[Senate Hearing 110-688]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-688
 
         THE MIDDLE EAST PEACE PROCESS: PROGRESS AND PROSPECTS

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


                                HEARING


                               BEFORE THE


                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE



                       ONE HUNDRED TENTH CONGRESS



                             SECOND SESSION



                               __________

                           SEPTEMBER 25, 2008

                               __________



       Printed for the use of the Committee on Foreign Relations


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                     COMMITTEE ON FOREIGN RELATIONS

                JOSEPH R. BIDEN, Jr., Delaware, Chairman
CHRISTOPHER J. DODD, Connecticut     RICHARD G. LUGAR, Indiana
JOHN F. KERRY, Massachusetts         CHUCK HAGEL, Nebraska
RUSSELL D. FEINGOLD, Wisconsin       NORM COLEMAN, Minnesota
BARBARA BOXER, California            BOB CORKER, Tennessee
BILL NELSON, Florida                 GEORGE V. VOINOVICH, Ohio
BARACK OBAMA, Illinois               LISA MURKOWSKI, Alaska
ROBERT MENENDEZ, New Jersey          JIM DeMINT, South Carolina
BENJAMIN L. CARDIN, Maryland         JOHNNY ISAKSON, Georgia
ROBERT P. CASEY, Jr., Pennsylvania   DAVID VITTER, Louisiana
JIM WEBB, Virginia                   JOHN BARRASSO, Wyoming
                   Antony J. Blinken, Staff Director
            Kenneth A. Myers, Jr., Republican Staff Director

                                  (ii)



                            C O N T E N T S

                              ----------                              
                                                                   Page

Hagel, Chuck, U.S. Senator from Nebraska, statement..............     4
Kerry, Hon. John F., U.S. Senator from Massachusetts, opening 
  statement......................................................     1
Welch, Hon. C. David, Assistant Secretary for Near Eastern 
  Affairs, Department of State, Washington, DC...................     4
    Prepared statement...........................................     8
    Responses to questions submitted for the record by Senator 
      Richard Lugar..............................................    25
    Responses to questions submitted for the record by Senator 
      Russell Feingold...........................................    29
    Responses to questions submitted for the record by Senator 
      George Voinovich...........................................    31

              Additional Material Submitted for the Record

Casey, Hon. Robert P., Jr., U.S. Senator from Pennsylvania, 
  prepared statement.............................................    25

                                 (iii)




         THE MIDDLE EAST PEACE PROCESS: PROGRESS AND PROSPECTS

                              ----------                              


                      THURSDAY, SEPTEMBER 25, 2008

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 3:02 p.m. in room 
SD-419, Dirksen Senate Office Building, Hon. John Kerry, 
presiding.
    Present: Senators Kerry, Feingold, and Hagel.

     OPENING STATEMENT OF JOHN F. KERRY, U.S. SENATOR FROM 
                         MASSACHUSETTS

    Senator Kerry. This hearing will come to order. I 
appreciate everybody being here on time. We're working a little 
bit under the pressure of the clock and I just want to give 
everybody a heads-up on that. Secretary Gates and Admiral 
Mullen, Chief of the Joint Chiefs of Staff, are coming in to 
brief us at 4 o'clock. So we're going to wrap up about 10 of 4. 
I'm just giving everybody a heads-up, though we may well be 
able to get through most of our questions and issues in that 
time anyway. I never viewed this as a particularly prolonged 
hearing.
    I do want to thank Secretary Welch for coming here today to 
discuss this before we break up at some point in the next days 
for the elections and the Congress winds up its work here. I 
know that the Secretary has been in New York for the General 
Assembly, so we're particularly appreciative for his taking 
time to come back down here because obviously there's important 
work to be done up there, too.
    I'm grateful to the Secretary. He just introduced me to 
Ayman Nour's wife. As many of you know, he's in prison in Egypt 
and someone that we're deeply concerned about, and we 
understand may be in failing health, and we're awaiting word on 
the potential of the government, in fact, placing him among 
those other folks who have been released in recent days. So it 
is a matter of concern for our country and I'm appreciative to 
the Secretary for introducing me to her, and for her taking the 
time to be here.
    It's hard to overstate the importance of bringing about a 
lasting peace between the Israelis and the Palestinians. This 
is important to everybody concerned, directly by living in the 
region or indirectly because of their connections to the region 
and because of our mutual security concerns as a consequence.
    The vast majority of the people of Israel and the 
Palestinian people share the goal of bringing two states living 
side by side into peaceful and secure existence. The question 
is what we can do to help get them there.
    I appreciate that in recent months, the last year and a 
half perhaps, the administration has been making an effort to 
move that process forward, starting with the hosting of the 
Annapolis Conference last November and continuing in the months 
since. Secretary Welch, I recognize you've been working 
particularly hard on this issue, including making some 40 trips 
to the region.
    It is obviously a source of very significant frustration to 
many of us on this committee and in the Congress that for a 
period of almost 6 years this issue was to some degree ignored 
and certainly on a back burner at best. That has made the 
problem more difficult to solve, particularly in the timeframe 
left. But we are where we are and we need to focus on what 
these opportunities may be.
    I was in Israel and the West Bank in July. I had the 
opportunity to meet with Prime Minister Olmert, Defense 
Minister Barak, Mr. Nyaho, with Prime Minister Fayad and 
Saibarakat. At the time President Abbas was out of the country. 
I heard different views from each of them as to what had not or 
what had been accomplished in the negotiations, and maybe 
that's a reflection of the extent to which it demonstrated a 
desire by the negotiators on both sides to honor the 
commitments not to leak the details.
    But it sounded as if some progress had been made on the 
basic contours of a territorial exchange, water rights, 
security arrangements, and the demilitarized nature of the 
Palestinian state, if not on sone of the most difficult issues, 
the status of Jerusalem and the right of return. As we all 
know, until there is agreement on everything there is agreement 
on nothing.
    Now that Prime Minister Olmert has resigned and Minister 
Livni is trying to form a new government, it's not realistic to 
expect a dramatic breakthrough by the administration's deadline 
by the end of the year. While we all await the new governments 
in Israel, here at home, and possibly in the Palestinian 
Authority because of Prime Minister Abbas's term, which is 
scheduled to end in January, the challenge is very much to make 
sure that we can build on whatever progress has been made and 
that that serves as a foundation for the future. There's a lot 
of uncertainty and certain realities, however, ought to inform 
our choices. That's part of what we'd like to get at today with 
the Secretary, as we think about that in the next months, which 
will be months of transition for whichever administration is 
elected.
    First of all, we know that Israel needs a partner for peace 
that can be counted on to deliver for all the Palestinians, 
including those in Gaza. I've heard that for years. I know the 
strategy is to move ahead with the negotiations with the 
Palestinian Authority in hopes that the prospect of an 
agreement will empower the moderates and isolate the 
extremists. That makes it all the more important to ensure that 
the Palestinian Authority prevails over Hamas in the struggle 
for the loyalty of the people.
    This tough work of building durable, respected Palestinian 
institutions may not be as compelling as the peace negotiations 
themselves, but let me tell you something: It is every bit as 
crucial to achieving our goal. The failure to help Palestinians 
develop viable institutions with the confidence of their people 
underlies our past and it presents difficulties. And I'll tell 
you, if it continues it will fundamentally undermine chances 
for peace.
    When I met with Abu Mazen right after he was elected in 
2006, he looked me in the eye and he said: ``Senator, I know 
what you want me to do,'' ``you'' being you the United States, 
the Western world. ``You want me to disarm Hamas. But you tell 
me how I'm supposed to do that? I don't have any cars, I don't 
have any police, I don't have any radios, communications, 
training, or sufficient security forces to do the job.''
    Many believe that we have--we collectively, those of us 
extolling the virtues of peace and pushing for it and engaged 
in the process, Quartet or otherwise--have contributed to the 
deterioration of the situation in Gaza by pushing the 
Palestinians to hold elections when they weren't ready. We've 
all seen the results: Hamas in control, more rockets falling on 
Israel, and a major new roadblock on the path to peace.
    On this point, I was actually very encouraged by a meeting 
I had yesterday with General Dayton, who is in charge of our 
efforts to train Palestinian security forces. He told me that 
since we had last met in July those security forces have 
increasingly earned the trust of the Israelis, enabling them to 
move ahead with their policy of doing less as the Palestinians 
do more. And I saw first-hand in the West Bank our USAID 
mission and the efforts of Tony Blair, which have also brought 
about some progress in building the economy in the West Bank.
    We need to make certain that those initiatives receive all 
the resources that they need to extend the remarkable progress 
we have seen recently in Jenin to the rest of the West Bank.
    We can't do this alone. Countries that had made pledges of 
support must do their part by using their record oil profits to 
live up to their promises.
    We also know that there are enemies of peace who have a 
history of derailing the process, including Iran and Syria, and 
they continue to support Hamas and Hezbollah. That's why the 
Israeli dialogue with Syria through Turkey is so important. If 
successful, those negotiations could remove a historic 
adversary of Israeli that supports terrorist groups, to help to 
isolate Iran, and create additional leverage for negotiations 
on the nuclear program, and generate real momentum for the 
peace process itself. As I've said many times, the U.S. should 
be ready to play a direct role in these talks if we can help to 
reach a deal.
    We also know that Israeli's continued building of new 
settlements is, as Secretary Rice described it just a day or so 
ago, not helpful to the peace process. I think that's an 
understatement. In July I heard that there had actually been a 
dramatic increase in the number of new settlement permits 
approved in the months since Annapolis compared with the entire 
year before. When new settlements go up, it makes the 
Palestinian Authority look weak and ineffective, strips them of 
any of the legitimacy that we are encouraging them to develop, 
and discourages the Palestinian people as a whole, and it 
undermines the viability of the two-state solution.
    We know that any peace deal will require the active support 
of the major players in the region. King Abdullah of Jordan has 
done a remarkable job of trying to move the process forward, 
but he needs more support. The attendance of so many Arab 
countries at the Annapolis Conference was a positive beginning. 
But we have to make sure they remain engaged in a positive way 
of going forward.
    Finally, we know that successful negotiations are going to 
require a redoubled commitment to sustained high-level 
engagement by the United States. This must be an absolute top 
priority for the next administration. I'm confident that it 
will be.
    With that, let me turn to my colleague Senator Hagel for 
his opening remarks, and when he's finished, Secretary Welch 
will make his opening statement, and then, as I said, we'll 
work within the parameters of time.

   STATEMENT OF HON. CHUCK HAGEL, U.S. SENATOR FROM NEBRASKA

    Senator Hagel. Mr. Chairman, thank you.
    Welcome, Secretary Welch. I think Chairman Kerry has framed 
the issue pretty well and I would withhold any further comments 
until we hear from the Secretary, and then I will have some 
questions. Thank you.
    Senator Kerry. Thank you very much, Senator Hagel.
    Secretary Welch, thanks a lot again for coming. We 
appreciate it. We appreciate your significant service in the 
entire region, which well equips you to help move this process 
along.

STATEMENT OF HON. C. DAVID WELCH, ASSISTANT SECRETARY FOR NEAR 
      EASTERN AFFAIRS, DEPARTMENT OF STATE, WASHINGTON, DC

    Mr. Welch. Thank you, sir. With your permission, I'll make 
a few remarks to summarize my prepared testimony so that we can 
focus then on the issues, some issues that you have raised and 
some that I'd like to cover.
    Annapolis was a path-breaking event and since then we've 
tried to work along four tracks to support broadening the Arab-
Israeli peace, but especially focusing on the Palestinian 
track. First, the most important imperative is to support the 
negotiations themselves, bilateral negotiations. Second, as you 
mentioned, building the institutions for Palestinian statehood 
is not a project that has to await the inception of a state; it 
can be started now. Third, conditions on the ground meaningful 
to both Palestinians and Israelis, and there needs to be 
progress with respect to those. Finally, like other diplomatic 
endeavors, we want to maintain regional and international 
support for this agenda.
    I believe, Senator, we've seen advances along each of these 
tracks. There is in this almost a year now since the Annapolis 
Conference, an environment in which there has been substantial 
progress toward fulfilling the promise of that conference--two 
states, a two-state solution. In effect, sir, these are the 
first meaningful permanent status negotiations between Israel 
and the Palestinians in nearly a decade. I believe that they 
are very substantial and that both parties are committed to 
them.
    The fact that there isn't much in the way of public 
statements or agreements that have been announced or 
articulated should not be mistaken for a lack of progress. Our 
engagement on this issue is not one that's based on false hope 
or a lack of realism in our assessment of the obstacles to 
moving ahead, but our commitment, because of the importance of 
the issue, because we believe that both parties are sincerely 
committed to negotiations, we recognize, because we are privy 
to some of the work they've done, that it is substantial, and 
there is the possibility of a genuine breakthrough if this 
negotiating structure is sustained and protected.
    Thank you for recognizing that we've devoted a lot of time 
to it. I just came from a meeting between President Bush and 
President Abbas. I asked the White House, in preparation for 
this testimony, how many times President Bush had met with the 
Israeli and Palestinian leadership and we count more than 30.
    Our object isn't to interfere. It is to serve the 
traditional role that the United States has served on this 
important issue, providing good offices and support, ideas 
where we can move things forward.
    Secretary Rice has visited Israel and the Palestinian 
territories 22 times. As recently--the most recent was in 
August. This I think is both the level and the intensity of 
U.S. diplomatic engagement that it will take to move this issue 
along.
    We could look back in history, Senators, and talk about why 
we did things at any given point in time. Sometimes history has 
surprised us and we may or may not have had some responsibility 
for those events. But you can't predict everything in this 
world and you deal with the cards you have.
    I think, as we've seen in recent weeks in Israel, the 
political dynamics are also very fluid in the region. But the 
alternative now of relaxation in this effort is I don't believe 
in our interest or in the interest of the parties.
    I believe that the Israeli leadership and the mainstream 
Israeli political life is committed to peace with the 
Palestinians and a two-state solution. In a sense, we've 
reoriented the political discourse on both sides to the 
acceptance and the desire for a two-state solution. That's true 
also on the Palestinian side, though not all groups accept that 
outcome.
    In addition to launching bilateral negotiations, Annapolis 
was a significant step toward bringing together support for and 
applying momentum to a comprehensive peace. As you know, the 
Arab League continues to support its peace initiative, which is 
for a comprehensive solution, but also a two-state solution on 
the Palestinian track. Since I was last in front of this 
committee, Syria and Israel have undertaken talks, albeit 
indirect, facilitated by Turkey, an American ally. There's more 
stability in Lebanon today with the election of a new President 
there, who also visited the White House today. We see some 
prospect for stability to improve there. President Suleiman is 
the first Lebanese President in the Oval Office in 12 years.
    We are focused, of course, on the Palestinian-Israeli 
track, which we believe is the most mature and the most 
deserving of effort right now. But I recognize that these other 
complementary developments offer an important possibility for 
broadening the regional effort toward peace.
    We've tried to marshall international support as well, 
primarily through our activity in the so-called Quartet, which 
brings together the United States, the European Union, the 
European Commission, and Russia, which provides backing for the 
negotiations process. But also it is a normative body which can 
make some judgments about what is right to do. Ever since the 
election of Hamas to a position of a majority in the 
Legislative Council, the Quartet has articulated three 
principles for any Palestinian Government that offer a guide 
for engagement with the international community: Renunciation 
of violence and terror, recognition of Israel, and acceptance 
of past agreements negotiated by the parties. Regrettably, 
Hamas has not seen fit to recognize those principles.
    Second, there's some improvement in conditions on the 
ground, which I believe if expanded offers a chance for further 
political progress. If people on the ground don't see something 
good happening, they're not going to be very supportive of what 
their politicians are electing to try to do in negotiations. 
There has been some I would say--some progress, albeit modest, 
in implementing obligations under the roadmap and we believe 
the parties should redouble their efforts. We're playing a much 
more continuous and active role in observing and monitoring 
that. There's a senior American officer, GEN Will Fraser, who's 
assigned to that job and who visits about every 2 weeks to the 
area and communicates privately with the parties on the steps 
that we think ought to be taken to encourage further movement.
    Thanks to the support of the American taxpayer and the 
American Congress, we've led the way among donors to the 
Palestinians, including with direct budget support to the 
Palestinian Authority. You're quite right, it's been important 
to encourage support of others, but I believe the fact that 
we've been willing to step up and do this has brought others 
along. Collective European support of the Palestinian Authority 
is very substantial, well over two times the amount that we've 
done. And Arab support is coming in, though not at the pace we 
would like and in irregular baskets. I can go into that more if 
you're interested in the Q and A.
    As you know, Senators, the Palestinian Government is run by 
Prime Minister Salam Fayad, whose record of fiscal probity is 
to be admired, especially these days. We think that he's 
increased accountability for these American taxpayer dollars in 
a significant way while trying to get austerity within what has 
been a difficult system to administer. There's some evidence 
that he's had some successes there.
    Another important track is to help the security forces. I 
know you heard from General Dayton. It's been about a year 
since we started putting American taxpayer dollars to work in 
security training and equipping and there are now members of 
the national security forces, the Palestinian National Guard, 
who've come out of training with equipment and are moving into 
garrisons and activities in the West Bank. Just last week 
another tranche--another battalion of these troops--went into 
Jordan to commence their training there. We have very good 
cooperation with the Jordanians and the Egyptians on this 
effort.
    Of course, they need to be put to work. There the 
institutional deficiency of the Palestinian Authority is 
something we're having a little bit more trouble addressing. 
What we call the chain of prevention, the whole law and order 
structure, has been stressed in recent years, particularly in 
the West Bank, and it's basically nonexistent in Gaza. So 
that's taking additional work. The Europeans are very helpful 
in that area, but it's a place where we need to make additional 
progress.
    We try to concentrate on getting circles of control within 
the West Bank and expanding those outward. There's work been 
done now in Ramallah, but also in Nablus, and the centerpiece 
of the current effort is Jenin, the most important city in the 
northernmost governorate of the West Bank.
    Security cooperation between the Israelis and Palestinians 
there is better. There is more mobility for Palestinians, too. 
These are positive improvements that are recognized by Israel 
and its security services.
    In the negotiations, sir, since the United States is a 
sponsor and on occasion sits in trilateral meetings with the 
parties, we have accepted the responsibility of confidentiality 
in that process, but there are some things I can say about it 
in a public forum. There are advances. It's not a trivial thing 
to say that the parties have common aspirations. I know that 
sounds like diplospeak, but to define the goal and to think 
about ways in which to arrive at it is the essence of a 
negotiating process, and this one is real and under way.
    They want a comprehensive agreement on all the issues. You 
mentioned the core issues and that is their aspiration, as 
articulated at Annapolis, to address it comprehensively without 
exception.
    They have pledged to continue these bilateral, 
confidential, and contentious negotiations until they get their 
goal. We would like to see them realize that goal as soon as 
possible. I work for this administration, so I would like to 
see it in this administration. But we have a Hippocratic Oath 
to make sure that we carry it forward if that needs to be the 
case.
    The negotiating structure that is there is effective, 
productive, real, and I believe it will be kept in place 
because, at least on the Israeli side, current Foreign Minister 
Livni, who may form a government in Israel, is now well 
schooled in the whole effort and is personally committed to it.
    Our President has put out there for the first time from an 
American President as an articulated goal of U.S. policy that 
there should be a Palestinian state. We believe that would be 
in the interest of Israel and its security and we believe it 
would be in the interest of the United States and our security, 
and of course we would believe it would be in the interest of 
Palestinians.
    That's not going to come in a single dramatic moment, but 
only by methodical effort to do this. We spent a lot of time 
both building to Annapolis and in the virtually 1 year since. I 
hope you would agree that it is a serious effort. This is not 
because we want an accolade or a recognition, but because of 
the importance of this goal of comprehensive peace. I believe 
that we should stay that course.
    Thank you very much.
    [The prepared statement of Mr. Welch follows:]

Prepared Statement of Hon. C. David Welch, Assistant Secretary of State 
     for Near Eastern Affairs, Department of State, Washington, DC

    Chairman Kerry, Senator Coleman, and members of the subcommittee, 
thank you for giving me the opportunity to appear before you today to 
discuss our work to promote a just and durable peace between Israel and 
the Palestinians.
    Since the Annapolis Conference in November 2007, the United States 
has focused its efforts along four tracks: Supporting the bilateral 
Israeli-Palestinian negotiations; building the institutions of a 
Palestinian state; improving the conditions on the ground; and 
maintaining international and regional support for the negotiations. We 
have seen significant advances along each of these tracks, and these 
advances have created an environment in which substantial progress has 
been made, and will continue to be made, toward fulfilling the promise 
of Annapolis: Two states, Israel and Palestine, living side by side in 
peace and security.
    The fact that this environment exists is all the more dramatic 
given the volatility that wracked the region over much of the last 8 
years. After the Second Intifada exploded in 2000, ultimately costing 
thousands of Israeli and Palestinian lives, the prospects for peace 
negotiations retreated ever more remotely into the distance. The trust 
and mutual confidence required for meaningful negotiations dissolved, 
and the possibility of a brighter future for Israelis and Palestinians 
dimmed. Nascent reform within the Palestinian Authority (PA) in 2003, 
including the appointment of Mahmoud Abbas as Prime Minister, spurred 
hope in a positive dynamic, but this too collapsed when it was clear 
that power would remain centralized and decisionmaking would remain 
opaque. The Palestinian Presidential elections in January 2005 and the 
Israeli disengagement from Gaza later that year again provided some new 
opportunity. Yet the Hamas victory in the 2006 Palestinian legislative 
elections, followed by the war in Lebanon that summer, later dispelled 
this hope.
    Throughout this difficult period, President Bush nonetheless upheld 
his goals of fostering the creation of a sovereign, democratic, 
Palestinian state and of ending the conflict. Even as political 
conditions further deteriorated in the ugly Hamas coup in Gaza in June 
2007, we began to see the emergence of Israeli and Palestinian 
leaderships committed to peace through two states as the only feasible 
solution to the conflict. Recognizing the United States unique 
relationship with the parties, President Bush seized the opportunity 
and called an international meeting to support the parties' efforts 
toward peace.
    The Annapolis Conference in November 2007 was the first major 
Middle East peace conference since the Madrid Conference in 1991 and 
the only high-level, multilateral meeting of its kind ever to be held 
on American soil. Bringing together 50 countries from all continents, 
including 14 leading Arab States, Annapolis launched the first 
substantive negotiations in nearly a decade to address the core aspects 
of the conflict. It laid a foundation for Israelis and Palestinians to 
work together, focused the international community's support, and 
defined a constructive U.S. role. The absence of public agreements or a 
flurry of press releases should not be mistaken for a lack of progress. 
Ongoing, high-level U.S. engagement on this issue is sustained not by 
false hope or an unrealistic assessment of the challenges but by our 
belief in the sincerity of the parties' commitment to the negotiations, 
by the recognition of the progress they have made, and by the genuine 
possibility of a breakthrough if the current negotiating structure 
remains intact.
    Since November, President Bush and Secretary Rice have provided 
intense personal support and focus to the parties' bold efforts. The 
President visited Israel in May to share in commemorating its 
independence day. During the visit, he held a series of meetings with 
the parties--not to interfere in the negotiations, which they rightly 
emphasize should remain bilateral, but to mark the progress they have 
made and to provide any U.S. assistance they requested. Secretary Rice 
has visited Israel and the Palestinian territories on 22 occasions, as 
recently as late August. In near-monthly trilateral meetings with the 
negotiators, she has helped the parties to consolidate the gains they 
have made in their bilateral discussions and provided encouragement as 
they continue on the often challenging course toward a final peace 
treaty. My own work to buttress the negotiations has taken me to Israel 
and the Palestinian territories over 40 times.
    U.S. engagement has concentrated not on the provision of unilateral 
proposals but on promoting an atmosphere of consistency and stability 
within which the parties' bilateral negotiations can flourish. As 
recent events in Israel demonstrate, the political dynamics in the 
region are often fluid. However, there is no better indication of the 
value of the U.S. role than that, despite a temporary inward focus as 
Israel undergoes a political transition, we have seen no depreciation 
in Israel's interest in forging a lasting agreement with its 
Palestinian partners. The same is true on the Palestinian side, as 
President Abbas and the PA remain steadfast in their commitment to 
negotiations, even as rejectionist groups like Hamas continue their 
attempts to thwart a meaningful dialogue.
    In addition to launching the bilateral negotiations, Annapolis was 
a significant step toward stimulating momentum for comprehensive peace 
throughout the region. Fourteen Arab countries sat with the Prime 
Minister, Foreign Minister, and Defense Minister of Israel and 
committed to pursuing a resolution to their longstanding conflict, 
building on Egypt and Jordan's previously historic steps. The Arab 
League continues to reiterate its support for a two-state solution 
through its promotion of the Arab League Initiative. Syria has since 
undertaken indirect talks with Israel, facilitated by our ally Turkey. 
With the election of President Sleiman and the inauguration of the 
National Dialogue, stability is returning to Lebanon, and it is our 
hope that progress can be made in launching efforts to resolve the 
remaining issues between that country and Israel. While retaining our 
focus on the more mature bilateral Israeli-Palestinian negotiations, we 
should recognize these other complementary developments as an important 
indicator of the current regional dynamic and regional states' interest 
in a comprehensive peace.
    The impact of U.S. diplomatic efforts has been magnified by the 
Quartet's role in marshalling the energies of the international 
community. The Quartet has provided a vital forum for coordinating 
external backing for the negotiations; guaranteeing that the 
international community abides by the principle of ``do no harm'' by 
supporting, rather than intervening in, the bilateral dialogue; and 
protecting the negotiations from destructive forces. The Quartet 
established principles for the international community's engagement 
with Palestinian officials: Renunciation of violence, recognition of 
Israel, and acceptance of past agreements. Hamas brutality in Gaza 
since the 2007 coup, illustrated by its crackdown in recent months on 
those opposed to its illegitimate rule, underscore the importance of 
these principles. While we welcome the restoration of calm between Gaza 
and Israel, pursuing negotiations based on the Quartet principles 
remains the only path toward a long-term peace.
    There are some improvements to conditions on the ground, which if 
expanded, will encourage further political progress. Palestinians who 
do not see an improvement in their daily lives will lose faith in the 
negotiations. Regional governments are increasingly concerned about 
Israel's settlement activity, which undermines confidence and is seen 
as prejudging the outcome of negotiations. LTG William Fraser, and his 
successor, Major General Selva, continue to monitor roadmap 
implementation based on the U.S. mandate from the parties at Annapolis. 
While the parties have made some progress, albeit modest, in meeting 
their obligations under the roadmap, they must redouble their efforts: 
Palestinians must dismantle the infrastructure of terrorism and promote 
an atmosphere of tolerance, and Israel must freeze settlement activity, 
including natural growth, and increase access and movement for 
Palestinians.
    The international community also bears a responsibility to assist 
in improving conditions on the ground and in building a democratic 
Palestinian state. Led by the United States and the European Union, 
donors are providing direct budget support to the PA; ensuring that the 
basic needs of Palestinians are being met; funding high-impact projects 
to benefit Palestinians; and promoting efforts to link security, 
governance, and economic development. At the Paris Donors Conference, 
which followed Annapolis in December 2007, the U.S. pledged $555 
million in 2008 to include support for implementation of the 
Palestinian Reform and Development Plan (PRDP), which lays out the PA's 
plan for creating a viable and sustainable economy with secure revenue 
streams in the mid-to-long term. The United States has exceeded our 
pledged amounts. To date, with support from Congress, we have been able 
to make available $150 million in the form of a cash transfer for 
budget assistance to the PA and over $157 million in contributions to 
United Nations Relief and Works Agency for Palestine Refugees (UNRWA), 
comprising $57 million to UNRWA's Emergency Appeal for the West Bank 
and Gaza and over $99 million to its General Fund for ongoing 
activities benefiting Palestinian refugees throughout the region. In 
fiscal year 2008, the U.S. also allocated $239 million for project 
assistance. These funds are currently being obligated in the West Bank 
and Gaza by the U.S. Agency for International Development (USAID) for 
economic growth, democracy and governance, food assistance, education, 
health, water supply and budget support. An additional $25 million in 
INCLE funds will support the development of Palestinian security 
services. Congress subsequently appropriated in the FY 2009 ``bridge'' 
another $150 million in direct budget support to be provided in FY 2009 
and an additional $50 million for security support to the PA for FY 
2009.
    Under the government of Prime Minister Fayyad, the PA has 
undertaken substantial economic and fiscal reforms, which have been 
endorsed by both the World Bank and the International Monetary Fund. 
The PA has increased accountability and transparency and instituted a 
number of austerity measures to limit the growth of its budget, 
including by reducing the size of the public sector payroll, freezing 
wage increases, reducing utilities subsidies for citizens, and 
implementing tax administration reforms to increase tax revenue. The PA 
has instituted financial administrative reforms to track and manage 
donor funds and ensure that they do not end up in the hands of Hamas or 
other terrorist organizations. It has also established a single 
treasury account for all PA financing, eliminated all parallel 
financing mechanisms outside of this account, it developed a single 
comprehensive civil society roster and payroll.
    Maintaining broad international backing for the PA is crucial in 
guaranteeing that it continues to develop as the governing body of the 
Palestinian territories. Regional partners bear a special 
responsibility in demonstrating their support for the Annapolis process 
in this regard. We have welcomed the recent large financial commitments 
from Saudi Arabia, U.A.E, Kuwait, and Algeria and hope that these 
actions will pave the way for other Arab States to follow their lead. 
Without additional budget support, the PA will be unable to operate at 
the budgeted levels reviewed by the international community. It faces 
an anticipated $300 to $400 million cash shortfall in calendar year 
2008 and the reality of continuing budget shortfalls throughout 2009 
and 2010, which prevent the PA from engaging in long-term planning and 
from investing in the Palestinian people.
    The United States also continues to help the Palestinians build 
skilled, competent, and professional security forces that can establish 
rule of law in the West Bank and help the PA serve as a reliable 
security partner for Israel. Ensuring that the PA is able to maintain 
law and order throughout all of the areas it oversees and assume 
counterterrorism responsibility from Israel is also a critical element 
in improving the daily life of civilians. The U.S. has spent $86 
million to train, equip, and garrison over 1,000 members of the 
National Security Forces and Presidential Guard under the auspices of 
U.S. Security Coordinator LTG Keith Dayton, and we have requested an 
additional $25 million above the $75 million noted earlier to continue 
this program. Just last week, another 500-man National Security Force 
special battalion crossed into Jordan to commence training. Ultimately, 
it is our plan to train a total of five special battalions for the West 
Bank and two for Gaza.
    These trained forces are the cornerstone of a plan to couple 
improvements in law and order with economic development and criminal 
justice sector capacity building in targeted areas of the West Bank. 
The goal is to demonstrate the potential for real success in a future 
Palestinian state by creating the conditions for security and economic 
growth. The first tangible example of this strategy has been Jenin. 
Israel has shown a willingness to ease security restrictions in the 
Jenin governorate under the principle of ``as the Palestinians do more, 
we will do less.'' As a result, we have begun to see real progress on 
the security situation and in the economy. Unemployment in and around 
Jenin is down, trade between the Northern West Bank and Israel is up, 
and Israeli officials have publicly commented on the positive 
improvements in security in and around the city. We are focused on 
continuing the success of the Jenin Initiative by pushing for further 
economic development; an increased emphasis on criminal justice sector 
initiatives, including the training of judges and prosecutors and the 
construction of jails and courthouses; and a persistent law-and-order 
effort. The international community must underpin these endeavors by 
meeting the $242 million pledged at the June 2008 Berlin Conference on 
Palestinian policing and the rule of law.
    The Israeli-Palestinian conflict would not have endured for 60 
years if the obstacles to peace were limited and the solutions easily 
reached. However, the framework for negotiating a final resolution of 
the conflict is before us: Determined, professional negotiations 
between the parties; consistent yet constructive international 
engagement, led by the United States; and a vigorous effort to improve 
conditions on the ground. This formula has resulted in several key 
advances: Israel and the Palestinians now express common aspirations; 
they underscore their commitment to reaching a comprehensive agreement 
on all issues, without exception, as agreed at Annapolis; they pledge 
to continue their bilateral, confidential, and continuous negotiations 
until this goal is achieved; and they both attest that the negotiating 
structure is effective and productive and that they intend to keep it 
in place.
    President Bush's vision of a Palestinian state at peace with Israel 
will not come in a single dramatic moment but as the result of a 
methodical, sincere initiative by the parties to conclude a lasting 
agreement that benefits both their people. The confidential nature of 
their work, and the United States respect for their request on this 
score, is indicative of the seriousness of the negotiations. These 
negotiations are not in the pursuit of glory but an authentic and 
resolute effort toward a comprehensive treaty, and though such an 
agreement will not be signed tomorrow, the United States must stay the 
course to ensure that the foundation laid for peace results in a new 
future for the region.

    Senator Kerry. Let me begin by trying to frame the larger 
picture. I know you can't go into the details and I've got some 
sense of some of the details, as well. But I think it would be 
helpful to the general discussion for you to try to give us an 
honest assessment at this point of what people might fairly 
expect here, so that we don't have heightened expectations or 
dashed hopes.
    We have I think 116 days left of the Bush administration. 
We have 40-plus days until there's an election and power 
dramatically shifts. We may or may not see a government in the 
next weeks in Israel, and with President Abbas, we have to see 
what happens. His term is up in January and we don't quite know 
yet where that goes. So all three of the major players here are 
in a state of flux.
    Give us your best sense--I read an account yesterday of 
some leakage of some kind, suggesting a certain division of 
annexation and land and so forth, things that have been agreed 
to, none of which break really particularly new ground from 
Taba years ago, but which sort of said that Jerusalem and the 
right of return are not on the table in that regard.
    Now, that gets into the details and I'm not asking you to 
go there, but it certainly reflects on this question of 
expectations. So can you give us a sense today of what we who 
follow this and think about it a lot ought to be expecting, or 
what's in your sort of up-side, down-side balance on it?
    Mr. Welch. I will try to do so. I think it's important at 
the outset to make a distinction between what's going on in the 
negotiations, which are bilateral and confidential, and U.S. 
policy on any given point that might be an element in the 
negotiations.
    Let me begin with sketching where I think things are. First 
of all, there's a high sense of expectation whenever you 
mention this issue in the context of negotiations. But we need 
to remember that since the collapse of U.S.-led efforts at the 
end of 2000 there really hasn't been a negotiation on the 
permanent status issues until the last 9 months. Again, that 
period--there's lots of reasons for why that happened and it 
was a terribly difficult period for the parties. But the 
collapse in confidence and morale on the part of people on both 
sides to undertake this was very considerable. So it's no small 
achievement to reverse that, get people focused again on what 
is the goal. That's one point.
    The second point: What is that goal? There should be two 
states and one will be a state called Palestine. You know, it's 
within our lifetimes and our political understanding that the 
concept of a Palestine was alien. Now it's an articulated goal, 
and both parties agree to that.
    Senator Kerry. Can I say to you with all due respect, Mr. 
Secretary, for those of us--I've been here for 24 years now 
following this thing. That's not a big deal right now. I mean, 
that ground was broken a long time ago. The talks fell apart in 
2001 in January, just before the Clinton administration left, 
and largely because the players in those talks knew because of 
what had happened from people who didn't want them to succeed 
and the levels of violence in Israel that Sharon, Prime 
Minister Sharon, was going to win the election, and it was 
impossible for Arafat to cut a deal which he knew he couldn't 
go back to Ramallah and sell to anybody because Prime Minister 
Sharon had already publicly rejected the Oslo Accords.
    So the equation has been since then sort of one driven, 
frankly, by Prime Minister Sharon and the Likud originally, and 
then Kadima as it came to be because of differences there in 
how to proceed. But this notion that everybody's decided they 
want two states doesn't satisfy anybody any more in terms of an 
accomplishment or a great change. I mean, that's 6 years, 8 
years old.
    The debate now is over how much like Swiss cheese this 
state is going to look and what sort of rights and access are 
going to go with it, et cetera, and what happens to the 
settlements and so forth.
    So I think what we need is a better sense of whether these 
talks currently being undertaken are going to come up with 
some, in your judgment, specific agreements that reinforce the 
steps of the roadmap? Are they going to be different from the 
roadmap? Are they going to be agreements in principle on some 
larger issues, leaving out the most thorny ones? Or could we 
expect something more comprehensive?
    Mr. Welch. Well, I think the transition in Ariel Sharon's 
own understanding of the goal from one of rejection of the Oslo 
negotiation to telling his people that a Palestinian state 
ought to be a goal is a very significant one. So I do think 
that is an important change.
    Second, again speaking about the parties themselves, 
Senator, they have laid out that they want a comprehensive 
agreement. By that they mean no partial agreements or no steps 
along the way that would prejudice their ability to arrive at a 
comprehensive agreement. That's an important understanding 
right now between the two that are negotiating because from 
time to time there are other ideas floated out there about way 
stations on the way to a real peace treaty.
    Third, they subscribe to the idea that this should be 
continuous, confidential, and bilateral, which I expect will 
mean that it can be made irreversible, too, so that you can 
make progress, but you don't go back to a situation where it 
gets thrown out if one or the other party changes or some of 
those watching from the outside change their approach.
    You asked about the roadmap. They have a common 
understanding that, even though they're negotiating permanent 
status now, if they arrive at an agreement it's only 
implemented in accordance with the roadmap. That's important 
because the sequentiality of the roadmap had always been a 
question.
    Finally, they committed at Annapolis to negotiations on the 
core issues without exception and that is the purpose of this 
negotiation. In terms of our approach to it, we have joined 
them in saying it ought to be confidential, so I won't be one 
of those who puts out there elements of it.
    Senator Kerry. I understand.
    Mr. Welch. I don't think you would expect me to do that.
    Senator Kerry. Can you tell us where we are with respect to 
the roadmap? Where would it pick up in sequentiality?
    Mr. Welch. Well, if you recall there were three phases and 
the idea of comprehensive negotiations really didn't come until 
the second and third phases. Both parties have accepted to do 
the permanent status negotiations now, it being understood that 
the roadmap has to be implemented before any treaty is 
implemented.
    The picture is mixed. There are some of the obligations of 
the parties that are being addressed, some that even have been 
fulfilled, but others that need further work. For example, on 
the Palestinian side, while they're trying to rebuild security 
cooperation and security capability, this chain of prevention 
is pretty inadequate right now and they need to do a lot more 
to reform and restructure and rebuild their security services. 
This is in their interests because they see it first and 
foremost, as you know, Senator, as a law and order problem. 
They want their streets clean and safe.
    On the Israeli side, we are very concerned, as you pointed 
out, about the settlement activity. I think that's, even beyond 
being a roadmap obligation, it is prejudicial to the kind of 
climate of confidence that's necessary to sustain a negotiation 
and implicates potential final status issues, and that's 
worrisome to see.
    Senator Kerry. Can you share with us what perpetuates that 
as an ongoing source of tension between us and our friends? 
It's been the policy of our country for years that that's, 
``unacceptable,'' but it has never changed what happens.
    Mr. Welch. Well, you're right in the sense that our policy, 
though one of expressing concern and opposition to settlement 
activity, while at the same time raising what it implies for--
--
    Senator Kerry. I'm distinguishing, incidentally, between 
building within those areas immediately around Jerusalem, which 
are already by everybody's acceptance within the annexation 
concept, versus those areas that might be out by the Jordan 
River Valley or elsewhere.
    Mr. Welch. Well, most of the settlement activity that we 
can observe is concentrated west of the fence or barrier that 
Israel has put up for what are described as security purposes. 
Though there is activity elsewhere, it's modest. I'm not here 
to answer for why Israel continued doing this. I don't think 
the international community makes a distinction, and the United 
States doesn't. We're concerned because this activity harms the 
confidence of people. It undermines the morale of folks when 
they see this happening. At the same time, it's a bit of a 
political football in Israel, too.
    Senator Kerry. Last question. Then I'll turn it over to 
Senator Hagel.
    Are you encouraged? I mean, it strikes me that what's 
happened in Jenin and sort of the trust that has grown there, 
and frankly the willingness of Israel to be open-minded and 
experiment with that and allow those forces to take some 
initiative has been very positive. It may be a good model for 
what you could do as you stretch that further throughout the 
West Bank. Would that be an accurate assessment?
    Mr. Welch. Yes; that would be our both hope and 
expectation. Fundamentally it rests on trying to bring several 
things together at once: Security, the security effort; some 
investment in the community concerned; and greater cooperation 
between Israelis and Palestinians. As you know, for example, in 
Jenin they live very close to one another. Traditionally, in 
the days before the current difficulties, Israelis used to 
cross into Jenin and go shopping.
    Senator Kerry. Right.
    Mr. Welch. Commerce was relatively free and that was 
important to the people in the area. Movement has become much 
more difficult in recent years. So as both Israelis and 
Palestinians sense that there's some change there, I think 
those who would try to act against that will be pressured by 
their community not to do so, both Palestinian and Israeli.
    We would like to target international assistance more 
effectively on supporting that concept in other places, too. 
Some places are difficult. Hebron, al-Khalil, the most populous 
city in the southern West Bank, is a particularly sensitive 
area. But I think both parties would be willing to take a look 
at how they could do it there as well.
    In the middle of the West Bank, in Ramallah, Nablus, 
Jericho, the northern outskirts of Jerusalem, the southern 
outskirts of Jerusalem, Bethlehem, that kind of cooperative 
effort is under way, though perhaps in a little less organized 
fashion.
    So yes, overall the expectation would be that if this works 
in one place you could transmit it to another.
    Senator Kerry. Well, I really appreciate your coming here 
today. As I said, I'm going to have to leave at 10 of. I'll 
leave the gavel with Senator Feingold, who can close it out 
unless another Senator comes at that time. But we appreciate 
your efforts enormously on this, Secretary, we really do.
    Senator Hagel.
    Senator Hagel. Mr. Chairman, thank you.
    Secretary Welch, let me make just a general comment, and I 
want to really address some of the issues that Senator Kerry 
noted in his opening statement and some of the commentary here 
over the last 10 minutes. You have said things like people need 
to see progress to develop confidence, there is a sense of 
morale that's important in all this, they have to see their 
lives getting better in the Middle East, or wherever in the 
world when there has been despair and war, conflict.
    As I evaluate the last 8 years in the Middle East, I come 
to a conclusion that the Middle East today is more dangerous, 
more complicated, more combustible, more unstable than maybe 
ever, but certainly more than any time in the last 8 years. You 
can go through the countries. I mean, Syria, we don't have an 
ambassador in Syria. It's good that we had a meeting today with 
the Lebanese President with President Bush. I would not think 
that's a resounding statement of things are going well in 
Lebanon. Hezbollah is now well entrenched in Lebanon.
    We have over 150,000 troops still in Iraq, spending $10-$12 
billion a month in Iraq. I wouldn't consider that yet a great 
success, with the administration saying, well, we can't take 
any more troops out even though, as Secretary Gates said this 
week, Afghanistan, Pakistan, represent as dangerous a threat to 
our country as any part of the world, but yet we don't have 
enough troops to send there to help out our commanding general 
who says he needs three new brigades.
    Iran. I don't think Iran is particularly more inclusive in 
its attitude, nor in the reality of what they've been doing the 
last 8 years.
    Gaza. I'm not sure we're better off in Gaza today with 
Hamas in charge. Israel still is uncertain about what kind of 
government it's going to get, who's going to be the government.
    So as you add all this up, I have a little maybe different 
assessment of where we are today in the Middle East. Going back 
to some of your comments about circles of control and people 
don't see progress and other points, we've done a good job in 
the last 8 years focusing expectations--conferences, promises, 
policies, intentions. But we seem not to be able to get 
anywhere with it.
    I get to the Middle East fairly often, and when people see 
in Israel and the West Bank more checkpoints, more settlements, 
as Senator Kerry has noted--8 years ago there wasn't a fence.
    And by the way, I make these evaluations not assigning any 
responsibility or blame to any particular country or leader or 
individual. But I think I'm stating a pretty good inventory of 
fact here.
    So how do we break this? For example, Hamas. Do we think 
Hamas just fades away? Are we willing to deal with Hamas or how 
are we going to deal with Hamas? I don't think they're going to 
just assume that they're going to be in any deal. Why--for 
example, you talked about Turkey brokering an engagement with 
Israel and Syria. Why didn't we do that? If that's so important 
to this administration, obviously enough that you're taking 
some credit for it in your commentary, why don't we have an 
ambassador there? Why are we still withholding our ambassador?
    So I'm going to let you respond to this because I see a lot 
of disconnects, Mr. Secretary, from what you say, what this 
administration has said, from the reality of where we are. 
Again, if you would want to respond to any of that, and then I 
have a couple of specific questions.
    Thank you.
    Senator Kerry. Mr. Secretary, before you do and before I 
have to go, I want to take a point of personal privilege here 
if I can for a moment. I'm going to leave the gavel with 
Senator Hagel. I just want to say a few words as I do.
    This is probably the last hearing that the Foreign 
Relations Committee will hold in this session of Congress, 
barring emergency circumstances. Therefore it will be the last 
time that this fellow will be sitting to my left and be taking 
part in this committee's proceedings. I just want to say on a 
personal level--I had occasion to be able to say something 
about Senator Warner yesterday--there are few folks on the 
other side of the aisle who have just been superb in their 
willingness to reach across the aisle, to put the country ahead 
of their party, to think out loud and be willing to tell it the 
way they see it.
    Senator Hagel and I share the common experience of an 
uncommonly unpopular war in a difficult period of our country's 
history and I think we both learned a lot of the same lessons 
from that experience and we've both tried to apply them here in 
our conduct of public policy. But I want to express my deep 
personal admiration for Senator Hagel, who has suffered the 
obvious and expected brickbats from members of his own party on 
occasion for speaking the truth as he saw it, who's been 
unrelenting in his willingness to stand up and put the 
interests of our country and common sense and sense of duty and 
responsibility to the Constitution way ahead of any kind of 
politics whatsoever.
    We've been very, very lucky to have him as a member of this 
committee and I consider myself very lucky to have him as a 
colleague and have him as a friend. I've traveled with him. We 
were in a fun helicopter episode in Pakistan together. We've 
been through the snows and the heat of the desert and a lot of 
other things.
    But what a pleasure to serve with him, and this committee 
will miss his service enormously, and I thank him for it, as I 
know all my colleagues would if they were here. So thank you.
    Thank you for permitting me to do that. I appreciate it.
    Senator Hagel. Thank you, John.
    That was generous and thoughtful and I appreciate Senator 
Kerry's comments. Thank you, Mr. Secretary, for your friendship 
over the years as well and cooperation.
    So I guess it's just you and me, and it may not be 
pleasing, but nonetheless it is. So if you would like to 
respond to anything that I have said and then we can get on 
with some other particular questions.
    Thank you.
    Mr. Welch. Well, thank you, Senator. It's good to be one on 
one with you, although some might say it's an uneven match.
    I began my career working in the NEA area of the State 
Department in 1979 in Pakistan, which was part of my bureau at 
that time. I was burned out of that Embassy, and last week I 
was awoken at 2:45 in the morning as an attack was under way on 
our Embassy in Sana'a, Yemen. So I know that the Middle East is 
a dangerous, complicated, and combustible place, sir.
    That said, if we only look at the trouble spots in the 
Middle East--and I think of course duty obliges us most days to 
do that--we are missing a bigger picture. Much of the Middle 
East is quite stable. It is not inhospitable. It is not 
combustible. And relations with the United States in most 
countries in that area are pretty good.
    We just completed a successful trip to North Africa. One 
stop on that trip was Libya. We've gradually repaired our 
relationship with Libya. It's not all that it could be, but 
it's been improving, and we have a serious dialogue with them 
where we had none just several years ago. So if you look at 
North Africa as a whole now, there is no hole in it in terms of 
a good solid relationship with the United States.
    In the Levant countries, they've had more than their share 
of trouble, and of course the centerpieces of that are the 
Israeli-Palestinian arena, but also especially Lebanon. I do 
see that there's reason for hope there. I think when Lebanese 
come up with solutions, for example, it's important to be 
supportive of those, and we've tried, because Lebanon is so 
evocative in the Middle East as a symbol of diversity in 
democracy, to help Lebanese. It is a complicated picture 
because one important part of the Lebanese political scene is 
Hezbollah, which is a terrorist organization with which we have 
had a great deal of difficulty over the years.
    In Iraq, sir, as you know I don't work on it day to day, 
but I do do a lot about the Arab relationship with Iraq and 
Iraq's relationship with the Arab world. I think we've seen 
progress on that, especially in recent months.
    Just a couple of years ago, people were suggesting to us 
that we find a better regional diplomatic architecture or 
international diplomatic architecture to help support Iraq's 
return to sovereignty and sufficiency. I think we're making 
progress there. I'll let others speak to the situation inside 
Iraq and what the requirements there demand, but what I do know 
is in terms of reintegrating it into the world things have gone 
better.
    I find Iran, as you mentioned, one of the most perplexing 
and difficult problems in front of us. We have, however, given 
substance to a diplomatic approach. There are three Security 
Council resolutions in effect now, quite a number of IAEA 
decisions which set the rules of the road for Iran. 
Regrettably, they're not choosing yet to respond in a positive 
way to a package of incentives that has been suggested to them 
in return for suspending their nuclear misbehavior. But it's 
important to put in place those diplomatic building blocks so 
that there is an international consensus on how to address this 
problem.
    Much of our discussion today, of course, has been about the 
Israeli-Palestinian issue. Again, I think the return to 
negotiations is pretty fundamental. Would I like to see more 
progress on some of the things you mentioned? Absolutely. I do 
believe that it's important not to overrate the political power 
of Hamas within Palestine. They won an election for the 
Legislative Council by a plurality which was less than the 
majority that Abu Mazen won when he ran for President. I don't 
know how the next election will fare, but the example that 
they've shown to Palestinians in Gaza is hardly an inspiring 
one and there's some evidence to suggest it has not really 
taken hold in the West Bank either, where the political balance 
still remains quite a bit different.
    I believe that any new administration, sir, ought to 
address this issue as a matter of priority. Obviously, I'd like 
to prepare it as well as possible for them when that day comes. 
I think the experience of the last years has taught us that you 
can't single out any one of these problems alone and leave it 
unaddressed. It requires effort across the board, and 
particularly in the last years we've tried to apply that. It's 
an ambitious agenda, I know, and I'd hardly be here to tell you 
we've succeeded on all parts of it, but I think we've made a 
good effort.
    Senator Hagel [presiding]. Thank you. Well, let me get into 
some more specific areas. Let's start with Syria. Why haven't 
we returned our Ambassador to Syria?
    Mr. Welch. We recalled our Ambassador after the murder of 
former Prime Minister Rafiq Hariri. There was a sense then that 
it was appropriate to lower the level of our diplomatic 
interaction with Syria. We have concerns with Syrian policy and 
behavior in a number of areas.
    In Lebanon, Syria had been present with its military forces 
for long beyond the welcome that they received early on in 
Lebanon's civil war. The Lebanese wanted them out and they 
withdrew their military forces. Regrettably, they didn't 
withdraw their effort to apply influence in Lebanon and, 
wrongly or rightly, because of their failure to convince most 
Lebanese that they were on their side in trying to move their 
country safely ahead, they've been blamed for a lot that's gone 
on there.
    In Iraq, Senator, you know the Iraq situation very well. If 
you look on the perimeter of that country, it has difficult 
borders in almost every direction, but the most permeable, the 
most insecure, and the least controlled have been with Syria. 
That's been an especially severe problem for the Iraqis and, 
yes, for American troops stationed in Iraq. That situation 
improved somewhat, but I would argue largely because of Iraqi 
security effort and American security effort.
    Syria remains a sponsor of terrorist groups. There are a 
number of them safe havened in Damascus. It is more--it is 
easier for the political chairman of Hamas to give a speech in 
Damascus than it is for a Syrian civil rights advocate. We 
think that's, especially under today's conception of what needs 
to be done in the Arab-Israeli conflict, dangerous and 
antiquated, and I know it's presented a problem, not merely to 
the Israelis who've been on the receiving end of some of this 
terrorism, but also to others, including the Palestinians.
    Syria, if you look at all the change that has been 
occurring in the Arab world, everything ranging from economic 
growth to an expansion of political participation, more 
openness in the media, seems to be lagging behind in almost 
every category, particularly in human rights behavior. Granted, 
this is a far from perfect area across the board, but it's 
possible to single out some places that are notably less 
advanced and Syria would be one of those.
    When we see that there is some Syrian response that we deem 
to be meaningful across these concerns, I think we would 
reexamine our relationship. We do maintain a diplomatic 
presence there. Our dialogue is limited with Syria. We would 
like that to improve, but I'm an advocate of purposeful 
diplomacy, not simply diplomacy for the word alone.
    Senator Hagel. Thank you.
    Let me respond to a couple points you've made. On Syria, if 
in fact, we, as you have noted, are encouraging the Turks with 
their incentives regarding Israel and Syria, if in fact, as I 
have been told directly by Prime Minister Olmert on different 
occasions over the last 2 years, that engaging Syria is clearly 
in the interest of Israel, for obvious reasons, then I'm not 
sure how we then play much of a role in this standing on the 
sideline with no opportunity to help incentivize a change in 
behavior. And by the way, you and I both know that the Syrians 
have been helpful in some ways on that Iraqi border.
    But I guess the bigger part of this is where does this all 
go? It's the same question on Hamas and Hezbollah. Hamas and 
Hezbollah are there. That is a reality. You note that Hamas may 
not be particularly beloved, but the fact is they are in 
control in Gaza. The fact is Hezbollah is firmly entrenched in 
Lebanon. What are we thinking about in the way of dealing with 
those realities? Not, as I said earlier, policies, not 
intentions, not aberrations, but where and how do we move from 
this point to this point?
    In the case of Syria, the next administration is going to 
have to deal with these realities, because I actually, as 
opposed to some of the points that you made--and you're 
certainly correct about some of the progress, significant 
progress in North Africa, but I wasn't speaking about North 
Africa--I think we've gone backward in many dangerous areas.
    I think the Syrian Ambassador issue is one where we could 
take some creative thinking and apply it, as you say, to 
comprehensive strategies. To me, that means if we are going to 
see progress on the Israeli-Palestinian front and attempt to 
bring these issues to some higher ground, which obviously we 
are going to end the year evidently with no new agreement that 
I'm aware of, then, just as you say, step by step, but we have 
to see progress in that. We have to be creative. There has to 
be some incentive. There has to be some movement. Status quo 
doesn't exist. Things either get better or they get worse.
    I know you work within the confines of the authorities you 
have and that flexibility is given to you by administrations. 
As I said in my comments, I'm not holding you accountable to 
that, but this next administration it seems to me is going to 
have to break through a lot of the good intentions and we're 
going to have to move to some higher ground and do some 
creative thinking through some comprehensive strategic foreign 
policy.
    In the Israeli-Palestinian case I don't know how you do 
that--and you mentioned this--this is my word, not yours--by 
compartmentalizing our relationships. Well, we'll do a little 
Syria here, we'll do Iraq over here, we'll do Iran here, we'll 
give Iran the privilege of talking to us based on our 
conditions. But Iran is connected to all these trouble spots. 
At the same time the Iraqi Government, which we take some 
credit for helping create, has a relationship with Iran every 
day. It is literally an Alice in Wonderland kind of thing. We 
act like that's not happening, but the Iraqi Government is in 
and out of Teheran. That's what I consider a comprehensive 
strategy.
    Let me go to the Hamas and Hezbollah issues for a moment, 
because you tell me how we deal with this. You tell me how we 
are going to find ways to position Abbas, Fatah, whoever's in 
charge, to give them some upper hands, Lebanon, and facing the 
reality of these two organizations. Obviously Iran is connected 
into a good deal of this. So what would be your thought on--
take Hamas. We just let it go? We think that it will just self-
destruct? Where do we go? What do we do? They are a reality.
    Mr. Welch. Senator, I think in answering this question I'd 
like to return to your opening premise. I agree with you 
completely that across the board this region of the world is in 
many respects the epicenter of our foreign policy. It is 
incredibly important to the United States. And I would hope 
that once our transition is under way for the new 
administration that they will consider it a very high priority 
to deal across the board with these issues.
    This is not a matter of bureaucratic self-interest on my 
part. I just think it will take that sort of intensity 
elevation of this basket of issues.
    Hamas and Hezbollah, sir, you're right, are realities. They 
have a certain level of political support in their communities 
and, interestingly, both the Palestinian community and Lebanon 
are among the most politically open and emancipated in the 
Middle East in the sense that they do have votes and the votes 
are reasonably honest, and some good people win and sometimes 
they don't.
    It's not the principle that they should have a vote that is 
an issue for us, even though that's aroused some anxiety in 
some places some times. It's their policies that concerns us. 
We don't have to accept that their policy is a reality that is 
impermeable to change, impervious to change. What we're trying 
to do is, if they can't figure out what the best thing to do 
for their people is, then maybe their people can make a 
different decision, vote for someone else or make a course 
correction themselves.
    In the mean time, as I alluded to earlier--maybe I wasn't 
clear enough--I believe that the moderate center in both these 
communities is more substantial than the minorities associated 
with these groups. So it's very important to give them the 
authority, the power, the capability that they seek within 
their societies so that they can rebalance them.
    That requires an investment of American resources, too, and 
happily we've been willing to do that both for the Palestinians 
and the Lebanese. But it's at the end of the day up to them, 
too. We're not going to be able to exclude people, but the 
terms by which they are included are decisions that they can 
make.
    The alternative, to sort of say, well, gee, can't do 
anything about that because they're there, they're armed, 
they're dangerous and we have to cope with that reality, I 
think would be frankly premature capitulation. I don't think 
that the moderates would want to do that and they would feel 
abandoned by the United States were we to, even by our 
inaction, suggest that that would be the alternative.
    Whether this will work I don't know, because at the end of 
the day in--let's take the Palestinian territories for example. 
People want to see change, so they'll reward those who are 
going to bring them the kind of change they want to see. 
Unfortunately, they've been through a long period of militancy 
there and it's had its effect on politics. Now it's being 
recalibrated. I believe we have the best and most encouraging 
Palestinian Government in a long time there. They've taken 
substantial political risks and personal risks to move things 
ahead, and we have to help them.
    In Lebanon, that's a very complicated society and a lot of 
people are meddling around in it. There's tremendous risk 
there, but I am encouraged by the agreement that was reached in 
May in Doha and the election of a new President. This offers I 
think a path ahead, restoring dialogue to Lebanon, where it had 
unfortunately collapsed.
    I believe that what happened when Hezbollah took up arms 
against the Lebanese people will have an effect on their 
standing, because it sort of puts at risk their claim to be a 
resistance. They're nothing but an armed militia hanging onto a 
cause, but willing to use their guns against their own. I think 
again the majority of Lebanese are not going to tolerate that.
    Senator Hagel. What would you say--and you mentioned 
lessons learned in some of your statements. What would you say 
would be the most significant lessons we've learned, should 
have learned, on this Arab-Israeli issue over the last 8 years? 
How would you frame the future? How are you going to advise the 
next Secretary of State and President as to what should be the 
policy over the next 4 years? What should we do differently? 
Anything? Have we learned anything?
    It goes back to my earlier point, I think things have 
gotten worse. Now, you may not agree with that, so you I 
suspect would tell the next Secretary of State and the next 
President, we'll just keep doing what we're doing. Or you tell 
me, what would you do and what would you say? How would you do 
something differently, what would you do, how would you do it, 
and what lessons have we learned that would predicate those 
recommendations?
    Mr. Welch. Sir, I would use three very straightforward 
words: Priority, investment, and results. We have to make this 
a priority. It will require an investment, and I mean that in a 
real sense, not just a diplomatic sense. And No. 3, it's 
imperative to produce results, because results count.
    We've been through a long drought. I believe--I'm not 
disagreeing with you that there are all these difficulties, 
sir, but I believe there is an opportunity here, particularly 
in the last year that we've rebuilt the negotiation. But it's 
not complete, and it can be challenged and it can be shaken. I 
don't even dismiss that it could be reversed. I think that is 
very dangerous. The idea of two states is potentially at risk 
under those circumstances, and I don't see an alternative here.
    We will have a transition process that happily in my 
Department I think I can say will be reasonably well organized, 
sir, and I'll have a chance to provide plenty of advice. But I 
would say in this context that those were the three things that 
I would try and say to the new team: Give it a priority, put 
some serious effort on the table, and expect and demand 
results.
    Senator Hagel. Within that, I didn't hear anything 
different that you would suggest, because I assume what you 
have said we have been doing and what you've just said we 
should be doing is a continuation of the three principles that 
you laid out, which I assume you think we've been doing, and 
putting forth effort and prioritization. I assume we're doing 
those.
    Mr. Welch. We are.
    Senator Hagel. You wouldn't see anything different, then?
    Mr. Welch. We are doing these things. And I'm sorry, I 
thought you had asked me about what to advise the next folks.
    Senator Hagel. Well, basically does that mean we just keep 
doing what we're doing?
    Mr. Welch. Yes, but----
    Senator Hagel. Nothing different? Nothing new?
    Mr. Welch. That's certainly necessary. It may not be 
sufficient. We have 3\1/2\, 3 months, more or less, still left 
of what I would like to see as productive effort, and we're not 
stopping as of November 5. We stop at 12:01 January 20 for this 
administration. And I'm a professional diplomat. There'll be 
others like me around who will try to carry on throughout the 
national security bureaucracy, for that matter. And we can do 
things between now and then.
    There are some things that we have under way right now 
where I still believe that there's room for progress and you 
might even, if you took a look at them, see them as innovative.
    Senator Hagel. Well, I don't think it's been a lack of 
effort, certainly not on your part, on our professional career 
diplomats. I don't think anyone has ever suggested that. But 
you will be in a position, as you know, to make recommendations 
to a new administration. And I think the reality is, you talk 
about 3\1/2\ months left. This administration, any 
administration with 3\1/2\ months left, is essentially over and 
the idea and the concept within the framework of all outside 
parties knowing that you will have a new President and a new 
administration, and any capital expended or any effort would be 
wiser to do with that new administration.
    So my point being--and you understand that; you've been 
through many administrations--that there's always new hope, new 
possibilities, when a new administration takes office. What my 
question was about was, based on whatever the lessons learned 
you and your colleagues have seen, have absorbed, what would 
you say, if anything, a new administration should do 
differently, if we should do anything differently?
    I understand, as we all do, industry and efforts and 
leadership and prioritization. I mean, again I assume we've 
been doing that. But I'm talking about beyond that. I'm talking 
about policy and should we be incentivizing things differently, 
should we be trying something new, should we be framing the 
issue differently. Those are the kinds of things that I would 
ask you.
    Mr. Welch. Well, it's a thoughtful question. Most of the 
complex problems that you've mentioned, Senator Hagel, 
sometimes Americans take a look at them and see them as issues 
of organized violence, war, despair. But in most of those cases 
there are really serious political problems involved, and it 
isn't sufficient to use one tool alone in these cases. I'm not 
a soldier; I'm a diplomat. I believe that ``diplomacy'' is a 
strong word, not a weak one.
    I think at the heart of the three points I made is that we 
have to search for political solutions in these cases, while at 
the same time protecting our security interests and advancing 
them where necessary. I think if you do that you improve the 
possibilities. And I believe that using American credibility 
and strength in a diplomatic sense is an important part of our 
national power. I'd like to think that when we--across the 
region, in those cases where we have deployed that tool, we 
have been diligent and rigorous in using it to advance our 
interests. We sometimes take some hits for it publicly because 
diplomacy is an untidy business, and you don't always do it 
with people you like or that you would spend an evening with. 
But it's for a purpose and it can produce results, sometimes at 
a lower cost than the alternatives.
    I think after a career in public service of the kind I've 
had, I think that that's what I'd like to pass on, not merely 
to the next administration, but to my colleagues. It's 
physically and politically not risk-free. These are decisions 
that have to be made, and our leadership expects, as I tried to 
indicate, results and, by the way, still expects more in the 
next 3\1/2\ months.
    In return, I ask for the chance to give objective advice 
and try new ways of doing it. Sometimes, sir, it works and 
sometimes it doesn't.
    Senator Hagel. Thank you.
    What results do you think are possible over the next 3\1/2\ 
months?
    Mr. Welch. Well, I would like to see, bearing in mind that 
Israel has to compose its new political leadership, that this 
negotiating track that we've embarked on to support does move 
ahead. Ideally, it would produce an agreement. If it doesn't, 
it must be continued and continued on a substantial basis, so 
we try to build that every single day. I think it has to be 
done carefully and quietly, but that is in my judgment 
incredibly important.
    Second, we have, as I mentioned with respect to North 
Africa, but I didn't mention with respect to the Arabian 
Peninsula, good relationships with all these countries and we 
could still broaden our partnership with them. I'm worried 
about Yemen, for example, Senator Hagel, where I think a new 
level of attention and investment has to be brought. It's a 
difficult country and has a really serious problem with its 
internal security and I think that requires us, working with 
Saudi Arabia and Oman, to see whether we can help, but also 
some decisions on our part.
    Then there are some overarching questions, too. For 
example, in my area of responsibility there are countries from 
which there are quite a number of detainees at Guantanamo have 
come, and as we look at returning these, these folks, to their 
places of origin, we need to do that in a rigorous way, but we 
need to do it, because I think reducing the profile of that 
problem is very much in our interests. That cuts across 
virtually the entire region, I regret to say, although there 
are some high concentrations of certain detainees.
    One of the most important changes we've seen in the last 
several years across the Arab world is there is one of the 
largest transfers of wealth in human history now occurring. A 
great deal of money to be invested in the Arab world, and there 
is a sharp rise in inter-Arab trade and investment, which I 
think is wholesome for the economies across the region. But 
they've got problems, too, both in interacting with each other 
and high inflation, high unemployment in some cases.
    So continuing the effort to promote economic reform and 
engagement with them on trade issues is vital. I think I would 
hope that the next administration could take a look at our 
trade policy and keep available the option of free trade 
agreements, including in this area.
    We need to reconnect also in an important way with these 
societies, cooperating in everything from health to education 
to democracy promotion activities. That varies from place to 
place, but it's more rigorous and institutionalized across the 
region. And we've had--that's had some--I don't want to 
overrate it--some success.
    What's really encouraging to me as somebody who has worked 
on this region for a long time is the number of Americans who 
are interested in it, and not just because of the bad news. 
When I went to Egypt in 2001 there were two dozen people 
studying Arabic at the American University in Cairo. When I 
left in 2005, 4 years later, there was about 20 times that 
number. Middlebury College has a language program in 
Alexandria, Egypt, now.
    I love the fact that Americans want to connect into these 
societies, where 7 years ago they saw them as alien and 
hostile. I think again, increasing that openness on their part 
and on our part is a really important step for the future.
    Sorry if I went on.
    Senator Hagel. Well, those are objectives and what we need 
to do. But let me go back again. You said you would hope that 
we could still accomplish some things over the next 3\1/2\ 
months. What are you talking about? What do you believe we can 
accomplish over the next 3\1/2\ months? A new peace agreement 
on Israel-Palestinian issues, or what were you referring to 
when you mentioned that? What's possible in your opinion, as 
you have noted, still possible over the next 3\1/2\ months as a 
result?
    Mr. Welch. Well, I think we can make progress in the 
Israeli-Palestinian negotiations. I believe it was Senator 
Kerry who said there's a bit of a pause, but it's not a halt. I 
do believe there is a way to do this in a measured, careful, 
confidential way.
    Senator Hagel. Do you believe that in the next 3\1/2\ 
months we can get an agreement that takes us to a higher ground 
position?
    Mr. Welch. That's a good question and I want to be careful 
in answering it. There is a difference between possibility and 
probability. I think it's really important, Senator Hagel, to 
have a lofty objective out there. If you sell yourself short, 
you're not going to encourage parties who already have a 
difficulty in cooperating and working with one another to try 
and move forward. So it's good to have an ambitious goal. It 
increases leverage.
    We'd like to attain that. Whether we will is another 
question. But I don't think we should pull back from that goal. 
To the degree we can make progress toward it, I believe that we 
should make that progress irreversible so it can be transferred 
over. That's one arena.
    I think that including in dealing with the Iranian threat, 
the reestablishment of Iraq as a sovereign, secure country, 
troubled though it is internally, still is hugely important to 
the stability and security of the entire region. So 
reconnecting it into the region and reconnecting the region to 
it is I think very, very important.
    Some of Iraq's neighbors and others have begun to 
reestablish diplomatic missions there--a halting process, but a 
good one. Communication between the Iraqi Government and all of 
its neighbors, Iran included, but also Turkey, Syria, Jordan, 
even Saudi Arabia, certainly Kuwait, has improved. Those 
borders are more secure today than they were before. That's a 
really important project.
    As I mentioned, I also think that we need to pay special 
attention to Yemen, not just because there was a terrorist 
attack on our Embassy, but it's a rather complicated situation 
and needs an investment.
    There are other areas of concern, too. One of the reasons 
that we were focusing on North Africa is because of a 
recrudescence of extremist activity in that region, which is 
seeing itself most violently in Algeria. That's going to 
require greater regional cooperation and greater cooperation by 
the United States with that region.
    So those are a few of the things that we want to work on. I 
should say within the North Africa arena, too, I'm determined 
to see this agreement that we made with Libya implemented in 
full because once that happens I think we can move off the 
plateau we're on and improve that relationship. It would be 
very good to turn that over in a much better fashion to the 
next administration as well.
    Senator Hagel. Thank you.
    Mr. Secretary, as we wind this meeting down I want to again 
thank you and your colleagues for your efforts and your good 
work, also acknowledge--when you speak of contributions made by 
professional diplomats, I am aware and it should be noted that 
you lost your father last month. If I have my facts correct, I 
think he was a 33-year career diplomat, much accomplished and 
highly regarded, World War II veteran, survivor of Pearl 
Harbor, a man who gave immensely to his country. So to you and 
your family, we are sorry, but we appreciate his great service 
to our country; and you obviously follow right along the family 
genetic trail. So thank you.
    Mr. Welch. Thank you, Senator.
    Senator Hagel. This hearing is adjourned.
    [Whereupon, at 4:30 p.m., the hearing was adjourned.]
                              ----------                              


              Additional Material Submitted for the Record


  Prepared Statement of Hon. Robert P. Casey, Jr., U.S. Senator From 
                              Pennsylvania

    Thank you, Chairman Kerry, for holding this important hearing today 
on the Middle East Peace Process. This year we marked the 60th 
anniversary of the founding of Israel, a state created by the Jewish 
people as a place where Jews could live in peace. Unfortunately, for 
Israelis and Palestinians, that peace has proved elusive throughout the 
years. The consequences of inaction have proved costly to all those in 
the region whose daily lives are shaped by political decisions they 
have little control over. They have also had dramatic spillover effects 
within the global community amongst those who see a stalemate on the 
peace process as vindication that there can never be peace between 
peoples of different religions and cultures.
    Mr. Chairman, I was pleased when the Bush administration convened 
the Annapolis Conference in November 2007. After 6 years of missing 
American leadership on this vital matter, many of us had hopes that we 
could finally move forward on addressing the difficult issues that have 
separated Israelis and Palestinians for so long now. Israeli Foreign 
Minister Livni and former Palestinian Prime Minister Qurei have made 
important strides in bringing both sides back to the negotiating table. 
While it looks unlikely that a comprehensive agreement will be reached 
this year, it is imperative that both sides, in good faith, keep 
talking and investing in the process.
    Similarly, the next U.S. administration must be actively engaged on 
the Middle East Peace Process from the very onset. Strong American 
leadership will be critical to bringing about a lasting solution 
whereby two states, Israel and Palestine, can live side by side in 
peace and security. Solution of the Israeli-Palestinian conflict will 
also reap benefits for other U.S. foreign policy and national security 
priorities in the region and the broader Muslim world. History has 
repeatedly shown us we cannot afford to sit on the sidelines when it 
comes to this vital issue.
                                 ______
                                 

Responses of Assistant Secretary David Welch to Questions Submitted for 
                  the Record by Senator Richard Lugar

    Question. How can the Foreign Relations Committee be helpful in 
ensuring that the progress made on the Annapolis process is preserved 
and continued into a new administration?

    Answer. During their recent briefing for the Quartet in Sharm el-
Sheikh, Egypt, on November 9, Israeli and Palestinian negotiators 
requested three forms of assistance from the international community: 
(1) Support for the parties' continuing efforts to reach a final, 
comprehensive peace and respect for their mutually agreed principles 
for the negotiations; (2) promotion of an environment conducive to 
peace, nonviolence, and the two-state solution, including ongoing 
provision of political and economic assistance to the Palestinian 
Authority; and, (3) no third party intervention in the bilateral 
negotiations. We intend to respect the parties' requests. To that end, 
it is likely that, in the months ahead, the administration will ask for 
congressional support for infrastructure projects and institutional 
capacity-building to improve the lives of Palestinians and bolster the 
credibility of the legitimate Palestinian Government, which 
demonstrated its desire for a durable and lasting peace with Israel. We 
must also continue to support efforts to promote good governance and 
the rule of law in the Palestinian territories to lay the foundation 
for the establishment of a democratic and viable Palestinian state.

    Question. Would it be appropriate for the administration to offer 
``bridging proposals'' to help parties progress in their bilateral 
negotiations?

    Answer. In their briefing for the Quartet on November 9, Israeli 
and Palestinian negotiators reported on the significant progress made 
to date in their bilateral negotiations and described the mutually 
agreed principles that govern their dialogue. While welcoming support 
and assistance from the international community once an agreement is 
reached, the parties' requested that the negotiations remain bilateral 
and confidential. We will respect the parties' request to avoid direct, 
third-party intervention so they may continue their negotiations toward 
fulfillment of the promise of Annapolis and the establishment of a 
Palestinian state.

    Question. What sort of progress is USAID making with respect to PA 
projects, work with the ministries, etc? What costs were incurred in 
delaying projects because of restrictions on interactions with the 
Palestinians? Are civil works receiving the same sort of support and 
attention as General Dayton's work? Are the efforts balanced? More 
specifically, have civil works projects been commenced to take 
advantage of the progress USSC has made in Jenin and in other areas of 
the West Bank?

    Answer. During the period of restrictions on interactions with the 
Hamas-led PA, we estimate that USAID incurred $14 million in costs 
associated with the suspension or cancellation of projects. In June 
2007, Hamas violently took control of the Gaza Strip. President Mahmoud 
Abbas declared a national emergency, dismissed the Hamas government, 
and appointed a new government comprised entirely of non-Hamas, 
independent ministers under the leadership of Prime Minister Salam 
Fayyad. Immediately after Secretary Rice removed the restrictions on 
contact with the PA, USAID moved rapidly to reorient programs to 
support the new Prime Minister's government. Existing activities were 
redirected to involve PA Ministries as both partners and beneficiaries. 
USAID staff and implementing partners became active participants in PA 
sectoral planning processes that resulted in the preparation of the 
Palestinian Reform and Development Plan (PRDP), which the PA presented 
to the international donor community at the Palestinian Donors 
Conference in December 2007. USAID worked very closely with its PA 
counterpart ministries in developing the spending plan for the $68 
million in West Bank and Gaza FY 2008 New Obligating Authority (NOA) 
funding, the $171 million in FY 2008 Emergency Supplemental project 
funding and the $300 million total in Cash Transfer funding that was 
provided in the FY 2008 NOA and FY 2009 ``Bridge Supplemental'' 
appropriations.
    Robust USAID commitments to civil works projects in FY 2008 include 
$91.5 million allocated to essential public infrastructure projects 
identified by the PA; $38 million for governance and rule of law 
activities, including a special focus on PA capacity building; $52 
million for economic growth and job creation programs that address high 
PA priorities; and $40.5 million for investments in health, education, 
and youth-oriented programs that support PA efforts to provide 
essential services to the Palestinian people and enhance the 
credibility of the Abbas/Fayyad government. All of these activities are 
under way at this time, delivering on our commitments made at the 
Palestinian Donors Conference, with total expenditure rates for all 
programs estimated at $41 million per month in FY 2009.
    USAID is working closely with General Dayton and the USSC, the 
Special Envoy for Middle East Regional Security (SEMERS) General Jones, 
as well as international partners to implement a coordinated strategy 
that links security assistance with economic and institutional 
development. USAID economic and social development activities both 
support and benefit from the improvements in security in Jenin 
accomplished by Palestinian National Security Forces with USSC 
assistance. Our support for rule of law and governance programs is 
closely coordinated with more specific assistance to police forces 
provided by the European Union Police Coordinating Office for Police 
Support (EUPOL COPPS). As a key part of the coordinated program, USAID 
announced $3 million in initial assistance activities in Jenin on May 
28, 2008; these activities are completed or nearly completed. In her 
recent visit to a major USAID hospital renovation site in Jenin, 
Secretary Rice announced the next phase of an additional $14 million in 
USAID commitments in Jenin. More broadly, USAID has direct assistance 
activities under way and planned in all 11 West Bank Governorates.

    Question. As the USSC's work proceeds, is there a sense that PA 
leadership has sufficient will and capability to take the necessary 
decisive steps to end terrorist activity?

    Answer. The Palestinian Authority Security Forces, especially those 
trained with State Department assistance under the auspices of the U.S. 
Security Coordinator, LTG Keith Dayton, have shown increased will and 
capability to confront the terrorist infrastructure in the West Bank. 
In Jenin, Nablus, and Hebron, three of the West Bank's largest cities 
and most populated governates, deployed forces have arrested members of 
Hamas and Islamic Jihad, dismantled al-Aqsa Martyrs Brigade structures, 
and in one notable case, discovered a large cache of explosives. 
Israeli Domestic Intelligence Chief Yuval Diskin recently described 
security cooperation with the West Bank authorities as ``excellent, 
especially in combating terrorism'' as well as shutting down 60 
institutions connected to Hamas. This illustrates the increasing degree 
of confidence with which Israel views the Palestinian Authority's 
ability to provide for law and order in the West Bank.

    Question. What signs are there that the IDF will cede authority to 
the PA forces in the West Bank?

    Answer. The IDF has made incremental steps toward allowing 
increased Palestinian Authority Security Forces (PASF) activity, most 
notably in Jenin and Hebron, and has reduced its activity in other 
sectors in order to reduce Palestinian pressure on President Abbas and 
the PA. The IDF over the last 6 months has operated on a policy of ``as 
the PA does more, we will do less.'' As a result, the Government of 
Israel allowed the PASF to deploy to Jenin while reducing the IDF's 
footprint in the area. The IDF and PASF have also increased their level 
of cooperation. As a sign of the success of this cooperation, the GOI 
has also allowed the PA to deploy a limited number of forces to Hebron, 
a city to which until recently the GOI was unwilling to allow the PASF 
to deploy.
    Final authority for security remains with the IDF, however. The IDF 
continues to carry out regular incursions into Area A, to deny PASF 
freedom of movement in Areas B and C, and to refuse to give the PASF 
``right of first refusal'' on arrests.

    Question. What benchmarks or metrics should we use to measure the 
progress of the Palestinian security forces and the effectiveness of 
U.S. assistance to these forces?

    Answer. The main goals of our assistance to the PA Security 
Services (PASF) are to help the Palestinians meet their roadmap 
obligations and help set the conditions for a two-state solution to the 
Israeli-Palestinian conflict. A key measure of the progress of the PASF 
toward meeting roadmap obligations is the number of arrests and 
prosecutions of criminals and terrorists in the West Bank. By all 
accounts, the increased PASF security operations throughout the West 
Bank have instilled a high degree of public support for the imposition 
of the rule of law in the Palestinian communities, addressed 
lawlessness in many important areas, enabled increased economic 
development, a key to reducing frustrations which spur radical support, 
and reduced the incidences of direct terrorist threats within the area.
    A less tangible, but no less important metric is the level of 
security cooperation between the IDF and PASF, engendered by PASF 
professionalization under USSC auspices, which helps build trust 
between the two sides. The Government of Israel has stressed that until 
they trust the PASF to prevent all forms of terror from Palestinian 
territory, they will not cede security control to the PASF. However, 
cooperation between the IDF and PASF, which has markedly improved, has 
led the IDF to reduce its operations in certain areas of the West Bank 
where the PASF is operating. The ability of the PASF to help improve 
overall law and order in the West Bank is also noteworthy. Jenin's 
residents have widely praised the performance of the U.S.-trained PASF 
forces there, and cite their presence as responsible for reduced 
lawlessness. We view this new dynamic as a key step toward a two-state 
solution and a demonstration of the effectiveness of U.S. assistance to 
the PASF.

    Question. According to a report this week by major aid agencies, 
despite the cessation of violence in Gaza the flow of commercial and 
humanitarian goods across border crossings remains severely impeded. 
What efforts are being undertaken to better facilitate the movement of 
goods in and out of Gaza while still preserving Israeli security needs? 
What efforts are being taken to strengthen the still fragile Hamas-
Israel calm?

    Answer. Despite several months of fragile calm in the Gaza Strip 
since the ``tahdiya'' was declared July 19, the humanitarian situation 
there remains challenging, and has worsened dramatically since November 
4, when hostilities resumed between Hamas-affiliated militants and the 
Israeli Defense Forces (IDF). Since the tahdiya began on July 19, 
Israel has allowed a net increase in the number of trucks allowed into 
Gaza. However, even with this increase, the number remains less than 
the amount of trucks entering Gaza prior to the Hamas take over. Border 
crossings have been closed frequently since November 4, resulting in a 
temporary suspension of the U.N. Relief and Works Agency for Palestine 
Refugees in the Near East's (UNRWA) food distribution program that 
affected 60,000 people, and fuel shortages that are causing ongoing 
blackouts across Gaza City and compromising hospital operations.
    Hamas' actions remain the primary cause of suffering in Gaza. 
Assuming the tahdiya is reestablished, Israel can mitigate the 
difficult humanitarian situation by increasing operating hours at 
crossings, including for humanitarian organization staff and medical 
cases, and expanding its definition of humanitarian items to include 
basic construction materials.
    In targeted approaches to the Government of Israel (GOI), we have 
had past success facilitating the import into Gaza of required items 
for specific humanitarian projects, including obtaining GOI agreement 
to allow in approximately 20 truckloads of supplies and sports 
equipment for UNRWA's 2008 ``Summer Games,'' as well as metal piping 
and other supplies to help facilitate a joint USAID/EU/World Bank 
sewage project in Beit Lahiya in early 2008.
    We and others in the international community will continue this 
type of approach on humanitarian projects of interest to the USG and 
importance to the people of Gaza, making use of the coordination 
mechanisms and communication channels within the GOI's Office of the 
Coordinator for Government Activities in the Territories (COGAT). At 
the same time, we will work as we always have done with the Government 
of Israel and the Palestinian Authority at the policy level toward a 
comprehensive, lasting solution to the hardships now faced by the 
Palestinian people: A comprehensive peace agreement that leads to the 
establishment of an independent Palestine governed by a democratically 
elected leadership, living side by side with Israel in peace and 
security.

    Question. Will you make the reports of General Fraser and General 
Jones available to the committee?

    Answer. The Roadmap Monitoring mission, previously headed by 
Lieutenant General Fraser, and currently headed by Lieutenant General 
Selva, and the office of the Special Envoy for Middle East Regional 
Security, headed by General Jones (ret.) are reporting directly to 
Secretary Rice. The Roadmap Monitoring mission's reports are not 
disseminated beyond Secretary Rice, and General Jones will not be 
creating a final report.

    Question. What is your view of the apparent rapprochement between 
Jordan and Hamas?

    Answer. We continue to welcome Jordanian efforts to overcome 
Palestinian divisions, consistent with the Quartet principles. Jordan 
has been a vital contributor to the Middle East Peace Process.
    As we have long stated, Hamas can be a part of the peaceful process 
by accepting the principles outlined by the Quartet: Renunciation of 
violence and terror, recognition of Israel, and acceptance of previous 
agreements between the parties, including the roadmap.

    Question. Is the administration actively supporting the current 
Israel-Syria proximity talks?

    Answer. While our focus remains on supporting the more mature 
Israeli-Palestinian track, consistent with the process launched at 
Annapolis in November 2007, we have welcomed Turkey's efforts to 
facilitate indirect negotiations between Israel and Syria in order to 
advance comprehensive peace throughout the region. We have stated our 
willingness to be helpful in this regard at any time that it is useful 
to the parties. Engagement with Syria, including by Israel, should 
address the full range of our concerns about Damascus' policies, 
including ending the flow of foreign fighters into Iraq and of weapons 
into Lebanon, renunciation of the Syrian Government's support for 
terror and expulsion of the leadership of Palestinian terrorist groups 
from its territory, cessation of cooperation with the Iranian Islamic 
Revolutionary Guards, and an end to human rights violations.

    Question. Has the Department, or Embassy Cairo, made any public 
statements with respect to the continued imprisonment of Ayman Nour? 
Or, of other lower profile political prisoners?

    Answer. Secretary Rice, Ambassador Scobey, and I have all publicly 
spoken out on a number of occasions against the continued imprisonment 
of Ayman Nour. This is something that we regularly raise, both publicly 
and privately, with the Egyptians at all levels. President Bush, for 
example, raised it with President Mubarak when they last met. We have 
repeatedly raised our serious concerns about the path and pace of 
political reform and democracy in Egypt at the highest levels, and we 
will continue to do so. As part of this effort, we also regularly call 
for the release of all political prisoners in Egypt, and for an end to 
the harassment and detention of political activists and journalists in 
Egypt.

    Question. I continue to be disappointed in progress on the Status 
of Forces/Strategic Framework Agreement, and in the failure of the 
Department to provide draft text of the agreement as Senators Biden, 
Kerry, Hagel and I requested some months ago. What is the backup plan, 
should the agreement not be concluded in time, or should we not get 
agreement on key principles? What's the worst case scenario? Can PM 
Maliki grant immunities to our forces and authorize combat and 
detention operations by executive fiat?

    Answer. We are confident that the many months of negotiations on 
the Status of Forces/Strategic Framework Agreement will yield mutually 
beneficial agreements between the United States and the Government of 
Iraq. While the United States could seek an extension of the mandate 
for the multinational force currently provided under U.N. Security 
Council Resolution 1790, in past years, the Security Council has acted 
to extend the mandate based upon the request of the Iraqi Government, 
and Prime Minister Maliki has made it clear that he does not support 
such an extension. It is our understanding that Prime Minister Maliki 
could not grant immunities to our forces by unilateral executive 
action.

    Question. Has Iraq agreed to provide all Embassy and Chief of 
Mission personnel privileges under the Vienna Convention on Diplomatic 
Relations of 1961? Will WPPS contractors be covered? Have discussions 
been concluded or even commenced on these points?

    Answer. Like our diplomats and staff posted at U.S. missions 
throughout the world, Embassy personnel in Iraq will enjoy applicable 
privileges and immunities under the rules set forth in the Vienna 
Convention on Diplomatic Relations of 1961 (VCDR). The level of 
privileges and immunities that any individual employee is entitled to 
will depend upon one's position and role within the U.S. mission. Since 
negotiations began in March, the Iraqis have consistently stated that 
they oppose continued immunity from Iraqi legal process for offenses 
that contractors_in particular security contractors_may commit related 
to activities carried out under their contracts. The status of 
contractors has been a significant area of discussion between the 
United States Government and the Government of Iraq, and to date we 
have not reached agreement on this point.
                                 ______
                                 

Responses of Assistant Secretary David Welch to Questions Submitted for 
                 the Record by Senator Russell Feingold

    Question. What impact does the recent diplomatic strain between the 
U.S. and Russia over the Georgia crisis have on the future of the 
Quartet [U.S., EU, U.N. and Russia] produced Roadmap?

    Answer. The Quartet continues to play an important role in 
supporting efforts by Israel and the Palestinians to arrive at a 
negotiated peace. In that regard, the roadmap remains an important 
guide toward achieving a two-state solution. A future peace treaty 
between the parties, as enumerated by Israel and the Palestinians at 
the November 2007 Annapolis conference, will be subject to the 
implementation of the roadmap.

    Question. If President Abbas does step down in 2009 and elections 
don't take place, the Palestinian Legislative Council's Speaker_who is 
a member of Hamas, would serve as acting President_a move that could 
very likely mean an end to the peace process. Likewise, if elections 
are held, there is a good chance Hamas would do even better than it did 
last time. Can you describe the political situation in the Palestinian 
Territories and assess for us the political strength of Fatah and 
Hamas?

    Answer. Fatah and Hamas remain at odds over control of the 
Palestinian territories. The Palestinian Authority, led by President 
Abbas, is firmly in control of the West Bank while Hamas has retained 
control over Gaza and consolidated power since its takeover of that 
area in June 2007. The two sides have engaged periodically in 
reconciliation talks, mediated by Egypt, but there has been no concrete 
progress. Abbas has laid out his conditions for a Palestinian 
reconciliation, which reflect the Quartet principles_renunciation of 
violence, recognition of Israel, and acceptance of past agreements 
between the parties. Hamas has rejected these principles.
    Hamas and Fatah are also at odds over when the President's term 
expires. Abbas' position is that his term does not end on January 9, 
2009, as Hamas alleges. He has stated that his term ends concurrent 
with the term of the Palestinian Legislative Council, currently 
scheduled for January 2010, as stated in the 2005 elections law agreed 
to by all parties.
    Fatah has been able to maintain its base of support in the West 
Bank. Security initiatives in Nablus, Jenin, Qalqilya, Tulkarm, and 
Bethlehem_and shortly in Hebron_have reduced crime against Palestinian 
citizens, leading to increased commerce and improvements in overall 
economic conditions. Furthermore, PA coordination with Israel Defense 
Forces has resulted in a smaller Israeli footprint in West Bank towns. 
As an indicator of the credit accruing to Fatah in the West Bank from 
these initiatives, recent polling shows that Fatah's popularity is 
increasing against Hamas and Abbas continues to poll higher in head-to-
head contests when paired against Hamas leaders. Hamas remains strong 
and well organized in Gaza, exerting near-total control.

    Question. It is my understanding that the humanitarian situation in 
Gaza ranks third worst in the world--after Somalia and Darfur. In May 
2008, a number of credible organizations released a report that 
described the humanitarian crisis as a man-made disaster resulting from 
the isolation and blockade of Gaza after its take-over by Hamas 
militants last June. Certainly Israel has a right--and an obligation--
to protect its citizens from rocket attacks from Gaza, but how 
effective has the current strategy been and where do you see room for 
improvement--so that Israel has the protection it needs and the people 
of Gaza are not deprived of basic services?

    Answer. Hamas' actions remain the primary cause of suffering in 
Gaza. However, Israel may be able to help mitigate the difficult 
humanitarian situation by increasing operating hours at crossings, 
including for humanitarian organization staff and medical cases, and 
allowing certain items to expedite the continuation of international 
humanitarian projects in the Gaza strip.
    Despite a fragile calm in the Gaza Strip since the ``tahdiya,'' or 
period of calm, was declared June 19, the humanitarian situation there 
remains challenging. Since then, Israel has increased the number of 
truckloads crossing into Gaza from the low point of 2,380 truckloads 
per month in the 12-month period following the June 2007 Hamas 
takeover. The U.N. Office for the Coordination of Humanitarian Affairs 
reports that in September 2008, 4,049 truckloads entered Gaza. However, 
this number still represents a sharp decrease from 12,000 truckloads 
that entered in May 2007, prior to the Hamas takeover of Gaza, due in 
large part to crossings closures prompted by intermittent rocket fire 
from Hamas-affiliated militants.
    We will continue to work with Israel, and the wider international 
community, on these issues, making use of the coordination mechanisms 
and communication channels within the GOI's Office of the Coordinator 
for Government activities in the territories. At the same time, we will 
continue to support the efforts of the Government of Israel and the 
Palestinian Authority to reach a comprehensive, lasting solution to the 
hardships now faced by the Palestinian people: An independent Palestine 
governed by a democratically elected leadership, living side by side 
with Israel in peace and security.

    Question. Citizen Diplomacy is crucially important to breaking down 
differences and building understanding. So I closely followed the 
situation surrounding the Gazan Fulbright scholars this past summer who 
were initially not allowed to leave to obtain U.S. visas. In May, 
Secretary Rice said: ``If you cannot engage young people and give them 
a complete horizon to their expectations and to their dreams, then I 
don't know that there would be any future for Palestine.'' Clearly, 
situations like this impact our ability to engage in broader public 
diplomacy efforts in the Middle East, and further strain the 
relationship between Israelis and Palestinians. Can you tell me what 
proactive steps the State Department is taking to engage Palestinian 
youth in people-to-people exchanges, and how we can avoid a repeat of 
this unfortunate situation?

    Answer. The State Department is committed to providing Fulbright 
exchange opportunities for Palestinians from the West Bank and Gaza. 
The Fulbright Program, the U.S. Government's flagship international 
exchange program, is designed to increase mutual understanding between 
the people of the U.S. and other countries and regions. Through our 
diplomacy and exchange programs, the State Department seeks to engage 
young Palestinian leaders to promote learning, tolerance, and 
international cooperation. Other initiatives, such as the International 
Visitors Program, the Youth Exchange and Study (YES) program, and the 
Young Writers Program, further enable cultural exchange and the 
opportunity for future Palestinians leaders to broaden their 
understanding of the United States.
    In FY 2009 and pending funding availability, we expect to award up 
to 20 Fulbright grants to students and scholars from the West Bank and 
Gaza to pursue graduate degrees, research and teaching opportunities in 
the U.S. The State Department works closely with the Government of 
Israel on a consistent basis to ensure that procedures are in place for 
all Department-sponsored exchange participants, including Fulbright 
grantees, to be able to travel to apply for visas.
    Once visa applications have been made, the Department will pursue 
the timely processing of visa applications and other forms of official 
permission required for travel of Palestinian students accepted to 
programs of study in the U.S. and elsewhere. Our posts in Tel Aviv and 
Jerusalem have developed a specific procedure for handling Fulbright 
applications, including coordination with Israeli authorities early in 
the process to ensure that any questions or problems are resolved in a 
manner that does not unduly inconvenience applicants or cause extensive 
delays.
                                 ______
                                 

Responses of Assistant Secretary David Welch to Questions Submitted for 
                 the Record by Senator George Voinovich

    Question. What is a realistic expectation for the status of the 
talks when President Bush leaves office?

    Answer. Israelis and Palestinians are engaged in the first serious 
negotiations in nearly a decade and continue to express their 
commitment to the Annapolis process. The parties have reiterated on 
numerous occasions that their goal remains to conclude a final, 
comprehensive agreement by the end of 2008 that establishes a 
Palestinian state and ends the conflict. The U.S. will continue to 
promote an environment conducive to these negotiations in a manner that 
allows the parties to pursue their bilateral initiative.

    Question. What is your assessment by all stakeholders toward 
implementation of UNSCR 1701?

    Answer. Progress has been made since August 2006 toward a permanent 
cease-fire and long-term solution to the Israeli-Lebanese conflict via 
the principles and elements of UNSCR 1701. The Lebanese Armed Forces 
(LAF) have deployed throughout the country for the first time in 40 
years, and a strengthened UNIFIL has helped to prevent renewed 
hostilities.
    However, important elements of UNSCR 1701 remain unimplemented. No 
progress has been made toward securing the Lebanon-Syria border against 
unauthorized weapons shipments as called for by paragraph 14 of UNSCR 
1701. A recent report of the U.N.'s Lebanon Independent Border 
Assessment Team noted that, while facing severe political and 
logistical constraints, the Lebanese Government could do more to seal 
the border. Israel also alleges persistent Hezbollah violations of the 
weapons-free zone south of the Litani River stipulated by paragraph 8 
of UNSCR 1701. While neither we nor UNIFIL has been able to corroborate 
this specific claim, Hezbollah is working to expand military 
infrastructure, including fortifications and lines of communication, in 
UNIFIL's area of operations while rebuilding its military arsenal north 
of the Litani River.
    Nor has there been significant progress in disarming all armed 
groups in Lebanon and establishing government monopoly on the use of 
force. However, the national dialogue process recently relaunched by 
President Sleiman is a step toward this goal and is addressing 
Lebanon's national defense strategy, including the status of 
Hezbollah's arms.
    Israel commits regular air and sea violations of Lebanon's 
territorial sovereignty, citing an overriding need to gather 
intelligence on Hezbollah's activity inside Lebanon pending full 
implementation of the UNSCR 1701 arms embargo and an end to Hezbollah 
rearmament. Israeli citizens and troops also remain north of the Blue 
Line in the divided border village of Ghajar, in violation of UNSCR 
1701. UNIFIL is working with both the Lebanese and Israeli Government 
to broker a solution. Finally, the U.N. Secretary General continues to 
request additional cluster munition targeting data from Israel. The 
U.N. has deemed information provided to date insufficient to aid 
cleanup operations in south Lebanon.
    We continue working to support Lebanese security services, 
especially with training and equipment useful in border security 
missions, and to explore with our allies options for greater 
international involvement on the border. We will continue to encourage 
Lebanese-led processes like the National Dialogue to focus on a 
political solution to the issue of Hezbollah's arms. While recognizing 
the security concerns that drive Israeli overflights, we have urged a 
reduction in number to avoid provocations. We have also encouraged 
Israel to accept UNIFIL's interim plan for northern Ghajar as a means 
to resolve a potential flashpoint and to demonstrate to Lebanon the 
value of diplomacy, as contrasted with Hezbollah's armed 
``resistance.'' Finally, we will continue to support U.N.-led diplomacy 
aimed at resolving the Sheba'a farms dispute consistent with paragraph 
10 of UNSCR 1701, perhaps in the context of a new or renewed Israeli-
Lebanese armistice that addresses other outstanding elements of UNSCR 
1701.

    Question. How can the United States best encourage implementation 
of UNSCR 1701_specifically stemming the flow of arms to Hezbollah?

    Answer. We have undertaken bilateral and multilateral efforts to 
improve implementation of the UNSCR 1701 arms embargo. We are providing 
the Lebanese Armed Forces (LAF) with equipment_including night vision 
devices, Humvees, and secure communications gear_to improve their 
ability to monitor the border and interdict smuggling. Nearly $7M of 
this equipment supported requirements identified by the German-led 
Northern Border Pilot Project (NBPP). While the NBPP's technical 
assistance to Lebanese security forces achieved only limited results, 
it provided important lessons for possible future multilateral efforts 
to help Lebanon secure its borders. We have continued to remind the 
Lebanese Government of its obligations under UNSCR 1701_political and 
logistical complications notwithstanding_to prevent arms smuggling into 
Lebanon, and have encouraged them to seek international assistance if 
necessary.
    Ultimately, however, it will be difficult or impossible to end 
weapons smuggling without the full cooperation of the Syrian 
Government, which continues to provide direct material support, 
including weaponry, to Hezbollah and other groups that threaten 
Israel's security. We have raised this issue in our limited recent 
contact with the Syrians, and encouraged Israel to make Syrian support 
for these groups a key component of Israeli-Syrian talks.

    Question. Does the administration intend to push for a ``status 
document''? If so, what is the administration's rationale toward 
publication of a detailed status document prior to the conclusion of 
any agreement?

    Answer. Consistent with the spirit of Annapolis, the parties 
continue to reiterate their commitment to reach a final, comprehensive 
agreement by the end of the year. The U.S. role is to support the 
parties' efforts toward this goal and ensure the stability of the 
negotiating environment. We continue to respect the parties' request to 
maintain confidentiality in the negotiations and to avoid direct 
intervention in their bilateral dialogue.

    Question. What is your view on the current political situation in 
the Palestinian territories?

    Answer. Fatah and Hamas remain at odds over control of the 
Palestinian territories. The Palestinian Authority, led by President 
Abbas, is firmly in control of the West Bank while Hamas has retained 
control over Gaza and consolidated power since its takeover of that 
area in June 2007. The two sides have periodically engaged in 
reconciliation talks, mediated by Egypt, but there has not been any 
concrete progress. Abbas has laid out his conditions for a Palestinian 
reconciliation, which reflect the Quartet principles_renunciation of 
violence, recognition of Israel, and acceptance of past agreements_and 
the PLO's commitment to the peace. Hamas has rejected these principles.
    Hamas and Fatah are also at odds over when the President's term 
expires. Abbas' position is that his term does not end on January 9, 
2009, as Hamas alleges. He has stated that his term ends concurrent 
with the term of the Palestinian Legislative Council, currently 
scheduled for January 2010, as stated in the 2005 elections law agreed 
to by all parties.

    Question. How would you assess the political strength of Fatah and 
Hamas?

    Answer. Fatah has been able to maintain its base of support in the 
West Bank. Security initiatives in Nablus, Jenin, Qalqilya, Tulkarm, 
and Bethlehem_and shortly in Hebron_have reduced crime against 
Palestinian citizens, leading to increased commerce and improvements in 
overall economic conditions. Furthermore, PA coordination with Israel 
Defense Forces has resulted in a smaller Israeli footprint in some West 
Bank towns. As an indicator of the credit accruing to Fatah in the West 
Bank from these initiatives, recent polling shows that Fatah's 
popularity is increasing against Hamas and Abbas continues to poll 
higher in head-to-head contests when paired against Hamas leaders. 
Hamas remains strong and well organized in Gaza, exerting near-total 
control.

                                  
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