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CNN LATE EDITION WITH WOLF BLITZER

Interview With Shimon Peres; Interview With Stephen Hadley

Aired August 6, 2006 - 11:00   ET

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


WOLF BLITZER, HOST: It's 11 a.m. in Washington, 8:00 a.m. in Los Angeles, 6 p.m. in Jerusalem and Beirut and 7 p.m. in Baghdad. Wherever you're watching, from around the world, thanks for joining us for our special "Late Edition."
It's been another very deadly day in the Middle East.

We'll get to my interview with the Israeli vice premier, Shimon Peres, in just a few minutes. First, though, let's go to CNN's Fredricka Whitfield at the CNN Center for a quick check of what's in the news right now. Fred?

(NEWSBREAK)

BLITZER: Thanks very much, Fred.

Let's go to Israel now, where there was a deadly rocket attack today. CNN's senior international correspondent Matthew Chance has just filed this report.

MATTHEW CHANCE, CNN CORRESPONDENT: (inaudible) attack on Israel since the beginning of this conflict, 24 days ago. I'm standing here at Kfar Giladi, which is the entrance to a small kibbutz near the Lebanese border.

Earlier today, a barrage of rockets rained down on this area, as they have been around northern Israel for the past several weeks. The difference, today, one of them hit a crowd of Israelis that had gathered in this car parked right behind me, killing at least 10 of them, injuring many more.

We saw the injured being ferried away in helicopters earlier today. Because of the censorship laws in this country, in Israel, I'm not permitted to tell you what kind of people these were, whether they were civilians or soldiers.

Suffice to say, this is a military area where Reserve paratroopers have been gathered before they go into Lebanon. And so this has become the deadliest incident for Israelis in this conflict so far.

Matthew Chance, CNN, on the Israeli-Lebanese border.

BLITZER: Let's go to Beirut right now. Our bureau chief, Brent Sadler is standing by with more on this very, very deadly day, Day 26.

Brent, seemingly, no end in sight, but update our viewers how this day has gone in Lebanon.

BRENT SADLER, CNN CORRESPONDENT: Well, so far, Wolf, a new range of attacks by the Israelis against the southern suburbs of the Lebanese capital, a daylight attack against those strongholds of Hezbollah that have been repeatedly hit, normally, Wolf, during the early hours of the morning, when there are not many people about.

Sunday, late afternoon, within the past hour, we saw plumes of gray smoke rising above buildings in the suburbs just several miles away from our live shot here.

The IDF say there were air strikes. But, unusually, we could not hear, on this occasion, any air activity at that time, but a series of explosions and many plumes of smoke rising, that coinciding with the arrival, at Lebanon's international airport, of the secretary-general of the Arab League, Amr Mussa, who is here to take part in a top-level meeting of Arab foreign ministers.

Also, while Syria's foreign minister, Walid Moallem is in town, meeting Lebanese President Emile Lahoud and other top officials, the Syrians, really, supporting Lebanon's stated rejection of that U.N. draft resolution that's going to be voted on, expectedly, early next week.

I asked Walid Moallem what he thought about that U.N. draft. Let's listen.

(BEGIN VIDEO CLIP)

WALID MOALLEM, SYRIAN FOREIGN MINISTER: This draft resolution is a recipe for the continuation of the war because, unfortunately, it's not fair for Lebanon.

Second, it is a recipe for possible civil war in Lebanon, which nobody, nobody, nobody has any interest to see this happening, except Israel.

(END VIDEO CLIP)

SADLER: Well, the Lebanese, Wolf, are not accepting that draft plan because they say they want to see Israeli troops withdraw from Lebanon, hand in hand with the cessation of hostilities. And that, clearly, is not happening.

One footnote, Wolf, Walid Moallem said, after that news conference --he said that, if Israel were to strike Syria, Syria's president Bashar Assad has already given orders to Syria's military to immediately strike back against Israel. Wolf?

BLITZER: Brent Sadler in Beirut. Stand by. We're going to get back to you as these next two hours on "Late Edition" unfold.

I want to bring in CNN's John Roberts. He's been embedded, these past few days, with Israeli troops moving into South Lebanon. John is on the phone with us right now. Update our viewers, John, those of us who have been following your trip there, your coverage. It's been remarkable. But give us a sense where you are, as much as you can. And what do you see and hear?

JOHN ROBERTS, CNN CORRESPONDENT: Well, Wolf, we're in southern Lebanon, in the area of the intense fighting. There's a number of towns and villages on the Lebanese side of the border that have been involved.

A couple of names you'll recognize are Bint Jbeil, also Ayt al- Shahab. There are other towns and villages to the west as well, where the Israeli is pushing into. And they're steadily pushing north.

Just a short distance away from the position that I'm in, we witnessed a huge barrage of artillery fire. And the Israeli Air Force dropped a number of bombs on a village. I can't disclose which village because that might give away our location.

But, Wolf, there definitely is a tremendous amount of fighting going on here. It has accelerated, if anything, with the news that this U.N. resolution has been brokered between the United States and France.

A big question here, though, among the Israelis: What will it mean if the UNIFIL force is expanded? There's not a lot of trust, in Israel, as you know, Wolf, for what the United Nations can do.

Commanders that I've talked to, in the unit that I'm traveling with say, we don't see how we could leave Lebanon. And it appears the Lebanese see it the same as well because that resolution does not call for Israel to completely withdraw, just cease offensive operations.

So it would appear, at this point, Wolf, as if, even if this resolution gets passed, these troops that I'm on the ground with here, this elite reserve unit, is going to be staying on the ground in Lebanon for some time.

Although they have only been called up for an initial 21 days, that can easily be extended. Wolf?

BLITZER: John, based on your own eyewitness accounts, what you have seen in the past few days, since you've moved into South Lebanon with these elite Israeli fighters, how intense has the fighting been on the ground?

What have you seen?

ROBERTS: There hasn't been a lot of direct contact from the group that I'm traveling with. They are a tank-hunting reconnaissance unit. And what they do is they go out and they scout ahead. They establish a position so that they can call in potential air strikes or artillery hits for the commanders back on the other side of the border.

It's usually regular army that engages the most, for the most part, with the Hezbollah fighters, close quarters contact. This group stands off a little bit more.

But we've had just an amazing perspective on the entire battlefield here, Wolf. And just as far as you can see, from one side of the horizon to the other, smoke filling the sky.

There is non-stop artillery fire, non-stop tank fire. We hear mortar rounds. We get some incoming -- a missile hit a building next to where we were last night. We have seen Katyusha rockets come in.

And every once in a while, a Hezbollah fighter on the other side tries to get off a single mortar shot, though they don't seem to be any sort of coordinated attack with the mortars, which is very comforting to the people that I'm here with because there is danger at every turn out here, Wolf.

And they have to be very careful about wherever they place their feet.

BLITZER: Do the troops as they go into south Lebanon, the Israeli forces, John, are they just moving in or do they sort of stay put, leave troops behind and control various areas as other forces continue their advance?

ROBERTS: What they tend to do, Wolf, is try to take the high ground surrounding a town. They would occupy buildings, whatever on the outside of the town, rather than going inside and getting involved in the heavy fighting such as in Bint Jbeil, which took such a heavy toll on the Israeli army last week, where they lost eight soldiers in a single skirmish.

They just want to control the area. They don't necessarily want to go into the town. Once they control the area, once they're reasonably certain that all of these towns are cleared of civilians -- and I can tell you that the town I'm in is completely and utterly deserted -- then they start opening up with artillery fighter to soften up the positions.

They'll start shooting at towns and buildings with tanks. The air force will drop a couple of bombs in. And then they'll slowly move in and gain more territory. But they still, really, though, Wolf, because Hezbollah is so well dug in here, like to avoid actually going into the urban areas. Because that's where it's proven it can be so dangerous.

BLITZER: John Roberts is embedded with Israeli forces moving into south Lebanon. He calls us when he can. John, thanks very much for doing your excellent reporting. And we're going to be checking back with you whenever John can do that. John Roberts exclusively for CNN in south Lebanon embedded with Israeli forces.

We'll take a quick break. When we come back, my interview with Israel's vice premier, Shimon Peres. What's the Israeli government say about this draft U.N. Security Council resolution? That interview coming up next.

(COMMERCIAL BREAK)

BLITZER: Our web question of the week asks this: Should the United States negotiate directly with Syria and Iran over the Middle East crisis? You can cast your vote. Go to cnn.com/lateedition. We'll have the results at the end of the program. Straight ahead, the Israeli vice premier, Shimon Peres, weighs in on the U.N. Security Council draft resolution to try to end the war with Hezbollah. You're watching a special "Late Edition: Crisis in the Middle East."

(COMMERCIAL BREAK)

BLITZER: Welcome back to "Late Edition." It's been another very deadly day in both Israel and Lebanon. What's Israel's reaction to a proposed U.N. Security Council resolution calling for a cessation of hostilities with Hezbollah? Just a little while ago, I spoke with the Israeli vice premier, Shimon Peres, in Jerusalem.

(BEGIN VIDEOTAPE)

BLITZER: Vice Premier Peres, thanks very much for joining us on "Late Edition." A couple of news developments today, major news potentially. Did Israel capture one of the Hezbollah fighters involved in the kidnapping of those two Israeli soldiers back on July 12th?

SHIMON PERES, ISRAELI VICE PREMIER: Yes. That's true.

BLITZER: What are you going to do with that person?

PERES: First of all, we shall investigate what happened, and see what was exactly his role, but we shall conduct ourselves in accordance with the law.

BLITZER: Are you hoping to potentially exchange that Hezbollah fighter for those two Israeli soldiers?

PERES: We don't think so. We think they were captured on our land without any reason, and we don't feel that we have to compensate the Hezbollah because they took hostage two of our soldiers. But if then Lebanon would like to talk about exchange of prisoners, we are always ready to.

BLITZER: To talk with the Lebanese government about an exchange of prisoners. When you say this Hezbollah fighter was captured on, quote, "our land," does that mean he was inside Israel?

PERES: No, I mean, the Lebanese gentleman was captured in Lebanon. We made the raid against a base from which they used to fire rockets against Israel, and I think we have in our hands like 20 Hezbollah persons that were captured on that very day and night.

BLITZER: The prime minister of Israel, Ehud Olmert, said this on Wednesday. He said, "I think Hezbollah has been disarmed by the military operation of Israel to a large degree. The infrastructure of Hezbollah has been entirely destroyed. More than 700 command positions of Hezbollah were entirely wiped out by the Israeli army."

Yet over these past few days, including today, we see Hezbollah launching a barrage of rockets into northern Israel, killing many Israelis. It looks like they still have an enormous fire power capability at hand. PERES: Well, we have to distinguish. I think the prime minister was referring to the long-range missiles and rockets, that most of them were really I know destroyed, or silent. This short-range missiles or rockets still are in their hands, and they fire them from the southern part of Lebanon. We know they have still plenty of them, and apparently they are going to continue to fire them against Israel.

BLITZER: Let me read to you what this U.N. Security Council draft resolution that the U.S. and France accepted says about Israel. It calls for a full cessation of hostilities, based upon in particular the immediate cessation by Hezbollah of all attacks and the immediate cessation by Israel of all offensive military operations. What is Israel's understanding of that phrase, "offensive military operations?"

PERES: Israel understands that this is just a draft, not yet a resolution. We shall wait for the full resolution before we shall react. But we want to remind you that Israel implemented all of the United Nations resolutions concerning Lebanon. Not that this helped very much, but we kept our respect toward the United Nations.

We shall wait another couple of days for the first resolution, because the first resolution must be followed by a second resolution, and then the second resolution has to be implemented. So there is no sense to react ahead of time, but there is one remark that I would like to make.

Today, the major problem for all of us is are there two governments in Lebanon or one government in Lebanon? It's more in my judgment a resolution about the future of Lebanon, because we understand perfectly well where the Lebanese government stands, and we understand that many of their declarations are the result of being frightened by the Hezbollah.

But if Hezbollah will take over Lebanon, it's one story. If Hezbollah will continue to divide Lebanon, it's another story. If Lebanon will become an independent state, it is a third story.

I heard that the foreign minister of Syria said that there is a danger of a civil war in Lebanon. There is more than a civil war. It's a divided government, so there is no government. It's a chaotic situation, and we are waiting and see if really the Lebanese government is a government, if they can really make decisions, if they can really replace the Hezbollah forces on the southern part of Lebanon.

BLITZER: Here's what Hassan Nasrallah, the leader of Hezbollah, said on Thursday. He said, "If you hit our capital, we will hit the capital of your entity. If you hit Beirut, the Islamic resistance will hit Tel Aviv, and is able to do that with God's help." Does your government, your intelligence community believe Hezbollah has the capability of hitting Tel Aviv?

PERES: They have had in their arsenal rockets and missiles that were by the way produced in Syria that have a long range. They can reach Tel Aviv. But we believe that most of them, if not all of them, were already destroyed by our forces.

Now, the problem is that the leader of Hezbollah should ask himself, what did he do until now? He destroyed Lebanon. He destroyed peace. Nobody in the world can understand why did they start the war. Nobody in the world can understand what is the purpose of the war.

It's a very strange situation. He divided a land. He destroyed a country. He produced a war. And he talks around as though he would be a hero. It's unbelievable and unacceptable.

BLITZER: He also suggested that he would stop if you stopped. Let me read to you what he said on Thursday. He said, "You attack our cities, our villages, our civilians, our capital, we will react. And at any time you decide to stop your aggressions on our villages and towns and cities and our civilians, we will not hit any settlement or any Israeli city." Do you take that seriously as an offer to have a cease-fire?

PERES: No. No. He suffers from a short memory. He started to attack Israel. Israel never started any war, any aggression against Lebanon. Though we knew that he has collected 12,000 missiles and rockets, collected from Syria and from Iran. He stole them. We didn't attack.

We waited for five years, six years, until he started to use them. He did not answer to this very day why did he start. What does he want to achieve? Because we left Lebanon completely in accordance with the United Nations, and he keeps on dividing Lebanon and he keeps on to be a head of an aggression, of an aggressive party, which doesn't listen to anybody.

BLITZER: He cites -- he keeps citing this tiny disputed area called Shebaa Farms along the border between Israel, Lebanon and Syria. In the past, your position has been this disputed territory is really Syrian territory, not Lebanese territory, but Lebanese government says it's Lebanon. Now the Syrian government says it's Lebanon as well. In order to resolve this issue once and for all, would Israel be willing to withdraw from Shebaa Farms?

PERES: Let me say the following. We never declared that Shebaa is part of Israel. We never said that this is part of our motherland. On the other hand, we are not ready to pay a price for an aggression. The Shebaa issue should be dealt with after the war and not because of the war. And then on Shebaa again, we behaved according to the United Nations resolution. I think Mr. Hadley just mentioned it, that the delineation of the border between Syria and Lebanon will enable to find the solution for the Shebaa.

But it cannot be -- we do not intend, we don't want to pay a price because of their attack. Because day and night, they fire missiles over our heads. Now every day almost 180, 200 missiles. So it's not a simple proposition. We are not ready to act under pressure. We were ready to withdraw from Lebanon not because somebody fired at us, but because we really wanted to contribute to a full peace in the Middle East. BLITZER: Let me read to you what King Abdullah of Jordan said on Thursday. He's a friend of Israel. Jordan and Israel have a peace treaty. "The war will not solve anything, and Arab peoples see now in Hezbollah a hero facing aggression and defending their land. If Israel destroys Hezbollah, and let's say after a year or two there is no solution to the Palestinian cause or Lebanon or Syria, then a new Hezbollah would emerge, maybe in Jordan, Syria or Egypt. Israel should know this."

This coming from someone who's made peace with Israel. How concerned are you that Israel's reaction to what happened on July 12th is, as many analysts around are suggesting, making the situation in the Middle East even worse?

PERES: I have the highest regard for his majesty the king of Jordan. We consider him a man of peace. But I'm afraid this is a very bleak outlook, because if everybody can become a Hezbollah, what is the sense to negotiate? Why give back land? Because when you give back land, you don't have peace. You have an attack.

I can understand the sentiment that the king may wanted to express, but in reality, if the future that they will really become Hezbollah, namely they'll get orders from Iran, they will attack without reason, they will fight for no purpose. That's a very bleak outlook. I know the king, and I'm sure that his views is by far more considerated.

I can understand what he wanted to say, but I believe that all of us must have more hope. If we shall submit to terrorism, the Middle East will be always under fire. And terrorism is not just a problem for Israel. Not just for the Middle East. It's a problem for the rest of the world, and we shall have to develop strategies so people that should indiscriminately kill innocent people will not govern our life.

BLITZER: One final question because we're almost out of time. If you could say -- speak directly to the president of Syria right now, Bashar al-Assad, what would you say to him?

PERES: I would say that he missed the boat once, twice. The late Prime Minister Rabin really almost answered all the requests of Syria. Why didn't they make peace? I think President Sadat suggested to Assad senior to go with him to Camp David. He refused.

I believe that President Clinton went to Geneva to meet President Assad senior, and he was sure he would get a positive reply. All of a sudden, he came in, and he got a negative reply. Now, I myself negotiated also through the United States secretary of state with Assad.

And I told him, look, we are ready to make peace immediately. But if you want -- that was before their actions in 1996. But if you want really to make peace shortly and clearly and immediately, you should do what King Hussein did, what President Sadat did. Namely, meet on the highest level and do it. The reply I got was, I'm ready to meet, but I can't give you a date. Now, you cannot have peace without a date. You must have a date for negotiation. I would say to President Assad: You want peace? Come and meet and sit down without prior conditions. Let's see what can we do together.

But just by issuing orders or issuing threats -- I heard today from the foreign minister of Syria, a man that I respect, Moallem, saying all of a sudden that Israel has had a plan to attack Syria or attack Lebanon. That's totally unfounded. We don't have any plans of aggression.

We were patient in the face of the arsenal. We are patient in the face of them sending missiles to Syria -- to Lebanon. We waited, and we restrained ourselves, and we invited many times the Syrians to come and sit around the table directly, openly, without inhibitions (ph). It's a very serious issue. And nobody can give an order to the other party.

Peace means to meet and negotiate, and not just to issue conditions or issue ultimatums.

BLITZER: Shimon Peres, the vice premier of Israel, thanks very much for joining us.

PERES: Thank you.

(END VIDEOTAPE)

BLITZER: And coming up in the next hour of our special "Late Edition," we'll get the view from Lebanon. We'll go live to Beirut, speak with Lebanon's economy minister, Sami Haddad. But up next, is a solution to the crisis in sight? We'll get perspective from former Secretary of State Henry Kissinger and former Defense Secretary William Cohen. "Late Edition" continues right after this.

(COMMERCIAL BREAK)

(NEWSBREAK)

BLITZER: Welcome back to our special "Late Edition: Crisis in the Middle East." I'm Wolf Blitzer in Washington. Is the Israeli- Hezbollah conflict exposing flaws in U.S. policy in the region? Joining us now to discuss that and more, the former Secretary of State Henry Kissinger and the former Secretary of Defense William Cohen. He's now the CEO of the Cohen Group here in Washington. Gentlemen, thanks for coming in to "Late Edition."

Dr. Kissinger, let me begin with you. And briefly give us your sense. Do you see light at the end of this Israeli/Hezbollah tunnel right now, or is this fighting going to continue open-ended?

HENRY KISSINGER, FORMER SECRETARY OF STATE: Well, if the U.N. resolution is really implemented in all of its parts, that would be considerable progress. First, it would be progress locally in removing Hezbollah as a military force from southern Lebanon. And thereby remove the tensions between Israel and Lebanon.

And, secondly, it would be a progress in the deeper negotiations that will have to take place with radical states like Iran and, to some extent, Syria, who fueled this conflict and who hopefully could learn from it, that there are limits to adventures.

BLITZER: Secretary Cohen, are you optimistic right now as you see this draft U.N. Security Council resolution put forward or gloomy?

WILLIAM COHEN, FORMER SECRETARY OF DEFENSE: Well, I think we have to be optimistic about it, because the alternative is really unacceptable. If this fighting continues, we're likely to see a solidification of sentiment against Israel supporting Hezbollah. To see that not only the solidification, but perhaps even radicalization of the Muslim population through much of the world.

So I think that we have to say, as Secretary Rice has said, we'll see who's for peace and who is for war when we put this thing forward. It's very important that we press that.

BLITZER: The draft resolution that the U.S. and France, Dr. Kissinger, put forward, stops short of calling for an immediate cease- fire.

Many of the Arab leaders, including many analysts here in the United States, including Republican Senator Chuck Hagel, Republican of Nebraska, would like to see an immediate cease-fire.

Listen to what Chuck Hagel said earlier in the week.

(BEGIN VIDEO CLIP)

SEN. CHUCK HAGEL (R-NE): The sickening slaughter on both sides, Mr. President, must end and it must end now. President Bush must call for an immediate cease-fire. This madness must stop.

(END VIDEO CLIP)

BLITZER: The resolution does not do that. What do you think?

Should there be an immediate cease-fire as a first step and then worry about the diplomatic fallout after that?

KISSINGER: Well, the U.N. resolution has made specific proposals. It asks for an end of -- for a cease-fire from Hezbollah and an end of offensive operations by Israel. And if both sides obey this, there will be, in fact, a cease-fire.

I don't like the proposition that you can call, every time there's a conflict, you call it madness. Because there are causes of this conflict and they have to be removed. It isn't simply insanity that is producing it.

BLITZER: Who's right on this issue, Secretary Cohen, Chuck Hagel or George W. Bush? COHEN: Well, I think Chuck Hagel is right to raise the issue about the need to stop hostilities. Obviously, it has to be agreed to by both the Israelis and Hezbollah.

But allowing this continue without any sort of parameters being put upon it, then you're likely to see threats being made by Hezbollah against Tel Aviv, the Israelis responding. They will attack Syria.

Iran has indicated they would support Syria if that were to take place. And so then you see the potential for a much wider regional war.

And so I think the emphasis on seeing if we can't get a cessation of hostilities, if it takes that to sit down, as Shimon Peres just said a moment ago, you have to sit down with someone to start talking to them and negotiating to bring about an end to hostilities.

I think that's what has to happen. I think that's what Secretary Rice is trying to achieve right now. But Chuck Hagel, to his credit, is saying that we're killing a lot of innocent civilians.

We talk about the casualties. We use this phrase, "collateral damage." We're seeing a lot of damage done to innocent people on both sides. And I think that anyone of any sensitivity is saying, let's see if we can't find a way to stop it and negotiate a way to a peaceful resolution and a more enduring one.

BLITZER: Dr. Kissinger, a lot of people certainly understand Israel's efforts to go after Hezbollah, Hezbollah rockets, missiles, Hezbollah fighters.

But what a lot of people around the world don't understand is Israel's destruction of so much of Lebanon's infrastructure, whether bridges or roads or airport runways.

Do you understand why Israel is doing this?

KISSINGER: I have not understood the Israeli strategy as well as I've understood it in previous wars. Because it seems, to me, strategy always has to be tied to clear-cut diplomatic objectives.

But I would also say, at this moment, the issue is not saving lives, because, of course, we have to save lives.

There is a specific proposal put forward by Secretary Rice and the French government that provides for a specific end to hostilities. And this would be the most rapid way of bringing this war to a conclusion, after which a negotiation can take place about some of the other issues that were also raised by the U.N. resolution.

BLITZER: Secretary Cohen, do you understand Israel's military strategy?

They argue that, by destroying these bridges, these roads, they're stopping the re-arming of Hezbollah additional rockets, weapons, coming into Lebanon from Syria. COHEN: I think there have been miscalculations on both sides. I think that the Israelis have miscalculated in terms of being able to destroy Hezbollah militarily and its military capability. I think Hezbollah has miscalculated by thinking the Israelis wouldn't respond this aggressively. But in terms of what is taking place today, the perception is that Goliath, Israel, is really exceeding its authority or responsibility here by pounding Beirut and parts of Beirut so hard that the Hezbollah is becoming the David.

And I think it's a complete role reversal and one that's not in Israel's interests. And so saving lives is only part of the issue, to be sure, as Secretary Kissinger has said. But there have to be other issues involved. And that is going to the source.

President Bush has talked about the source being Iran and Syria. And that's very important that we hold Iran responsible and Syria responsible for undermining Resolution 1559.

But in addition to that, we have to get back to the other root causes. And I've said this on many occasions. And that is dealing with the road map and the peace process. Because they are all interconnected.

We have to go to the U.N. to say to the Iranians, you have been undermining 1559 by supplying arms and weapons to the Hezbollah. That has got to stop, not only that, but your pursuit of nuclear weapons.

There is an approach that has to be made that's comprehensive in nature. It also has to take into account the West Bank and Gaza.

BLITZER: Dr. Kissinger, the president, earlier in the week, suggested that said what Israel is facing against Hezbollah is part of a much bigger problem that the United States, the West has faced, that was underlined on 9/11. Listen to what the president said.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: For decades, the status quo in the Middle East permitted tyranny and terror to thrive. And as we saw on September 11, the status quo in the Middle East led to death and destruction in the United States. And it had to change.

(END VIDEO CLIP)

BLITZER: Is Israel's war against Hezbollah right now part of the same U.S. war against Al Qaida?

KISSINGER: On some levels, it is. Hezbollah is an organization that is implanted on Lebanese territory. It's a military force without the approval of the Lebanese government, in violation of U.N. resolutions.

And, therefore, it is a part of this non-state threat that many countries have faced. It also has local origins. The local origins have attempted to be addressed by this U.N. resolution. The fundamental origin is the relation of Iran to its region and to the rest of the world. This is symbolized by the nuclear program of Iran. And so these issues have to be looked at together, and hopefully can be resolved by re-integrating Iran, in some manner, into the international community, but not unless they're willing to give up support of organizations like Hezbollah.

BLITZER: Do you want to weigh in, Secretary Cohen, on that?

COHEN: I agree with what Secretary Kissinger just said. We have to also be conscious of the fact that, as a result of this conflict that continues to go on without abatement, that we're seeing Christians, Druze and others in Lebanon who are uniting, or supporting Hezbollah.

That is the danger that we're seeing at this particular point. And that's why it's important, as Secretary Rice has said, we've got to see a cessation of hostilities because, if this dynamic continues to unfold in this fashion, you're going to see Hezbollah come out as a much stronger political force, one that currently has arms that need to disarmed, but that will be a much stronger force throughout not only Lebanon but the greater Gulf area, throughout Arab worlds.

BLITZER: Secretary Cohen and Secretary Kissinger, thanks to both of you for coming in to "Late Edition." I appreciate it very much. And coming up next, the human toll of the war. We'll get perspective on how civilians in Beirut are coping. Stay with us. Our special "Late Edition: Crisis in the Middle East," will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to "Late Edition." The Lebanese government says the 26 days of fighting between Israel and Hezbollah have claimed nearly 700 lives, most of them civilians, and wounded nearly 2,400 people. Joining us now from Beirut to talk about the impact of the crisis on Lebanon and its people is Roula Talj. She's a Lebanese political analyst, a former government adviser.

Roula, Thanks for coming back. Let me read to you what the prime minister of Israel said the other day, Ehud Olmert. He said, "We wish to live side by side with you in peace and tranquility and with God's help and peace as well, but we shall not renounce our right for the state of Israel to exist and protect our right to live here."

What do you think the Israeli government should be doing in the face of this barrage of deadly rockets and missiles coming in to Israel on a daily basis?

ROULA TALJ, LEBANESE POLITICAL ANALYST: First of all, I think the state of Israel should stop the hostilities and the attacks and killing civilians and destroying infrastructure and causing famine and diseases and, you know, all sorts of disasters has been going on in Lebanon for the last three weeks. I think this has to stop immediately.

And then appreciate what he said. I can completely agree with him that he wants to secure his people a state of Israel that will not be threatened of non-existence one day. But you also have to bear in mind that the Palestinians also need to have a state. And they need to live in peace and have a normal life, go to work, feed their kids, not be threatened or humiliated by Israeli soldiers any more. This has to stop.

BLITZER: Roula, what about Hezbollah? What do you want Hezbollah to do right now?

TALJ: I think when Israel withdraw from southern Lebanon, from Shebaa Farms, and returns all the prisoners, this is the minimum Israel should do in order for Hezbollah to stop retaliating. Because I don't know if you heard Nasrallah on the television a few days ago. He said we are reacting to hostilities and to Israel's attacks, and we are not acting.

And I truly believe him. I think that if Israel stops, he will stop, too. But then if they withdraw from southern Lebanon, then Hezbollah will find it very difficult to keep shelling bombs into Israel. And I don't think he would.

BLITZER: But are you...

(CROSSTALK)

BLITZER: Roula, Roula, Roula, are you justifying the launching of these Katyusha rockets with these ball bearings randomly against civilian targets in Haifa and elsewhere in northern Israel? Is this appropriate?

TALJ: Are you talking about the shelling of the Katyusha now?

BLITZER: Yeah. I'm talking about what Hezbollah is doing right now.

TALJ: I think it's a reaction to all the destruction and to the massacre that took place in Lebanon, Wolf. I think we have more than 1,200 dead. And we have 3,000 severely injured. Seventy percent of those are women and children. I don't know if you're seeing the pictures.

BLITZER: But what a lot of people are trying to understand, Roula, is who started this. Because, as you know, on July 12th, Hezbollah came into northern Israel unprovoked, kidnapped two Israeli soldiers, killed eight others. And as a result, the Israelis began their moves against Hezbollah. Do you accept that Hezbollah started this current war?

TALJ: Wolf, I don't think it's any more about the soldiers, about the kidnapping of the soldiers. But I do believe that there was a build-up which started in 1948. But I'm not going to go back to that point. But I want to tell you and tell the American people a very short story. And I want you to judge who is behind all this mess in the middle east.

In 2004, September 2004, a common friend of yours and mine, Wolf, and I won't say his name now, came to Lebanon and Damascus. And he is a very close friend to Israel, believe me. Nobody more than this guy love Israel's interest. He came to see whether there is a possibility for a certain peace talk in the future.

And, you know, when -- a week later, President Bush made a presidential statement forbidding any peace talks to go between Israel, Lebanon and Syria. So I will let you not and the smart people in Washington and the United States to judge who is behind this mess in the Middle East today.

BLITZER: We're almost out of time, Roula. But very quickly, do you see this current draft U.N. Security Council resolution that the U.S. and France have put forward as a basis to stop this fighting?

TALJ: I think the U.N. resolution came too little too late. If it came before the killing of Qana, the massacre of Qana and the other massacres that you're not talking much about, I think then, maybe then, it would have been a possibility. But I don't think -- I think they need to push for a complete cease-fire, unconditional cease-fire right now and get somebody else, another entity that the United States and Ambassador Bolton should not state a word anymore.

They should let more neutral partners to deal with this issue and be the go-between between Israel and Lebanon. Because I don't -- Washington, this administration, lots of people in Lebanon, the main player in this conflict don't trust it. They don't trust Washington. So I see -- I can't see it playing an effective role, to be honest with you.

BLITZER: All right. Roula Talj is a Lebanese political analyst, a former adviser to the Lebanese government. Thanks, Roula. Good luck to you. Good luck to everyone in Beirut. I know these are difficult, dangerous times for a lot of people in the region. Much more ahead on our special "Late Edition," including the story of an Israeli prisoner of war. We're going to talk about that with his wife and his father.

Plus, a special conversation with Lebanon's economy minister, Sami Haddad, about his government's handling of Hezbollah. This special "Late Edition: Crisis in the Middle East," continues right at the top of the hour.

(COMMERCIAL BREAK)

BLITZER: Thanks very much for joining us. We're continuing our coverage of the crisis in the Middle East. There has been death and destruction, once again, on both sides of the border, Israel keeping up its attacks on Hezbollah targets in Lebanon.

Let's move on to CNN's John Roberts. He's embedded with Israeli military forces as they're moving through South Lebanon. John's joining us on the phone.

John, update our viewers what you see and what you hear.

ROBERTS: Good afternoon to you, Wolf. From my vantage point, which is high on this hilltop overlooking south-central Lebanon, I can literally see the entire battlefield laid out before me.

I can probably see four or five different towns. Shells have been raining down. The Israeli air force has also been pounding the area with bombs. Tanks have been opening up on parts of villages, trying to route out those Hezbollah guerrillas, as the Israeli forces continue to try to sweep northward.

But, Wolf, it's very difficult going. Almost to a man, the unit that I'm traveling with, which is a reconnaissance and tank-hunting unit, although they're not hunting tanks in this conflict as Hezbollah has none, has said that it's very tough going; it's a very slow push.

This is a reserve unit. Many of the people in this unit have seen action in Lebanon before, during the Israeli occupation. And they say that this is a different type of war.

This is not the type of war where you can go in and claim entire towns and villages. What they have to do is take the high ground, try to surround a village and try to then bring in that heavy artillery and heavy armor to try to push Hezbollah back.

In terms of the progress toward a diplomatic solution, there is a lot of skepticism in the units that I'm traveling with as to exactly what that's going to mean.

Will the expansion of the United Nations force be enough to try to suppress Hezbollah from firing those rockets, try to stop them from moving back into these town and villages? They don't believe so.

So the commanders of this unit believe that they are going to be in Lebanon for some time, at least until that international force starts moving in, and perhaps a little bit longer.

But, Wolf, the unit that I'm with, I should tell you, -- as I said, it is a reserve unit. It's civilian soldiers who were called up a couple of weeks ago on a 21-day rotation.

They have been here before. They know the terrain. But still, it's a bone-wearying, exhausting type of exercise. It's an infantry company that I'm with. We marched seven hours to get into southern Lebanon.

And each night after that, we have been marching again, pushing further and further north as they set up recon positions, trying to identify Hezbollah positions, call in artillery on them.

It's very tough going, Wolf. I got my first cup of coffee in a couple of days, for which I'm very thankful, because sleep is something that really is a luxury that you don't have here. And you've got to, kind of, try to keep going on adrenaline. And that runs out after a while.

But these soldiers that I'm with, working very, very hard, trying to accomplish their mission. And they know that it's a very difficult one, as well, because, in this type of asymmetrical warfare, how exactly do you declare victory? There's a belief among some of these soldiers that all Hassan Nasrallah has to do is pop his head out at the end of the conflict and say, I fought Israel and I'm still here. And by association, he wins.

So what they're looking to do here, Wolf, is not necessarily wipe out Hezbollah. They're trying to suppress them long enough that that international force can get in and try to do something about those hundreds of Katyusha rockets that keep raining death into northern Israel.

But they say that's probably the toughest job of all -- is going after the rocket launchers.

BLITZER: John, I assume so much of the territory where you and those Israeli soldiers are marching through, there is fear of land mines, booby traps, improvised explosive devices.

How concerned are the Israeli soldiers about all those potential deadly traps out there?

ROBERTS: They believe, Wolf, that every building, every bush, every valley, every hill is a threat.

There were threats, of intelligence that came in, that perhaps there was a missile attack planned on the position that the soldiers have taken up, a location which I can't disclose.

Yesterday, they got similar intelligence. They put their flak jackets and their helmets on for about an hour. There was a high alert. Then they stood down. And right after they stood down, what they told me was a Sagyar (ph) missile, one of those very powerful anti-tank missiles, went into the top floor of the building next door.

So, Wolf, there really is a threat at every turn here. They're trying to protect themselves as best they can. But they know, after what happened in Ayat Al-Shahab earlier today, in which Hezbollah attacked a building in which Israeli forces had set up a position that they are extremely vulnerable and they do not know, at this point, where the threat could come from.

It could come from the front. It could come from behind. It could come from beside them. They just don't know, because they say Hezbollah has infiltrated itself, integrated itself so well into the community here.

BLITZER: John Roberts, be careful over there. Thanks very much for those exclusive reports. And we'll keep checking back with you.

John calls us on the phone when he can -- clearly a very, very dangerous assignment for him.

Meanwhile, just south of John in northern Israel, we're now getting details on what has turned out to be the deadliest day yet for Israel since the fighting with Hezbollah began some 26 days ago.

Today's Hezbollah attack against a village settlement -- actually a kibbutz called Kfar Giladi in northern Israel. Our senior international correspondent, Matthew Chance, is in northern Israel. He's joining us now with more.

We see smoke. We hear explosions behind you, Matthew. Update our viewers on what has happened in northern Israel today.

CHANCE: Well, Those explosions you may have just heard before we came on air at that point were outgoing artillery shells being fired from positions here in northern Israel -- there they are again -- into positions in southern Lebanon, in support of those ground forces with whom we just heard John Roberts reporting with, as they sweep their way across southern Lebanon, striking hard at Hezbollah positions.

But there has been a ferocious barrage, Wolf, coming in the other direction as well, rockets falling all over this part of the northern part of Israel, the Galilee panhandle, as it's called.

I'm going to step away from the camera for a moment to show you. From this position that we're in right now, you can see. That's the valley that leads right into the south of Israel. We're standing here in the north. And you can see the plumes of smoke billowing up throughout that valley, and also, very fierce fires raging as well.

Because what happens is, when those rockets land -- and they have been landing dozen by dozen here over the course of the past several weeks -- they ignite the brush and they set off these enormous fires.

They're also extremely deadly, as we have seen, particularly today, in the deadliest rocket attack that Israel has suffered since this war began, 24 days ago. It happened a short distance from here near a small kibbutz called Kfar Giladi, which has about 900 people, normally, there. Ten people or 11 people, now, I've just been told, according to medical officials, have been confirmed dead as a result of that strike by a Katyusha rocket.

Because of the censorship laws here, I'm not permitted to tell you whether or not they were soldiers. But certainly, it's being widely reported elsewhere and the area did have a long concentration of military personnel in it at the time.

Regardless of that, though, it's the biggest blow Israel has suffered in terms of casualties since this war began, Wolf.

BLITZER: It must be causing a major shockwave through Israel, this latest strike.

And I wonder if there are any indications, now, it will further escalate Israeli military operations?

CHANCE: Well, it's certainly not going to encourage people to step away from further conflict. There's a great sense of frustration here, and a great sense of anger as well, to some extent, that the Israeli military, which is by far the most powerful military force in this region, has not yet been able to put an end to these Hezbollah attacks. It's been firing a great deal of airstrikes. It's been pounding the area with artillery fire. It has between 10 and 12,000 ground troops inside Lebanon, but even still, the Hezbollah are managing to fire their rockets into tanks and cities across northern Israel.

And so I think the prevailing mood in Israel is that they want these military operations to be kept up until this missile threat is at least reduced. Even the Israeli government says it might not ever be able to take out the missile threat altogether by military purposes, because Hezbollah has these very long-range rockets, which it can fire from deep into northern Lebanon and still hit Israeli territory. That will take some kind of political solution and that hasn't been agreed yet, Wolf.

BLITZER: Matthew Chance on the border, the northern part of Israel, The border with Lebanon. Matthew, we'll get back to you. Thank you very much for that.

Coming up, we'll go to Beirut, get a different side of the story from the Lebanese government. Will Lebanon fight a U.N. draft resolution to end the crisis? We'll talk to the country's economic minister, Sami Haddad, when our special "Late Edition: Crisis in the Middle East," continues.

(COMMERCIAL BREAK)

BLITZER: And just after we started -- stop speaking with Matthew Chance in northern Israel, this is what he heard and this is what we captured on videotape, only moments ago, the sirens going off in northern Israel, once again, still daylight hours as you see there. That means Katyusha rockets or other rockets or missiles approaching northern Israel.

The sirens wailing in the northern part of the country. This the deadliest day yet for Israel. We're going to go to Beirut after a short break and get the view from the Lebanese government. Cabinet Minister Sami Haddad standing by to join us live. Our special "Late Edition" will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back. Another deadly day in the Middle East. More death and destruction in Israel. More death and destruction in Lebanon as well. And with the Israeli-Hezbollah war now in its 26th day, what are the next steps for Lebanon's government? Joining us now live from Beirut is the country's economy minister, Sami Haddad. Minister, thanks very much for coming in. Why is your government reacting so coolly if not rejecting this draft U.N. Security Council resolution put forward by France and the United States?

SAMI HADDAD, LEBANESE ECONOMY MINISTER: This draft resolution is disappointing because we need to see an immediate end to this war. So, we are urgently asking for an immediate cease-fire. And more importantly, we are also asking that shortly after the cease-fire is in place, the Israeli army should withdraw from the territory it has reoccupied. And to be followed immediately by a redeployment of the Lebanese army to the south with the help of the U.N. security forces which need to obviously be beefed up. BLITZER: But what assurances would the Israeli government have, the Israeli people have that Hezbollah would stop firing rockets into northern Israel or would stop getting more rockets from Syria?

HADDAD: I mean, the cabinet meeting of yesterday, which includes, obviously our cabinet includes two Hezbollah ministers, and Hezbollah has officially said that it is willing to stop fire. Number two, when you ask about the Hezbollah resupplying, I'm not a military expert, but Israel has blown up almost all the bridges in the country.

We are having a very, very hard time just to get basic supplies around the country. Not only to war-affected areas but almost everywhere. So I really don't see how any resupply can arrive. But, I mean, this is not my area of expertise.

BLITZER: But does the Lebanese army, 60,000, 70,000 troops that report to the Lebanese government, do they have the capability or the desire to go ahead and disarm Hezbollah, which was the mandate, as you know, in U.N. Security Council Resolution 1559 that passed some two years ago?

HADDAD: There is a strong political will, and the Lebanese army is capable to redeploy in the south. When you talk about disarming, we have been hoping to reach this through peaceful means. And this conflict, this war has not helped, obviously. But if the idea is that the Lebanese government will disarm Hezbollah by force, it means that we want to start civil war immediately after we end the war with Israel.

BLITZER: So when Condoleezza Rice says this, I'll play an excerpt of what she said on "Larry King Live" on Thursday, I want to get your reaction. Listen to what she said.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, U.S. SECRETARY OF STATE: Through Resolution 1559, Lebanon has an obligation to disarm militias, and to make sure that all arms are in the hands of the Lebanese government and the Lebanese security forces.

(END VIDEO CLIP)

BLITZER: And to be precise, Minister, the U.N. Security Council Resolution 1559 calls for the disbanding and disarmament of all Lebanese and non-Lebanese militias. What you're suggesting, and correct me if I'm wrong, is that if the Lebanese army tried to do that to Hezbollah, that would cause a civil war?

HADDAD: Well, let me be more accurate. We want to extend our full sovereignty over all Lebanese territory, and we want to have the monopoly over the use of armed forces, i.e., this should belong like every government to the legitimate armed forces of the government, i.e., essentially the Lebanese army.

Now, this army Hezbollah I think can be achieved peacefully if there is no reason for Hezbollah to have arms. And Hezbollah, as you probably know, has been in existence, its armed faction and political faction have been in existence for almost 20 years. And they came about when Israel occupied Lebanon.

Now, if there is no justification and no territory to get back and no prisoners to get back, and if we get these land mine maps that we have been desperately requesting, there is absolutely no need for Hezbollah to have arms. And Hezbollah has officially said that they agree with the principle that Lebanon should have full sovereignty over its territory this and we should have, i.e., the Lebanese army, should have a monopoly on armed forces. Yes, we have not been able to, as you say, disarm Hezbollah, but I am very hopeful that it can be achieved by peaceful means.

BLITZER: When you say these land mine maps, explain what you're referring to because some of our viewers might not be familiar with this specific problem.

HADDAD: Well, the Israeli army occupied Lebanon from 1982 to 2000, occupied southern Lebanon. And they left land mines and these land mines are maiming many Lebanese. And this is a very, more than legitimate and reasonable request to ask Israel to hand these maps to us so that we can remove these mines.

BLITZER: Listen to what the Israeli ambassador, Dan Gillerman at the United Nations, said the other day.

(BEGIN VIDEO CLIP)

DAN GILLERMAN, ISRAEL AMBASSADOR TO THE UNITED NATIONS: We would not agree to a cease-fire which would be just -- which would be a patchwork thing and which could erupt any moment. We have to make sure that Hezbollah is indeed totally incapable.

(END VIDEO CLIP)

BLITZER: You want to respond to that suggestion that he makes, that Israel is going to demand that Hezbollah, in his words, is totally incapable?

HADDAD: We want a permanent cease-fire because, as you can see and as the world can see, who is suffering the brunt of this war? It's Lebanon. It's our civilian population and our economic infrastructure. We have almost a thousand dead. Most of the bridges in the country have been bombed. Factories, roads, I mean, the economy is completely devastated.

And the toll on our civilian population is huge. We have almost 25 percent of our population that has become refugees. I mean, put this on any scale, put it in the scale of the U.S., and you can understand what it means for any government.

So who is suffering? Yes, both sides are suffering. But we are suffering, if you look at the numbers, at least ten times as much as the other side is suffering. So we want a definite end to this war, and we want the Lebanese army, with the help of international force mandated by the U.N. to protect us from the wrath of the strongest war machine in the region, that's raining terror and catastrophe on Lebanon.

BLITZER: We heard some ominous words earlier this week from the U.S. military commander of the Central Command, General John Abizaid, who oversees U.S. military forces in the Middle East. He told the congressional committee this. Listen to what he said, suggesting that is happening now potentially could turn out to get a whole lot worse. Listen.

(BEGIN VIDEO CLIP)

GENERAL JOHN ABIZAID, U.S. CENTRAL COMMAND: Hezbollah fields greater and longer-range weapons than most regional armed forces. If left unchecked, it is possible to imagine chemical, biological or even nuclear weapons being transferred to militias or terrorist organizations by a state actor.

(END VIDEO CLIP)

BLITZER: As a Lebanese cabinet minister, do you see what a lot of U.S. officials see, Hezbollah basically being a proxy of Iran in the Middle East?

HADDAD: Look, there is no doubt that Hezbollah has close ties to Iran. It is not a secret. But you also have to understand that Hezbollah is a political party, and Hezbollah has many members in parliament, and these members of parliament have been elected in a democratic election.

So Hezbollah enjoys grassroots support in many segments of the Lebanese population. And this is due to the long occupation by the Israeli army of the southern part of Lebanon. So, I mean, it is the wish of the Lebanese government, and we hope that we can achieve this through the cease-fire and this U.N. resolution, that we, the Lebanese government, extend our sovereignty over our full territory with the help of the international community through U.N.-mandated forces.

And then if Hezbollah, I mean, is not anymore in the south, then it is a Lebanese-Lebanese issue that we have been dealing with, and we will hopefully bring to a successful conclusion, and Hezbollah can be a political party. It is a political party. And there will be no need and no justification for it to have arms.

BLITZER: Sami Haddad is the economy minister of Lebanon. He's got a huge, huge job ahead of him. Minister, thanks very much for spending a few moments with us here on "Late Edition."

HADDAD: Thank you, Wolf.

BLITZER: And just ahead, what should the Bush administration be doing to try to stop the fighting? We'll talk about that and more with President Bush's national security adviser, Stephen Hadley. He's with the president in Crawford, Texas. Our special "Late Edition: Crisis in the Middle East," continues right after this.

(COMMERCIAL BREAK) BLITZER: For Israel, it's been the deadliest day yet in this 26- day war. At the same time, Israel keeping up its own attacks against Hezbollah targets in Lebanon. CNN's Karl Penhaul is joining us now live from Tyre in south Lebanon. I understand, Karl, there was some major military action on the part of the Israelis, not far away from where you are.

KARL PENHAUL, CNN CORRESPONDENT: That's it, Wolf. In fact, it was for that reason interesting to listen to Matthew Chance and see what the situation there in northern Israel is.

And here, just south of Tyre, we have been seeing, for many hours now, a constant bombardment by Israeli artillery, Israeli warplanes.

Now, I wanted to show you a picture there, if you can see on the ridge line there, it's looking a little dusky, hazy now, but you're going to be able to make out, on the ridge line there, this plume of black smoke that is going up there now, probably strike by an Israeli warplane.

Also in that region, there has been a lot of shelling by Israeli artillery for many hours, in fact. And it seems that what the Israelis have been trying to do is both shell that ridge line, and also a valley below it, to try and make some headway there.

But we've also seen, from that position, barrages of Hezbollah rockets going out. So it could be for that reason.

But all of this comes hot on the heels of that Israeli commando attack in which Israelis did say that they're taking out the commanders (ph) of the long range rocket units here around Tyre.

But certainly, the response from Hezbollah today has been anything but quiet. They have been putting up more rockets throughout the day, Wolf.

BLITZER: We know the Israelis dropped leaflets telling people to get out of Tyre, to get out of, basically, all of South Lebanon.

Have the Lebanese basically followed that advice, or are they stuck there?

PENHAUL: In fact, since the start of this war, Wolf, those leaflet drops have been a regular occurrence.

And, of course, out of Tyre, a lot of people have left. This is normally a city of 90,000 people. Now they estimate that less than 20,000 are left here.

In the outlying villages, a lot of people have come in from Tyre and then and headed north to Beirut. So the area is emptying out. But there certainly is still a number of stragglers there.

The Red Cross, today, were telling me that, close to the border, in some of those towns there, there are a number of elderly people, a number of disabled people who simply can't leave. There are also others who don't have the fuel to power their cars and simply can't afford to leave. Wolf?

BLITZER: Karl Penhaul, reporting for us from Tyre. Karl, thanks very much for that. We'll check back with you. Be careful in South Lebanon.

And with the Israeli-Hezbollah conflict now its 26th day, what is the next step for the U.S. government?

We spoke just a little while ago with President Bush's national security adviser, Stephen Hadley, from Crawford, Texas.

(BEGIN VIDEOTAPE)

BLITZER: Steve Hadley, thanks very much for joining us on "Late Edition." Another very deadly day in Israel and Lebanon.

Realistically, knowing what you know, when do you think the violence, the deaths will stop between Israel and Hezbollah?

STEPHEN HADLEY, NATIONAL SECURITY ADVISER: Wolf, as you know, we are trying to get a Security Council resolution. That Security Council resolution would call for a full cessation of hostilities. That would mean that Hezbollah attacks must stop, and Israel must stop its offensive operations.

That resolution is being worked in New York, as we speak. Our hope is to get it voted some time Monday afternoon, Tuesday morning. Because we want to get that resolution adopted as a first step toward bringing down the violence, moving very quickly to a second resolution, which would involve a multinational force and call for the Lebanese army to move into southern Lebanon, backed by that multinational force.

And at that point, the Israelis could withdraw from southern Lebanon. So that's where we're trying to get. It is a two-step process.

We've used a two-step process so that we can get this first resolution, get the violence down, buy a little time in order to put the multinational force together, and then move into a second resolution, and into what we hope will be a sustainable cease-fire in this conflict.

BLITZER: What kind of timeframe do you think it will take to get the second resolution passed and an international stabilization force into South Lebanon?

HADLEY: We want to move as quickly as we can. As you know, the long pole in the tent of these things is putting together the multinational force.

We would like to move as quickly as we can. Again, after this first resolution, we hoped the violence would go down, but as you know, it always takes time for these things to ramp down.

And in any event, we are going to move very quickly to this second resolution. We hope it's days, not weeks. And we hope that the adoption of the first resolution will allow people to focus on the next step, the second resolution, and the multinational force. We want to move, obviously, as quickly as we can.

BLITZER: The French ambassador to the U.N. suggested, maybe, two, three weeks to get part two done. Is that realistic?

HADLEY: We would like, obviously, to accelerate that. We think that while this first resolution should bring down the violence, and we would hope the Lebanese and Israeli parties would accept that resolution and agree to what it calls for, we would then like nonetheless to move as quickly as we can to the second resolution.

The purpose of that first resolution will be to make it very clear what the international community thinks is the way forward, and will challenge the parties to opt for peace.

And I think we will see, at that point, those parties willing to go into a process at least to a sustainable cease-fire. And it will isolate those parties that may not.

And our concern, based on the statements we've heard, of course, is with Hezbollah. And we look to the Lebanese government to bring Hezbollah along on this resolution.

And quite frankly, we will look to Syria and Iran, two countries that have influence with Hezbollah, to use that influence to get Hezbollah to support the Lebanese government and whatever comes out of the Security Council here in the next day or next couple of days.

BLITZER: Will you speak directly to Syria and Iran, to appeal to them to use their influence to get Hezbollah to stop launching rockets against northern Israel?

HADLEY: Well, in some sense, Wolf, we just did. In the comments we've made publicly, there are a number of countries who we are in touch with who are sending that message. And we are sending that message as well.

BLITZER: Well, why not just go ahead and have a dialogue with the government in Damascus and the government in Tehran, that many of your analysts are suggesting, probably, would be a good idea?

HADLEY: As you know, we have offered a dialogue with the Iranian government as part of the discussions on the nuclear issue.

We would like very much to be able to enter into those negotiations with Iran to try and resolve the nuclear issue. And we have offered to do so if Iran will do what the U.N. Security Council, what the European Union, who has been working this issue with Iran, has called for -- really the entire international community is calling for -- which is for Iran to suspend their uranium enrichment activities.

So we would be delighted to enter into direct discussions with Iran on the nuclear issue. And, obviously, that could pave the way for a broader set of discussions. But the first step is Iran needs to be willing to do what the international community has asked it to do.

BLITZER: And what about Syria?

What about sending back the U.S. ambassador to Damascus to resume a high-level diplomatic dialogue?

HADLEY: We, as you know, Wolf, have had a high-level dialogue with Syria for, really, the entire first term of the administration. That high-level dialogue was interrupted with the killing of Rafik Hariri and evidence that the Syrian government might have been involved.

I have to tell you, the results of that dialogue were not particularly encouraging. We made clear to Syria what the international community was asking it to do, that it had a strategic choice to make.

One path would involve closer relations with the international community; another isolation. And unfortunately, the problem has not been the dialogue or the lack of dialogue or lack of conversation. The problem has been lack of action on the part of Syria.

Syria has made some choices, in our view very bad choices, that have really reduced it to be Iran's handmaiden, and alienated it from its friends in the region and resulted in considerable isolation.

And we would like nothing better than for Syria to make a different strategic choice. That's a message we're sending. That's a message that other countries have sent as well.

BLITZER: What about the whole notion of the Lebanese government's rejection, at least for the time being, of this U.N. Security Council draft that the U.S. and France came up with?

Prime Minister Fouad Siniora said Saturday, "It does not really achieve the objective that they have set for themselves. I don't deny the good intentions, but it really requires that we have to be very frank with them to tell them that this is not really adequate."

And Nabih Berri, the leader of the Shiite Amal party in Lebanon, the speaker of the parliament, said today, "Lebanon, all of Lebanon, rejects any talks or any draft resolution that does not include the seven-point government framework. If Israel has not won the war, but still gets all this, what would have happened had they won?"

In other words, they are saying Israel has to pull out of Lebanon.

HADLEY: Their seven-point plan, which Prime Minister Siniora announced, is very much like the kind of framework, I think, that the international community is developing.

Everybody, in the end of the day, including the Israelis, want Israeli forces to move out of southern Lebanon. But it needs to be done in a way that will result in addressing of the underlying causes to this problem. And the underlying cause is the failure for implementation of U.N. Security Council Resolution 1559, which called for the disarmament of Hezbollah.

And it was really Hezbollah's ability to retain its arms and to act independent of the Lebanese government to make an unprovoked attack on Israel that has caused this crisis.

So if we're going to get out of this crisis in a permanent basis, we need to have a situation where the Israelis can move out of south Lebanon, and Hezbollah will not move back in. And the international force is going to be critical for that.

The Lebanese army needs to do that work, but at this point it is not strong enough to do so, and that's why we believe it needs to move south, supported by the multinational force. We want to go where the Lebanese government wants to go, but we couldn't get there in one step. It would have been our preference, but we could not get there in one step because of the time it will take to put together the multinational force.

So we decided to do it in two steps, a first U.N. Security Council resolution that will call for a cessation of hostilities and get the violence down as we move to get together the international force and to go to the outcome that both Siniora and the Siniora government and, we believe, the Israelis really want. There is no disagreement really on the end state, on the elements of a resolution of this matter. This issue is sequence.

BLITZER: What about...

HADLEY: We would have liked to have done it in one step, too. But we couldn't get there.

BLITZER: What about that tiny little disputed area known as Shebaa Farms, which the Lebanese government says is Lebanon, which the Israelis say they think is really Syria, part of the Golan Heights. Syrian officials now acknowledge, they say it is Lebanon. What is the U.S. government position on Shebaa Farms? Should Israel pull out and return it to Lebanon?

HADLEY: Well, the first step, obviously, is to figure out whose is Shebaa? Is it Lebanon or Syria? And interesting, there was as part of U.N. Security Council Resolution 1680, there was a framework for doing that, which begins with a delineation of the border. Delineation of the border between Lebanon and Syria, including all disputed areas. That's what 1680 called for, and again, one of the reasons we still have this issue on the international agenda is because 1680, U.N. Security Council Resolution 1680 was never implemented.

So, the real way to go forward in a permanent resolution of these issues is for full implementation of the U.N. Security Council resolutions that have already set out the framework for...

BLITZER: But let me just -- we're out of time, but if the Syrian government and the Lebanese government both say this is Lebanon, and the Israelis acknowledge this is not Israel, it's occupied territory, it would be OK, I assume, with the U.S. government, if Israel decided to give Shebaa Farms to Lebanon?

HADLEY: That'll be a decision that the Israeli government obviously has to make, and it is, as you can imagine, it is a decision that is extremely -- would be extremely difficult for them to make under the current circumstances, given the hostilities. That may be something that can be worked out among the parties in the future. But obviously, the precondition for it is really the demarcation of the border, which is what 1680 called for some time ago.

BLITZER: Steven Hadley, the president's national security adviser, joining us from Crawford, Texas, thanks very much.

HADLEY: Thank you, Wolf.

(END VIDEOTAPE)

BLITZER: And up next, we'll get the other face of war. The wife of an Israeli soldier captured by Hezbollah talks about her husband and efforts for his safe return. That's coming up.

(COMMERCIAL BREAK)

BLITZER: Welcome back. The latest Middle East conflict began on July 12th when Hezbollah captured two Israeli soldiers during a raid into northern Israel. Since then, the soldier's families have been making appeals for their release around the world.

Joining us now from our bureau in Chicago is Karnit Goldwasser, the wife of captured Israeli soldier Ehud Goldwasser, and Shlomo Goldwasser. He is the father of Ehud. Welcome to "Late Edition." I'm sorry that we have to meet under these circumstances.

But you know that the Israeli government, the vice premier, Shimon Peres, confirming on "Late Edition" in the last hour that Israeli forces have captured at least one of the Hezbollah fighters they say kidnapped Ehud Goldwasser on July 12th. I wonder if we could get your reaction, Karnit. Let me go to you first.

KARNIT GOLDWASSER, WIFE OF KIDNAPPED ISRAELI SOLDIER: When we heard it, we were very pleased because now perhaps we know something that -- what happened to Udi, because -- I call him Udi. It's his nickname. Because until today we didn't get any news, and maybe now we can get something new from Udi.

BLITZER: Shlomo, you're the father of this kidnapped Israeli soldier. What's your reaction?

SHLOMO GOLDWASSER, FATHER OF KIDNAPPED ISRAELI SOLDIER: I would like to know -- first of all, it's the first time I hear about it from a figure like minister. There were rumors. I would like to know what he says about the kidnapping, if Ehud was in good shape, if he was wounded, where he was last time that he saw him, things like this. I want -- the bottom line, I want a sign of life from him. BLITZER: Have you received any indication that your son is alive?

S. GOLDWASSER: No. No, sir. It's already 25 days since he was kidnapped. And we didn't receive anything.

K. GOLDWASSER: We came here...

BLITZER: Go ahead, Karnit.

K. GOLDWASSER: We came here, Udi's father and my mother, because we are the delegation of the three families, the Regev family, the Shalit family, the soldier that was kidnapped three weeks before Udi and Eldad, and our family, Goldwasser family. And we came here with the help of UJC, United Jewish Communities, that brought us here to bring a sign, something that could help us to know if Udi is OK, Udi and Eldad is OK, if they're injured or not. And we came here, maybe, to bring the sign that they are still alive.

BLITZER: Did you have any opportunity to speak to representatives from the International Committee for the Red Cross to see if they could get access to your husband and your son? Shlomo, let me ask you that question.

S. GOLDWASSER: Yes. We spoke two days ago. We spoke to the Red Cross representative in New York. And she told us that she had nothing of our son. Besides we mentioned the letter that we sent via the representative of the Red Cross in Israel. This is the Red Cross letter to prisoners of war. And we tried to trace where it was stopped, this letter. She couldn't highlight it. And we might meet with the Red Cross...

K. GOLDWASSER: President.

S. GOLDWASSER: ... president, in Israel. He's going to visit there on Wednesday after he visits in Lebanon. Maybe he will know more information about what happened to the letter.

K. GOLDWASSER: With the letter, we sent, also, a Bible. So we don't know exactly what happened with the letter and the Bible.

BLITZER: Shlomo, would you be willing -- and this is a difficult question, I know, for you to answer -- for your government, the government of Israel, to release Lebanese prisoners being held in Israel, in order to win the freedom of your son?

S. GOLDWASSER: Well, I'll answer you. We met with Prime Minister Ehud Olmert on Monday, last week. And Prime Minister Olmert promised us that he will do everything to bring back our sons.

He went more than this. And he mentioned that he realized (ph) to our sons, like as they were his sons. I think that I can't criticize or give advice to a prime minister who is talking to me like this.

BLITZER: Karnit, do you want to answer that question? K. GOLDWASSER: You know, as Shlomo said, the most important thing I heard from the prime minister, and he told us a lot of things, but the most important that he's dealing with is this situation like they were his sons.

So what can we ask him more?

You know, fathers take care of his son like he's a precious thing. This is what he's doing with the three soldiers.

BLITZER: We have been showing our viewers some photographs, some still photos, including from your wedding, Karnit.

If you could say one final word to the captors, those who are holding these three Israeli soldiers, what would you say?

K. GOLDWASSER: I prefer to say to the wife of the captors -- I prefer to ask them, as a wife to a wife, maybe she could help me. Maybe she could tell her husband to help me and to bring a sign, something that Udi and Eldad are OK and they are still alive.

And then, I hope that the peace and the quiet to Israel and to Lebanon will start. And for me, everything will be ended when we are living in the North of Israel, when we will have peace and quiet -- and when I say we, it's Udi and me, the families that are living in the North of Israel and the Israeli population.

BLITZER: We have to, unfortunately, leave it there. Shlomo and Karnit Goldwasser, I know these are difficult, difficult days for both of you. Good luck to both of you. I Appreciate your spending a few moments with us on "Late Edition."

Up next, the results of our Web question of the week. We'll also take a closer look at a summer camp here in the United States that tries to promote peace between Israelis and Arabs. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Remember, the results of that poll, not necessarily scientific.

Welcome back. As a tense and dangerous situation plays out in the Middle East, how are Arab and Israeli children from the region actually viewing the conflict?

CNN's Mary Snow caught up with some of them and got some surprising answers.

(BEGIN VIDEOTAPE)

MARY SNOW, CNN CORRESPONDENT: This tight rope challenge has both nothing and everything to do with the Middle East crisis. Fifteen- year-old Nitsan (ph) is from Israel. Aseel (ph), also 15, is from the West Bank.

Thirty feet above the ground, they're forced to rely on each other to make it across.

UNIDENTIFIED MALE: Aseel (ph), listen for a second. Stand on this for five minutes. And then you will feel comfortable.

SNOW: It is one of a number of trust building exercises at the Seeds of Peace camp in Maine. Many of these Israelis and Arab campers say, until now, they have never known someone from the so-called "other side."

Here they work, play and live together.

UNIDENTIFIED MALE: It's not easy for teenagers to have to deal with the reality and what they hear on the news and having to do dialogue with the so-called enemy.

SNOW: War headlines are posted in Hebrew and Arabic. It's all brought in daily dialogue sessions held with kids like 17-year-old Omer from Israel and 16-year-old Kareem (ph) from the West Bank.

Is it always in the back of your mind that the other side is the enemy, so-called enemy?

UNIDENTIFIED MALE: Of course, from my point of view. I always look at Omer going to the army at 18. And she may go on the field and she may stop me at a checkpoint and humiliate me. I always think of that.

SNOW: Omer has thought about it too.

UNIDENTIFIED MALE: When you're coming to a checkpoint, with a soldier, would you prefer him to be from Seeds of Peace, that is, knowing Palestinians and respects them and will treat you with the respect he has learned during his time in the organization, or do you just want some soldiers to be there?

SNOW: Omer says she'll be proud to serve and is willing to die for her country. Kareem says he won't rule out dying for Palestine.

UNIDENTIFIED MALE: The things that they call terrorists, I call them freedom fighters.

SNOW: Would you ever become a freedom fighter?

UNIDENTIFIED MALE: Well, it depends on what happens. If it's a personal revenge, of course I will become a freedom fighter.

But I believe, right now, the resistance I can give to my country, I can get an education; I can fight by words; I can do a lot of other stuff.

SNOW: How does it make you feel when you hear that?

UNIDENTIFIED MALE: It's not the first time hearing him say I'm willing to go sacrifice myself or willing to kill you. I guess it's, like, the same for them to hear I'm going into the army.

I see freedom fighters as my enemy and he sees soldiers as the devil. So I guess it's, kind of, like the same.

SNOW: They say the fact they can even talk about these things is progress.

They move on with their camp day. At one point, they work together to field calls from campers' families overseas.

There are times when these kids are just kids, united in cheering for the soccer team. But with reality lurking, these teens will be on the front lines of decision-making when they return home.

STEVEN FLANDERS, COO, SEEDS OF PEACE: They come and they sleep with one eye open and one eye shut because they're sleeping with what they otherwise thought was the enemy.

When they go home, they go home with eyes wide open because they have just experienced a whole new opportunity for life.

Mary Snow, CNN, Otisfield, Maine.

(END VIDEOTAPE)

BLITZER: And that's your "Late Edition" for this Sunday, August 6. Please be sure to join me again next Sunday and every Sunday at 11:00 a.m. Eastern for the last word in Sunday talk.

And if you missed any of our show today, by the way, you can now download a video podcast of the entire two hours. Just go to cnn.com/podcast. Click on the link for "Late Edition."

I'm also in "The Situation Room," Monday through Friday, 4:00 to 6:00 p.m. Eastern and then for another hour at &:00 p.m. Eastern. Until tomorrow, thanks very much for watching. I'm Wolf Blitzer in Washington.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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