February 15, 2001
Dirksen Senate Office Building, Washington, D.C.

Introduction:

Jeffrey Gedmin, executive director, New Atlantic Initiative, and resident scholar, American Enterprise Institute
Fred Thompson, U.S. Senate (R-Tenn.)

Moderator:

Tony Snow, FOX News Sunday

Participants:

Iain Duncan Smith, U.K. shadow secretary of state for defence and member of Parliament
Jane Harman, U.S. House of Representatives (D-Calif.)
Jon Kyl, U.S. Senate (R-Ariz.)
Benjamin Netanyahu, former prime minister of Israel
Richard N. Perle, American Enterprise Institute
David Trimble, Northern Ireland Assembly
R. James Woolsey, former director, CIA

MR. GEDMIN: Good afternoon and welcome. My name is Jeff Gedmin. I'm a resident scholar at the American Enterprise Institute, and I am the executive director of the New Atlantic Initiative. It's my pleasure to welcome you for what I think will be a terribly interesting and stimulating conversation this afternoon. We've put it under the title or rubric, "Intractable Conflicts, How Democracies Deal with Terrorists, and Other Challenges for the New Administration."

There are a lot of challenges for this new administration and a complex set of issues that the Bush team will deal with, but probably nothing more formidable and elusive than the various terrorist threats that exist today.

We are pleased to co-host this afternoon's conversation, a roundtable, with Senator Fred Thompson. Senator Thompson, I'd be happy to turn it over to you for some introductory remarks. Then we'll give it to Tony Snow and commence.

SENATOR THOMPSON: All right. Thank you very much. I'd like to welcome everyone to this important discussion about how democracies deal with terrorism and the challenges for the new administration.

I want to thank the American Enterprise Institute and Dr. Jeff Gedmin for inviting me to speak briefly and for going the extra mile in bringing some of the world's most prominent leaders and experts on terrorism to participate in this panel discussion.

I am pleased that former Israeli Prime Minister Benjamin Netanyahu, U.K. Shadow Secretary of State for Defence and Member of Parliament Iain Duncan Smith, and the United Kingdom's first Minister for Norther Ireland David Trimble are able to be here with us. Distinguished guests indeed. They have traveled far. I appreciate their taking their time to share their views with us. Their personal experiences should provide us with some very unique perspectives.

I am also pleased that James Woolsey, a former Director of U.S. Central Intelligence, and Richard Perle, former Assistant Secretary of Defense, could be here as well. Each has worked on terrorism issues while in government service and should give us a glimpse into how the United States has dealt with terrorists in the past and provide some ideas about what we should do in the future.

I also would like to welcome my colleague Senator Jon Kyl, who chairs the Judiciary subcommittee responsible for terrorism and who has been very active on these matters; and Representative Jane Harman from the House, who is a member of the National Commission on Terrorism and is a recognized expert on U.S.-Israeli security issues.

And, finally, I would be remiss if I didn't mention Mr. Tony Snow, renowned columnist and host of Fox News Sunday, who has agreed to moderate this event. Thank you, Tony.

As we look at terrorism today, the most significant dynamic may well be how much it's changed over the last ten years. Terrorists are becoming increasingly sophisticated and transnational in nature. They are less dependent upon state sponsors, and their targets and purposes are increasingly based upon local issues. They seek weapons that are more lethal and look for softer targets that provide greater opportunities for mass casualties.

It is noteworthy that terrorist incidents have decreased in the 1990s. The number of people killed or wounded in these incidents has increased substantially. As the USS Cole tragically demonstrated, the United States is certainly not immune from such attacks.

Last week, at a hearing of the Senate Intelligence Committee, CIA Director George Tenet warned us that the terrorism threat is real, it is immediate, and it is growing. As we see the threat of terrorism grow, we are doubly concerned because we know that, historically, civil liberties often have been most jeopardized in times of chaos, fear, and insecurity, the very things that terrorism engenders. The freedoms and civil liberties that we enjoy as democracies were hard won, and we are determined that they not be jeopardized.

In the United States, where we have yet, frankly, to experience the full brunt of terrorism that many of our allies have had to deal with for years--some of them here with us today--there are laws that prohibit our intelligence agencies from operating within the United States. It is illegal, with very few narrow exceptions, for our law enforcement agencies to search a person or residents without a warrant. Law enforcement can listen to telephone conversations of suspected terrorists only if advanced court approval is obtained to wiretap. There are constitutional limitations on the ability of law enforcement to stop suspected terrorists. Our military is forbidden, under our Posse Comitatus law, from acting as a law enforcement role domestically.

However, it must be acknowledged that democratic rights often make it difficult for our government to conduct effective counterterrorist activities. One court decision recently held that it was a violation of due process to use classified information in detaining an alien during the pendency of his deportation hearing. This individual had ties to the Palestinian Islamic jihad. The court found that the secret evidence failed to give the alien notice of evidence presented in opposition to his release and denied him opportunity to confront the witnesses against him and rebut the information.

Another court also ruled that secret evidence which accused an alien of hosting a meeting with several World Trade Center bombing conspirators could not be used to detain an alien where no evidence of terrorism had been presented in open court.

Therefore, we find ourselves with a constant challenge of balancing the need to carry out the first obligation of government--protecting our government and our citizens from destruction--with the need to protect the essence of what makes our government legitimate--our civil liberties.

The Hart-Rudman Commission on National Security in the 21st Century, which published its final report last month, highlighting terrorism as a major and growing threat, recognized the dual concerns that we consider here today. The report very clearly states that, "Congress is crucial for guaranteeing that homeland security is achieved within a framework of law that protects the civil liberties and privacy of American citizens."

Also, last summer, the bipartisan National Commission on Terrorism, which was commissioned by the Congress in response to the growing terrorist threat, published a final report that addressed many of these issues. The Commission recommended, among other things, full use of law enforcement intelligence authority domestically for recruiting counterterrorism sources; investigating suspected individuals or groups and expelling suspected terrorists.

A recent CRS report to Congress says, and I quote, "Implicit in the reasoning of the Commission's report is that combatting terrorism, particularly in the wake of a mass-casualty catastrophic incident, may require restrictions on individual liberties. The assumption is that carefully planned and measured restrictions in advance of a catastrophic event, coupled with well-thought-out contingency planning for a constructive military role in the aftermath of an incident, constitute an effective way of preserving, not diminishing, individual liberties and domestic freedoms and institutions."

Needless to say, this report has generated a great deal of discussion, as well it should.

In short, terrorism is a threat not only to our foreign and domestic security policies, it is a potential threat to our rights and freedoms. Given the great complexity of this issue and Congress' pivotal role, I look forward to hearing the thoughts and recommendations of our distinguished guests. I'm sure that they have much to share with us on this topic, and, again, I welcome you to this panel discussion.

Tony, thank you for being here with us, and I'll turn it over to you.

MR. SNOW: Senator Thompson, thank you.

First, a few notes on how we're going to proceed this afternoon. I'm going to throw out a few questions. It is my job to try to wheedle a few comments out of this shy and retiring group of individuals.

At some point, however, you see we have a couple of microphones stationed in the room, and we would invite your questioning as well.

Let me also say to the panelists, what we are trying to do here is have a conversation. Now, I know it's difficult to have a relaxed conversation with about a dozen people spread around one of these tables, but fake it, because really what we want to have is an exchange of ideas. So feel free to engage one another. When the conversation lags, I'll throw in a dumb question because that's what journalists do. And then we'll move on. So let me begin with the first question, and I want to pose it to Prime Minister Netanyahu.

It's pretty well established that terrorists are not democrats.

MR. NETANYAHU: With a small "d"?

MR. SNOW: Yes, that's right.

[Laughter.]

MR. SNOW: Senator Thompson, that one's for you.

Terrorist organizations are not democracies. I will correct it. That being the case, is it possible, credibly, to negotiate with them?

MR. NETANYAHU: Well, you can tactically negotiate with them, and we often have. But the larger rule in fighting terrorists is that you have to fight them. I would say that's the first thing. You have to refuse to be terrified, and you have to fight them. Everything else is, as we say in our tradition, details.

I would make two comments right off the bat in my conversation the best that I can muster here. I think first that democracies are not at great risk in the loss of civil liberties because the experience of most democracies has been that this natural oscillation between civil liberties on the one hand and the quest for public security on the other, while the pendulum shifts, it shifts in a pretty confined way. And you didn't see either Italy or Britain or Germany or France or, for that matter, Israel, which has been under a much more continuous terrorist threat, become anything less than exemplary democracies.

There are all sorts of instruments, including this institution, parliamentary or congressional involvement or oversight, to protect undue surveillance. But it is also a fact that democracies can defeat terrorism fairly easily. Fairly easily.

I just gave you the examples of the European countries. Europe was plagued with terrorism in the late '60s and 1970s. You don't see that today. You remember the waves of hijackings of airplanes. You don't see that today.

Now, it has not been because the terrorists have all reformed and have become democrats, with a capital or a small "d." It is because they have met a wall of resistance that has deprived them of the means to act with impunity. And I think this is the key in fighting terrorism. The most important thing is to deprive terrorists and those who dispatch the terrorists of impunity and immunity. And this means acting, I believe--I'm going to give it to you in a nutshell. This is my mini-speech. After that, you can tear it up to pieces. But I will give you one coherent--what I think is a coherent view of how to fight terrorists, and then you can do anything you want with it.

I think that the most important thing is to refuse to accept the moral acceptability of terrorism. There is no position of moral relativism that says, well, you know, the terrorists are justified because they are mowing down people, innocent people at random, and those who strike at the terrorists are equally culpable. They're not. The terrorists are always guilty of committing a crime because the deliberate and systematic murder and maiming and menacing of innocent civilians is a war crime. That's how we define war crimes. Responding to that by seeking to act deliberately and methodically against the terrorists themselves is not a crime. It is an act of self-defense.

The second point that I would make is that in fighting terrorists, other than taking the moral high ground, it is important to hit not only the terrorists themselves but those who give them the wherewithal to operate. This is essentially what happened in Europe.

The reason Germany and France were successful is because the home-grown terrorist movements there had one hinterland, and that's the Soviet Union. The minute the Soviet Union and East Germany and other satellites of the Soviet Union and Eastern Europe collapsed, that terrorism didn't have a chance.

The reason our terrorism, the terrorism against us, still works is because it has a hinterland, either in Lebanon or in the Palestinian areas or in Iran and elsewhere.

If you want to fight successfully terrorism of this kind, you must address those who support that terrorism. And you can do so by applying pressures against them, military pressures, economic pressures, political pressures and so on, just as you applied against Qadhafi for doing the Lockerbie bombing. You place a real price and exact a real price from those who support terrorism.

I think that is well within our means. I think it is possible to contain and ultimately really eliminate this threat from international politics, except for one thing, and that is that those who practice terrorism up to now and have stopped doing so, say, like Iran or Iraq, will soon have the means to terrorize us that are entirely different. And these are the atomic weapons and ballistic missiles that they will have that will make the regime of terror that we've experienced in the last three decades a child's play.

When you have regimes that are used to the practice of terrorism possess weapons that can stop -- (microphone out) -- that can dictate terms to us, quite overtly, without even the need of a mask, then we will enter a very, very difficult period indeed.

So if I have to say what am I concerned with, it is not with the spread of terrorism. I think we've contained that spread. It is with the possibility that terr orist states, states that practice terrorism on the sly in previous decades, will now practice an overt terrorism, armed with these menacing weapons. I think that is the real danger that we face today.

End of speech. There will not be anything quite as long from me, but I took the first respondent's rights.

MR. SNOW: I've had you on my show. I'll believe it when I see it.

[Laughter.]

MR. SNOW: Mr. Woolsey, let's pick up on something Prime Minister Netanyahu just mentioned, which is the danger of proliferation now from there states. Is this something that can be contained or is it inevitable?

MR. WOOLSEY: Well, it is a very substantial danger, and he mentioned Iran and Iraq, and I think rightly so. Both are customers of the Russian military-industrial complex, sometimes directly, sometimes indirectly, and of technology certainly for ballistic missiles and weapons of mass destruction. And also I think it's important that we not lose sight of something that he pointed out and I want to stress, which is focusing on state support of terror, and I think especially from Iran and Iraq.

We have gotten into the mode for the last several years of thinking in this country that terrorism is largely a law enforcement problem and, if you simply arrest the foot soldiers and maybe a second lieutenant or two who were involved in the terrorism and lock them up, you have solved the problem. I think that is far from true.

There is a new book out that American Enterprise Institute, where Richard is, has published--and Jeff--by Laurie Milroy (ph) called "The Study of Revenge," about Saddam, which makes, I think, a reasonable case, certainly one that deserves anyone who disagrees to try to refute it, that Iraq may have had a substantial hand in the World Trade Center bombing.

There are other cases in which state sponsorship--directly, indirectly, working through cutouts, working through false flag operations, and all the rest--may be involved in some of the terror incidents that have been, I think, too easily subscribed to just sort of a pickup team of Islamic fundamentalists.

And there's another reason why it's important to look at state sponsorship, which is that not looking at it is unfair to Islam. Islam is one of the world's great religions, and there are many millions, hundreds of millions, of peaceful, reasonable Muslims. And certainly there are some individual groups and sects and so forth that are oriented toward violence against Israel, against the United States, against the West. But we should not get off into the mode of thinking that all of this is a clash of civilizations or a clash of cultures.

It makes a big difference whether there is a Saddam Hussein in Iraq or a (?) Al-Faqui, the rule of the jurisprudential, so-called, in Iran. And I think we need to start turning our attention again, along with our friends from Israel and others, towards state sponsorship of some of these acts of terror that we've brushed over in the past and some that I'm afraid we may say in the future.

MR. SNOW: Jane Harman, you were nodding vigorously, especially when he was talking about the role--talk about the sponsors of the sponsors, particularly what's going on in Russia and China now.

MS. HARMAN: Well, I was going to talk about Russia. I hate to agree with Jim Woolsey, but I have to. Russian technology transfer to Iran is one of the biggest threats that we face now. I see Prime Minister Netanyahu nodding. I first became aware of this on a trip to Israel several years back. Iran is an enormous threat to Israel. Iran's missile industry and nuclear industry are specifically being aided by Russian advisers and Russian technology.

Senator Kyl and I worked together a few years ago to get strong resolutions passed by the Senate and the House calling on the Clinton administration to impose sanctions on Russian firms doing business in the United States pursuant to existing law. That really never happened. There was a response but nothing much happened, and we learned later that Vice President Gore had had a secret agreement with Prime Minister Chernomyrdin, which basically undercut everything we did.

I would hope that this administration would be vigilant now and make sure that any technology transfer to Iran and Iraq is stopped, because, you know, when you talk about proliferation, I think that's where to look, not North Korea, not China, but Russian transfers to the Middle--you know, those two countries in the Middle East.

MR. SNOW: Senator Thompson?

SENATOR THOMPSON: Well, I certainly would include China. Our intelligence reports that we get biannually again listed China as perhaps the world's leading proliferator of weapons of mass destruction, not only Iran but, of course, Pakistan, Syria, Libya, across the board.

As you know, when we had our little discussion about most-favored-nation, some of us tried to include in that debate the issue of Chinese proliferation, and that was defeated. But I think it's going to be something that stays with us for a long, long time. I don't think that we can continue reaching out the hand of friendship, increased trade, all the things that we would like to see with regard to China, while ignoring what's going on there with regard to human rights, which gets most of the attention, but ignoring the thing that really poses a direct threat to our country, albeit perhaps indirectly, and that is the massive proliferation of weapons of mass destruction to several rogue nations.

MR. SNOW: Senator Kyl, what do we do about that?

SENATOR KYL: First of all, democracies which generally support free trade have to begin to put national security considerations, if not ahead of, at least on a plane equal to their trade considerations. And we find that a sad but true state of affairs that in the United States Congress, for political reasons, those who want to promote trade have the upper hand against those who would at least ask for some consideration of national security.

I was prompted to think about this in Munich a couple weekends ago when, in response to Secretary Rumsfeld's plea that we begin to work as allies toward the development of a missile defense system which could help defend against part of this terrorism threat, a plea which he was making largely to the allies there, Sergey Ivanov, who is the security adviser to Vladimir Putin, argued instead that--instead of missile defense, he said export controls will be what can deter terrorism.

Now, I find this ironic, of course, coming from his lips, but he, I think, points up a larger truth, and that is that people in the West are prone to want to talk about export controls and other kinds of non-proliferation agreements and arms control agreements as ways of dealing with proliferation, and yet--as opposed to the real hard work of actually building defenses, and yet when it comes time to enforce them are totally unwilling to do that. And until democracies are willing to get serious and have the will to put national security ahead of mere trade considerations, then we are just as bad as the Russians when it comes to helping these people, because we become the unwitting tools in at least not stopping the kind of conduct countries like Russia are actually deliberately engaging in.

MR. SNOW: Mr. Smith, do you agree?

MR. SMITH: Yes. I think it seems to me there are two aspects to this issue on terrorism. First is the sort of terrorism that is taking place--and I am sure David will say something about this--in Northern Ireland, which is at a much lower level, but gratuitous acts of violence in the pursuit of a particular political objective, which in Northern Ireland they've had to put up with for decades now. And whilst it doesn't necessarily make the headlines of the news worldwide, the collective effect of that progressively over a period of time is to sap the willpower of the democratically elected governments to carry on enforcing their will. And, thus, we've seen one of the responses to that seems to me that there has been a slightly liberal view of this, which is to say, well, if you give them what they want or some of what they want, then this will go away, that there's a proportionate trade-off here.

MR. NETANYAHU: We have never heard of that.

[Laughter.]

MR. SMITH: Well, we've experienced a bit of that in the U.K., and David may want to say some more about that. But what often happens--and this is where, you know, we are at the present in Northern Ireland--one side starts to give considerably in that process, only to find the other side doesn't ante up to their side of the equation. And then we get to another stage in the debate, which is, well, maybe we didn't give quite enough, maybe you needed to give a bit more to bring them on just that little bit further so that they meet that requirement. And I'm sure David will want to say a little bit more about that.

But my real concern is at that low level there is a problem, which is, if you lack the will eventually to deal with this as well in a military sense, then you are left with only that sort of solution. And that is a good invitation for people to carry on doing what they're doing because it is in actual fact being rewarded.

On the second side of the equation, which is that of the weapons of terror used--we're talking here about ballistic missiles and weapons of mass destruction--absolutely this is really the new dimension that we're going to have to deal with over the next 20 and 30 years.

The possession of a ballistic missile and a biological, chemical, or even nuclear warhead is a very good investment for a country like Iraq. It's one of the cheapest and most effective things they can possibly possess. It's far cheaper than trying to build up your air forces to compete with what is now demonstrated as a hugely overwhelming capability belonging to NATO. But what you do have with one of these things is that aspect of terror, that is to say, that the nations who may expect this thing to arrive on their heads may start making irrational judgments about how to deal with it if they can't themselves deal with terrorism. And, therefore, as you would want to in a more domestic terrorist environment deal with this to stop the military threat whilst dealing with the politics, if you don't deal with the military aspect of it, then the political end is all about giving way.

So on this international stage, if you don't deal with active defense, which I think is the key, i.e., ballistic missile defense, and invest everything in simple treaties because that makes you feel better about yourself, arguably more than having any enforcement power, then the likelihood is you end up doing much what I was describing in the domestic sense, but internationally now, which is constantly saying, well, if we give something because that's what they want, then maybe that will solve the problem.

So although the two are in dimension quite fundamentally different, I think ultimately the way in which you deal with them comes down to a very similar process, which is you must have some form of active and progressive defense against both aspects whilst, if necessary, by all means, passive and negotiable defense whilst trying to resolve the core problem. But if you try to do one without the other, and certainly the negotiation without the military, then you end up with nothing less than, frankly, a sellout.

MR. SNOW: David Trimble, let's focus on a couple of points that he just made. First, can concessions sometimes be unwittingly or unduly provocative in terms of inviting rather than suppressing violence? And, second, from a rhetorical point of view, when people talk about cycles of violence, rather than trying to point a finger at terrorist acts, do they also at the same time create a sense of moral equivalence that makes it difficult to negotiate?

MR. TRIMBLE: I'm going to take your first question in a slightly different form by going back to the original question you asked about whether negotiations with terrorists are possible. And basically, no, they're not. The British Government from 1972 tried repeatedly to draw the IRA into negotiations. 1972 was the first time that Gerry Adams and Martin McGinniss were invited to speak to British Government Ministers for that purpose. And all the efforts between 1972 and 1994 to draw the IRA into negotiations failed. Subsequent efforts began to appear to succeed.

Why? Because in the interval, we had actually started to defeat terrorism. And that is quite crucial because while the terrorists thought that they had the chance of winning by terror, they weren't prepared to negotiate or interested in negotiations.

What brought them to negotiation was the fact that we were beginning to be effective in defeating terrorists, partly through intelligence--and I think this is what Bibi was saying--but you've got to have an effective defense, and crucial for that is an intelligence about who you're dealing with. But because you can't--because terrorists strike without being seen and melt away into the population or whatever and you have nothing you can strike back at, it's very difficult to deal with. You, therefore, need an intelligence as to who you're dealing with. When you've got that, you can start to bear down on them.

Now, terrorists sometimes are supported by other states in ways that have been mentioned. Sometimes they have their own sources of support within the state. Actually, most of the conflicts that have occurred in Europe in the last number of years have been within states rather than between states. So what you've got to do, if you looked where their support is, is to detach that support from them. If there are segments of society that are supporting terrorists, then you've got to say to yourself how do we diminish that support, how do we detach it, without getting into the situation that Iain was talking about, where you're then trying to appease terrorism, because appeasement we have seen doesn't work.

With regard to state-sponsored terrorism, where other states are helping terrorists, now that actually is an easier situation to deal with. The problem that you have with terrorists has been not being able to find them. But if a state is supporting terrorists, you can find the state. It can't disappear. When the USAF bomb Tripoli from bases in England, Qadhafi thought he'd retaliate against England by supplying the IRA with hundreds of tons of terrorist material. He was clearly sponsoring the IRA at that stage. He changed his position on that, and one can just speculate as to the pressures that were brought to bear on his state to make him change his policy. The state can't hide.

Similarly, when we're dealing with, you know, states that have obtained weapons of mass destruction, that state, okay, it may have its biological weapons, it may have acquired some nuclear weapons, it may have delivery systems, and that poses a threat. But the state can't hide. You're in a position to take measures against it. I mean, just because some rather nasty states have got weapons of mass destruction, that doesn't mean that the theory of deterrence is not useless. You've got to think about what you can do to bring pressure on that state. Yes, by all means, look at your defenses, and I have no objection to looking at missile defenses and things like that. But just because we have some small states that are pretty volatile and do have weapons doesn't mean that we should, therefore, think that this is a unique threat. It is the same threat that we faced in a different form for the last half-century and succeeded in dealing with, defeated that threat. So I don't think we need to be pessimistic about the situation.

You mentioned cycles of violence. Yes, that causes a problem where, instead of having a clear-cut situation where you're dealing with there organizations and the response to the state and state authorities to it, if we got some people there who are also freelancing, it then becomes extremely difficult, and it also becomes difficult if some members of your own intelligence organizations or other organizations get overenthusiastic in terms of what they're doing. So obviously you want to try and limit and simplify the situation you're dealing with. But then some situations become intractable because of the complexity of what you're dealing with.

But you should never get into the situation of thinking that there's something special about terrorism that makes it difficult or impossible. Well, it does make it difficult to defeat it. It doesn't make it impossible to defeat. It can be done. But it's a matter of looking carefully and coldly at what you have to do in order to succeed.

MR. SNOW: Richard Perle, we have agreement here now that deterrence is necessary. What as a matter of American policy ought our approach to deterrence be?

MR. PERLE: I think I am not as persuaded as some others about the efficacy of deterrence in at least some important terrorist situations. And the reason for that in part is that, to deter, you have to credibly promise punishment or retaliation. And it's been a very long time since we punished terrorists, and an even longer time since we punished the territory from which they operated, which in my view is fundamental to success in dealing with terrorism that has an international aspect, and much of it does.

David Trimble is quite right. Countries can't hide. Terrorists can. Sometimes terrorists get caught, and the preoccupation with bringing terrorists to justice often opens the way to not taking punitive action against the territory from which they operated.

So I would, in fact, rather see us devote less attention to tracking down terrorists and bringing them to justice and rather more attention spent clobbering the territory from which they operate. And if we do that often enough, they will not longer have a base from which to operate. They will no longer have the diplomatic pouch to convey their instruments of terror. They will no longer have the false documentation that is necessary to operate internationally. They will no longer have the training camps.

We know where the camps are that are training terrorists. We know where the PKK camps are. We know where the Palestinian camps are. But when was the last time that, in response to an act of terror, we went after the base that supports them? Until we do, the terrorism will continue.

MS. HARMAN: I think we did that or the Clinton administration did that several years ago against Osama bin Laden, perhaps not extremely effectively and there was some issue about whether one of the targets, a medical facility in Sudan, was the right target. Nonetheless, I think that was an effort to do what Richard is talking about.

And I do agree with the opening comments that Fred made about the need to balance some aggressive action on the front end with the law enforcement capability on the other end. That was something we recommended in this Terrorism Commission that Jim and I served on, and we said that if there is a tension between the two--and there often is--we came down in favor of taking policy action ahead of law enforcement action.

MR. NETANYAHU: Maybe I could offer, at least from one perspective, a view of how terrorism rises and how it subsides.

We've had now a period of a decade to look at Israel's dealings with the Palestinian terrorism, and it turns out that in those periods where Israel was offering major concessions to the Palestinian side, we received more terrorism. And in those periods, including my own watch, when we took a much tougher position and insisted on reciprocity and insisted that the Palestinian Authority control the territory which is under its control, we got a lot less terrorism. In fact, terrorism virtually stopped.

It is axiomatic that terrorism grows from those territories and those regimes who think they can get away with it. And if you are forced to--if you exact a price, they're going to think twice and three times, and it may be an exchange. It may take time until that policy of firmness bears fruit. It usually does. From our experience it really seems like an ironclad rule.

In fact, terrorism grew to--and violence grew to unprecedented proportions in the last four months when on the Israeli side there were enormous concessions, undreamed-of concessions, including the partition of Jerusalem, which is unimaginable to most of us. And all of this in the face of weakness in response to ongoing attacks. This merely produced more and more and more terrorism.

I think when you'll see, as I believe the Israeli people gave a mandate to see, a change of policy, we'll see after some exchange of inevitable blows and counterblows, you will see a reduction of terrorism.

Now, having said that, I've just given a very good endorsement to a policy, which I believe in, which is the policy of strengthened deterrence in the face of terror. But I fall on what Richard Perle said. I think deterrence has its limits. And its limits are primarily in the case of these radical states who practice terrorism almost by reflex, who will acquire or are about to acquire weapons of mass destruction. They already have biological and chemical weapons. They will cross a threshold in the coming decade when they have nuclear weapons.

Now, I think that we have to look at deterrence and whether deterrence is sufficient. I know there is a debate that is going on in this city and in many other capitals, and I take a very clear position in this debate. I think that deterrence is not enough against a certain mentality. I think deterrence is most of the time sufficient. It certainly was sufficient in deterring, say, the Soviets because the Soviets were supremely rational. Stalin may have been a very wayward personality, but on the international stage, he acted with supreme rationality. The same can be said of Khrushchev. They never overstepped their bounds. The always made a very firm calculation of cost and benefit, and every time they were challenged, as in the Cuban missile crisis, as in Berlin, and elsewhere, they always made the right calculation. They did not overstep the bounds.

The same cannot be said necessarily of the Ayatollah regime in Iran. The same cannot be said necessarily of Saddam Hussein. It is also true that what would deter the Soviets may not necessarily deter Saddam. The fact that you would exact a very strong price from the people of Iraq doesn't necessarily do anything to Saddam, as long as he thinks he can maintain the regime, his own person, his own tribe, his own family.

Therefore, I'm not sure that deterrence will be sufficient in the case of nuclear-armed rogue states as it was in the case of the super-power conflict. Therefore, I strongly come down on the side of saying that, in addition to deterrence, you need a defense. You need a defense against the irrational impulses of these dictators.

That defense has to be tested in its practical applicability, but if you can have a ballistic missile defense, at the very least a theater defense, and maybe more than that, and you have the capacity to use your technological superiority, our technological superiority, to give our people, to give our civilization a defense against these dangerous regimes, then we should do it. Because we are going to cross a juncture in history that we have not experienced in the last 50 years. We're going to cross that threshold in which regimes, single-man regimes that have absolutely no buffers between the leader and the bomb except a finger will come into being. And I think that we have to go beyond deterrence to a defense strategy, and that is why I very, very strongly support the effort to develop a ballistic missile defense.

I egoistically say that I hope that you'll begin with theater defense, but this does not exclude other developments that you wish to do for the continental United States, obviously.

MR. SMITH: If I could, just as the risk of being, A, slightly provocative and then, B, come down onto the ballistic missile defense, the one issue that I thought wasn't--that when we talked about state-sponsored terrorism and you deal with that by hitting them very hard, that's fine providing that the state you're dealing with is of that pariah nature that allows you to do that.

The problem, of course, is when your friends are the problem, not your enemies, and, David, I'm going to tempt you a little bit, but--

MR. PERLE: Please define "friends."

[Laughter.]

MR. SMITH: Well, when a lot of the money for possession of weapons amongst terrorists in Northern Ireland, shall we say some of it, originated from this great country, it makes it slightly more difficult to deal with. And so whilst I don't say we should absolutely--

[Laughter.]

MR. SMITH: Forgive me if I--I think there's a slight exception to that, but David may wish to say more about that. Sometimes your friends are more difficult than your enemies.

The real issue I want to come to is ballistic missile defense. The only thing I would--I agree absolutely with what you just said. But the one caveat is I disagree that these are irrational states. You're right in the sense that they pose a massive danger, but I think the problem is to think of them as irrational. I think they are highly rational. It is the most rational thing--if I was now Saddam Hussein, the most rational decision I could take would be go hell for leather to get myself a ballistic missile and a weapon of mass destruction, because that gives me a massive chip in the game. I am now able to say to countries like the United States, the United Kingdom, the NATO alliance, such as it would be in those sort of circumstances, that they carry on their actions to me, but with a massive doubt in their mind.

And I'll give you an example. If, for example, Milosevic had possessed, let's say, a weapon of mass destruction and the means to deliver it, let's really examine what might have happened in the Kosovo conflict. Here he sat, and we believed--he doesn't actually have to possess it, by the way. We only have to believe that he is likely to possess it. And then he says that if a bomb drops on Serbia, I simply target Rome or Athens.

Now, he's not targeting Washington. He's not targeting the U.K. that has a massive--both of which have very--reasonable arsenals, certainly, of weapons themselves. So now there's the question whether or not the deterrence can be used against him and he's not targeting us.

Of course, Rome would wonder whether or not we're likely to do that, and they would get slightly twitchy. Athens would certainly begin to doubt it. And the very idea that he might do it would have crashed, I think, the coalition apart. And if we hadn't had Italy, we couldn't have mounted any of the campaign, anyway. So immediately, with just the threat and nothing more, and maybe even only the hint of possession and nothing more, he just broke the alliance.

My point is that's--in my book, that's rational. That's a wonderfully cheap, immensely powerful way of behaving. And, therefore, the point here is that the possession of these is a very inviting process for that reason, and I'm less--I'm not worried about them because they act irrationally. I think I'm worried about them because they act rationally. It is us that are acting irrationally, and that's the reverse of the process.

I agree absolutely with everything in terms of how to deal with it. You need to have an active defense that then makes the price tag, the ticket of entry into that game, so high that they can't do it and it becomes irrational to even attempt it.

If I might just leave it at that.

MR. SNOW: Jim?

MR. WOOLSEY: One formulation on this that's being used by some researchers and writers here now is the difference between rationality and reasonableness. I once wrote a paper on Hitler as a diplomat when I was an undergraduate, and Hitler's diplomacy from 1933 until the outbreak of war in '39 was supremely rational. It was shrewd, it was calculated, it was masterful. It was all pointed toward the objective of the Aryan race ruling everyone and destroying Jews, Slavs, and everyone else, an entirely unreasonable position. But from the point of view of tactics, the rationality was certainly there, just as it was with Stalin, as Prime Minister Netanyahu pointed out.

So I think we have to get away from the idea, as we're talking about these issues, that the only people we're worried about are raving lunatics. That's not true. We're very much worried about national leaders such as Saddam, who, as Hamlet said of himself, or the man in "North by Northwest," they know exactly what they want to accomplish. What they want to accomplish is absolutely horrible, but they're doing it in a very careful and calculated way. And I think both Mr. Netanyahu and Mr. Smith made the same point.

But I think that is a key matter as we're talking about things like missile defense. We do not need missile defense solely to deal with raving lunatics. Very rarely does a complete raving lunatic become the head of a state. But people like Hitler and Kim Jong-Il, Stalin, Saddam Hussein, others, do.

MR. SNOW: Representative Harman, there's a big debate in this country about missile defense in your party. Many members of your party argue that it's not, in fact, a deterrent to would-be terrorists, but it's provocative. What's your view?

MS. HARMAN: Well, my view has several parts. First of all, I am an ardent fan of theater missile defense, and I think it's absolutely critical that a country like Israel, which is the test bed for missile attacks, be protected. And as I think everyone here knows, there is a cost-shared system between us and Israel called the Arrow, which is now deployed in Israel. I was in the country a few weeks ago, and I saw it in the field. It's, you know, proven technology, probably better anything we've fielded, and it's interoperable. And I'm strongly for things of that kind, and Israel needs that kind of system and so do U.S. troops in war theaters around the world.

I think it's a tougher issue about national missile defense, not the concept of it, but we don't have a proven system that works. In order to fund something, we will have to transfer large dollars from other defense projects that could be as or more important, and there are some, you know, issues about its being provocative. That is, I think, the way you put it to me. Certainly the European Union doesn't like the idea. The Chinese, the Russians don't. I'm not saying that being popular with China and Russia is a particular goal of ours. But, on the other hand, if we're creating less stability in the world, we ought to be careful about that. And perhaps there are versions of the system, perhaps a sea-based system, that give us more flexibility and that would work better.

I'm sure enraging a couple of folks over here, but, you know, when we think about terrorist threats against the United States, I think the protection against them, to some extent, is in the health care area. You know, biological and chemical attacks require vaccines, enormous support for first responders, a system that really works to deal with quarantines and so forth. And we have none of that, and that will be very expensive. So I want to be sure we spend money there as one of our first priorities.

MR. SNOW: Richard Perle, I'm going to let you respond, and then Senator Thompson has a question to pose.

MR. PERLE: On the question of ballistic missile defense, three quick points.

Iain Duncan Smith made the point about raising the price of entry, and I want to stress that. Whether it makes sense for Saddam Hussein to invest in acquiring a ballistic missile, and the warhead to go with it, depends in part whether, having done so, he has an instrument of power. He might get one, he might get two, he might get half a dozen, at great expense.

If we have the capability to intercept one or two or half a dozen, then the result of that investment is nugatory. He really hasn't accomplished his purpose. If we have no defense, which is our current situation, then even the one makes him a formidable figure.

So it is an act of non-proliferation, anti-proliferation to put that barrier in place and to raise the entry price to a point that simply can't be managed by the Saddam Husseins of the world. That seems to me, Jane, highly stabilizing, because if, despite the efforts, you can't get over that barrier, maybe you don't make that effort in the first place. And this would apply not only to Saddam Hussein but to others.

There's another reason for wanting a defense as opposed to deterrence, and one can argue that every time there's a terrorist attack, deterrence has by definition failed. Whoever committed that act was surely not deterred.

But there is a moral reason for wanting to defend rather than avenge an attack, particularly with a weapon of mass destruction. I don't see how, when we have the financial and technological means, an American President could justify basing the defense of the American people on the threat to destroy millions of innocent civilians who may live under a despotic regime like Saddam Hussein's regime. How could we justify destroying women and children in Baghdad because Saddam Hussein, who they didn't choose, who they may not have endorsed, had done something dreadful to the United States?

So for moral reasons alone, it is unacceptable to depend on deterrence only. We might have been able to justify it during the Cold War when Jane's argument that you could provoke a response that would render the defense ineffective may have been right--it may not have been right, but it may have been right. But that no longer applies, and a defense of the kind that we are now contemplating can be done. We know it can be done. It can be made effective, and it gives us the option of not having to threaten the lives of innocent civilians in order to protect innocent civilians.

SENATOR KYL: Let me take issue a little bit with what James said. I don't think we can equivocate when it comes to terrorism. And what is a strategic defense for Israel is a theater defense for the United States. If strategic defense is good for Israel, strategic defense is good for the United States. We can't leave ourselves subject to blackmail, our hands tied in the conduct of our foreign affairs because American citizens are held hostage to blackmail or threat of these weapons. And we certainly want to be able to protect our citizens, just as Israel wants to protect its citizens.

Therefore, while I absolutely agree with the notion of developing theater defenses because they can become strategic defense for our allies and protect our forces deployed abroad, we need to evolve those systems into systems that will protect the United States as well.

I also disagree somewhat with the notion that we'd be taking dollars for more important programs if we invested in the national missile defense system. A, there are systems--and on this Jane and I agree--sea-based systems which can be developed and deployed very rapidly at relatively low cost; and, B, I would say what's more important: I mean, sugar subsidies may get your re-elected but they don't do much to protect you.

And, finally, I think we do need to talk candidly, the question that Tony posed about upsetting the Russians or the Chinese, because the way that both Russia and China talk about this today is akin to terrorism. It is terrorism in a slightly different form. It is an effort to influence the United States not to do something by a threat of using these horrible weapons. Now, if that's not terrorism, I'm not exactly sure what is.

And I think we're being too politically correct always to avoid mentioning the name China. The United States may be confronted with the very difficult decision of protecting Taiwan, coming to its aid, or succumbing to its defeat by an aggressive China someday. And China has made no bones about the fact that it would like to be able to hold the United States hostage so that we won't interfere in what they consider to be their own business.

Russia, likewise, simply likes to leverage anything it can against United States interests these days. Putin is reverting to a kind of policy that characterized some stages of the Soviet Union.

That is not acceptable for the United States, and I think we've got to say, first of all, we're going to do what's right for the reasons that Richard Perle outlined, and, A, Russia cannot afford to contest that, fortunately, and, B, in any event, they have no veto right over the United States protecting its citizens and protecting its freedom of action. It all goes back to the same point that was raised in answer to the very first question.

In answer to the question how democracies deal with terrorism, the answer is not well, because we usually don't have the will to do what we need to do. And when we have the will, we win.

SENATOR THOMPSON: I agree. So let's change the subject for a moment.

[Laughter.]

SENATOR THOMPSON: Getting back to some of the comments that were made earlier, Iain makes the comment, I think very valid comment, that it can be very rational behavior to do some bad things: acquiring nuclear weapons, threatening nuclear weapons. But what about the actual use? And in picking up on the comments Bibi made and the comments that James made, I would ask, in thinking about the nature of the mentality that we may be dealing with and its importance and so forth: Do you ever see a rational scenario, an evil one but a rational scenario, where a small nation would attack a United States city?

James, I would--

MR. WOOLSEY: It has been well chronicled in several Russian reports of the Cuban missile crisis that Che Guevara particularly, and Castro, too, urged the use of nuclear weapons by the Russians during the '62 crisis. You had--it wasn't a small nation; it was shrunken by that time--Germany, but you had the orders by Hitler in March of '45 to--effectively a death march for millions of German people. It was essentially kind--

SENATOR THOMPSON: Well, I say a small nation. I'd say a rogue nation because one that would obviously risk immediate annihilation.

MR. WOOLSEY: Well, first of all, their case is--it's much easier for them to make the case to themselves to do something like that if they can hide their hand, if they can do it through terrorism, through a false flag operation or something like that.

In the case of something such as a direct threat, what they are doing, I would think, would be playing a game of chicken with us. President Bush had a hard enough time getting both the House and Senate behind the Gulf War when Saddam--and putting the coalition together--when Saddam did not have a nuclear weapon and a ballistic missile that could reach Europe and the United States. Had he had that, I think we might have had a harder time getting some of our allies, like the French, for example, on board and he might not have gotten every vote in the Senate that he got.

So it seems to me that what you're talking about in some of these stand-off situations versus a rogue state is a kind of a game of chicken, in a way, but it's one that may free their hand to be far more aggressive in their region.

SENATOR THOMPSON: I see that, but my question is really a little different. Do you ever see a rational scenario whereby a rogue nation would actually launch an attack?

MR. NETANYAHU: Well, the first thing we have to understand is that they have the capability, they might have the intention. There is no question that Iran is today building that capability. Iran today has missiles that can easily reach Israel, but they're working on the second stage of the Shahad (ph) missile which could reach deep into Western Europe, and within 12 to 15 years, they intend to reach the eastern seaboard of the United States. So, first of all, Washington, take note of that. It's on the eastern seaboard of the United States. You from California can take heart. It will take some time until they reach that distance.

But there is no question that Iran is developing missile capabilities, ballistic missile capabilities, to be a global power and to be able to reach both into the United States and just about any other part of the world. There are other powers in the world that they can also threaten.

Why test their intention? It's much better to assume bad intentions and curtail their capabilities.

Now, there are two ways of curtailing their capability. One has been largely missed. Even though I must say that I implored Washington again and again and again during my tenure as Prime Minister, and I said that on our watch the most important thing that we can do is prevent the--I was going to say "the leakage," but it's not a leak. It's a river, not of Russian technology but of Russian technologists who are actually works with their Iranian counterparts on site, using computer programming, using materiel, using Russian research facilities to develop and cut short the time needed to both develop ballistic missiles and unconventional warheads.

The most important thing that the United States can do in the time it has available is to try to stop this flow of the technology of death. But assuming that we may have crossed already the point of no return on this--I'm not sure that that is the case. I haven't tracked it in the last year. But assuming that that is the case, what we have to do is concentrate our efforts on preventing that capability from being able to deliver death.

I wouldn't risk an assumption that if Iraq or Iran or maybe other countries had the ability to hit Washington that they wouldn't use it.

Now, it's very true what you said before. They might not use it directly. In fact, it might appear as a threat to one of your allies or one of your forces or one of your carriers. It could be a terrorist threat that is not immediately tied to that address. It might take your intelligence some time to figure out who is actually backing that threat. And that could be a nuclear threat. If you have that technology, you can make such a threat.

But assume that coupled with that threat is an umbrella, a larger umbrella threat that says if you try to do anything against that organization or that territory, then we will hit Washington--right now we're targeting something in the Gulf, but if you try to do something, we have already that capability to bomb Washington or bomb New York City. We are living in an entirely different world. We are approaching that world. It may not be obvious to the people sitting in comfortable salons of the West. We are approaching that world. It's going to be a far different world from the one that we have experienced so far because these people are different. I don't want to call them rational or irrational. But their proclivity for risk is different.

And what they also assume is that the punishment and its cost is different. They usually think, first of all, about themselves and about their immediate family and, I would say, their immediate tribe. That is their--and their regime. Above all and before anything else, their regime. If they think that they can survive, then they will play. They will play these dice, they will roll these dice in ways that Russia didn't roll it, that China doesn't roll it and probably won't roll it, that India doesn't roll it, and that some of these other countries that have nuclear weapons do not roll it.

I would say that nuclear proliferation is bad, but some of it--it's always bad, but some of it is horrible. That is, if Holland acquired nuclear weapons, it is far different from Iran acquiring nuclear weapons or Saddam acquiring nuclear weapons. Saddam is about to acquire nuclear weapons. Iran is about to acquire nuclear weapons.

I say that the West should beware--not the West, the East too. I said this to Putin. I said it's as big a threat on Russia as it is to the United States. But it so happens that the United States has the capability to add an extra measure of defense in the form of ballistic missile defense, and I strongly urge you to accelerate your discussions and decisions to that effect.

MR. SNOW: Iain, I want to defer to you, but I also want to add an extra wrinkle to this, which is, in responding to acts of terror, is it possible to do so on a multilateral basis, or is this, in fact, something the nations are much more effective when they have the freedom to do it unilaterally?

MR. SMITH: Well, if I could answer the first question, and then I'll come to that because I think--I mean, I'm going to break the rule, the golden rule of all politicians. I'm going to answer this question.

The answer is yes. Could they use it? Would they use it? Yes, because the balance of judgment would be that in using it they gained more than they lost, as in all things. And I think that on this you only have to get some feel for that by looking at what happened in the Iran-Iraq war. I mean, what was Iraq eventually being driven to using? And you look in some of the chemical weapons that they were already simply using as conventional weapons by the end of that war on a variety of people, then you realize that actually any limitation to the usage of those weapons was they didn't have anything worse.

The other thing I'd love everybody to just refocus slightly, I always use the term "weapons of mass destruction," because everyone immediately does always think of nuclear. But, you know, biological weapons are in some senses much easier weapons to both obtain and use and could have just as devastating an effect in many sense as a nuclear weapon. And this is the key point. The judgment that somebody like that would use would be that in using the weapon, they selected the target carefully so that the target left the doubt in the minds of those who possessed the capability to retaliate, that they should retaliate immediately. All they need is for them to say we shouldn't retaliate immediately for fear of escalating this, and then they also need to say, well, in hitting this particular individual country or whatever, I also unravel the thing from below, whatever it is, this alliance. I talked about Milosevic. I talked about picking the weakest target.

I mean, the best is always to pick the weakest target because if the whole of an alliance is structured on one weak brick, then the whole of the alliance comes down when the weak brick goes. It's no good hitting the gun turret and bouncing off. You hit the weak brick.

That's where I come to the answer on this. So the answer is I think categorically yes. If I don't believe that, then I don't believe in active defense against it. And I do, and I do that because I believe they're highly capable of using them, and using them in a very rational way. Again, I come back to my previous point. So I think they are a very real threat and a weapon of terror that can be used.

On the multilateral point, yes, I mean, I think there are moment when you need to understand that a threat to one is a threat to all. I mean, I take the view here, again, on this issue of this sort of threat, it's not in the interest, for example, of countries in Europe to see the United States vulnerable. It can't possibly be in our interest to see the United States vulnerable, even though we might make the calculation that we are not immediately vulnerable ourselves.

So I would say that there is a reason for us to want to join with the United States in one aspect, simply seeing the United States feel secure about its invulnerability. In this case, I actually happen to believe that we're going to be vulnerable before the United States, so I'd like the United States to make sure that we're not vulnerable as well. So there's a trade-off here. But I do think that there is a reason why certain of your allies, if they are vulnerable, if they are threatened, and even if you are not directly, it is therefore not in your interest to leave them threatened, because that at least stabilizes the whole of your alliance, and the strength of the whole alliance, as I said earlier on, is at the weakest point. And, thus, there is a reason for multilateral approaches to terrorist threats.

On the more domestic front, yes, that came back to my earlier point which I made, which is, you know, sometimes your friends are your worst problem in this respect, because, again, there you have the other side of how do you deal with something multilaterally, and part of that might be in trying to restrict the assistance that may come from other nations at the same time when they don't necessarily want to admit that they're actually--there are people doing it from a free society. And it's a bit more difficult from a free society to deal with them than otherwise.

So, yes, I am in favor of multilateral, providing they do what I want.

[Laughter.]

MR. SNOW: Jon Kyl, the Bush administration is attempting to cobble together a defense strategy and at this point without significant increases in defense expenditure. Is that possible over the long run to remain credible on the kind of budgetary path we are talking now?

SENATOR KYL: No. As a matter of fact, it actually costs money sometimes to make a change which moves away from having to acquire a lot of Cold War-type weapons. The administration has a great idea. Richard Perle has been one of the chief proponents of the notion that we can move beyond the kinds of weapons that were needed during the Cold War to a new generation of weapon that relies on technology. But that will be expensive. Let there be no doubt about that.

And among the things that we have to begin to focus on is more intelligence, which costs more money; dealing with the cyber threat, which we haven't even talked about here yet, which requires a great deal of work; and the development of these new techniques on a base which has withered to almost nothing. No R&D in our budget to speak of in the last few years.

So it's actually going to cost us money to move toward a system which, in the long run, might save money but, in the short run, I think is going to cost us some money.

MS. HARMAN: Could I take the other side of that? I agree with what the Bush administration is trying to do. I think it is terrific and it is high time. And just as President Nixon went to China, I think that President Bush can finally scrub the defense budget and force us to make some hard choices, getting rid of platforms that fought the last war and investing in the next generation of technology and the next generation of intelligence.

But I think there are savings to make. The tooth-to-tail ratio in the defense budget is 30:70. Now, there's enormous overhead that we don't need, and there's the opportunity, if we reassess some of this stuff and take on the depot caucus in the Congress--I'm sure that's a revolutionary idea--that we actually might be able to buy a better defense for about the same dollars or just slightly more dollars.

MR. PERLE: I wouldn't judge the administration's approach to this prematurely. I think the new administration was faced with the question of whether to put more money in the defense budget immediately. And had it chosen to do so, that money would inevitably have flowed to the Clinton program for defense, which is not the program that the new administration should want or does want. And so I think you will see additional money for defense, but it will be consistent with a new program and one that moves very much in the direction that Senator Kyl and Congresswoman Harman are talking about.

Could I try to bring this back to an issue that we touched on but I think only skated over? That is the question of negotiating with terrorists. I have the highest regard for Prime Minister Netanyahu and for David Trimble. And I am happy to say I have never been in the very uncomfortable position that they are in, which is intimate and unavoidable contact with terrorists as negotiating partners. But, in fact, Bibi, when you were at Camp David, the head of the other delegation in the other room was a terrorist. Despite the handshakes and all the other associated diplomacy, Yasser Arafat was a terrorist. And I think there's a strong argument that he is still a terrorist.

I watched him recently give a speech in which he said to the audience: Give me more of your children. And the children he had in mind were suicide bombers. Does that make him a terrorist? I think it does.

Gerry Adams was embraced at the White House, involved in negotiations with the British Government. I think Gerry Adams was and probably is a terrorist. I don't know when you cease to be a terrorist.

For years, we have confused ourselves by drawing distinctions between organizations that have the same basic objective and purpose but distinguish themselves in name only so that there's the terrorist wing and the non-terrorist wing and they just happen to be intimates and for practical purposes interchangeable.

So my question to those who have had to deal with these tough issues is: How do you approach terrorists when the world wants you to negotiate? And once you begin that process, you inevitably stop talking about your negotiating partner as a terrorist and then the moral relativism sets in and the situation deteriorates.

MR. NETANYAHU: Well, Richard, the answer is that what you, first of all, insist on is the cessation and abandonment of terror. In fact, I inherited an agreement called the Oslo Agreement that had been duly signed and approved by Israel's Government and Knesset. It was a binding agreement. But I said that I would insist on a simple principle of reciprocity, which means if you want to get anything out of Israel, you have to at least fulfill the first provision of the Oslo Accords. Under these accords, Israel was to give the Palestinians some territory, and the Palestinian Authority made a firm commitment to prevent the use of that territory as a base for terrorist attacks against Israel. That was the deal.

Well, we gave the territory, but they didn't live up to the deal. So when I took over, we had an enormous explosion of terrorism, just preceding my election. You couldn't board a bus in Israel. I mean, people were afraid to drive behind buses because they exploded all over the place, and mothers were afraid to send their children to school because of the fear of terrorist attacks.

I did not agree to continue the process as long as that violence take place, and, in fact, I was faced with an explosion of violence very shortly after I came into office. That violence did not last four months, as the present. It actually lasted about an hour from the moment that I landed in Israel, because it took place while I was abroad.

I delivered a very clear message to a very senior member of the Palestinian Authority that if the violence continues and does not stop immediately, then I would enter with our armored force immediately. This was right at the beginning of this crisis. It took less than an hour, and the violence stopped. And this wasn't a publicly delivered ultimatum. It was privately delivered. And it was very clear that the other side believed--by the way, correctly--that I would act.

So the first thing is to insist on a cessation of violence, and, in fact, within a very short time, within a few months, there was no violence at all. That's the first thing. You do not negotiate with someone with a predilection for terrorism or the habit of terrorism, as you say. You do not negotiate and say, well, go ahead, you can continue, you know, with your habit while we talk peace. You can't have peace or terror--peace and terror cohabit simultaneous. You have to force that choice. If you want violence, then it's violence. And if you want peace, it's peace.

So the first thing that I did, and I think this room must do now, is put that choice squarely before Mr. Arafat and say: What do you want? Do you want an armed confrontation? You'll have it. And you'll pay. Or do you want a peace process? Well, at the very least, the peace process means a no war and no violence process, so stop the violence. I think this is the first thing that is required.

After that is restored, and not before, we are entitled, I think obliged to demand not only a change in behavior but also a change of message. And the message that Arafat is delivering to his people is what you describe. It is not delivered to Washington. It is not delivered to Britain or to the West, and certainly not to the international news media. But it is daily and systematically delivered to the Palestinian people. And that is a message that says we don't want a peace with Israel. We want a peace with no Israel. We don't want a state next to Israel. We want a state instead of Israel. And we're prepared to use violence to carry out this extreme goal.

We want to see not only a change in the behavior--insofar as the abandonment of violence, we have a right to insist on a change of message from one of incitement to Israel's destruction to one of peace and co-existence.

These were exactly the elements of the policy that I had put in place. Because I insisted that Arafat take action to curb the violence--David Trimble and I were talking just before we walked into this room. He had committed to--what shall I say, decommission? Is that the right thing? To collect weapons, illegal weapons that had found their way into his area, to jail terrorists, to stop this propaganda of hate. All of these things I insisted he do before we gave him anything.

I was obviously presented as the obstacle to peace. Well, they removed the obstacle. They didn't get peace. In fact, they put in the most compliant government in Israel's history--I'm being nice; I don't want to use a British word--the most compliant, accommodating government in Israel's history--

MR. SMITH: Can you tell me what that word is? I can use it later on.

[Laughter.]

MR. NETANYAHU: Those 1930s words. I don't want to create unnecessary analogies.

[Laughter.]

MR. NETANYAHU: But it's the "A" word, accommodating. Accommodating. And that accommodation policy obviously produced the very opposite of what I described before. So the answer to your question is, having inherited an agreement with a regime that practiced violence and terrorism, I insisted that that regime stop practicing violence and terrorism. And I think this was and remains the first fundament of any restoration of tranquility. You simply do not accept it. I did not accept it then. I don't think the people of Israel accept it now. This is the meaning of the overwhelming results of the recent election. The people of Israel want peace. They're prepared to pay a price for peace, but not any price, and they don't want a false peace. Peace means coming home in one piece. It doesn't mean getting blown up into bits and pieces.

I think that this is the demand that should be put forward very squarely, very forthrightly, before the Palestinian leadership choose. It's peace or terror, but not both. It's one or the other.

MR. TRIMBLE: Just on that point, I agree very much with what Bibi has been saying about we care that there is an absence of violence. In terms of our own process, that was set out way back in '93 in insisting that there be a commitment to exclusively peaceful and democratic means.

Well, of course, you are in then a transition, and you hope that the transition is moving in the right direction. But Richard's quite right to say that once you're engaged directly with people, then you've got to keep your feet on the ground. The transitional period may be a long time, and just because you're optimistic about where the transition is going--and it's very important that there should be no illusions, and that's important for the actors themselves, to remind themselves of what it is they're actually dealing with to make sure that they don't develop any illusions about the individuals that they're dealing with. But there's a strange temptation that exists in society to romanticize those who have been involved in violence. One can only think about, you know, the images of Che Guevara and the way in which that image became an icon for several generations.

I'm not quite sure where the impulse comes from that leads to this romanticization of what is actually a rather nasty and evil thing. And I think the individuals who are involved in the process need to guard against that, and if there is one criticism I would make of the outgoing administration, they did tend to rather too romantic a view of some of the individuals that were involved, and I think that was a disadvantage.

But I don't want to personalize that criticism because I think there's a danger for society. The image of Che Guevara appealed to a generation, and one can see far too many individuals in the media who succumb to the same romantic view. That's a bit like the attraction that intellectuals in the '30s had for Stalin, even though--more precisely, because they knew he was a rather nasty man. And I think there is a need consequently for realism in dealing with this.

Yes, as Bibi says, you start off with insisting upon a commitment to non-violence and a commitment to peaceful means. And a transitional situation can be vague and difficult. It can become rather messy. And then it's necessary to keep your feet on the ground.

MR. SNOW: All right. Now, I know Jim Woolsey wants to make a comment. I had also promised at the outset that people in the audience would be able to ask questions, so I will ask you to queue up now. But, also, I think the way we're going to work it, because we're running close to--it's going to be pretty tight. I want you to ask questions directly to one member of the panel, and keep it short, no statements, no sermons, just a quick, pithy question. And we will try to get in as many as possible.

Jim?

MR. WOOLSEY: Let me say just a quick word about an issue that we haven't discussed here, which is civil liberties. Civil liberties seems to me to be one of the most important reasons why one wants to fight terrorism hard and in a sensible way. I'm one of those who believes that one of the darker stains on this country's honor in the 20th century was the incarceration of the Nisei, the Japanese Americans, in 1942. The three principal people who were responsible for that really were Franklin Delano Roosevelt, Earl Warren as Attorney General of California, and Hugo Black, who wrote Korematsu, the decision that upheld it. Three great names in supporting civil liberties, otherwise.

The reason they did is because the country was scared. It was scared after Pearl Harbor. And when a democracy is scared because something terrible has happened, it can do some rather stupid things.

So one of the most important reasons why it's important to fight terrorism hard but also wisely is to keep something from pushing us into some type of reaction like that, whether it's against Muslims or anyone else.

Now, we have some guidelines that Jane and I talked about when we were on the terrorism panel that the CIA put out in 1995--I would say, call to everyone's attention, after I left that organization--that make it difficult, not impossible but difficult, I think, to penetrate terrorist groups because they operate on the premise that it should be an exception if you're recruiting someone who has violence in their background as an agent, as a spy, as an asset.

If you don't know what's going on in Hezbollah, it's not because you have too many human rights violators on your payroll. It's because you don't have enough. Nobody in Hezbollah, except people who want to be human rights violators. If you only recruit nice people as spies, you're going to be able to do a dandy job of learning in Lebanon, let's say, what's going on in the churches and the chamber of commerce, but you won't have the foggiest idea what's going on inside Hezbollah.

So I would suggest that getting rid of those types of restrictions don't infringe on civil liberties of us in democracies and are being smart in fighting terrorism. But as you're fighting it, you do want to take care--and Senator Kyl held some hearings that I was privileged to testify in two and a half years about this issue of secret evidence. There are ways in which one can use secret evidence in some of these terrorist cases in the United States, but do it with cleared counsel, do it with unclassified summaries of evidence, do it in ways that respect historic civil liberties and the Constitution.

And I think we should never lose sight of the fact that we need to fight in pursuit of saving the Constitution, the civil liberties that exist in countries such as the U.K. and Israel and the United States, do it in a way that respects those civil liberties, but still fight hard and not get sidetracked with things like the CIA guidelines.

MR. SNOW: Let me once again encourage audience members to line up behind the microphone. If you don't, I'll just keep hogging the floor.

Jane--go ahead.

QUESTION: I'd like to know from Prime Minister Netanyahu if he could explain how--a couple things. One is, Do you favor the notion of bringing the Israeli Army back into the territories that have already been handed back to the Palestinians? And, two, just looking at the Palestinian argument that's been made by (?) Sharali (ph), that you can't give up the violence until you get negotiations going? They basically give the opposite point of view. How would they--what leverage would they have then to get anything of what they're asking for if they were to simply give up all the violence that they've been accused of perpetrating?

Thank you.

MR. NETANYAHU: Well, I don't think that it makes any sense to discuss military tactics, but I assure you that Israeli has a variety of means-- by the way, not only military, administrative, economic, and others--to make sure that Palestinian violence does not pay.

Now, you just said something that I completely disagree with. You said, well, why should they give up the violence if they're not--that way they won't get what they want, what they say they want. What is it that they've been saying that they want all along? They've said for years--Arafat and his spokespeople, spokeswomen and spokesmen in the West, have said that what they want is a West Bank state with half of Jerusalem as its capital. Give us that, they said, and we'll have peace.

Well, in Camp David, Barak did exactly that. He gave them a West Bank state with half of Jerusalem as its capital. So what's the problem? Why didn't they just take it? Why did the violence come after Camp David? And the reason for that is that there is an enormous discrepancy between what is said that the Palestinians want in the West and what they say to their own people that they want. What they say to their own people is that they want Jaffa, Akko, and Haifa, all of pre-1967 Israel. For them, the West Bank, Judeo-Sumeria, is--yes, it's part of Palestine, but it's the distant hinterland. The heart of Palestine is pre-1967 Israel.

If you will open at random a Palestinian paper, you're bound to see a cartoon, and that cartoon in this state-controlled media, where everything is published according to Arafat's behest, would invariably show an Israeli soldier dressed up like a stormtrooper, armed to the teeth, facing a Palestinian youngster. What does the youngster hold, the Palestinian youngster hold in his hand? Do you know?

Ah, you've been listening to my speeches. It's not a slingshot. It is not a rock. It is a key, a physical key. And every Palestinian child from kindergarten northward, as we say, knows exactly what the meaning of that key is. That is the key to the house in Jaffa. It's the key to the house in Haifa. That is the key to the conflict. And, in fact, it is a demand for the dismantling of Israel, or swamping Israel with millions of refugees, which would effectively terminate its life.

So the truth of the matter is that our conflict with the Palestinians, as it's been unmasked and revealed to the great majority of Israelis, I must say, who understood it as such, this is not a conflict over borders, the borders of Israel, but over its very existence. There's hardly something that you can do to accommodate somebody who says: I want to destroy you, please give me the means to do so. That is not a sufficient, shall we say, negotiating position.

So what we have--I think what the Israeli people have said recently is they don't want only the abandonment of violence, of the method of conflict, they want an abandonment of the goal of the conflict, which is annihilationist. And we want to see a movement not only in activity and action, but also in education.

And I can say that in this we have one or two good precedents. Anwar Sadat, the late President of Egypt, or, for that matter, the late King Hussein said exactly the same thing, in Cairo or in Amman, as they said in Jerusalem or as they said in Washington. They said: No more war, it's over, we are here for real peace, peace is not just a tactic by which we pocket more and more Israeli territories so we can get the sea, the Mediterranean, in our sights and push the Jews into the water. But that's exactly what Arafat is saying to his people.

Therefore, the coupling of terrorism with annihilation as a goal is something that should not be sanctioned or accepted or excused. I think it should be unmasked, it should be attacked, it should be decried, it should be--there should be a demand for a change on both fronts, on both the policy and on the method of carrying out the policy. There should be an unequivocal voice from every corner, beginning from every corner of the civilized world and a peace-loving world. I mean that, peace-loving, those who really want and love peace, they should demand from the Palestinians a policy of peace, period.

MR. SNOW: Next question.

QUESTION: Yes, hi. My name is Tahir Taghi-Zadeh with the embassy of Azerbaijan, Washington, D.C. I'd like to thank the distinguished panelists for a very fascinating and educational discussion. But my question will be probably a very narrow one, either to Senator Kyl here or to the gentlelady, whoever can first answer it.

It is regarding a recent case in Ohio where a district court has sentenced one Mr. Moorad Topalian, a long-time leader of army and National Committee of America, to 37 months on charges of illegally possessing explosives.

Mr. Topalian for a number of years has been a very effective lobbyist here in D.C. and had very good access to the congressional offices. So he has managed to damage the image of both Turkey and Azerbaijan considerably. My question would be: How can it happen here in America, in the biggest democracy in the world to which we all look with hope, you know, and respect, that somebody who is involved in a vicious campaign of terror and violence can at the same time have a very good access to the inner sanctum of American decisionmaking?

Thank you very much.

MR. SNOW: Well, that's--okay. Either one of you want to bite on that.

[Laughter.]

SENATOR KYL: I'll make a comment on a related matter. There are large ethnic minorities in the United States which have significant influence on American policy, not always, to my way of thinking, positive.

[Laughter.]

MS. HARMAN: Yes, but we are a diverse country, and our diversity is part of our strength, and we have a--you know, I think I'll take the opportunity to weigh in strongly for campaign finance reform. I mean, we need a better system with less access by money and perhaps for other reasons.

I just want to add something that Jim Woolsey said about the protection of civil liberties. This stuff is hard. One of the key things we should be doing, I think, is to figure out how to get it right on the front end, to anticipate terrorist attacks against U.S. cities. There's a big article in this week's Time Magazine called, "Danger: Terror Ahead," and it's all about the bin Laden enterprise and how it's building and his efforts to acquire bombs and dirty bombs around the world, et cetera. And we should be thinking in terms of devoting more resources--I'm not trying to ding the defense budget here at all. I'm talking about this as part of our consideration of defense against one of the major threats. We should be thinking very strategically about how we anticipate these attacks, prepare people for these attacks, and handle them with the utmost respect, as far as possible, for the civil liberties of the folks in the city or the place under siege.

MR. SNOW: But is it not the nature of terrorism that it's quite often unpredictable? Or what you are saying is that we are insufficiently equipped in terms of intelligence and, therefore, need to beef up intelligence?

MS. HARMAN: Well, I certainly believe that. But these are asymmetrical threats. There's absolutely no way you can build any shield strong enough to prevent--for example, the Treasury Department closed down last week because there was a foul odor in the sewer system. That odor, fortunately, was just some, you know, non-dangerous chemical, and we won't go into that.

[Laughter.]

MS. HARMAN: But it could have been a terrorist attack. We could have--you know, this is the stuff we're talking about.

MR. PERLE: But, you know, we know where bin Laden operates from. He operates from Afghanistan. And while it would be nice to hit his camps, we may not be able to identify those camps, but we can surely identify the intelligence organization of the authorities who give him refuge. And my question is: Why don't we do that?

If we did it, I think we would find that terrorists would have a harder time finding refuge than they do now.

We know that Syria has supported and, as far as I know, continues to support installations in the Baka Valley that are devoted to terrorism. So we chase down the terrorists who operate from there, and we leave the Syrian intelligence organization untouched. Why do we do that?

MR. SMITH: Could I just--the gentleman asked a very specific question, I thought, and it's a difficult one to answer. Perhaps I could just give an observation to that. I've been at Azerbaijan so I have a little perspective on that. I think the answer to the question is that in democracies there is a deep reluctance to restrict freedom of speech and activity to the extent that they err invariably on the side of excessive tolerance for those who will use that to their own effect. I say that with some reluctance, but it is an observation. I think that the answer is that democracies, not just the USA or the U.K. and others, have a responsibility, I think, to be certain that the people operating and using their countries for those purposes are genuinely doing so for reasonable and peaceful purposes and that they're not actually using that country as a surrogate for the sponsorship of terrorism by another means.

It's a difficult one. You know, we have this problem. But it's not an absolute answer, but I wonder if that isn't the problem, and I sense that the further away you get from the country concerned, the more difficult it gets to take a view about that.

QUESTION: Yes, I have a question for Mr. Woolsey. I know most of you mentioned that when you respond to terrorism, you respond directly to the state that sponsors that terrorism. But how do you respond to terrorism when it occurs in a failed state, such as Mali, and you don't have intel-sharing agreements with those countries that surround that state?

MR. WOOLSEY: Well, that's part of the problem with an Afghanistan or, if terrorism should come at neighboring states, out of some of the failed states in Africa and the Mideast. You have really a terrible dilemma because sometimes there are targets, I think, that you can hit, but sometimes the terrorists--and this is the case of bin Laden--is sufficiently wealthy or powerful that you--when he was in Sudan, you almost had a terrorist-sponsored state, and, similarly, in Afghanistan, as distinct from state-sponsored terrorism. If someone has hundreds of millions of dollars in Afghanistan or Sudan, he can sort of write his own ticket about what the government is doing. And certainly the Taliban is highly tolerant of him and sees a lot of reason to continue to protect him, just as Sudan did for some time.

But even in a state that is as failed in many ways as Sudan was, we were still able to bring enough pressure on them to ask him to leave. Sudan is still doing some many terrible things, but at least they did get rid of bin Laden, or kick him out, anyway.

So it's hard, and like a lot of this crazy business, it's extremely hard. But sometimes failed states, such as, I think, Afghanistan today, do have vulnerabilities that one can use to try to make them pressure even someone as strong and powerful in their society as a bin Laden is.

MR. TRIMBLE: There's no easy answer to the question that you posed, but there's obviously no security for us, in global terms, while there are failed states. Now, that is not to advocate some form of neocolonialism, but I think there is a clear obligation on the West, maybe more than the West, to be concerned about this issue. And it's not just a problem in Africa. It's a problem in Eastern Europe, too, where there's a very close relationship with a lot of governments in Eastern European countries and criminal gangs, if not worse.

So we've obviously got a concern, and we say there isn't an easy solution. But I think it ought to be part of our policy to say what can we do to try and introduce successful, stable states into some parts of the world.

MR. SNOW: All right. We were scheduled to conclude at 4 o'clock. We started a little late, so I'm going to let us go just slightly over. We're going to have one more question. Then if anyone on the panel wants to issue a brief closing remark, start formulating those now.

QUESTION: Okay. Mr. Trimble, you spoke about what you described as the rather too romantic view of the Clinton administration towards some of the Irish figures that they were dealing with. Do you think this is going to change under the Bush administration? Or do you think that some of the ethnic interest groups that Senator Kyl spoke about, if you like, cut across American politics?

As a secondary, more specific point, do you think that the Bush administration will move towards listing the real IRA as a banned organization, the group that carried out the (?) bombing?

MR. TRIMBLE: Yes, it's been really quite remarkable the way in which the organization responsible for the largest single atrocity in Ireland the last 30 years has not been listed as a terrorist organization. The Clinton administration did assure us that they'd started the procedures. I'm not quite sure exactly where those procedures have got to. I'd very much hope that the incoming Bush administration accelerates them and puts the real IRA, the continuity IRA, on the list and, indeed, mainstream IRA, if it ever returns to violence.

As to what the new administration might do, part of my reason here is to see if I can glimmer a bit of intelligence--

[Laughter.]

MR. SNOW: All right. Does anyone on the panel care to make any closing remarks?

MR. PERLE: Well, I can't resist saying that I think it is a real insult to Irish Americans for any administration to believe that they do not want a terrorist organization identified as such.

SENATOR KYL: Let me just say that for those who aren't familiar with the New Atlantic Initiative, I compliment Jeff Gedmin and the New Atlantic Initiative for sponsoring this forum and all of the other great things that it does to help deal with issues like this that challenge us and bring people together to help create solutions.

Thank you, Jeff.

MR. NETANYAHU: Well, I can only thank you. This has been the most polite parliamentary discussion--

[Laughter.]

MR. NETANYAHU: It's a wonderful surprise. Thank you.

MS. HARMAN: I would just add thanks and also note that terrorism is not partisan. I mean, both Democrats and Republicans would be wiped out by a major terrorist attack, and that prompts me to suggest that we all work together on an effective counterterrorism program, because if we don't, we won't have one.

MR. SNOW: All right. That concludes the remarks. I want to thank everyone and thank you for coming.

[Whereupon, at 4:05 p.m., the meeting was adjourned.]

Transcript prepared by Miller Reporting Co., Inc.