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CNN LATE EDITION WITH WOLF BLITZER

Interview With Abdul Aziz Al-Hakim; Interview With Shimon Peres

Aired December 10, 2006 - 11:00   ET

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


WOLF BLITZER, CNN ANCHOR: It's 11:00 a.m. here in Washington, 8:00 a.m. in Los Angeles, 4:00 p.m. in London and 7:00 p.m. in Baghdad. Wherever you're watching from around the world, thanks very much for joining us for "Late Edition."
We'll get to my interview with James Baker and Lee Hamilton in a few minutes. First, though, let's check in with CNN's Fredricka Whitfield for a quick look at some other important news making headlines right now.

(NEWSBREAK)

BLITZER: Let's go live to Baghdad where our senior international correspondent, Nic Robertson, has been watching the Iraqi reaction to the Iraq Study Group report and an unexpected visit by the secretary of defense, Donald Rumsfeld.

Nic, what's the latest?

NIC ROBERTSON, CNN ANCHOR: Well, Wolf, very surprising reaction from Iraq's Kurdish president, Jalal Talabani, a staunch ally of the United States, criticizing the Iraq Study Group's report, saying it undermines the sovereignty of Iraq.

He calls leaving so many U.S. military trainers training the Iraqi army undermines its sovereignty. He calls the study group's report unjust, unfair, and dangerous.

(BEGIN VIDEO CLIP)

JALAL TALABANI, IRAQI PRESIDENT: I think that the Baker-Hamilton is not fair, is not just, and it contains some very dangerous articles which undermine the sovereignty of Iraq and the constitution.

(END VIDEO CLIP)

ROBERTSON: And this comes on the heels of the words from another senior Kurdish leader in Iraq, saying that the study group plans to essentially take away from the Kurds control over their oil revenues, from the Kurdish area, putting it more under central government control. He called it unworkable.

The visit here by outgoing defense secretary Donald Rumsfeld was a very wide-ranging visit, highly secret. Military spokesmen here weren't aware of it before he was coming, couldn't tell us about it when he was here.

But he visited the al-Asad air base in the West, a massive Balad air base about 50 miles north of Baghdad, that is a major U.S. medical facility.

He came here to Baghdad -- the mission, it seemed, to thank troops, thank commanding officers for their work. He spent time with the troops, ate with them, talked with the officers here.

BLITZER: Nic Robertson, we'll check back it you in Baghdad. Thanks very much.

The Iraq study group and its blunt criticism of the war and the president's policy set off a political uproar here in Washington this week.

Joining us now, the two co-chairmen. In Houston, James Baker; he was the secretary of state under the first President Bush. He's now honorary chairman of the James Baker Institute for Public Policy at Rice University.

And here in Washington, Lee Hamilton, the former Democratic congressman from Indiana, currently the director of the Woodrow Wilson Institute for Scholars.

Gentlemen, thanks very much for coming in. Let me start with you, Secretary Baker.

Jalal Talabani, the president of Iraq, a man I assume you know quite well -- we've interviewed him many times -- very blunt in rejecting your report, saying it contains very dangerous articles that undermine the sovereignty of Iraq.

You just heard him. What's your reaction?

JAMES BAKER, IRAQ STUDY GROUP CHAIRMAN: Well, I think that's disappointing, if that's indeed what he said.

On the other hand, the only one that was cited in the report, Wolf, was the fact that we call for a sharing of oil proceeds. That's a part of national reconciliation.

And quite frankly, the whole future of Iraq depends upon whether or not the Iraqi government can effect a program of national reconciliation between Kurds, Shia and Sunni.

And one very indispensable element of that national reconciliation program is the sharing of oil proceeds on the basis of population. Everything we saw on our trip to Baghdad, everyone we talked to agreed with that.

BLITZER: Here, Congressman Hamilton, is exactly what Talabani, the president of Iraq, said.

I'll read it, specifically. "I think the Baker-Hamilton report is unfair and unjust. It contains very dangerous articles that undermine the sovereignty of Iraq and its constitution. I consider the report to be a type of insult to the Iraqi people... The report has a mentality that we are a colony where they impose their conditions and neglect our independence."

Those are strong words from the Kurdish president of Iraq.

LEE HAMILTON, IRAQ STUDY GROUP VICE CHAIRMAN: Part of the problem, I'm sure, is that we recommend conditional aid to Iraq, depending on their performance. We want them to meet a number of milestones with regard to national reconciliation, security, and delivering the basic services.

And if they do not meet those milestones, then we recommend a reduction in military or political or economic aid.

Up until this point, we've given a blank check to the Iraqis. And I'm not surprised that the president would like that sort of a deal.

But we believe that the American people want our aid to be conditional. We want that aid to be given only if there is a response from the Iraqi government that shows performance.

I do not believe that the American people want to extend $8 billion a month to Iraq, to a government that is not doing enough to stop killing in Iraq. And we want them to do something about it.

BLITZER: Secretary Baker, I suspect, also, because I've spoken with other Kurdish leaders, that they don't like your notion of having an international conference in which all of the regional neighbors of Iraq would be involved because, as you well know, and as Congressman Hamilton well knows and our viewers know, the Kurds have no great love for Turkey and they certainly don't want Turkey playing a role in the future of northern Iraq, which in effect, has become an autonomous Kurdistan.

BAKER: Well, they don't want Turkey playing a role in terms of moving in there and preventing them from enjoying the status that they currently enjoy, thanks, of course, totally to the actions of the first President Bush in 1991, as an autonomous region up there in the North.

But they certainly don't want the Turks coming in and clamping down on them. And that's one of the main purposes of our suggestion, not that there be a conference but that there be meetings of all of the countries neighboring Iraq, meetings sponsored by the United States and the government of Iraq, and meetings, by the way, that Prime Minister Maliki has supported.

So I'm really rather confused by that critique.

BLITZER: Congressman Hamilton, right after the president met with Abdul Aziz al-Hakim, arguably the most powerful Shiite politician in Iraq right now, and he made it clear he disagrees strongly with several of your key recommendations, including this notion of bringing in these regional players, of the neighbors. He's a Shiite leader. He wants to have, in the southern seven or nine provinces of Iraq, the same kind of autonomous area that the Kurds have in the North.

And he also doesn't want Sunni Arabs from Saudi Arabia, from Egypt, from Jordan, getting involved in what he sees as the future of a Shiite-led country in Iraq.

So you have the Kurdish leader, the Shiite leader both rejecting your recommendations or at least key aspects of your recommendations.

HAMILTON: Well, we want a unified Iraq. It doesn't surprise me that Hakim wants to exclude the Sunnis. You've got three groups, three large groups there -- Kurds, Sunnis and Shias -- and there's a real movement ahead, picking up, to shut out the Sunnis.

That's a prescription for ongoing war. It's a prescription for permanent war. The Sunnis will not accept a Shia-led government by itself if they're shut out of the deal and don't have a fair deal.

Now, moreover, all of our friends in the region are Sunni. And they're not going to let a government form in Iraq which is only Shia or only Kurd or a combination of the two.

So we have a prescription, under this approach, of kind of a permanent war.

(CROSSTALK)

BLITZER: Secretary Baker, go ahead.

BAKER: Wolf, let me answer that also. It could be a prescription for a wider regional war.

And, as Lee said, it's understandable, I think, that the Kurds, who would like their own independent state, might have some problem with some of the things we suggest in there, which is to support the president's vision, this current administration's vision, of an Iraq that can sustain itself, defend itself and govern itself, and that the Shia in the south might want their own state.

But that is a prescription for not just a broad-based civil war but a wider regional war.

HAMILTON: Yes.

BLITZER: Secretary Baker, the Kurds not excited about your report, to put it mildly. The Shia apparently not very happy as well, if you listen to Abdul Aziz al-Hakim, that interview coming up here on "Late Edition."

Listen to what a Sunni parliamentarian said this week, reacting to your report: "These recommendations might be a solution for the American crisis in Iraq but not a solution for the Iraqi crisis. The withdrawal of the American forces at a time when the Iraqi forces are still poorly trained is bad. There should first be a broad purging of the security elements, because they were established on a sectarian basis with militias. There is no assurance that they will enforce justice." So, at least Dhafir al-Ani not very happy about your recommendations either.

BAKER: Well, it would be a good idea for him to read the report, because we're not talking about a withdrawal before the training and equipping mission is proceeding, before additional Iraqi brigades are deployed. And any withdrawal would be subject, of course, to changed conditions on the ground. He ought to read the report before he makes those kind of suggestions.

BLITZER: I want Lee Hamilton to weigh in as well, because, you know, you're getting negative reaction from all the key groups in Iraq.

HAMILTON: Well, it doesn't surprise me that the Sunni leader wants us to stay there, because right now the American forces are protecting the Sunnis.

We've got to move these people toward the concept of a unified nation. President Bush is trying to do that. Our whole -- the premise of all of our policy in recent years has been a unified Iraq.

What you're seeing with all of these statements you're reading to us this morning is individual leaders talking about their own ethnic groups and looking at the situation from that perspective. If that is the perspective that these leaders are going to adopt, then there will be no unified Iraq, and there will be no United States presence there in a pretty short period of time.

We want a unified Iraq. We're prepared to put a lot of resources into it to get that. But these kinds of statements make it very difficult for us to do it.

BLITZER: You can want it all you want, obviously, but if they don't want it, it's going to be hard to impose a solution.

HAMILTON: That's right. But all of these leaders talked to us and said, "We want a unified Iraq."

BAKER: Yes.

HAMILTON: And our recommendations move in that direction.

BLITZER: All right.

BAKER: Wolf, you're absolutely right. If they don't want it, we're not going to get it. And we're not going to get it simply militarily. Unless they get together and actually receive national reconciliation and all of these statements go in the direction, as Lee just pointed out, of their own sect interest or ethnic group interest, unless they get national reconciliation, we are not going to solve the problems of Iraq.

BLITZER: All right, gentlemen, stand by, because we have a lot more to talk about.

We're going to take a quick break. Just ahead, we'll continue our conversation with James Baker and Lee Hamilton.

Then we'll go to Baghdad. We'll get an exclusive Sunday interview with arguably the most powerful Shiite politician in Iraq, Abdul Aziz al-Hakim. He was at the White House this week, met with the president. We'll tell you what he has to say.

And coming up later today for our North American viewers, an hour of excellent analysis of all aspects of the conflict in Iraq. "This Week in War," with our John Roberts, coming up at 1:00 p.m. Eastern, right after "Late Edition."

We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to "Late Edition." I'm Wolf Blitzer in Washington. We're continuing our conversation with the two co- chairmen of the Iraq Study Group: the former Secretary of State James Baker and former Democratic Congressman Lee Hamilton of Indiana.

Secretary Baker, here's a question our viewers want to know: Is it worth it right now, given what you, yourself, point out in your report, $2 billion a week it's costing U.S. taxpayers, already nearly 3,000 Americans killed? If the U.S. stays for another year, let's say, and another 1,000 American troops are killed, 5,000 injured, $100 billion spent, is it going to really make a difference when all is said and done?

BAKER: Well, Wolf, you can't put any value on just one American life. There's no way to value that. And yet, we have significant national interest in what's going on in Iraq and in what's going on in the region.

We're there now. We simply cannot pick up and leave. Then you would have a broader-based civil conflict, you'd have a region-wide war. And America's interests all over that part of the world would be severely, severely damaged. So we really have no choice.

We say that you change in the primary mission of our forces, an enhanced and more active and vigorous diplomatic offensive. And conditionality, by way of our aid to the Iraqi government, can make a difference, it can help us succeed.

BLITZER: Because, as you know, Congressman Hamilton, a lot of your Democratic colleagues, former colleagues, in the Congress, they think it's over right now, and it's just imperative to get these American troops out of Iraq as quickly as possible, including John Murtha, who's been saying that at least for a year now.

What do you say to the American public who think that, you know what, it's simply not worth it to continue this policy, to continue to endanger these Americans?

HAMILTON: I think Jim's on the right track there when he talks about our large interests in the region. There's no area of the world that caused us more heartburn than the Middle East over a period of years. And we are trying to propose here not just a solution for Iraq but a comprehensive, diplomatic strategy that would begin to deal with all of the problems in that region.

Look, Iraq is where -- it's an oil-rich nation. It is where the Sunnis and Shias, kind of, come together. It is a country that's, kind of, at the crossroads, in that sense.

And instability in Iraq is going to spill over all over the place in that region. And you could really have a very, very chaotic situation which would be very detrimental to American interests.

BLITZER: It's interesting, Secretary Baker, that a lot of the criticism here in the United States, domestically, of your report not coming from Democrats but from the conservative element, especially among your fellow Republicans.

The New York Post had an editorial, "The Counsel of Cowards" it was entitled. "The study group offers 79 recommendations, adding up to a cowardly exit from Iraq and the abandonment of tens of thousands of Iraqis who took America's promises at face value. Also to be tossed overboard are regional allies who believed America has the will to finish the fight it began." And then it had a front page, you saw, "Surrender Monkeys." You and Lee Hamilton depicted on the front page of the New York Post.

What is your reaction to that?

BAKER: Well, my reaction is, if you believe that editorial, you believe in the tooth fairy. That's simply not true.

The fact of the matter is that we have a comprehensive strategy here that we have proposed that involves military, political, diplomatic, and a change in the nature of our relationship and our approach to the Iraqi government.

There is no provision in here for a blanket withdrawal. There is a provision -- there are calls in here for changing the primary mission of our forces. I don't think the American people want their sons and daughters to continue to be sent to Iraq to referee sectarian violence between different sects in Iraq.

We still think we can achieve the president's goal of an Iraq that can defend itself, support itself and sustain itself, govern itself, if we make the changes that we have suggested.

We said before we started this, Wolf, that we were going to be criticized from all sides, and, indeed, that's probably true.

But the truth of the matter is, America has a huge problem here. The administration has a big problem here. It's not going to be solved by those kinds of comments and editorials. And it's not going to be solved, frankly, by resort to politics as usual. And that's a little bit of what that is.

The American people don't want this to be treated as just a political matter. They want it to be treated with the seriousness that it demands.

BLITZER: Are you encouraged or discouraged, Congressman Hamilton -- because we only have a few seconds left -- by the initial response from President Bush?

Because you met with him; you heard his public statements. He's not excited about unconditional talks with Iran and Syria. He's not excited about a timetable for a precipitous, in his words, U.S. withdrawal.

HAMILTON: We don't want a precipitous withdrawal either.

Yes, we're encouraged. He said that this report, he points out it's bipartisan, that it may be the basis for common ground. He's going to be getting a lot of recommendations in the next few days. This is the only recommendation he's going to get that's bipartisan, that can bring us together as a country, that can unify our efforts as a country.

We're not going to be have unanimous support for any proposal in Iraq. This is a way forward with an effective proposal that takes into account the political environment in Washington, keenly split, the political environment in Iraq, also split; permits us and the Iraqis to join together as a way to conclude this war while protecting the American interest.

I think the president has to look at this very, very hard before he goes off on another choice.

BLITZER: Well, he said he's actually read the whole report. I have, as well, and I recommend it to our viewers here in the United States and around the world.

Lee Hamilton, thanks very much for coming in.

Secretary Baker, always a pleasure having you on "Late Edition," as well.

BAKER: Thank you, Wolf.

BLITZER: And good luck to everyone involved in this effort.

Coming up in just a few minutes, will any policy changes end the violence and the death in Iraq? We'll speak with one of Baghdad's most powerful politicians, the Shiite leader, Abdul Aziz al-Hakim, in an exclusive Sunday interview.

And we're also following all of today's other important news. The Iraqi president, Jalal Talabani, rejecting the Iraq Study Group report. In Lebanon, Hezbollah and other anti-government forces holding massive protests. And another typhoon hits the Philippines.

We'll bring you all of the latest developments. Stay right here. We'll be right back.

(COMMERCIAL BREAK) (NEWSBREAK)

(COMMERCIAL BREAK)

BLITZER: Welcome back to "Late Edition." I'm Wolf Blitzer in Washington.

U.S. officials say Abdul Aziz al-Hakim, the leader of the largest Shiite political party in Iraq, has enormous influence in the shape of a future Iraq. He met this past week with President Bush and Vice President Cheney here in Washington.

Following those talks, I spoke with Abdul Aziz al-Hakim, also here in Washington.

(BEGIN VIDEOTAPE)

BLITZER: Your Eminence, thanks very much for coming in. Welcome to Washington. Welcome to "Late Edition."

ABDUL AZIZ AL-HAKIM, UNITED IRAQI ALLIANCE LEADER (THROUGH TRANSLATOR): I would like also to express my thanks to you, to allow me -- to give me the opportunity to talk to the Washington people.

BLITZER: Thank you.

You come at a momentous time to Washington. I know you met with the president of the United States and the vice president of the United States and other top U.S. officials. You also come when the Iraq Study Group has issued its report, making recommendations to the president.

Here is one recommendation which represents a direct pressure point on your government, the government of Prime Minister Nouri al- Maliki. I'll read it to you.

"If the Iraqi government does not make substantial progress toward the achievement of milestones on national reconciliation, security and governance, the United States should reduce political, military or economic support for the Iraqi government."

Is this a wise U.S. strategy?

AL-HAKIM (THROUGH TRANSLATOR): Regardless of what came in this report, but actually there are a lot of positive things in it. And one of them is it's a pro-the reconciliation, national reconciliation.

The reconciliation did not come because of the pressure of the United States or any other forces, outsiders, but it was just coming from the Iraqi government itself. And it was given to the parliament, and the parliament voted on it.

BLITZER: It looks like the situation in Iraq right now is falling apart. The situation seems to be deteriorating, even as we speak. AL-HAKIM (THROUGH TRANSLATOR): It's not out of control, because this government is controlling everything. And this government is taking care of security. And there are, of course, violence in Baghdad, in some other governorates. But in some areas, it's quiet. There are a lot of efforts to stop the violence in many directions.

BLITZER: Here's what the report says: "The Supreme Council for the Islamic Revolution in Iraq," your organization, "seeks the creation of an autonomous Shia region comprising nine provinces in the south. Hakim has consistently protected and advanced his party's position. SCIRI has close ties with Iran."

Here's the question: Are you aligned with Iran right now? And do you want to create a Shiite theocracy in Iraq aligned with Iran?

AL-HAKIM (THROUGH TRANSLATOR): This is not up to us. The constitution says that -- it just declared the federation, and it was voted on, and it's not up to our council. It was by the Iraqi people, and it was voted up on this federation.

And the coalition that we are part of agreed upon having those nine governorates to be part of the federation. And, of course, it will not take place unless the whole Iraqi people vote on it and accept it.

BLITZER: Are you aligned with the Iranian Revolutionary Guard, as this Iraq Study Group alleges?

AL-HAKIM (THROUGH TRANSLATOR): This is also an inaccurate statement, because we have a strong relationship with Iran, as well as we have a strong relationship with the United States. We have good relationships with many countries.

But when it comes to the whole national decision, we make our national decision on our own, without the interference of outsiders.

BLITZER: Do you want an international conference, including all of Iraq's neighbors -- Iran, Syria, Jordan, Saudi Arabia, Egypt -- to be involved in trying to ease the crisis in Iraq right now? In other words, do you want Arab Sunnis outside of Iraq playing a role in determining your country's future?

AL-HAKIM (THROUGH TRANSLATOR): It's well-known that the Iraqi problem is an internal and external one. And whatever effort outsiders do and support us with that, we welcome any effort and any initiative. But when it comes to the decision, of course, and it's conditional that they don't just take the decision-making from us.

There were many meetings, regional, the countries. They had many meetings about Iraq, and this is not the first time. So they did that before.

BLITZER: When do you want United States troops out of Iraq? How quickly would you like to see U.S. forces leave? AL-HAKIM (THROUGH TRANSLATOR): Of course we would like to see the American forces withdraw, allied forces withdraw as soon as possible. But this depends on the opinion of the military and security experts and the political experts in this, to decide what is the right step for that and what is the timetable for that.

BLITZER: Do you think the presence of American forces, 140,000, 145,000 U.S. troops in Iraq are helping your country or hurting your country?

AL-HAKIM (THROUGH TRANSLATOR): Of course the number is not a factor, but what is important is for the Iraqi people and the Iraqi government to take care of their own business.

BLITZER: So you would like the U.S. troops to leave?

AL-HAKIM (THROUGH TRANSLATOR): We would like, of course, to see them go safe back to their country. And we will welcome them as visitors to our country. And this is the will of every nation. They don't like to see foreign troops on their soil.

BLITZER: Do you believe there is a civil war in your country right now between Iraqi Sunni versus Iraqi Shia?

AL-HAKIM (THROUGH TRANSLATOR): I cannot say that this is a civil war. Of course, there are some sectarian violence in some areas, but not in all Iraq. But that's what we can see, not civilian war, but some sectarian violence.

Of course, the Sunni leadership -- the Sunni religious leadership, and the Shia leadership also, they don't agree with that, and they don't like to see any violence.

BLITZER: Here is what the Iraq Study Group recommended this week: "As part of a solution to the crisis in Iraq," it said, "there must also be a renewed commitment by the United States to a comprehensive Arab-Israeli peace on all fronts: Lebanon, Syria, and President Bush's June 2002 commitment to a two-state solution for Israel and Palestine."

Do you support a two-state solution, Israel living alongside Palestine?

AL-HAKIM (THROUGH TRANSLATOR): Of course, this report represents the people who put it, and it's up to them. I cannot judge all the documents, and I cannot judge whatever came into this report. And it depends on the people who put it.

BLITZER: But do you believe, Your Eminence, that Israel has a right to exist?

AL-HAKIM (THROUGH TRANSLATOR): Currently I'm not thinking about anything except Iraq.

BLITZER: I ask the question because of your close relationship with the president of Iran, Mahmoud Ahmadinejad, who said a year ago, "Israel must be wiped off the map of the world, and God willing, with the force of God behind it, we shall soon experience a world without the United States and Zionists."

Do you agree with him or disagree with him?

AL-HAKIM (THROUGH TRANSLATOR): There are many present (ph) politicians who've said many things and talked about many things. But currently we are concentrating on Iraq and the Iraqi issue.

BLITZER: So you don't want to say whether or not you believe in a two-state solution, Israel and Palestine?

Because here in the United States, you know, Israel is a very close ally of the United States. And there is concern that, because of the Iranian position to try to destroy Israel and your alignment with Iran, there is concern about you.

That's why I ask these questions, to give you an opportunity to reassure the American public that you don't stand with Mahmoud Ahmadinejad on that sensitive issue.

AL-HAKIM (THROUGH TRANSLATOR): We respect the legitimacy of all other countries and their politics and everything they do. But we now are concentrating about the Iraqi issues. And we will not go beyond the Iraqi issues.

BLITZER: So you don't want to answer that?

I don't want to press the issue much more, but I clearly hear you saying you don't want to answer that question.

AL-HAKIM (THROUGH TRANSLATOR): Everyone who understands, it's his right to understand whatever. I explained what I have to explain.

BLITZER: The other sensitive issue that people want to know your position is on, because this has come up often, Mahmoud Ahmadinejad's rejection that there was a Holocaust.

Do you believe that there was a Holocaust in which 6 million Jews were killed?

AL-HAKIM (THROUGH TRANSLATOR): I am currently thinking about the Iraqi issues.

BLITZER: Would you like to be the leader of Iraq one day?

AL-HAKIM (THROUGH TRANSLATOR): My ambition is to stay as a servant for the Iraqi people.

BLITZER: Thank you very much for giving me some time. Welcome to Washington.

AL-HAKIM (THROUGH TRANSLATOR): I would like also to express my gratitude for giving me the opportunity to talk to your viewers.

(END VIDEOTAPE) BLITZER: And coming up, we'll get a very, very different perspective. Is the situation in Iraq linked to the Israeli- Palestinian conflict?

We'll ask the Israeli vice premier, Shimon Peres.

And later, Representatives Jane Harman and Chris Shays on how changes in Iraq policy will play on Capitol Hill. "Late Edition" will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to "Late Edition." I'm Wolf Blitzer in Washington. In the Iraq Study Group report, the Arab-Israeli conflict is seen as inextricably linked to the situation in Iraq.

I put this issue to the former Israeli prime minister, the current vice premier, Shimon Peres, when we spoke here earlier.

(BEGIN VIDEOTAPE)

BLITZER: Prime Minister Peres, thanks very much for joining us. Welcome to Washington.

SHIMON PERES, ISRAELI VICE PREMIER: Thank you.

BLITZER: A lot of commotion as a result of the Iraq Study Group's recommendation, among other things, a recommendation that directly involves Israel.

I'll read it to you. "There must be a renewed and sustained commitment by the United States to a comprehensive Arab-Israeli peace on all fronts: Lebanon and Syria, and President Bush's June 2002 commitment to a two-state solution for Israel and Palestine."

In other words, the study group recommends a much more assertive U.S. involvement. And that, in turn, could help the U.S. in Iraq. Your reaction?

PERES: The problem is not to state commitment. All of us are for it. The problem is, there is a two-party situation among the Palestinians. They are split.

The problem is not so much how to build a Palestinian state on the side of the state of Israel but how to unite the Palestinians.

BLITZER: But the general notion that James Baker and Lee Hamilton and their colleagues have that, in order to ease the crisis, potentially a catastrophe, in Iraq, the United States has to get much more intimately involved on the Israeli-Palestinian front.

PERES: I wish it would help. The problem is that there are two different wars. One political, which Abu Mazen, or Abbas, as they call him, is having...

BLITZER: Mahmoud Abbas, the president of the Palestinian Authority?

PERES: Right. And the other is religious: Hamas. Hamas is not looking for a territorial solution. They want to get rid of Israel. They don't look for victory. They look for domination of the Iranians, the Hamas and the Hezbollah, over the Middle East, religiously.

So you will talk to them and they won't answer. Today the prime minister, on behalf of Hamas, said that, even if we should reach an agreement, we will not recognize Israel.

BLITZER: We're going to get to that shortly.

Another element in the Iraq Study Group's report that came out this past week included a call for the Bush administration to engage in a direct dialogue with Iran and Syria, without preconditions.

And to entice the Syrians, it said this: "In the context of a full and secure peace agreement, the Israelis should return the Golan Heights, with a U.S. security guarantee for Israel that could include an international force on the border, including U.S. troops, if requested by both parties."

Is this a good idea?

PERES: This is a second step. The first step to recommend is that Syria will disconnect relations with Hezbollah. I don't see the first step. So obviously, how can you have the second step?

Basically, we are all for embracing peace. We would like to negotiate some time, somehow. But the Syrians have a double policy. If the Palestinians are split, the Syrians are double...

BLITZER: But hypothetically, if the Syrians were willing to accept these conditions, sever their ties with Hezbollah, other so- called terrorist groups that the U.S. regard as terrorist groups, and negotiate a settlement, a full peace agreement with Israel, would Israel be ready to give up the Golan Heights?

PERES: Israel has shown, in the past, it was ready. Actually, we have had a full agreement with the Syrians. At the last minute, when President Clinton flew to Geneva, to meet Assad the father, and they were sure it was going through, and at the last minute, he said no. All the story with the Syrians is spent (ph) with "no" and "no" and "no."

BLITZER: But was Israel willing to give up all of the Golan Heights?

PERES: At that time, more or less, yes. The difference was minor. It was bridgeable. That was done by...

BLITZER: Do you think the current Israeli government -- you're the vice premier -- would be willing to do the same if there were a change of heart in Damascus?

PERES: I don't see the change of heart. The present government says we are seeking a full-fledged peace with everybody.

But the Syrians are connected with Hezbollah. The Syrians are hosting the headquarters of Hamas. The Syrians don't want to meet with us.

So, I mean, as a wish, I'm all for it. The problem is, is it more than a wishful thinking? I wish it would be a reality.

BLITZER: On Iran, the study group recommends, also, that the U.S. open up a direct dialogue with Iran and not link it to Iran stopping its enrichment of uranium program.

Your prime minister, Ehud Olmert, said the other day -- he said this. He said, "It is absolutely intolerable for Israel to accept the threat of a nuclear Iran. I prefer not to discuss the Israeli options. Israel has many options."

But your minister of strategic affairs, Avigdor Lieberman, said this on Thursday.

BLITZER: He said, "We must also be prepared to deal alone with this problem. The dialogue with Iran will be a 100-percent failure, just like it was with North Korea.

PERES: Well, I'm not so sure, you know. I think Iran is a problem for the rest of the world. I wouldn't recommend that Israel will monopolize it and make it an Iranian-Israeli conflict. It will be a mistake. Israel has enough troubles of her own.

And I cannot see how the world can tolerate an Iranian bomb and, as a consequence, a Middle Eastern nuclear situation. It will go (inaudible) to terroristic organizations. Even the Russians have to think what will happen if a nuclear bomb will arrive, for example, to Chechnya.

So why should we monopolize it? I think it's a danger.

Now, to talk with Iran, we have had relations with Iran, different Iran. The problem is...

BLITZER: You had relations when the shah was in power.

PERES: The shah, the first king in history that liberalized Israel and was for immigration to Israel was Cyrus, the emperor of Iran, of Persia. He was the best friend Israel had.

BLITZER: That was a long time ago.

PERES: Well, we have time maybe to take a shorter time. The shah wasn't a long time ago. The problem is not Iran, not the Iranian people. The problem is the ayatollahs. If you can talk with ayatollahs, God bless you.

BLITZER: Let's talk a little bit about this book by former President Jimmy Carter entitled "Palestine Peace, Not Apartheid." You worked with Jimmy Carter for a long time. I don't know if you've had a chance to read the book, but it's caused quite a bit of controversy here in the United States, I assume in Israel as well.

PERES: I'm not surprised by it. Jimmy Carter did a brilliant job in Camp David.

BLITZER: Back in 1978.

PERES: Back in 1978. And without him, I'm not sure if Camp David would take place. Shall never forget it. I think this was the most brilliant achievement of his presidency. He really did a great job.

Now, he knows Israel for apartheid -- can a Jewish person be for apartheid? A people that, throughout history, suffered from discrimination, from apartheid of any sort. We shall be for apartheid? Doesn't he know it?

BLITZER: He says that he's not saying that there's apartheid in Israel, but, in effect, in the Israeli-occupied territories, the West Bank. Listen precisely to what he told me, the other day, here on CNN. Listen to this.

(BEGIN VIDEO CLIP)

JIMMY CARTER, FORMER PRESIDENT OF THE UNITED STATES: In the West Bank, in the occupied territories, a horrible example of apartheid is being perpetrated against the Palestinians who live there. Israel has penetrated and occupied, confiscated and colonized major portions of the territory belonging to the Palestinians.

(END VIDEO CLIP)

BLITZER: Strong words from the former president of the United States.

PERES: Yes, but I'm even more surprised listening to it. He knows perfectly well the Palestinians are divided in two parts. One parts wants to make this -- we promise to help and support the Palestinian state, to give practically all of the land back. What sort of an apartheid?

The other side, there is Hamas. Hamas is against anybody and everybody who is not religious in their sense, who is modern. I mean, without them, the Palestinians would have already a state a long time ago. They postponed it. How can you accuse us?

You know, even take Hamas. We gave back Gaza completely to the Palestinians. We took out all the soldiers from there. We dismantled settlements by force. We paid $2 billion compensation. We handed over the whole land.

Who doesn't enable them to be independent and be alone? I can't understand Mr. Carter. President Carter is a man of fact. He should know it. How can he call it apartheid?

BLITZER: We have to leave it right there. Shimon Peres, the vice prime minister of Israel. Prime Minister, thanks very much for coming in.

PERES: Thank you.

BLITZER: And just ahead, we'll get a closer look at what changes we can really expect in Iraq from two Pulitzer Prize-winning reporters: Bob Woodward of The Washington Post and John Burns of the New York Times.

For our North American viewers, coming up at 1:00 p.m. Eastern, "This Week at War," with John Roberts. That follows "Late Edition."

We'll be right back.

(COMMERCIAL BREAK)

BLITZER: This is "Late Edition," the last word in Sunday talk.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: If we were to fail, that failed policy will come to hurt generations of Americans in the future.

(END VIDEO CLIP)

BLITZER: President Bush sticking to his guns on the war, as the Iraq Study Group turns up the heat. Will Mr. Bush accept new proposals?

And can he regain confidence on Capitol Hill?

We'll talk to two key House members, Democrat Jane Harman and Republican Christopher Shays.

(BEGIN VIDEO CLIP)

BAKER: We do not recommend a "stay the course" solution. In our opinion, that approach is no longer viable.

(END VIDEO CLIP)

And the fall-out of the Iraq report in Washington and Baghdad; insight from two Pulitzer prize-winning reporters, Bob Woodward of The Washington Post and John Burns of the New York Times.

ANNOUNCER: Live from CNN in Washington, this is "Late Edition" with Wolf Blitzer.

BLITZER: Welcome back. We'll get to my interview with Congresswoman Jane Harman and Congressman Chris Shays in just a moment. First, though, let's go to Fredricka Whitfield at the CNN Center for a quick check of what's in the news right now.

(NEWSBREAK) BLITZER: Let's go live to Beirut right now, with hundreds of thousands of protesters once again on the streets, demanding changes in the government.

Brent Sadler, our Beirut bureau chief, is right in the center of the action. What's the latest there, Brent?

BRENT SADLER, CNN BEIRUT BUREAU CHIEF: Well, first of all, Wolf, you can hear, very loud, the noise coming out of downtown Beirut. For the past four hours, the city has been paralyzed, once again, by a massive show of strength, supporting the Hezbollah-led opposition that's trying to bring down the U.S.-backed prime minister, Fouad Siniora, who heads a very wobbly government.

However, that government is pledging to hold firm against these continuing protests, accusing the Hezbollah-led alliance of trying to mount a coup, using the momentum of the street to topple the Siniora government.

For the first time this day, there have been counter-protests in the North, in the important Sunni Muslim town of Tripoli. Large numbers there, smaller than here in downtown Beirut but no less politically significant, Wolf.

Now, where is all this leading?

Many people here in Lebanon fear that there is a dangerous sectarian divide separating these rival camps, and that while there has just been one protester killed during the past week, in an isolated incident, given the levels of security with the masses of armed troops, armed security police, and coils of barbed wire around the prime ministry complex of Fouad Siniora, where at least half a dozen of his cabinet ministers are holed up, very grave concerns that this deepening deadlock bodes ill for the near future of Lebanon. Back to you, Wolf.

BLITZER: Brent, we'll watch it closely with you. Thank you very much for that report.

The Iraq study group talked up its bipartisanship, its single voice and unanimous findings. But will the president implement their 79 recommendations?

And how will the U.S. Congress respond?

Joining us now, two veterans of the Iraq debate and of the political wars here in Washington: Democratic Congresswoman Jane Harman of California -- she's been a long-serving member of the House Intelligence Committee -- and Republican Congressman Chris Shays of Connecticut. He's been to Iraq 15 times, more than any other U.S. lawmaker.

Congressman, thanks very much for coming in.

Welcome in, and I'll start with you, Jane Harman. Is it time, right now, for the U.S. to cut its losses and simply pull out of Iraq? REP. JANE HARMAN (D), CALIFORNIA: It's time to change the strategy. And the ISG report lays out a good baseline to change that strategy.

I'm from California, Wolf. And I think we had an earthquake on November 7 when the Republicans were removed from power over the Iraq and corruption issues.

There were two aftershocks. The first one was Rumsfeld leaving. And the second is this report. The fact that it's being shot at from the right and the left shows me that it's pretty sound.

Not every detail is sound. It leaves out energy independence. And I think it fails to notice that the reality on the ground is a partitioning of the country, which I think is OK. But it is time to change our strategy. "Stay the course" is dead.

BLITZER: But you're willing to keep U.S. troops in Iraq, combat forces, for at least another year, whatever the cost, whatever the consequences?

HARMAN: No. I insist that we change the strategy. The report says we should embed troops and start moving our troops out. It doesn't set a firm timetable, except to say, in '08, they should be substantially out. Maybe that timetable should be shorter.

I don't know that I have enough information to say what it is. But I do know that the military mission to have large amounts of troops in Iraq to secure the country has failed and we have to change that strategy now.

Your Republican colleague, Senator Gordon Smith of Oregon, was very emotional the other day on the Senate floor, in coming out -- and he's a good conservative Republican -- and saying, this is not working; it's time to cut losses. Listen to what he said.

(BEGIN VIDEO CLIP)

SEN. GORDON SMITH (R-OR): I, for one, am at the end of my rope when it comes to supporting a policy that has our soldiers patrolling the same streets, in the same way, being blown up by the same bombs, day after day.

(END VIDEO CLIP)

BLITZER: Congressman Shays, he also goes on to say, This may be, may be criminal, what the U.S. government is doing right now.

REP. CHRISTOPHER SHAYS (R), CONNECTICUT: I think he means "criminal" in this sense. It's just outrageous to have our soldiers play Russian roulette: Which car drives by them that has the bomb? Which barrel has the shell?

And so, clearly, staying the course is wrong. And the study committee is right in identifying it. And they're very sensible. They're saying transition Iraqi and American positions, particularly in patrolling the streets; reconciliation. The Iraqis are starting to do that. They've done it on de-Baathification and now with oil. And the last one is you need a diplomatic effort in the neighborhood.

All of that makes tremendous sense. And the key point, I think, is where they say it has to be conditional. In other words, we stay as long as the Iraqis do their part. But the moment they stop doing their part, we're out of there.

BLITZER: Because we're hearing from President Jalal Talabani today, in my interview with Abdul Aziz al-Hakim, the Shiite leader, Sunni politicians -- they don't like this Iraq study report.

They think the U.S. is trying to impose a deal on the Iraqis themselves. And they're saying this interferes in their own sovereignty.

SHAYS: Well, I mean, they can make that point, and it's fair, and they should. And I like the idea that they want to be an independent nation.

But our support is conditional as well. They have a right to take their position. We have a right to take ours. Then they have to decide if they still want us. If they want us to leave, we'll leave.

BLITZER: The secretary, former secretary of state James Baker, the co-chairman of the Iraq Study Group, had this advice this week about -- for the president, in terms of accepting the recommendations, the 79 recommendations of the panel. Listen to this.

(BEGIN VIDEO CLIP)

BAKER: I hope we don't treat this like a fruit salad and say, I like this, but I don't like that; I like this, but I don't like that.

This is a comprehensive strategy designed to deal with this problem we're facing in Iraq but also designed to deal with other problems that we face in the region.

(END VIDEO CLIP)

BLITZER: Accept it all or, basically, don't accept it? What do you think of that advice?

HARMAN: Well, you can take the raspberries out of the fruit salad. I think Chris is right. We agree that the framework is right in this report; Three parts; change the military strategy; performance-based support for Iraq, built around reconciliation and enhanced diplomacy. That's right.

But some pieces may be wrong. The linkage to Israel, the way it is spelled out, may be wrong. But my point is that we have to pay attention to what's happening on the ground. And what's happening on the ground is partition. And that's what the Iraqis seem to be wanting.

Now that they're going to share the oil equitably -- or that's what they said yesterday -- I think that's a very healthy sign that this may be their choice for how to move. The report doesn't support that, and I think that's a flaw in the report.

BLITZER: Because, as you know -- you've been to Iraq a lot, Congressman Shays -- for all practical purposes, at least many observers say, there already is partition. Kurdistan in the North -- Kurdistan -- if you fly into Kurdistan and you have a passport, they stamp it with a visa that says "Kurdistan." It doesn't say Iraq. And if you want to go to the southern part of Iraq from Kurdistan, you need to get a visa to go into Iraq.

SHAYS: That part's accurate. And Kurdistan is the one peaceful area. So if I were the Kurds, I'd like to say peaceful.

I don't think we should divide up Iraq. And actually, that's going to be the Iraqi decision.

My judgment is this, that basically, it's not clean enough. All the urban areas have a mixed population. And I think that the study group pointed that out. So I would not be trying to encourage a division.

BLITZER: But even as we speak, those mixed areas are being unmixed, if you will. There's a lot of -- if you call it ethnic cleansing or whatever -- a lot of Sunnis are leaving, a million refugees so far. Many of those mixed Shia-Sunni neighborhoods are no longer mixed.

SHAYS: And that's because they haven't been dealing with reconciliation. They haven't been confronting that issue. So that's really an indication of a failure because of our staying-the-course attitude.

This agreement now on oil says that the central government will make sure it's divided based on population, not based on region.

HARMAN: I'm talking about semi-independent regions. This is what Joe Biden's talking about, what the former chairman...

BLITZER: You like that idea?

HARMAN: Yes, I do. I'm increasingly...

BLITZER: The Iraq Study Group rejected that notion.

HARMAN: I know they did, because there is some intermixing in certain areas. But...

BLITZER: President Bush rejects it as well.

HARMAN: I know he does. But Yugoslavia is the right model here. We don't need...

BLITZER: To break it up? Balkanization?

HARMAN: We don't need independent countries, I don't believe. I think we can have a central country that provides for equitable sharing of the oil and the common defense.

But basically, if these regions separate, I think there will be more stability on the ground. That seems to be what the choice of the Iraqis is, and that should be what controls.

BLITZER: Is that your assessment, as well?

SHAYS: My assessment is, if we do see real regionization, it's an indication that some of our policies failed. I don't think we should head in that direction. But if that's the outcome, that's the outcome.

BLITZER: Here are a couple of the recommendations of the Iraq Study Group.

"If the Iraqi government does not make substantial progress toward the achievement of milestones on national reconciliation, security and governance, the United States should reduce its political, military or economic support for the Iraqi government."

Another one: "By the first quarter of 2008, subject to unexpected developments in the security situation on the ground, all U.S. combat brigades not necessary for force protection could be out of Iraq."

Are those two recommendations you accept?

HARMAN: I think they're the right recommendations. And I think we could be out sooner. I think embedding troops and the way it is laid out by Bill Perry, who was the architect of this, former secretary of defense who's a member of the study group, is the right way to go.

And our military presence besides that, except to support that effort, should diminish starting right now. We should start moving out.

And by the way, Wolf, you showed just before we came on that clip of what's going on in Lebanon. And Afghanistan isn't going well. There are parts of this world that need more of our attention.

Sandra Day O'Connor, one of the members, said to me, "Jane, take this and move on." And I agree with that.

We have to contain Iraq. These are bipartisan recommendations. We can improve them, but we have to focus now on other parts of the world that are even more dangerous.

BLITZER: Correct me if I'm wrong, but before you were re- elected, Congressman, you wanted more troops deployed to Iraq, along the lines of what Senator John McCain and others are suggesting?

SHAYS: No. I suggested we have a timeline. And that's what was controversial. A timeline to motivate the Iraqis...

BLITZER: But should there be a surge of troops in the short period?

SHAYS: No, no, I don't think there should be. I think the timeline we need is to say, "If you don't do these things in reconciliation, we're going to leave."

BLITZER: What timeline do you want?

SHAYS: Well, I want to see -- first off, I want to see the speed-up that we're now doing on transitioning Iraqi forces. We're cutting that time in half, so that Iraqis patrol the streets, not Americans.

I want to see timelines for them to have reconciliation on oil, on de-Baathification, on how we divide up the...

BLITZER: What is the timeline? When do you want troops out by?

SHAYS: Well, I...

BLITZER: How much time should the U.S. give Iraq?

SHAYS: Well, first off, very little time.

BLITZER: How much?

SHAYS: Really, months to begin, and a year or so before we start drawing our troops out.

BLITZER: All right. We're going to pick up this conversation, Congressman. Stand by.

A lot more to talk about. We'll continue with Jane Harman, Chris Shays, what's happening in Congress, the war, the world, lots more, coming up.

Also still to come, two Pulitzer Prize-winning journalists: Bob Woodward of The Washington Post, John Burns of the New York Times. They're standing by for their view of what's happening in Iraq and over at the White House.

And for our North American viewers, coming up at 1:00 p.m. Eastern, a comprehensive look at all the events in Iraq and analysis from experts and correspondents. "This Week at War," with John Roberts, right after "Late Edition."

We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to "Late Edition." I'm Wolf Blitzer in Washington.

We're continuing our conversation with two experienced hands in the U.S. Congress: Democrat Jane Harman and Republican Chris Shays.

Here is one of the conclusions, Chris Shays, of this Iraq Study Group report.

"Our government still does not understand very well either the insurgency in Iraq or the role of the militias. The Defense Department and the intelligence community have not invested sufficient people and resources to understand the political and military threat to American men and women in the armed forces."

When I was there last year with General Abizaid, it was clear to me that the United States did not have a good understanding of the insurgency, of the sectarian violence. It seems like it's not much better now.

SHAYS: I totally agree with it. And I'm a former Peace Corps volunteer. We also don't understand the culture. You embarrass an Iraqi male in front of his wife, you've made an enemy for life.

So, clearly, that's part of what we need to do. We need to understand the enemy better. We need to understand our friends in the Middle East better.

BLITZER: You served on the Intelligence Committee, until now. Is this accurate?

HARMAN: Yes, it's accurate, but it's more complicated. They talk about the rotation system. We have new people coming every year because it's such a hard place to serve. We have a lot of people there. But they're junior.

And you're right, we didn't understand, we still don't understand, the size and scope of the insurgency. We obviously blew it on the WMD problem. Our intelligence community is doing better.

But let's remember, we have everyone in Iraq, and we don't have enough eyes and ears on the ground in Iran, in North Korea -- very hard targets -- in Lebanon and in the other trouble spots of the world. That's another reason why we have to get the Iraq problem behind us.

And let me just add one more thing. Congress has served notice that now there will be careful review of the Iraq budgets. No more budgeting by supplemental. All of this will go through the regular budgeting process. That means the administration will have to come to Congress with specific plans for moving forward, and those will be reviewed.

BLITZER: Can you in good conscience support $2 billion a week -- a week -- to continue this war in Iraq?

SHAYS: In good conscience, I can, as long as it results in good results.

BLITZER: Because you could imagine, with $100 billion over the next year, what you with could do domestically with that kind of money.

SHAYS: Let me just make the point: We cannot fail in Iraq, because if we fail in Iraq, we fail in Iran, we fail in Lebanon, we fail elsewhere. So we need to just be spending this money much better.

BLITZER: Because you know, a lot of Democrats, Jane Harman, would much rather have you spend, over the next year, $100 billion for health care or Social Security or other health issues, related issues, than spend the money in Iraq.

HARMAN: Well, that's true. But also, we are failing in Iraq. A little reality test here. We are failing in Iraq. And this is good money after bad, and good lives after good lives.

We have to change the strategy. Failing in Iraq, which we are doing, not correcting the course, is not going to help us anywhere else in the world and not going to help our...

BLITZER: So you think the U.S. can still win?

HARMAN: No, I think the U.S. cannot win on this course. "Stay the course" has to change.

By the way, I think the president is soon going to lose his command authority. It's going to move to the Pentagon, under Bob Gates, the newly confirmed secretary of defense, who is there to make new decisions, working with Congress.

BLITZER: But the president's still the commander in chief.

HARMAN: Surely, he is. But the vice president no longer is the center of the action in the administration, and I'm saying the president may not be either. It doesn't mean he won't be in place. It doesn't mean he can't countermand decisions. But he's going to have pushback from a Pentagon that's going to have a very different view of this.

BLITZER: You support unconditional talks between the United States and Syria and Iran?

SHAYS: Yes.

BLITZER: That's in the recommendations.

SHAYS: Yes.

BLITZER: Even though they both, according to the State Department, support terrorism?

SHAYS: To get to the ultimate result you have to go into areas you don't want to to get to that final result. To not have dialogue with either country I think is a mistake.

BLITZER: You don't think the U.S. should demand that they first stop supporting terrorist organizations? SHAYS: I think there should be dialogue behind the scenes to get to a point where we can have public dialogue.

BLITZER: You're comfortable with that?

HARMAN: I think we have to be very tough with both countries. And they are supporting terror. They're different from each other; they have united in common cause against us, which is highly unfortunate. But Syria is Sunni, and Iran is Shia, and they have a lot of differences. And we should be, as Baker says, trying to flip Syria. I think that's a good idea.

BLITZER: How angry are you at the speaker-to-be, Nancy Pelosi, for deciding you should not be the chair of the House Intelligence Committee, even though you were in line to become the chair?

HARMAN: I am not angry. It was her choice. Obviously, I had hoped to stay. I thought I'd earned it and that it had been promised. But I think Silvestre Reyes is an excellent choice. He has my support. I'm going to stay in the game on these issues. Here I am, Wolf.

But I also think that her majority is created by moderates and conservatives who won in Republican seats who talk tough and smart on security issues. And I will help them stay in Congress and help keep our majority in 2008.

BLITZER: You're in the minority now, but was this a good idea, to make sure that Jane Harman is not the chairman of the House Intelligence Committee?

SHAYS: She was doing a great job. And the key is that she wasn't being partisan. We went into Iraq on a bipartisan basis -- two-thirds of the House, three-quarters of the Senate. And we're going to get out of Iraq successfully only if we do it on a bipartisan basis.

BLITZER: How do you feel about William Jefferson, the congressman in Louisiana, being re-elected yesterday, even though the suggestions, the allegations there was $100,000 of bribe money in his refrigerator?

HARMAN: Well, we each get elected by our own voters, and I'm not going to comment on the choice that they made. His case, I assume, is going to proceed, if it is. The Justice Department is looking at it, and they will do what they do. And if he is found guilty, so be it.

But at the moment, he has not been charged, I don't believe. And he won an election fair and square, so far as I know.

BLITZER: Was the Mark Foley -- he's a Democrat, William Jefferson. Mark Foley was a Republican congressman. The House Ethics Committee came out with a report saying that members and staff were negligent, not protecting underage congressional pages, but no one is going to be charged, no one is going to be accused of any flat-out wrongdoing. SHAYS: Well, it just points out how difficult it is for people to police their own body. And, frankly, I think there should have been more than just a description of what happened, but some people should have been held accountable.

BLITZER: Chris Shays, Jane Harman, let me congratulate both of you on being re-elected. Chris Shays narrowly being re-elected, but I'm sure you're happy to be here in Washington.

Thanks very much to both of you for coming in.

HARMAN: Thank you, Wolf.

BLITZER: And still to come, insight from two journalists who know the Iraq story very well: Bob Woodward of The Washington Post and John Burns, the Baghdad bureau chief for the New York Times. They're standing by, live.

And we're following all of the rest of the day's top news: a startling new claim surrounding the death of Princess Diana; the latest on another typhoon that hit the Philippines; and a deadly fire at a hospital in Russia.

All that coming up on "Late Edition." We'll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: I thought we would succeed quicker than we did. And I am disappointed by the pace of success.

(END VIDEO CLIP)

BLITZER: President Bush, sparring with reporters this week about the war and his reaction to the Iraq Study Group.

Welcome back to "Late Edition." I'm Wolf Blitzer in Washington.

With me now, two reporters who followed the war from the very beginning. Joining us here in Washington, Bob Woodward of The Washington Post. His most recent best-seller is entitled "State of Denial: Bush at War, Part III."

And joining us from Iraq, Baghdad bureau chief for the New York Times, John Burns. Both of our reporters, Pulitzer Prize winners.

Guys, thanks very much for coming in.

And John, let me start with you. Let me read one of the recommendations of the Iraq Study Group: "By the first quarter of 2008, subject to unexpected developments in the security situation on the ground, all U.S. combat brigades not necessary for force protection could be out of Iraq."

There are some qualifiers there, but is that at all realistic? JOHN BURNS, NEW YORK TIMES: Frankly, I don't think it is. I've not met many people here, Iraqi or American, who think it is. And let's look, first of all, at the qualifier, "subject to unexpected developments on the ground."

One thing that's been sure here, from the very beginning, is that there are unexpected developments on the ground.

The war is a great deal worse than now it was at the beginning of 2006, and there's very little reason to believe it's going to be any better at the end of 2007 or the beginning of 2008. It may be a great deal worse.

And what we've seen of the Iraqi armed forces to date, although there have been units that have fought bravely alongside American units, it has to be said it's very difficult to see how, even stiffened by an increase in 10,000 or 15,000 American advisers, the so-called military transition teams, that army could sustain itself and protect the government here within 15 months.

After all, it's been now, what, 3 1/2 years since the United States embarked on trying to build an army here. They had to start again after the first year. And they have an army, an Iraqi army which has about a 50 percent readiness rate. That's to say, at any one time, only about 50 percent of the units are ready to deploy.

Fifty percent of the 10 divisions -- it's in the Baker-Hamilton report -- are not deployable outside of the regions in which the recruits joined up.

It does not look like a realistic objective. From here, it looks much more like a proposal, like many others in the report, that was designed to bind up wounds in Washington, D.C. than to bind up wounds here in Iraq.

BLITZER: That's what a lot of people are now concluding.

Bob Woodward, a lot of people are also suggesting, and this is implied in what John just said, that it's going to get worse before it gets even worse in Iraq.

In other words, the violence we're seeing today may be just the beginning, as bad as it is right now.

Here's what the president said on Thursday at his news conference with Tony Blair.

(BEGIN VIDEO CLIP)

BUSH: I understand there's sectarian violence. I also understand that we're hunting down Al Qaida on a regular basis and we're bringing them to justice. I understand how hard our troops are working.

I have made it abundantly clear how tough it is. I also believe we're going to succeed. (END VIDEO CLIP)

BLITZER: All right. I'll paraphrase from the title of your book. Is the president still in a state of denial?

BOB WOODWARD, WASHINGTON POST: Well, what's interesting -- all the fireworks about the Iraq Study Group, which is earnest, sincere effort, it's a year or two behind the curve.

As John Burns was saying, on the ground, and I've reported this; others have reported that the study group says, oh, it is a grave and deteriorating situation...

BLITZER: "Dire" was one of the words.

WOODWARD: Yes. But that's been known. And George Bush knows that and has known that for two years. His own chief of staff, Andy Card, two years ago, recommended that Rumsfeld be replaced because of some of the problems identified in this report.

So the question is: What's going to move Bush, who's the commander in chief, who's going to make this decision?

(CROSSTALK)

BLITZER: Is it too little, too late, these recommendations of the Iraq Study Group?

Should these recommendations have been made a year or two ago?

WOODWARD: Sure, obviously. And there should have been a realization -- and this is one of the points of my book -- that there is a truth here on the ground that has not been absorbed in the strategy and the tactics.

And so we are in a situation where, as somebody told me, and I think John Burns would verify this, Iraq is like a Mad Max movie -- the level of violence -- we can't even measure it, as this Iraq Study Group points out.

BLITZER: And they're under-reporting it, apparently, the U.S. government, as well, the level of violence.

John, I read all your columns, all your articles in the New York Times. Let me refer to something you wrote on November 12th: "It is something ordinary Iraqis say with growing intensity, even as they agree on little else. Let there be a strongman, they say, not a relentless killer like Saddam Hussein but somebody who will take the hammer to the insurgents and the death squads and the kidnappers and the criminal gangs."

I've heard this from others outside of Iraq, including some prominent Arab leaders in the region, who say what Iraq really needs right now is a strongman; forget about democracy. Elaborate on what you were writing. BURNS: Well, it's an irony -- perhaps you could even say a tragedy -- of the American enterprise in Iraq that those two elections which brought, ultimately, something like 12 million of the 27 million Iraqis to the polls and which gave everybody so much hope that there was going to be a turn for the better has actually only worsened things here by bringing to power -- and I'm not only talking about the government, the Shiite religious parties, but basically, sectarian interests.

And it's very hard to discern, anywhere in the political class here, a strongman. The one thing, as I wrote in that piece, that all Iraqis agree on is that the Democratic experiment, though it has brought them freedoms that they yearned for, for so long, has done absolutely nothing to stem the tide of the war. And there is a very wide agreement that they could dispense with much of the trappings of democracy if only they could get somebody -- who, it's not very clear; perhaps Ayad Allawi, the first prime minister, the first of three Iraqi prime ministers we've seen since June 2004 -- and give him plenipotentiary powers.

But that's about as unrealistic as anything that you're going to find, frankly, in the Baker-Hamilton report, insofar as it would be likely to bring an end to this conflict at this stage.

BLITZER: It seems like that violence is escalating.

And I want to pick up that point you just made, Bob Woodward, on the intensity of the violence. Here's from the Iraq Study Group Report: "On one day in July 2006, there were 93 attacks or significant acts of violence reported. Yet a careful review of the reports for that single day brought to light 1,100 acts of violence. Good policy is difficult to make when information is systematically collected in a way that minimizes its discrepancy with policy goals."

You wrote a whole book about this, that there was wishful thinking, a state of denial.

WOODWARD: Yes. And those secret reports that I have in the book and report on go to the president. He knows this.

And so, you know, we're in a situation, really, where there has got to be some strategic realignment. This study group says that there are no new ideas. I'm not sure. I mean, John Burns, kind of, suggested one. It's not something you can adopt as a policy. A strongman...

BLITZER: But for this administration to say, you know what, forget about democracy; let's put a Tito...

(LAUGHTER)

... or someone who's powerful, who can unite the Shia and the Kurds and the Sunnis with an iron fist, that's not exactly in line with what the president has been saying.

WOODWARD: No. It would be a contradiction. But if the reality on the ground gives us that and it's somebody that we can deal with, maybe that's where we're going.

Also, the factor that disturbs me in all of this is there's no focus on the troops. The troops are the chessmen and women on the board who get moved around for policy or somebody's political cover and so forth.

And too few people are thinking about them.

And the X factor in all of this is Bob Gates. Now he's going to be secretary of defense. As he said, he's not going to be a bump on a log, that he's going to come in and he's going to look at this situation. He's a former CIA director, a realist. And he's going to say, "What the hell have we got ourselves into?"

And something dramatic is going to have to be done. You can't move around the edges on this. This idea that the Iraq Study Group has put forward of, "Well, let's just embed more U.S. forces in the Iraqi units; maybe let's quadruple it" -- I mean, John Burns can tell you, reporters who've been with those units, that's going to do absolutely nothing. And to do it effectively would take years.

BLITZER: All right, guys. Stand by, because we're going to continue this conversation.

A lot more to come up with right after a short break. Bob Woodward and John Burns with more on their special insights from here in Washington and Baghdad.

Stay with "Late Edition." We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to "Late Edition." I'm Wolf Blitzer in Washington.

We're just getting this in from the Associated Press and Reuters. Military hospital in Chile, in Santiago, says now that the former dictator, Augusto Pinochet, has died. We'll stay on top of this story, bring you the reaction, the fallout. The Chilean dictator, Augusto Pinochet, dead, according to wire service reports.

From Washington to Baghdad, the buzz this week over the Iraq Study Group, its downbeat assessment of the war, and fresh questions of how President Bush will respond. Still with us, Bob Woodward here in Washington, John Burns in Baghdad.

John, the reaction from Iraqi leaders, including the president, Jalal Talabani, himself a Kurd, today, very negative to this Iraq Study Group recommendations. I spoke with Abdul Aziz al-Hakim, arguably the most influential Shiite political leader in Iraq right now. Sunnis not very happy with it.

Give us your sense of what, if anything, this Iraq Study Group is going to accomplish inside Iraq.

BURNS: Well, my first impression, when the report came down and we began talking to Iraqi leaders about it, was that it didn't seem to have done anything to stir their sense of urgency.

Their reactions all went, as far as we could tell, to their sectarian interests. The Kurds are worried about oil. The Shiites are worried about the constitutional review that the Baker-Hamilton group wants. They're worried about the disbanding and disarming of their militias and so forth.

And I think that many of them were drawn immediately to that qualifier you already cited on the troop withdrawal, American troop withdrawal, barring unexpected developments on the ground. And I think they saw that as the kind of get-out which may well allow them to continue squabbling amongst themselves for quite a long time.

BLITZER: Bob, I want to pick up on something that you spoke about, the new, incoming defense secretary, Robert Gates, to succeed Donald Rumsfeld, who made a surprise visit to Baghdad in Iraq this weekend.

In your book, "State of Denial," you write this: "Some of the senior civilians Rumsfeld appointed were astonished and alarmed at how hard he was now squeezing the Pentagon controls. He micromanaged daily Pentagon life and rode roughshod over people. Rumsfeld's micromanaging was almost comic."

All right. What's going to be the impact now of a new defense secretary with clearly different perspectives coming in?

WOODWARD: Well, he was not there for the war, and so he's going to make a fresh assessment of it. And they have to come up with something -- I used the word "dramatic" or "different," not incremental. Incremental doesn't work anymore.

For instance, I've heard the idea of literally issuing the Iraqi government an ultimatum and saying, "You have 120 days, and then we are moving all our troops out of the violent areas and the cities to the border, to various enclaves, getting our troops out of the line of fire. And in that 120 days, we want to see what you're going to do."

And then, you know, we know in our business that deadlines matter. And sometimes you have to live with deadlines. And sometimes it's very, very painful. And people say, "Oh, no, it can't be done."

But the ball has to move here. Not only politically is there this agitation, but the troops -- what about the troops? How do they feel about this? And they're not happy.

BLITZER: John, how would the Iraqis react to that kind of ultimatum?

BURNS: I don't think that they think they're going to get that kind of ultimatum. I mean, they will have read those first 50 pages of the Baker- Hamilton report as closely as you and I and everybody else did. And they will notice, amongst other things, that Baker-Hamilton raised the moral question. That's just to say, if you will -- it's my term, not theirs -- having broken this society by toppling Saddam Hussein, tyrannical as he was, the assumption of moral responsibility that the United States has to somehow see Iraq through.

Then there are the much wider political questions about the consequences for the United States of a meltdown in the region and of a war in Iraq, a civil war, which I think everybody here thinks would be catastrophic beyond present imagining.

One of my Iraqi friends said to me, "OK, the United Nations says 3,700 Iraqis died in October, civilians." He said, "There will be that many in my district alone in one night" -- he's a Sunni in Baghdad -- "if American troops are withdrawn."

So I think the Iraqi leaders think that that point is not likely to come.

BLITZER: Do you want to react to that?

WOODWARD: Well, yes. I'm not suggesting that the troops leave Iraq. In fact, it's quite possible they will send a handful or even more in. There has to be some strategic realignment.

Our troops are in the crossfire. You know, John talks to them, I get e-mails, I hear from people. And they say they go out and they're waiting to be attacked, and that this is a very passive role they have. They don't like it.

You need some change. That's all. And he's right, you can't pull out instantly, or perhaps you can't set a timetable. But you need something that people will say, "Oh, this is a change, and this has a chance of working." It may not work.

BLITZER: We've got to leave it there, unfortunately.

Bob Woodward's new book, "State of Denial," a best-seller. Thanks very much, Bob, for coming in.

John Burns of the New York Times, thanks very much to you. Stay safe over there.

We'll take a quick break. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: An update for you who are following the story: The former Chilean dictator, Augusto Pinochet, dead at the age of 91, this coming in from a military hospital in Santiago.

Pinochet, perhaps the most controversial and notorious of the old Latin American military dictators. Augusto Pinochet, dead at 91. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: I just want to repeat the news we've been reporting. The former Chilean dictator, Augusto Pinochet, dead, CNN has now confirmed, at the age of 91, at a military hospital in Santiago. Augusto Pinochet suffered a heart attack last week. And now, in case you missed it, let's check some of the highlights from the other Sunday morning talk shows here in the United States.

On ABC, the British prime minister, Tony Blair, worried about creating any timetable for withdrawal from Iraq.

(BEGIN VIDEO CLIP)

TONY BLAIR, BRITISH PRIME MINISTER: I think we've got to plan to succeed. And I think that, if we start saying to the people that we're fighting in Iraq that we're ready to get out, irrespective of the success of the mission, I think that would be very serious.

(END VIDEO CLIP)

BLITZER: On Fox, Republican Senator Sam Brownback supported a change in Iraq policy.

(BEGIN VIDEO CLIP)

SEN. SAM BROWNBACK (R-KS): The country's been pretty patient on Iraq. But now it's time to move things forward.

It's time to get things in the security environment handed over to the Iraqis. It's time to get the regional political atmosphere such that we can engage people in the region instead of them poking at us all the time inside of Iraq, us going to them and really trying to engage.

I think it is really time for us to engage in new strategy.

(END VIDEO CLIP)

BLITZER: On CBS, Democratic Senator Carl Levin emphasized what he thought was the Iraq Study Group Report's bottom line.

(BEGIN VIDEO CLIP)

SEN. CARL LEVIN (D-MI): The key element to this report, to me, is that they say that there is no military solution in Iraq; there is only a political solution in Iraq, and that the Iraqis have got to come together politically.

The Iraqi prime minister acknowledged that the reason that the violence is continuing is because the Iraqis have not reached a political settlement. We've got to put pressure on the Iraqis to do exactly that.

(END VIDEO CLIP)

BLITZER: Finally, on NBC, The Washington Post's Pentagon reporter, Tom Ricks, the author of the important book, "Fiasco," gave a prediction on how much longer he thinks U.S. troops will be in Iraq.

(BEGIN VIDEO CLIP) TOM RICKS, WASHINGTON POST PENTAGON REPORTER: I think we'll be in Iraq, probably, for 10 to 15 years, with American troops much reduced in their numbers. That's, kind of, the best-case scenario.

(END VIDEO CLIP)

BLITZER: Highlights from the other Sunday morning talk shows here on "Late Edition," the last word in Sunday talk.

And that's your "Late Edition" for this Sunday, December 10. Please be sure to join us again next Sunday and every Sunday for two hours, starting at 11:00 a.m. Eastern.

"Late Edition," the last word in Sunday talk. And remember, I'm also in "The Situation Room" Monday through Friday from 4:00 to 6:00 p.m. Eastern, and then for another hour at 7:00 p.m. Eastern. Until tomorrow, thanks very much for watching. I'm Wolf Blitzer in Washington.

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