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NEWS FROM CNN

Crunching the Numbers in Washington; Violence in Iraq; Palestinians-Israeli Leadership May Initiate Cease-Fire

Aired February 7, 2005 - 12:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


WOLF BLITZER, CNN ANCHOR: Hello. I'm Wolf Blitzer in Washington. To our viewers, thanks very much for joining us.
Unfolding this hour on NEWS FROM CNN, the White House delivers a budget constrained by war and record deficits. We'll lay it all out, examine the politics of government spending.

And Condoleezza Rice encouraging peace, at least trying to do so, in the Middle East. And offering some incentives to go with it. We'll dissect her first diplomatic tour as secretary of state.

Also, insurgent bombings and surface-to-air misses. Our senior international correspondent Nic Robertson will join us on the latest violence in Iraq.

First, some headlines "Now in the News."

On the advice of doctors, Pope John Paul II is staying put in the hospital for at least a few more days. Vatican officials say the 84- year-old pontiff, who gave a brief blessing from his hospital window yesterday, is getting stronger every day.

Swiss police storm the Spanish consulate in Bern, ending a seven- hour standoff. The remaining two hostages were freed. Their three assailants escaped. Swiss authorities say the trio apparently was after visas and cash in the city.

Gather up the confetti. Boston is throwing another victory party. Its football team, the New England Patriots, bringing home another Super Bowl trophy, the third in four years. Details of tomorrow's huge celebration still being worked out.

Among the most popular stories this hour on cnn.com, take a look at this. A 4-year-old, yes, a 4-year-old, takes a ride in Sand Lake, Michigan. Police say the toddler drove his mother's car a quarter of a mile to the video store before heading home. It's creating a buzz.

Also, creating more than just an Oscar buzz, the movie "Million Dollar Baby" stirring some serious debate. But the discussion may just spoil the outcome of the film. So readers beware. If you want more information, click on to cnn.com for details.

Crunching the numbers here in Washington, especially on Capitol Hill. With $2.5 trillion -- trillion -- to spend, the latest Bush budget which is now officially unveiled calls for more money for the U.S. military and homeland security but less money for other programs. Here's what the president said about his new budget just a few moments ago.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It's a budget that focuses on results. Taxpayers in America don't want us spending our money without achieving results. It's a budget that reduces and eliminates redundancy. It's a budget that is a lean budget.

(END VIDEO CLIP)

BLITZER: Let's get some reaction now. Our congressional correspondent Ed Henry already monitoring reaction on Capitol Hill.

Ed, the president proposes a budget. It has to be appropriate. It has to be approved by both houses of the U.S. Congress. They can increase it, decrease it, keep it the same. The process only now beginning.

What's the initial reaction?

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: That's right, Wolf. In fact, for this $2.5 trillion budget, as you mentioned, the president proposes but Congress disposes. And key lawmakers in both parties are already talking about disposing key parts of this budget.

The bottom line is that the president is proposing that about 150 federal programs face cuts or outright elimination to deal with the budget deficit that right now is projected to be about $427 billion this year, $390 billion next year. But even top Republicans up here are privately admitting that some of these cuts are going to be so politically unpopular that many of them will never see the light of day.

Democrats in particular up here are zeroing in on cuts on the domestic front. In particular, about one-third of those 150 federal programs that are being targeted, one-third of them deal with education, schools. That's something Democrats are going to be harping on.

Also health care funding. Medicaid facing deep cuts. That's the health care program for the poor.

Veterans programs, environmental programs. Also Amtrak. Anyone who uses a railroad all across the country, particularly out West in some of the rural parts of the country, they're going to be up in arms about this as well.

Democrats like Harry Reid, the new Senate Democratic leader, also pointing out that he believes that this budget is not only irresponsible, he believes it's misleading, because key figures, such as the $80 billion in more funding for the ongoing war in Iraq, also in Afghanistan, is not included in this budget. But Republicans like Senator John Cornyn say that at a time of deficits, a time of war, it's time for the federal government to tighten its belt.

(BEGIN VIDEO CLIP) SEN. JOHN CORNYN (R) TEXAS: What we ought to be looking at the dead wood. We ought to be looking at those programs that don't actually serve their purpose. And we ought to fund those at zero. Those that do work, those that do meet the purposes of the Congress and the American people, should be funded better.

(END VIDEO CLIP)

HENRY: And the major political question that both political parties up here are monitoring is how this budget will affect the rest of the president's second-term agenda here on Capitol Hill. We've already heard low-ball estimates of about $2 trillion in more federal borrowing will be needed in order to reform Social Security. Democrats insist it will really be about $4.5 trillion to pay for the transition to private accounts.

The question being raised now by people in both parties is, given the budget cuts that are being talked about, given the budget deficits, as well, how is the president going to pay for Social Security reform? Big question here -- Wolf.

BLITZER: Ed, you know this subject very, very well. You've been covering the Hill for a long time.

Has the president ever used his veto to -- to -- to eliminate some of the increases that Congress is going to go forward? Because, as you know, last year the president did a little bit of a smaller scale. He called for all sorts of cuts, Congress summarily ignored all of those recommendations, submitted a budget. They passed it. The president signed it into law.

Has he once used his veto pen to eliminate some of those programs he wants to see eliminated?

HENRY: The president has not once used his veto pen on anything, including appropriations bills. And, in fact, you put your finger right on it.

Fiscal conservatives up here are getting very frustrated that Republicans run the House, the Senate and the White House. But even though they talk about limited government, we're now talking about a $2.5 trillion budget for the federal government. So they want to see a leaner budget.

That's why they're happy the president is proposing this, but you're right, they was him to put the money where the mouth is and actually start vetoing some of these appropriations bills if they go over. As you say, a lot of times the president at the beginning of this process will talk about a lot of cuts, then Congress restores the money and the president doesn't do anything about it. Fiscal conservatives up here want to see him use that veto pen -- Wolf.

BLITZER: All right. I suspect until he starts using that veto pen they're not going to take him all that seriously. But we shall see what happens the next weeks and months as the budget debate gets unfolding -- gets going on Capitol Hill. Thanks very much for that, Ed Henry.

Live at 5:00 today we'll go through the numbers with Josh Bolten. He's the director of the Office of Management and Budget. It's his responsibility to release this budget. Josh Bolten will join me live on "WOLF BLITZER REPORTS." That's coming up later today, 5:00 p.m. Eastern.

From the budget to the Middle East, and a possible step towards peace. The secretary of state, Condoleezza Rice, met today with the Palestinian leader, Mahmoud Abbas. Yesterday she met with Ariel Sharon, the Israeli prime minister.

CNN's Guy Raz is in Jerusalem. He's following this story.

Update our viewers, Guy. What happened today?

GUY RAZ, CNN CORRESPONDENT: Well, Wolf, Condoleezza Rice left the region with a very clear message to both Israelis and Palestinians. That is, the United States is essentially back in the game.

Now, for the past three years, the United States refused to deal with Yasser Arafat. Of course, the late Palestinian president. Now the Bush administration clearly signaling its willingness, its intent and desire to re-engage in the process and take an active role. And Condoleezza Rice wasn't wasting any time.

She announced the appointment of a U.S. security coordinator to come to the region to oversee this period of calm that's been established between both sides. She also extended invitations to both leaders to come to the White House to meet with President Bush later this spring. We understand both Prime Minister Ariel Sharon and Palestinian President Mahmoud Abbas have accepted. And finally, and most importantly, Ms. Rice emphasized that under her tutelage as secretary of state the United States is prepared to take an active and renewed vigorous role in the peace process.

Now, both Israelis and Palestinians regard Ms. Rice as somebody who comes to the region with the weight of the White House behind her. They know she has a close relationship with the president. And there really is a sense here that whatever Condoleezza Rice says essentially are the words of the president -- Wolf.

BLITZER: The whole notion of Condoleezza Rice now as secretary of state, Guy, give us a bottom-line assessment. The Israelis and the Palestinians dealt with Colin Powell for four years. Now they've been introduced to her as secretary of state. What was their initial impression?

RAZ: Well, their initial impression of Condoleezza Rice was essentially their old impression. In some ways this was a reintroduction.

Both sides know Condoleezza Rice well. The Israelis have had very close dealings with her over the past several years, as have the Palestinians. But neither side really understands or knows the extent to which the administration now wants to re-engage in the process. And that is the key difference between Condoleezza Rice and Colin Powell.

And also, of course, there really is a sense that Condoleezza Rice, because of her relationship with the president, comes here with a different kind of forcefulness that perhaps Colin Powell didn't have -- Wolf.

BLITZER: Guy Raz reporting for us from Jerusalem. Guy, thanks very much.

Condoleezza Rice's next stop is Rome before heading tomorrow to Paris, where she's expected to give her first major foreign policy speech as secretary of state. The French foreign minister, by the way, Michel Barnier, has suggested that Rice's visit will be a good opportunity to make what he calls a fresh start in relations between the United States and France.

We'll have much more ahead this hour. We'll break down President Bush's budget proposals. Congress now has those numbers. They have their work cut out for them. More than 150 programs on the chopping block.

And when it comes to modern warfare like we're seeing in Iraq is the U.S. military training out of date? We'll get some analysis.

You're watching NEWS FROM CNN and we're back in a moment.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

With fellow Republicans in control of both houses of Congress, you might think President Bush would have little trouble getting his agenda passed, including his latest spending plan. Let's break it all down. Our senior political analyst, Bill Schneider, here to give us some excellent analysis.

This is almost like a kabuki dance they do every year. The president submits a budget. Congress then can do with that whatever -- whatever it wants. It's a recommendation only. Congress can increase, decrease, leave it the same. Very often they simply ignore a lot of the president's recommendations and come up with their own plan.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: That's right. I haven't heard the phrase DOA in this budget cycle. But that's often what they say when the president sends a budget, dead on arrival, because, look, the Congress is responsive not just to the president, even if they are Republicans, but to their own constituencies.

In there, there are a lot of cuts in farm subsidies. Well, a lot of those Republicans from red farm states that voted for Bush, they're going to say, wait a minute, if I support these kind of farm subsidies, I am doomed politically. They're not going to support that. BLITZER: And a lot the -- what we heard from Ed Henry, a lot of the problem, the president can't veto a lot of these -- can't veto any of these things because the Republicans are the chairmen of the committees, they're the majority in both the House and the Senate. If he goes ahead and vetoes a bill, it's a slap at his own party's leadership in Congress.

SCHNEIDER: That's right. He cannot veto these. He doesn't have the line item veto power that a lot of state governors have to veto one piece of spending rather than another. He has to accept or reject the whole bill.

Look, here's an example. Last year he proposed cutting 65 programs. You know how many -- or rather eliminating 65 programs.

You know how many were actually eliminated by Congress? Four. He wanted to cut 63 programs. How many were actually cut? Twenty. It's very tough.

BLITZER: And so this time, when he says they're going to cut 150 programs or whatever, a lot of people on Capitol Hill are skeptical, given the entrenched interest that so many of these members, Republicans and Democrats, have in these various programs.

SCHNEIDER: They certainly do. And there's one other question. Because a lot of Democrats and even some Republicans are saying how serious is this president really about reducing the deficit when some big budget items are not even in there?

Like the cost of the wars in Afghanistan and Iraq. Like the Social Security proposal, which can cost $2 trillion in 10 years, $4 trillion in 20 years. It's not even in there.

And what about his desire to make the tax cuts permanent? That would make a big revenue cut. If he wants to pass that, it's not even in this budget. So his critics will say, how serious is this president really?

BLITZER: So the process now is going to unfold over many, many months between the time that final appropriations bills are signed into law. This is going to go on. The debate is only just beginning right now. But it's -- it's a strong political debate in that it gives the Democrats right now, particularly the Democrats, some opportunities to score some points to shoot at the president's policies.

SCHNEIDER: You covered President Clinton in the White House. And you might remember when he gave speeches in the mid '90s he used to talk about the one thing we must do is to protect Medicare, Medicaid, education and the environment. He always used that formula, M squared, E squared.

Well, you know what? This budget proposes big cuts not in Medicare, which is an entitlement program, but in Medicaid, and in education. One-third of the programs targeted for elimination are in education and in the environment. Those Medicaid cuts are going to drive governors crazy because they share that expense. And if the federal government cuts spending on Medicaid, it's going to put an enormous burden on the states. Those are very controversial programs.

BLITZER: Let's hear what the president said at his cabinet meeting over at the White House earlier this morning, just within the past hour or so, on his new budget.

(BEGIN VIDEO CLIP)

BUSH: Congress needs to look at this budget and Congress needs to act on this budget in a fiscally responsible way.

(END VIDEO CLIP)

BLITZER: The president is going to push. He's going to push, and we'll see what the Congress does right now. Bill Schneider, thanks very much for that analysis.

SCHNEIDER: Sure.

BLITZER: We're going to take a quick break. We have more NEWS FROM CNN coming up.

And this just in. The Associated Press reporting that the Israeli prime minister, Ariel Sharon, and the Palestinian Authority president, Mahmoud Abbas, will announce some sort of formal cease-fire at their summit in Sharm El Sheikh tomorrow. That's the word The Associated Press is reporting right now.

We're checking that. We'll get more information for you as it becomes available.

The fight for Iraq is a war like no other war before it. I'll talk with a U.S. military insider about modern-day training for U.S. soldiers. He says they're not receiving the best possible training for the mission in Iraq.

Also, we'll go in-depth on efforts toward peace in the Middle East. The new secretary of state, Condoleezza Rice, making friends in the Middle East. We'll have analysis of what's going on.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

In Iraq today, some of the worst violence since national elections a week ago Sunday. Our senior international correspondent Nic Robertson joining us now live from Baghdad with a complete update.

Give us the latest, Nic.

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT: Well, Wolf, the attacks seem to have been focused this day on police recruitment centers. Two major attacks within an hour of each other.

One in the northern city of Mosul, about 10:30 a.m. in the morning. A suicide bomber walked into a police recruitment center, detonated his explosives, killing at least 12 people, four others wounded.

In the same city, we've been told there was a mortar attack on the governorate, at least three mortars fired. One landed in a cafe, killed one person, wounded three others.

The other major attack coming at about 11:00 a.m., just north of Baghdad, the town of Baquba at a police station there. Recruits landing outside when a car full of explosives was driven up within feet of the police station. The explosives were detonated and at least 14 people killed there, 16 wounded.

The blast was one of the biggest in the town for a long time. U.S. officials say so big it blew chunks off the walls of neighboring buildings. However, we're told there were some 200 police recruits inside the police station at the time. They, however, were able to escape mostly unharmed -- Wolf.

BLITZER: Nic, stand by for a minute. I want you to bring you into this conversation we're going to have with our next guest, Lieutenant Colonel Leonard Wong. He's with the U.S. Army War College, retired U.S. Army, professor of military strategy at the Army War College.

Colonel, thanks very much for joining us.

LT. COL. LEONARD WONG (RET.), U.S. ARMY: My pleasure.

BLITZER: You have a problem with the way the military trains troops, specifically heading towards Iraq. Is that right?

WONG: That's not exactly right. I don't have a problem.

What's happening in post-war Iraq is that the complexity, uncertainty, ambiguity of the post-war Iraq, Operation Iraqi Freedom environment, is producing a cohort of junior officers who are learning to be creative, innovative, adaptive. And they're quite confident in their abilities. And they're to handle just about anything thrown at them.

BLITZER: Well, I guess I'm a little confused. What's the problem with the standard training that the U.S. Army has given these kinds of troops?

WONG: There's not a problem. We have the world's best trained Army, always will have the world's best trained Army. The question is, is how do you train someone for something you don't know that's going to happen? How do you train for uncertainty? How do you train for...

BLITZER: How do you do that? WONG: Well, first you develop the basics like a football team. You train and you go over procedures, so when you hit the huddle everyone has an agreement.

But when the ball snaps, that's when it really kicks in. I think we saw that yesterday, is can you be flexible? Can you adapt to the enemy? That's what our soldiers are learning in post-war Iraq right now.

BLITZER: Are they doing -- well, how are they learning that? Did they just learn it on the job? And they've gone into a situation they have to call their audible at the line of scrimmage, if you will?

WONG: Well, that's exactly it. We've trained them to a point. But then we've put them in this environment. There's complexities. Complexities in changing roles.

For example, there used to be some debate whether American soldiers could shift from functioning as aggressive warriors to calming peacekeepers. Well in Iraq, they're being warriors. They're being peacekeepers. They're being nation builders simultaneously.

And our junior leaders are learning how to do that. There are complexities with war. The days of coordinating with units on your left and right, driving north and shooting at everything that...

BLITZER: Which was in the first Gulf War.

WONG: Exactly right. Shooting everything that appears as a hot spot in your thermal sites, they yearn for those days. But they know that today that the rules of engagement say that innocent civilians are on the battlefield. You have to think...

BLITZER: Were these commanders, these warriors who have gone into Iraq now, most of them were trained, at least in the early part of their career, for the war like -- that existed during the first Gulf War. Were they adequately prepared for what they're finding in Iraq right now?

WONG: Absolutely. Because what we developed was a confidence in our -- in our officers, in our junior leaders.

They were extremely confident. What we're developing now is a capacity. A capacity to handle something we haven't even thought of yet. That's what we need for our future senior Army officers.

BLITZER: All right. Let's bring in Nic Robertson. He's -- he's monitoring this, he's on the ground. He's been embedded with U.S. troops on and off now for a couple years.

Nic, as you take a look at the training of the U.S. troops who are there, do they tell you they feel that they've been adequately prepared for the mission that they have?

ROBERTSON: Well, certainly the young officers, the captain rank that I've seen, have been acting very, very professionally, able to tackle a real range of different -- different situations. Quite literally, for example, talking in the afternoon to a cleric, to a mullah in a mosque, and the very same evening going and doing raids in houses next door and then being hit by an IED a few streets away in the morning of the following day.

So there is that huge range. And they do seem to tackle it very well with the skills that they give them.

But what some of the younger soldiers are saying is, look, the training we were given wasn't for this kind of situation where we're literally face to face with aggressive, hostile people at one moment, and just a few yards behind them on the street, innocent civilians. That's a kind of situation they say they find difficulty with -- Wolf.

BLITZER: What about that, Colonel?

WONG: Well, I think Nic's correct. And I think what you saw is -- with the Stryker Brigade, and they were training for an all-out battle. But what they're finding now is there's complexities of this war that's affecting their ability to be leaders. They're changing because of this because they're now developing the capacity to handle things they haven't even thought of.

I think when these young soldiers return they're going to show up at the national training centers in the Army, they're going to see a different type of training. They're not going to see who's a clear- cut enemy. They're going to find something that's a little more used to what they're seeing now.

BLITZER: But the next U.S.-led war may be a war very similar, let's say, to the first Gulf War.

WONG: Exactly.

BLITZER: Which is a different -- a different mission than this war is, which is, as you say, nation building and urban warfare, if you will.

WONG: Exactly. And that's why the Army right now is facing a cohort of junior officers who are coming in, who are used to making decisions on their own, used to working independently, can take the initiative. Now the question is, is what does the Army do with these junior officers? Can we leverage this out-of-the box perspective that we've always wanted in our future leaders?

BLITZER: Has the U.S. military adequately trained the U.S. military to train a foreign military in the sense that that's what the major mission now after the elections for the United States military in Iraq is, to make sure that the Iraqis themselves can take charge? In other words, to become teachers, if you will. Are they -- did they go into that mission well-trained for that mission?

WONG: I think if you want to find the best teachers in the world, just turn to the Army. Because training is what they do. Because they're always getting ready for the next war, not looking back and saying it's going to be just like the last war, but always getting ready. What you see today is they're preparing for the uncertain, they're preparing for the unpredictable.

BLITZER: And how's that coming along, Nic, based on the -- you know, your reporting and what you're hearing anecdotally, the training of the Iraqi military?

ROBERTSON: From the soldiers I've talked to, it's going to be a challenge. I mean, the challenge is a cultural divide of not only being from one culture and trying to teach -- teach people from another culture in their own country about what they should do and how they should do it, there are those differences to bridge. But also in attitudes on how an enemy should be phased down and how the people should be treated.

Certainly the soldiers I've talked to are looking forward, they say, to this new role. But it is one they're going to have to get used to.

Of course one of the things that has put these young captains and people of that rank in such a -- such a complex situation is that now the military is able to give them a lot more information, much more quickly, and that has generally sort of pushed the command decision- making much lower down the scale of the ranks. And that's why they're in this position.

And from what -- from what I've seen, and from the conversations I've heard, they're ready for this new role. But it isn't something that they've really had specific training for.

BLITZER: Nic, I know you have a question for Colonel Wong. Go ahead, ask him what's on your mind.

ROBERTSON: Well, the training that -- that -- from the Stryker Brigade that I've embedded with, they had trained for battles before where it had been a situation where they were on one side of the river, let's say, and they had to retake the other bank of the river. And the assumption was the enemy forces had the whole of the other side, there were no civilians involved.

This was a situation that they were trained for. A completely different situation is what they found in Mosul. A civilian population, and the enemy anywhere in front and behind them.

WONG: That's exactly right. Training only goes so far. And what we need to train in our leaders today is the ability to handle conditions that they didn't expect. And that's really the mark, is that once -- soldiers are very competent. But now they're gaining that ability to be innovative and confident in dealing with the situations that they never envisioned.

BLITZER: It's a -- it's a whole new world for a lot of these troops out there, Colonel.

WONG: But it's also the wave of the future. I think the cold war days where we knew exactly what the Soviets wanted to do, we understand that that's all over now. Be prepared for the unpredictable. BLITZER: Nic, I'll give you the last word. Go ahead.

ROBERTSON: You know we -- I talked a lot with some of the captains exactly about this, about passing this new information back so that the people coming in behind them could have the advantage of their information, could be trained, could know the terrain, the tactics that work and that don't work.

And there was a really strong feeling amongst the -- amongst the soldiers there that this information should be passed back.

They did see some of that happening, but they certainly said that they would like to see it happening more, more often and much more quickly so those -- the next troops -- that fill in after them, in perhaps eight or nine months time, will have everything that they have right now -- Wolf?

BLITZER: Nic Robertson in Baghdad. Thanks, Nic, very much.

Please, as I always say to you, be safe over there. Lieutenant Colonel Leonard Wong, U.S. Army War College -- retired, U.S. Army -- thanks very much.

WONG: My pleasure.

BLITZER: And just ahead, efforts toward peace in the Middle East with new leadership in the Palestinian Authority.

And a pledge for U.S. aid, is this the best opportunity to try to achieve some sort of settlement in that embattled region? I'll discuss that with a panel of guests.

They'll join us from the region right after the break.

(COMMERCIAL BREAK)

BLITZER: Welcome back to the news from CNN. I'm Wolf Blitzer in Washington.

Before leaving the Middle East, Secretary of State Condoleezza Rice named Lieutenant General William "Kip" Ward to serve as the U.S. security coordinator to the Palestinian security forces.

Our pentagon correspondent, Barbara Starr, is standing by live at the pentagon to tell us a little bit about this general, what this means -- Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Wolf, this general -- Lieutenant General William Ward now tapped for one of the most sensitive security positions in the Bush administration.

Lieutenant General Ward will be the Palestinian security coordinator for Secretary of State Condoleezza Rice. She spelled out his duties earlier today at a press conference.

(BEGIN VIDEO CLIP) CONDOLEEZZA RICE, U.S. SECRETARY OF STATE: General Ward will also work with Egypt, Jordan and others to coordinate assistance to the P.A. as it rebuilds its security capacity to end violence and terror and restore law and order.

General Ward will travel to the region to make an initial assessment in the next few weeks.

(END VIDEO CLIP)

STARR: And it is generally understood that General Ward will then be monitoring compliance with security requirements on both sides, both the Israelis and the Palestinians.

But this coming as a bit of a surprise to some of General Ward's friends in the U.S. Army, who didn't know anything about it. They say it just emerged over the last couple of days -- in fact, General Ward, at his office with the Army in Heidelberg, Germany, earlier today.

General Ward has long experience in peacekeeping. Right now, if we look at his biography, he is the deputy commander, the number two man for the U.S. Army in Europe. But he also served as the chief of the U.S. military mission in Egypt, where he worked on regional security issues, further implementation of Israeli-Egyptian peace agreements.

He also served as the head of the peacekeeping effort with the stabilization force in Bosnia, in the Balkans, so a lot of experience in noncombat environments, if you will, in very tough, very sensitive security positions.

He now will take that on for Condoleezza Rice -- Wolf?

BLITZER: And it shouldn't be a huge surprise, Barbara, that they went to the European command for this, since the European command is in charge of not only Europe, Turkey, but Israel, Syria, Lebanon, as opposed to the central command which deals with the rest of the Middle East and the Persian Gulf.

Barbara Starr reporting for us at the pentagon.

That was Wolf showing off a little bit with his knowledge about the difference between the European command and the central command, former pentagon correspondent.

Thanks, Barbara, very much.

A full-court press by the United States in the Middle East, where Secretary of State Condoleezza Rice has wrapped up separate talks with Israeli and Palestinian leaders. She says the time is right for significant progress.

Joining us, now, to talk about the chance for peace, three guests: Saida Hamad is the Jerusalem bureau chief for an "Al-Hayat," an Arabic language newspaper based in London. She's joining us now live from Ramallah on the West Bank. Hirsh Goodman is with the Jaffe Center for Strategic Studies at Tel Aviv University. He's in Jerusalem along with Aaron David Miller. He's a former, top state department official who spent some two decades deeply involved in the Israeli-Palestinian peace process.

He's now the president of Seeds of Peace.

Thanks to all of you for joining us.

Saida, let me begin with you. We're getting word confirmed here to CNN there will be a formal declaration of a cease-fire tomorrow at Sharm el Sheikh, when the Israeli and Palestinian leaders meet, a cease-fire going into effect.

Tell us what you -- what you've heard about this.

SAIDA HAMAD, AL-HAYAT: OK. Actually, Wolf, the information that I got, it would be more a declaration of principles. There is still -- the Israelis are still a little bit reluctant to announce a joint, or participate in a joint statement for a cease-fire.

This is what -- I was told by this by some Egyptian diplomats only a few minutes ago. But the Palestinian stand remains still. The Palestinians are sticking to the road map, saying that the first article of the road map says that there should be a declaration, a joint declaration, by the Israelis and the Palestinians for a mutual cease-fire.

BLITZER: All right.

HAMAD: So, Wolf, we have to wait and see tomorrow who will win on this matter exactly.

BLITZER: All right, we'll see how far they're willing to go.

Hirsh Goodman, in Jerusalem, what are you hearing, specifically, on some sort of joint declaration that Mahmoud Abbas and Ariel Sharon might make at Sharm el Sheikh tomorrow?

HIRSH GOODMAN, TEL AVIV UNIVERSITY: Yes, I think -- we think -- that Mahmoud Abbas is an excellent prime minister. He's been elected by the Palestinian people. We're just not sure he's going to be able to enforce a cease-fire.

And therefore, if there is terrorism, if there are mortars, if there are more rockets, and Hamas and the other militant wings don't tow the line, if he doesn't yet have the security forces to impose a cease-fire, it would be very silly to declare one then have it broken, formally broken, and have it break down.

Rather leave things OK. Let's declare our intention to end the fighting and to work for a better future. But I think a formal declaration would make any aberration a formal problem, and I think it would be better to do these things opaque (ph).

BLITZER: What do you think, Aaron Miller? You spent a long time dealing with Israelis and Palestinians when you worked at the state department.

AARON DAVID MILLER, FMR. MIDEAST NEGOTIATOR: Well, Wolf, nobody ever lost money betting against Arab-Israeli peace. But the reality is, for the first time in four years, you have a genuine opportunity.

You have a Palestinian president who really does believe that the arms struggle, the Intifada, has been a disaster for his people. You've got an Israeli prime minister who's extremely serious about, in a very bold and historic proposition, by July he's going to dismantle and remove Israeli settlements from Gaza.

And you've got the makings, it seems to me, of very practical, pragmatic security cooperation on the ground. For the first time, it seems to me, Israelis and Palestinians are thinking realistically. Their expectations are not sky high.

And if you ask me, what is the best evidence, the best sign of that, it seems to me, you've got a very practical agenda. And I think that's going to be in the interest of both sides. `

BLITZER: The last time around, Aaron Miller, as you well know, George Tenet was sort of the security coordinator. And he was then the CIA director. Now they've gone to the U.S. military and have invited Lieutenant General William Ward to take over, on a day-to-day basis, deal with Palestinian security forces.

From your understanding, what specifically will be his mission?

MILLER: I think he's going to be -- he'll have at least three. Number one is to make an assessment of the needs and requirements of Palestinian security services. You know, during the '90s, we provided material forensic support, vehicles, communications, equipment.

And if Palestinian security services are going to centralize and fight terror and counter violence, they're going to need the capability to do it.

Number two, it seems to me the Egyptians and the Jordanians will have a meaningful role to play here, both in terms of training and political support. And Kip Ward has experience in Egypt. And it seems to me he'll run interference there.

And finally, I don't know whether or not he's going to head up the trilateral security committee that was also a product of the '90s in which Israelis, Palestinians and Americans worked very practically on the kinds of problems on the ground that they're going to encounter. But he's certainly going to have to play a key liaison role in working with both sides.

He's got an ambitious agenda. But it seems to me he's going to have an enormous amount of support for both the Israeli and the Palestinian side.

BLITZER: Let's bring back Saida Hamad in Ramallah.

What is your understanding now of the U.S. role, the U.S. role not only with Condoleezza Rice in charge of the diplomacy, now there's a Lieutenant General who's going to be working with the Palestinian security forces, plus a promise of $350 million U.S. assistance to the Palestinians to encourage the Palestinians to develop the West Bank and Gaza, to get going towards democracy, if you will?

Is this what the Palestinian leadership wants?

HAMAD: Well, actually, Wolf, I just wanted to say first that Dr. Rice's visit is considered very -- and viewed -- very positively by the Palestinian leadership. That's for sure. It's the first visit since three years.

Dr. Rice also, her language was absolutely different than the other American representatives who visited the country, the Palestinian representatives, for a long time.

There is a change of language, that's for sure. But I'm really just a bit skeptical about the way that the Americans are going to turn this into reality, meaning for example, the appointment of General Ward.

The Palestinians would like this person, this appointed personality, to really have an active role in determining who is -- the minute that there is a cease-fire, the minute there is some kind of declaration between the Palestinians and the Israelis, the Palestinians really would like to have monitors on the ground.

Who is really breaking the cease-fire? Who is doing what on the ground?

Putting that aside, and this is a very important point for the Palestinians also, the Palestinians they would like (ph) what the Americans want to also monitor their position, their activities.

As President Mahmoud Abbas stated it today, he's very clear. He says, the road map is the only way to achieve the Palestinian aspiration.

BLITZER: All right.

HAMAD: So he's very clear on that. He's ready to cooperate with the Americans.

But the problem is, is the -- are the Americans going to change their strategy of policy?

BLITZER: All right.

HAMAD: I have to say, Wolf, that Dr. -- just one second, please. Dr. Rice, today she said that America is -- Israelis, I'm sorry -- have to take difficult decisions.

This statement was used by the ex -- the ex-American foreign minister, Madeleine Albright. But she used it with the Palestinians. There is a change on the ground. The Palestinians are hopeful. But economy was, regarding your question, economy is important. BLITZER: All right.

HAMAD: As long as there's a siege, as long as the war is being felt, it won't matter how much money you pour into the Palestinian territories...

BLITZER: All right, Saida, stand by...

HAMAD: ... because you can have freedom of movement.

BLITZER: We're going to get back to you...

HAMAD: ... of movement.

BLITZER: We're going to get back to you.

Hirsh Goodman, briefly, before we take a quick break -- we'll continue this conversation.

On a practical level, at least in the last few weeks, there have been discussions going on between Israeli and Palestinian security officials. The defense minister of Israel has met with Palestinian security officials.

What is your understanding? How is this process coming along?

GOODMAN: Well, I think the appointment of General Ward is very, very important because he's not a mediator. And for the first time, the Americans are not negotiators. There's no big daddy here, there's no big uncle here.

He's been appointed to help the Palestinian prime minister collect the legal arms, put up a security force, get a decent police force in place, get rid of the horrible security mess that Arafat left behind, paying people out of paper bags, playing one against the other, and mainly to collect the weapons and create a sort of society in which democracy can flourish. That's his job.

He's not coming here as a Middle East negotiator. And I think that's a very welcome change because it means the sides have now matured to a point after four years of bloody conflict, where they see they can't defeat each other, to a point where they have to look eyeball to eyeball to negotiate a better future without big daddy there.

BLITZER: All right.

GOODMAN: And I think it's a good sign of maturity and a good sign for the future.

BLITZER: Hirsh Goodman, stand by. Aaron Miller, stand by. Saida Hamad, we're going to get back to all of you.

Much more on the latest effort to try to restart Israeli- Palestinian negotiations. And now there's word of an unprecedented effort to start Syrian-Israeli negotiations. We'll share that with you, as well.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

We're talking about Israeli-Palestinian peace prospects with three guests. Saida Hamad is the Jerusalem bureau chief for the Arabic language newspaper "Al-Hayat." She is in Ramallah.

Hirsh Goodman is with the Jaffe Center for Strategic Studies at Tel Aviv University. He's in Jerusalem, along with former state department official, Aaron David Miller, who is now the president of Seeds of Peace.

And I'll start with you, Aaron.

There is word now we're getting from the Associated Press in Damascus that the Syrian government, the Syrian government has just announced it will purchase 10,000 tons of apples from Arab farmers on the Israeli occupied part of the Golan Heights in an almost unprecedented trade move.

The Syrian government saying they need to do this to encourage Arab farmers on the Golan Heights. The Israeli foreign ministry spokesman, Norik Regaf (ph) saying that this is a welcome move in -- by Syria.

What do you make of this?

MILLER: Well, I'd welcome it, too. One of the problems with the Israeli-Syrian negotiations for the last 10 years is that for a variety of reasons, the Syrians refused to create the kind of public confidence and trust that the Palestinians, the Jordanians and certainly the Egyptians helped generate as part of their peacemaking strategy.

So if the Syrian government is going to reach out to the Israelis, even through Israeli Arabs or through Arabs on the Golan Heights through these sorts of gestures, I think that's fine.

But there's a cautionary note here. And I want to sound it. I've seen this movie before. The notion somehow that you can negotiate an Israeli-Syrian and Israeli-Palestinian peace agreement simultaneously, seems to me, if we go down that road again, we're going to end up with no progress on either track because, you're going to create a situation in which the government of Israel is going to have to confront two settler constituencies, withdraw from both the Golan Heights and part of the West Bank...

BLITZER: All right.

MILLER: ... certainly from Gaza simultaneously. And I'm not sure that's in anybody's interest right now.

BLITZER: What do you think, Saida? HAMAD: Well, maybe I would agree with you, but on the fact that maybe the Palestinians always complain that the Israelis might play on this two-track negotiations. Meaning Israel would press on the Palestinians to get something from the Syrians and vice versa.

However, we have to mention that the Syrians have been giving signals to Israel. President Bashal Assad (ph) said clearly that he's welcoming any negotiations without any conditions.

However, I think as long as Israeli Prime Minister Sharon is in his position, I don't think there is any prospects for -- at least in the very near future...

BLITZER: Saida?

HAMAD: ... for resuming of negotiations with the Syrians.

BLITZER: Hirsh Goodman, I interviewed Farouk al-Sharaa, the foreign minister of Syria a couple weeks ago, on CNN's "LATE EDITION." He said flatly full peace, full peace with Israel. Syria is ready for trade, diplomatic, all sorts of relations with Israel in exchange for a full withdrawal from the Golan Heights.

Is that doable?

GOODMAN: No, I don't think it is doable. I agree with Aaron, actually.

There's no way, I think, that any Israeli politician, even a strong politician like Sharon, even in partnership with Faris (ph) and a broad-based coalition, there's just no way that we can deal with withdrawal from Gaza, negotiating peace with the Palestinians and giving up the Golan Heights.

There are a lot of people in Israel who would gladly give up the West Bank and gladly give up Gaza because of a whole slew of reasons, but who would not budge from the Golan Heights.

So it would consolidate opposition to Sharon, and he'd fail. So I think it's not a good idea at this time.

I think, instead, Syria should concentrate on cleaning up its human rights record, should concentrate on trying to make itself a respectable member of the international community, should get rid of its chemical weapons and so on and so forth.

And when we've done our deal with the Palestinians, and they've cleaned up their house internally, maybe we'll be able to speak business.

BLITZER: All right, Hirsh Goodman, buttoning up his discussion for us.

HAMAD: Wolf...

BLITZER: Saida, unfortunately we're all out of time. But we'll continue this conversation in the coming days.

Saida Hamad from "Al-Hayat" in Ramallah, thanks very much for your contribution. Aaron Miller of Seeds of Peace, thanks to you, as well.

We'll take another quick break.

I'll wrap up this edition of news from CNN in just a moment. And this note, please be sure to stay with CNN at the top of the hour on "LIVE FROM."

Who is deep throat? Former Nixon administration official John Dean, he was the White House counsel during Watergate, says the most famous anonymous source in history is near death, and we may soon learn of his true identity.

That's coming up on "LIVE FROM" at the top of the hour.

(COMMERCIAL BREAK)

BLITZER: I'll be back later today, every weekday 5:00 p.m. Eastern for "WOLF BLITZER REPORTS." We'll take a closer look at what's going on with Condoleezza Rice in the Middle East.

Until then, thanks very much for joining us. I'm Wolf Blitzer in Washington.

"LIVE FROM " with Kyra Phillips, Tony Harris, they're standing by. There they are. They're coming up next after a short break.

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