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Lou Dobbs Tonight

New Explosions Heard in Gaza; Global Protests against Israel; White House Blames Hamas; President-elect Obama's Promises; No Buy- American Clause in Auto Bailout; Corruption and Drug Violence in Mexico

Aired December 29, 2008 - 19:00   ET

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


KITTY PILGRIM, CNN CORRESPONDENT: Thanks, Suzanne.
Tonight, Israel vows all-out war against Hamas. Now will this conflict spread to other countries? We'll have complete coverage.

And tonight, a top Obama adviser says middle class tax cuts remain a top priority for President-elect Obama. We'll tell you whether the president-elect can deliver on that promise.

And tonight, Chrysler and General Motors are about to receive billions of dollars in government loans but they still won't commit to a buy-American policy for auto parts. We'll have all that, all the day's news and much more from an independent perspective, straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT: News, debate, and opinion for Monday, December 29th. Live from New York sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: Good evening, everybody. Israeli warplanes tonight are attacking Gaza for a fourth straight day and Israeli troops are massing on the border. Israeli Defense Minister Ehud Barack (ph) today declared Israel will fight Hamas to, quote, "the bitter end". More than 300 Palestinians have been killed.

Four Israelis have been killed by Hamas rockets in three days. Anti-Israel protestors today clashed with the British police outside the Israeli Embassy in London. It was one of a series of anti-Israel protests around the world. And Nic Robertson reports from Jerusalem on the latest fighting. Nic, what are the Israeli forces doing tonight?

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT: Well they have increased their security around Gaza. They have called up 6,500 reservists, about 2,500 or so have been activated so far. Tonight though they are continuing to hit targets inside Gaza within the past half an hour, a number of loud explosions were heard in Gaza.

According to unofficial reports so far, 10 people killed and 40 wounded in those attacks. We do know, however, that the targets in those attacks were a foreign ministry run by Hamas and an internal security building run by Hamas, over 300 missile strikes so far by Israeli defense forces. More than 150 rockets fired out of Gaza so far in the past four days by Hamas. Seventy-five of those rockets fired out in the past 24 hours, an indication that Hamas beginning to find its war footing. Two Israeli civilians killed in those rocket attacks today. One of the rocket attacks reaching as far north as Ashdog (ph) on the coastline, farther north, than rockets have hit before from Gaza.

That increasing the potential number of casualties around Gaza as the rockets continue to come out. The foreign minister here in Jerusalem has warned Palestinians that if they're hiding in Gaza, if they are located near fighters and their ammunition near weapons' supplies then they should move because those are going to be the targets of the Israeli strikes -- Kitty.

PILGRIM: Thanks very much, Nic Robertson from Jerusalem.

Well there were anti-Israel protests in more than a dozen countries as the Israeli airstrikes intensified. In London, there were hundreds of protestors and they confronted police outside the Israeli Embassy. The protestors shouted pro Hamas slogans and blocked the road. About 2,000 protestors marched to the center of the German capital Berlin. The protestors disbursed peacefully after about three hours and there have also been anti-Israel protests in cities across the United States, including this protest in the city of Anaheim, California.

The White House today blamed Hamas for the escalation of the violence in the Middle East. Now the White House saying Hamas has shown, quote, "its true colors as a terrorist organization", unquote. Elaine Quijano reports from near President Bush's ranch in Crawford, Texas.

(BEGIN VIDEOTAPE)

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT (voice-over): As Israeli airstrikes across Gaza stretched in to a third day, President Bush at his Texas ranch, conferred with top advisors via secure video leaving it to a spokesman to reiterate the U.S.'s view.

GORDON JOHNDROE, WHITE HOUSE SPOKESMAN: Hamas has a choice to make. Right now they are choosing to be a terrorist organization that fires rockets into Israel. That is not going to lead to a sustainable cease-fire.

QUIJANO: The Bush administration continues to stand by Israel, claiming Hamas for provoking the latest violence. And as Israel amasses tanks near the Gaza border, the U.S. is being cautious and commenting on the possibility of an Israeli ground incursion.

JOHNDROE: I think that any ground operation, according to the Israelis would be part and parcel of the overall operation, given their statements saying that they don't want to retake Gaza that they simply want to protect their people.

QUIJANO: Secretary of State Condoleezza Rice has been in contact with senior Palestinian and Israeli officials trying to work towards what the U.S. is calling a sustainable and durable cease-fire, but the analyst say with Hamas, which controls Gaza, at odds with other Palestinian leaders any lasting peace appears a long way off.

UNIDENTIFIED MALE: We have to understand that unless we have a united Palestinian house and some enforceable cease-fire it's very difficult to diplomacy.

(END VIDEOTAPE)

QUIJANO: Now Bush aides say it's up Hamas to stop the violence, and even as Israel moves tanks along the Gaza border, the United States is notably not urging restraint -- Kitty.

PILGRIM: In terms of public statements today, how strong would you assess it today, Elaine?

QUIJANO: Strong public statements again, but not really notably anything different necessarily in terms of the ultimate message and that is the United States views this, really, as the fault of Hamas. That if it had not been for Hamas firing rockets into Israel, it would not have prompted the response on the part of Israel.

Now asked today whether or not the level of the response has been justified, White House spokesman Gordon Johndroe said the United States understands that Israel is doing what it must to defend itself -- Kitty.

PILGRIM: You know actually you bring up a Gordon Johndroe, he -- the quote that I read earlier today, Elaine, was Hamas is choosing to be a terrorist organization. Hamas has a choice to make. That's seems fairly succinct and fairly strong.

QUIJANO: It is very strong and the idea here being that of course they understand with the complicated politics of the Palestinian landscape, that there is a choice to be made by the leaders of Hamas who have also tried to position themselves as a governing party. Clearly here what the White House is saying is that any thought of being taken seriously as a legitimate organization is being wiped away every time Hamas fires rockets into Israel -- Kitty.

PILGRIM: Thanks very much, Elaine Quijano. Thanks Elaine.

Well President-elect Obama has not made any public statement about the escalating violence between Israel and Hamas. Now one of his advisors said, quote, "There's only one president at a time". But it is clear the conflict will be a major issue for the president-elect when he takes office on January 20th. Ed Henry reports from Honolulu -- Ed?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well Kitty, it's unclear whether or not the president-elect will have a different approach to this whole conflict than President Bush has had. Simply because we've not heard from the president-elect during this working vacation here in Hawaii. He has not spoken out during this crisis in Gaza and his aides are only putting out statements repeating the same mantra we've heard before, which is that there's only one president at a time. And they say they're saying that because they don't want to step on President Bush's toes. They don't want to send confusing signals around the world about the fact that they have not officially taken office yet. So they keep saying they want the U.S. to speak with one voice. But when you look closely at what Barack Obama said as a candidate, including during his trip to Jerusalem back in July, it's very interesting because he said a lot of similar things to what you just heard from Elaine in terms of what President Bush and his aides say.

For example, Barack Obama as a candidate, said in July, that if Hamas was reigning down rockets on his house where his two young daughters sleep, he would understand why Israel needs to react so forcefully. So obviously, that sounds very similar where the Bush administration is right now. So, it's unclear whether or not there really will be a new approach come January 20th.

What the president-elect is doing in the meantime is trying to stay in the loop. Over the weekend he had a phone call with current Secretary of State Condoleezza Rice. He also consulted with some of his own top advisors including retired Marine General Jim Jones, the incoming national security adviser, as well as Senator Hillary Clinton who will be secretary of state if the U.S. Senate confirms her, obviously.

But as you noted at the top, this is a fresh reminder of the many national security challenges that this incoming president will face come January 20th. And we've been speaking a lot in recent weeks about financial security challenges. But there are also are a lot of national security challenges that could end up defining the Obama presidency -- Kitty?

PILGRIM: That's right, Ed, not an easy time. Thank you very much. Ed Henry.

Well, the conflict between Israel and Hamas today led to a jump in crude oil prices. Crude oil today ended just above $40 a barrel. That's a rise of more than $2 a barrel since Friday's close.

Coming up, will the Israeli Hamas conflict escalate? Now two leading authorities on the Middle East will join me.

And also new evidence of the rising power of violent Mexican drug cartels.

Also will the government bailout of Chrysler and General Motors be good for American workers?

And new questions about President-elect Obama's plans for middle class tax cuts. Who will benefit? Stay with us.

(COMMERCIAL BREAK)

PILGRIM: There are new questions tonight about President-elect Obama's promise of tax cuts for middle class Americans. Well, those tax cuts are part of his administration's stimulus plan and the question now is who will benefit from these tax breaks? Louise Schiavone has our report.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): The Obama team's on-again off-again attack on the Bush era tax package is now on again. In, says Barack Obama political advisor David Axelrod (ph), tax breaks for the middle class. Out, tax breaks for upper income groups.

DAVID AXELROD, OBAMA ADVISOR: When you add up the tax cuts and the expiration or the repeal of the tax cut for the wealthy, it will amount to a net tax cut for the American people.

SCHIAVONE: Under the plan so-called middle class breaks would be offset by a roll back of upper income tax incentives, but critics say there could be a larger price.

J.D. FOSTER, HERITAGE FOUNDATION: Our focus right now has got to be on getting the economy stronger and you don't strengthen the economy by threatening tax hikes on anybody.

SCHIAVONE: Axelrod's comments beg the question, what is middle class? Economists say it ranges from 40,000 to $60,000 for households to as high as $80,000 for families. But how would that compare to Mr. Obama's campaign promise of no new taxes for Americans earning less than $250,000? And analysts warn these shifting signals could further disrupt an already precarious economy.

GERALD PRANTE, THE TAX FOUNDATION: What you don't want now is uncertainty. He may not be raising capital gains taxes. We don't know but it's this type of induced risk that's out there, this political risk that's in the market. It would be better if he just said what he's going to do regardless of what it is.

SCHIAVONE: It's expected that the Obama middle class tax break plan would cost as much as $140 billion over two years. While about 100 billion would be saved by eliminating tax breaks for the wealthy.

(END VIDEOTAPE)

SCHIAVONE: But, Kitty, that 100 billion is nothing compared to the roughly half trillion or quarter-trillion dollar -- three quarters of a trillion dollar cost that could emerge from the new administration's economic stimulus plan -- Kitty?

PILGRIM: Thanks very much. Louise Schiavone. Thanks, Louise.

Well as Americans continue to struggle financially, the number of Florida residents turning to food stamps is at record levels. In the last two years, the number of Floridians needing food assistance has skyrocketed. More than 40 percent to nearly two million people. That's the second largest increase in Florida's history.

And that means one, almost one in 10 Floridians now using food stamps. State officials say many more residents qualify for the program. Now, nationwide the number of people using food stamps is also soaring. More than 31 million people use food stamps. That's up 17 percent from a year ago.

The federal government tonight is on the brink of giving General Motors and Chrysler billions of dollars in emergency loans. But the government is not requiring carmakers to buy American auto parts. Now supporters of a "Buy American" provision say tax dollars could actually subsidize foreign companies. Bill Tucker has our report.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): When the American automakers went hat in hand to Washington to ask for a bailout they ran into a lot of resistance and skepticism, if not hostility. Congressman Don Manzullo at one point put the head of Ford on the hot seat over the issue of outsourcing.

VOICE OF REP. DONALD MANZULLO (R), ILLINOIS: Are you going the use U.S. taxpayer dollars to resource or to source more tool and dye equipment and fasteners from overseas facilities for American manufacturers?

UNIDENTIFIED MALE: No. No.

TUCKER: That reassurance from Ford, which is not receiving any bailout money, apparently was enough. Congress did not include any buy-American requirement in the loans to GM and Chrysler requiring them to buy parts from suppliers here in the U.S. And according to data from the United States Business and Industry Council, parts made overseas are rapidly increasing in market share, threatening America made parts and in turn American factories and jobs.

In the decade from 1997 to 2006, imports for auto lighting equipment more than doubled. Imported engines and engine parts rose by a third and imported power train and brakes dramatically increased. Supporters of a buy-American provision say the requirement would bailout the automakers while giving a boost to the broader manufacturing sector. They say not doing so could have negative consequences.

ALAN TONELSON, U.S. BUSINESS AND IND. COUNCIL: If these companies are not at some point very soon, held to much higher U.S. content requirements, these precious taxpayer dollars are going to wind up subsidizing foreign auto making and foreign auto parts making and foreign economic growth, rather than growth and revival in the U.S. economy.

TUCKER: As for trusting the automakers?

REP. BRAD SHERMAN (D), CALIFORNIA: Careful reading of the written pronouncements of the automobile companies indicates that they themselves are not going to adhere to the kind of tough conditions that the American people expect and that the auto industry needs.

(END VIDEOTAPE)

TUCKER: Now, those opposed to a buy-American provision say that such a provision is unworkable given the complex nature of global supply chains and they argue that a buy-American provision is likely, not legal, under the rules of the World Trade Organization, which may seem incredible, Kitty, but there you have it.

PILGRIM: You know the buy-American has great logical appeal, though, when you actually describe it.

TUCKER: What happens is our trade agreements set us up for a conflict of national interest versus international interest and it's going to be a difficult one for Congress to have to resolve because everybody likes to play this aren't we good guys in the international world and they've been hesitant to put our own national interests in front, which is arguably what they need to be doing right now.

PILGRIM: Thanks very much. Bill Tucker.

Well that does bring us to tonight's poll. So we would like you to answer this question -- should carmakers be required to buy American parts if they are receiving American taxpayer bailout money. Yes or no? Cast your vote at loudobbs.com. We'll bring you the results a little bit later in this broadcast.

And still ahead, much more on Israel's all-out war with Hamas, including the Iranian connection. We'll have two leading experts on the Middle East and they'll join us.

And also Mexico's brutal drug war escalates; we'll have a special report on the threat to this country.

(COMMERCIAL BREAK)

PILGRIM: Mexican drug cartel violence tonight is reaching dangerous new levels. Now tonight there are new charges of drug cartel corruption in Mexico that range from a presidential guard to a beauty queen. Casey Wian has the report.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Mexican President Felipe Calderon's two-year war against drug traffickers and drug cartel corruption has now apparently spread to Calderon's own presidential guard. Mexican prosecutors announced an army major assigned to a presidential guard unit is under house arrest for allegedly passing information to a drug cartel in exchange for as much as $100,000.

Perhaps less of a threat, yet still a major scandal in Mexico, involves Laura Zuniga (ph), a Mexican beauty pageant winner arrested last week with her boyfriend and another man. They were allegedly transporting assault rifles, other weapons and ammunition and $50,000 cash. Her boyfriend is allegedly the brother of a top drug trafficker.

UNIDENTIFIED MALE (through translator): I think the criminals have penetrated pretty much everything. It's sad for our youth.

WIAN: Too common in Mexico these days are gruesome images such as this. The bodies of 12 men, nine of them decapitated, found murdered in southern Mexico. At least seven were soldiers. Across the border from San Diego in Tijuana, the bodies of seven more suspected drug cartel victims were discovered over the weekend. The carnage comes on the heels of a meeting between U.S Secretary of State Condoleezza Rice and her Mexican counterpart Patricia Espinosa (ph). Each side praised the other's efforts to fight drug cartel violence.

CONDOLEEZZA RICE, U.S. SECRETARY OF STATE: We have enormous respect for President Calderon and what his government is trying to do with this scourge of organized crime and drug trafficking and all of the associated problems that it brings.

PATRICIA ESPINOSA, MEXICAN FOREIGN REL. SECY. (through translator): The drug market leads to crimes in money laundering and precursor chemicals and weapons trafficking and corruption and a growing level of violence that affects our societies on both sides of the border and that is why we are committed to fully attacking this problem jointly with great determination.

WIAN: This month, the United States released about $200 million to pay for helicopters and other equipment to help Mexico fight drug cartels. The United States has pledged more than a billion dollars in military and law enforcement aid during the next three years.

(END VIDEOTAPE)

WIAN: And much of that money is conditional on Mexico cleaning up its notoriously corrupt law enforcement and judicial systems. As those efforts continue the body count escalates. More than 5,300 people have been killed in drug cartel violence this year alone -- Kitty?

PILGRIM: Well Casey that's an interesting point because you could say -- you could argue conceivably that a two-year war is making some progress if you keep turning up these cases, but in fact you point out that the body count suggests exactly the opposite.

WIAN: Absolutely and it's clear that the Mexican drug cartels are now influencing -- they're spreading their influence throughout Mexican society in greater numbers than they ever have before. We knew that there was going to be an escalation in violence when Felipe Calderon two years ago decided to crack down on the cartels. No one expected it would be this brutal and last this long and so far, no end in sight, Kitty.

PILGRIM: Very disturbing, thanks very much. Casey Wian.

Well a Mexican court sentenced a human trafficker to 60 years in prison for smuggling about 200 people into this country. Those people included supporters of the terrorist group Hezbollah. Salim Boughader Mucharrafille was convicted of organized crime and human smuggling charges. He's a Mexican of Lebanese dissent. Now Boughader ran a cafe in Tijuana, across the border from San Diego.

Time now for some of your thoughts and Paul in Florida wrote to us: "How can we get the message to the airheads in Washington that our border are neglected?"

And Ernie in Florida wrote to us: "The lack of security at our borders is not only an invitation to terrorists; it is an open invitation to drug dealers, gangs and criminals."

And Brenda in Indiana wrote: "Any point of entry that is not fully protected is an invitation for disaster. It is irrational for the federal government to not work proactively to ensure our defense. So the question is, why are our leaders so obviously comfortable ignoring our nation's vulnerabilities?"

We'll have more of your e-mails a little bit later in the broadcast. And each of you whose e-mail is read here receives a copy of Lou's new book "Independents Day: Awakening the American Spirit". It's now available in paperback.

Well, turning now to dangerous weather across the country. Tonight, thousands of Michigan residents are still without electricity and that's after a winter storm knocked out power in many areas. Winds of more than 60 miles an hour knocked down trees and power lines. More than 400,000 Michigan homes and businesses were left in the dark.

And some of those customers could be without power until Wednesday. Melting snow and ice is causing flooding in Illinois and some other states. Flood warnings are in effect throughout the Midwest.

Coming up, Governor Rod Blagojevich of Illinois hangs on to power. Will he be impeached? Three top political analysts will join us.

Also new airstrikes in Gaza at this hour as Israel declares all- out war. We'll have the very latest on that.

And two leading authorities on the Middle East will tell us whether Israel's war with Hamas will escalate.

We'll also examine close ties between Hamas and Iran and what Iran could gain from this conflict. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Israel tonight launched a new wave of airstrikes against Hamas targets in Gaza. And this is the fourth straight day of attacks. Israel tonight destroyed at least three buildings including the foreign ministry. A Gaza-based journalist told CNN he heard 18 blasts. He said two fires were blazing in the early-morning hours in Gaza.

Well Israel says it intends to destroy the ability of Hamas to fire rockets and mortars at Israel. Israeli officials say many of those weapons came from Iran. Brian Todd has the report.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice-over): With each air strike, anti-Israeli protests in the Arab and Muslim world ratchet up.

UNIDENTIFIED GROUP: (INAUDIBLE)

TODD: That pot being feverishly stirred from Teheran, the Iranian leadership calling for Muslims around the world to show their anger toward Israel, defend Palestinians in Gaza. U.S. and Israeli officials tell CNN Hamas militants in Gaza have been supported by Iran in the past with weapons, cash and...

ISAAC HERZOG, ISRAELI SECURITY CABINET: We know of Hamas operatives, commanders and soldiers who were trained in Iran itself. We know that. So there is close cooperation and the exchange of know- how in activities.

TODD: Know-how, he says, like advice on how to make the Kassam rockets fired into Israel.

Contacted by CNN, an Iranian official said there's no evidence to those claims. Officials and analysts we spoke with say whatever level of support Iran has given, it doesn't mean Iran is waging a full-proxy war against Israel through Hamas now. They say Iran's ties to fellow Shiite leaders of the group Hezbollah are much closer than they are to Hamas's Sunni leadership. Iran's support for Hamas is basically to counter U.S. backing of Israel, and, analysts say, the blockade of Gaza by Israel and Egypt makes it very tough for Tehran to get anything to Hamas.

But don't think Iran is not using this conflict to its advantage, as it has in the past.

SHIBLEY TELHAMI, BROOKINGS INSTITUTION: Iran benefits in terms of Arab public opinion in this environment, because the Arab public is very angry. They see the pictures. They blame Israel. They blame the U.S. for supporting Israel.

TODD: Another strategic success for Iran here, diversion of the world's attention from its own nuclear program.

(END VIDEOTAPE)

TODD: Israeli officials have been working for months to focus attention on Iran's nuclear program, in an effort to get the new Obama administration to act quickly on it. Now, all eyes will be on Gaza, and the concern over whether this conflict will escalate into something bigger -- Kitty?

PILGRIM: Thanks, Brian. Brian Todd reporting from Washington.

Joining me now are two of this country's leading authorities on the Israeli-Palestinian conflict. We're joined by Stephen Cohen. He is the founder and president of the Institute for Middle East Peace and Development. He's also a visiting professor at Yale University. Joining us from Washington is James Zogby, founder and president of the Arab-American Institute.

Gentlemen, both of you, thank you for coming on the program. As we've been watching the events unfold over the last few days, there's been really scenes of terrible destruction. Mr. Cohen, I'd like to ask you, Ehud Barak today said it's all out war against Hamas. We've seen the Israeli government approve a measure to call up approximately 7,000 reservists, 2,000 are already being called up. And the Israeli prime minister actually just said this could last for some time. What's your assessment of how serious the situation is, and how long it could go on?

STEPHEN COHEN, INSTITUTE FOR MIDDLE EAST PEACE AND DEVELOPMENT: Well, it is a very serious situation because the suffering of the people in Gaza is a very long-term problem. It has gone on for many, many years. When Israel decided, under Prime Minister Sharon, to withdraw from Gaza, it was hoped that that would produce some improvement in the situation of the life of the people of Gaza. But Gaza was then quickly taken over by Hamas. And the situation for them has gotten only worse, because as they renewed conflict with Israel, Israel decided that it had to stop the bombing, the rockets fire, and any other violence that was being done against Israeli civilians by Hamas.

So this is a very serious situation. And I think it's very serious for the Palestinians and very serious for the Israelis and also, very serious for Egypt. Egypt is caught in a terrible dilemma. It would like to see this problem end. But it is being criticized harshly by people like Hassan Nasralla of Lebanon for not opening the border between Gaza and Sinai, and allowing the Palestinians to run out in large numbers.

PILGRIM: Let me bring it back to the Palestinian situation. And we had Mustafa Barghouti, who is an independent member of the Palestinian parliament, make a comment. And I would like to get Mr. Zogby's comments on this. Let's listen to it for a moment.

(BEGIN VIDEO CLIP)

DR. MUSTAFA BARGHOUTI, PALESTINIAN PARLIAMENT MEMBER: It will not make Hamas weaker. It will make Hamas stronger. It will make Islamic trends in the whole Arab world much stronger. It is embarrassing Abbas and making him look not only very weak, but incapable of protecting even their beliefs, his own population --

(END VIDEO CLIP)

PILGRIM: Mr. Zogby, the Palestinians are still divide. Do you agree that this will make Hamas stronger?

JOHN ZOGBY, ARAB AMERICAN INSTITUTE: Absolutely. We've seen this tragedy play out so many times in the past in the rhetoric, the sort of hollow bluster from Israel and from Hamas or Hezbollah, or whoever Israel is fighting at the time; both sides echo each other in the sense that this is the war to end all wars, and this is -- we're going to defeat the enemy. We're going to deal them a blow that they'll never recover from.

At the end of the day, the only impact is, number one, massive loss of life and destruction of property, an increase in anger and resentment for Israel and the United States, an enhancement of the extremists trend in the region, and a weakening of support for moderate allies of the United States of America, who are caught in a bind. And so, the pathetic nature of this tragedy is that we know exactly how it's going to end.

What has to happen is restraint. And that's where the U.S. is at fault, because the role that America can play is, in effect, the adult supervision on the playground. And instead, you have necessary two pathologies playing out. One side thinking violence will end the occupation. The other side thinking violence will stop the resistance to the occupation. And the U.S. being a coat-holder and nothing more. The impact here is that it hurts us. It hurts Israel. It hurts the Palestinians most of all. And it sets back peace and moderation in the whole region.

PILGRIM: You make a great point, Mr. Zogby. President Bush came out -- or a spokesman came out today, very strong words. Hamas is choosing to be a terrorist organization. Hamas has a tough choice to make. But Mr. Cohen, what should the United States be saying to Israel now that it's not saying?

COHEN: It has to make sure that when the Arab league Meets that they know that Israel will accept a reasonable understanding with Hamas about what will end this conflict, not making a demand of Hamas that would humiliate Hamas, because then Hamas will not accept a cease-fire that is reasonable for Israel. It is a very tough negotiation that has to be led by the Arabs. So far, the people involved with Hamas, Turkey and Qatar, are not capable of producing the agreement that is necessary with Israel. It will eventually involve Egypt, Saudi Arabia and Jordan, and Israel has to know from the United States that the United States wants Israel not to extend this, but to agree on a cease-fire that will not only end Hamas' actions against Israel, but will also get Israel to open up the communication and transportation between Gaza and other parts of Israel and so on, which will allow Gaza to breathe, to have an economy, to have fuel and so on.

PILGRIM: Mr. Zogby, I'll give you the last word on that one.

ZOGBY: Sure. The tragedy of Gaza is an old one. From the beginning of the occupation, there is no people who have suffered more in the region than the people in that absolutely forsaken piece of land. They are desperate. They are angry. These Israeli actions only increase it and strengthen the role of Hamas. We've had chances in the past to bring -- create Palestinian reconciliation. We had the Mecca Accords, led by Saudi Arabia. But Israel and the United States wouldn't honor those accords.

I think that Hamas should be forced to make a choice between terrorism and governance. But when they did make the choice, and agree to the Mecca Accords, we didn't respect it. So I think that we have to give it one more shot. Peace needs one more shot. Israel, the United States and the Palestinians need one more shot. But we have to honor the agreements made once they are made.

PILGRIM: Gentlemen, what you're saying makes a lot of sense. Thanks for coming on the program. Stephen Cohen, James Zogby, thank you.

Still ahead, do Americans think Caroline Kennedy is qualified to be a U.S. senator? We'll have new poll results that are just released.

Also, the very latest in the fight to impeach Illinois Governor Rod Blagojevich. We'll discuss those stories and more with three of the best political analysts in the country. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: The attorney for Illinois Governor Blagojevich tonight is hitting back at the prosecutors and this attorney says federal wiretaps may have caught the governor making what he called unfortunate remarks. But he says those tapes do not show the governor doing anything that justifies impeachment. U.S. Attorney Patrick Fitzgerald wants lawmakers to hear those tapes. State lawmakers are investigating whether the Illinois General Assembly should vote on impeachment. Blagojevich returned to work today after the Christmas holiday.

Accused Wall Street ponzi scheme operator Bernard Madoff is now also a victim of theft. Police in Palm Beach, Florida, say burglars broke into Madoff's estate and stole a statue worth more than 10,000 dollars. Police have no leads on this case, and Madoff remains under house arrest in his Manhattan apartment on 10 million dollars bail. He is accused of stealing some 50 billion dollars from investors.

Joining me now for more on these and other stories are three of the best political analysts in the country, and all of them are CNN contributors. We're joined by Democratic strategist Robert Zimmerman, Pulitzer Prize winning columnist for the "New York Daily News" Michael Goodwin, and in our DC bureau, syndicated columnist Diana West. Thank you all for being here.

You know, the White House today -- let's start with the Israeli- Palestinian issue because we've been watching this video for days now and it's just been really quite disturbing. The White House came out with a strong statement blaming Hamas for the violence. Israeli troops are on the border. But we did have Ehud Barack quoting Obama. And let's listen to what he had to say about it.

(BEGIN VIDEO CLIP)

EHUD BARAK, ISRAELI FOREIGN MINISTER (through translator): I stood next to President-Elect Obama in July of 2008 when he visited Insterot (ph). There, he said, if someone were to fire a missile on my house while my two young daughters are sleeping, I would do everything I could to stop him. And I assume that the Israelis will do the same thing.

(END VIDEO CLIP)

PILGRIM: Now, you know, of course, we can't have two presidents at once. But this is the problem that President Barack Obama will inherit. Some thoughts on those comments? ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: I think the comments that President-Elect Obama made when he was visiting Israel, that were reflected in the Knesset, I think demonstrate that we have a bipartisan foreign policy, a bipartisan foreign policy that is reflected by both the comments from the Bush administration and by the foreign policy team that Barack Obama has assembled. General Jim Jones, his national security adviser, Bill Gates in defense, of course, Senator Clinton as the secretary of state designee.

And the issue here is not just the fact that it's the terrible tragedy with Hamas, as perpetrated on its own people, but we as Americans have a very special stake in seeing Israel succeed, because this is part of the war on terrorism. And that has to be understood. This war against Hamas' conduct is not just a war for Israel to defend itself. It's also a war that all of us have to be committed to fighting.

PILGRIM: Right. A very serious war, Robert, but, you know, the problem is that the expectations on the Obama administration may be dangerously high. We actually one of our guests earlier in the day, Aaron David Miller -- he's a public policy scholar at the Woodrow Wilson International Center in D.C., actually said something to this point. Let's listen to that for just a moment.

(BEGIN VIDEO CLIP)

AARON DAVID MILLER, WOODROW WILSON INTL. CTR: This man is not the war president and he's not the peace president. He's the fix American's house broken president. He was not elected to resolve the Israeli-Arab or Kashmir conflict. While he can't be a consequential president without being involved in foreign policy, that's not his mandate.

(END VIDEO CLIP)

PILGRIM: This is -- you see what a tough position he's in. Diana, we have bipartisan support for a fairly consistent and coherent policy. Yet, the situation itself is so dire.

DIANA WEST, SYNDICATED COLUMNIST: I hope Robert is right no that. We actually haven't heard President Elect Obama or his spokesman be supportive of the White House statements. They've just said that they believe there's only one president at a time. As far as his policy team, we have quite a coterie of policy experts who are known for being hostile to Israel or even pro-Palestinian. I'm not sure we know what direction Barack Obama is going to be taking this. I'm actually a little worried about his silence on this.

ZIMMERMAN: Diana, I don't think you have to worry about Secretary of Defense Robert Gates or, for that matter, General Jim Jones or Secretary of State designee Hillary Clinton. They have demonstrated their strong resolve and strong commitment for Israel. They're leading the foreign policy team. Likewise, Barack Obama's statements have always reflected strong support for Israel. I think it's time to put the partisanship aside and to come together as one government, and keep our bipartisan foreign policy consistent. PILGRIM: Michael, do you see daylight between them?

MICHAEL GOODWIN, "THE NEW YORK DAILY NEWS": I do agree with what Robert said about that team. Diana is also right that some of Obama's statements have not been clear. The idea of changing the world -- one of the reasons a lot of people in the Arab world hate America is because of our support of Israel. I think that people need to remember -- those people need to remember that it has been the policy of the United States, going back several presidents now, for a two state solution, that the Palestinians would have a state. Ehud Barak, when he was prime minister of Israel almost ten years ago, offered the Arabs a state. Bill Clinton tried to broker that deal. Yasser Arafat turned it down.

Hamas does not want to negotiate with Israel. It wants to destroy Israel. So all these expectations about Obama -- if he's going to be able to make a deal -- there's only one deal to be made. That is fundamentally, will Hamas accept Israel's right to exist? Everything else is a detail.

ZIMMERMAN: There is no deal with Hamas. The only deal with Hamas is for the Palestinian residents of the West Bank to overthrow the Hamas government. We've seen -- referring to the Palestinian residents of Gaza to overthrow the Hamas government. We've seen on the West Bank how the Palestinian Authority has worked cooperatively with the Israeli government, and they've made progress there. So the potential does exist. The obstacle is whether those who live in Gaza can overthrow Hamas.

PILGRIM: This may be the great test of the administration that Joe Biden was actually speaking about. We'll be back in just a moment. We're going to have more with our panel.

(NEWS BREAK)

PILGRIM: We'll be back in just a moment, so stay with us.

(COMMERCIAL BREAK)

PILGRIM: We're back with our panel, Robert Zimmerman, Michael Goodwin and Diana West. Let's start with the Caroline Kennedy controversy. It's been a big topic of discussion, at least in New York state for the last week, and many other places. I'd like to bring up a poll. It's an interesting one. More than half of Americans think that Caroline Kennedy is qualified to be senator, and that's 52 percent yes, 42 percent no. But I think the feeling, or at least the discussion going on in most circles is that maybe she hasn't articulated her desire to become senator sufficiently. What's your thoughts on this?

ZIMMERMAN: She started over the weekend to give interviews and that's a good start. The previous tactic of having questions submitted in writing and then only selecting certain questions to answer wasn't exactly the most transparent or, for that matter, effective way to establish her vision or her leadership. Now that she's giving answers, it's going to be up to the governor to make his evaluation as to who is most qualified to serve.

What's important here to note is that she's just one of a broad spectrum of candidates who are open for that position who have truly served the state and the nation very effectively. She has to make her case. She started the process, but she is certainly not there yet.

PILGRIM: You know what I find really intriguing is that if you split it up men and women, that 57 percent of women actually think she's qualified to be senator. I'd like to ask you, Diana, do you think there's a gender issue playing into this whole discussion?

WEST: Well, there always is in these kinds of questions. This is, in many ways, also kind of the American-Idolization of politics, putting these sorts of questions up to polls. Who thinks she's qualified, who doesn't? Getting back to one thing that Robert said a little bit earlier, it's not partisan politics trying to parse the purposes and policies of Barack Obama's advisers, many of whom, including Jim Jones and Robert Gates, are not known as good friends of Israel. He has a cipher at this point. And we have to wait and see what will come. I think it has nothing to do with partisanship. I hope Robert is right.

PILGRIM: You've got your licks in on Robert.

ZIMMERMAN: I yield.

PILGRIM: Let's go to Michael Goodwin, who's actually written in Sunday's "Daily News" a column about the Caroline Kennedy issue. Pretty tough stuff. Not ready for the job, you said. "It's a cringe inducing experience" and "New York can do better." Who do you think would be a better candidate? Why are you so harsh on this issue?

GOODWIN: I don't think it's harsh and I don't endorse candidates. Caroline Kennedy put herself out there. She basically had the field to herself. She's the only one openly campaigning for it. We should remind viewers that this is not an election. The governor of New York has the sole vote. It's an electorate of one. She lobbied him. She had her family and friends lobby him. She went out and she has made a fool of herself, frankly. She's embarrassed, I think, about everybody who has talked to. It's just kind of cringe inducing.

She doesn't have the answer to any questions. It's a kind of gibberish, heartfelt, family. It always comes back to her name. That's her only calling card. Without her name, she wouldn't be in this.

PILGRIM: If you're not harsh, I don't know what that is.

ZIMMERMAN: He's also one of the smartest and one of the most inciteful political columnists in the country. This was a column read around the nation. Whether I agree with all of it or not is another story. What's interesting about the polling is not just the national polling, but in New York state, she's not leading the field in polling. She's running even or slightly behind Andrew Cuomo. There's clearly no popular mandate for her. She has to make her case like every other candidate does. I think that is also worth nothing.

This is not -- I think they recognize. I think she and her supporters recognize this will not be a legacy victory. She's going to have to make her case. She's begun the dialogue. But she also has to match the records of others who have very accomplished records of achievement.

PILGRIM: That's right. Diana, last word.

WEST: It all comes down to Governor Paterson. It's his vote or no ones. I don't know. It will depend on how much she has seemed to embarrass herself.

PILGRIM: We will certainly be following this in the weeks ahead and probably be discussing about it by tomorrow. Thank you very much for being here, Robert Zimmerman, Michael Goodwin and Diana West. Thank you.

Still ahead, we have some of the results of tonight's polls. We'll have some more of your thoughts. Stay with us. We'll be right back.

(COMMERCIAL BREAK)

PILGRIM: Tonight's poll results, 95 percent of you think car makers should be required to buy American parts if receiving American taxpayer bailout money.

We do have time for some of your thoughts. D.C. In Tennessee wrote to us, "Dear Lou, I have some advice for the new Congress and administration: whatever you're thinking of doing, do the opposite. The results of the last 20 years suggest it couldn't hurt."

And Douglas in New Jersey wrote: "we got into this financial mess by people spending money they didn't have and lending money to people who couldn't pay it back. Then the government decides to fix the problem by spending it doesn't have and lending money to companies who can't pay it back. We're being fooled a second time by the same elites that created the problem in the first place."

And we have Gregory in North Carolina: "Lou, I love your show. You bring some of the best viewpoints on news today. The questions you ask are tough, pertinent and what we as the public want to ask. Thank you for keeping everyone accountable for their actions."

And one more. Gary in Texas: "Thank you for your report on Heroes Sunday Night. I have had three sons in the wars, one still in Afghanistan. I cried and laughed and I never thought of anyone being my hero until my sons went to war and now I have three of my own.

Do send us your thoughts. Go to LouDobbs.com.

Thanks for being with us tonight. "CAMPBELL BROWN: NO BIAS, NO BULL" starts right now, with Tom Foreman sitting in for Campbell Brown.