A Conversation with Tony Blair

RICHARD N. HAASS: Good afternoon. Welcome to the Council on Foreign Relations here in Washington. I'm Richard Haass, president of the council.

And welcome, in particular -- two things: One is we are honored and thrilled to welcome Tony Blair to the council, and secondly, we are excited about the fact this is -- this is going to be one of the last meetings we will have before we move into our new digs here in Washington at 1777 F Street. So early on in the new year we look forward to seeing you all there.

Mr. Blair, as everyone in this room knows, was prime minister of the United Kingdom, of Great Britain and Northern Ireland for a decade. And he stepped down from that position -- approximately, what? -- a year and a half ago -- 18 months ago, give or take.

He now has a portfolio of activities and interests and he's here today, though, in the capacity of representative of the Quartet. This is the foursome consisting of the United States, the EU, Russia and U.N. that plays a significant coordinating role when it comes to diplomacy vis-a-vis the Middle East, with the particular focus on the Israeli-Palestinian question and on the task of developing and readying Palestinian institutions and capacities on the path to Palestinian statehood.

This is essential work for two reasons: First, Israelis need to see Palestinian institutions and they need to see Palestinian capacities up and working if they are going to take risks and make the sorts of concessions that are going to be necessary if peace is going to happen. And secondly, it is important that these institutions are functioning well and that these capacities are adequate to the challenges they will surely face if a Palestinian state, if and when it comes to exist, is not to become a failed state.

Tony Blair, I would think, is uniquely suited to the task, given his experience at 10 Downing Street, in the Middle East, but also in Northern Ireland. I was fortunate enough to work with him for three years when I was the U.S. envoy to the Northern Ireland peace process the first three years of the current administration.

And what Tony Blair did was, to me, quite extraordinary at two levels, both at the conceptual level as well as at the operational level. He was essentially the chief architect, but also the general contractor, of the Northern Ireland peace process. And the fact that it has gone as far advanced as it has, and essentially succeeded, is more his doing, I would think, than any other single outsider.

People and ideas make a difference in life and in history, and he contributed himself and his ideas and probably more hours than he -- even he can count to the task. And the good news is that it worked. (Applause.)

TONY BLAIR: Thank you.

HAASS: Let me say that today's meeting makes this something of a Middle East week here at the Council on Foreign Relations, given yesterday's publication "Restoring the Balance," a joint report of the Council on Foreign Relations and the Saban Center of Brookings. I believe copies of this report were made available.

And what it did was urged a new Middle East policy for the new administration here in the United States, one characterized by a greater emphasis on diplomacy, a greater emphasis on multilateralism; and, in particular, called for three new initiatives -- toward Iran, towards the Israeli-Syrian divide and towards the Israeli-Palestinian divide.

The scenario today is quite straightforward. Mr. Blair will replace me in short order here and will talk for some 25 minutes, give or take, on the situation in the Middle East as he sees it. He and I then will have a brief private conversation that we will share with all of you and others, and then we will open it up to you, our members.

Obviously, from the phalanx of cameras in the back of the room, this is anything but off the record. It is most definitely on the record.

If you do have your cell phone on, please turn it off, and not just to vibrate, but please turn it off, as it tends to interfere with the sound system.

With that, let me welcome Tony Blair to the Council on Foreign Relations. (Applause.)

BLAIR: Thank you. Thank you very much indeed, Richard. And hello, everyone. I'm absolutely delighted to be here at the Council on Foreign Relations. Thank you so much for giving me this opportunity to come and talk to you.

Thank you, Richard, very much for that kind introduction. And it gives me the chance also to pay a tribute to you for the work that you did when you were envoy in Northern Ireland. As I now know but didn't then, being an envoy can sometimes be a difficult position to be in, amongst all the different parties. But you really did a superb job. And I remember the early stages of the Northern Ireland agreement, particularly, wouldn't have come about without your intervention. So from me to you and on behalf of the people of the United Kingdom, thank you. (Applause.)

Now, just before I deliver my speech, I -- there was a British prime minister, Harold Macmillan, that some of you may have heard of, who was once asked about the Arab-Israeli problem, and he said, "There is no problem." And the interviewer said, "Well, what do you mean, there's no problem?" And he said, "A problem is something with a solution." (Laughter.) Despite that, I've undertaken this role.

And in the past 15 as Quartet representative to the Middle East, I've learned a great deal. I've learned that the Israeli-Palestinian issue, seemingly intractable, can be solved. And I have had reinforced my belief that indeed it must be.

So the question is, how can it be done? The past 40 years are littered with initiatives, signposts to various breakthroughs, unsatisfactory compromises, new dawns that swiftly turned to dusk, and failed negotiations.

Along the way, however, there have been immense gains, sometimes obscured by the central impasse. Egypt and Jordan are at peace with Israel. The Arab peace initiative of the then Crown Prince Abdullah in 2002 signalled a new pan-Arab approach. The contours of the final status issues, if not their outcomes, have been clarified. The Annapolis process and the limited, but nonetheless real, change on the West Bank during the past year, for which the president and Secretary Rice deserve much credit, have yielded a genuine platform for the future. But the central impasse does indeed remain.

My view -- formed since I came to Jerusalem, and refining much of what I thought when I tusseled intermittently with the issue for 10 years as British prime minister -- my view is that the impasse remains because the reality on the ground does not, as yet, sufficiently support the compromises necessary to secure a final negotiated settlement. In other words, we have tended to proceed on the basis that if we could only agree to terms of this two-state solution -- territory, refugees, Jerusalem -- i.e., the theory -- we would then be able to change the reality of what was happening on the ground -- i.e., the practice.

In my view, it is as much the other way round. The political process and changing the reality have to march in lockstep. That is the key to this issue. And until recently, they haven't.

The reason this is critical to resolving this dispute is as follows. The problem is not that reasonable people do not agree, roughly, what the two states look like. I don't minimize the negotiation challenge. But listen to sensible Palestinians and sensible Israelis and you will quickly find that the gaps are not that big. They're certainly not unbridgeable.

Ask the people, Israeli or Palestinian, and they will say very simply, yes, a two-state solution is ideal. But then they will say equally, simply, no, it won't happen.

Why? Because each people has lost faith in the other's good faith. Israelis don't believe they have a partner for peace. Palestinians don't believe Israel is sincere in offering statehood. And the reasons for this are also simple.

Put yourself in the shoes of Israel. For years, Israel has fought for the right to exist. For years, it has been surrounded by other nations, much larger than Israel, which question that right to exist.

They tried, so they would say, to reach a settlement, most recently in the year 2000. They despaired of negotiation. So under Prime Minister Sharon, they decided to disengage from the Palestinians and create a de facto separation into two states.

So as they see it, they leave Gaza. And in their eyes, they end the occupation. They take 8,000 settlers with them. They get Hamas and rocket attacks in return.

Look at the map. Gaza threatens Sderot and Ashkelon. But rockets cannot as yet reach from Gaza to the main centers of population, in Jerusalem or Tel Aviv.

Israel cannot live with a Gaza-type mess on the West Bank. It can live with Hamas and their rockets. A few miles from Ben Gurion Airport, it's an impossibility.

So now Israelis say, we have a failed set of steps for peace, a divided Palestine, a divided Palestinian Authority and therefore no proper path left for peace.

You cannot understand Israel's position unless you understand that Israel believes that a Palestinian state cannot be agreed unless it is a secure partner for peace.

Now, there are Israelis who believe in one state, a Greater Israel. But they aren't the majority. The majority are two-staters, if you like, who have given up believing that two states are possible. So that is the Israeli reality.

The Palestinian reality however is harsh, oppressive and acute. Put yourself in their shoes. Their land is occupied. Each part of their lives, as they see it, is regulated by the occupying power.

They are not free to move, to build in well over half their territory. And they see settlements dug deep inside what, on any basis, will be the land of their state. As a result of the network of restrictions, they can be made to wait hours to visit relatives, get to work, get to school.

They suffer the indignity of being searched, the humiliation of being herded, the trauma, and it is a trauma, of knowing that at any moment, their daily existence can be turned upside down. That is their reality. And its impact is to appear to mock pretentions of statehood.

The Palestinians know that they will have to make compromises, as Israel will. They know compromises will be painful. But why should they endure that pain, why should they engage in that hardheaded negotiation of an agreement when the reality contradicts, in their eyes, the likelihood that any such agreement will ever be translated into effect? Why lay down the rhetoric and move from resistance to governance when the facts of daily life disprove the possibility that such governance can exist?

That is the Palestinian reality. In other words, the problem is that until now, the reality on the ground for Israelis and Palestinians has not passed what I would call the minimum threshold of credibility for the political negotiation to succeed, not for the Israelis on security, not for the Palestinians on lifting the occupation.

The key, therefore, to resolving this issue is not to try to put a negotiated agreement on the top of a pyramid whose foundations are, as yet, lopsided and uncertain. The key is simultaneously with the political process to secure those foundations and build them from the bottom up. Then, as the reality changes, so will the context for a successful negotiation.

Now, let me emphasize: We need a strong and credible political process, and we need it with a firm, shared vision at its heart, two states. It would've been good if the principles of such a vision could have been set out this year. Unfortunately, it does not yet prove possible. But the issues are well known and, through Annapolis, are under active discussion for the first time.

However, there will not be a successful and final conclusion to any such process, in my view, unless the reality is conforming to it, boosting it, underpinning it and not contradicting it.

The good news is that the internal and external conditions that for so long have militated against these now are -- strongly argue for it.

Israel knows that it cannot swallow up the Palestinians. The decision by Prime Minister Sharon to put the barrier between Israel and the West Bank, withdraw from Gaza and put nothing between Palestine and Jordan saw to that. It is, in truth, the Sharon legacy. He actually decided against Greater Israel.

For the Palestinians, they've learned the leadership of Abu Mazen and Salam Fayyad is not playing at peace-making. They want it and, if allowed to, will make it.

And perhaps most significant of all, the Arab nations are now ready for peace. Palestine is no longer a cause to be paraded symbolically, a rallying cry to motivate the people. It is a thorn, a cause as likely to be used against them as for them; a symbol not of their determination but of their impotence. They want justice for the Palestinians, genuinely and passionately, but they harbor no delusions that this will come through the destruction of Israel.

There is something else. All sides now fear the influence of Iran, fear it and want to focus on it, (shorn of a ?) problem that complicates, confuses and confounds such focus.

The challenge is that the years following the second intifada made the realities for both sides all the tougher.

So what now? We need four things.

First, there has to be that viable serious negotiating process. It will need creativity, ingenuity and most of all good will generated by positive change on the ground.

But it should not be forced to a premature conclusion. It needs to be taken forward with vigor and determination, both for its own sake but also because without that prospect to aim for, changing the reality will be all the harder.

It is also essential that neither side prejudices the outcome of such a process, which is why the expansion of settlements is so threatening to the Palestinians.

Second, the Israeli reality I describe, Palestinian security capability, has to be subject to a comprehensive plan with a comprehensive plan of implementation. Here again, thanks to the excellent work of General Jones and General Dayton, together with the EU Mission on Civil Policing, we don't need to start from scratch. There are Palestinian forces being trained, battalion by battalion, in Jordan as we speak and now starting to be deployed. There is a Palestinian reform plan for not just the security forces but police, courts, criminal justice, prisons prosecutions, actively supported by the European Commission and member states. In other words, for the full panoply of a proper functioning system of law and order.

All that remains is for these proposals to be brought together, systematized and made susceptible of implementation and coordination with Israel.

This is not as easy as it sounds, if it sounds easy. But with proper attention, it could be done, and it has to be done. And the point is, it's started, because as the capacity for the Palestinians to provide security on the West Bank grows, so the Israelis have progressively to lift the occupation. As Palestine does more, Israel should do less. And in case you think this is an idle dream, it is happening now. It's only beginning. It's a huge way to go. But it's happening nonetheless.

In Jenin, where I was last week, in the northern West Bank, in a piece of territory actually larger than Gaza, Palestinian forces now do most of the security under Prime Minister Fayyad's leadership, massive credit to him. And Palestinian forces are now keeping order also in Nablus. Recently they have moved to Hebron.

The picture is slowly changing. The first major checkpoints, like Shavei Shomron, Hahul, Rimonim, have been opened.

We have, therefore, empirical evidence from the past year that such an approach works. It now has to be moved to a far greater level of cooperation, operation and permeation. And as they are now, outside forces from friendly nations can help.

Third, into this changing security picture, and intimately joined to it, must come economic and social change. There is a tendency, understandable, for the international community and NGOs to dilate constantly on the inhibition that access and movement restrictions place on the Palestinian economy and society. Again, do not misunderstand me. Those restrictions must be lifted for the Palestinian economy to achieve its potential, and the sooner the better. But what has happened in the last year shows that there is no shortage of enterprise on the part of the Palestinian people, despite all the manifold difficulties.

The IMF are revising their figures for the West Bank economy. They will show significant economic growth for 2008. In Bethlehem, where we've worked really hard to get a change in conditions, hotel occupancy, which 12 months ago incidentally was 10 percent, is now over 80 percent. Bethlehem will be full this Christmas. Over 1 million tourists have come. The olive harvest this year has doubled. There are plans, now financed, for major housing developments, and scores of smaller development projects are springing up all over the West Bank.

The unemployment rate of a growing population is falling, and we hope early next year the Jenin industrial park will begin construction.

So our point's very simple. There's plenty to despair of, but there are also slender and real grounds for hope.

But again, this part of the foundation for peace needs to be taken to a far more integrated and systemic level of work. The Paris conference raised some $7.7 billion for the Palestinians. This year the budget support has been the highest ever. The Palestinians have now a worked-out reform program for institution-building. Of course the Palestinian economy can only really fulfill its potential when the Palestinian people are free, but what has happened in the last year shows that potential.

The point is this. In respect of both realities, Israeli and Palestinian, there is progress we can deepen, lessons that can be applied. But it won't happen without intense and intensive, granular, detailed application.

And fourth, we need a new strategy for Gaza. The "tahadiya," (or calm ?), was the right thing to do. It should be maintained. But it isn't an answer. The people of Gaza continue to suffer grievously. The people of Sderot continue to live in fear. The smuggling through the tunnels, as I heard last week from Gazan businesses, puts the legitimate economy at risk, and the military grip of Hamas tightens.

We have to show to the people of Gaza how another choice can exist, so that they can rejoin some state of normality and that we will work to bring such a situation about so that the suffering can end. I have little doubt that the people would take such a choice, especially if on the West Bank they see tangible change and improvement.

But one thing is for sure: We cannot maintain the status quo in Gaza there another year. It won't work. The terms of Palestinian unity should also be set by the international community and by the Arab world, terms that are fair for the Palestinian people but are consistent with the two-state solution.

There can only be one Palestinian state. It will combine Gaza and the West Bank. However much we are tempted to set Gaza to one side because of the chaos it causes to Palestinian cohesion, it cannot be. But neither is its predicament inevitable. It can and it must be reversed.

So in all these four areas, there is no need -- indeed, in my view it would be an error -- to start from square one. What is required, rather, is an enhanced order of dedication to build the reality on the ground which, according to the thesis I've outlined to you today, is the necessary condition for a successful political negotiation; ensuring these two dimensions are intertwined, each as important as the other, each on its own, much less than the sum of both together.

Seeing them in this way is more than an act of analysis. It then changes the method by which we proceed to peace. It means we recognize a degree of particularity in respect of the confidence-building on the ground around the security, the economic, the social development, and the partnership between Israel and the Palestinians to achieve it that takes a sustained period of negotiation and deliberation as intensive as the political negotiation itself. In other words, these issues and how these intentions are translated into practice have to move center stage.

The progress so far, limited as it is, provides the basis for doing more. When such change has happened, it has had an effect. The incremental steps now have to be transformed into a complete and rounded strategy that locks in the politics by changing the reality on the ground. If we do this, I am confident that we can resolve this issue. And in truth, there is no option but to resolve it.

There is occasionally a resentment when people speak of the cardinal importance of the Israel-Palestine issue. You know, the feeling is sometimes on both sides that by elevating its significance we place the resolution of it at such a level that the proper interests of the parties may just get sacrificed in the rush to do the deal. This feeling is especially raw for many Israelis. They worry that because the Palestinian cause matters so deeply to so many Muslims, Israel's legitimate interests are going to be trampled upon in the unswerving desire to placate Muslim opinion.

So I should make one thing clear: nothing should ever be done to put Israel's security at risk. Indeed, I would go further. Israel's security matters profoundly to our own. Sacrificing it would not just be wrong, but shortsighted in the extreme.

But resolving this issue on terms consistent with Israel's security is indeed Israel's wish. And that, too, is undeniably in our interest; as well, of course, in the interest of the Palestinians and the Muslim world.

The Israel-Palestine dispute did not cause the extremist affliction we face based on a perversion of the proper faith of Islam. It would exist if Israel didn't. But its resolution can be an essential part of consigning that affliction to the oblivion it deserves.

I believed this before I became the Quartet representative; I believe it even more strongly now. Peace between Israelis and Palestinians would release forces of modernization across the region. It would pin back the forces of reaction. And it does not inhabit an entirely separate sphere from issues like Iran or Iraq or Afghanistan or Pakistan, or any of the other troubled parts of that region which crowd in on our consciousness and compete for our attention. It is integral to resolving them too.

For there is, in truth, one struggle, with many dimensions, between those who believe in peaceful coexistence and those who find fulfillment in conflict. It links the terrorists in Mumbai with the suicide bombs in Tel Aviv. It has to be confronted and beaten. It cannot be beaten by military means alone.

It is as much by the force of ideas as the force of arms that we will secure our future. And the principal idea is this, that people of different faiths, cultures and creeds can live together peacefully.

Amongst vast swaths of the world, peace between Israel and Palestine would possess defining symbolic power for such an idea. That's why it matters. That's why it must be done: for the sake of Israel, for the sake of the Palestinian people and for the sake of the world. It can be done. Of that, I'm sure. The challenge now is to do it.

Thank you. (Applause.)

HAASS: Thank you. That was as eloquent a description of the necessity to work both top-down and bottom-up, in a negotiation, as I've ever heard. So thank you. Let me drill down a little bit on two aspects of your statement.

One is, you talked about the need for a strong and credible political process. And then you said, and I quote, "It would have been good if the principles of such a vision could have been set out this year."

Could you say a little bit more about the utility -- be it the Quartet, the United States, yourself -- of laying out more of a vision of final status, as a way to facilitate exactly what you've been talking about here today?

Why is it that people should turn their backs on radicalism, unless they have a pretty good idea of what the light is at the end of the tunnel?

BLAIR: Yeah, I think that's right. I think it was Shimon Peres who once said, there's good news and bad news. The good news is, there's light at the end of the tunnel. The bad news is, there is no tunnel. (Laughter.)

I think that the -- what Palestinians need to know is that the contours of such a state are going to deliver them what, they would say, is an independent, viable state. In other words, it's not a section of disparate, little pockets of land. It actually is one proper state.

For the Israelis, what they need to know is something rather different in a way. I mean, obviously they need to know that they're not going to get, you know, suddenly hordes of refugees come streaming back into Israel and so on. There's all that.

They need to know that they can keep the essential identity of Israel as a Jewish state, in a sense. But I think that the other thing they need to know is that there is a security infrastructure in place that means that Israel can have next door, to it, a state that is running its own affairs.

And I think, you know, in Annapolis, the process that was launched actually, during the course of the last year, and obviously I discuss this a lot with the parties, for the first time, they are genuinely discussing all the critical issues. And I think behind the scenes -- for obvious reasons, I won't say too much about it because it -- they want it to be maintained behind the scenes -- actually, they have been getting down to kind of bridging some of the gaps on issues like territory and refugees and so on.

And so I think you're right. What is actually necessary is, for this to be a credible political process, people have to feel that it really is going to deal with these tough issues and get them resolved. And all I'm saying to you is it's not impossible to resolve these questions if you want to, you know.

And I think the other thing that's fascinating -- I mean, I know many of you will have been out there -- but, you know, when you actually stand, as I did a few months back, at Mt. Nebo in Jordan and you kind of look across the Jordan Valley and then you see in the distance Jerusalem and then beyond Jerusalem, obviously. This is a small -- this is a very small bit of territory. On the one hand it means it should be possible to resolve it. On the other hand, it means what your next-door neighbor's doing is pretty important to you.

So, you know, I feel that there's political negotiation, yes. What it's got to do is give people the credible sense you're going to do the deal. And I think it can do the deal. My whole point is it will -- the parties will only feel they can make the compromises if their realities are taken account of.

HAASS: You also said in your talk that we have to -- you talked about Gaza, which is obviously -- you correctly pointed to the progress in the West Bank. It's harder to point to progress, shall we say, in Gaza. To the contrary, we can merely point to deterioration there.

BLAIR: Yeah.

HAASS: We have to show -- you said we have to show the people of Gaza how another choice can exist. And I have little doubt that the people there would take such a choice, especially if on the West Bank they saw a tangible change and improvement.

What is -- what is it you have in mind? What is behind -- is it -- are you envisioning elections there that could be carried out in a way that conceivably -- that Hamas would be voted out of power? Are you imagining a political process where Hamas, almost like the provisional IRA, changes its stripes? What is your sense of what we're talking about?

BLAIR: I mean, I think either one of those things is a possible way through.

But here's what has to happen: First of all, there will be elections at some point in the Palestinian territory. In fact, 2010 is more or less the latest -- early 2010 is more or less the latest time that can happen. So there's going to be elections. Now, my point is if we are sensible about it, we're going to try and make sure that people with a moderate and modern view of the future of Palestine win. Well, we better get on and get the right measures in place to do that. But that's one possibility.

The second possibility, I think, is that -- you know, I think what is important is to understand from the point of view of people in Gaza, they feel blockaded and under siege, whether they're terrorists or they're not terrorists. And, of course, the majority aren't. And therefore, what I think is important is that we are making an offer to them where it is clear that, actually, this -- these restrictions can be lifted, that they can rejoin the civilized world, if you like, provided that the politics within Gaza conform to a peaceful resolution of this issue.

Now, at the moment I don't think that's clear to people there. I don't think they understand what the choices are. And I think the danger of the current situation is that the combination of the tunnels, which is used to smuggle in arms and finance, is kind of almost displacing any sense of a legitimate private-sector economy.

And the businesspeople that I spoke to from Gaza last week just said to me: Look, you know, we're running legitimate businesses, but we have no business anymore, and people are coming to us and saying, "If you don't sign up to receiving your stuff through the tunnels and from various organizations that are really part of the black economy, then you guys are going to be out of business. Now what do you want to do?"

So, you know, I think time is pretty urgent. And I think there is a -- sometimes a tendency to believe you can kind of set Gaza to one side. And my view is that Gaza will make absolutely sure that they are not set to one side, one way or another. And so it's important we deal with it now. As I say, I think we can, but it needs, I think, a great deal more sophisticated a strategy than the one we've got over there now.

HAASS: Let me push the Northern Ireland parallel one more time, which is, in Northern Ireland you ultimately had British security forces that provided a context. Who does that, ultimately, in Gaza? How does it -- I know the progress you described in building up security capacities in the West Bank; how does one build up security capacities in Gaza?

BLAIR: I don't think you can until they agree to be rejoined to the Palestinian Authority, is the truth. But I think what is interesting is that in the West Bank for the first time -- and I've obviously watched this very carefully over the last year -- the Israeli Defense Force, for the first time, accepts that the Palestinians are really changing their capability. Now, that's a big step forward.

And look, you know, the trouble with any of these situations is that you kind of -- I always think the hardest thing in politics is to prevent the picture of balance, because, actually, by and large our political discourse doesn't do balance. (Laughs.) It just kind of, "it's all terrible" or "it's all fantastic." And so I was trying to give you a balanced perspective.

So there are real changes happening on the West Bank, but there's an awful long way to go. I think the difficulty, and this is why I feel a sense of urgency about this situation, is that we are in a race against time, because those people in the region who do not want a settlement of this issue are also very active.

HAASS: Do you also feel a sense of urgency that if we don't make real progress in the -- I won't ask for time limits, but soon, that the chance of ever coming up with a viable two-state reality will essentially have been lost? Are we getting close to a -- what Malcolm Gladwell would call a tipping point?

BLAIR: I think there's a risk, yeah. I mean, I -- look, you know, I think you kind of learn with these things that you never give up, because you just can't. Because there is no -- I mean, there is only a one-state solution or a two-state solution. And let's be absolutely clear. If it's a one-state solution, there's going to be a hell of a fight.

So you know, and I think that intelligent people on both sides accept that. But I personally think that if we don't -- we've got a platform on which to build. But if we don't build urgently, we will have a real problem, quite soon down the line.

HAASS: Just one or two more quick questions, then I'll open it up.

One deals with settlements, which again you correctly mentioned in your statement. You've had all sorts of contacts with the Israeli government, with aspects of Israeli society.

Is it your sense that in the right circumstances, Israel would agree not simply to stop new settlement activity but would be prepared to go through what would be the wrenching political and physical act of actually disbanding settlements?

Can you -- is that in your, you know, within your realm of imagination as possible?

BLAIR: Yes. I think they will do that.

I mean, and they are prepared to do that, if it is the price of a lasting peace, because obviously you can't keep all the settlements, on the West Bank, and have a viable Palestinian state. And after all, I think, this is really, this is why the thesis that I'm outlining, I think, is so much more important now than it might have been 10 years ago. You cannot overstate the importance, in Israeli minds, of the Gaza experience for them.

Now, you know, for a lot of the international community, people feel, well, the disengagement from Gaza happened in the wrong way. It was unilateral. It didn't take place with the proper consultation and all of that.

But as I thought at the time, when it was announced, and I was actually here in Washington, when it was announced, that was the moment at which the international community should have gone in and almost lifted the Palestinian infrastructure -- political, economic, social -- in Gaza, to make sure that it provided evidence that a state could be run.

Instead what happened, I'm afraid, is that there was a vacuum. And so the Israelis took 8,000 settlers with them. And that was a wrenching experience. They actually took some out from the northern part of the Palestinian territory, in the West Bank, as well.

Now, is this tough for Israel? Yes, of course, it is. But you won't get a peace deal without. I mean, there will be land squats no doubt as part of this deal.

But yes, there will have to be outposts and settlements that are disbanded for this to work. And that will be a hugely difficult thing, for Israel and for Israeli politics. But my view is that Israel will do this in circumstances where, they think, they're getting a genuine peace back.

HAASS: One aspect of the international community that did not step up to the plate, if I may use a baseball metaphor -- I don't know if it works in cricket -- (cross talk) -- is that the Arab states did not open up their wallets and did not do much to help in Gaza.

Do you believe that they've internalized that lesson and are now, particularly given the wealth that some of the oil-producers have accumulated, are now willing to make a significant economic investment in the Palestinian areas?

BLAIR: Yes, but here's the thing. And it's really important to realize this. For the Arab world, there is a deep-seated cynicism as to whether this process will ever go anywhere.

Now, if I were running their show and I'm not so, but if I were, I would say, even if I think it's not going anywhere, I would still be investing in the Palestinians, like crazy, because I think it's the right thing to do.

And I think it's sensible for them to do it. But their position -- and I'm just describing it to you, I'm not justifying it -- is, when we see this process really credible, we'll get behind it, but what we're not going to do is put a whole lot of our money in and then end up with the whole thing washed away.

So, obviously, I'm -- and we (have had ?), you know, considerable success. There's been more budget support for the Palestinians this year than ever before, although a lot of it from America and Europe, but the Arabs did subscribe to the Paris conference, did pledge money.

My short answer to your question, Richard, is, I am sure that they will back this process if they really think it has got the full weight of the political system here and in Europe and elsewhere behind it.

HAASS: I could go on, but I won't. So let me open it up. If people would wait for the microphone, let us know who they are and be as succinct as possible, that will give more of our members a chance.

Odeh Aburdene.

QUESTIONER: (Off mike.)

HAASS: You have to speak closer to the microphone, Odeh..

QUESTIONER: My question to you: Will Israeli-Syrian peace negotiations enhance the Palestinian-Israeli track?

BLAIR: Stand -- ?

HAASS: You can do whatever you'd like.

BLAIR: Thank you! (Laughter.)

HAASS: It comes with being a former prime minister.

BLAIR: It's (all right ?). But they seem more polite than prime minister's questions, so -- (laughter).

HAASS: (Inaudible.) (Laughing.)

BLAIR: I mean, give them a chance, though. I just feel slightly more comfortable standing in the despatch box, as it were. (Laughter.)

Yes, I think -- I think pushing ahead on the Israel-Syrian track is entirely sensible. I just don't think it's a substitute for the Palestinian track. That is the word of caution that I would offer. I totally -- I thought -- I said this to Richard before -- I thought he and Martin's article was a fantastic article, I think really intelligent, good analysis.

And, you know, I think that -- this is just my view, but my view is that these problems are linked. There is one basic issue in that region, and actually further than that region. I mean, I mean the broader, broader, broader Middle East, if you like. And that is, do people live together peacefully across the faiths, cultures and so on? Do they embrace the modern world? Do they embrace the practices and habits of the modern world, or do they retreat into a sort of, you know, reactionary and backward way of living where people see themselves as in essential conflict with each other?

And that's the struggle that's going on. And, you know, can you resolve the Israel-Syrian issue? Yes, you could do. I mean, again, it's not complicated if people really want to do that and live in harmony with one another, but personally I don't think that will happen in substitute for the Israel-Palestine negotiation.

HAASS: Bob Kaiser.

QUESTIONER: Mr. Blair, tell us about the Quartet. Why are the Russians still involved? And what is the Russian role, and is it any use? (Laughter.)

BLAIR: You're talking about my boss, there -- (laughter) -- or one of them. It's very funny, actually. Whenever you say to people, a lot of people -- you know, not this audience, obviously, but a lot of people say, "Well, what's the Quartet?" And you say, "Well, it's got the EU, the U.N., the U.S. and Russia in it." And they say, "Wow, that must be a really tough job."

And actually, in relation to this, whatever other issues there are with Russia, I have to say they've been extremely helpful. They've been helpful during the course of the process. They've actually worked closely with -- with my people. And they've got good links, actually, for obvious reasons, with the Israelis or with -- certainly with strong sections of Israeli opinion, and with the Palestinians. So they're not a problem for me in this context, which is --

QUESTIONER: (So, useful ?).

BLAIR: Yes, in the sense that they're helpful. (Laughter.) And look, out in the Middle East, that's a big plus. (Laughter.)

HAASS: I saw a hand -- all the way in the back row. Yes, ma'am.

QUESTIONER: Thank you. Nadia Bilbassy, with MBC Television, Middle East Broadcasting Center.

Mr. Blair, as you know, the Palestinians always perceive the U.S. successive administrations, regardless if they're Democrats or Republicans, as very pro-Israel. In your opinion, what can this new administration do to show itself as an honest broker in the Middle East and to gain confidence of the Palestinians?

BLAIR: Well, I think the most important thing is that the process is taken forward with, as I say, real determination on the four fronts that I've outlined. And if Palestinians, and indeed the Arab world, see real changes on the ground happening, if they think the Palestinian state, as an independent state, can become a reality, then I think, you know, the mood would change completely.

As you will know from being out there, people just don't believe it at the moment. So we've got to give them that belief. I mean, it's belief that people have lost. It's the credibility they've lost. We've got to give them that back. And I think that actually what the president-elect has put together is a very, very strong team; not just with Hillary Clinton as secretary of State, but obviously, Jim Jones, someone I've been working with out in the Palestinian Territory these last months, who understands the situation very well.

And what I'm saying is, I think there is a consensus now amongst the international community -- not just America, but everyone -- as to how to deal with this, more or less around the points that I'm making. The question is now, and what people will watch for is, is it taken forward with the requisite urgency and determination? And I have every confidence that it will be.

Just one other thing, though, to say, because I often say this when people say to me, well, you know, you're very -- because I am, I'm perfectly happy to state it -- is I consider myself a friend of Israel. I mean, the thing that you've always got to realize about a peace agreement between two sides is that it takes two sides. So, you know, this deal will not be done without the Palestinians; it won't be done without Israel. So you know, sometimes, to be in a position where you are a friend of Israel is actually an advantage in making the peace. Now, it's important that that is taken forward in the right way. And as I say, I believe it will be.

But I think there is every opportunity to demonstrate to people, and quite quickly, that there is a complete seriousness of intent about moving this issue forward, and then to set it in the broader context, which is the key to everything, for people to realize that these other issues, as I say, that crowd in on our consciousness -- whether it's Iran or Pakistan or Afghanistan or Iraq, the whole business to do with the Middle East -- in my view, these are, you know, intimately connected questions.

And therefore, if we are making progress in a way that protects Israel's security, that gives the justice of a homeland and a state to the Palestinians, I think we will release forces and energy for modernization right across that part of the world. And my goodness, we need it.

HAASS: We got time for a few more. Again, let's keep the questions on the subject of the day. Sally Quinn?

QUESTIONER: What do you do about Jerusalem? What do you do about Jerusalem?

BLAIR: There are a huge number of -- I mean, one of the things I do quite carefully in this -- I hope you forgive me for this -- is not start offering my speculation on what the final outcome of some of these issues is, because I find it the surest way to make sure that such speculation never amounts to anything.

I think there are all sorts of creative and intelligent ways through Jerusalem. It is very difficult. It matters enormously, not just to the Israelis and the Palestinians; it matters to the Arab world. But -- and without, as I say, going into the detail of what I think could be a potential resolution of that issue, I am absolutely confident that if people want to find a way through, they can.

You know, this is an issue where it is perfectly obvious you've got Jewish -- you've got Israelis, you've got Palestinians, Jewish people and Muslims living side by side in Jerusalem. They will have to find a way of administering Jerusalem sensibly and of allowing people their freedom of worship.

Now, as I say, there are lots of creative ideas out there on how this could be done. And if it were what stood between people and the settlement, I am sure some of those creative ideas or at least one of them would be taken to fruition.

So I agree it is immensely sensitive and difficult. But in my view, it is not impossible -- a resolution.

HAASS: Bob?

QUESTIONER: Mr. Blair, Robert Pastor from American University in the Carter Center. Let me pursue, if I could, Richard's point on Gaza that you'd raised. Specifically, if the calm is so important, would the Quartet be willing to monitor that calm, the elements of it, which might require some mediation, of course, and talking to both sides -- both Hamas as well as Israel? And regarding the elections, how do you move towards an election in 2010 if the Quartet, in effect, says that one of the parties of the election, we will not recognize their victory?

BLAIR: Well, here's the issue with -- I mean, let's take it straight to the nub of the point, which is really to do with Hamas.

I mean, I think, there is a basic problem with bringing Hamas into a negotiating process, for two states, if they don't accept that one of the states should exist. And certainly I remember, Richard will remember, when we got the Northern Ireland peace process going.

People often say to me, well, you talked to Sinn Fein and the IRA and so on. We did but we did it in the context of what were actually called then the Mitchell Principles, which was a commitment that everyone had to give to exclusively peaceful and democratic means.

Now, there were lots of arguments about whether people kept that. But actually the did at least avow those principles. And it gave us something to build on.

The other thing is that of course, Hamas are being talked to. I mean, the Egyptians talk to them. And the calm was negotiated through the Egyptians, between Hamas and the Palestinian Authority and the Israelis and the international community.

I actually think what we need to do is to make sure, first, that that calm can be maintained. But then to add to that means starting to bring in real humanitarian help, to people, at the same time as you start to lift some of the restrictions that are there. But you've got to make it clear, all the way through, that is only going to happen if the rocket attacks also stop.

And so how you mediate that, I agree, is incredibly difficult. And you know, you probably know that I actually wanted to go down and tried to go down to Gaza myself a short time ago. But Hamas are in the position, if they wanted to accept that position, that they could maintain that calm.

So you know, you have to ask, at some point, why it is that they don't do all that they can and should do, in order to create the circumstances in which a new dispensation could come about.

What I'm in a sense saying, from our perspective, from the Quartet perspective, is we have to make it clear that if those conditions arrive, we will take the action that helps the people and opens the place up.

Now, how you necessarily mediate that, you can speculate on a law. But I don't think, at this moment in time, the problem is the method of mediation. I think it's the absence of a clear will, on the part of those running Gaza, and perhaps the absence of a clear offer on the part of those from the outside.

Now, if you could match, if you could get those two things together, I think, it's possible to start changing the reality in Gaza. And I do and I have said this all the way through the last year. You will not get a peace deal while Gaza remains as it is.

HAASS: The hand in the fourth row.

Yes, sir. Right here. Keep going.

QUESTIONER: Peter Zimmerman, retired from King's College London.

I want to ask an operational question which drills fairly deeply down but which is surely on the mind of every Israeli. How can one ensure that the Palestinian security forces, which you've described, remain constitutionally and de facto under the control of a democratically elected government; do not begin to constitute, themselves, a separate force in the society and are unswayable by emotional appeals? I take it for granted that there will be tensions between Israel and Palestine over at least the first many years of a two-state solution.

BLAIR: It's a good question. I think you can -- and this is part of the whole debate: What is the security structures that would give Israel some guarantees? And obviously the issues to do with America and what it says to Israel with respect to that are very important.

But I also think there is a way of helping, with an international dimension to this, that allows us really to monitor and mentor very closely what happens with the Palestinian forces. I mean, in the end, you know, the question in any peace agreement -- and we faced this, actually, quite intimately when we were trying to reform the Royal Ulster Constabulary and turn it into the Northern Ireland police force. We had to actually change the whole recruitment of that force. We had to bring in people, including people who were republicans fighting the RUC, had to become part of the new police force.

In the end, I think, there is -- there are no ultimate and complete and unbreakable guarantees. But I think what you've got to say is that if you can establish a fair basis for peace that is accepted and you have security institutions on the Palestinian side that, as I say, are closely (mentored ?) and monitored and where there's a sort of permeation, if you like, of real, you know, close interaction with the international community, I think that would give you a better chance of long-term security than a situation where the Palestinian people feel in despair, without hope, and where they believe that legitimate means of aspiration to a state are denied them.

So I think that there are major questions about this. But it's really interesting -- if you look at the forces that have now been trained by the Americans in Jordan and have gone back into the West Bank within these last months, I mean, they are doing a good job.

You know, I was in Jenin for the third time in six months last week. I could not have gone to Jenin a year ago. And I was there with Palestinian forces. They -- you know, you get some sort of a sense of how the people feel.

And this is the other thing that's really important to recognize, and it should actually give us hope for the whole of this region. It was the people that were telling me, for the first time, we've got a police force here. We've got security forces, not these militia who roam the streets, who have all sorts of other agendas and -- for money-making activities and all the rest of it.

These people, who are business people, ordinary people -- and there a lot of them there -- said for the first time they started to feel safe within their own territory, and that safety and that feeling that because of a different relationship with Israel and because of increased capacity in the Palestinian side, that they were actually able to live a normal life. My feeling, in the end, is that is the best guarantee, and probably ultimately the only one.

HAASS: It's been so long since any meeting on the Middle East at the Council on Foreign Relations or anywhere else ended on a hopeful note -- (laughter) -- that I'm going to --

BLAIR: (Chuckles.) And I am an optimist --

HAASS: -- we're going to end it there. Also, given the -- let me apologize. I know that we could have gone on for a long time. A lot of hands are in the air. I apologize. But let me also, perhaps more important, thank the former prime minister for being with us today. (Applause.)

.STX

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