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CNN Larry King Live

Tony Blair on Mideast Peace Process; Will There Be Mideast Peace?; Prominent Businessmen on Mideast Peace Process

Aired December 12, 2010 - 21:00   ET

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

LARRY KING, CNN ANCHOR: Tonight, top leaders of Israel and the Palestinian Authority meet right here on the dispute that has plagued the Middle East for years. Peace.

Is either side willing to make tough compromises, difficult decisions to end the conflict once and for all? Can they hammer out a strategy maybe during the next hour?

Plus, special envoy to the Middle East Tony Blair joins us for his unique take on one of the world's most pressing problems.

Next on LARRY KING LIVE.

(END OF VIDEO CLIP)

KING: Good evening. Welcome to a special Sunday edition of LARRY KING LIVE.

Tony Blair is the former British prime minister and special envoy for the Quartet on the Middle East. He's in the United States to address the 2010 Saban Forum hosted by the Brookings Institution.

Mister Prime minister, it goes on and on. Now the Obama administration has made a decision to step back from trying to persuade Israel to freeze settlement expansion.

You have called that sensible. Why?

TONY BLAIR, MIDDLE EAST QUARTET ENVOY: Because I think we need to find a way forward now that gives both parties confidence that we can have a negotiation that actually succeeds. And in the meantime, we've got to push ahead and create the change on the ground that's going to make a real difference in the lives of Palestinians and also provide the Israelis with the assurances they require on security.

So you know, we've hit an impasse. It's a problem, but we've got to find a way through.

KING: But is that decision -- where does it leave efforts for peace talks? It sounds status quo again.

BLAIR: Well, I think that there's still a lot that's going to go on. One of the things -- interesting things that's happening in the Middle East right now and in the Israel/Palestine situation, is the Palestinian Authority under the leadership of its prime minister, with the full authority of the president of the Palestinian Authority, they have been doing some really good things on the West Bank in these past few years.

They've been taking the militia off the streets and putting in proper security. They've been building the economy. They've been building the institutions of government. Gaza, as we know, is a different story and we can come to that. But on the West Bank of the Palestinian territory, there is a real attempt to build a state from the bottom up, and despite all the difficulties in the political negotiation, that process of providing improvements in the economy and living standards of Palestinians does offer us a proper way forward for the future if we want to take it.

KING: Secretary of State Clinton said in her speech at the Saban Forum that you will address that the United States not being a passive participant, however. Did you hear anything -- we're not going to be passive, yet we're letting them off the hook on peace.

Did you hear anything new in that?

BLAIR: Well, I don't think it's so much hearing something new, Larry. But I think the United States are going to be active in going between the parties now and trying to work out whether there is a basis for a credible negotiation that leads to the two states that we want to see. A secure state of Israel and a viable state of Palestine.

And the fact that they're going to be doing this in a somewhat different way from how we originally contemplated it, I don't think that matters so much. The important thing is that they conduct intensive negotiations with both sides to see, look, is there really a basis upon which we can move forward?

And then as I emphasize all the time, in the meantime, carry on with the issues to do with the economy and security and, for example, bringing help to people in Gaza and giving Palestinians a sense that it's possible if we can have a political negotiation that succeeds, that they will run their own state and given the Israelis the assurances that they require on security since that is the key concern that Israel has.

So, you know, I don't think it's a foolish thing for the Americans to step back at this moment from the original path forward and say, right, let's try and work out the right way forward now and get this thing on track properly.

KING: How would you assess, Mr. Prime Minister, the Obama administration since they've taken office with regard to this issue? Have things moved forward, have they gone backward, have we stayed mired?

BLAIR: Well, the single biggest thing they've done is say it's a priority from the outset. I mean part of the problem in previous situations is that American presidents have come to this issue, come quite close to a solution, but come very much towards the end of their time in office. The fact that President Obama made this a priority from day one I think is really important. It gives us the chance now -- you know we've hit this obstacle. Instead of saying, well, that's it for this presidency, we're able to look at another way forward. And that's the single-most important thing.

Also, you know, as I've known from my discussions out in the region, I've just returned from Israel and Palestine a few days back, you know, people do actually think he's sincere about bringing about a deal.

So, you know, I think there's some big pluses for the administration in this, but we've got now to carry on and in particular as I say, work out how we support those state building activities that the prime minister of Palestine is engaged in.

KING: By the way, Mr. Prime Minister, as an aside, your book is terrific.

(LAUGHTER)

BLAIR: Well, thank you. That's very kind of you.

KING: I mean it. What about the Obama administration's goal of achieving at least the outline of a final peace settlement by September of 2011? Good idea -- would you bet on that happening?

BLAIR: I'm not a betting man, which is probably fortunate in this instance, but it's -- look, it's possible. Of course it is. But -- look, here's a bit of good news. A majority of Israelis and a majority of Palestinians still want peace and still want peace basically on the basis of two states.

So, you know, if we could get this negotiation going again credibly, if we can make real change on the ground quickly, which is possible, we can make this thing work quite quickly. But we need to re- establish the credibility of that, of the process in order to do that.

And that's why I think -- you know, let's hope we can get it done by that period of time. But the most important thing is over this coming period of time the next few weeks, the next few months, to see that there is a real outline of a credible plan and solution for this and in my view, above all else, make those changes that are going to give the Israelis confidence on security and the Palestinians confidence that their lives are going to improve and that the dignity they feel the statehood is owing to them is going to be theirs.

KING: We'll have some more moments with Tony Blair, and then we'll meet two leaders of each side following this. Don't go away.

(COMMERCIAL BREAK)

KING: We're back with Tony Blair, the former prime minister of Great Britain.

George Mitchell, our United States envoy, goes back to the Middle East I think next week. What might another round of shuttle diplomacy accomplish? It seems like we've had shuttle diplomacy forever.

BLAIR: You know, George Mitchell and I worked together on the Northern Ireland peace agreement.

KING: I know.

BLAIR: And one of the things you learn in this business is that you can have failure after failure and hit obstacle after obstacle but you just got to keep going because in the end it can be done.

And you know in the end with Northern Ireland, it was done. But it was tough every inch of the way, and we were constantly hitting snags and difficulties. But if it's important enough, and this is important enough, then we're just going to keep going.

KING: You've spoken, Mr. Prime Minister, about the cardinal importance -- you call it -- of the state building exercise of the Palestinian Authority. How is that exercise going? What would constitute what you would call real change?

BLAIR: The real change is in the Palestinian Authority providing security of a high quality. In other words, if you go back a few years, there were often militia running cities and towns. You know, there wasn't a properly constituted Palestinian police and security force.

Today there is. You know, today they are building rule of law institutions, courts and prisons and so on, and when the Palestinians -- because remember, this is a small bit of territory. You know you could fit the whole of Israel and Palestine into New York state let alone California.

So it's a small bit of territory. So people are living side by side. Security really matters. So the Palestinian Authority in building this security capacity give confidence to the Israelis. At the same time as a result of that, the Israelis have removed some of the restrictions, given the Palestinians greater freedom to operate.

Now all that has to go far further. You know don't misunderstand me. We're a long way off where we need to be. But we do know what works. What works is the Palestinians building capacity to run their affairs properly and the Israelis responding to that by allowing greater freedom.

And that then creates the conditions. This is the point of my view. This creates the conditions in which you can then get a peace deal because -- you know, you're going to be talking to Tzipi Livni, who is the foreign minister of Israel, and in the last peace process negotiation.

And she will tell you that you can, you know, go around this circuit many, many times. You come back to the same issues to do with borders and Jerusalem and refugees and security and so on. But what gives us the chance to make this peace deal possible is the confidence that we're not just talking about these things in theory, we're actually doing them in reality. And that's the challenge now. So, you know, this is the thing we've got to focus on.

KING: Your friend, former President Clinton, told me that while Northern Ireland was a tremendous problem, I can't compare to this one. Do you agree?

BLAIR: I think that's probably true, although one interesting thing. In Northern Ireland, we reached peace, but there never was and still isn't an agreed outcome. In other words, some people want a united Ireland, some people want a United Kingdom.

At least here with the Israel/Palestine situation, there is in principle an agreed outcome. A secure state of Israel, a viable state of Palestine. So, you know, the complexities are of a different order and you've got many different regional issues not least the role of Iran and so on, but actually in one sense, it is possible to see a future state of Israel and state of Palestine because that's, in fact, what both sides say they want to get to.

KING: While we have you, a couple of other quick things. Secretary of State Clinton called the WikiLeaks publication of thousands of diplomatic cables an attack on international -- on the international community. What's your view of that?

BLAIR: Well, I agree with her totally. I mean the fact is for people to be able to conduct international affairs, they've got to be able to do so with some level of confidentiality. And that's not, you know, secrecy or hiding things from the public. You know any person of common sense can sit down and work out that if you're dealing with highly sensitive issues between countries, you're going to be able to do so confidentially.

So you know, that's my view on that.

KING: Thanks so much. Always good seeing you, Mr. Prime Minister. It's great pleasure having you with us.

BLAIR: Thanks very much, Larry. All the best to you.

KING: Former Prime Minister Tony Blair, special envoy for the Quartet -- Quartet, rather, on the Middle East. When we come back, we'll meet Salam Fayyad, the prime minister of the Palestinian Authority, and Ehud Barak, the former prime minister of Israel.

Don't go away.

(COMMERCIAL BREAK)

KING: By the way I want to thank Haim Saban for helping put together this very important evening, the special edition of LARRY KING LIVE.

Salam Fayyad is the prime minister of the Palestinian Authority. Ehud Barak is the deputy minister and minister of defense of Israel and its former prime minister as well. It's a rare opportunity to have top statesmen on both sides of this to take part in the forum for the Saban Forum and to be with us on this show.

All right. Prime Minister Fayyad, the United States has dropped its efforts to try to persuade Israel to continue the freeze on settlement expansion. Where does that leave us now?

SALAM FAYYAD, PRIME MINISTER, PALESTINIAN AUTHORITY: Well, we are fortunate to listen to an important policy statement by secretary of state two nights ago here in Washington. And based on that, my understanding is that the administration intends now that both sides with a view to try to identify positions on the core issues of permanent status.

We on the Palestinian side have done so in the course of the proximity talks that took place some months ago and I think it's very important to begin to get a definition as to have the government of Israel stand on those core issues beginning with a definition as to what is meant by the government of Israel when it says a Palestinian state.

What kind of state does Mr. Netanyahu have in mind? The one he says Palestinian state. That's very important to begin to know in order for us Palestinians to begin to get the sense of possibility about this anywhere that's acceptable to us.

KING: Let's open in that area. Prime Minister -- Deputy Prime Minister Barak, what responsibility does Israel have on this and how does it define a Palestinian state?

EHUD BARAK, DEPUTY PRIME MINISTER, ISRAEL: I think two states for two people who think about a secure Israel side by side with a viable Palestinian state both territorially, economically, politically and so on, but demilitarized.

I believe that the objective is clear and even agreed upon, but we have to dive into the details because both divinity and hell are in the details.

KING: This is so frustrating to people.

Prime Minister Fayyad, why can't we make more progress in this area?

FAYYAD: Well, maybe precisely because the issues were not approached in the way that I'm proposing to you. I think for much too long issues were talked about in general terms.

Yes, there were rounds of discussions or negotiations where issues were discussed at great length. Camp David, for example, is an example of which Mr. Barak is fully aware, for sure. But those were very few instances when the issues were discussed to the extent necessary if not negotiated to reach an agreement.

A lot of bad things happened in between. A lot of disruption. Leading to probably what might be called disillusionment with the capacity of the political process to produce. Now I believe is the time particularly after the difficulties of the past year and a half or so to get to the issues directly and therefore -- permanent status issues are known.

They were discussed extensively on many occasions before if not negotiated. Now is the time to really put those issues on the table and begin to answer with specificity as to where the parties stand on those issues. I think it's important for the administration to approach the task this way this time around.

A lot has been said over the past year and a half in general terms. I'm talking here about, for example, what Prime Minister Netanyahu had said about the two-state solution. What Mr. Barak had said is something that is the starting point. Two-state solution in terms of what it means. But, you know, what we hear said about the kind of state that may be inferred from statements made by Mr. Netanyahu is not terribly reassuring.

KING: All right.

FAYYAD: It is stated in general terms. Not specific enough. Does not really come close --

KING: Prime Minister Barak, Secretary Clinton essentially urged both of you to stop blaming each other and focus on what needs to be done.

Can you be more specific in answer to Prime Minister Fayyad's questions about specific?

BARAK: I thing that the secretary is right about the need to go into the details. I see a delineating a line within the land of Israel according to demographic and security considerations that will allow a solid Jewish majority within our border and a viable Palestinian state demilitarized on the other side.

Security issues should avoid the petition of what happened in Lebanon and Gaza later on when we pulled out to the last square inch and found ourself (sic) facing rockets and missiles of all sorts hitting the heads of our civilian population. So that should be avoided.

We should avoid also the wave of terror that accompanied the failure of Camp David 10 years ago under my premiership when a wave of suicide attacks covered the streets of Israel.

And we have, of course, to take into account the possibility of an eastern front being emerging on our eastern border. But all these, I believe, could be solved in a way that will not -- I repeat not be contradictory to the needs of a Palestinian viable and continued state.

So I think that the refugee issue should be solved in a way that will allow them to be part of the Palestinian state not going back to Israel and Jerusalem in a mutually agreed way where the heavily populated Arab neighborhood will become Arab -- part of the Arab Palestinian state. The Israeli neighborhoods including the Easter Jerusalem part of Israel main settlement blocks remain in Israel and the isolated settlement being brought back home. And so basically, the only -- the most important element in my judgment comes at the end.

It should be agreed and stated by the Palestinians that this solution is the end of conflict and finality of mutual claims. And I believe that it's achievable.

KING: OK. All right. We'll check on that. Let's be -- we'll be right back with this in just a moment. Don't go away.

(COMMERCIAL BREAK)

KING: We're back.

It appears, Prime Minister Fayyad, that according to former Prime Minister Barak, Israel is ready to deal with the specifics. Are you -- does that satisfy you in some way?

FAYYAD: We are ready, too. We're ready to begin a process, actually. We've been waiting. The issue, as you know, happened to be lack of success in convincing Israel to comply with its obligations under the roadmap including importantly the area of settlement expansion.

But that's not really the only obligation Israel has under the roadmap. The fact that it's been failure in securing that kind of commitment or implementation thereof should not mean that there are no other issues that can and should be pursued in a hurry which would as a matter of fact give strength and more meaning to the effort --

KING: Right.

FAYYAD: -- of the Palestinian Authority is implementing in terms of getting ready for statehood. For example --

KING: Prime Minister Barak -- excuse me, Prime Minister Barak, what obligation in your opinion do the Palestinians have? What do you want from them?

BARAK: I see -- we expect them to stop ending -- to stop actions against Israel and international forums. You know Israel vis-a-vis the Palestinians we are the stronger side party, so to speak, and we have to make the concessions, but Israel is basically isolated within the stretch of Muslim countries all around and some of them even considering actively wiping us from map and history.

So we have to be secure and we take it very seriously. We expect Palestinians to act more -- in a more kind of friendly or neighborly manner in many issues.

I should tell you honestly that Prime Minister Fayyad made a great job in the last few years in building this bottom up estate in (INAUDIBLE) for the Palestinians and it is extremely helpful for the coming negotiation what he had accomplished under the directives of President Abbas. But still there is a way to go. And we -- I don't -- I propose that you will not spiral into a blaming or blame game where they can't work -- we have not accomplished -- that will stretch forever.

KING: All right.

BARAK: We have to come seriously to enter the room and start negotiating issue by issue. All the --

KING: There is a --

(CROSSTALK)

BARAK: Simultaneously.

KING: There is a key thing here, Prime Minister Fayyad, and we ask directly. Do you trust Prime Minister Barak?

FAYYAD: In the spirit of looking forward --

KING: Yes.

FAYYAD: -- let me agree with what you just said. Instead of looking backward, let's look forward in terms of what needs to happen. Building on the progress we've been able to make in the area of security, having succeeded in turning things around remarkably.

Now why can't we see this effort validated politically by the government of Israel and with it stopping its military raids into areas under Palestinian Authority control? This is not looking backward, this is looking forward.

I think this would impart a great deal of credibility to the effort of state building that Mr. Barak had just referred to and it would begin to make it look like an exercise as part of an effort that could lead to ending the Israeli occupation that began in 1967 and will make this whole effort begin to look like a state in the making, which is important not only to us Palestinians but also to our Israeli neighbors.

KING: And Mr. Barak, do you trust Salam Fayyad?

BARAK: I fully trust him. I don't want to praise him too much because it might help him back home. But I think that he's extremely sincere. I think that Abu Mozzam is sincere. I spent a long time negotiating with his predecessor Arafat and found ultimately with President Clinton that Arafat didn't want to end a '67 -- namely occupation but '47, the very emergence of a Jewish democratic state in the region.

And I think that now it had changed. It changed dramatically for the positive, now other players are competing with each other whose peace plan will be adopted by the rest of the world as a reference and Israel is much riper. When I came back from Camp David, some of my harshest critics were Tzipi Livni and Ehud Olmert. Now they're well in the mainstream. And I believe that many Likudniks think the same. And I think that basically the situation is ripe. It is time for leadership, for decision, for going over the (INAUDIBLE), don't put dissent on the -- the settlement issue of 43 years. All settlements together do not cover even 2 percent of the area of the West Bank. And we do not plan any establishment of new settlements or confiscating new land.

So it's basically about sitting together, seriously looking in each other's eyes, understand that each side has to overcome political resistance from within its own place. And I just want to mention that basically the Palestinian sovereignty does not control the Gaza Strip. We're trying to see what could be done about it.

Hamas is a major obstacle, but we cannot meddle into it. We have to leave the Palestinians to solve it among themselves.

KING: And we will the gentlemen what the United States role is and should be. Don't go away.

(COMMERCIAL BREAK)

KING: Gentlemen, Secretary Clinton warned that ending this conflict once and for all, achieving a comprehensive regional peace, is imperative. Imperative. What role do you see the United States playing? And do you trust the United States?

Ambassador -- Prime Minister Fayyad?

FAYYAD: We do. And as a matter of fact, our position is in order for the process to move forward in a credible way and in a way that begins to project promise of success, the United States must definitely be involved and intimately involved in running the show and as necessary to come up with bridging proposals.

You have what Mr. Barak has said about the land mass that is occupied by settlements, 2 percent of the West Bank. Now in previous discussions in terms of what might be involved in a final settlement, this was an issue of contention. For example, as how much of the land mass should be talked about by way of swaps.

The last round of discussion what was on the table was something like 6 percent of the land mass of the West Bank. There's a big difference between the two. This is the way in which issues should be negotiated and discussed and quickly.

What should not happen, though, is for the timeline that was adopted up until this point is for the timeline has got to be maintained. I don't think that we should start over in the sense of planning on another two years or starting to block today. I think that we should maintain the original timeline of targeting an end to this conflict. In the course of this coming year, I think it's imminently doable.

KING: And Mr. Barak, what do you think of the United States' role? How much do you trust this country?

BARAK: I think that the United States basically the only player that can enter the room and be respected or trusted by both sides to help them to come to terms together.

We think that all settlement blocks together should cover for security and other reasons about 10 or 12 percent. The Palestinians think it's 2 percent. Some numbers would be found in the middle and some way should be found to make sure that they have a contiguous area, Judea and Samaria, in the West Bank and the connection for the -- to the Gaza Strip once the regime there is changed. And so on.

And I think that on all issues, including the refugee and Jerusalem conflict, we will need the United States but we ultimately have the -- supreme responsibility. I don't believe that we are doing the Palestinians a favor by going to an agreement. It's their right, it's our right.

It has to do with our own identity and future and security and it's not a zero sum game. And the Americans can provide both the encouragement for both sides to continue as well as the glue in some organizing support for Palestinian refugees in the world wherever they are settled, organizing the support, financial support that probably the Palestinian state will need and giving the answers together with us and with the region to the security needs of Israel.

KING: I'm going to take a break and ask the gentlemen when we come back to predict where all of this is going and find out if they see a light at the end of the tunnel. Don't go away.

(COMMERCIAL BREAK)

KING: Prime Minister Fayyad, honestly, do you see 2011 as a pivotal year? Do you see a light at the end of the tunnel?

FAYYAD: I do. There has to be the case. As I said and as Mr. Barak had said before, the issues were discussed extensively before. There's no reason why the issue cannot or the conflict cannot be -- conflict resolution cannot be achieved with an agreement first in the course of this coming year.

As far as we are concerned, we set out to get ready for statehood and to complete the task of getting ready for statehood in two years beginning in August of last year. We are more than halfway through the implementation of that program and we are on course to achieve the goal of getting ready and being granted for state come 2011.

The question is will the political process have delivered an end to the Israeli occupation by then. I believe it can. And where we are today, yes, there's a great deal of disappointment that the past year and a half have not produced the right conditions to get the process started in the right way.

Nevertheless, I do not believe it's too late. It could happen. If the issues are addressed in a serious way and a direct way.

KING: All right. Prime Minister Barak, how optimistic are you? Or are you optimistic?

BARAK: You know, many in the individuals say that (INAUDIBLE) is a pessimist is an optimist with experience. But I don't think that way. I think that more than anything else it's our supreme responsibility as leaders to make whatever we can that this year will be the year when -- where a solution is achieved.

I'm committed to put all my weight on it. And I believe that our people is committed and I think that it could be done. And the alternative is much worse be it the Balkan (ph) situation or both the situation or just total chaos.

Anything that could be achieved through agreement between two mature governments, responsible governments is much better than leave it to the (INAUDIBLE) that no one knows where it should end.

KING: So can we say that both of you are in a mood to get this done in 2011? Are you saying, Prime Minister Fayyad, it will happen?

FAYYAD: You know that's really that we have made when we launched this statehood program two -- in August 2009. We thought that two years then would be enough for us to get ready for statehood. By way of having strong institutions of the state.

We also thought that we enlisted for the political process to have delivered an end to the Israeli occupation which is required in order for us to have some sense of state of Palestine on the territories occupied in 1967.

KING: Mister Barak, will it happen?

BARAK: I don't know. I do not pretend to be a prophet. But I hope it will happen. I believe it could happen. I think we have to invest in a lot of work that is still to be done both in the bottom-up activities that Prime Minister Fayyad is leading and diplomatic in order to bring it together.

I think that it could happen. I hope it will happen. Unfortunately, you know, Fayyad is not the president of the Palestinian Authority, I am not the prime minister. We have work to do within our own domestic politics as well.

KING: Thank you both very much. Thank you very much.

And when we come back, two prominent businessmen, not in the government but very involved in the topic will join us. Don't go away.

(COMMERCIAL BREAK)

KING: Two distinguished world gentlemen are going to join us now. Haim Saban, businessman, philanthropist and chairman of the Saban Forum on U.S.-Israeli relations all on which this program is based tonight.

And Hani Masri is also a businessman and a philanthropist and founder and president of Tomorrow's Youth Organizations.

Haim Saban's background is Israeli, Hani Masri's is Palestinian. Both gentlemen have heard the earlier portions of the show with the former prime minister -- former prime ministers of Israel and England and the current prime minister of the Palestinian Authority.

From what you've heard, Haim Saban, they want peace, you want peace, the other side wants peace. Is it going to happen?

HAIM SABAN, CHAIRMAN, SABAN FORUM ON U.S.-ISRAEL RELATIONS: It has to happen. There is no two ways around that issue. If you look at the little sliver of land between the Mediterranean and the Jordan River, you will find a lot of Jewish archaeology.

With that said, there are 2.5 million people of Palestinian descent that live on that land. Therefore, the only way going forward is two states for two people. There is no other opportunity, solution of any kind neither for the Palestinians nor for the Israelis. So --

(CROSSTALK)

SABAN: I was just going to say that when something has to happen, eventually it happens.

KING: Since everybody wants it, Hani Masri, why didn't it happen yesterday?

HANI MASRI, FOUNDER, TOMORROW'S YOUTH ORGANIZATION: That's a good question, Larry. I mean we have been into this process for 15 years. And nothing has happened so far.

And I think most the majority of the Palestinians and the Israelis want a two-state solution. And -- but it is frustrating. The process is very frustrating. That is why I have in the last few years paid attention to children and women in Palestine, and we started the program of helping children and women by establishing TYO.

But I hope that something will happen eventually. But the process is very difficult and very frustrating, but there is no other way except that we do a peace agreement somehow.

KING: Haim Saban, you live in America. What role should the United States be playing? Are you -- are you satisfied with the role that the United States is playing with the speech made by Secretary Clinton the other day at your forum?

SABAN: I am -- yes, Secretary Clinton opened the Saban Forum in Washington on Friday. And she made a very compelling speech, and I really agree with I would say 99.9 percent of her thoughts as she put them forth.

You asked Hani a minute ago why isn't peace happening. You know it's a very complicated area loaded with emotions, and at the moment, you know, the leaders on both sides I think are very well intended but at the same time they need some more encouragement.

And what we're hoping is that the United States will supply that encouragement and basically the safety net that both the Israelis and the Palestinians need, because there are significant risks involved for both sides, so the United States absolutely can play a very significant role. And I believe that this administration has every intent to do so.

KING: Hani, do you have faith in the American commitment in this?

MASRI: I do, but this is a very difficult question to answer because in the last 15 years different administrations have dealt with this issue. Nothing have happened. In the meantime, we have 60 percent of the Palestinians today are under the age of 16.

There are social and cultural problems. There are issues that have to deal with the occupation and the right of freedom for people, and we must move while the politicians are negotiating. We must move on the issues of helping children, helping the economy of the Palestinians.

It is very difficult situation. Moving on helping women, empowering them to take a role in society, and that is why about a few weeks ago I've done this program which we chaired by Quincy Jones and Terry McAuliffe and we honored Cherie Blair, and we honored President Clinton.

And that is to bring awareness to the issues, the main issues, which is while the politicians are talking, we are going to do programs on the ground and expand our programs in terms of helping children and women in the whole -- in that whole region.

And as an American I say that it's my duty. I cannot help in the political process. That's not my job and we are there to be supportive of both leadership, no question, on both sides want to achieve an agreement. But in the meantime, we have to move on and help and do something on the ground.

KING: All right.

MASRI: And Americans always are givers, and as an American I want to give something of my life to the people of the area.

KING: And we have two outstanding Americans with us in our closing moments. I'll ask if -- what role, Haim Saban, sees the businessman playing. Can the businessman, the philanthropist help? Don't go away.

(COMMERCIAL BREAK)

KING: Haim Saban, you put on this forum every year this, a most noteworthy forum. You certainly have contributed to the cause as Mr. Masri. Are there other thing the businessmen, the prominent citizens of your countries, Israel and Palestine, can do?

Haim Saban first.

SABAN: Yes. Well, first of all, I do have to commend my good friend Hani Masri for the work he's doing on the ground. It is holy work, and it is very important work and I think it's absolutely wonderful that is putting his money where his mouth is and, you know, his time and basically bringing on board such highly placed individual as President Clinton and Cherie Blair and others to support what he's doing and give it exposure.

I believe that on the business side, which is not an area we have focused on, there are people that are doing a lot of things. My wife and I have been thinking about going to the Palestinian and Israeli youth through the media. It is our intent to engage with Prime Minister Fayyad and his team in exploring the production of documentaries and films that will promote reconciliation between the two side.

That we promote understanding, that we promote tolerance, which I believe frankly is missing right now in the overall rhetoric of this issue, so it is absolutely possible for individuals such as Hani Masri, and, again, I commend him for it, myself and hopefully many others to join in doing some bottom-up work because the top-to-bottom work we can only influence to a certain extend by having the Saban Forum, having the Saban Center, issuing ideas, but it can go only thus far.

On the other hand, as I said, educating the people for tolerance and acceptance of each other is something we can do very impactfully.

KING: May I say, Haim, that anything can I do in this area, help with your documentaries in any way, I publicly announce tonight, I offer my services.

To you, too, Mr. Masri, anything we can do. I -- do you think the businessman can be more involved?

MASRI: Yes, of course, and here is the biggest example, and we are very close friends for many years. We both worked very hard. The ultimate objective is the same, and we both work very hard to see that there is peace achieved in that area, and Haim's center have served the community of the Middle East very well in Washington and in other places, and I -- his work is incredible, but you can do a lot, Larry.

First of all, we will miss your show. It is a show that I have always watched, and I've known you for all these years. It is the best show and CNN will miss it, and you --

KING: Well, I'll be around.

MASRI: You have done a lot of things.

KING: I'm offering my services tonight to help in any way I can with you two great gentlemen. If anything in my small way I can do --

MASRI: Help the children.

KING: I put my offer on the plate.

MASRI: Help the children and women of the Middle East. They all need help. We are -- in America we need to zoom in in our freedom and charities and so forth, and not zoom all the military in. We need to zoom in presenting ourself as a great nation, as a nation that is given.

SABAN: Hey, Larry.

KING: Mister Saban, I'll give you -- I'll give you the last word, Haim. Are you optimistic? Are you confident that we're going to see this day come about?

SABAN: It must come about. Therefore, I'm confident that it will come about, and a word of advice for you. If you're going to offer your services to a Palestinian and an Israeli at the same time, watch out, man, because we're going to keep you busy. Be careful.

(LAUGHTER)

MASRI: Yes.

KING: Thank you both very much. Haim Saban, Hani Masri, and thanks for your assistance in putting this show together tonight. We hope in some way it helped.

MASRI: Thank you, Larry. It does.

SABAN: Thank you, Larry.

KING: Thank you.

Before we go, our thoughts are with a towering diplomatic figure tonight. U.S. Ambassador Richard Holbrooke. At this hour, the president's special envoy to Afghanistan and Pakistan is hospitalized in Washington, critical condition after surgery to fix a tear in his aorta.

In addition to having been a guest on this program, Ambassador Holbrooke is a member of the extended LARRY KING LIVE family. His daughter-in-law Sarah is one of our best and senior producers.

We send our best to Ambassador Holbrooke. Hope he makes a swift and complete recovery.

Conan O'Brien tomorrow night. Barbra Streisand Wednesday. Right now it's time for the latest news on CNN.