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CNN Late Edition with Wolf Blitzer

Interview With Donald Rumsfeld; Interview With Saeb Erakat; Interview With Ehud Olmert

Aired February 06, 2005 - 12:00   ET

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

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


WOLF BLITZER, HOST: It's noon in Washington, 9 a.m. in Los Angeles, 7 p.m. in Jerusalem and 8 p.m. in Baghdad. Wherever you're watching from around the world, thanks very much for joining us for "LATE EDITION."
We'll get to my interview with Defense Secretary Donald Rumsfeld in just a few minutes. First, though, let's get a quick check of what's in the news right now.

(NEWSBREAK)

BLITZER: While the votes are still being counted one week after Iraq's historic elections, returns at least so far are showing strong support for the party endorsed by Iraq's leading Shiite cleric, the Grand Ayatollah Ali al-Sistani. That could have major implications for Iraq's new constitution.

Our senior international correspondent, Nic Robertson, is standing by in Baghdad with details.

Nic?

NIC ROBERTSON, CNN CORRESPONDENT: Well, Wolf, for the first day in several days, the electoral commission has not announced any more new results.

There has been a second announcement by the monitoring commission, the monitoring board here in Iraq, who are monitoring the elections. They say they've looked at 80 percent of the voting stations. They find the electoral process to have been broadly satisfactory. At 12 percent of the stations, they say there were irregularities; at 9 percent intimidation; and at 5 percent of the voting stations they say some people were actually turned away -- but overall satisfactory.

The debate really going on now within the Shia religious circles. The strong showing of the religious Shia party so far, the United Iraqi Alliance, is leading some of their religious clerics to call for a very strong representation of Islamic law, the sharia law, to be enshrined into Iraq's new constitution.

However, the Sunni population, who partook less than the other parts of the population in Iraq in the election, some of their religious leaders have actually said they will not get involved in drafting this new constitution unless U.S. forces set a date to leave the country or begin to leave the country.

But it is the debate going on within the Shia religious circles that is perhaps giving most interest here. Who will take the lead political positions? And how much of that Islamic law will be drafted into the constitution?

And because those parties are feeling that they're in a strong position, they want more than perhaps they might have indicated before, Wolf.

BLITZER: So are people seriously concerned that some sort of Islamic theocracy could emerge out of these democratic elections?

ROBERTSON: Well, when I was talking with Kurdish leaders, just before the elections occurred, from the north of the country, who are relatively secular, they said their biggest concern about the Sunni Muslims not getting into the elections in a big way would mean that the Shias and possibly the religious element within the Shia community would come out in a more dominant form.

And it seems that these fears are realized. The more secular elements in the country -- and Iraq has been run on a secular basis for many years now -- are worried, many within the sort of secular Sunni community, many secular Shias, who would see the best way to keep Iraq together, to keep it united is for it to be a more secular Iraq.

Wolf?

BLITZER: Nic Robertson in Baghdad.

Nic, thanks very much. I'll pose that question to Defense Secretary Rumsfeld. That's coming up.

But let's move on to Pope John Paul II. He appeared in public for the first time today since being hospitalized last Tuesday.

Our senior international correspondent, Walter Rodgers, standing by in Rome with details of that.

Walt?

WALTER RODGERS, CNN CORRESPONDENT: Hello, Wolf.

Those who prayed for the recovery of Pope John Paul II were rewarded this Sunday at midday, His Holiness appearing at the Gemelli Hospital window, where he's been on the 10th floor since last Tuesday.

This was the pope's first public appearance in a week. Last Sunday, of course, he appeared in the Vatican at his bedroom window delivering the weekly Angelus. It was thought at that time that the pope was exposed to too much cold.

Monday the Vatican announced the pope had the flu. Tuesday he was rushed to the hospital here behind me, the emergency room there, because he was having difficulty breathing. There was considerable anxiety about His Holiness, much anxiety as to whether he would even be able to appear in public this Sunday in his hospital room. So there was great relief when the window was opened, His Holiness was sitting in a wheelchair. He managed to genuflect, managed to wave, managed a very brief blessing, a matter of seconds, in which he said in Latin, "In the name of the Father, in the name of the Son, in the name of the Holy Spirit." The actual Angelus itself was read for him, about 10 minutes long.

The pope thanking those who prayed for him, thanking for the doctors in the hospital, making it very clear through one of his aged archbishops, Leonardo Sandri, that he is still very much in charge here at the Vatican.

At the Vatican itself today, there were video screens set up so that the pope's message from his hospital could be seen. Pilgrims were there, a scant few thousand, about half what the normal size is.

Tomorrow we're expecting a bulletin, a new medical bulletin, on the pope's condition.

Wolf?

BLITZER: Walter Rodgers reporting from Rome.

Thanks, Walter, very much.

Back to Iraq now. The success of last week's Iraqi elections isn't quieting concerns about the continuing security challenges there.

Just a short while ago, here in Washington, I spoke with Secretary of Defense Donald Rumsfeld about the ongoing fight against insurgents, the time table for an exit of U.S. forces and much more.

(BEGIN VIDEOTAPE)

BLITZER: Mr. Secretary, welcome back to "LATE EDITION." Thanks for joining us.

DONALD RUMSFELD, SECRETARY OF DEFENSE: Thank you. It's good to be with you.

BLITZER: Let's talk about when the Iraqi military, the security forces, will be ready to completely take over responsibility of their day-to-day security. When do you believe that might happen?

RUMSFELD: The problem with answering that question with a date is that you can't know what the level of the insurgency is going to be. You don't know the extent to which Iran and Syria are going to misbehave or behave. You can't know the extent to which Zarqawi's money is going to flow in and he'll hire more criminals or suicide bombers.

So what you have to do is look at the conditions. And the answer is that you see the conditions on the ground, and they may be higher or lower, and the test is to see that the Iraqi security forces over time can manage that level of insurgency.

And we're working very hard to achieve that, and so far they've done a very good job.

BLITZER: Joe Biden, the senator, the ranking Democrat on the Foreign Relations Committee, writes in The Washington Post today, "We should focus on real standards, not raw numbers. The real standard is straightforward: Can an Iraqi soldier or policeman do what we ask American soldiers to do, provide law and order, protect the infrastructure, defend the borders and, above all, defeat the insurgency? There are nowhere near 136,000 Iraqis capable of accomplishing these goals."

Is he right?

RUMSFELD: The 136,000 is the number of Iraqi security forces. Some of them are trained to be policemen. And, now, a policeman is not a counterterrorism or a police commando. He's not a regular army officer. He's a policeman. And he's trained to do that.

So there are about seven or eight or 10 different categories that are being trained to do very different things. So it is correct to say that they all can't be policemen and they all can't be counterterrorists. But it is not correct to say that there are not 136,000, because there are, but they're trained to do quite different things.

The...

BLITZER: How many are there? Of the 136,000, I assume 40,000 or 50,000 are police. But how many of the soldiers are really ready to go out there and fight, kill and protect their people?

RUMSFELD: We've got the numbers of each category.

Now, the thing that's correct in that statement you've read is that numbers are interesting, but they're not determinative.

Quality is also important. And that means, how good are the noncommissioned officers? How strong is the chain of command? How good is their intelligence? What is their mobility? Can they move around the country and be sustained?

Those are issues -- are they battle-hardened? Some of them just came out of training. They're green as grass. Some of them have been there a year. They fought in Fallujah. They helped protect the polling places, and they know what they're doing, and they do a very good job.

BLITZER: So, you don't want to give us a number of how many you think are really good at that job already?

RUMSFELD: At the -- depends on what's "that job." They're good at what they're being trained for, after they've been at it a little while. Then it just takes them a while to get good. The thing that worried me about the statement you read is, there is no military in the world that's as good as the United States military. I mean, the idea that these folks are going to be able to pick up and start operating like our special operations people do or like our Green Berets do or like our soldiers do or our pilots or our Navy people, they're not. I mean, we have the best military on the face of the Earth.

These people are going to develop a capacity to be a good military for that part of the world.

BLITZER: That's why the president presumably said this in his State of the Union address. Listen to what he said.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We will not set an artificial timetable for leaving Iraq, because that would embolden the terrorists and make them believe they can wait us out.

We're in Iraq to achieve a result: a country that is democratic, representative of all its people, at peace with its neighbors and able to defend itself.

(END VIDEO CLIP)

BLITZER: All right. Now, that's a very ambitious, very ambitious agenda. It sounds like that's years away.

RUMSFELD: It doesn't to me, but certainly that's the goal he has had from the beginning.

And when he says defend itself, I don't think he's talking about defending against Iran or its neighbors, he's talking about defend itself from the internal insurgency.

And over time, that could take many years for them to develop the military capability to defend against an external aggression.

But the presence of U.S. forces does not depend on that latter fact, of being able to defend against an external presence. It depends on the Iraqi security forces' ability to manage their internal security, so the people of that country can get on that path to democracy which was seen last Sunday in such a thrilling way.

BLITZER: What if the democratically elected government in Iraq is a Shiite theocracy?

RUMSFELD: Well, I don't think it will be. But look, Iraq is for Iraqis. It's not for Americans. We're not going to decide what kind of a country they're going to have. They're going to...

BLITZER: The critics will point out...

RUMSFELD: They're going to decide what government they want. They're going to write their constitution. It's not going to be written by foreigners. It's going to be written by them.

Now, when you ask me what I think, I think that the Shia in Iraq are more Iraqis than they are Shia. I don't think they're people who are getting up in the morning and saying, "Gee, I wish we had a theocracy like Iran does, with a handful of clerics telling everyone what to do." I don't think that's going to happen.

BLITZER: You don't think the Grand Ayatollah Ali al-Sistani wants that?

RUMSFELD: No. I don't think it's going to happen.

BLITZER: And if it did, if they were to elect a Shiite-led government that wants an Islamic regime, along the lines of Iran, would that have been worth it, to see the number of U.S....

RUMSFELD: I don't think it's going to happen.

BLITZER: It's possible it could happen though.

RUMSFELD: I don't think it's going to happen.

BLITZER: In Algeria, they had elections and they wanted some sort of Islamic...

RUMSFELD: I understand.

BLITZER: ... fundamentalist regime.

RUMSFELD: That's right.

BLITZER: And, of course, that didn't happen because they went to war on that.

RUMSFELD: I think the great sweep of human history is for freedom. And I think people want to be free.

And I think any country that decides it's going to take half of its population, its women, and set them on the side and not allow them to participate is fashioning a system that is, over time, going to be a difficult one to sustain, because I think people do want to participate.

BLITZER: If it were to happen, would you stop it from happening?

RUMSFELD: No, I'm -- look, the Iraqis are going to decide that constitution. They're going to fashion what they fashion.

BLITZER: And it's up to them solely?

RUMSFELD: Of course it is.

BLITZER: The Lieutenant General Steven Blum, U.S. chief, National Guard Bureau, testified this week before the House Armed Services Committee. Listen to what he said.

(BEGIN VIDEO CLIP)

LIEUTENANT GENERAL STEVEN BLOOM: As it pertains to the National Guard, the Army National Guard in particular, we were woefully underequipped before the war started.

That situation hasn't gotten any better. As a matter of fact, it's getting -- it gets a little bit worse every day.

(END VIDEO CLIP)

BLITZER: And specifically, if you talk about military shortfalls, in the Army reserves, according to the New York Times, 7,000-troops shortfall; National Guard, 15,000-troops shortfall.

RUMSFELD: Shortfall of what -- recruiting, retention, total numbers?

BLITZER: Of recruiting. And National Guard and Army Reserve, as you know, make up about 40 percent of the U.S. troops on the ground in Iraq right now.

Basically, in terms of recruitment shortfalls, the National Guard, in terms of a monthly basis, is down about 56 percent. The Marines are down only 3 percent, but that's the first time that the Marines have missed a monthly goal in 10 years, since July 1995.

RUMSFELD: Yes.

BLITZER: Are you concerned about this, specifically about what General Blum says?

RUMSFELD: Any time our country's engaged in a conflict, you have to be concerned and attentive to the recruiting and retention, particularly when you've got a volunteer force, as we do.

Everyone who serves is a volunteer. Basically, recruiting -- you cited a few that are low. Basically, overall, recruiting and retention is roughly on track.

Some of the numbers are low, for an interesting reason: We're increasing the size of the Army and the Marines. When you do that, you reduce the pool that people pull from to have a National Guard recruiting. Many of the people that go into the Guard and reserve come out of the active force. And if you're holding them in -- not holding them in -- encouraging them to stay in, because you're increasing the size of the active force, obviously you have reduced the pool.

Second, we've increased our goals, because we need to increase the size of the force.

BLITZER: Is the U.S. military right now overstretched?

RUMSFELD: It's clearly stressed, but they're performing brilliantly, they're doing a fabulous job. And we're adjusting the incentives and the number of recruiters that are out. And the test now is to make sure that we have the right kinds of incentives to attract and retain the people we need. And they're doing a great job.

BLITZER: If there were a second front right now, let's say another crisis on the Korean peninsula, for example, could the U.S. military meet that challenge?

RUMSFELD: The chiefs and the combatant commanders look at those things all the time, and they constantly are running scenarios and tests and making judgments about how we would manage something were something else to occur that wasn't anticipated.

And when you're engaged, as we are in Iraq, doing something else might take somewhat longer, it might be done in a slightly different way, but the estimates I get are that, basically, we're capable of performing the task that the president has assigned.

BLITZER: I interviewed Ambassador Barbara Bodine on Friday. She's a retired U.S. ambassador. She was part of the Coalition Provisional Authority, went into Baghdad the day the Saddam statue went down.

Looking back on some of the mistakes she says were made, she's blaming you and the office of the secretary of defense for some initial blunders. Listen to what she said.

(BEGIN VIDEO CLIP)

BARBARA BODINE, FORMER CPA OFFICIAL: ... the decision was that we were not going to get involved in trying to stop the looting. And, in fact, the secretary of defense, you know, basically trivialized it and said it was just messy and part of democracy.

That was kind of the first signal that we were not going to really try to take control of the country.

(END VIDEO CLIP)

BLITZER: I wonder if you want to respond to her.

RUMSFELD: No, not really. I don't know what else she may have said.

But the reality is that, when we went into that country, our soldiers had the task of, first of all, defeating the enemy. And in that early day, in the very early days when Baghdad was being taken, there was some looting.

And the question -- it wasn't my decision -- it was a question for the commanders, the battlefield commanders. She implies that I made some sort of decision.

I commented that I thought the battlefield commanders made the right decisions, and the right decisions were to defeat the enemy, instead of providing security around a museum or something. I forget what else there was that somebody was concerned where there was looting. I think the battlefield commanders did a good job. BLITZER: You said earlier today that, by the middle of this month, February 15th, all U.S. vehicles in Iraq, outside of secured areas, will be fully armored, will be fully protected.

Was that program accelerated -- would that have been the case had that soldier in Kuwait in December not asked you that provocative question?

RUMSFELD: I didn't think it was provocative. I thought it was a fair question.

BLITZER: Well, he said he was rummaging through junkyards.

RUMSFELD: Sure, and that's happened in -- I go all over the country and let people ask me questions like that, and I'm happy to do it. And I think it's important for a secretary...

BLITZER: But did it accelerate the process?

RUMSFELD: I think it's important for a secretary of defense to go out there and meet with the troops and let them ask anything they want.

I don't know.

I know that -- and I'd like to rephrase what you said. I didn't say they'd be fully armored.

I said they would all have what the military deems to be appropriate armor for their use. In other words, everything is not a tank. Everything is not at every level. They have varying levels, depending on their purpose.

But it is correct that by February 15th, General Casey believes that'll be the case.

(END VIDEOTAPE)

BLITZER: More of the interview coming up. Just ahead, I'll ask Defense Secretary Rumsfeld about the Iraqi insurgency. Is next-door neighbor Syria involved?

President Bush's warnings about Social Security: Is the retirement program going bankrupt? Two top U.S. senators standing by to debate that issue.

And later, Secretary of State Condoleezza Rice on a Middle East mission right now. How should the Bush administration jumpstart the peace process? We'll get perspective from two former U.S. secretaries of state and from Israeli and Palestinian leaders. They're standing by as well.

"LATE EDITION" will continue right after this.

(COMMERCIAL BREAK)

BLITZER: Welcome back to "LATE EDITION."

Here is part two of my interview with Defense Secretary Donald Rumsfeld.

(BEGIN VIDEOTAPE)

BLITZER: Is Syria doing everything it can to stop insurgents from getting into Iraq, from funding the insurgents, from taking the steps that you want it to take in order to ease the insurgency in Iraq?

RUMSFELD: Certainly not.

BLITZER: What else must they do?

RUMSFELD: Well, they haven't even released the Iraqi assets. Millions and millions and millions of dollars of Iraqi assets are in Syria. And the Iraqi government has asked for those assets, and they need that money, and Syria's keeping it, for example.

There's no doubt but that Baathists are located in Syria, from Iraq, the relatives of people that are causing the trouble and the insurgency.

And no, no, certainly not, Syria's not been helpful.

BLITZER: A lot of people listened to what the president said about Iran in his State of the Union address, and especially some of the European allies wonder if Iran might be next on your target list.

Listen to what the president said.

(BEGIN VIDEO CLIP)

BUSH: Today, Iran remains the world's primary state sponsor of terror, pursuing nuclear weapons while depriving its people of the freedom they seek and deserve.

And to the Iranian people, I say tonight: As you stand for your own liberty, America stands with you.

(APPLAUSE)

(END VIDEO CLIP)

BLITZER: Is Iran next?

RUMSFELD: Look, those are nothing to do with the Department of Defense. The president handles Iran policy. He's decided on a diplomatic route, and he's commented on that, as has the new secretary of state, Condi Rice, and the previous secretary of state, Colin Powell. And they're on a diplomatic path.

BLITZER: Are the Iranians developing chemical, biological and nuclear weapons?

RUMSFELD: Those are questions for intelligence officials.

I think that it's fairly clear from the public statements of the Iranians that they are on a path of seeking a nuclear weapon and don't have it at the present time.

BLITZER: How close are they, in your estimate, based on all the intelligence you're getting?

RUMSFELD: I don't make estimates. That's the business for the intelligence community. But they're some years away, according to the estimates, but I don't know if the estimates are correct or not.

You know, the intelligence community has a tough job. Their job is to find out exactly what people don't want them to find out. And that's not easy, particularly when you have a closed society like that.

BLITZER: Can the U.S. accept a nuclear weapon in Iran?

RUMSFELD: Those are issues that are for the president.

BLITZER: You don't want to get into that.

I will get into this issue that you raised, or at least Larry King raised the other night when you spoke with him. Listen to what you said.

(BEGIN VIDEO CLIP)

RUMSFELD: I submitted my resignation to President Bush twice during that period and told him that I felt that he ought to make the decision as to whether or not I stayed on. And he made that decision and said he did want me to stay on.

(END VIDEO CLIP)

BLITZER: Now, that was in regard to the Abu Ghraib prison abuse scandal that erupted.

RUMSFELD: Yes.

BLITZER: You offered to resign.

Were there other moments over these past four years that you offered to resign?

RUMSFELD: No. Just twice.

And I had to make an initial threshold decision as to whether I felt I could be effective, and I made that decision and felt I could.

It was in the middle of a political campaign. People running for president obviously say things that -- it's not unusual. Furthermore, there's never in our history of our country has there been a wartime situation in a presidential campaign where the president hasn't been criticized and the secretary of defense hasn't been criticized. So I made a decision that I could be effective, but I also made a decision that I thought the president ought to have a chance to make that judgment call, as to how he wanted to go forward. And so, I submitted my letter of resignation to him twice, and we had a long discussion about it, and he persuaded me that I should stay on.

BLITZER: And you're still here.

Lieutenant General James Mattis, U.S. Marine Corps, made some controversial comments in San Diego the other day. Listen, among other things, to what he said. Listen to this.

(BEGIN VIDEO CLIP)

LIEUTENANT GENERAL JAMES MATTIS, U.S. MARINE CORPS: You go into Afghanistan, you got guys who slapped women around for five years because they didn't wear a veil. You know, guys like that ain't got no manhood left anyway, so it's a hell of a lot of fun to shoot them.

(END VIDEO CLIP)

BLITZER: That was the gist of what he said. You've had a chance to look into this. What do you think of that?

RUMSFELD: The commandant of the Marine Corps said that he was concerned about the words, and he counseled with that individual. And as far as I can see, the matter's closed.

BLITZER: No more punishment or retribution or anything like along those lines? He's going to continue on in his career?

RUMSFELD: That appears to be what has been decided by the commandant of the Marine Corps.

BLITZER: Our Barbara Starr, our Pentagon correspondent, broke a story this week that the Pentagon is funding some Web sites in Bosnia and northern Africa...

RUMSFELD: Yes.

BLITZER: ... paying journalists to contribute to this.

The president of the United States had some comments, not in connection with the Pentagon, but in connection with the Department of Education, Department of Health and Human Services, where they funded some commentators for propaganda or public relations purposes.

Listen to what the president said.

(BEGIN VIDEO CLIP)

BUSH: All our Cabinet secretaries must realize that we will not be paying, you know, commentators to advance our agenda. Our agenda ought to be able to stay on its own two feet.

(END VIDEO CLIP) BLITZER: All right. What do you think?

RUMSFELD: I agree with the president. And I am -- I've asked -- in fact, I didn't even ask, I was told that we're looking into the issue you raised.

Apparently, it's something that is eight or 10 years old. It involves Europe and some Web sites there.

And if I heard the president correctly, he said people shouldn't be paid to advance an agenda. To my knowledge, that's not the case in this instance, but someone is looking into it. And obviously, if that is the case, that they were doing it to advance some agenda, then they shouldn't be, and it would be stopped.

I'm told that, in this case, people were just asked to prepare anything. They weren't told what to write. It had nothing to do with an agenda. They were asked to take a subject and, if they wanted to, write something on it, which people do all the time.

But we'll find out more about it, and certainly the president is correct.

BLITZER: We are, unfortunately, all out of time, but thanks very much for joining us, Mr. Secretary.

RUMSFELD: Thank you.

BLITZER: You've had a busy day.

RUMSFELD: I have.

(END VIDEOTAPE)

BLITZER: And just ahead, we'll get a check of what's in the news right now, including the latest on Condoleezza Rice's first trip to the Middle East as secretary of state.

Then, two top U.S. senators, Republican Mitch McConnell and Democrat Christopher Dodd, square off on a U.S. exit strategy for Iraq and more.

"LATE EDITION" will be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: Our country is still the target of terrorists who want to kill many and intimidate us all. And we will stay on the offensive against them until the fight is won.

(END VIDEO CLIP)

BLITZER: President Bush, in his State of the Union address Wednesday night, saying the United States would continue to take the fight to the terrorists.

Welcome back to "LATE EDITION."

Joining us now, two leading members of the United States Senate: Mitch McConnell of Kentucky is the Senate's number-two Republican. Democrat Christopher Dodd of Connecticut is a key member of the Senate Foreign Relations Committee.

Senators, welcome back to "LATE EDITION."

Let me start, Senator Dodd, with you. Senator Kennedy says Defense Secretary Rumsfeld should resign. Senator Kerry says so. What do you say?

SEN. CHRISTOPHER DODD (D), CONNECTICUT: No, I don't the resignation. I appreciate the call for that. But I'm more interested in the policy issues than resignations at this point.

I gather he submitted his resignation twice, and the president didn't accept it, so...

BLITZER: On the Abu Ghraib prison scandal.

DODD: Yes. The policy issue is where we need to address.

BLITZER: Well, what you heard in the interview we just conducted, were you reassured by him, remain concerned about him on the policy issues?

DODD: I remain concerned about it.

You really didn't get an answer to your question, that is, to what extent do we have security forces in Iraq achieving the level of skill that they could replace American soldiers?

Putting aside the question of timetables, the ultimate question we have to ask is, when are the Iraqis going to be able to defend whatever form of democracy they embrace? Are they going to be able to do it on their own?

We cannot be the permanent guarantors.

BLITZER: He said there are too many uncertainties right now, he can't give an answer.

DODD: I understand. I'm not expecting him to come down to the exact number, but at least a ball-park number.

We know we're way short of that. You pointed to Senator Biden's article in The Washington Post today, in which he laid that out. We have numbers running anywhere from around 4,000 to 7,000; if you listen to Mr. Cordesman or others, up to 136,000.

It's a very vague spread there, as to what the actual numbers are.

BLITZER: Anthony Cordesman.

DODD: We ought to get that.

BLITZER: He's an analyst at the Center for Strategic and International Studies, Tony Cordesman.

But why not give the American public at least some sort of timetable -- it doesn't have to be precise -- for an exit strategy?

SEN. MITCH MCCONNELL (R-KY), MAJORITY WHIP: Because it's something we simply cannot outline in advance. We will not know exactly how this is going to play out. You can't predict every single thing that's going to happen. I mean, Eisenhower would have been fired on D-Day had we had 24-hour television coverage in those days.

Look, we had a great election last Sunday. Iraqis showed great courage.

I was there a few weeks ago; it certainly doesn't make me an expert. I got a chance to watch the General Patraeus's operation, training the soldiers.

Secretary Rumsfeld made it clear in the Wall Street Journal the other day that a number of those soldiers did a great job on election day. Are they what we want them to be? No. But we've made a lot of progress, and we're going to continue to make progress.

And we won't leave -- just so there's no misunderstanding about it -- we will not leave until they are ready to take over the job of defending their country.

BLITZER: Were you reassured by what happened last Sunday, the Iraqi elections?

DODD: It was a great day. It was certainly inspirational to watch the, what was it, roughly 8 million Iraqis that showed up to vote under the most extreme circumstances. It's extremely important. It was extremely worthwhile.

What comes after this now? What sort of a government gets formed? Are they going to be inclusive? Will moderate Sunnis be allowed to participate? Will the Kurds really seek to be a part of an Iraqi country in the coming weeks and months?

So the election was -- obviously, none of that would have happened without a good election. They've had that. What happens in the weeks and months now after this will really determine how successful that election was.

BLITZER: Secretary Rumsfeld said he did not believe it was realistic to assume that the Shiite majority in Iraq right now would create an Islamic theocracy in that country, although a lot of experts are fearful of that.

MCCONNELL: I don't think there's any chance of that. We met with a lot of the Shiite leadership a couple of weeks ago. They're acutely aware of the need to reach out to the Sunnis. They knew even then the turnout was going to be low in the four provinces that are largely Sunni-dominated, where more of the security problems are going to be.

Watch the appointments they make. Watch the appointments that they make during this interim period. They're going to reach out to the Sunnis, bring a lot of them into the government.

And remember, there are two more elections this year. The Sunnis will have a chance, in effect, to veto the new constitution, because if only three of the provinces do not ratify the new constitution, it won't go into effect. So they have a lot of power to ensure that they're adequately represented in the new government.

BLITZER: Are you as confident as Senator McConnell?

DODD: Not as confident. I hope it happens, because if it doesn't happen, this will not work. It will fracture, and you'll have civil war in the country. And it's important we encourage that to be the case, to be inclusive.

There are some reports already that they want to make more of their constitution a religious document than a secular document. And I hope that's not the case. There is certainly going to be some of it, but it will really be incumbent upon this newly elected assembly to really insist upon invitation, the idea of some sort of a federalist arrangement here.

Because clearly, when you had the sort of de facto referendum on the part of the Kurds, using the election of last Sunday, to actually ask Kurds whether or not they wanted to be part of a greater Iraq, the answer came back 2-1, no. That's troublesome. That's worrisome.

So it will be very important that this assembly reaches out to the Kurdish population to make sure they're going to be a part of a larger federal state.

BLITZER: Can the U.S. live with a nuclear weapon in Iran?

MCCONNELL: That is, of course, a very difficult question. We certainly want Iran not to become a member of the nuclear family.

The British and the French and the Germans are working on that in a multilateral approach.

We've just demonstrated with the welcoming -- or we're in the process of welcoming Libya into the community of non-nuclear states, and they're beginning to see the benefits of that.

Hopefully, the Iranians will conclude that it's not in their best interest to become a nuclear power.

BLITZER: But if they reject that and go ahead and build the bomb...

MCCONNELL: Well, that's a hypothetical I don't think we have to address. I mean, everybody's working on it. The British, the Germans and the French are taking the lead. We're supporting what they're doing.

BLITZER: Well, I guess the question is, should there be a military option for the U.S.?

MCCONNELL: I don't think we ever state whether there's a military option or not. That's something we never announce in advance.

BLITZER: What do you think?

DODD: Well, I don't think you ought to eliminate an option either.

But I would like to see us work more. The response of Secretary Rice to the German, French and British initiative is basically, "We have nothing to say." I think that's a mistake.

No matter who runs Iran, you're going to have the possibility of them wanting to acquire nuclear capabilities. Even if the reformers take over, I don't think they're going to drop that option. So, it's going to take work. And I would like to see us become more a part of it.

The president almost suggested that the other evening in the State of the Union. He talked about obviously the support for Hamas and other terrorist organizations coming out of Iran. He's right on that. He then quickly said, of course, we ally ourself with the reform elements in Iran. Sort of a mixed message here.

It seems to me we ought to be engaged with our colleagues in Europe. It's a good opportunity for us to rebuild the relationships in Europe and do something meaningful about trying to minimize the option of a military strike in Iran to deal with a nuclear capability.

BLITZER: Condoleezza Rice is in Israel right now, meeting with Israelis and Palestinians. Tomorrow there's a summit meeting. On Tuesday, the new Palestinian Authority president, Mahmoud Abbas, will meet with Ariel Sharon, the Israeli prime minister.

I assume both of you support the $350 million aid package that the president proposed in his State of the Union address for the Palestinians.

Will you, though, demand conditions be attached to granting that money to the Palestinians?

MCCONNELL: Well, there have traditionally been some conditions attached.

But, look, they're heading in the right direction. They just had a real election, which is unique for the Palestinians. In the old days, you could vote for Arafat or no one else. Elections are breaking out all over, in the most unusual places. I think the Palestinians deserve our support as they move toward what looks like the best opening we've had for a final peace settlement between the Palestinians and the Israelis in our lifetime.

BLITZER: What do you think?

DODD: I'm very optimistic about it.

I, first of all, want to commend President Mubarak and King Abdullah. They've done a tremendous job in bringing these people together.

There's real hope here, I mean real hope, maybe for the first time in years.

My hope would be the administration would stay engaged. I think the failure to be as engaged, disengaged as we were over the past four years was a problem. I think the fact that Condoleezza Rice is there is very important.

And I agree with Mitch. I wouldn't -- there may be some conditionality here, but we ought to send a message that we're prepared to really back this effort. If, in fact, the Palestinian leadership is able to convince their people that this is the right route to follow, then we ought to be willing to back that up with some real assistance to them so they can get on their feet.

MCCONNELL: And the only thing I would add is, the only reason the administration was not engaged was that Arafat was there. Now that Arafat is gone, you have a legitimate leader, popularly elected, who wants, genuinely wants peace. So the conditions are changed, and so the administration is much more engaged.

DODD: Well, there were other elections there, and there were people chosen in that period of time. Arafat was alive, but we certainly could have done more, in my view.

BLITZER: All right, we're going to continue this conversation, but we have to take a quick break.

Much more coming up. When we come back, we'll turn to some domestic issues, including the future of Social Security. Is the U.S. retirement program headed for collapse?

"LATE EDITION" continues right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: By the year 2042, the entire system would be exhausted and bankrupt.

(AUDIENCE BOOING)

If steps are not taken to avert that outcome, the only solutions would be dramatically higher taxes, massive new borrowing or sudden and severe cuts in Social Security benefits or other government programs.

(END VIDEO CLIP)

BLITZER: President Bush, in his State of the Union address, getting some boos when he spoke about the need to reform Social Security.

Welcome back to "LATE EDITION."

We're talking with Republican Senator Mitch McConnell of Kentucky and Democratic Senator Chris Dodd of Connecticut.

Senator Dodd, were you among those booing the president?

DODD: Oh, no, no, I don't believe in doing that.

But the president, not that he should be booed by members of Congress, but to say, as he did, that by 2042 this program will be totally bankrupt is just totally false, totally false. There isn't an analysis in the world that would draw that conclusion.

At worse, by 2052, it may not -- 20 percent, somewhere around 20 percent of the fund, may not be there. But 80 percent of the Social Security trust fund will be intact 50 years from now.

This is not a crisis. This is an effort to eliminate and so fundamentally alter Social Security -- maybe the best program we've ever provided in the 20th century, taking seniors out of poverty, where only 10 percent of them today are in poverty.

Social Security has made a huge difference. This president want to eliminate it.

BLITZER: Do you disagree with that, Senator McConnell?

MCCONNELL: I think we're quoting the wrong president. President Clinton was saying in 1998 and again in 1999 that we ought to go in and tackle this program.

The current Democratic leader, Harry Reid, said in 1999 that, even with regard to the controversial personal retirement accounts, that he was open to that.

Senator Durbin, the new Democratic whip, was saying in 1998 there are going to be huge benefit cuts down the road; we ought to get about solving this problem now.

Look, my attitude is, why don't the Democrats show us their plan?

BLITZER: All right.

Is there a Democratic plan?

DODD: Well, sure. There are all sorts of them. If you want to save Social Security, we can do any number of things. That's not what the president's talking about.

He's talking about borrowing $4.5 trillion -- does nothing in his plan. He hasn't said a word yet on how he'd save Social Security -- laid out some options the other night.

We could just take the tax cuts, take one-third of the tax cuts he wants to make permanent by 2006, just a third of them, let the other $8 billion go ahead -- that money alone would be enough to meet the $2.2 trillion shortfall over the 50 years for Social Security. That alone solves Social Security.

Now, if you want to change the program and privatize it as the president does, that's a whole separate issue.

BLITZER: Senator McConnell?

MCCONNELL: Look, the point is, do we have a problem here that we ought to address or not?

I think what I see the Democrats doing is sticking their heads in the sand, which is not what they were doing in the late '90s when there was a Democratic president, saying, "We don't want to deal with this, unless it's to raise taxes."

DODD: No, no, no. That's not raising taxes. That's just taking the tax cut and reducing it a bit. That's a separate issue.

Saving Social Security is not complicated. There are any number of things that could be done to make up the 20 percent.

Let me state again: Congressional Budget Office, even the White House analysts, will tell you, in 2042 to 2052, 80 percent of the Social Security trust fund will be there. That's a 20 percent shortfall 40 to 50 years from now.

That is easy to make up, that shortfall, and without cutting benefits at all.

Now, you want to do other things...

BLITZER: The whole debate -- sounds like the whole debate is over these individual, these private retirement...

MCCONNELL: No.

DODD: And that's a separate issue.

MCCONNELL: Let's just put that aside. Let's just put the personal retirement accounts aside. Do we or don't we want to save the Social Security system for our children?

BLITZER: Everybody's suggesting that.

MCCONNELL: Well, we don't have a single Democrat that I know of, with the possible exception maybe of Chris's colleague from Connecticut, who wants to sit down on a bipartisan basis and address the problem.

DODD: Oh, no, we'll sit down, absolutely sit down.

I believe that -- I've always been a strong supporter of individual retirement accounts, for instance, the 401(k)s we were talking about a minute ago. We ought to be promoting more of that.

To go and say to someone, as someone suggested in an editorial comment, "Your retirement plan is in deep trouble, so instead of encouraging you to save more to strengthen it, we want you to borrow more to strengthen it" -- here we are already with $7 trillion in debt. You want to borrow $4.5 trillion more.

BLITZER: Very quickly, because we're almost out of time, are you willing to -- the president says all the options are...

DODD: To save Social Security...

BLITZER: ... on the table. Are you willing to talk to him to come up with some sort of compromise?

DODD: Saving Social Security, absolutely, and there are all sorts of ideas that can save it.

Privatizing Social Security is not saving Social Security.

BLITZER: That sounds like one option that he's not accepting.

MCCONNELL: Well, fine, let's see what his plan is. Because four years from now, the baby-boomers start retiring. Young people think they're likely to see a UFO than they are a Social Security check.

DODD: No, no. That's because you keep telling them that.

MCCONNELL: They're right, because the benefit cuts or the tax increases that would be required to sustain the program as it currently is are completely unacceptable.

BLITZER: Would you be willing to hold back on making the tax cut permanent?

MCCONNELL: We're willing...

DODD: Just a fraction of it.

MCCONNELL: ... to sit down and talk to them. They don't want to talk. They want to circle the wagons, say there's no problem, no problem, stick their head in the sand.

DODD: No.

BLITZER: They're talking right now. We'll see what -- we'll see what...

DODD: It's a great issue. We thank them for the gift, actually.

BLITZER: We have to, unfortunately, leave it right there.

Senator Dodd, thanks very much.

DODD: Thank you very much.

BLITZER: Senator McConnell, thanks to you as well.

We'll take a quick break. Much more when we come back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to "LATE EDITION."

We'll talk about Iraq and the Bush foreign policy agenda with former U.S. secretaries of state Henry Kissinger and Madeleine Albright.

We'll also speak with Israeli Vice Prime Minister Ehud Olmert and chief Palestinian negotiator Saeb Erakat.

All that coming up. First, though, let's get a quick check of what's in the news right now.

(NEWSBREAK)

BLITZER: Secretary of State Condoleezza Rice right now in the Middle East. At this hour, she's been meeting with the Israeli prime minister, Ariel Sharon. Her visit is in advance of Tuesday's Israeli- Palestinian summit in Egypt.

Our State Department correspondent, Andrea Koppel, is traveling with the secretary. Andrea is joining us live from Jerusalem.

What's the latest, Andrea?

ANDREA KOPPEL, CNN CORRESPONDENT: Well, Wolf, Secretary of State Rice arrived here in Israel a short time ago and made the rounds.

But unlike recent visits by her predecessor, former Secretary of State Colin Powell, Secretary Rice was greeted by something that has been in short supply here in recent years, and that is a sense of optimism, a renewed feeling of hope that now, with the passing of former Palestinian leader Yasser Arafat and the democratic election last month of Palestinian President Mahmoud Abbas, there is an opportunity to build some momentum, to get the two sides again talking peace.

Rice, as you said, met with the Israeli prime minister, Ariel Sharon, and also with the Israeli foreign minister. She's holding separate meetings with each side.

This is really on the eve of Tuesday's summit, which will be the highest-level meeting between Israeli and Palestinian leader in over four years. They'll be meeting at a summit hosted by Egypt in the Red Sea resort of Sharm el-Sheik. But the real test, obviously, is going to come in the days that follow that summit, at which both sides are expected to declare a cease-fire. And that really is the focus of Secretary Rice's visit here, both in Israel and then when she travels to the West Bank tomorrow to meet with the Palestinian president and other Palestinian leaders.

She is going to be seeking to find out how the U.S. can really do what President Bush is pledging to do, and that is, Wolf, to try a renewed sense of commitment to the process and really a -- not only just giving money, but really investing the time and energy and personal commitment of the president and the top U.S. diplomat to try to get this process moving forward and really get a sense of momentum.

Wolf?

BLITZER: That was Andrea Koppel, reporting from Jerusalem, covering every step of the way Dr. Rice's, Secretary Rice's trip throughout the region.

Thanks, Andrea, very much.

The Bush administration is also trying to calm concerns that the United States won't be pulling the strings behind Iraq's new government.

Our White House correspondent, Suzanne Malveaux, is standing by with information on that.

Suzanne?

SUZANNE MALVEAUX, CNN CORRESPONDENT: Good morning, Wolf. Earlier this morning, the vice president, Dick Cheney, said that there would be no artificial timetable to pull out U.S. troops in Iraq.

Now, really, right now the administration is in a tough position. This is because just yesterday Sunnis' top leaders said that, of course, they did not want to participate in Iraq's new constitution, drawing up that constitution, unless there was some sort of clear indication of the draw-down of U.S. troops.

This, of course, being important, because their organization -- rather, their group was not represented as well as some of the other groups. They, of course, in participating, would give a certain sense of legitimacy to that process.

Cheney, of course, performing a delicate balancing act. On the one hand, of course, saying that the U.S. is not going to stay a day longer than necessary. On the other hand, of course, saying that the mission would have to be accomplished before they were able to withdraw.

And finally, Cheney also tried to play down the U.S. role, in terms of Iraqi elections, saying that the role in writing the constitution and establishing the next move for the government is in the hands of the Iraqis. (BEGIN VIDEO CLIP)

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: This is not going to be, you know, an Iraqi version of America. This is going to be Iraqi. It's going to be written by the Iraqis, for the Iraqis, implemented and executed by them.

And it's absolutely essential that that be allowed to happen and that we preserve the integrity of that process that we set in motion.

(END VIDEO CLIP)

MALVEAUX: Cheney also, of course, tried to downplay any kind of indication that the United States was eager to use military action and try to convince Iran to abandon its nuclear ambitions. Cheney, of course, striking a much different tone than just a couple of weeks ago, when he suggested perhaps Israel would be willing to target and strike some of those nuclear sites.

Wolf?

BLITZER: Suzanne Malveaux at the White House.

Thanks, Suzanne, very much.

While he's promising that the United States will stay the course in Iraq, President Bush is also serving up some tough talk for its neighbors, Iran and Syria.

Joining us now to talk about what's at stake for Iraq and the U.S. presence in the Middle East, two guests, both former secretaries of state of the United States: in Connecticut, Henry Kissinger; he served under Presidents Nixon and Ford. Here in Washington, Madeleine Albright; she served under President Clinton.

Good to have both of you back on "LATE EDITION." Thanks very much.

Let's start off with Iraq, and I'll begin with you, Dr. Kissinger. A theocracy in Iraq -- the Shiites clearly the majority. If they want to have one, democratically moving in that direction, they certainly, at least on paper, can do that.

HENRY KISSINGER, FORMER SECRETARY OF STATE: They can do it on paper. But if they're wise, they will recognize that there are Sunnis, about 20 percent of the population, that have dominated in the past and that would certainly not accept a theocratic government. And then there are Kurds, so that's another 20 percent that have a capacity to secede and declare their independence.

So if they want to hold Iraq together, and if they want to run a government with the support of a substantial part of the population, I think they will find a way to take account of their religion but not to do it as a theocratic government.

BLITZER: Listen to this, Madam Secretary, the president, in his State of the Union address, on the limits of U.S. power in Iraq. Listen to this.

(BEGIN VIDEO CLIP)

BUSH: The United States has no right, no desire and no intention to impose our form of government on anyone else.

(APPLAUSE)

That is one of the main differences between us and our enemies.

(END VIDEO CLIP)

BLITZER: Not only in Iraq, the limits of U.S. power, but around the region, in his call for democracy.

Do you believe this fear of an Islamic theocracy in Iraq emerging in realistic?

MADELEINE ALBRIGHT, FORMER SECRETARY OF STATE: Well, I hope it isn't, because, as Henry Kissinger said, it is something that would lead to the dissolution of Iraq.

But I do think we need to understand the Shias, according to the latest tallies, have won a very large majority. And the question is, how much of Islamic law are they going to impose without having an actual theocracy?

But I think clearly we cannot impose our form of government on them.

And the issue will be -- Wolf, there are many, many steps here. The constitution has to be written, there has to be a referendum, then there have to be more elections.

And while we're really celebrating the euphoria of the past elections in Iraq, it is very, very clear that there's a lot of work that still has to be done to make sure that we do get a relatively stable, moderately democratic Iraq, which is what is so important at this point.

BLITZER: Are you confident that, Dr. Kissinger, that what happened last Sunday, the elections in Iraq, will be translated to a real democracy there anytime soon?

KISSINGER: I think it was a hopeful step.

I'm not absolutely confident that people who have not known democracy in their history, certainly not in their recent history, and that have lived under a dictatorship, are going to move smoothly toward a democracy.

On the other hand, there's a middle class in Iraq. So far, the leaders have shown considerable sophistication.

I'm hopeful, not confident, but it's the direction in which we have to move and which has the only real promise for stability. BLITZER: Do you have confidence, Madam Secretary, in the president, the secretary of state, the secretary of defense, the leadership, the vice president of the United States, that they know what they're doing in Iraq right now?

ALBRIGHT: Well, no, I don't, actually, because I've been listening to the interviews today, and I think Secretary Rumsfeld seems to have a view that certain things have to happen. We're very unclear about the numbers of Iraqis that have been trained. I am so confused by the numbers that I can't tell whether it's 4,000 or 136,000.

And I think there are real questions, and we do need to know better what the plan is. I personally do not believe that there should be a date deadline set, because in Bosnia we did that and I think we regretted it. But what should be set are a number of benchmarks about what needs to be done.

In additional to the political/governmental things I described earlier, there really has to be great progress on reconstruction and getting the people involved again. Because, as Dr. Kissinger said, you know, this is not a nation that was born to democracy. But democracy has to deliver. Otherwise you just have post-euphoria times when people get discouraged with democracy.

And those are the kinds of benchmarks, in addition to training the Iraqis, that have to be met before the U.S. can pull out.

BLITZER: Do you think, Dr. Kissinger, the Bush administration should be, once again, trying to recruit support among reluctant allies in Europe -- Germany, France in particular -- to try to get some help in dealing with the situation in Iraq right now, or just leave them on the sidelines?

KISSINGER: No, I think that there is a possibility that the European nations are going to support us on the political evolution and the economic reconstruction of Iraq. And this is an opportunity that we should at least fully explore.

My impression is that both sides are eager to get over the debates of the past two years. And if that is the case, we should come up with some concrete joint programs during the president's trip to Europe and maybe to create a group that charges itself with the economic and political reconstruction of the region.

BLITZER: All right. Let's move on and talk a little bit about Iran.

A lot of the European allies very concerned about some statements coming out of Washington that Iran might be the next military target of the U.S.

Listen to this question that was posed to Secretary Rice the other day in London.

(BEGIN VIDEO CLIP) QUESTION: Can you envisage circumstances during President Bush's second administration in which the United States would attack Iran?

CONDOLEEZZA RICE, SECRETARY OF STATE: The question is simply not on the agenda at this point in time. You know, we have diplomatic means to do this. Iran is not immune to the changes that are going on in this region.

(END VIDEO CLIP)

BLITZER: The strategy, Madam Secretary, of the Bush administration, the way I could basically discern it, right now is to try to delay the Iraqi nuclear development as much as possible and hope in the meantime there will be a revolution from within that will create a new regime, get rid of the mullahs in Tehran.

Is that a wise strategy?

ALBRIGHT: Well, I think that it is betting on something that might not happen. Because I think, according to a report that Dr. Bzrezinksi and Bob Gates put out, we can't be waiting for a change in Iran.

Then, also, it seems that even the reformers are eager to have some kind of a nuclear capability.

So, what I think is important is to have a diplomatic exchange in some way with Iran, offer that in a way as part of our working with the Europeans also.

They need to be tougher on the Iranians. And I think we need to be more forthcoming and reverse the good cop/bad cop. And we have other opportunities here.

But just deciding to wait for an overthrow I don't think is the answer.

BLITZER: If the Iranians pursue a nuclear bomb -- and it looks like they're getting close -- would you support a series of precision U.S. airstrikes, 13, 15, whatever it takes, to try to pinpoint their underground nuclear facilities, destroy that -- obviously short of a full-scale invasion of Iran, but do at a massive scale what the Israelis did to the Iraqi nuclear reactor back in 1981?

ALBRIGHT: Well, first of all, I would not take the military option off the table. But everything that I know and have heard is that it is not possible to do that, given the kind of nuclear developments that have been going on in Iran and that the various places that this is taking place are not necessarily pinpointable.

And I think the real question here is how we proceed now in concert with the Europeans. I think that Secretary Rice actually kind of said that we wanted to stay out of it for now and let the Europeans carry on while we stand aside. And I don't think that's a wise approach.

BLITZER: You want the U.S. to be directly involved with the Europeans?

ALBRIGHT: Yes.

BLITZER: We'll pick up that thought.

Dr. Kissinger, stand by.

We're going to take a quick break. When we come back, much more on what's happening with the U.S. strategy in Iran. The former secretaries of state Henry Kissinger and Madeleine Albright, we'll continue our conversation with them.

And later, a top Israeli and a top Palestinian will weigh in on this week's summit in Egypt between the Israelis and the Palestinians. Are we on the verge of a new era in the Middle East?

"LATE EDITION" continues right after this.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

We're talking about global hot spots, the challenges that they face for the United States, with former U.S. secretaries of state Henry Kissinger and Madeleine Albright.

Dr. Kissinger, Vice President Dick Cheney said on January 20th, referring to the Iranian nuclear weapons capability, he said -- and I'll put this up on the screen: "If, in fact, the Israelis become convinced the Iranians had a significant nuclear capability, the Israelis might well decide to act first and let the rest of the world worry about cleaning up a diplomatic mess afterwards."

Is that a realistic fear? How do you assess that Israeli wild card in this whole Iranian nuclear situation?

KISSINGER: Well, for Israel an Iranian nuclear capability and long-range missiles are a major threat to their survival.

On the other hand, I cannot imagine that Israel will start a Middle East war or a huge Middle East crisis without some notification of the United States. So I can't quite -- I can't imagine a separate Israeli action, separate from the United States.

BLITZER: But, Dr. Kissinger, if they thought this was an existential threat to their very survival, if they consulted with the U.S. in advance, they'd probably get a "no" for an answer. They didn't consult with the U.S. in 1981 when they knocked out the Iraqi nuclear reactor.

KISSINGER: If they get very desperate, they may do that -- they might do this.

But the important issue over the next years is whether we can develop a policy with respect to Iran that combines diplomacy with pressure when pressure is -- if pressure is needed. One shouldn't put diplomacy on one side and pressure on the other. And there are many stages through which one would go before one goes to the military stage.

But what we need is a coordinated strategy with the Europeans and maybe others. Because if nuclear weapons spread to Iran, the genie will be really totally out of the bottle, and we will live in a different world with huge risks for mankind.

BLITZER: Let's move on and talk about what's happening in the Middle East right now, the situation between the Israelis and the Palestinians.

Do you believe, Madam Secretary, based on your four years as secretary of state, Dr. Rice right now embarking on this initiative, that it would be wise to get a special envoy on the part of the Bush administration to really take charge of the Israeli-Palestinian portfolio, or leave it in the hands of the secretary of state and others?

ALBRIGHT: Well, I think that, at some point in a process that's going to take some time, I think the role of a special envoy is important, because the secretary of state really cannot do this full- time. There are so many other issues out there. And at a certain stage, when there needs to be somebody on the ground, somebody that knows the record, I think it is important.

At this particular moment, though, I do think that there are hopeful signs of the Israelis and Palestinians working with each other, with some U.S. involvement but not necessarily the idea of a special envoy this minute.

But I do think that, in the long run, it is important, because the job of getting this done is so essential. There's a window of opportunity. And the secretary of state can't be there all the time.

BLITZER: Dr. Kissinger, you were there all the time in the Israeli-Egyptian disengagement negotiations after the 1973 war, the shuttle diplomacy that you went in over, what, a month or 30-days-plus between Jerusalem and Damascus and the Israeli-Syrian disengagement agreement.

Was that the model that should be engaged by the current secretary of state?

KISSINGER: I was secretary of state at the time. And I don't think that, under present conditions, the secretary of state can afford to be in the Middle East for 35 straight days, as I was on the Syrian disengagement. Those were very particular circumstances at the time that made we believe it was necessary then.

So, at some point, it may be that the administration will want to appoint somebody to shepherd the negotiations, but it's not needed now.

I agree with the arguments that this is the best opportunity that I have seen in maybe decades to make a significant breakthrough and maybe even move into final status negotiations.

Because during the first term of President Bush, a number of issues were settled in a kind of a process that was not a negotiation but that created new realities on which a negotiation can now be based.

And the attitudes that have so far been shown by both sides and by moderate Arabs and probably even by Europeans makes a coherent approach the most feasible that I've seen in a long time.

BLITZER: All right. We're almost out of time, but I want Secretary Albright to weigh in on her successor, Condoleezza Rice -- Colin Powell in between.

What do you think of Condoleezza Rice? Is she up to this challenge?

ALBRIGHT: Oh, I do think she's up to the challenge. And I do think that one can't judge a secretary of state in the first few days.

She's a very smart person. She was trained by my father, so I feel very close to her in that regard.

BLITZER: She got her doctorate...

ALBRIGHT: At the University of Denver.

BLITZER: ... where your father was her professor.

ALBRIGHT: Right, and actually persuaded her to go into international relations.

But I think that one has to watch what really happens. The trip that she's taking now is important, but it's kind of a whirlwind. And we know -- both Henry and I have been through those kinds of trips -- is that there's a lot of nice words, and now the hard work comes.

And as I said to Secretary Powell, the job of secretary of state is the best in the world, but it's harder than it looks.

BLITZER: So if you had been a senator, you would have voted to confirm her, unlike a bunch of other Democrats.

ALBRIGHT: Well, I'm not a senator, but I would give her the chance. And I also think that the president has a right to appoint a secretary of state.

BLITZER: Madeleine Albright, thanks very much for joining us.

Henry Kissinger, as usual, thanks to you as well.

Up next, we'll get a check at what's in the news right now, including Iran's response to President Bush's challenge to that country. That's coming up.

Later, as Secretary of State Condoleezza Rice begins a round of diplomacy in the Middle East, we'll speak live with the Israeli Vice Prime Minister Ehud Olmert and the chief Palestinian negotiator Saeb Erakat about trying to repair a tattered peace road map.

"LATE EDITION" will continue right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: The only force powerful enough to stop the rise of tyranny and terror and replace hatred with hope is the force of human freedom.

(APPLAUSE)

(END VIDEO CLIP)

BLITZER: President Bush outlining his global vision -- an ambitious one that includes the creation of a Palestinian state.

Welcome back to "LATE EDITION." I'm Wolf Blitzer in Washington.

This week there will be a fresh effort to try to break the Middle East deadlock when the Israeli prime minister Ariel Sharon and the Palestinian Authority president Mahmoud Abbas meet at a summit in Egypt.

Just a short time ago, I spoke with the chief Palestinian negotiator, Saeb Erakat, about his side's expectations.

(BEGIN VIDEOTAPE)

BLITZER: Saeb Erakat, thanks very much for joining us.

There's a big summit on Tuesday in Egypt -- the prime minister of Israel, the president of the Palestinian Authority. Is everything in place right now to resume serious peace negotiations between the Israelis and the Palestinians?

SAEB ERAKAT, PALESTINIAN CABINET MINISTER: We have been engaged, Wolf, with my Israeli colleagues for the past two weeks. Actually last night it was till about 2 o'clock in the morning, doing and exerting every possible effort in order to ensure that the Sharm el- Sheikh summit will be a summit for resolutions and not negotiations.

And we have made a great deal of progress in many of the substantial issues. There are some differences remaining concerning the issues of settlements, the war in Jerusalem. I hope that in our meeting tomorrow we can work out most of the things required for a successful summit.

But let me warn, Wolf, let us not have so much expectations from the summit. This is a good summit. This is a good start. This is a message that Palestinians and Israelis will be declaring a mutual cessation of violence against the other, resuming the rebuilding of trust -- and I'm using the term "rebuilding of trust" -- and confidence between the two sides. It's going to be a long journey, a long way, a very sizable and good steps, but in a long way. So we don't want people's expectations to go higher than what this summit can carry.

I would urge at this time that the United States policymakers, especially that Dr. Rice is here, Europeans, Russians, Americans, everyone, Israelis, Palestinians, to pursue the policy of what's needed and to abandon the policy of what's possible.

The policy of what's possible to us (UNINTELLIGIBLE) not possible to us. I mean, the same thing about the Israelis and the Americans, in terms of the cost-free (ph) and the least (ph) free politics, lead us to where we are now. So today we need to really re-engage on the basis of what's needed.

BLITZER: Are you effectively saying that the negotiations are about to resume where they broke down four years ago or so at the collapse, just before the resumption of the intifada?

ERAKAT: No, I'm not saying this. At that time we were negotiating, Wolf, the permanent status issues. I don't expect that we will do that immediately.

What we will be doing here is resuming the negotiations and reviving the security coordination and cooperation, reviving the steering and monitoring committee that covers the economic, financial, agriculture, all of the day-to-day activities, resuming the work and to implement the first phase of the road map.

There will be a committee to have the Israelis redeploy from the occupied area since 2000, while Palestinians will assume the security responsibilities.

There will be a committee on prisoners and their release and the criterias, a committee to ensure a crisis management, whenever there is a crisis, that we will have a joint crisis management and joint damage control.

But I want to say that the Sharm el-Sheikh summit will be the beginning. It will not be the first and last summit. This is anticipated to be one of a series of summits between Palestinian and Israeli leaders. And let's take it from there. Let's not overload the wagon. Let's not have our expectations. But let's begin what's needed now.

BLITZER: On Friday, the new secretary of state, Condoleezza Rice, urged the new Palestinian Authority leadership to take steps to make sure there's no terrorism. Listen to what she said at that news conference with the British foreign secretary, Jack Straw.

(BEGIN VIDEO CLIP)

RICE: The Palestinian security forces need to be unified. There needs to be, as the Palestinians themselves say, one authority, one gun. And there needs also to be -- there will need to be some international effort, and the United States is prepared to play a major role in that, to help in the training of the Palestinian security forces and in making sure that they are security forces that are part of the solution, not part of the problem.

(END VIDEO CLIP)

BLITZER: Is the Palestinian Authority ready to crack down and make sure that Hamas, the Al-Aqsa Martyrs Brigade, Islamic Jihad, don't resume terrorist strikes against Israelis?

ERAKAT: Wolf, the Palestinians have been engaged in an internal dialogue. Yes, we will deliver.

As far as our commitment to stop violence against Israelis anywhere period, this is a commitment on us. We do realize the difference between political pluralism and authority pluralism. And we want to rebuild the rule of law. We want to rebuild our security forces that have been destroyed by the Israelis.

And we need the Americans' help. And we appreciate President Bush's last speech at the State of the Union in which he committed himself to the two-state solution. And we want him to transfer this vision to a realistic (ph) political track by resuming the permanent status negotiations and Jerusalem settlement borders, refugees as soon as possible. And then we appreciate the fact that $350 million pledged to help the Palestinian economy.

Yes, we are determined to exert any possible effort in order to maintain one authority and, at the same time, continue with the path of democracy reform and institution-building, rebuilding and equipping our security forces.

But on front, we will be ready to declare a cessation of violence against Israelis anywhere. Hoping to do that in Sharm el- Sheikh. And we hope that we'll hear from Mr. Sharon that Israel will stop violence against Palestinians anywhere.

This is the start, and we'll take it from there.

BLITZER: Are you prepared to accept the U.S. offer as expressed by Condoleezza Rice, the U.S. offer for a major role, in her words, a major U.S. role in helping to train the Palestinian security forces? Is this something that you accept?

ERAKAT: Absolutely. We welcome this.

And, by the way, this is what the road map specified, that the U.S. would lead the effort in rebuilding, retraining, re-equipping, reconsolidating the Palestinian security forces. And we want this, and we welcome this.

And we ask our brothers in Egypt and Jordan to help in this endeavor, because it's one of the most important ingredients, to begin immediately the retraining, the reconsolidating, the rebuilding and re-equipping of Palestinian security forces.

BLITZER: Are you also going to coordinate and cooperate with the Israeli withdrawal from Gaza?

ERAKAT: Well, we have not touched on this issue yet. So far, Wolf, you know that they have spoken about unilateral steps, no partners, they have decided many things alone.

So I have been urging them all the time to abandon the ways of unilateralism, fait accompli policy, settlement walls, and come back and make partners.

Today, my question to my Israeli colleagues: How do you make Gaza disengagement part of the road map? Because what's between me and them is the road map and its obligations.

BLITZER: What about the Israeli decision now to release several hundred Palestinian prisoners, including the son of Marwan Barghouti, a well-known Palestinian leader serving a life sentence in a prison in Israel? Is this enough right now, the gestures that the Israelis are making, including military withdrawal from some of the cities of the West Bank?

ERAKAT: See, I don't think that we're doing anything as gestures, and we don't doing anything as gestures. What we have are commitments.

Now, last night, we succeeded in forming a joint Israeli- Palestinian committee to address the issue of Palestinian prisoners, to change the arrangements and the criterias. And this will be declared in Sharm el-Sheikh, and I think this is a good development.

What we need, when the Israelis release prisoners, we ask them, do it in cooperation with us, please consult us. Please abandon the way that you know better for us. We need to be your partners. Come back and let us talk and discuss and agree on everything, including the prisoners.

BLITZER: Saeb Erakat, thanks very much for joining us. Good luck in these historic negotiations. Let's hope it moves forward to a peaceful resolution. Appreciate it very much.

ERAKAT: Thank you, Wolf.

(END VIDEOTAPE)

BLITZER: And up next, we'll get the Israeli perspective. We'll hear directly from the vice prime minister of Israel, Ehud Olmert. He's standing by to join us live.

"LATE EDITION" will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to "LATE EDITION."

Joining us now live from Jerusalem with the Israeli reaction, the vice prime minister of Israel, Ehud Olmert.

Mr. Vice Prime Minister, thanks very much for joining us.

The president of the United States in his State of the Union address this past week said, Israeli-Palestinian peace, the goal, he said, of two states, Israel and Palestine, is now, in his words, within reach. Do you agree?

EHUD OLMERT, VICE PRIME MINISTER, ISRAEL: I agree that we are certainly closer today to the fulfillment of this dream than we were a few months ago. The death of Yasser Arafat and subsequently the democratic elections and the election of Mr. Abu Mazen as the new chairman of the Palestinian Authority made a difference.

And the most important thing, the voluntary decision by the Israeli government to pull out from the Gaza district and to dismantle Israeli settlements in the Gaza district and some in the West Bank, is the most dramatic and important historic breakthrough in the Middle East.

And all this is about to be accomplished. So the Israeli decision on the one hand and the possible emergence of a new democratic leadership on the Palestinian side is certainly a major step forward, the like of which didn't have years in the Middle East.

BLITZER: So you believe you now have a legitimate partner for peace, a partner that's committed to the peace process, on the other side?

OLMERT: We certainly have now a candidate who is certainly a man of integrity. And we believe that he genuinely wants to change the realities in the Middle East.

The main question, obviously, is whether he's capable of doing it, whether he will have the power, whether the Palestinians will pull themselves together, all of them, in order to stop the terrorists and dismantle the terrorist organizations in order to allow the new realities to actually take place.

BLITZER: You heard Saeb Erakat, the chief Palestinian negotiator, say the Palestinians want all the attacks -- the Palestinian Authority wants all the attacks against Israelis stopped, end quote. In effect, that's what he said.

Do you believe they have that capability, though, to control Hamas and these other groups?

OLMERT: We don't know yet. It remains to be seen. But the very fact that they make this announcement, the very fact that Abu Mazen has expressed this demand from the organizations is a change in itself. Because when Yasser Arafat was chairman, he did the opposite, he encouraged the terrorist organizations, he financed them, he orchestrated all the terrorist actions against us.

Here comes a new leader, and he brings a new spirit, a spirit of a commitment to end violence and to stop terror and to embark on negotiations in a meaningful and sincere way.

This is a great change.

Now, as I say, it remains to be seen whether he will have the power to impose his will on these organizations, whether he will be prepared to engage in a confrontation with these organizations and stop them -- if they don't want to do it, even stop them by force.

BLITZER: The Israeli -- your government is taking...

OLMERT: I hope that his ability will match his courage.

BLITZER: Your government has already started taking some steps to try to send some signals to the Palestinians, including releasing hundreds of Palestinian prisoners, including withdrawing militarily from some of the West Bank cities.

What Saeb Erakat suggested was coordinate with them, talk to them, work together with them in some sort of partnership, instead of taking some of these steps unilaterally.

Is that a wise policy recommendation from his part?

OLMERT: Oh, it certainly is.

Well, the basic decision to pull out from Gaza and from the settlements was already made unilaterally because, at that time, the Palestinians were not ready and they didn't have a leadership that was willing to cooperate with us.

But all these measures that you have mentioned, including the release of prisoners, is going to be coordinated as Saeb had said. We have established a joint committee that will review all of these, and we are certainly prepared to do it.

The basic -- Wolf, the basic strategy of the Israeli government is very simple. This is a risk, because, at this point in life, the Palestinians have not yet delivered. They haven't yet stopped terror. We still have terror, and we have to suffer terror almost every day. But since the new leadership appears to be genuine and willing to change the policy of the Palestinians, we are prepared to take a serious risk.

And the first step will be the release of hundreds of terrorists that were arrested and convicted by Israeli courts, and now we release them and pardon them. There's always a risk that they will return to terror, but we are prepared to take the risk because there is a new spirit.

Israel will not hesitate to take every possible measure that will help strengthen this new spirit in the Palestinian camp. And we'll cooperate and coordinate with the proper authorities of the Palestinians in order to advance this.

BLITZER: One...

OLMERT: So we are prepared. We sit with them. We discuss with them those things.

BLITZER: One Palestinian prisoner who's reportedly about to be released, if he hasn't been released yet, is the son of Marwan Barghouti, one of the Palestinian leaders, if you will, who's been convicted of terrorism serving a life sentence in Israel.

Is the son of Marwan Barghouti, Kasam (ph) Barghouti, being released?

OLMERT: Well, his name was mentioned within this context of the Palestinian prisoners that are likely to be released. Of course, not his father, who was convicted in five different murder cases of the worst possible kind.

But we are willing to go a long way toward the new Palestinian leadership. We understand that they need to show that they have done something that changes the reality from their point of view, and we are prepared to cooperate with them.

Again, as I said, there is a risk-taking here, because they haven't yet practically started fighting against the Palestinian terrorist organizations. Some rockets were still launched against us in the last few days, and fire attempts were made in different parts of the West Bank and Gaza.

But we believe that this spirit by Abu Mazen is genuine, and therefore we are prepared to go along with it...

BLITZER: All right.

OLMERT: ... and take measures, even if there is a risk-taking, a serious risk-taking at this point.

BLITZER: Let's talk briefly about Iran and its nuclear program. The Iranian chief nuclear negotiator said today -- and I'm quoting -- he said, "If such an attack takes place, of course we will retaliate, and we will definitely accelerate our activities to complete our fuel cycle and make nuclear fuel."

He was talking about a possible U.S. or Israeli attack against Iran's nuclear facilities.

How concerned is your government about Iran's nuclear capabilities, and do you have contingency plans to try to take them out militarily?

OLMERT: I'm not familiar with any contingency plan by the United States to attack Iran, but...

BLITZER: What about Israel?

OLMERT: ... the possible possession -- but we are not even talking about it, not raising this possibility.

The very chance of an Iranian possession of nuclear weapons is of course a threat not just to the state of Israel, but to the entire world. We are talking about one of the most nondemocratic regimes any place in the world, not much different from the ones of Saddam Hussein. They don't hide their intentions. They spell it out in the most explicit way. They say that they are ready to acquire these -- to possess the nuclear weapons in order to be used primarily against the state of Israel, but not only the state of Israel.

So this is a major threat to the well-being and stability of almost every part of the world, Europe as well. And I think that this is therefore incumbent upon the United States and the European countries to take the necessary measures in order to stop it.

I am not here in order to give an open advice to the United States, how to do it. I know that the American administration is very much concerned with it and the Europeans are concerned with it, and they will have to find the proper measures.

It will be an enormous mistake to even assume that this is just a private problem of the state of Israel. It is not. It's our, all, all of us, problem. And I think that the United States, as the leader of the free world, has to be in the front line of those who are taking the necessary measures in order to stop it.

BLITZER: Ehud Olmert is the vice prime minister of Israel.

Mr. Olmert, thanks very much for joining us on "LATE EDITION."

OLMERT: Thank you.

BLITZER: And we'll take a quick break. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Let's take a look at what's on the cover of today's major news magazines.

U.S. News and World Report says, "Ready or Not: Can the Iraqis Take Charge?"

Newsweek looks at the new game of retirement.

Time magazine focuses in on the "Merchant of Menace," the father of Pakistan's nuclear bomb.

That's all the time we have. Thanks very much for joining us. I'm Wolf Blitzer in Washington.

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


Aired February 6, 2005 - 12:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, HOST: It's noon in Washington, 9 a.m. in Los Angeles, 7 p.m. in Jerusalem and 8 p.m. in Baghdad. Wherever you're watching from around the world, thanks very much for joining us for "LATE EDITION."
We'll get to my interview with Defense Secretary Donald Rumsfeld in just a few minutes. First, though, let's get a quick check of what's in the news right now.

(NEWSBREAK)

BLITZER: While the votes are still being counted one week after Iraq's historic elections, returns at least so far are showing strong support for the party endorsed by Iraq's leading Shiite cleric, the Grand Ayatollah Ali al-Sistani. That could have major implications for Iraq's new constitution.

Our senior international correspondent, Nic Robertson, is standing by in Baghdad with details.

Nic?

NIC ROBERTSON, CNN CORRESPONDENT: Well, Wolf, for the first day in several days, the electoral commission has not announced any more new results.

There has been a second announcement by the monitoring commission, the monitoring board here in Iraq, who are monitoring the elections. They say they've looked at 80 percent of the voting stations. They find the electoral process to have been broadly satisfactory. At 12 percent of the stations, they say there were irregularities; at 9 percent intimidation; and at 5 percent of the voting stations they say some people were actually turned away -- but overall satisfactory.

The debate really going on now within the Shia religious circles. The strong showing of the religious Shia party so far, the United Iraqi Alliance, is leading some of their religious clerics to call for a very strong representation of Islamic law, the sharia law, to be enshrined into Iraq's new constitution.

However, the Sunni population, who partook less than the other parts of the population in Iraq in the election, some of their religious leaders have actually said they will not get involved in drafting this new constitution unless U.S. forces set a date to leave the country or begin to leave the country.

But it is the debate going on within the Shia religious circles that is perhaps giving most interest here. Who will take the lead political positions? And how much of that Islamic law will be drafted into the constitution?

And because those parties are feeling that they're in a strong position, they want more than perhaps they might have indicated before, Wolf.

BLITZER: So are people seriously concerned that some sort of Islamic theocracy could emerge out of these democratic elections?

ROBERTSON: Well, when I was talking with Kurdish leaders, just before the elections occurred, from the north of the country, who are relatively secular, they said their biggest concern about the Sunni Muslims not getting into the elections in a big way would mean that the Shias and possibly the religious element within the Shia community would come out in a more dominant form.

And it seems that these fears are realized. The more secular elements in the country -- and Iraq has been run on a secular basis for many years now -- are worried, many within the sort of secular Sunni community, many secular Shias, who would see the best way to keep Iraq together, to keep it united is for it to be a more secular Iraq.

Wolf?

BLITZER: Nic Robertson in Baghdad.

Nic, thanks very much. I'll pose that question to Defense Secretary Rumsfeld. That's coming up.

But let's move on to Pope John Paul II. He appeared in public for the first time today since being hospitalized last Tuesday.

Our senior international correspondent, Walter Rodgers, standing by in Rome with details of that.

Walt?

WALTER RODGERS, CNN CORRESPONDENT: Hello, Wolf.

Those who prayed for the recovery of Pope John Paul II were rewarded this Sunday at midday, His Holiness appearing at the Gemelli Hospital window, where he's been on the 10th floor since last Tuesday.

This was the pope's first public appearance in a week. Last Sunday, of course, he appeared in the Vatican at his bedroom window delivering the weekly Angelus. It was thought at that time that the pope was exposed to too much cold.

Monday the Vatican announced the pope had the flu. Tuesday he was rushed to the hospital here behind me, the emergency room there, because he was having difficulty breathing. There was considerable anxiety about His Holiness, much anxiety as to whether he would even be able to appear in public this Sunday in his hospital room. So there was great relief when the window was opened, His Holiness was sitting in a wheelchair. He managed to genuflect, managed to wave, managed a very brief blessing, a matter of seconds, in which he said in Latin, "In the name of the Father, in the name of the Son, in the name of the Holy Spirit." The actual Angelus itself was read for him, about 10 minutes long.

The pope thanking those who prayed for him, thanking for the doctors in the hospital, making it very clear through one of his aged archbishops, Leonardo Sandri, that he is still very much in charge here at the Vatican.

At the Vatican itself today, there were video screens set up so that the pope's message from his hospital could be seen. Pilgrims were there, a scant few thousand, about half what the normal size is.

Tomorrow we're expecting a bulletin, a new medical bulletin, on the pope's condition.

Wolf?

BLITZER: Walter Rodgers reporting from Rome.

Thanks, Walter, very much.

Back to Iraq now. The success of last week's Iraqi elections isn't quieting concerns about the continuing security challenges there.

Just a short while ago, here in Washington, I spoke with Secretary of Defense Donald Rumsfeld about the ongoing fight against insurgents, the time table for an exit of U.S. forces and much more.

(BEGIN VIDEOTAPE)

BLITZER: Mr. Secretary, welcome back to "LATE EDITION." Thanks for joining us.

DONALD RUMSFELD, SECRETARY OF DEFENSE: Thank you. It's good to be with you.

BLITZER: Let's talk about when the Iraqi military, the security forces, will be ready to completely take over responsibility of their day-to-day security. When do you believe that might happen?

RUMSFELD: The problem with answering that question with a date is that you can't know what the level of the insurgency is going to be. You don't know the extent to which Iran and Syria are going to misbehave or behave. You can't know the extent to which Zarqawi's money is going to flow in and he'll hire more criminals or suicide bombers.

So what you have to do is look at the conditions. And the answer is that you see the conditions on the ground, and they may be higher or lower, and the test is to see that the Iraqi security forces over time can manage that level of insurgency.

And we're working very hard to achieve that, and so far they've done a very good job.

BLITZER: Joe Biden, the senator, the ranking Democrat on the Foreign Relations Committee, writes in The Washington Post today, "We should focus on real standards, not raw numbers. The real standard is straightforward: Can an Iraqi soldier or policeman do what we ask American soldiers to do, provide law and order, protect the infrastructure, defend the borders and, above all, defeat the insurgency? There are nowhere near 136,000 Iraqis capable of accomplishing these goals."

Is he right?

RUMSFELD: The 136,000 is the number of Iraqi security forces. Some of them are trained to be policemen. And, now, a policeman is not a counterterrorism or a police commando. He's not a regular army officer. He's a policeman. And he's trained to do that.

So there are about seven or eight or 10 different categories that are being trained to do very different things. So it is correct to say that they all can't be policemen and they all can't be counterterrorists. But it is not correct to say that there are not 136,000, because there are, but they're trained to do quite different things.

The...

BLITZER: How many are there? Of the 136,000, I assume 40,000 or 50,000 are police. But how many of the soldiers are really ready to go out there and fight, kill and protect their people?

RUMSFELD: We've got the numbers of each category.

Now, the thing that's correct in that statement you've read is that numbers are interesting, but they're not determinative.

Quality is also important. And that means, how good are the noncommissioned officers? How strong is the chain of command? How good is their intelligence? What is their mobility? Can they move around the country and be sustained?

Those are issues -- are they battle-hardened? Some of them just came out of training. They're green as grass. Some of them have been there a year. They fought in Fallujah. They helped protect the polling places, and they know what they're doing, and they do a very good job.

BLITZER: So, you don't want to give us a number of how many you think are really good at that job already?

RUMSFELD: At the -- depends on what's "that job." They're good at what they're being trained for, after they've been at it a little while. Then it just takes them a while to get good. The thing that worried me about the statement you read is, there is no military in the world that's as good as the United States military. I mean, the idea that these folks are going to be able to pick up and start operating like our special operations people do or like our Green Berets do or like our soldiers do or our pilots or our Navy people, they're not. I mean, we have the best military on the face of the Earth.

These people are going to develop a capacity to be a good military for that part of the world.

BLITZER: That's why the president presumably said this in his State of the Union address. Listen to what he said.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We will not set an artificial timetable for leaving Iraq, because that would embolden the terrorists and make them believe they can wait us out.

We're in Iraq to achieve a result: a country that is democratic, representative of all its people, at peace with its neighbors and able to defend itself.

(END VIDEO CLIP)

BLITZER: All right. Now, that's a very ambitious, very ambitious agenda. It sounds like that's years away.

RUMSFELD: It doesn't to me, but certainly that's the goal he has had from the beginning.

And when he says defend itself, I don't think he's talking about defending against Iran or its neighbors, he's talking about defend itself from the internal insurgency.

And over time, that could take many years for them to develop the military capability to defend against an external aggression.

But the presence of U.S. forces does not depend on that latter fact, of being able to defend against an external presence. It depends on the Iraqi security forces' ability to manage their internal security, so the people of that country can get on that path to democracy which was seen last Sunday in such a thrilling way.

BLITZER: What if the democratically elected government in Iraq is a Shiite theocracy?

RUMSFELD: Well, I don't think it will be. But look, Iraq is for Iraqis. It's not for Americans. We're not going to decide what kind of a country they're going to have. They're going to...

BLITZER: The critics will point out...

RUMSFELD: They're going to decide what government they want. They're going to write their constitution. It's not going to be written by foreigners. It's going to be written by them.

Now, when you ask me what I think, I think that the Shia in Iraq are more Iraqis than they are Shia. I don't think they're people who are getting up in the morning and saying, "Gee, I wish we had a theocracy like Iran does, with a handful of clerics telling everyone what to do." I don't think that's going to happen.

BLITZER: You don't think the Grand Ayatollah Ali al-Sistani wants that?

RUMSFELD: No. I don't think it's going to happen.

BLITZER: And if it did, if they were to elect a Shiite-led government that wants an Islamic regime, along the lines of Iran, would that have been worth it, to see the number of U.S....

RUMSFELD: I don't think it's going to happen.

BLITZER: It's possible it could happen though.

RUMSFELD: I don't think it's going to happen.

BLITZER: In Algeria, they had elections and they wanted some sort of Islamic...

RUMSFELD: I understand.

BLITZER: ... fundamentalist regime.

RUMSFELD: That's right.

BLITZER: And, of course, that didn't happen because they went to war on that.

RUMSFELD: I think the great sweep of human history is for freedom. And I think people want to be free.

And I think any country that decides it's going to take half of its population, its women, and set them on the side and not allow them to participate is fashioning a system that is, over time, going to be a difficult one to sustain, because I think people do want to participate.

BLITZER: If it were to happen, would you stop it from happening?

RUMSFELD: No, I'm -- look, the Iraqis are going to decide that constitution. They're going to fashion what they fashion.

BLITZER: And it's up to them solely?

RUMSFELD: Of course it is.

BLITZER: The Lieutenant General Steven Blum, U.S. chief, National Guard Bureau, testified this week before the House Armed Services Committee. Listen to what he said.

(BEGIN VIDEO CLIP)

LIEUTENANT GENERAL STEVEN BLOOM: As it pertains to the National Guard, the Army National Guard in particular, we were woefully underequipped before the war started.

That situation hasn't gotten any better. As a matter of fact, it's getting -- it gets a little bit worse every day.

(END VIDEO CLIP)

BLITZER: And specifically, if you talk about military shortfalls, in the Army reserves, according to the New York Times, 7,000-troops shortfall; National Guard, 15,000-troops shortfall.

RUMSFELD: Shortfall of what -- recruiting, retention, total numbers?

BLITZER: Of recruiting. And National Guard and Army Reserve, as you know, make up about 40 percent of the U.S. troops on the ground in Iraq right now.

Basically, in terms of recruitment shortfalls, the National Guard, in terms of a monthly basis, is down about 56 percent. The Marines are down only 3 percent, but that's the first time that the Marines have missed a monthly goal in 10 years, since July 1995.

RUMSFELD: Yes.

BLITZER: Are you concerned about this, specifically about what General Blum says?

RUMSFELD: Any time our country's engaged in a conflict, you have to be concerned and attentive to the recruiting and retention, particularly when you've got a volunteer force, as we do.

Everyone who serves is a volunteer. Basically, recruiting -- you cited a few that are low. Basically, overall, recruiting and retention is roughly on track.

Some of the numbers are low, for an interesting reason: We're increasing the size of the Army and the Marines. When you do that, you reduce the pool that people pull from to have a National Guard recruiting. Many of the people that go into the Guard and reserve come out of the active force. And if you're holding them in -- not holding them in -- encouraging them to stay in, because you're increasing the size of the active force, obviously you have reduced the pool.

Second, we've increased our goals, because we need to increase the size of the force.

BLITZER: Is the U.S. military right now overstretched?

RUMSFELD: It's clearly stressed, but they're performing brilliantly, they're doing a fabulous job. And we're adjusting the incentives and the number of recruiters that are out. And the test now is to make sure that we have the right kinds of incentives to attract and retain the people we need. And they're doing a great job.

BLITZER: If there were a second front right now, let's say another crisis on the Korean peninsula, for example, could the U.S. military meet that challenge?

RUMSFELD: The chiefs and the combatant commanders look at those things all the time, and they constantly are running scenarios and tests and making judgments about how we would manage something were something else to occur that wasn't anticipated.

And when you're engaged, as we are in Iraq, doing something else might take somewhat longer, it might be done in a slightly different way, but the estimates I get are that, basically, we're capable of performing the task that the president has assigned.

BLITZER: I interviewed Ambassador Barbara Bodine on Friday. She's a retired U.S. ambassador. She was part of the Coalition Provisional Authority, went into Baghdad the day the Saddam statue went down.

Looking back on some of the mistakes she says were made, she's blaming you and the office of the secretary of defense for some initial blunders. Listen to what she said.

(BEGIN VIDEO CLIP)

BARBARA BODINE, FORMER CPA OFFICIAL: ... the decision was that we were not going to get involved in trying to stop the looting. And, in fact, the secretary of defense, you know, basically trivialized it and said it was just messy and part of democracy.

That was kind of the first signal that we were not going to really try to take control of the country.

(END VIDEO CLIP)

BLITZER: I wonder if you want to respond to her.

RUMSFELD: No, not really. I don't know what else she may have said.

But the reality is that, when we went into that country, our soldiers had the task of, first of all, defeating the enemy. And in that early day, in the very early days when Baghdad was being taken, there was some looting.

And the question -- it wasn't my decision -- it was a question for the commanders, the battlefield commanders. She implies that I made some sort of decision.

I commented that I thought the battlefield commanders made the right decisions, and the right decisions were to defeat the enemy, instead of providing security around a museum or something. I forget what else there was that somebody was concerned where there was looting. I think the battlefield commanders did a good job. BLITZER: You said earlier today that, by the middle of this month, February 15th, all U.S. vehicles in Iraq, outside of secured areas, will be fully armored, will be fully protected.

Was that program accelerated -- would that have been the case had that soldier in Kuwait in December not asked you that provocative question?

RUMSFELD: I didn't think it was provocative. I thought it was a fair question.

BLITZER: Well, he said he was rummaging through junkyards.

RUMSFELD: Sure, and that's happened in -- I go all over the country and let people ask me questions like that, and I'm happy to do it. And I think it's important for a secretary...

BLITZER: But did it accelerate the process?

RUMSFELD: I think it's important for a secretary of defense to go out there and meet with the troops and let them ask anything they want.

I don't know.

I know that -- and I'd like to rephrase what you said. I didn't say they'd be fully armored.

I said they would all have what the military deems to be appropriate armor for their use. In other words, everything is not a tank. Everything is not at every level. They have varying levels, depending on their purpose.

But it is correct that by February 15th, General Casey believes that'll be the case.

(END VIDEOTAPE)

BLITZER: More of the interview coming up. Just ahead, I'll ask Defense Secretary Rumsfeld about the Iraqi insurgency. Is next-door neighbor Syria involved?

President Bush's warnings about Social Security: Is the retirement program going bankrupt? Two top U.S. senators standing by to debate that issue.

And later, Secretary of State Condoleezza Rice on a Middle East mission right now. How should the Bush administration jumpstart the peace process? We'll get perspective from two former U.S. secretaries of state and from Israeli and Palestinian leaders. They're standing by as well.

"LATE EDITION" will continue right after this.

(COMMERCIAL BREAK)

BLITZER: Welcome back to "LATE EDITION."

Here is part two of my interview with Defense Secretary Donald Rumsfeld.

(BEGIN VIDEOTAPE)

BLITZER: Is Syria doing everything it can to stop insurgents from getting into Iraq, from funding the insurgents, from taking the steps that you want it to take in order to ease the insurgency in Iraq?

RUMSFELD: Certainly not.

BLITZER: What else must they do?

RUMSFELD: Well, they haven't even released the Iraqi assets. Millions and millions and millions of dollars of Iraqi assets are in Syria. And the Iraqi government has asked for those assets, and they need that money, and Syria's keeping it, for example.

There's no doubt but that Baathists are located in Syria, from Iraq, the relatives of people that are causing the trouble and the insurgency.

And no, no, certainly not, Syria's not been helpful.

BLITZER: A lot of people listened to what the president said about Iran in his State of the Union address, and especially some of the European allies wonder if Iran might be next on your target list.

Listen to what the president said.

(BEGIN VIDEO CLIP)

BUSH: Today, Iran remains the world's primary state sponsor of terror, pursuing nuclear weapons while depriving its people of the freedom they seek and deserve.

And to the Iranian people, I say tonight: As you stand for your own liberty, America stands with you.

(APPLAUSE)

(END VIDEO CLIP)

BLITZER: Is Iran next?

RUMSFELD: Look, those are nothing to do with the Department of Defense. The president handles Iran policy. He's decided on a diplomatic route, and he's commented on that, as has the new secretary of state, Condi Rice, and the previous secretary of state, Colin Powell. And they're on a diplomatic path.

BLITZER: Are the Iranians developing chemical, biological and nuclear weapons?

RUMSFELD: Those are questions for intelligence officials.

I think that it's fairly clear from the public statements of the Iranians that they are on a path of seeking a nuclear weapon and don't have it at the present time.

BLITZER: How close are they, in your estimate, based on all the intelligence you're getting?

RUMSFELD: I don't make estimates. That's the business for the intelligence community. But they're some years away, according to the estimates, but I don't know if the estimates are correct or not.

You know, the intelligence community has a tough job. Their job is to find out exactly what people don't want them to find out. And that's not easy, particularly when you have a closed society like that.

BLITZER: Can the U.S. accept a nuclear weapon in Iran?

RUMSFELD: Those are issues that are for the president.

BLITZER: You don't want to get into that.

I will get into this issue that you raised, or at least Larry King raised the other night when you spoke with him. Listen to what you said.

(BEGIN VIDEO CLIP)

RUMSFELD: I submitted my resignation to President Bush twice during that period and told him that I felt that he ought to make the decision as to whether or not I stayed on. And he made that decision and said he did want me to stay on.

(END VIDEO CLIP)

BLITZER: Now, that was in regard to the Abu Ghraib prison abuse scandal that erupted.

RUMSFELD: Yes.

BLITZER: You offered to resign.

Were there other moments over these past four years that you offered to resign?

RUMSFELD: No. Just twice.

And I had to make an initial threshold decision as to whether I felt I could be effective, and I made that decision and felt I could.

It was in the middle of a political campaign. People running for president obviously say things that -- it's not unusual. Furthermore, there's never in our history of our country has there been a wartime situation in a presidential campaign where the president hasn't been criticized and the secretary of defense hasn't been criticized. So I made a decision that I could be effective, but I also made a decision that I thought the president ought to have a chance to make that judgment call, as to how he wanted to go forward. And so, I submitted my letter of resignation to him twice, and we had a long discussion about it, and he persuaded me that I should stay on.

BLITZER: And you're still here.

Lieutenant General James Mattis, U.S. Marine Corps, made some controversial comments in San Diego the other day. Listen, among other things, to what he said. Listen to this.

(BEGIN VIDEO CLIP)

LIEUTENANT GENERAL JAMES MATTIS, U.S. MARINE CORPS: You go into Afghanistan, you got guys who slapped women around for five years because they didn't wear a veil. You know, guys like that ain't got no manhood left anyway, so it's a hell of a lot of fun to shoot them.

(END VIDEO CLIP)

BLITZER: That was the gist of what he said. You've had a chance to look into this. What do you think of that?

RUMSFELD: The commandant of the Marine Corps said that he was concerned about the words, and he counseled with that individual. And as far as I can see, the matter's closed.

BLITZER: No more punishment or retribution or anything like along those lines? He's going to continue on in his career?

RUMSFELD: That appears to be what has been decided by the commandant of the Marine Corps.

BLITZER: Our Barbara Starr, our Pentagon correspondent, broke a story this week that the Pentagon is funding some Web sites in Bosnia and northern Africa...

RUMSFELD: Yes.

BLITZER: ... paying journalists to contribute to this.

The president of the United States had some comments, not in connection with the Pentagon, but in connection with the Department of Education, Department of Health and Human Services, where they funded some commentators for propaganda or public relations purposes.

Listen to what the president said.

(BEGIN VIDEO CLIP)

BUSH: All our Cabinet secretaries must realize that we will not be paying, you know, commentators to advance our agenda. Our agenda ought to be able to stay on its own two feet.

(END VIDEO CLIP) BLITZER: All right. What do you think?

RUMSFELD: I agree with the president. And I am -- I've asked -- in fact, I didn't even ask, I was told that we're looking into the issue you raised.

Apparently, it's something that is eight or 10 years old. It involves Europe and some Web sites there.

And if I heard the president correctly, he said people shouldn't be paid to advance an agenda. To my knowledge, that's not the case in this instance, but someone is looking into it. And obviously, if that is the case, that they were doing it to advance some agenda, then they shouldn't be, and it would be stopped.

I'm told that, in this case, people were just asked to prepare anything. They weren't told what to write. It had nothing to do with an agenda. They were asked to take a subject and, if they wanted to, write something on it, which people do all the time.

But we'll find out more about it, and certainly the president is correct.

BLITZER: We are, unfortunately, all out of time, but thanks very much for joining us, Mr. Secretary.

RUMSFELD: Thank you.

BLITZER: You've had a busy day.

RUMSFELD: I have.

(END VIDEOTAPE)

BLITZER: And just ahead, we'll get a check of what's in the news right now, including the latest on Condoleezza Rice's first trip to the Middle East as secretary of state.

Then, two top U.S. senators, Republican Mitch McConnell and Democrat Christopher Dodd, square off on a U.S. exit strategy for Iraq and more.

"LATE EDITION" will be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: Our country is still the target of terrorists who want to kill many and intimidate us all. And we will stay on the offensive against them until the fight is won.

(END VIDEO CLIP)

BLITZER: President Bush, in his State of the Union address Wednesday night, saying the United States would continue to take the fight to the terrorists.

Welcome back to "LATE EDITION."

Joining us now, two leading members of the United States Senate: Mitch McConnell of Kentucky is the Senate's number-two Republican. Democrat Christopher Dodd of Connecticut is a key member of the Senate Foreign Relations Committee.

Senators, welcome back to "LATE EDITION."

Let me start, Senator Dodd, with you. Senator Kennedy says Defense Secretary Rumsfeld should resign. Senator Kerry says so. What do you say?

SEN. CHRISTOPHER DODD (D), CONNECTICUT: No, I don't the resignation. I appreciate the call for that. But I'm more interested in the policy issues than resignations at this point.

I gather he submitted his resignation twice, and the president didn't accept it, so...

BLITZER: On the Abu Ghraib prison scandal.

DODD: Yes. The policy issue is where we need to address.

BLITZER: Well, what you heard in the interview we just conducted, were you reassured by him, remain concerned about him on the policy issues?

DODD: I remain concerned about it.

You really didn't get an answer to your question, that is, to what extent do we have security forces in Iraq achieving the level of skill that they could replace American soldiers?

Putting aside the question of timetables, the ultimate question we have to ask is, when are the Iraqis going to be able to defend whatever form of democracy they embrace? Are they going to be able to do it on their own?

We cannot be the permanent guarantors.

BLITZER: He said there are too many uncertainties right now, he can't give an answer.

DODD: I understand. I'm not expecting him to come down to the exact number, but at least a ball-park number.

We know we're way short of that. You pointed to Senator Biden's article in The Washington Post today, in which he laid that out. We have numbers running anywhere from around 4,000 to 7,000; if you listen to Mr. Cordesman or others, up to 136,000.

It's a very vague spread there, as to what the actual numbers are.

BLITZER: Anthony Cordesman.

DODD: We ought to get that.

BLITZER: He's an analyst at the Center for Strategic and International Studies, Tony Cordesman.

But why not give the American public at least some sort of timetable -- it doesn't have to be precise -- for an exit strategy?

SEN. MITCH MCCONNELL (R-KY), MAJORITY WHIP: Because it's something we simply cannot outline in advance. We will not know exactly how this is going to play out. You can't predict every single thing that's going to happen. I mean, Eisenhower would have been fired on D-Day had we had 24-hour television coverage in those days.

Look, we had a great election last Sunday. Iraqis showed great courage.

I was there a few weeks ago; it certainly doesn't make me an expert. I got a chance to watch the General Patraeus's operation, training the soldiers.

Secretary Rumsfeld made it clear in the Wall Street Journal the other day that a number of those soldiers did a great job on election day. Are they what we want them to be? No. But we've made a lot of progress, and we're going to continue to make progress.

And we won't leave -- just so there's no misunderstanding about it -- we will not leave until they are ready to take over the job of defending their country.

BLITZER: Were you reassured by what happened last Sunday, the Iraqi elections?

DODD: It was a great day. It was certainly inspirational to watch the, what was it, roughly 8 million Iraqis that showed up to vote under the most extreme circumstances. It's extremely important. It was extremely worthwhile.

What comes after this now? What sort of a government gets formed? Are they going to be inclusive? Will moderate Sunnis be allowed to participate? Will the Kurds really seek to be a part of an Iraqi country in the coming weeks and months?

So the election was -- obviously, none of that would have happened without a good election. They've had that. What happens in the weeks and months now after this will really determine how successful that election was.

BLITZER: Secretary Rumsfeld said he did not believe it was realistic to assume that the Shiite majority in Iraq right now would create an Islamic theocracy in that country, although a lot of experts are fearful of that.

MCCONNELL: I don't think there's any chance of that. We met with a lot of the Shiite leadership a couple of weeks ago. They're acutely aware of the need to reach out to the Sunnis. They knew even then the turnout was going to be low in the four provinces that are largely Sunni-dominated, where more of the security problems are going to be.

Watch the appointments they make. Watch the appointments that they make during this interim period. They're going to reach out to the Sunnis, bring a lot of them into the government.

And remember, there are two more elections this year. The Sunnis will have a chance, in effect, to veto the new constitution, because if only three of the provinces do not ratify the new constitution, it won't go into effect. So they have a lot of power to ensure that they're adequately represented in the new government.

BLITZER: Are you as confident as Senator McConnell?

DODD: Not as confident. I hope it happens, because if it doesn't happen, this will not work. It will fracture, and you'll have civil war in the country. And it's important we encourage that to be the case, to be inclusive.

There are some reports already that they want to make more of their constitution a religious document than a secular document. And I hope that's not the case. There is certainly going to be some of it, but it will really be incumbent upon this newly elected assembly to really insist upon invitation, the idea of some sort of a federalist arrangement here.

Because clearly, when you had the sort of de facto referendum on the part of the Kurds, using the election of last Sunday, to actually ask Kurds whether or not they wanted to be part of a greater Iraq, the answer came back 2-1, no. That's troublesome. That's worrisome.

So it will be very important that this assembly reaches out to the Kurdish population to make sure they're going to be a part of a larger federal state.

BLITZER: Can the U.S. live with a nuclear weapon in Iran?

MCCONNELL: That is, of course, a very difficult question. We certainly want Iran not to become a member of the nuclear family.

The British and the French and the Germans are working on that in a multilateral approach.

We've just demonstrated with the welcoming -- or we're in the process of welcoming Libya into the community of non-nuclear states, and they're beginning to see the benefits of that.

Hopefully, the Iranians will conclude that it's not in their best interest to become a nuclear power.

BLITZER: But if they reject that and go ahead and build the bomb...

MCCONNELL: Well, that's a hypothetical I don't think we have to address. I mean, everybody's working on it. The British, the Germans and the French are taking the lead. We're supporting what they're doing.

BLITZER: Well, I guess the question is, should there be a military option for the U.S.?

MCCONNELL: I don't think we ever state whether there's a military option or not. That's something we never announce in advance.

BLITZER: What do you think?

DODD: Well, I don't think you ought to eliminate an option either.

But I would like to see us work more. The response of Secretary Rice to the German, French and British initiative is basically, "We have nothing to say." I think that's a mistake.

No matter who runs Iran, you're going to have the possibility of them wanting to acquire nuclear capabilities. Even if the reformers take over, I don't think they're going to drop that option. So, it's going to take work. And I would like to see us become more a part of it.

The president almost suggested that the other evening in the State of the Union. He talked about obviously the support for Hamas and other terrorist organizations coming out of Iran. He's right on that. He then quickly said, of course, we ally ourself with the reform elements in Iran. Sort of a mixed message here.

It seems to me we ought to be engaged with our colleagues in Europe. It's a good opportunity for us to rebuild the relationships in Europe and do something meaningful about trying to minimize the option of a military strike in Iran to deal with a nuclear capability.

BLITZER: Condoleezza Rice is in Israel right now, meeting with Israelis and Palestinians. Tomorrow there's a summit meeting. On Tuesday, the new Palestinian Authority president, Mahmoud Abbas, will meet with Ariel Sharon, the Israeli prime minister.

I assume both of you support the $350 million aid package that the president proposed in his State of the Union address for the Palestinians.

Will you, though, demand conditions be attached to granting that money to the Palestinians?

MCCONNELL: Well, there have traditionally been some conditions attached.

But, look, they're heading in the right direction. They just had a real election, which is unique for the Palestinians. In the old days, you could vote for Arafat or no one else. Elections are breaking out all over, in the most unusual places. I think the Palestinians deserve our support as they move toward what looks like the best opening we've had for a final peace settlement between the Palestinians and the Israelis in our lifetime.

BLITZER: What do you think?

DODD: I'm very optimistic about it.

I, first of all, want to commend President Mubarak and King Abdullah. They've done a tremendous job in bringing these people together.

There's real hope here, I mean real hope, maybe for the first time in years.

My hope would be the administration would stay engaged. I think the failure to be as engaged, disengaged as we were over the past four years was a problem. I think the fact that Condoleezza Rice is there is very important.

And I agree with Mitch. I wouldn't -- there may be some conditionality here, but we ought to send a message that we're prepared to really back this effort. If, in fact, the Palestinian leadership is able to convince their people that this is the right route to follow, then we ought to be willing to back that up with some real assistance to them so they can get on their feet.

MCCONNELL: And the only thing I would add is, the only reason the administration was not engaged was that Arafat was there. Now that Arafat is gone, you have a legitimate leader, popularly elected, who wants, genuinely wants peace. So the conditions are changed, and so the administration is much more engaged.

DODD: Well, there were other elections there, and there were people chosen in that period of time. Arafat was alive, but we certainly could have done more, in my view.

BLITZER: All right, we're going to continue this conversation, but we have to take a quick break.

Much more coming up. When we come back, we'll turn to some domestic issues, including the future of Social Security. Is the U.S. retirement program headed for collapse?

"LATE EDITION" continues right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: By the year 2042, the entire system would be exhausted and bankrupt.

(AUDIENCE BOOING)

If steps are not taken to avert that outcome, the only solutions would be dramatically higher taxes, massive new borrowing or sudden and severe cuts in Social Security benefits or other government programs.

(END VIDEO CLIP)

BLITZER: President Bush, in his State of the Union address, getting some boos when he spoke about the need to reform Social Security.

Welcome back to "LATE EDITION."

We're talking with Republican Senator Mitch McConnell of Kentucky and Democratic Senator Chris Dodd of Connecticut.

Senator Dodd, were you among those booing the president?

DODD: Oh, no, no, I don't believe in doing that.

But the president, not that he should be booed by members of Congress, but to say, as he did, that by 2042 this program will be totally bankrupt is just totally false, totally false. There isn't an analysis in the world that would draw that conclusion.

At worse, by 2052, it may not -- 20 percent, somewhere around 20 percent of the fund, may not be there. But 80 percent of the Social Security trust fund will be intact 50 years from now.

This is not a crisis. This is an effort to eliminate and so fundamentally alter Social Security -- maybe the best program we've ever provided in the 20th century, taking seniors out of poverty, where only 10 percent of them today are in poverty.

Social Security has made a huge difference. This president want to eliminate it.

BLITZER: Do you disagree with that, Senator McConnell?

MCCONNELL: I think we're quoting the wrong president. President Clinton was saying in 1998 and again in 1999 that we ought to go in and tackle this program.

The current Democratic leader, Harry Reid, said in 1999 that, even with regard to the controversial personal retirement accounts, that he was open to that.

Senator Durbin, the new Democratic whip, was saying in 1998 there are going to be huge benefit cuts down the road; we ought to get about solving this problem now.

Look, my attitude is, why don't the Democrats show us their plan?

BLITZER: All right.

Is there a Democratic plan?

DODD: Well, sure. There are all sorts of them. If you want to save Social Security, we can do any number of things. That's not what the president's talking about.

He's talking about borrowing $4.5 trillion -- does nothing in his plan. He hasn't said a word yet on how he'd save Social Security -- laid out some options the other night.

We could just take the tax cuts, take one-third of the tax cuts he wants to make permanent by 2006, just a third of them, let the other $8 billion go ahead -- that money alone would be enough to meet the $2.2 trillion shortfall over the 50 years for Social Security. That alone solves Social Security.

Now, if you want to change the program and privatize it as the president does, that's a whole separate issue.

BLITZER: Senator McConnell?

MCCONNELL: Look, the point is, do we have a problem here that we ought to address or not?

I think what I see the Democrats doing is sticking their heads in the sand, which is not what they were doing in the late '90s when there was a Democratic president, saying, "We don't want to deal with this, unless it's to raise taxes."

DODD: No, no, no. That's not raising taxes. That's just taking the tax cut and reducing it a bit. That's a separate issue.

Saving Social Security is not complicated. There are any number of things that could be done to make up the 20 percent.

Let me state again: Congressional Budget Office, even the White House analysts, will tell you, in 2042 to 2052, 80 percent of the Social Security trust fund will be there. That's a 20 percent shortfall 40 to 50 years from now.

That is easy to make up, that shortfall, and without cutting benefits at all.

Now, you want to do other things...

BLITZER: The whole debate -- sounds like the whole debate is over these individual, these private retirement...

MCCONNELL: No.

DODD: And that's a separate issue.

MCCONNELL: Let's just put that aside. Let's just put the personal retirement accounts aside. Do we or don't we want to save the Social Security system for our children?

BLITZER: Everybody's suggesting that.

MCCONNELL: Well, we don't have a single Democrat that I know of, with the possible exception maybe of Chris's colleague from Connecticut, who wants to sit down on a bipartisan basis and address the problem.

DODD: Oh, no, we'll sit down, absolutely sit down.

I believe that -- I've always been a strong supporter of individual retirement accounts, for instance, the 401(k)s we were talking about a minute ago. We ought to be promoting more of that.

To go and say to someone, as someone suggested in an editorial comment, "Your retirement plan is in deep trouble, so instead of encouraging you to save more to strengthen it, we want you to borrow more to strengthen it" -- here we are already with $7 trillion in debt. You want to borrow $4.5 trillion more.

BLITZER: Very quickly, because we're almost out of time, are you willing to -- the president says all the options are...

DODD: To save Social Security...

BLITZER: ... on the table. Are you willing to talk to him to come up with some sort of compromise?

DODD: Saving Social Security, absolutely, and there are all sorts of ideas that can save it.

Privatizing Social Security is not saving Social Security.

BLITZER: That sounds like one option that he's not accepting.

MCCONNELL: Well, fine, let's see what his plan is. Because four years from now, the baby-boomers start retiring. Young people think they're likely to see a UFO than they are a Social Security check.

DODD: No, no. That's because you keep telling them that.

MCCONNELL: They're right, because the benefit cuts or the tax increases that would be required to sustain the program as it currently is are completely unacceptable.

BLITZER: Would you be willing to hold back on making the tax cut permanent?

MCCONNELL: We're willing...

DODD: Just a fraction of it.

MCCONNELL: ... to sit down and talk to them. They don't want to talk. They want to circle the wagons, say there's no problem, no problem, stick their head in the sand.

DODD: No.

BLITZER: They're talking right now. We'll see what -- we'll see what...

DODD: It's a great issue. We thank them for the gift, actually.

BLITZER: We have to, unfortunately, leave it right there.

Senator Dodd, thanks very much.

DODD: Thank you very much.

BLITZER: Senator McConnell, thanks to you as well.

We'll take a quick break. Much more when we come back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to "LATE EDITION."

We'll talk about Iraq and the Bush foreign policy agenda with former U.S. secretaries of state Henry Kissinger and Madeleine Albright.

We'll also speak with Israeli Vice Prime Minister Ehud Olmert and chief Palestinian negotiator Saeb Erakat.

All that coming up. First, though, let's get a quick check of what's in the news right now.

(NEWSBREAK)

BLITZER: Secretary of State Condoleezza Rice right now in the Middle East. At this hour, she's been meeting with the Israeli prime minister, Ariel Sharon. Her visit is in advance of Tuesday's Israeli- Palestinian summit in Egypt.

Our State Department correspondent, Andrea Koppel, is traveling with the secretary. Andrea is joining us live from Jerusalem.

What's the latest, Andrea?

ANDREA KOPPEL, CNN CORRESPONDENT: Well, Wolf, Secretary of State Rice arrived here in Israel a short time ago and made the rounds.

But unlike recent visits by her predecessor, former Secretary of State Colin Powell, Secretary Rice was greeted by something that has been in short supply here in recent years, and that is a sense of optimism, a renewed feeling of hope that now, with the passing of former Palestinian leader Yasser Arafat and the democratic election last month of Palestinian President Mahmoud Abbas, there is an opportunity to build some momentum, to get the two sides again talking peace.

Rice, as you said, met with the Israeli prime minister, Ariel Sharon, and also with the Israeli foreign minister. She's holding separate meetings with each side.

This is really on the eve of Tuesday's summit, which will be the highest-level meeting between Israeli and Palestinian leader in over four years. They'll be meeting at a summit hosted by Egypt in the Red Sea resort of Sharm el-Sheik. But the real test, obviously, is going to come in the days that follow that summit, at which both sides are expected to declare a cease-fire. And that really is the focus of Secretary Rice's visit here, both in Israel and then when she travels to the West Bank tomorrow to meet with the Palestinian president and other Palestinian leaders.

She is going to be seeking to find out how the U.S. can really do what President Bush is pledging to do, and that is, Wolf, to try a renewed sense of commitment to the process and really a -- not only just giving money, but really investing the time and energy and personal commitment of the president and the top U.S. diplomat to try to get this process moving forward and really get a sense of momentum.

Wolf?

BLITZER: That was Andrea Koppel, reporting from Jerusalem, covering every step of the way Dr. Rice's, Secretary Rice's trip throughout the region.

Thanks, Andrea, very much.

The Bush administration is also trying to calm concerns that the United States won't be pulling the strings behind Iraq's new government.

Our White House correspondent, Suzanne Malveaux, is standing by with information on that.

Suzanne?

SUZANNE MALVEAUX, CNN CORRESPONDENT: Good morning, Wolf. Earlier this morning, the vice president, Dick Cheney, said that there would be no artificial timetable to pull out U.S. troops in Iraq.

Now, really, right now the administration is in a tough position. This is because just yesterday Sunnis' top leaders said that, of course, they did not want to participate in Iraq's new constitution, drawing up that constitution, unless there was some sort of clear indication of the draw-down of U.S. troops.

This, of course, being important, because their organization -- rather, their group was not represented as well as some of the other groups. They, of course, in participating, would give a certain sense of legitimacy to that process.

Cheney, of course, performing a delicate balancing act. On the one hand, of course, saying that the U.S. is not going to stay a day longer than necessary. On the other hand, of course, saying that the mission would have to be accomplished before they were able to withdraw.

And finally, Cheney also tried to play down the U.S. role, in terms of Iraqi elections, saying that the role in writing the constitution and establishing the next move for the government is in the hands of the Iraqis. (BEGIN VIDEO CLIP)

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: This is not going to be, you know, an Iraqi version of America. This is going to be Iraqi. It's going to be written by the Iraqis, for the Iraqis, implemented and executed by them.

And it's absolutely essential that that be allowed to happen and that we preserve the integrity of that process that we set in motion.

(END VIDEO CLIP)

MALVEAUX: Cheney also, of course, tried to downplay any kind of indication that the United States was eager to use military action and try to convince Iran to abandon its nuclear ambitions. Cheney, of course, striking a much different tone than just a couple of weeks ago, when he suggested perhaps Israel would be willing to target and strike some of those nuclear sites.

Wolf?

BLITZER: Suzanne Malveaux at the White House.

Thanks, Suzanne, very much.

While he's promising that the United States will stay the course in Iraq, President Bush is also serving up some tough talk for its neighbors, Iran and Syria.

Joining us now to talk about what's at stake for Iraq and the U.S. presence in the Middle East, two guests, both former secretaries of state of the United States: in Connecticut, Henry Kissinger; he served under Presidents Nixon and Ford. Here in Washington, Madeleine Albright; she served under President Clinton.

Good to have both of you back on "LATE EDITION." Thanks very much.

Let's start off with Iraq, and I'll begin with you, Dr. Kissinger. A theocracy in Iraq -- the Shiites clearly the majority. If they want to have one, democratically moving in that direction, they certainly, at least on paper, can do that.

HENRY KISSINGER, FORMER SECRETARY OF STATE: They can do it on paper. But if they're wise, they will recognize that there are Sunnis, about 20 percent of the population, that have dominated in the past and that would certainly not accept a theocratic government. And then there are Kurds, so that's another 20 percent that have a capacity to secede and declare their independence.

So if they want to hold Iraq together, and if they want to run a government with the support of a substantial part of the population, I think they will find a way to take account of their religion but not to do it as a theocratic government.

BLITZER: Listen to this, Madam Secretary, the president, in his State of the Union address, on the limits of U.S. power in Iraq. Listen to this.

(BEGIN VIDEO CLIP)

BUSH: The United States has no right, no desire and no intention to impose our form of government on anyone else.

(APPLAUSE)

That is one of the main differences between us and our enemies.

(END VIDEO CLIP)

BLITZER: Not only in Iraq, the limits of U.S. power, but around the region, in his call for democracy.

Do you believe this fear of an Islamic theocracy in Iraq emerging in realistic?

MADELEINE ALBRIGHT, FORMER SECRETARY OF STATE: Well, I hope it isn't, because, as Henry Kissinger said, it is something that would lead to the dissolution of Iraq.

But I do think we need to understand the Shias, according to the latest tallies, have won a very large majority. And the question is, how much of Islamic law are they going to impose without having an actual theocracy?

But I think clearly we cannot impose our form of government on them.

And the issue will be -- Wolf, there are many, many steps here. The constitution has to be written, there has to be a referendum, then there have to be more elections.

And while we're really celebrating the euphoria of the past elections in Iraq, it is very, very clear that there's a lot of work that still has to be done to make sure that we do get a relatively stable, moderately democratic Iraq, which is what is so important at this point.

BLITZER: Are you confident that, Dr. Kissinger, that what happened last Sunday, the elections in Iraq, will be translated to a real democracy there anytime soon?

KISSINGER: I think it was a hopeful step.

I'm not absolutely confident that people who have not known democracy in their history, certainly not in their recent history, and that have lived under a dictatorship, are going to move smoothly toward a democracy.

On the other hand, there's a middle class in Iraq. So far, the leaders have shown considerable sophistication.

I'm hopeful, not confident, but it's the direction in which we have to move and which has the only real promise for stability. BLITZER: Do you have confidence, Madam Secretary, in the president, the secretary of state, the secretary of defense, the leadership, the vice president of the United States, that they know what they're doing in Iraq right now?

ALBRIGHT: Well, no, I don't, actually, because I've been listening to the interviews today, and I think Secretary Rumsfeld seems to have a view that certain things have to happen. We're very unclear about the numbers of Iraqis that have been trained. I am so confused by the numbers that I can't tell whether it's 4,000 or 136,000.

And I think there are real questions, and we do need to know better what the plan is. I personally do not believe that there should be a date deadline set, because in Bosnia we did that and I think we regretted it. But what should be set are a number of benchmarks about what needs to be done.

In additional to the political/governmental things I described earlier, there really has to be great progress on reconstruction and getting the people involved again. Because, as Dr. Kissinger said, you know, this is not a nation that was born to democracy. But democracy has to deliver. Otherwise you just have post-euphoria times when people get discouraged with democracy.

And those are the kinds of benchmarks, in addition to training the Iraqis, that have to be met before the U.S. can pull out.

BLITZER: Do you think, Dr. Kissinger, the Bush administration should be, once again, trying to recruit support among reluctant allies in Europe -- Germany, France in particular -- to try to get some help in dealing with the situation in Iraq right now, or just leave them on the sidelines?

KISSINGER: No, I think that there is a possibility that the European nations are going to support us on the political evolution and the economic reconstruction of Iraq. And this is an opportunity that we should at least fully explore.

My impression is that both sides are eager to get over the debates of the past two years. And if that is the case, we should come up with some concrete joint programs during the president's trip to Europe and maybe to create a group that charges itself with the economic and political reconstruction of the region.

BLITZER: All right. Let's move on and talk a little bit about Iran.

A lot of the European allies very concerned about some statements coming out of Washington that Iran might be the next military target of the U.S.

Listen to this question that was posed to Secretary Rice the other day in London.

(BEGIN VIDEO CLIP) QUESTION: Can you envisage circumstances during President Bush's second administration in which the United States would attack Iran?

CONDOLEEZZA RICE, SECRETARY OF STATE: The question is simply not on the agenda at this point in time. You know, we have diplomatic means to do this. Iran is not immune to the changes that are going on in this region.

(END VIDEO CLIP)

BLITZER: The strategy, Madam Secretary, of the Bush administration, the way I could basically discern it, right now is to try to delay the Iraqi nuclear development as much as possible and hope in the meantime there will be a revolution from within that will create a new regime, get rid of the mullahs in Tehran.

Is that a wise strategy?

ALBRIGHT: Well, I think that it is betting on something that might not happen. Because I think, according to a report that Dr. Bzrezinksi and Bob Gates put out, we can't be waiting for a change in Iran.

Then, also, it seems that even the reformers are eager to have some kind of a nuclear capability.

So, what I think is important is to have a diplomatic exchange in some way with Iran, offer that in a way as part of our working with the Europeans also.

They need to be tougher on the Iranians. And I think we need to be more forthcoming and reverse the good cop/bad cop. And we have other opportunities here.

But just deciding to wait for an overthrow I don't think is the answer.

BLITZER: If the Iranians pursue a nuclear bomb -- and it looks like they're getting close -- would you support a series of precision U.S. airstrikes, 13, 15, whatever it takes, to try to pinpoint their underground nuclear facilities, destroy that -- obviously short of a full-scale invasion of Iran, but do at a massive scale what the Israelis did to the Iraqi nuclear reactor back in 1981?

ALBRIGHT: Well, first of all, I would not take the military option off the table. But everything that I know and have heard is that it is not possible to do that, given the kind of nuclear developments that have been going on in Iran and that the various places that this is taking place are not necessarily pinpointable.

And I think the real question here is how we proceed now in concert with the Europeans. I think that Secretary Rice actually kind of said that we wanted to stay out of it for now and let the Europeans carry on while we stand aside. And I don't think that's a wise approach.

BLITZER: You want the U.S. to be directly involved with the Europeans?

ALBRIGHT: Yes.

BLITZER: We'll pick up that thought.

Dr. Kissinger, stand by.

We're going to take a quick break. When we come back, much more on what's happening with the U.S. strategy in Iran. The former secretaries of state Henry Kissinger and Madeleine Albright, we'll continue our conversation with them.

And later, a top Israeli and a top Palestinian will weigh in on this week's summit in Egypt between the Israelis and the Palestinians. Are we on the verge of a new era in the Middle East?

"LATE EDITION" continues right after this.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

We're talking about global hot spots, the challenges that they face for the United States, with former U.S. secretaries of state Henry Kissinger and Madeleine Albright.

Dr. Kissinger, Vice President Dick Cheney said on January 20th, referring to the Iranian nuclear weapons capability, he said -- and I'll put this up on the screen: "If, in fact, the Israelis become convinced the Iranians had a significant nuclear capability, the Israelis might well decide to act first and let the rest of the world worry about cleaning up a diplomatic mess afterwards."

Is that a realistic fear? How do you assess that Israeli wild card in this whole Iranian nuclear situation?

KISSINGER: Well, for Israel an Iranian nuclear capability and long-range missiles are a major threat to their survival.

On the other hand, I cannot imagine that Israel will start a Middle East war or a huge Middle East crisis without some notification of the United States. So I can't quite -- I can't imagine a separate Israeli action, separate from the United States.

BLITZER: But, Dr. Kissinger, if they thought this was an existential threat to their very survival, if they consulted with the U.S. in advance, they'd probably get a "no" for an answer. They didn't consult with the U.S. in 1981 when they knocked out the Iraqi nuclear reactor.

KISSINGER: If they get very desperate, they may do that -- they might do this.

But the important issue over the next years is whether we can develop a policy with respect to Iran that combines diplomacy with pressure when pressure is -- if pressure is needed. One shouldn't put diplomacy on one side and pressure on the other. And there are many stages through which one would go before one goes to the military stage.

But what we need is a coordinated strategy with the Europeans and maybe others. Because if nuclear weapons spread to Iran, the genie will be really totally out of the bottle, and we will live in a different world with huge risks for mankind.

BLITZER: Let's move on and talk about what's happening in the Middle East right now, the situation between the Israelis and the Palestinians.

Do you believe, Madam Secretary, based on your four years as secretary of state, Dr. Rice right now embarking on this initiative, that it would be wise to get a special envoy on the part of the Bush administration to really take charge of the Israeli-Palestinian portfolio, or leave it in the hands of the secretary of state and others?

ALBRIGHT: Well, I think that, at some point in a process that's going to take some time, I think the role of a special envoy is important, because the secretary of state really cannot do this full- time. There are so many other issues out there. And at a certain stage, when there needs to be somebody on the ground, somebody that knows the record, I think it is important.

At this particular moment, though, I do think that there are hopeful signs of the Israelis and Palestinians working with each other, with some U.S. involvement but not necessarily the idea of a special envoy this minute.

But I do think that, in the long run, it is important, because the job of getting this done is so essential. There's a window of opportunity. And the secretary of state can't be there all the time.

BLITZER: Dr. Kissinger, you were there all the time in the Israeli-Egyptian disengagement negotiations after the 1973 war, the shuttle diplomacy that you went in over, what, a month or 30-days-plus between Jerusalem and Damascus and the Israeli-Syrian disengagement agreement.

Was that the model that should be engaged by the current secretary of state?

KISSINGER: I was secretary of state at the time. And I don't think that, under present conditions, the secretary of state can afford to be in the Middle East for 35 straight days, as I was on the Syrian disengagement. Those were very particular circumstances at the time that made we believe it was necessary then.

So, at some point, it may be that the administration will want to appoint somebody to shepherd the negotiations, but it's not needed now.

I agree with the arguments that this is the best opportunity that I have seen in maybe decades to make a significant breakthrough and maybe even move into final status negotiations.

Because during the first term of President Bush, a number of issues were settled in a kind of a process that was not a negotiation but that created new realities on which a negotiation can now be based.

And the attitudes that have so far been shown by both sides and by moderate Arabs and probably even by Europeans makes a coherent approach the most feasible that I've seen in a long time.

BLITZER: All right. We're almost out of time, but I want Secretary Albright to weigh in on her successor, Condoleezza Rice -- Colin Powell in between.

What do you think of Condoleezza Rice? Is she up to this challenge?

ALBRIGHT: Oh, I do think she's up to the challenge. And I do think that one can't judge a secretary of state in the first few days.

She's a very smart person. She was trained by my father, so I feel very close to her in that regard.

BLITZER: She got her doctorate...

ALBRIGHT: At the University of Denver.

BLITZER: ... where your father was her professor.

ALBRIGHT: Right, and actually persuaded her to go into international relations.

But I think that one has to watch what really happens. The trip that she's taking now is important, but it's kind of a whirlwind. And we know -- both Henry and I have been through those kinds of trips -- is that there's a lot of nice words, and now the hard work comes.

And as I said to Secretary Powell, the job of secretary of state is the best in the world, but it's harder than it looks.

BLITZER: So if you had been a senator, you would have voted to confirm her, unlike a bunch of other Democrats.

ALBRIGHT: Well, I'm not a senator, but I would give her the chance. And I also think that the president has a right to appoint a secretary of state.

BLITZER: Madeleine Albright, thanks very much for joining us.

Henry Kissinger, as usual, thanks to you as well.

Up next, we'll get a check at what's in the news right now, including Iran's response to President Bush's challenge to that country. That's coming up.

Later, as Secretary of State Condoleezza Rice begins a round of diplomacy in the Middle East, we'll speak live with the Israeli Vice Prime Minister Ehud Olmert and the chief Palestinian negotiator Saeb Erakat about trying to repair a tattered peace road map.

"LATE EDITION" will continue right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: The only force powerful enough to stop the rise of tyranny and terror and replace hatred with hope is the force of human freedom.

(APPLAUSE)

(END VIDEO CLIP)

BLITZER: President Bush outlining his global vision -- an ambitious one that includes the creation of a Palestinian state.

Welcome back to "LATE EDITION." I'm Wolf Blitzer in Washington.

This week there will be a fresh effort to try to break the Middle East deadlock when the Israeli prime minister Ariel Sharon and the Palestinian Authority president Mahmoud Abbas meet at a summit in Egypt.

Just a short time ago, I spoke with the chief Palestinian negotiator, Saeb Erakat, about his side's expectations.

(BEGIN VIDEOTAPE)

BLITZER: Saeb Erakat, thanks very much for joining us.

There's a big summit on Tuesday in Egypt -- the prime minister of Israel, the president of the Palestinian Authority. Is everything in place right now to resume serious peace negotiations between the Israelis and the Palestinians?

SAEB ERAKAT, PALESTINIAN CABINET MINISTER: We have been engaged, Wolf, with my Israeli colleagues for the past two weeks. Actually last night it was till about 2 o'clock in the morning, doing and exerting every possible effort in order to ensure that the Sharm el- Sheikh summit will be a summit for resolutions and not negotiations.

And we have made a great deal of progress in many of the substantial issues. There are some differences remaining concerning the issues of settlements, the war in Jerusalem. I hope that in our meeting tomorrow we can work out most of the things required for a successful summit.

But let me warn, Wolf, let us not have so much expectations from the summit. This is a good summit. This is a good start. This is a message that Palestinians and Israelis will be declaring a mutual cessation of violence against the other, resuming the rebuilding of trust -- and I'm using the term "rebuilding of trust" -- and confidence between the two sides. It's going to be a long journey, a long way, a very sizable and good steps, but in a long way. So we don't want people's expectations to go higher than what this summit can carry.

I would urge at this time that the United States policymakers, especially that Dr. Rice is here, Europeans, Russians, Americans, everyone, Israelis, Palestinians, to pursue the policy of what's needed and to abandon the policy of what's possible.

The policy of what's possible to us (UNINTELLIGIBLE) not possible to us. I mean, the same thing about the Israelis and the Americans, in terms of the cost-free (ph) and the least (ph) free politics, lead us to where we are now. So today we need to really re-engage on the basis of what's needed.

BLITZER: Are you effectively saying that the negotiations are about to resume where they broke down four years ago or so at the collapse, just before the resumption of the intifada?

ERAKAT: No, I'm not saying this. At that time we were negotiating, Wolf, the permanent status issues. I don't expect that we will do that immediately.

What we will be doing here is resuming the negotiations and reviving the security coordination and cooperation, reviving the steering and monitoring committee that covers the economic, financial, agriculture, all of the day-to-day activities, resuming the work and to implement the first phase of the road map.

There will be a committee to have the Israelis redeploy from the occupied area since 2000, while Palestinians will assume the security responsibilities.

There will be a committee on prisoners and their release and the criterias, a committee to ensure a crisis management, whenever there is a crisis, that we will have a joint crisis management and joint damage control.

But I want to say that the Sharm el-Sheikh summit will be the beginning. It will not be the first and last summit. This is anticipated to be one of a series of summits between Palestinian and Israeli leaders. And let's take it from there. Let's not overload the wagon. Let's not have our expectations. But let's begin what's needed now.

BLITZER: On Friday, the new secretary of state, Condoleezza Rice, urged the new Palestinian Authority leadership to take steps to make sure there's no terrorism. Listen to what she said at that news conference with the British foreign secretary, Jack Straw.

(BEGIN VIDEO CLIP)

RICE: The Palestinian security forces need to be unified. There needs to be, as the Palestinians themselves say, one authority, one gun. And there needs also to be -- there will need to be some international effort, and the United States is prepared to play a major role in that, to help in the training of the Palestinian security forces and in making sure that they are security forces that are part of the solution, not part of the problem.

(END VIDEO CLIP)

BLITZER: Is the Palestinian Authority ready to crack down and make sure that Hamas, the Al-Aqsa Martyrs Brigade, Islamic Jihad, don't resume terrorist strikes against Israelis?

ERAKAT: Wolf, the Palestinians have been engaged in an internal dialogue. Yes, we will deliver.

As far as our commitment to stop violence against Israelis anywhere period, this is a commitment on us. We do realize the difference between political pluralism and authority pluralism. And we want to rebuild the rule of law. We want to rebuild our security forces that have been destroyed by the Israelis.

And we need the Americans' help. And we appreciate President Bush's last speech at the State of the Union in which he committed himself to the two-state solution. And we want him to transfer this vision to a realistic (ph) political track by resuming the permanent status negotiations and Jerusalem settlement borders, refugees as soon as possible. And then we appreciate the fact that $350 million pledged to help the Palestinian economy.

Yes, we are determined to exert any possible effort in order to maintain one authority and, at the same time, continue with the path of democracy reform and institution-building, rebuilding and equipping our security forces.

But on front, we will be ready to declare a cessation of violence against Israelis anywhere. Hoping to do that in Sharm el- Sheikh. And we hope that we'll hear from Mr. Sharon that Israel will stop violence against Palestinians anywhere.

This is the start, and we'll take it from there.

BLITZER: Are you prepared to accept the U.S. offer as expressed by Condoleezza Rice, the U.S. offer for a major role, in her words, a major U.S. role in helping to train the Palestinian security forces? Is this something that you accept?

ERAKAT: Absolutely. We welcome this.

And, by the way, this is what the road map specified, that the U.S. would lead the effort in rebuilding, retraining, re-equipping, reconsolidating the Palestinian security forces. And we want this, and we welcome this.

And we ask our brothers in Egypt and Jordan to help in this endeavor, because it's one of the most important ingredients, to begin immediately the retraining, the reconsolidating, the rebuilding and re-equipping of Palestinian security forces.

BLITZER: Are you also going to coordinate and cooperate with the Israeli withdrawal from Gaza?

ERAKAT: Well, we have not touched on this issue yet. So far, Wolf, you know that they have spoken about unilateral steps, no partners, they have decided many things alone.

So I have been urging them all the time to abandon the ways of unilateralism, fait accompli policy, settlement walls, and come back and make partners.

Today, my question to my Israeli colleagues: How do you make Gaza disengagement part of the road map? Because what's between me and them is the road map and its obligations.

BLITZER: What about the Israeli decision now to release several hundred Palestinian prisoners, including the son of Marwan Barghouti, a well-known Palestinian leader serving a life sentence in a prison in Israel? Is this enough right now, the gestures that the Israelis are making, including military withdrawal from some of the cities of the West Bank?

ERAKAT: See, I don't think that we're doing anything as gestures, and we don't doing anything as gestures. What we have are commitments.

Now, last night, we succeeded in forming a joint Israeli- Palestinian committee to address the issue of Palestinian prisoners, to change the arrangements and the criterias. And this will be declared in Sharm el-Sheikh, and I think this is a good development.

What we need, when the Israelis release prisoners, we ask them, do it in cooperation with us, please consult us. Please abandon the way that you know better for us. We need to be your partners. Come back and let us talk and discuss and agree on everything, including the prisoners.

BLITZER: Saeb Erakat, thanks very much for joining us. Good luck in these historic negotiations. Let's hope it moves forward to a peaceful resolution. Appreciate it very much.

ERAKAT: Thank you, Wolf.

(END VIDEOTAPE)

BLITZER: And up next, we'll get the Israeli perspective. We'll hear directly from the vice prime minister of Israel, Ehud Olmert. He's standing by to join us live.

"LATE EDITION" will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to "LATE EDITION."

Joining us now live from Jerusalem with the Israeli reaction, the vice prime minister of Israel, Ehud Olmert.

Mr. Vice Prime Minister, thanks very much for joining us.

The president of the United States in his State of the Union address this past week said, Israeli-Palestinian peace, the goal, he said, of two states, Israel and Palestine, is now, in his words, within reach. Do you agree?

EHUD OLMERT, VICE PRIME MINISTER, ISRAEL: I agree that we are certainly closer today to the fulfillment of this dream than we were a few months ago. The death of Yasser Arafat and subsequently the democratic elections and the election of Mr. Abu Mazen as the new chairman of the Palestinian Authority made a difference.

And the most important thing, the voluntary decision by the Israeli government to pull out from the Gaza district and to dismantle Israeli settlements in the Gaza district and some in the West Bank, is the most dramatic and important historic breakthrough in the Middle East.

And all this is about to be accomplished. So the Israeli decision on the one hand and the possible emergence of a new democratic leadership on the Palestinian side is certainly a major step forward, the like of which didn't have years in the Middle East.

BLITZER: So you believe you now have a legitimate partner for peace, a partner that's committed to the peace process, on the other side?

OLMERT: We certainly have now a candidate who is certainly a man of integrity. And we believe that he genuinely wants to change the realities in the Middle East.

The main question, obviously, is whether he's capable of doing it, whether he will have the power, whether the Palestinians will pull themselves together, all of them, in order to stop the terrorists and dismantle the terrorist organizations in order to allow the new realities to actually take place.

BLITZER: You heard Saeb Erakat, the chief Palestinian negotiator, say the Palestinians want all the attacks -- the Palestinian Authority wants all the attacks against Israelis stopped, end quote. In effect, that's what he said.

Do you believe they have that capability, though, to control Hamas and these other groups?

OLMERT: We don't know yet. It remains to be seen. But the very fact that they make this announcement, the very fact that Abu Mazen has expressed this demand from the organizations is a change in itself. Because when Yasser Arafat was chairman, he did the opposite, he encouraged the terrorist organizations, he financed them, he orchestrated all the terrorist actions against us.

Here comes a new leader, and he brings a new spirit, a spirit of a commitment to end violence and to stop terror and to embark on negotiations in a meaningful and sincere way.

This is a great change.

Now, as I say, it remains to be seen whether he will have the power to impose his will on these organizations, whether he will be prepared to engage in a confrontation with these organizations and stop them -- if they don't want to do it, even stop them by force.

BLITZER: The Israeli -- your government is taking...

OLMERT: I hope that his ability will match his courage.

BLITZER: Your government has already started taking some steps to try to send some signals to the Palestinians, including releasing hundreds of Palestinian prisoners, including withdrawing militarily from some of the West Bank cities.

What Saeb Erakat suggested was coordinate with them, talk to them, work together with them in some sort of partnership, instead of taking some of these steps unilaterally.

Is that a wise policy recommendation from his part?

OLMERT: Oh, it certainly is.

Well, the basic decision to pull out from Gaza and from the settlements was already made unilaterally because, at that time, the Palestinians were not ready and they didn't have a leadership that was willing to cooperate with us.

But all these measures that you have mentioned, including the release of prisoners, is going to be coordinated as Saeb had said. We have established a joint committee that will review all of these, and we are certainly prepared to do it.

The basic -- Wolf, the basic strategy of the Israeli government is very simple. This is a risk, because, at this point in life, the Palestinians have not yet delivered. They haven't yet stopped terror. We still have terror, and we have to suffer terror almost every day. But since the new leadership appears to be genuine and willing to change the policy of the Palestinians, we are prepared to take a serious risk.

And the first step will be the release of hundreds of terrorists that were arrested and convicted by Israeli courts, and now we release them and pardon them. There's always a risk that they will return to terror, but we are prepared to take the risk because there is a new spirit.

Israel will not hesitate to take every possible measure that will help strengthen this new spirit in the Palestinian camp. And we'll cooperate and coordinate with the proper authorities of the Palestinians in order to advance this.

BLITZER: One...

OLMERT: So we are prepared. We sit with them. We discuss with them those things.

BLITZER: One Palestinian prisoner who's reportedly about to be released, if he hasn't been released yet, is the son of Marwan Barghouti, one of the Palestinian leaders, if you will, who's been convicted of terrorism serving a life sentence in Israel.

Is the son of Marwan Barghouti, Kasam (ph) Barghouti, being released?

OLMERT: Well, his name was mentioned within this context of the Palestinian prisoners that are likely to be released. Of course, not his father, who was convicted in five different murder cases of the worst possible kind.

But we are willing to go a long way toward the new Palestinian leadership. We understand that they need to show that they have done something that changes the reality from their point of view, and we are prepared to cooperate with them.

Again, as I said, there is a risk-taking here, because they haven't yet practically started fighting against the Palestinian terrorist organizations. Some rockets were still launched against us in the last few days, and fire attempts were made in different parts of the West Bank and Gaza.

But we believe that this spirit by Abu Mazen is genuine, and therefore we are prepared to go along with it...

BLITZER: All right.

OLMERT: ... and take measures, even if there is a risk-taking, a serious risk-taking at this point.

BLITZER: Let's talk briefly about Iran and its nuclear program. The Iranian chief nuclear negotiator said today -- and I'm quoting -- he said, "If such an attack takes place, of course we will retaliate, and we will definitely accelerate our activities to complete our fuel cycle and make nuclear fuel."

He was talking about a possible U.S. or Israeli attack against Iran's nuclear facilities.

How concerned is your government about Iran's nuclear capabilities, and do you have contingency plans to try to take them out militarily?

OLMERT: I'm not familiar with any contingency plan by the United States to attack Iran, but...

BLITZER: What about Israel?

OLMERT: ... the possible possession -- but we are not even talking about it, not raising this possibility.

The very chance of an Iranian possession of nuclear weapons is of course a threat not just to the state of Israel, but to the entire world. We are talking about one of the most nondemocratic regimes any place in the world, not much different from the ones of Saddam Hussein. They don't hide their intentions. They spell it out in the most explicit way. They say that they are ready to acquire these -- to possess the nuclear weapons in order to be used primarily against the state of Israel, but not only the state of Israel.

So this is a major threat to the well-being and stability of almost every part of the world, Europe as well. And I think that this is therefore incumbent upon the United States and the European countries to take the necessary measures in order to stop it.

I am not here in order to give an open advice to the United States, how to do it. I know that the American administration is very much concerned with it and the Europeans are concerned with it, and they will have to find the proper measures.

It will be an enormous mistake to even assume that this is just a private problem of the state of Israel. It is not. It's our, all, all of us, problem. And I think that the United States, as the leader of the free world, has to be in the front line of those who are taking the necessary measures in order to stop it.

BLITZER: Ehud Olmert is the vice prime minister of Israel.

Mr. Olmert, thanks very much for joining us on "LATE EDITION."

OLMERT: Thank you.

BLITZER: And we'll take a quick break. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Let's take a look at what's on the cover of today's major news magazines.

U.S. News and World Report says, "Ready or Not: Can the Iraqis Take Charge?"

Newsweek looks at the new game of retirement.

Time magazine focuses in on the "Merchant of Menace," the father of Pakistan's nuclear bomb.

That's all the time we have. Thanks very much for joining us. I'm Wolf Blitzer in Washington.

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