number of Americans who, for quite a 
while, wanted to take that position, sort of a time-out period. 
This is one of these intractable affairs. They could not have 
anticipated that Prime Minister Sharon would build a fence, 
that he would take these strategic considerations. But he has, 
and so, as a result, things have changed, whether everyone has 
realized that or not.
    Constructive Americans would still say, well, our hopes are 
broader for the total Near East or Middle East. In other words, 
we believe in the war against terrorism. There must be some 
fundamental changes so that the lives of people, hundreds of 
millions of them, are improved and so that there is some hope 
for young people out there who now may feel hopeless and who 
might go into terrorism because of their despair. Beyond that, 
we simply believe in freedom, democracy, human rights, rights 
for women, a number of other things.
    We want to get engaged. We are out there with the war 
against terrorism. We had our wake-up call. Suddenly we 
discovered countries that we had not been dealing with for 
quite a long while.
    Yet, there are still other Americans who say, get over it. 
That was 9/11 and we responded appropriately. We have got our 
homeland defense now. We are mopping up the Taliban and al-
Qaeda between the borders of Afghanistan and Pakistan. We are 
doing the best we can with the U.N. and others in Iraq, to 
bring about some stability there. This will be a distinct 
improvement. We are doing much better with diplomacy with the 
Europeans, perhaps in Iran, maybe with the six powers in North 
Korea. We have had some good fortune in Libya.
    You have devoted all of your lives to this issue. This 
committee has not been quite so devoted, but some of us, for 
quite a long while, have, as Senator Biden pointed out, been 
listening to you. Why are we seized with this issue as being 
this critically important?
    I ask this not to argue you out of telling me why it should 
be. I think that somebody probably needs to express the 
priority and why we are here today.
    Ambassador Ross. Let me put it in the following way. In the 
war on terror, there is a military component that is absolutely 
indispensable. You have no alternative to it. You have to 
defeat those who understand only one way to deal. But to win 
the war on terror you have to do things other than in the 
military realm, and I am not talking now about the obvious 
points about sharing intelligence, law enforcement, financial 
flows, and so forth. I am talking about how you create an 
environment that shows that hate does not work and that hope is 
still there and that there is a reason not to be so angry.
    If you take that global statement and you relate it 
specifically to the issue of, well, if Sharon is doing this 
anyway, and the Israelis can handle it after they get out, why 
do we still care, we care because we do not want this to be a 
replay of Lebanon in the year 2000 where Hizbollah looked like 
the real victor where violence works, negotiations do not. We 
do not want Hamas to inherit what happens in Gaza or, for that 
matter, in the West Bank. We do not want their model to look to 
be successful because if it is successful, the war on terror 
will be much harder for us to have to contend with more 
generally.
    What we want is for Palestinians who believe in peace to be 
able to show there is a pathway there. They can take advantage 
of it. I think Rob said it earlier. If the Israelis are getting 
out of settlements in the West Bank, let us coordinate with the 
Palestinians about what the handover is going to be so we do 
not have Hamas standing at the top of buildings in Kfar Darom 
or Netzarim waving a Hamas flag. We have a big stake in this 
when it comes to the broader war on terror. So this dimension 
of it is, at least from the standpoint of your question, one we 
have to consider.
    Mr. Malley. Mr. Chairman, if I could add. I think it is a 
very fair question and I would just make three points in 
response.
    The first one is I am not in favor of engagement for 
engagement's sake. I think it is not a matter of sending a 
special envoy simply to be there to make phone calls. I think 
there is always a risk in U.S. engagement. There is always a 
cost and it should be worth the cost. Therefore we should have 
objectives that are commensurate to the risk that we take.
    All that being said--and here I agree 100 percent with what 
Dennis just said--if we want to have an effective policy in the 
Middle East and in the war against terrorism, we are going to 
need to try to come to terms with this issue and to try to 
resolve it. There is no single issue that dominates the minds 
of Arabs and of Muslims more than this one, and it is a 
constant burden on our efforts. As I said in my opening, 
nothing hurts us more than the perpetuation of the conflict, 
and nothing would help us more than its resolution. It is the 
constant elephant in the room, and anyone who you will talk to 
from Indonesia to Morocco to anywhere in the Middle East will 
say that. I think that is why it remains at the top of our 
national agenda, even though we have so much else to worry 
about.
    The Chairman. Mr. Indyk, do you have a thought?
    Ambassador Indyk. Just one other comment because I agree 
very much with what both Dennis and Rob have said, and they 
have been very articulate about it.
    But I would just like to make a different point, which is 
that people who care about the survival, security, and well-
being of the state of Israel should also have an interest in 
seeing us engaged because there has been this kind of 
simplistic conclusion reached over the last 3 years that 
somehow by disengaging we are doing Israel a favor. And over 
900 Israeli lives later and with the deep recession cutting 
into the hopes and dreams of the Israeli people, Israel is in 
trouble. Israel is not better off as a result of our 
disengagement. And Israel cannot survive as a Jewish state, the 
thing that you have been focusing on today, unless it has 
peace, eventually has peace with its neighbors. And it can 
achieve that peace--even Dr. Kissinger reached that 
conclusion--in the foreseeable future, but it cannot do it 
without American engagement.
    Ariel Sharon is going to undertake a unilateral 
disengagement? No. He is coming here to get us involved in his 
unilateral disengagement because he knows he cannot do it 
effectively without U.S. engagement. And so that is an 
additional reason because of our interest in the survival and 
well-being of the state of Israel that we should want to be 
engaged.
    The Chairman. Well, that is a very good point. I remember 
when this committee visited with former Prime Minister Shimon 
Peres. He frequently got into the economic issues of the area 
and what this might mean for Israel, in addition to surrounding 
states. Israel is a small state with relatively few people 
given the territory. It could have its borders at this point, 
but the commerce and the opportunities that might come from a 
greater Middle East participation, obviously, might not work 
out under those circumstances without there being diplomacy 
and, if not friendship, at least tolerance and a movement to 
deal pragmatically.
    Well, I thank each one of you for those answers. We are 
reassured that we are on the right track in holding the 
hearing. We thank you for the investment of your time, which 
has been very, very generous, and your wisdom. Thank you very 
much.
    The hearing is adjourned.
    [Whereupon, at 5:47 p.m., the committee adjourned, to 
reconvene subject to the call of the Chair.]
                              ----------                              


             Additional Statement Submitted for the Record


           Prepared Statement of Senator Russell D. Feingold

    I thank Chairman Lugar and Senator Biden for calling this very 
important hearing, and thank all of the witnesses for being here today.
    Over the weekend the terrorist attack on a crowded bus in Jerusalem 
reminded all of us once again of the horrific facts of the situation 
that Israelis face every day. There can be no justification for 
targeting and murdering innocent civilians. This seems so obvious that 
it shouldn't have to be said, but I fear that it is not at all obvious 
to some of the key actors whose cooperation is crucial to making the 
Road Map work.
    Along with their Israeli neighbors, the Palestinian people have 
suffered greatly, and too many families in both communities have been 
touched by tragedy. Both people deserve a just and lasting peace 
between two secure states. It is in their interest, it is in the 
interest of their children, it is in the interest of stability in the 
region, and it is unquestionably in the interest of the United States. 
But getting from here to there requires leadership on both sides, it 
requires courage on both sides, and--all observers seem to agree--it 
requires vigorous, sustained, and extremely high-level U.S. diplomatic 
effort. We do not have all of the ingredients in place today. I look 
forward to hearing more from my colleagues and from our excellent 
witnesses about the prospects for getting these factors in place and 
moving this process forward.

                                 
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