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North Korea Frees Elderly U.S. War Veteran; Ice Storm Slams Dallas Area; President Obama at the Saban Forum

Aired December 07, 2013 - 13:00   ET

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

FREDRICKA WHITFIELD, CNN ANCHOR: We have much more ahead in the CNN NEWSROOM and it all starts right now.

Hello, again. I'm Fredricka Whitfield. And here are the top stories that we're following in the CNN NEWSROOM.

Ice, sleet, and snow. A cold snap hits much of the U.S., knocking out power for hundreds of thousands of people. And plunging central parts of the country into bone-chilling cold.

We're going live to the heart of the storm next.

And home at last after six weeks locked up in North Korea, an elderly U.S. war veteran suddenly free. He is now back home. And we just heard from him last hour.

Plus, after ineffective chemotherapy and a failed bone marrow transplant, this 15-year-old leukemia patient thought he would die. But then an experimental treatment changed everything. Details coming up.

Merrill Newman back on U.S. soil, accused of alleged crimes in his time fighting in the Korean War. The 85-year-old tourist was captured in October in North Korea and detained by authorities there. Now after six weeks, Newman is a free man. He arrived at the San Francisco Airport just moments ago on a United Airlines flight from Beijing.

So why the sudden release that North Korean officials are calling a deportation?

North Korea state media say that it's because in large part this video where Newman appeared to have apologized for his alleged crimes.

Joining me now, CNN correspondent Dan Simon who is in front of Merrill Newman's condominium complex there in Palo Alto.

So, Dan, he hasn't quite made it from the airport to his condo, I presume as of yet, and he didn't answer any questions last hour. Just made a simple statement of being grateful to be back home.

DAN SIMON, CNN CORRESPONDENT: He looks to be in terrific condition, Fredricka. You know, we haven't seen him yet. As you said we're in front of this retirement complex. We don't know if he's headed here or if he's going to receive some kind of medical evaluation, but the bottom line is he is back home, he is safe, and this is what he had to say just a short time ago.

(BEGIN VIDEO CLIP)

MERRILL NEWMAN, RELEASED BY NORTH KOREA: Good morning, I am delighted to be home. I want to thank the Swedish embassy in Pyongyang and the American embassy in Beijing for all their help. It's been a great, great homecoming and I'm tired but ready to be with my family now.

And thank you all for the support we got. And very much appreciate it.

(END VIDEO CLIP)

SIMON: And, Fredricka, just to put this in context, this is an 85- year-old who had a heart condition. He had been held captive since the end of October. You can just imagine how worried his family must have been for him. The bottom line is he is looking good. We'll be curious to hear how his condition went or his captivity went, how he was treated. Of course those questions are going to come later. As you said, Fredricka, he didn't take any questions.

WHITFIELD: Right. And is there a feeling that we will know kind of the impetus of his release?

SIMON: That's a great question. You know, this is a man who was an intelligence officer during the Korean War. Obviously he had a desire to go back to North Korea and perhaps visit with some of the people that he knew during his wartime. It's apparent that he said the wrong thing to someone and he was taken into custody and actually accused of war crimes.

No one knew what was going to happen. Then we saw him give this apology and again, it was just sort of a waiting game. And then last night suddenly the North Korean government without explanation just decided to release him. The news division of the Korean government said he was released because he obviously offered this sincere apology and they said that they released him for, quote-unquote, "humanitarian purposes" -- Fred.

WHITFIELD: All right. Dan Simon, thanks so much, in Palo Alto.

The family of a Christian missionary Kenneth Bae who has been held in a North Korean prison for over a year issued this statement about Mr. Newman's release. It read in part that the Bae family is, quote, "pleased to hear that Mr. Newman was released from North Korea. We have faith in our government to bring Kenneth home." End quote.

All right. Let's talk weather in a very bad way. A major storm is on the march from the Gulf Coast to the Great Lakes. It's already hit several states in the form of an ice storm. The Dallas-Fort Worth area is among the hardest-hit.

The weather knocked out power for hundreds of thousands of people. Much of the state has now been plunged into bone-chilling cold. At least one death has been attributed to the weather conditions. A tow truck spun off an icy bridge, killing the driver. As the storm swept into Arkansas, trees and power lines were down. The governor has declared a state of emergency. The weather is now moving up to the northeast. A winter storm warning has already been issued for central Ohio.

Well, as you can tell, this storm is not over yet. Something tells me it's just beginning to pick up steam.

Alexandra Steele is in the Severe Weather Center. What should others expect?

ALEXANDRA STEELE, AMS METEOROLOGIST: Hi, Fred, good morning. Well, you know, those pictures aren't really what it is going to look like with this new storm.

Now what we saw with the ice from Dallas to Memphis, they had ice and the temperature stayed incredibly cold. This is going to be a different scenario. So I want to show you the timing of it and who will see what and when.

Here is the forecast radar. This story is a someday ice and some snow story. So here's tomorrow morning at 8:00 a.m., and you can see the pink kind of coming out of nowhere. Area of low pressure develops in the southeast, and this is what happens. Of course the white snow.

The pink is the ice, definitely the most problematic with this, the freezing rain and sleet with this storm. So Sunday morning this is where it gets into, Kentucky, West Virginia and Virginia. And then by the time we head to about 4:00 in the afternoon, gets into Washington as well. So it looks as though Washington could see maybe one to three inches of snow. But in addition, about a quarter of an inch of ice.

So that will be the problem. And then into Sunday night, you can see it moves overnight into New York. New York doesn't look like any snow deal perhaps, but then it all moves farther north than that. And with this, temperatures on Monday quickly rebound into the 40s. So whatever ice does fall, we're going to watch that quickly melt.

And here's where the ice scenario is, Fred. In Richmond to Roanoke, that's where we could see the potential for a half an inch of ice.

WHITFIELD: So folks need to start stocking up the pantries right now because something tells me you do not want to get on the road trying to, you know, venture out to get any notches of any sorts so be prepared.

STEELE: Yes, but temperatures really are going to warm up, Fred.

WHITFIELD: Yes. I get that part.

(CROSSTALK)

STEELE: So Monday will be OK to be on the road.

WHITFIELD: That is good.

STEELE: Yes.

WHITFIELD: All right. Alexandra, appreciate that.

STEELE: Sure. Yes.

WHITFIELD: All right. So right now it is the big ice and they're waiting for the big thaw now in the big D, Dallas. Hard hit.

CNN's Ed Lavandera is live for us right there.

So, Ed, there was the Dallas marathon. Did it happen?

ED LAVANDERA, CNN CORRESPONDENT: Right.

WHITFIELD: Or is it going to happen?

LAVANDERA: No. The Dallas marathon which was supposed to be run tomorrow, Sunday morning, was cancelled for the first time in that event's history. There was also supposed to be a big holiday parade, a big tradition in downtown Dallas. In fact a few days ago, crews had already started setting up the grandstands along the path of the parade. That was cancelled. Those stands are still just sitting there, waiting for the storm to pass so the crews can tear that back down.

So the parade and the marathon and a bunch of other events, businesses and schools had to close yesterday, and this town and Dallas-Fort Worth area is just extremely quiet outside. We're in Clyde Warren Park which is just on the northern edge of downtown Dallas. This is a place where -- is usually packed on a weekend, coming out here to enjoy the weekend. So there's just nobody out here.

A couple of people walk out every once in a while. But that -- you see behind me is all ice, not snow. And this is what you're seeing. This is a leaf here, and it is just caked, can't even -- you can't even break that ice apart.

WHITFIELD: Wow. That's some ice.

LAVANDERA: There on this leaf. That ice is just completely wrapped around a lot of foliage that you see everywhere around town. So that's what we're dealing with here. That is just a thick layer of ice that has frozen on and that's what a lot of this -- a lot of the greenery around here is dealing.

And of course we're going to talk about the roadways. Incredibly dangerous and treacherous today. Crews are being -- and people being warned to be very careful. A lot of that slush that was on the roadways yesterday has hardened up in this frigid temperatures and the airports are just still struggling to catch up with all their flight schedules.

WHITFIELD: My goodness. LAVANDERA: Dallas,-Fort Worth International Airport cancelled about 50 percent of its outbound flights so far today. That's about 400 flights in all.

WHITFIELD: Wow. Bad situation. All right, thanks so much, Ed Lavandera there in very chilly Dallas.

All right. Plans now for a week of mourning for Nelson Mandela are coming into focus. People all over the world are remembering the former South African president. Mandela was 95 years old.

According to a government minister, tomorrow is a day of prayer and reflection in South Africa. Mandela's memorial service will be held on Tuesday at a soccer stadium outside of Johannesburg. It seats about 100,000 people. His body will be lying in state from Wednesday until Friday. Mandela's funeral and burial will take place next Sunday, the 15th.

So when patients are diagnosed with cancer, they fear the worst. But coming up, we have an amazing story of a young boy who's getting a second chance at life and his treatment may just answer the prayers of so many others fighting this tamed disease.

(COMMERCIAL BREAK)

WHITFIELD: Right now, live pictures in Washington, D.C. President Barack Obama there taking part in a conversation at the 10th Annual Saban Forum in that city. The forum bringing together American and Israeli leaders from across the political and social spectrum.

Let's listen in right now to the introduction of the president.

HAIM SABAN, SABAN FORUM: And I am personally honored that you insisted that I have this conversation with you, even though I never set foot for any conversation for 10 years. So thank you. I'm very honored.

Should we start with Iran?

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We should.

SABAN: OK, good.

(LAUGHTER)

SABAN: Mr. President, polls indicate that 77 percent of Israelis don't believe this first nuclear deal would preclude Iran from having nuclear weapons. And they perceive this as an existential matter for them.

What can you say to the Israeli people to address that concern?

OBAMA: Well, first, before I answer the question, let me say to you, Haim, thank you so much for the great work that you've done. I thank the Saban Forum and the Saban Center has done outstanding work and it provides us a mechanism where we don't just scratch the surface of these issues.

Obviously the challenge in -- the challenges in the Middle East are enormous and the work that's being done here is terrific, so I want to also thank Strobe for hosting us here today and all of you who are here, including some outstanding members of the Israeli government and some friends that I haven't seen in a while. So thanks for having me.

Let me start with the basic premise that I've said repeatedly. It is in America's national security interests, not just Israel's national security interests or the region's national security interests, to prevent Iran from getting a nuclear weapon.

And let's remember where we were when I first came into office. Iran had gone from having less than 200 centrifuges to having thousands of centrifuges, in some cases more advanced centrifuges. There was a program that had advanced to the point where their breakout capacity had accelerated in ways that we had been concerned about for quite some time and, as a consequence, what I said to my team and what I said to our international partners, was that we are going to have to be much more serious about how we change the cost-benefit analysis for Iran.

We put in place an unprecedented regime of sanctions that has crippled Iran's economy, cut their oil revenues by more than half, have put enormous pressure on their currency. Their economy contracted by more than 5 percent last year. And it is precisely because of the international sanctions and the coalition that we were able to build internationally that the Iranian people responded by saying, we need a new direction in how we interact with the international community and how we deal with this sanctions regime.

And that's what brought President Rouhani to power. He was not necessarily the first choice of the hardliners inside of Iran. Now that doesn't mean that we should trust him or anybody else inside of Iran. This is a regime that came to power swearing opposition to the United States, to Israel, and to many of the values that we hold dear.

But what I've consistently said is even as I don't take any options off the table, what we do have to test is the possibility that we can resolve this issue diplomatically. And that is the deal that, at the first stages, we have been able to get done in Geneva, thanks to some extraordinary work by John Kerry and his counterparts in the P5 Plus 1.

So let's look at exactly what we've done. For the first time in over a decade, we have halted advances in the Iranian nuclear program. We have not only made sure that in Fordor and Natanz that they have to stop adding additional centrifuges. We've also said that they've got to roll back their 20 percent advanced enrichment. So we're --

SABAN: To how much?

OBAMA: Down to zero. So you remember when Prime Minister Netanyahu made his presentation before the United Nations last year --

SABAN: The cartoon with the red line? OBAMA: The picture of a bomb. He was referring to 20 percent enrichment, which the concern was if you get too much of that, you now have sufficient capacity to go ahead and create a nuclear weapon. We're taking that down to zero. We are stopping the advancement of the Arak facility, which would provide an additional pathway, a plutonium pathway for the development of nuclear weapons.

We are going to have daily inspectors in Fordor and Natanz. We're going to have additional inspections in Arak. And as a consequence, during this six-month period, Iran cannot and will not advance its program or add additional stockpiles of advanced uranium -- enriched uranium.

Now, what we've done in exchange is kept all these sanctions in place -- the architecture remains with respect to oil, with respect to finance, with respect to banking. What we've done is we've turned the spigot slightly and we've said, here's maximum $7 billion out of the over $100 billion of revenue of theirs that is frozen as a consequence of our sanctions, to give us the time and the space to test whether they can move in a direction, a comprehensive, permanent agreement that would give us all assurances that they're not producing nuclear weapons.

SABAN: I understand. A quick question as it relates to the $7 billion, if I may.

OBAMA: Yes. Please.

SABAN: How do we prevent those who work with us in Geneva --

OBAMA: Right.

SABAN: -- who have already descended on Tehran looking for deals, to cause the seven to become 70?

OBAMA: Well, then --

SABAN: Because we can control what we do.

OBAMA: Yes.

SABAN: But what is the extent that we can control the others?

OBAMA: Well, Haim, this is precisely why the timing of this was right. One of the things we were always concerned about was that if we did not show good faith in trying to resolve this issue diplomatically, then the sanctions regime would begin to fray.

Keep in mind that this was two years of extraordinary diplomatic work on behalf of our team to actually get the sanctions in place. They're not just the unilateral sanctions that are created by the United States. These are sanctions that are also participated in by Russia, by China, and some allies of ours like South Korea and Japan that find these sanctions very costly. But that's precisely why they've become so effective. And so what we've said is that we do not loosen any of the core sanctions. We provide a small window through which they can access some revenue, but we can control it and it is reversible. And during the course of these six months, if and when Iran shows itself not to be abiding by this agreement, not to be negotiating in good faith, we can reverse them and tighten them even further.

But here is the bottom line. Ultimately, my goal as president of the United States, something that I've said publicly and privately and shared everywhere I've gone, is to prevent Iran from getting a nuclear weapon. But what I've also said is the best way for us to prevent Iran from getting a nuclear weapons is for a comprehensive, verifiable, diplomatic resolution, without taking any other options off the table if we fail to achieve that.

It is important for us to test that proposition during the next six months, understanding that while we're talking, they're not secretly improving their position or changing circumstances on the ground inside of Iran. And if -- at the end of six months it turns out that we can't make a deal, we're no worse off, and in fact we have greater leverage with the international community to continue to apply sanctions and even strengthen them.

If, on the other hand, we're able to get this deal done, then what we can achieve through a diplomatic resolution of this situation is, frankly, greater than what we could achieve with the other options that are available to us.

SABAN: Let's all hope we get there.

OBAMA: Absolutely.

SABAN: You have hosted Passover dinners at the White House.

OBAMA: I have.

SABAN: And you know this famous saying, "Why is this night different than any other night?" In that context, I would like to ask you a question.

OBAMA: Please.

SABAN: With the best intentions and all efforts, President Reagan vowed that Pakistan would not go nuclear. Didn't happen. With the best intentions and all efforts, President Clinton vowed that North Korea won't go nuclear.

Why is this nuclear deal different than any other nuclear deal?

(LAUGHTER)

OBAMA: Well, we don't know yet. No, we don't know yet. I think it's important for everybody to understand this is hard. Because the technology of the nuclear cycle, you can get off the Internet. The knowledge of creating a nuclear weapon is already out there. And Iran is a large country and it is a relatively wealthy country, and so we have to take seriously the possibility that they are going to try to get a nuclear weapon. That's what this whole exercise is about.

Having said that, if you look at the history, by the time we got an agreement with North Korea, they essentially already had a nuclear weapon. With respect to Pakistan, there was never the kinds of inspection regimes and international sanctions and U.N. resolutions that were in place. We have been able to craft an international effort and verification mechanism around the Iran nuclear program that is unprecedented and unique. That doesn't mean it's easy. And that's why we have to take it seriously.

But I think one of the things that I've repeatedly said when people ask, why should we try to negotiate with them, we can't trust them, we're being naive, what I try to describe to them is not the choice between this deal and the ideal, but the choice between this deal and other alternatives.

If I had an option, if we could create an option in which Iran eliminated every single nut and bolt of their nuclear program, and foreswore the possibility of ever having a nuclear program, and, for that matter, got rid of all its military capabilities, I would take it. But --

SABAN: Next question --

OBAMA: Sorry, Haim, I want to make sure everybody understands it. That particular option is not available. And so as a consequence, what we have to do is to make a decision as to, given the options available, what is the best way for us to assure that Iran does not get a nuclear weapon.

And the best way for us to assure it is to test this diplomatic path, understanding that it's not based on trust; it's based on what we can verify. And it also, by the way, does not negate the fact that Iran is engaging in a whole bunch of other behavior in the Middle East and around the world that is detrimental to the United States and detrimental to Israel.

And we will continue to contest their efforts where they're engaging in terrorism or they're being disruptive to our friends and our allies. We will not abide by any threats to our friends and allies in the region, and we've made that perfectly clear. And our commitment to Israel's security is sacrosanct, and they understand that. They don't have any doubt about that.

But if we can negotiate on the nuclear program in the same way that Ronald Reagan was able to negotiate with the Soviet Union even as we were still contesting them around the world, that removes one more threat -- and a critical, existential threat -- takes it out of their arsenal. And it allows us then to ultimately I think win them -- defeat some of their agenda throughout the region without worrying that somehow it's going to escalate or trigger a nuclear arms race in the most volatile part of the world.

SABAN: Unfortunately, you're right. It would.

Tom Friedman had an interesting perspective in one of his columns. He said, "Never negotiate with Iran without some leverage and some crazy on your side. We have to out-crazy the crazies."

Do you think he has a point?

(LAUGHTER)

OBAMA: Well, the -- you know, Tom is a very smart observer. You know, and I know that my friend, Bibi, is going to be speaking later, and if Tom wants to characterize Bibi the way you just described, that's his --

SABAN: I didn't say that.

OBAMA: That's his prerogative, that's not my view.

(LAUGHTER)

You know, Prime Minister Netanyahu and I have had constant consultations on these issues throughout the last five years. And something that I think bears repeating. The United States military cooperation with Israel has never been stronger. Our intelligence cooperation with Israel has never been stronger. Our support of Israel's security has never been stronger.

Whether you're talking about Iron Dome, whether you're talking about trying to manage the situation in Gaza a little over a year ago, across the board, our coordination on the concrete issues facing Israel's security has never been stronger. And that's not just my opinion. I think that's something that can be verified.

There are times where I, as president of the United States, am going to have different tactical perspectives than the Prime Minister of Israel and that is understandable because Israel cannot contract out its security. In light of the history that the people of Israel understand all too well, they have to make sure that they are making their own assessments about what they need to do to protect themselves. And we respect that. And I have said that consistently to the prime minister.

But ultimately, it is my view, from a tactical perspective, that we have to test out this proposition. It will make us stronger internationally, and it may possibly lead to a deal that we'll have to show to the world, in fact, assures us that Iran is not getting a nuclear weapon.

It's not as if there's going to be a lot of capacity to hide the ball here. We're going to be able to make an assessment because this will be subject to the P5 Plus 1 and the international community looking at the details of every aspect of a potential final deal, and we're consulting with all our friends, including Israel, in terms of what would that end state look like. And if we can't get there, then no deal is better than a bad deal. But presuming that it's going to be a bad deal and, as a consequence, not even trying for a deal I think would be a dire mistake.

SABAN: Well, personally, I find a lot of comfort in the fact that even though the United States and Israel may have red lines in different places, we are on the same place as far as the bottom line goes --

OBAMA: Absolutely.

SABAN: And Iran will not have nuclear weapons. Fair to say?

OBAMA: That is more than fair.

SABAN: Good. Thank you. Should we move to these Israeli- Palestinians --

OBAMA: We should.

SABAN: OK.

(LAUGHTER)

Very obedient President I have here today.

(LAUGHTER)

OBAMA: You know, this is the Saban Forum, so you're in charge.

(LAUGHTER)

SABAN: I wish.

OBAMA: Or Cheryl is in charge.

SABAN: You're more -- you're on now, Mr. President. It is Cheryl who is in charge.

OBAMA: That's exactly right.

SABAN: Anyway. First of all, before I ask the first question, I would be remiss if I didn't, from the bottom of my heart, thank you for your continuous effort to achieve peace in the Middle East. Thank you so very much.

OBAMA: I appreciate that. Thank you.

(APPLAUSE)

SABAN: Well, people talk about an imposed American solution. We've heard these rumors rumbling around for a while. The U.S. has always said it doesn't want to impose. What would you propose?

OBAMA: Well, first of all, this is a challenge that we've been wrestling with for 60 years. And what I've consistently said is that the only way this is going to be resolved is if the people of Israel and the Palestinian people make a determination that their futures and the futures of their children and grandchildren will be better off with peace than with conflict.

The United States can be an effective facilitator of that negotiation and dialogue. We can help to bridge differences and bridge gaps. But both sides want -- have to want to get there. And I have to commend Prime Minister Netanyahu and President Abbas for the courageous efforts that have led to very serious conversations over the last several months.

They are not easy. But they come down to what we all know are going to be the core issues. Territory, security, refugees, Jerusalem. And there are not a lot of secrets or surprises at this point. We know what the outlines of a potential agreement might look like. And the question then becomes, are both sides willing to take the very tough political risks involved if their bottom lines are met.

For the Palestinians, the bottom line is that they have a state of their own that is real and meaningful. For the Israelis, the bottom line is, to a large extent, is the state of Israel as a Jewish state secure. And those issues have been spoken about over the last several months in these negotiations in a very serious way. And I know Tzipi Livni is here and been participating in that, and we're very grateful for her efforts there.

And I think it is possible over the next several months to arrive at a framework that does not address every single detail but gets us to a point where everybody recognizes better to move forward than move backwards. Sometimes when you're climbing up a mountain, even when it's scary, it's actually easier to go up than it is to go down.

And I think that we're now at a place where we can achieve a two-state solution in which Israelis and Palestinians are living side-by-side in peace and security. But it's going to require some very tough decisions.

One thing I have to say, though, is we have spent a lot of time working with Prime Minister Netanyahu and his entire team to understand from an Israeli perspective what is required for the security of Israel in such a scenario. And we -- going back to what I said earlier, we understand that we can't dictate to Israel what it needs for its security. But what we have done is to try to understand it and then see through a consultative process, are there ways that, through technology, through additional ideas, we can potentially provide for that.

And I assigned one of our top former generals, John Allen, who used to -- most recently headed up the entire coalition effort in Afghanistan. He's retired now, but he was willing to take on this mission. And he's been working to examine the entire set of challenges around security if --

SABAN: Has he concluded anything?

OBAMA: Well, he's come up to -- he has arrived at the conclusion that it is possible to create a two-state solution that preserves Israel's core security needs.

Now that's his conclusion, but ultimately he's not the decision-maker here. Prime Minister Netanyahu and the Israeli military and intelligence folks have to make that determination. And ultimately, the Palestinians have to also recognize that there is going to be a transition period where the Israeli people cannot expect a -- a replica of Gaza in the West Bank. That is unacceptable.

And I think we believe that we can arrive at that point where Israel was confident about that, but we're going to have to see whether the Israelis agree and whether President Abbas, then, is willing to understand that this transition period requires some restraint on the part of the Palestinians as well. They don't get everything that they want on day one.

SABAN: Right.

OBAMA: And that creates some political problems for President Abbas, as well.

SABAN: Yes. Well, I'd say my next question as to -- what was the reaction of the prime minister to General Allen for John Kerry.

OBAMA: Yes, ask John Kerry, or ask the Prime Minister.

SABAN: Yes. OK.

OBAMA: I don't want to speak for him.

(LAUGHTER)

SABAN: They won't tell me, but, OK.

OBAMA: That's probably true.

(LAUGHTER)

SABAN: My last question.

OBAMA: Yes.

SABAN: The Palestinians are two people. One in the West Bank, led by President Abbas, that is negotiating the deal.

OBAMA: Right.

SABAN: And one in Gaza, led by Hamas that wants to eradicate Israel from the face of the earth. President Abbas, as far as I know, says he won't make a deal that doesn't include Gaza, which he doesn't control. How do we get out from this labyrinth?

OBAMA: Well, I think this is going to have to happen in stages. But here's what I know from my visits to Israel, my visits to the West Bank. There are people of goodwill on both sides that recognize the status quo is not sustainable over the long term, and as a consequence, it is in the interests of both the Israelis and Palestinians to resolve this issue.

There are young people, teenagers that I met both in Israel and in the Palestinian Territories that want to get out from under this history and seek a future that is fundamentally different for them. And so if, in fact, we can create a pathway to peace, even if initially it's restricted to the West Bank. If there is a model where young Palestinians in Gaza are looking and seeing that in the West Bank Palestinians are able to live in dignity, with self-determination, and suddenly their economy is booming and trade is taking place because they have created an environment in which Israel is confident about its security and a lot of the old barriers to commerce and educational exchange and all that has begun to break down, that's something that the young people of Gaza are going to want.

And the pressure that will be placed for the residents of Gaza to experience that same future is something that is going to be I think overwhelmingly appealing.

But that is probably going to take place during the course of some sort of transition period. And the security requirements that Israel requires will have to be met. And I think that is able -- that we can accomplish that, but ultimately it's going to be something that requires everybody to stretch out of their comfort zones.

And I do -- the one thing I will say to the people of Israel is that you can be assured whoever is in the office I currently occupy, Democrat or Republican, that your security will be uppermost on our minds. That will not change. And that should not mean you let up on your vigilance in terms of wanting to look out for your own country. It does -- it should give you some comfort, though, that you have the most powerful nation on earth as your closest friend and ally. And that commitment is going to be undiminished.

SABAN: That was my last question.

OBAMA: Yes. The -- I promised -- we worked something backstage where as long as Haim's questions weren't too long, I'd take a couple of questions from the audience. And he was very disciplined so let me take one or two.

This gentleman right here. Why don't you get a microphone so everybody can hear you?

UNIDENTIFIED MALE: My name is Amoud Siadli (ph). I used to be a general in the Israeli Air Force, and intelligence, and now running a think tank in Tel Aviv.

Looking into the future agreement with Iran, I put behind me the initial agreement.

OBAMA: Right.

UNIDENTIFIED MALE: And what is really important is the final agreement. Two questions. What is the parameters that you are -- see as a red line to ensure that Iran will be moving forward -- moving backward, rolling back from the bomb as much as possible? And what is your plan B if an agreement cannot be reached?

OBAMA: Well, the -- with respect to the -- with respect to the end state, I want to be very clear there's nothing in this agreement or document that grants Iran a right to enrich. We've been very clear that given its past behavior, and given existing U.N. resolutions and previous violations by Iran of its international obligations, that we don't recognize such a right, and if, by the way, negotiations break down, there will be no additional international recognition that's been obtained.

So this deal goes away and we're back to where we were before the Geneva agreement, subject -- and Iran will continue to be subject to all the sanctions that we've been put in -- we put in place in the past and we may seek additional ones.

But I think what we have said is we can envision a comprehensive agreement that involves extraordinary constraints and verification mechanisms and intrusive inspections, but that permits Iran to have a peaceful nuclear program.

Now, in terms of specifics, we know that they don't need to have an underground, fortified facility like Fordor in order to have a peaceful nuclear program. They certainly don't need a heavy-water reactor at Arak in order to have a peaceful nuclear program. They don't need some of the advanced centrifuges that they currently possess in order to have a limited, peaceful nuclear program.

And so the question ultimately is going to be, are they prepared to roll back some of the advancements that they've made that would not justify -- or could not be justified by simply wanting some modest, peaceful nuclear power, but, frankly, hint at a desire to have breakout capacity and go right to the edge of breakout capacity. And if we can move that significantly back, then that is, I think, a net win.

Now, you'll hear arguments, including potentially from the prime minister, that say we can't accept any enrichment on Iranian soil. Period. Full stop. End of -- end of conversation. And this takes me back to the point I made earlier. One can envision an ideal world in which Iran said, we'll destroy every element and facility and you name it, it's all gone. I can envision a world in which Congress passed every one of my bills that I put forward.

(LAUGHTER)

I mean, there are a lot of things that I can envision that would be wonderful. But precisely because we don't trust the nature of the Iranian regime, I think that we have to be more realistic and ask ourselves, what puts us in a strong position to assure ourselves that Iran is not having a nuclear weapon and that we are protected? What is required to accomplish that and how does that compare to other options that we might take?

And it is my strong belief that we can envision a end state that gives us an assurance that even if they have some modest enrichment capability, it is so constrained and the inspections are so intrusive that they, as a practical matter, do not have breakout capacity. Theoretically, they might still have some. But, frankly, theoretically, they will always have some, because, as I said, the technology here is available to any good physics student at pretty much any university around the world. And they have already gone through the cycle to the point where the knowledge, we're not going to be able to eliminate. But what we can do is eliminate the incentive for them to want to do this.

And with respect to what happens if this breaks down, I mean, won't go into details. I will say that if we cannot get the kind of comprehensive end state that satisfies us and the world community and the P5 Plus 1, then the pressure that we've been applying on them and the options that I've made clear I can avail myself of, including a military option, is one that we would consider and prepare for. And we've always said that. So that does not change.

But the last point I'll make on this. When I hear people who criticize the Geneva deal say it's -- you know, it's got to be all or nothing, I would just remind them if it's nothing, if we did not even try for this next six months to do this, all the breakout capacity we're concerned about would accelerate during that six months. Arak would be further along. The advanced centrifuges would have been put in place.

They'd be that much closer to breakout capacity six months from now. And that's why I think it's important for us to try to test this proposition.

I'll take a couple of more. Yes, sir. Right over here.

UNIDENTIFIED MALE: Mr. President, Boise Smith, Israeli journalist from "Israel Hayom Daily" newspaper.

Mr. President, I covered the negotiations with Iran, nuclear negotiations, Geneva 2009, Istanbul 2010.

OBAMA: Right.

UNIDENTIFIED MALE: And I came back now from Geneva again, where you could see the big change was not only on Iran's side, but also on the P5 Plus 1 side, meaning they were very eager to get -- to reach an agreement.

Coming back from Geneva, we learned, and some of us had known before, the secret talks America had with Iran. And we know the concern you have on the Israeli security, we're very grateful. But how does it coincide with your secret negotiations Washington had with Tehran?

Thank you.

OBAMA: Hey, you know, the truth is, is that, without going into the details, there weren't a lot of secret negotiations. Essentially what happened -- and we were very clear and transparent about this -- is that from the time I took office, I said we would reach out to Iran and we would let them know we're prepared to open up a diplomatic channel.

After Rouhani was elected, there was some acceleration leading up to the U.N. General Assembly. You'll recall that Rouhani was engaging in what was termed a charm offensive, right, and he was going around talking to folks. And at that point, it made sense for us to see, all right, how serious are you potentially about having these conversations?

They did not get highly substantive in the first several meetings but were much more exploring how much room, in fact, did they have to get something done. And then as soon as they began to get more technical, at that point, they converged with the P5 Plus 1 discussions.

I will say this. The fact of Rouhani's election -- it's been said that there's no difference between him and Ahmadinejad except that he's more charming. I think that understates the shift in politics that took place in this election. Obviously, Rouhani is part of the Iranian establishment and I think we have to assume that his ideology is one that is hostile to the United States and to Israel.

But what he also represents is the desire on the part of the Iranian people for a change of direction. And we should not underestimate or entirely dismiss a shift in how the Iranian people want to interact with the world.

There's a lot of change that's going to be taking place in the Middle East over the next decade. And wherever we see the impulses of a people to move away from conflict, violence, and towards diplomatic resolution of conflicts, we should be ready and prepared to engage them -- understanding, though, that ultimately it's not what you say, it's what you do.

And we have to be vigilant about maintaining our security postures, not be naive about the dangers that an Iranian regime pose, fight them wherever they're engaging in terrorism or actions that are hostile to us or our allies. But we have to not constantly assume that it's not possible for Iran, like any country, to change over time.

It may not be likely. If you asked me what is the likelihood that we're able to arrive at the end state that I was just describing earlier, I wouldn't say that it's more than 50/50. But we have to try.

Last question. And I think it's -- the young lady right there.

UNIDENTIFIED FEMALE: Mr. President, my name is Ilana Diane (ph), I'm a reporter for the Israeli Channel Two. I have been listening to your analysis of the Iranian deal, and I can only imagine a different -- a slightly different analysis given by our Prime Minister Netanyahu.

OBAMA: I think that's probably a good bet.

UNIDENTIFIED FEMALE: Israelis --

OBAMA: That's more than 50/50.

(LAUGHTER)

UNIDENTIFIED FEMALE: Israelis are known for their understatement. And I try to imagine a conversation between you two.

OBAMA: Yes.

UNIDENTIFIED FEMALE: And he would ask you, Mr. President, I see this deal as a historic mistake, which he's already stated.

OBAMA: Yes.

UNIDENTIFIED FEMALE: And I think it's the worst deal the West could have gotten.

OBAMA: Right.

UNIDENTIFIED FEMALE: And you would have told him, Bibi, that's where you go wrong. What would you have told him? That's one thing. And then, perhaps to understand the essence of your conversation, he would ask you, Mr. President, is there one set of circumstances under which you will order your B-52s to strike in Iran? What would you tell him?

(LAUGHTER)

Is there any set of circumstances in which you will order your fighter pilots to strike in Iran? What would you tell the prime minister?

OBAMA: Let me make a couple of points. Number one, obviously, the conversations between me and the prime minister are for me and the prime minister, not for an audience like this. And I will say that Bibi and I have very candid conversations, and there are occasionally significant tactical disagreements, but there is a constancy in trying to reach the same goal. And in this case, that goal is to make sure that Iran does not have a nuclear weapon.

As president of the United States, I don't go around advertising the circumstances in which I order pilots to launch attacks. That I think would be bad practice.

(LAUGHTER)

I also would say, though, that when the president of the United States says that he doesn't take any options off the table that should be taken seriously. And I think I have a track record over the last five years that indicates that that should be taken seriously.

You know, it's interesting, in the region, there was this interesting interpretation of what happened with respect to Syria. I said it's a problem for Syria to have chemical weapons that it uses on its own citizens. And when we had definitive proof that it had, I indicated my willingness potentially to take military action.

The fact that we ultimately did not take military action in some quarters was interpreted as, ah, you see, the president is not willing to take military action. Despite the fact that I think Mr. Qaddafi would have a different view of that, or Mr. bin Laden. But be that as it may, that was yesterday, what have you done for me lately?

(LAUGHTER)

But what I -- but the point is that my preference was always to resolve the issue diplomatically. And it turns out, lo and behold, that Syria now is actually removing its chemical weapons that a few months ago it denied it even possessed, and has provided a comprehensive list, and they have already begun taking these weapons out of Syria. And although that does not solve the tragic situation inside of Syria, it turns out that removing those chemical weapons will make us safer and it will make Israel safer. And it will make the Syrian people safer, and it will make the region safer.

And so I do not see military action as an end unto itself. Military action is one tool that we have in a tool kit that includes diplomacy in achieving our goals, which is ultimately our security. And, you know, I think if you want to summarize the difference, in some ways, between myself and the prime minister on the Geneva issue, I think what this comes down to is the perception, potentially, that if we just kept on turning up the pressure, new sanctions, more sanctions, more military threats, et cetera -- that eventually Iran would cave.

And what I've tried to explain is two points. One is that the reason the sanctions have been so effective because we set them up in a painstaking fashion. The reason they've been effective is because other countries had confidence that we were not imposing sanctions just for the sake of sanctions, but we were imposing sanctions for the sake of trying to actually get Iran to the table and resolve the issue.

And if the perception internationally was that we were not in good faith trying to resolve the issue diplomatically, that, more than anything, would actually begin to fray the edges of the sanctions regime. That's point number one.

And point number two -- I've already said this before. You have to compare the approach that we're taking now with the alternatives. The idea that Iran, given everything we know about their history, would just continue to get more and more nervous about more sanctions and military threats, and ultimately just say, okay, we give in, I think does not reflect an honest understanding of the Iranian people or the Iranian regime. And I say that --

WHITFIELD: The president of the United States there at the Saban Forum there in Washington, a meeting between U.S. and Israeli leaders. The conversation being dominated by Iran's nuclear ability, the president also underscoring the strength of the U.S.-Israeli relations.

We'll have much more on this forum 30 minutes from now in the CNN NEWSROOM. Right now time for "YOUR MONEY."