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WORLD RIGHT NOW WITH HALA GORANI

Kerry: Two-State Solution In "Serious Jeopardy"; Kerry Condemns Israeli Settlements Palestinian Violence; Kerry Outlines U.S. Vision For Peace In Middle East; France On High Alert Ahead Of December 31; Officials: White House To Announce Sanctions Soon; 97 Arrested in U.K. in "Modern Slavery" Crackdown; Art Fraud: A Classic or a Copy. Aired 3-4p ET

Aired December 28, 2016 - 15:00   ET

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


(HEADLINES)

[15:00:17] HALA GORANI, CNN ANCHOR: Hello, everyone. I'm Hala Gorani live from CNN London this Wednesday. Thanks for being with us. This is THE

WORLD RIGHT NOW.

"The two-state solution is in serious jeopardy and unless something is done now, the status quo could turn into perpetual occupation," quote/unquote,

words from John Kerry, secretary of state, as he made a strong plea today for both Israel and the Palestinians to make lasting peace.

He condemned in particular in a very long speech 70 minutes Israel's settlement expansion warning that the settler agenda is defining the

country's future. Kerry also condemned Palestinian violence saying there's no justification for terror.

He laid out a framework for final status agreement which includes secure borders for an Israeli and Palestinian state, international assistance and

compensation for Palestinian refugees and recognition of Jerusalem as the capital of two states with freedom of access to holy sites.

Kerry says both sides have obligations. Listen to some of his speech.

(BEGIN VIDEO CLIP)

JOHN KERRY, SECRETARY OF STATE: The truth is that trends on the ground, violence, terrorism, incitement, settlement expansion and the seemingly

endless occupation, they are combining to destroy hopes for peace on both sides and increasingly cementing an irreversible one-state reality that

most people do not actually want.

Today there are a number -- there are a similar number of Jews and Palestinians living between the Jordan River and the Mediterranean Sea.

They have a choice. They can choose to live together in one state, or they can separate into two states.

But here is a fundamental reality, if the choice is one state, Israel can either be Jewish or democratic. It cannot be both and it won't ever really

be at peace.

(END VIDEO CLIP)

GORANI: It didn't take long for the Israeli Prime Minister Benjamin Netanyahu to respond. He says Kerry's speech was skewed against Israel,

adding his country doesn't need to be lectured by foreign leaders. Mr. Netanyahu's also rejecting Kerry's defense of a U.N. Security Council

resolution that demands a halt to Israeli settlement activities.

(BEGIN VIDEO CLIP)

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: Israel looks forward to working with President-elect Trump and with the American Congress,

Democrats and Republicans alike to mitigate the damage that this resolution has done and ultimately to repeal it. Israel hopes that the outgoing Obama

administration will prevent any more damage being done to Israel at the U.N. in its waning days.

(END VIDEO CLIP)

GORANI: Well, the U.S. vision for peace, the current one it should be said that Kerry outlined almost certainly has an expiration date with Donald

Trump's inauguration just a few short weeks away. The next American president is leaving no doubt where he stands on the issue.

Look at what Trump tweeted shortly before Kerry's speech, quote, "We cannot continue to let Israel be treated with such total disdain and disrespect.

They used to have a great friend in the U.S., but not anymore. The beginning of the end was a horrible Iran deal, and now this. Stay strong,

Israel, January 20th is fast approaching."

Let's get an update now from Jerusalem. Oren Liebermann, our correspondent, joins us live. Oren, I understand you were reporting

earlier that Israeli television did not carry the Kerry speech.

OREN LIEBERMANN, CNN CORRESPONDENT: They may have carried the first couple of minutes, but they certainly didn't take the entire 70-minute speech

which means Israelis, at least not live, didn't see the critical part of it, which is the parameters, how he would solve the most complex and

sensitive issues of the Israeli-Palestinian conflict, refugees, Jerusalem, borders.

[15:05:01]We were expecting something more specific there, I'll say that. One of the things we've been comparing or looking at over the last couple

days is the Clinton parameters, what did President Bill Clinton lay out at the end of his term in 2000 for his vision on how to solve those issues.

He actually had specific numbers and described where to draw the line in Jerusalem and how to handle refugees. Kerry's was much more vague about

how to do that and either way though it should be said that I don't think he could have been very specific, he could have been very vague.

That wasn't going to spare him from Prime Minister Netanyahu's anger over this speech. Hala, I don't think that Netanyahu sees a difference between

the Security Council resolution and the speech. I think it's all one element for Netanyahu.

GORANI: And what is Israeli public opinion, just generally speaking, what has been its response to the United States abstaining from this U.N.

Security Council Resolution 2334 condemning the expansion of Israeli settlement activity? Generally speaking, what have ordinary Israelis said

about it?

LIEBERMANN: Widely unpopular here. Even for those who oppose settlement expansion, the move at the U.N., which is to say the decision to abstain

and let this the Security Council resolution go through and the part of the U.S. was incredibly unpopular here from the left, the center and the right.

Even the left, those who oppose settlements generally, feel like that was a betrayal on the part of the U.S. and simply not the right way to do it.

But we've heard from Kerry a couple of times now and from the Obama administration whose advisors have come on Israeli TV to defend that

decision, they felt they have no other choice.

Kerry pointed out that Netanyahu's own government has prided itself on being the most pro settlement government in Israeli history. And one of

the important politicians here, that is the education minister, the head of the right wing Jewish home party should be noted the day after Trump's

election said the era of a Palestinian state is over. That is part of what concerned Kerry here.

GORANI: All right. Certainly interesting to see how things will change, will develop when Donald Trump is president. He's already tweeted his

thoughts on the matter. Oren Liebermann, thanks very much. He's live in Jerusalem.

We'll get Palestinian perspective in a moment, but for now let's get the Israeli reaction. I'm joined now by Danny Ayalon. He is on the line from

Tel Aviv. He is a former Israeli ambassador to the United States and a former deputy foreign minister of Israel.

Mr. Ayalon, first of all, your reaction to the speech by John Kerry? He's essentially saying, look, expansion of settlements and territory that would

obviously be part of a future Palestinian state hurts everyone, not just Palestinians but Israelis as well. Your reaction to that?

DANNY AYALON, FORMER ISRAELI AMBASSADOR TO THE UNITED STATES (via telephone): Well, my reaction is that the speech what the secretary failed

to mention was the fact that Israel has numerous times offered the Palestinians everything they wanted, but they refused. The settlement is

not the issue, but refusing over Palestinians to recognize Israel as a Jewish state or recognize Israel at all is long they teach in their

curriculum, their children that there's no place for Israel in the Middle East and that they play not only to the scenario but also, Tel Aviv or --

this is the main problem.

And also what he failed to mention is that the Palestinians themselves have a very, very intransigent position. If you look at the position of Israel

and the Palestinian since the (inaudible) started in '93.

Israel has made a lot of movement towards the Palestinians and they did not budge an inch. They also need to compromise on the issue of refugees. By

the way the secretary mentioned the plight of the Palestinian refugees, but again, no mention of the Jewish refugees from Arab countries 800,000 that

were expelled --

GORANI: Can I just ask you about the specific points on settlements here? Because settlements are being built on Palestinian land, sometimes quite

brazenly on private Palestinian land. I mean, even going against Israeli law itself. Why continue to do that? That's also one of the points made

by John Kerry, and many in your own country who disagree with this type of settlement expansion. How do you defend that?

AYALON: Well, absolutely. We are a democratic country, pluralistic. We have a lot of views here, but the issue of the settlement is reversible.

And it will be self-resolved once we have a lasting peace with the Palestinians, a peace which is not just a piece of paper but a real

historic reconciliations, and their agreements and internalizing the fact that we need to have a peaceful coexistence.

GORANI: As two states though? As two states or one? Because as two states it's hard to see how that's doable, feasible with the current

expansion of settlements deep into Palestinian territory.

[15:10:02]AYALON: Well, settlements are quite reversible. If you look at the fact in 2005, Israel evacuated 21 settlements from the entire Gaza

strip giving Gaza to the Palestinians, four more from another area. This has never been the issue. Now, there are a few hundred thousand Israelis

who live there, and you cannot just stop their living and livelihood until the Palestinians oblige to sit with us and negotiate directly without

conditions. This is the pain problem.

GORANI: OK. Danny Ayalon, thanks very much for joining us on the line from Tel Aviv. We appreciate you speaking with us this evening.

AYALON: My pleasure.

GORANI: Let's get the Palestinian perspective on this show now. We're joined by veteran lawmaker, Hanan Ashrawi. She's live in Ramallah in the

West Bank. I asked Danny Ayalon, and let me ask you, your reaction to the speech by John Kerry. He's got three more weeks left as secretary of

state.

HANAN ASHRAWI, PALESTINIAN LAWMAKER: I think it's a parting statement in a way, but impassioned and genuine statement from the heart and some ways it

tries to contextualize the policies of the U.S. and the vote at the U.N. Security Council vis-a-vis resettlements.

And also it expresses exasperation with constant Israeli policies for the past eight years the U.S. administration has been asking Netanyahu to stop

settlement activities, to abide by international law and the requirements of peace, and he has absolutely refused to do that.

So in the end, he is showing why they had to put American interests first and they had to vote in accordance with American policies, but at the same

time, he's trying to make a plea again, impassioned plea for the two-state solution based on his own commitments to Israel, based on his love of

Israel.

Based on his real affinity for Zionist ideology, which is what the majority of his speech was about that. He is trying to save Israel from itself, if

you will, because he thinks that the outcome, the de facto outcome of a one state solution can be disastrous for Israel and the region.

GORANI: Both, how do you think things will change with Donald Trump as president of the United States? He's tweeted his opposition to the U.S.'s

move at the U.N. Security Council to abstain from this vote on this particular resolution condemning settlement expansion. So this is going to

be a polar opposite approach, right? So how are Palestinians preparing for a Trump presidency?

ASHRAWI: Right. Well, listen, I don't know whether we should be responding to tweets because I've never heard of policy being done at the

highest level --

GORANI: It's the new normal, Mrs. Ashrawi. We have got many policy announcements over his Twitter. So I think you need to get used to it.

ASHRAWI: On Twitter.

GORANI: But if you look at what's been said --

ASHRAWI: Yes, but I think much more responsible channels for serious discussion, but the tweets from President-elect Trump certainly are not

encouraging at all. In many ways, he has said any kind of diplomatic niceties and he's expressed blatant and blind support for Israel.

And he's promising Israel that he would reverse all these policies, he's attacking the outgoing administration, he's citing blindly with the most

extreme right wing expansionist militaristic and racist government in Israel.

And this kind of convergence between a populist moves in the U.S. where we see the rise of racisms, xenophobia, Islamophobia and so on combined with

Israeli intransigence does not bode well for peace at all not just within Palestinian but for the region as a whole.

GORANI: Now you heard Danny Ayalon possibly say this is missing the point, the problem is not settlements. The problem is that Palestinians have been

offered time and time again great deals that they rejected, that settlements are reversible, especially those outputs -- outposts that are

deep in Palestinian territory. So what part of this do you believe is Palestinian responsibility? If responding to Danny Ayalon here.

ASHRAWI: Look, Danny Ayalon statements certainly need a large grain of salt to be swallowed. First of all, I would like him to prove what the

generous offers were and time again we've refused them. The thing is it's not the outrageousness of the lies.

The fact that sometimes they believe their own fabrications which is extremely dangerous. Had there been a real offer on the table two-state

solution based on international law, it would have been signed a long time ago. That's one issue. The second is -- I'm sorry, what was the second

part?

GORANI: No, the fact that you were saying settlements are reversible, that that's not the issue that we're focusing on the wrong thing.

[15:15:05]ASHRAWI: Yes, don't I wish. Don't we all wish that settlements are reversible? Look, they made a big to-do about what is settlement

outpost. They were supposed to remove all the outposts. Even illegal by their own laws, and yet been made into a major public issue, judicial

issue, legal issue, political issue and it has stayed.

And they're legislating an order to give them retroactive legitimacy, which is extremely dangerous, which is extremely dangerous, which is why John

Kerry again talked about the fact that they are trying to make them legitimate to legalize these illegal settlements.

So, I mean, there is a wide gap between public pronouncements and misleading statements and between realities on the ground. All you need to

do is come and visit and look at the West Bank and see where the settlements are placed, see what they control in terms of infrastructure,

land and resources.

And see how systemically they are expanding at a very alarming rate and you'll know why that destroying the two-state solution and why they're

superimposing gated Israel on historical Palestine in every irreversible way. A way that is specifically meant to be irreversible and to destroy as

Kerry said the contiguity and viability of the Palestinian state.

GORANI: Hanan Ashrawi, thank you so much for joining us from Ramallah there in the West Bank. We'll have more reaction from both sides of the

Kerry speech. We appreciate it.

ASHRAWI: You're welcome.

GORANI: In his speech today, Secretary of State Kerry said no country has been a better friend to Israel than the United States. And no U.S.

administration has done more for Israel's security than Barack Obama's. After all there was a security aid package that was authorized by the Obama

administration for $38 billion that is a record.

Elise Labott joins me now from Washington with more. First let me ask you, and many people have asked me this, why make this speech, this forceful,

you know, energetic 70-minute speech three weeks from the end of the Obama administration from stepping down? What's the point?

ELISE LABOTT, CNN GLOBAL AFFAIRS CORRESPONDENT: Well, it's a great question, Hala. And a lot of people today at the State Department are

saying, look, you know, it was a very powerful speech, but delivered about two years too late. Maybe Secretary Kerry should have introduced this

after those peace talks broke down in 2014 and tried to chart a course forward.

I think he tried after those talks broke down over the last several years to try and get something back together. Then the election, the campaign

came up, the administration didn't want to do anything to harm Hillary Clinton who was seen as very supportive of Israel.

And then when Donald Trump was elected, I think the administration was very wary of doing anything provocative to perhaps put him on the opposite

direction on this more hard line stance against what Donald Trump said he wants to do, which is negotiate Mideast peace.

But I think that this settlement issue has been something that the U.S., this administration felt very strongly about. You heard Hanan Ashwari talk

about what the settlements are doing to the future viability of a Palestinian state.

That's something Secretary Kerry has felt very strongly, was one of the main reasons for the breakdown of talks and is threatening the future

character of a Jewish state, it's threatening the viability of a two-state solution, which is what everybody including Prime Minister Netanyahu said

they wanted.

And you have to take it into the context of U.N. vote. Secretary Kerry was planning to make this vote and then deliver this speech in the context of

why they felt they needed to do something on the way out the door.

A lot of people will see it as a parting shot. This administration is framing it now as a way to kind of save Israel from what Secretary Kerry

called the most extreme elements, this settler movement that is really trying to end the two-state solution -- Hala.

GORANI: All right. Elise Labott, our global affairs correspondent at the State Department. Thanks very much.

A lot more coming up on the program. How European cities are enhancing security for New Year's Eve. If you are traveling around the world this

New Year's Eve, you'll want to tune in. We'll be right back.

(COMMERCIAL BREAK)

[15:21:27]

GORANI: Welcome back. Federal police in Germany have detained a Tunisian man with possible ties to the Berlin truck attacker. The German prosecutor

says the man's phone number was found on Anis Amri's cell phone. Police say their investigation suggests he could have been involved in some way in

that attack.

Anis Amri, you'll remember, was shot and killed in Berlin two days -- say he was shot and killed several days after the truck attack in Italy

eventually. He was the main suspect in the attack on a Christmas market that killed 12 people.

Repeating, he was not shot and killed in Berlin but much later on in Italy several days later. Of course, all of this is making people nervous,

especially people who are going to gather in large groups in cities that have been targeted by terrorism, Brussels, Paris, Berlin.

France of course is on high alert in the aftermath of the attack on Berlin. Our correspondent there, Melissa Bell, filed this report.

(BEGIN VIDEOTAPE)

MELISSA BELL, CNN CORRESPONDENT (voice-over): As in Germany, the end of the year in France means colorful and crowded Christmas markets. Even

before last week's attack in Berlin, security here in (inaudible) was tight ensured by regular police patrols, 200 cameras and 60 concrete blocks.

PIERRE-HENRY BRANDET, FRENCH INTERIOR MINISTRY SPOKESMAN (through translator): Large crowds mean strong security measures with controls,

searches, protective perimeters and all of that was obviously taken into account well before what happened in Germany although, of course, the

Berlin attack reminds us of the need for vigilance.

BELL: Vigilance that will mean 10,000 soldiers on the streets of France over the holiday period reinforcing a police presence that is 91,000

strong. Extra security measures announced earlier this month by this man, (inaudible) visited on the very week of his appointment as interior

minister. He called on Parisians to call on their strengths.

BRUNO LEROUX, FRENCH INTERIOR MINISTER (through translator): They are citizens are the service of our security, they pay a heavy price, and I ask

in this holiday period there be demonstration of friendship, solidarity towards those who ensure the security of the French people in this

difficult period.

BELL: For more than a year now France has been living under a state of emergency. Bernard Cazeneuve, the incoming prime minister told parliament

why it was both necessary and working.

BERNARD CAZENEUVE, FRENCH PRIME MINISTER (through translator): Since the beginning of the year 2016, 420 people with links to radical Islamism were

arrested, and 17 attacks planned on the French soil were foiled.

BELL: After the speech, MPs voted to extend the state of emergency until July of next year. But for those involved in policing the streets of

Paris, the extra measures are beginning to take their toll.

LUC POIGNANT, PARIS POLICE UNION REPRESENTATIVE (through translator): Obviously, we have the means to ensure Paris' security during the holiday

period, extra riot police will be deployed and also extra mobile units, but if I may ask, at what cost? What I mean is there is a human cost for the

security forces in general, where the policemen, we're really giving of ourselves, of our time and at a cost to us and to our families.

BELL: For now though the Interior Ministry insists that such sacrifices are necessary.

BRANDET (through translator): We have to maintain this high level of vigilance in the face of a threat that remains very high, even as we

continue to live, to live freely, and to live peacefully.

BELL (on camera): Authorities here in France are relieved that the Christmas period has gone as smoothly as it has. All eyes now turn to New

Year's Eve when hundreds of thousands of people will be here onto ring in a new year that they hope will be more peaceful than the two that preceded

it. Melissa Bell, CNN, Paris.

(END VIDEOTAPE)

[15:25:13]GORANI: Let's talk more about the challenges of keeping cities safe around the holidays. Bob Baer is an intelligence and security analyst

for CNN and a former CIA agent. He joins me now via Skype from Telluride, Colorado.

I just returned from Berlin where we were reporting on the terrorist attack on the Christmas market and of course, one thing that's obvious when you

walk around big capital cities like this is you can really not protect all these soft targets 100 percent.

So what should people, you know, be looking out for if they're walking around or vacationing in these capitals?

BOB BAER, CNN INTELLIGENCE AND SECURITY ANALYST: There's not much you can do. You simply have to, you know, follow the people you suspect and

preventive detention is the only way you'd ever stop this completely. But there's no way to put up barriers, police, you simply can't tell when a

truck is about ready to swerve off the road and run into a crowd. It's a nightmare trying to protect a city like Berlin or New York or Paris or

London.

GORANI: Yes.

BAER: There's not much you can do except keep track of potential jihadists.

GORANI: Well, the other thing though is that Christmas market was just so open. Eventually they reopened it a couple days later, they put some of

these concrete blocks. I mean, that kind of slows, you know, a speeding truck trying to kill as many people as possible. But fundamentally unless

you put -- surround yourself with blast walls, again, like you said, it's kind of hard to protect 100 percent.

BAER: Well, look at Paris New Year's or middle of the day truck on the sidewalk there's nothing you can do about it and of course there's always

Times Square. How do you stop a truck that's speeding toward you?

GORANI: Yes.

BAER: And that's you can arm the police with machine guns, but you know, are we there yet? Not so far.

GORANI: Right. We had Anis Amri who was also well known yet still able, we believe, to carry out the attack. We'll talk more I hope very soon

about some of these security measures. Bob Baer, thanks very much.

The White House vowed response to alleged Russian hacking during the November presidential election and now officials say the Obama

administration is just about to announce measures against Moscow. They say there may be covert actions as well.

U.S. justice correspondent, Evan Perez joins us live from Washington with some specifics. Break it down for us. The Obama administration is saying,

we're going to what, impose sanctions, punitive measures against Moscow because we believe Russia meddled in the election? Is that correct?

EVAN PEREZ, CNN JUSTICE REPORTER: That's correct. I think part of the importance of what they're going to do is they're going to name names of

people who they believe were involved in this disinformation operation.

This is an operation that the Russians -- the administration believes not only hacking into Democratic organizations, not only the Democratic

National Committee but disseminate that through Wikileaks, and other websites in an aim to hurt the campaign of Hillary Clinton.

This is something obviously the administration has been talking about behind the scenes for some months there was a little bit of trepidation

about doing this before November elections because of the concern that it would be seen to be favoring Clinton over Trump.

As you remember Trump was already claiming -- Donald Trump was already claiming that the elections were rigged. So there was a lot of concern

about that. A lot of assumptions at White House that Hillary Clinton was going to win.

So a lot of this stuff they've been working on behind the scenes and now we're going to see it with just a couple more weeks left in this

administration.

GORANI: I'm going to read the Russian response in just a second, but what are we talking about here? I mean, Donald Trump will be president in three

weeks. What is it that the Obama administration can do with three weeks to go?

PEREZ: Well, they're going to announce sanctions against individuals, they're going to try to --

GORANI: But can that stick? Once the Trump administration --

PEREZ: Yes. Once the Trump administration comes in, they can -- you're right. With the stroke of a pen rescind all of those measures. But there

is going to be -- they're going to have to contend with the U.S. Senate, the U.S. Congress where there's a tremendous amount of belief that the U.S.

intelligence is correct.

Even if Donald Trump doesn't believe it, members of Congress including a lot of Republicans, most of the Republicans I would say, believe that this

is what happened. So I think he's going to face pressure from his own party and from Congress to keep some of these sanctions in place.

GORANI: Interesting move there by the Obama administration there in the last few weeks. Thank you, Evan Perez in Washington.

Here's the response from Russia, I promised you. Said it will respond to any hostile steps the U.S. may take in response to the hacking allegations.

A spokeswoman for the Ministry of Foreign Affairs says any action against Russian diplomatic missions in the United States will immediately bounce

back on U.S. diplomats in Russia tit for tat, if you will.

[15:30:10] She says, quote, "Frankly, we are tired about the lies about Russian hackers. It's misinformation by the Obama administration aimed at

providing an excuse for its own failures," unquote. This is Russia's Ministry of Foreign Affairs spokeswoman reacting to the news.

Coming up next on THE WORLD RIGHT NOW, John Kerry has had strong words for Israel and the Palestinians, but Benjamin Netanyahu has called the comments

a disappointment. I will be speaking to his spokesperson next. Stay with us.

(COMMERCIAL BREAK)

GORANI: Welcome back. And we're turning to our breaking news. John Kerry's major speech outlining the U.S. vision for Middle East peace. The

Secretary of State says the two-state solution is in serious jeopardy, and he warned that Israel settlement expansion could lead to, quote, "perpetual

occupation of the Palestinians." Israeli Prime Minister Benjamin Netanyahu was quick to reject Kerry's speech calling it a disappointment and saying

Israel didn't need to be, quote, "lectured by foreign leaders," unquote.

The Prime Minister's spokesperson, David Keyes, joins me now live from our Jerusalem bureau. Thank you, Mr. Keyes, for being with us.

DAVID KEYES, SPOKESPERSON TO FOREIGN MEDIA FOR PRIME MINISTER BENJAMIN NETANYAHU: Thank you.

GORANI: First of all, I can imagine that you did not like John Kerry's speech. Specifically, what was it about it that you found objectionable?

KEYES: Secretary Kerry's speech was deeply, deeply disappointing, and that's primarily because it didn't really deal with the core of this

conflict. It spent probably a third, maybe even half of its time, blasting Israel for having Jews live in their ancient homeland of Judea, but that

doesn't even begin to touch the core of the conflict, which is the persistent Palestinian refusal to recognize a Jewish state in any

boundaries.

Now, think of the absurdity of this. Israel's Prime Minister has called literally hundreds of times to meet with President Abbas for peace talks

without any preconditions. He invited him to speak in the Kenizzite. He offered to go to the parliament in Ramallah which is just a few minutes

from where I'm standing.

And President Abbas not only said no to every one of those offers, he actually said he welcomes every drop of blood spilled in Jerusalem. His

advisors, like Sultan Abu Al-Einein, called to slit the throat of every Israeli wherever you find them. Statues are being named after Abu Sukar

who blew up 15 Israelis just down the street from where I'm standing. So to --

[15:34:52] GORANI: But can I just ask specifically about the points? I mean, I'm happy for you to list all those things, but at the same time, I

want you to react to what John Kerry specifically said, which is settlement expansion, essentially sometimes deep into private Palestinian land, into

territory that would obviously make sense as a future Palestinian state, that doesn't just hurt Palestinians but also Israelis, and therefore makes

a two-state solution virtually impossible. Do you not agree with that?

KEYES: I do not agree with that at all. The presence of Jews in Judea and Jerusalem doesn't prejudice, in any way, a solution of two states for two

peoples. And the idea that this presence of Jews somehow is the barrier to peace simply flies in the face of history because for literally decades

before there was a single Jew living anywhere in those territories, this conflict raged. And when Israel brought out every single one of those Jews

from Gaza, we got 20,000 missiles on our head. We got a theocratic terrorist organization calling for genocide against all Israelis.

If this conflict was about the presence of Jews here or there about homes, it would actually be a lot easier to solve. But the Palestinian leadership

to this day continues to reject any Jewish sovereignty in this land, and that is the reason why this conflict is raging.

GORANI: But why continue to expand --

KEYES: And what a tragedy.

GORANI: Why continue to expand settlements even sometimes on private land? I mean, this is something that John Kerry brought up. Many citizens of

your own country object to as well and find this to be ultimately counterproductive. It even goes against Israeli law in some cases. So how

is that not going against the viability of a two-state solution? This is something that I think people would like you to answer.

KEYES: Well, first of all, I'd question the premise of your question. I would point to the fact that over a million and a half Arabs live in Israel

as full citizens. And the idea that the Palestinian leadership, as a precondition to statehood, demands to evict every single Jew living from

their ancient homeland from places like Jerusalem -- and that's connected to this U.N. resolution which actually has the audacity to call the

western wall, occupied Palestinian territory.

Think about this, that this is one of the holiest sites of the Jewish people. So my vision and most Israelis' vision and the Prime Minister's

vision are two states living side by side in peace with mutual recognition to give everybody here hope for a better future. And what a travesty that

all of our calls for peace, to sit down at the table and work out all of those difficult issues including settlements, are summarily rejected by the

Palestinian leadership. What a tragedy for both Israelis and Palestinians.

And I'm hopeful that when we do finally sit across the table from our Palestinian neighbors in direct and bilateral negotiations, a real peace

deal can be worked out like Jordan and like with Egypt.

GORANI: I get that your point is it's all the Palestinians' fault. If only they were sort of open to the idea of some sort of discussion without

preconditions by the Israeli government of Benjamin Netanyahu, this could all be solved. This is what you're outlining for us. But I've got to ask

you about sort of, I mean, overall, the idea that these settlements are an impediment. There has to be some sort of -- is there no acknowledgment

from your position that if the settlement activity were curtailed, that it would help?

KEYES: I don't think it would help for the simple fact that the Palestinians define Tel Aviv as a settlement. And if you think I'm

exaggerating, just open a Palestinian textbook, turn on Palestinian television, look at what they're teaching their children, which is

essentially that all of Israel is also Palestinian. So it's pleasant to think of just a handful of outposts as settlements, but if the Palestinians

themselves are talking about flooding Israel with millions of refugees, if they're talking about Tel Aviv as a settlement, that's a whole different

world of problems.

And that's why it's so important that the United States should return to its historic position of protecting Israel at biased bodies like the United

Nations that call the western wall occupied territories. I mean the Americans should be asked, will they veto any of these resolutions? I hope

so.

GORANI: And do you think that with Donald Trump, things will change? How do you think a Donald Trump administration will change things? You saw his

tweets, presumably.

KEYES: Right. Well, obviously, we welcome the fact that he criticized this biased and deeply anti-Israel resolution because it actually pushes

peace further back. It's not just that we don't think the U.N. is the right forum, that the Security Council isn't the right forum, but by

hardening the positions of the Palestinians, by saying you don't actually have to accept Israel as a Jewish state, you're actually pushing peace

further away. And that's what's so dangerous about this.

So my hope is that countries around the world come together to encourage the Palestinians to, at long last, accept Israel as a Jewish state and to

cease their desire to eventually wipe Israel off the map.

GORANI: Let me ask you one unrelated question to this U.N. resolution and the Kerry speech. We're hearing from Reuters that the Attorney General in

Israel is ordering the police to open a criminal investigation into two matters involving your Prime Minister Benjamin Netanyahu. Is this

something you can confirm?

[15:40:11] KEYES: I can't at this moment, but I can assure you that there's no there, there. There's been a lot of rumors in the past; none of

them have been prove proven. And it's a shame that so much airtime is taken up by scurrilous scandals that are never proven. I'm sure it will be

fine.

GORANI: So you can confirm that the A.G. has indeed ordered the police to open two criminal investigations?

KEYES: No, I can't confirm that. What I can confirm is that there's no there, there because the Prime Minister has acted in an exemplary fashion.

And this rumor mill, which is all too often spreading basically lies about the Prime Minister, has been proven false time and time again.

GORANI: So you can't confirm the opening of investigations, but if, in fact, there is some sort of investigation by the police, you're saying that

there's been no wrongdoing?

KEYES: The only thing I can confirm is that the Prime Minister, whom I know and who has been proven to be clean in so many things that were once

deemed scandals, is somebody that can be trusted and I'm sure there's no there there.

GORANI: David Keyes, thanks very much for joining us from Jerusalem. We appreciate your time.

KEYES: Thank you very much. Thank you.

GORANI: Let's get some perspective from political analyst Josh Rogin; a former State Department official and Middle East analyst, Hillary Mann

Leverett. Thanks to both of you for being with us.

JOSH ROGIN, COLUMNIST, THE WASHINGTON POST: Thank you.

HILLARY MANN LEVERETT, CO-AUTHOR, "GOING TO TEHRAN: WHY AMERICA MUST ACCEPT THE ISLAMIC REPUBLIC OF IRAN": Thank you.

GORANI: Josh Rogin, first of all, three weeks left. The U.S. Secretary of State John Kerry, forceful speech, really long, more than an hour, you

know. He said what he had to say. Will it make a difference?

ROGIN: No, I don't think it will make a difference in the overall peace process which will now be governed by the incoming Trump administration and

the Netanyahu government. But I think it is trying to set a frame for the legacy of John Kerry and the Obama administration as they look back at

their years of effort trying to negotiate Mid-East peace, effort that has failed and that they now are clearly trying to place most of the blame for

on the Netanyahu government.

It also sort of puts a stake in the ground as to where the U.S. government policy is right now, and that's a policy that's very far away from where

the Israeli government is. And, you know, when we come back from our holiday breaks and we look at what the next administration is going to do,

U.S. policy's going to change a lot. So this is a marker just so for historical record to show that, at this point in time, the Obama

administration was very opposed to what the Israeli government is doing. That's going to change in a big way starting on January 20th.

GORANI: And Hillary, I mean, how will things change with Trump in the White House, do you think?

LEVERETT: Well, I think it's important to note that I think there is some blame being set here by Secretary Kerry in his speech, but I don't really

think it's to blame the Israelis. I think that he's setting up the incoming Trump administration to take the fall for the death of the peace

process because there's going to be no peace process if there is no two- state solution. I think the Obama administration sees the writing on the wall, and they don't want to be blamed in history, the short term or near

term, for that failure.

But I do think it will make a difference. The speech, this U.N. Security Council resolution, and very importantly, a conference that is coming up in

two weeks in Paris that the French are hosting with over 70 nations that will, again, set the framework for what they see, for what the world sees,

as a sustainable peace process to keep countries in the Middle East together going forward toward a peace process. I think that's what we're

going to be seeing, at least, in the near term.

GORANI: In fact, the French reacted just minutes after this speech and said, hey, great speech. We agree with everything John Kerry said.

So, Josh, you heard David Keyes there, I think, the spokesperson for Benjamin Netanyahu. I mean, you know, he's essentially blaming the

Palestinians for absolutely everything, saying the settlements aren't the problem. The Obama administration -- and we heard this also from Netanyahu

-- has it out for Israeli and have been anti-Israel for years. In that current political environment, what can be achieved in terms of getting any

kind of peace process back on track?

ROGIN: I think it's very unlikely that there will be any substantive peace process going forward in the next months or even years. I mean, you know,

I think what the incoming Trump administration will do will have the effect of taking the United States out of the role of being an honest broker if

that was even the case in recent months and years, and that will take away the U.S. ability, in my view, to sort of push both parties, who both would

have to make some sacrifices and some concessions to start a real peace process. And the U.S. simply won't have the leverage or the influence to

do that based on the stance that we see emerging from the Trump administration.

Now, that may be something that the Netanyahu government is totally OK with, you know. What John Kerry was saying pretty clearly is that he

doesn't actually believe that Netanyahu is really intending to pursue a two-state solution. He called into question the basic honesty of that

claim, and that was a pretty shocking moment from the speech. But going forward I think, you know, because of what's going to be a change in U.S.

policy to align it with the Netanyahu government, the prospects for any real substantive negotiation that involves concessions of both sides are

really low, unfortunately.

[15:45:30] GORANI: Our correspondent in Jerusalem was telling me a little bit earlier, Hillary, that even Israelis who are opposed to settlement

expansion, some of it illegal, obviously, on private Palestinian land, were unhappy about the U.S. not vetoing this Resolution 2334. He told me that

Israelis believe the Obama administration turned its back on Israel. What do you make of that reaction?

LEVERETT: I think it's reflective of a stark reality that Israelis have faced for a while but I think face now in an unprecedented way, which is

the profound isolation the state of Israel faces on the world stage. The standing ovation of countries represented in the United Nations at the

Security Council when this resolution passed was almost unprecedented. The only time I ever saw members at the U.N. stand, and I represented the

United States there in the late 1990s and into 2001, was after 9/11 when they stood with the United States after we were attacked.

It's almost unprecedented for members to stand. And I think, again, it shows the profound isolation the Israelis face, and I think that is

reflected as a hard reality on the ground, both in terms of those sentiments that your correspondent noted and also the furious reaction by

Prime Minister Netanyahu.

GORANI: But, lastly, Hillary -- sorry -- is this isolation only hardening, really, public opinion in a sense? I mean, if you wanted to affect change,

should there be another approach, simply put?

LEVERETT: Well, you know, I think there's this sort of kind of deep misunderstanding of what the Middle East peace process is about. It's not

for the United States to achieve some sort of peace in harmony, some kumbaya moment in the Middle East. This makes the peace processes all

about American interest.

It's about keeping different countries in the Middle East that are completely opposed to each other on this basic issue of Israel and

Palestine, keeping them together in a pro-American security and political order in the Middle East. It's how we balance our relations, for example,

with Saudi Arabia and Israel together. We need the peace process for our own reasons to manage these relations, not to bring about peace and

harmony.

So in terms of, you know, how public opinion is affected here or elsewhere, in terms of strategists sitting in the situation room, they understand the

stark reality. And even incoming President Trump's new Defense Secretary, General Mattis, his incoming Secretary of State Tillerson, they will

understand clearly they need to keep the Arab states and the broader Muslim world onboard with the United States. And for that Israel's going to have

to go along regardless of public opinion there or even here.

GORANI: All right. Hillary Mann Leverett, Josh Rogin, thanks so much to both of you for joining us. We really appreciate it this evening.

ROGIN: Thank you.

LEVERETT: Thank you.

GORANI: Quick break. We'll be right back. Stay with CNN.

(COMMERCIAL BREAK)

[15:50:16] GORANI: Ninety-seven people are arrested in the U.K. as the government cracks down on what it calls modern day slavery. They were made

after officers raided a series of nail bars. ITN's Jim Spencer has our story.

(BEGIN VIDEOTAPE)

JIM SPENCER, ITN NEWS CORRESPONDENT: This is a nighttime raid on a nail bar. Inside, officers think staff are working illegally, and they fear

some are the victims of modern day slavery. Often trafficked to the U.K., they're forced to work long hours.

It's organized crime masquerading as a manicure. Immigration officers are targeting a handful of risk industries where slavery is on the rise.

ANDY RADCLIFFE, UNITED KINGDOM IMMIGRATION ENFORCEMENT OFFICER: We've conducted over 280 visits and we found 14 victims of modern slavery. Those

14 would probably never have been discovered if we hadn't taken this proactive work. So alongside that, we also identified, arrested 96 other

people who were working illegally.

SPENCER: Last year's Modern Slavery Act increased sentences for perpetrators to a maximum life term. It also allowed for compensation

payments for victims using funds from seized assets.

ANNE READ, DIRECTOR, MODERN SLAVERY: We used to think that victims were hidden away, that they were locked up or behind closed doors, but actually,

they're very often in our communities. They're washing our cars, they're painting our nails, they're block paving our drives, and so everybody needs

to be alert to the fact that we could encounter a victim of modern day slavery.

SPENCER: It's almost 200 years since slavery was abolished in this country, but the Salvation Army say there are 10,000 people victims of

modern day slavery in the U.K. right now.

(END VIDEOTAPE)

GORANI: Well, don't forget to check out our Facebook page, facebook.com/halagoranicnn. I'll see you on the other side of this break.

Stay with us.

(COMMERCIAL BREAK)

GORANI: Well, are you feeling stuffed after the holidays, enjoyed a Christmas tipple or two? Then you might not want to hear the latest

lifestyle warning from a health body here in England.

It says 80 percent of middle-aged people in the country either weigh too much, drink too much, or just don't do enough. Obesity up 16 percent in

the last 20 years in the U.K., and the diabetes rate has doubled for those between 40 and 60 years old. The U.K. government is urging people to

consider ways they can improve their health as they head into the New Year.

If you're one of the lucky few who has classic artwork on the wall, how do you know it's real? That's the counterfeit conundrum facing the art world

as fraudsters continue their timeless quest to sell fakes. CNN's Nina dos Santos looks at how collectors try to spot the difference.

(BEGIN VIDEOTAPE)

NINA DOS SANTOS, CNN MONEY EUROPE EDITOR (voice-over): Old masters and iconic art from Italy. Pictures like these have always been coveted by

collectors, but in today's $63 billion art market, they've also become a lucrative target for forgers.

IAN DEJARDIN, SACKLER DIRECTOR, DULWICH PICTURE GALLERY: Such a famous painting.

DOS SANTOS: To highlight the increasing incidence of fakery, curators at this London gallery once replaced one of their works with a $100 copy made

in China.

DEJARDIN: The idea was we commissioned a copy by simple means. You can order them over the internet. We took the replica, put it in this frame --

this beautiful painting by Fragonard went into store temporarily -- and we hung it on the walls and put the usual label on it.

[15:55:11] DOS SANTOS: When they challenged visitors to spot it, ticket sales doubled, yet only 11 percent of viewers got it right.

DEJARDIN: The art world has always, always been plagued with forgers. It's not new. It's always there and that's because of the art market. The

value of paintings is so astronomical these days. I mean, it's kind of shot and so, obviously, where there's big money involved, criminals, which

is what it is, criminals will follow.

DOS SANTOS: With the value of fine art doubling over the past decade, the threat of forgery has also risen, netting some of the biggest names in the

business like Sotheby's, which had to reimburse a client $10 million after it sold a Frans Hals which wasn't what it first seemed. So while buyers

used to rely on the eye of the expert, the eye of the x-ray now offers the ultimate guarantee. And that means big business for this authentification

lab in south London.

FRANCIS EASTAUGH, GENERAL MANAGER, ART ANALYSIS AND RESEARCH: What we do here using science and forensics to uncover these fakes and forgeries is

not common in the art market, but it's becoming more so. And that just means, inevitably, a little more is coming out. You're finding these cases

of forgeries. We're really looking at the material that makes up these paintings, so the paint, the stretcher, the canvas, so all the different

constituent parts.

DOS SANTOS: Fake or fortune, when it comes to buying, the age-old rules still apply.

DEJARDIN: Think twice. If you can't trace it back, think twice. Caveat emptor. Buyer beware.

DOS SANTOS: Nina dos Santos, CNN Money, London.

(END VIDEOTAPE)

GORANI: Well, thanks for watching the program this evening. This has been THE WORLD RIGHT NOW. I'll see you same time, same place tomorrow but stay

with CNN. "QUEST MEANS BUSINESS" is next.

(COMMERCIAL BREAK)

END