Alan Keyes
April 11, 2002

ALAN KEYES, MSNBC HOST: Welcome to MAKING SENSE. I'm Alan Keyes.

Up front tonight, we're again focused, as we have been pretty much during the course of the whole week, on the crisis in the Middle East. As the vets move along in the wake of the reengagement of the Bush administration, Secretary Powell's trip, and the continuing and intense conflict of that still characterizes the confrontation between Israel and the Palestinians.

Here is what happened today. Israel pulled out of two-dozen small West Bank towns but swept into others and rounded up more Palestinians. Israel's army says over 4,000 Palestinians have been detained in the operation, 121 of whom were on Israel's most wanted list. And today in Jenin, where the fighting has come to an end, reporters touring a refugee camp that was previously off limits to journalists during the intense combat of the last eight days saw widespread devastation from Israeli tanks.

Meanwhile, on the diplomatic front, Secretary of State Colin Powell arrived in Israel earlier today after meeting with Jordan's King Abdullah. Powell meets Ariel Sharon tomorrow, Yasser Arafat on Saturday, his meeting with Arafat, of course, the subject of some tension in the U.S.-Israeli relationship. Obviously, the government of Israel didn't feel that they could stop him but didn't like the idea of breaking Arafat's isolation either.

Clearly, Secretary Powell's approach, which I believe frankly was engaged in, at least in part, as a result of pressures from the Europeans among others who are feeling pressure from the heavy Islamic presence in their own countries. The Euro-Powell approach, as I call it, has some implications that I think could be quite devastating.

We're in a situation right now where right now security concerns would have to be paramount if you or I were in the situation of the Israelis. And yet American policy seems to aim at any cost at reengaging a negotiating process where Israel sits down across the table from the very folks who have abused the process up to now with suicidal bombings, with terrorist attacks, with a commitment to violence as a way of manipulating the process. Also, the demands that the Arabs have put on the table have implications including the right of return that would mean tend of the Jewish character of the state of Israel.

Tonight's question before us, does the Euro-Powell approach to the Middle East mean an end to the state of Israel? Are we seeing the beginning of the end for the Jewish state? Joining us now, Frank Gaffney, founder and president of the Center for Security Policy and a former assistant secretary of defense during the Reagan administration. Also with us, Mark Rosenblum, the founder and president for Americans for Peace Now. Welcome to MAKING SENSE. Or welcome back, really, to both of you.

Frank, how was your vacation?

FRANK GAFFNEY, FOUNDER AND PRESIDENT, CENTER FOR SECURITY POLICY: Splendid, thank you, Alan. I enjoyed being with you during part of it.

KEYES: Thank you. I appreciated your willingness to break your vacation to come on.

Now, Mark, you were with us last night. We were talking about some aspects of the same situation. The question I am putting tonight has to do with the implications of this diplomacy and what happens in fact if we are able to force Israel's hand and produce a settlement along the lines that is being suggested by the Arab states, pushed by the Europeans, effectively represented, I'm sad to say, in the Euro-Powell approach.

Mark Rosenblum, why shouldn't we believe that this is going to mean in the end the demise of the Jewish state of Israel?

MARK ROSENBLUM, FOUNDER AND PRESIDENT, AMERICANS FOR PEACE NOW: Well, before I get to two reasons why I think it won't mean that — I think it's quite the opposite — rather than the destruction, I see it as the saving of the state of Israel. Before I say that, I think that this is not a Euro-Powell initiative. It's convenient to take President Bush out of the picture here. And the people who want to project this as the bad boys in the State Department trying to destroy Israel are missing this.

The president of the United States has directly engaged here. And Powell is going on behalf of the president. When Powell was flanked several weeks ago by Dick Cheney and by the secretary of state sending the State Department's Zinni and Cheney out to the region, it was president of the United States. So if you're looking for blame and bad guys here, it's the administration at large that's united.

Now, two reasons why in my opinion the presidential Bush initiative for peace is good for Israel and will save it. Number one, instead of this army Israel's battle against terrorism, it's giving a second arm to it. Israel fights militarily to defend itself from terrorism. And I don't think there's a final permanent military solution to terrorism. What Cheney and Bush and Powell are all doing is saying, “We're going to give you a diplomatic arm to try and get to a cease-fire and protect yourself from terrorism.”

The second and most important reason why this is in Israel's favor and will save Israel, the single most important issue that Israeli Jews regularly say they care about is living in a Jewish state. Israel cannot maintain a Jewish demographic character if it continues to hold onto the West Bank and Gaza. In 10 years, the majority of citizens and people inside of the state of Israel will be Palestinians. Therefore, Israel faces becoming a bi-national state racked by civil war. The president of the United States is saying disengage.

KEYES: Mark, I understand where you are going with that. But I have a question I would have to put to Frank.

A lot of what Mark Rosenblum is saying seems to me to depend on taking at face value the notion that if the West Bank is given to Yasser Arafat even on his terms that that's going to end it. Israel pulled out of Lebanon, and yet right now they're still being attacked from Lebanon. Can we, in fact, believe that a settlement that leaves Yasser Arafat in charge of the West Bank and Gaza in some form or other, according to his will, is going to mean an end of pressure against the existing Jewish state of Israel?

GAFFNEY: Well, not according to Arafat. What Arafat has said repeatedly to his own people, including on the eve, by the way, of signing the Oslo peace accords on both Jordanian and Egyptian television and innumerable times subsequently, is that this is part of the plan of phases adopted by the Palestine Liberation Organization in 1974 whereby they get part of the land back and they use it to destroy Israel in the second phase.

The map we've talked about many times, Alan, continues to exemplify this desire, this goal, this strategy. And I've got to say Mark has been pushing this line for a long time. I think very few people subscribe to it any longer. I'm sorry that he continues to do so.

And I think he's got a point. The president does bear some responsibility for what a disaster is now unfolding in terms of this administration's policy. I think he also has, however, been fairly clear at least on alternate days that he has committed to the security of the state of Israel. And there cannot be a secure Israel as long as Palestinians and other Arabs are determined to destroy Israel intend to try to do so from the West Bank, as we've been watching in recent days.

KEYES: Go ahead.

ROSENBLUM: I think Frank is right on the mark here. I think even if you impute the worst intentions and motivations to Yasser Arafat — and I for one am not defending Arafat. He's got blood in his hands, and he is wading in his waist up to it. But even if you assume the worst case about Arafat, my argument here that Frank really did not respond to and that the majority of the Israeli Jews also embrace is even if the Palestinians had these malevolent intentions — vis-a-vis Israel, we want to destroy it — Israel's ultimate basis for security is to return to a secure border and create a border that is not so murderously available.

KEYES: Mark, can I raise another question, though, because all of this sounds in the abstract like you're saying something. But the truth of the matter is, borders are not lines on a map. They have a lot to do with who your neighbors are and what their mentality is.

If you put the same bloodthirsty crew that is committed to the phased approach, that is already raising the South African paradigm, that insists on a right of return, that would shift the demographics within Israel proper across that border, it isn't the line on the border...

ROSENBLUM: Alan...

KEYES: ... The question is whether that leadership isn't so committed to the end result that, border or no border, you're still going to get the same strategy. You're not addressing that question.

ROSENBLUM: No, I'm addressing it directly. In the words of the prime minister, in the words of the secretary, the man who is in charge of the defense ministry, Ben-Eliezer, in the words of the foreign ministry, they all will say Arafat is a terrible problem. They want to deal with other people in the Palestinian national movement and even within the Palestinian Authority. There are people on the Palestinian national leadership side who are talking about a state not in place of Israel but next to Israel. And you mention...

GAFFNEY: But that's not Arafat. That's not the current leadership. That's not Hamas. That's not Hezbollah. That's not the groups that are presently out there...

ROSENBLUM: ... It may not be Yasser Arafat. It's not Hamas.

GAFFNEY: ... May I make just one point about this border business because I think we have indulged in a flight of fancy for a decade or more now. There is no way Israel can have a secure border along the lines of its border in 1967, the so-called green line. The difference between having control over a territory, even territory, as Mark says, that has a very high birth rate on the part of the Palestinians but also has the high mountains of Judea and Samaria, that has the water aquifers, that has the strategic depth relatively speaking of the West Bank. And having the green line, as the so-called secure borders is the difference between having a state of Israel that can survive on slots from its Arab neighbors and one that cannot, as we have seen.

And time and time again, they have tried to use the West Bank, '48, '56, '67, '73, as a platform from which to attack and destroy Israel. That mustn't be allowed to happen again. And I'm afraid, unless and until there really is somebody else to deal with, unless and until there really is an abdication from the Palestinians of this aspiration to liberate all of what they call the occupied territories, there's no way that border of '67 can be secured.

ROSENBLUM: Frank...

KEYES: Mark, before you start, I want to put a point to this question, though, because I still have to ask you to focus on it when I listen to what you're saying, “Deal with other leadership, there are other people,” and so forth. But we're talking right now about the Euro-Powell approach. We're talking about the specific approach that is being represented by this Powell mission.

And that approach, as we're going to see on Saturday, is to deal with Yasser Arafat, to legitimize his leadership, to reinstate his inevitability as the interlocker. We're not going down road where other voices are going to be heard. We're going down the road that empowers Mr. Arafat. And Behind the curtain of that empowerment, he may very well eliminate those other voices as he has in the past. So, how can you tell me that this Euro-Powell approach is going to get what you say we need?

ROSENBLUM: Three things, Alan. And this is you ask hard questions and want clear answers to them. And that's fair. You keep talking again about the Powell-Euro approach. And you want to avoid and evade the fact that this is a president of the United States.

So I want to talk about President Bush and why he is re-legitimating Yasser Arafat. The Israeli government has tried under Prime Minister Sharon to declare Arafat irrelevant. He has tried to keep him in Ramallah. He's tried to keep him in his compound. He has tried to keep him in two rooms.

And what has happened because of this policy now is Sharon has discovered Arafat has gone from being irrelevant to being irreplaceable, like it or not. And I don't like it. Alan, I don't like it. I do not like the fact that — I would prefer to have other leaders. But so long as he is perceived, and legitimately so, as the only person who won the last election...

KEYES: Frank...

ROSENBLUM: ... there is not yet another alternative yet on the horizon.

KEYES: I think the way things are going you would have to put an emphasis on the last election because that seems to be we're talking about. Frank Gaffney?

GAFFNEY: I just disagree fundamentally. I think that Arafat remains irrelevant unless we make him relevant again. Arafat should be expelled from the country. He should not be given a platform of the secretary of state because...

ROSENBLUM: Frank...

GAFFNEY: ... the only thing that can come of this...

KEYES: Let him finish.

GAFFNEY: ... the only thing that can come of this, in addition to impelling us once again into pressuring Israel to make territorial concessions that are not compatible with its security is we will vindicate the very notion that underpins Arafat's strategy, which is that terrorism pays off. He is being saved by a secretary of state of the United States precisely because terrorism pays off. Violence pays off.

Mark, you of all people promoting peace should understand that is antithetical to peace. It is rewarding terror. And it will assure there is a great deal more of it to come.

KEYES: Mark, go ahead.

ROSENBLUM: This is not Powell. The president, I know you too want to evade this because it is more convenient...

GAFFNEY: I've acknowledged that the president has some responsibility.

ROSENBLUM: ... The president of the United States has sent this mission.

(CROSSTALK)

ROSENBLUM: Come on.

GAFFNEY: The secretary of state is the man in the region making this effort with Yasser Arafat.

ROSENBLUM: Frank, you're discrediting your own substance as a commentator.

(CROSSTALK)

KEYES: Gentlemen...

ROSENBLUM: ... The secretary of state would not be there if the president of the United States had not sent them. This is utter nonsense.

(CROSSTALK)

KEYES: Excuse me, Mark, Frank, I have to tell you, Mark, that's a little unfair. One also has to try to share with this audience, which I am doing, an understanding of some of the internal dynamics that characterize this administration. And right now, Secretary of State Colin Powell is carrying the ball. He has, in fact, defeated other forces within the administration.

Yes, the president has blessed it. But it is Powell's imprimatur. And it will be Powell's responsibility at the end of the day as well as that of the president. But the president will then have decisions...

ROSENBLUM: So the president of the United States...

KEYES: ... hold it, the president will then have some decision to make about whether or not to rely once again upon the Euro-Powell approach. And I want to make it clear who is being discredited here. And it's not the entire administration. They have a chance to recover if they want to. But they're going to have to have hand off the ball to someone who has a little better sense about where to carry it, in my opinion.

That's why I used the phrase. And I'll go on using it too, because I think it's fair.

ROSENBLUM: You can. But then you've declared the president of the United States is not commander in chief. I think that is simply not (UNINTELLIGIBLE)...

KEYES: No, I haven't. Now, wait a minute, mark. I haven't declared him not commander-in-chief...

ROSENBLUM: He used the door open...

(CROSSTALK)

KEYES: ... He is right now letting his prestige and that of the administration and the American people ride on a feckless approach being pursued by his secretary of state. And I think we ought to be clear where it's coming from so we can remedy it when it fails.

(CROSSTALK)

GAFFNEY: ... the war on terrorism that the United States is pursuing is at stake here. The president is clearly...

(CROSSTALK)

KEYES: We have got to go. Gentlemen, one second. We have to go. We're going to continue this discussion, though, because this is critical in terms of the future of both our Mid-East policy and I think our larger terrorism policy. So we're going to go on talking about this question of whether or not the Euro-Powell approach, the kind of approach that's being pursued by this mission of Secretary Powell, is in fact going to result in Israel's demise.

You want to stay right there. More coming up.

(COMMERCIAL BREAK)

KEYES: Welcome back to MAKING SENSE.

Coming up later, the Euro-Powell approach to the Mid-East. We're talking about how it will affect Israel and the Palestinians. But what it will mean for America's own war on terror?

Also, a reminder that the chat room is sizzling tonight. T.B. Elections (ph) says: “Sharon was right to react to the seder bomb. But will all this bring peace or plant seeds of hatred in even once moderate Palestinians?”

You can express your opinion. You can join in right now at chat.msnbc.com.

But we are going to continue our discussion now. We focused on the question of whether or not the approach that is being taken, well intentioned though it may not be — and I am not sitting here saying that I think the secretary is out of the region trying to destroy Israel or that the administration is committed to that. No. But people make mistakes.

And in this particular case, those mistakes could result in setting up a situation that leaves the state of Israel without recourse for its survival. A lot depends, it seems to me, it came out in the last discussion on whether or not you can accept the notion that a leadership that has consistently, habitually, without exception manipulated the negotiating process in order to move from stage to stage to stage with violence and terrorism is suddenly going to abandon that agenda when it achieves its greatest success with those same terrorist tactics.

I think that's the question that is hanging over this whole Euro-Powell policy. How can we say that feeding the appetite of the terrorists — let's call them what they are — who dominate the Palestinian movement right now, that feeding that appetite is going to change the results and produce borders that will be tenable for Israel's survival? It doesn't make sense to me.

But joining us now to continue the debate and discussion, Ariel Cohen, an international relations research fellow at the Heritage Foundation, a conservative public policy group based here in Washington. Ian Lustick, a political science professor at the University of Pennsylvania and a former State Department analyst during the Carter administration. And Joseph Nye, former assistant secretary of defense in the Clinton administration, he is currently dean of Harvard University's JFK School of Government and author of “The Paradox of American Power: Why the World's Only Superpower Can't Go It Alone.”

Gentlemen, welcome to MAKING SENSE. And thank you for joining us tonight.

I want to start with Joseph Nye. And looking at the approach and what I am calling the Euro-Powell approach and the commitment to negotiations that continue to act as if Yasser Arafat is the indispensable man, why should we, in fact, believe that this can contribute to a result that is tenable for Israel's security?

JOSEPH NYE, FORMER ASSISTANT SECRETARY OF DEFENSE: Well, I think Powell should start with an absolute guarantee of the security of Israel. The Israelis are not going to be able to bargain politically if they feel their survival is at threat. And I think the Americans have to make clear that that's the bedrock.

But having said that, I think that we have to help them get to a situation where they can get back to where they were at least in August of 2000. And a friend of mine who is head of an Israeli security agency said the best chance we had in Israel for controlling Palestinian terrorism was when we had the security relationship with the Palestinian Authority. It's going to take a good ways to get back to that. But I think that's the only real way to deal with terrorism.

KEYES: But one question that I think is on the table with respect to that very cooperation would be the fact that that whole situation broke down because it didn't seem as if the Palestinians were truly committed to rounding up and suppressing the activities of the most violent elements of the PLO and other elements like the Hamas. Has that changed somehow? I don't see how with the same leaders one can expect the same approaches to produce different results.

NYE: Well, there was a period when Arafat, in fact, did control terrorism. He didn't have complete control of Hamas, but he did put some of the military types of Hamas in jail. I think we're going to need to get to a situation where that's the case.

I don't think Arafat is a very good leader. I don't think he can bring about final peace. But if we can get to a situation where we can control the terrorism, we're going to save Israeli lives and lay a groundwork for other people to start working on a more long-term peace process.

KEYES: Ariel Cohen, does that offer, you think, credible help for this Euro-Powell approach to things?

ARIEL COHEN, INTERNATIONAL RELATIONS RESEARCH FELLOW, HERITAGE FOUNDATION: Not really because we don't have the absolute control of Hamas, Islamic Jihad, Hezbollah, and all these terrorist organizations that Yasser Arafat refuses to control.

These organizations are bound on destroying American influence in the Middle East. They, like Osama bin Laden, want to drive the United States out of the Middle East. Hezbollah was involved in bombing of the Hobart Towers where American servicemen were killed. Other radical Islamic elements killed 253 Marines in Beirut in 1983.

The Yasser Arafat today is in cahoots with Arab regimes and Muslim regimes that support these murderers. He is in cahoots with the Iranians, as was demonstrated by the Korean aid affair when Yasser Arafat brought a shipload of 50 tons of deadly weapons, was trying to smuggle it in. He has an arrangement with Saddam Hussein where Saddam is paying $25,000 to the families of the Palestinians who kill people by blowing themselves up, the homicide-suicide murderers. And these are the leaders — this is the leadership in the Muslim world, Iran and Iraq, that are dead set on destroying American influence and presence in the Middle East.

KEYES: I am listening, and as I listen to do both sides here, at one level I can say that I think what Joseph Nye says has an air of reasonableness about it until I remember, to be quite frank, who we're dealing with. And this is the problem I am continually coming up against because we are not only looking at the situation such as Ariel Cohen describes, but we are also looking at one where, let's say you trust Yasser Arafat, and you reestablish some kind of cooperation, as the Israelis had, as Professor Nye has suggested.

Wouldn't they still be trying secretly to build their base of operations for the next time that Yasser Arafat wants to call on the use of violence and terror in the negotiating process? And wouldn't the Israelis have to keep an eye on what Arafat is doing? And who is going to cooperate with them to prevent that kind of duplicity, which did occur in this case? I don't see how this is going to be tenable. You simply don't have enough trust in this relationship with leaders that have this pattern of behavior.

IAN LUSTICK, PROFESSOR OF POLITICAL SCIENCE, UNIVERSITY OF PENNSYLVANIA: You speak of trust of Yasser Arafat. And I certainly don't trust him. There's not a single politician I do trust. And I think that's the key to understanding this problem.

The Palestinians have no reason to trust Sharon. They had no reason to trust Begin when he manipulated the Camp David negotiations to put thousands and hundreds of thousands of settlers in the West Bank and Gaza...

ROSENBLUM: I would like to remind...

(CROSSTALK)

LUSTICK: ... But neither side can trust the leaders of the others.

(CROSSTALK)

KEYES: Ariel, just a second, please. Ariel, wait a second.

LUSTICK: ... peace with its enemy by choosing the leaders of its enemy. If Jesus Christ himself were the leader of the Palestinians over the past number of years, he could not have done much different, much more than Yasser Arafat.

KEYES: Excuse me.

(CROSSTALK)

KEYES: Wait a minute. Wait a minute. You've stepped on my toes here. I've got to tell you that one of the thing that I was thinking and restraining myself, because I didn't want to interrupt you was how offensive I find that the moral equivalence that you have just outlined. To tell me that, well, you can't trust Sharon because he might put settlements somewhere. And putting settlements in the West Bank, expanding those settlements, that's the same as sending people in to peaceful places to blow up innocent civilians.

The very suggestion that what is at stake in the trust here is the same is absurd. On the one hand, you don't trust Yasser Arafat. Your mother and your children and your innocent civilians and great numbers will die every day and every other day. And, unfortunately, when that is the element of distrust that is involved, the government ought to have a responsibility to protect its people. And you're ignoring that completely.

(CROSSTALK)

ROSENBLUM: I would like to remind Mr. Lustick that the Carter administration was involved in Camp David one when he was part of the Carter administration. At that point, Menachem Begin that he mentioned return to Egypt 100 percent of the land that Israel occupied in a defensive war in '67 in Sinai. Why? Because Menachem Begin wanted peace. And for peace, Israelis gave up 100 percent of the territory.

Israel is in compliance with resolutions of the United Nations 242 and 338 that talks about land for peace, the return, 90 percent of all the territory occupied in '67. And now the Israel were willing and able to make peace with Arafat by Mr. Barak, the former prime minister offering, begging Mr. Arafat, just take 95 of the West Bank or 98 percent of the West Bank. And Yasser Arafat did not provide any counteroffers, turned around and walked away.

(CROSSTALK)

KEYES: Wait, wait. I want to turn to Joseph Nye, who had also some firsthand knowledge here because it does seem to me we have a track record on the part of the Israelis. They make agreements. They have kept agreements with other Arabs.

We also have a track record on the part of Mr. Arafat. He has made agreements. He hasn't kept them at all. I think the symmetry of distrust here is actually a slander against Israel. I'm sorry. But you have been involved to some extent. Do you see that same symmetry?

NYE: I agree with you that Arafat is a failed leader. And the irony is that when Sharon declared him irrelevant and tried to make him irrelevant, he actually rescued him from his own internal decline. Unfortunately, he has created Arafat now as the hero, potential martyr, of the Palestinians, so there's no one else to deal with. What I would like to do is get back to the situation where you have enough stability that we could hope that Arafat will gradually be made irrelevant by Palestinians so that we'll have better interlockers on their side to deal with.

ROSENBLUM: That was the Clinton plan. It didn't work.

NYE: Well...

LUSTICK: I would like to point out that in 1997 and '98 when the serious negotiations were going forward, Arafat and the Palestinians were in a situation in which they could control terror. There were almost no Israelis dying in that period.

What happened is that the infrastructure of peace and goodwill and expectation and hope that was created by Oslo was ripped up by 100,000 settlements, by...

(CROSSTALK)

KEYES: ... Wait, I'm going to have to bring the discussion to an end. Excuse me. Excuse me...

LUSTICK: ... Camp David Swiss cheese (UNINTELLIGIBLE)...

KEYES: We're going to have to bring the discussion to a close, but I'm going to close it out, though, with one last remark because it does seem to me that, in that history, there's one thing being left out. It's not the success of Arafat we're talking about. It's the success of an approach centered on terroristic violence.

That is what has revived Yasser Arafat, not Israel, and to say that Israel shouldn't have defended itself against that terror because it might revive Yasser Arafat, no. His abuse of this tactic and the rewarding of it tactic by forces outside of the region — that's what has rehabilitated him, in my opinion. Thanks.

Next, after this very lively discussion for which I thank the participants —

We really appreciate your joining us today.

Next, if the Euro-Powell approach means the end of Israel, will it also mean the end of the credibility of America in the larger war on terrorism?

You're watching America's news channel, MSNBC.

(COMMERCIAL BREAK)

KEYES: Welcome back to MAKING SENSE. I'm Alan Keyes.

We have been talking about how the Euro-Powell approach to the Middle East will affect the Middle East parties, but how's it going to affect America's own war on terror? I think this op ed by a former defense official that caught my eye today — it has a first paragraph that says it all.

“After Secretary of State Colin Powell's mission to the Middle East fails,” the author writes, “as it is now in the process of doing, all our friends and enemies will analyze it to see what has been accomplished and what has been learned. The principal accomplishment will be the rehabilitation of Yasser Arafat. The lesson learned will be that George Bush's stand against terrorism everywhere can no longer be taken seriously.”

That piece was written by Jed Babbin, a deputy undersecretary of defense in the Bush 41 administration. He joins us now.

Also with us, Charles Lipson, a political science professor at the University of Chicago and director of PIPES, the Program on International Politics, Economics, and Security.

Gentlemen, welcome to MAKING SENSE.

I must say that I thought that Jed Babbin's words there pretty well summarized the problem that's going to be faced right now, and that problem has to do with an inability to apply with any consistency the understanding that was articulated by G.W. Bush when he first launched the war on terror.

Jed Babbin, I thought your piece made a very cogent point and a difficult one on the look at how we are backing away from that formulation in one of the critical areas where terrorism is being abused, which is the Middle East. What effect do you think this is going to have on the larger situation of America's credibility in the war on terror?

JED BABBIN, SYNDICATED COLUMNIST: I think it's going to pretty much destroy it, Alan.

And thank you for the kind words.

The fact of the matter is the Israelis had made great progress in isolating Mr. Arafat, in cutting him off and making preparations to exile him. There were legitimate discussions going on around the world as to who Arafat's successor would be.

By meeting with him, Mr. Powell is making a tremendous mistake, one of historic proportions. He restores Arafat to the status of a leader, which he is not, and puts him back in the position where the Israelis, number one, can't exile him, and, number two, are going to have to talk to him. In essence, he's putting the process of peace back many, many years.

As long as Arafat is alive and there, he — Mr. Powell's actions are either going to seal Mr. Arafat's death or they are simply going to set back the process of peace many years.

KEYES: Well, one of the problems I have had — and I wonder if you'd address this for me — is that if Yasser Arafat and his abuse of terrorism in this process is somehow not sufficient to put him in the Osama bin Laden category, in terms of his terrorist activities, then why won't we take Osama bin Laden's excuse that, in point of fact, he was operating with the same cause and with the same objective as Yasser Arafat, to stop Israel's killing of Arabs and to end America's support for Israel?

If it's justifiable for Arafat terrorists to be included in a process of peace and negotiation, shouldn't we open channels of communication to Osama bin Laden?

BABBIN: Well, I think that's the logical conclusion of Mr. Powell's statements. Last week, he was saying that because Mr. Arafat had participated in the Mitchell process, had participated or begun to participate in the Tenet process, that he was not a terrorist. That's absurd.

If you say to Mr. Bin Laden, “Hey, come on in and start talking with us and you'll no longer be a terrorist,” that's where Mr. Powell's logic leads us. It's just not rational.

KEYES: Now, Charles Lipson, I look at this, and, frankly, I think that Jed Babbin is entirely correct, and I don't see what we're going to have left in the way of a credible claim that we, in fact, are against terrorism, not just those against those who perpetrated this particular act of terrorism against the United States. Aren't we giving away the game here?

CHARLES LIPSON, UNIVERSITY OF CHICAGO: Well, I think that we made a real mistake here, but the pro — the clarity of George Bush's statement against terrorism in the aftermath of 9/11, the fact that he saw it so clearly as the major challenge, both to the United States and to the civilized world generally, was, I thought, an extraordinary high point in his presidency, and I think that the problem that the Bush administration now faces is that it's really speaking with two voices. It can't really figure out whether it wants to isolate terrorists or negotiate with some of them.

KEYES: Well, if it negotiates, though, with a terrorist like Yasser Arafat on the plea that somehow or another this is part of a process and so forth and so on, I can see with Iraq, with North Korea, with Iran, with many other states that they have identified as part of the axis of evil, there are European players and the Communist Chinese and others who might very well plead that these people are part of some process they consider valuable, and that, therefore, the world shouldn't band against them. I think we're already seeing that with Iraq.

Don't we have to fear that this will undermine all our efforts to get a global opposition to the terrorist infrastructure?

BABBIN: Well, it absolutely does.

LIPSON: You've got a very...

BABBIN: I'm sorry.

LIPSON: You haven't heard much about the axis of evil, have you, recently because the Europeans were very upset about it and a number of Arab states were very upset about it, Alan. So I think that you're putting your finger on a very important point.

Look, the real problem in dealing with Arafat is that he is simultaneously actively involved in not just not putting down terrorism, but actually sponsoring it, supporting terrorism on the one hand, and, on the other, he really does have a huge political base among the Palestinians, and the efforts by the Israelis to isolate him have really, in one sense, backfired.

They've strengthened his political support, and unlike what Sharon and others had hoped, they really have not been able to make him irrelevant. So he is, on the one hand, a terrorist...

KEYES: Well...

LIPSON: ... and, on the other hand, he is not politically irrelevant.

KEYES: Very quickly, would he have gotten away with this if the Europeans and now unfortunately the U.S. through Powell hadn't legitimized the tactic that he was following? I mean, essentially, didn't we establish his — reestablish his credibility even amongst his own people?

LIPSON: Well, that's exactly the right point, Alan. I mean, the point is that we are not dealing with a legitimate leader of any political group. The Palestinians have not held an election in many, many years. Arafat is only legitimate so long as the TV cameras point at him.

The Israelis were taking away his political power simply by isolating him from communication. Now we have Mr. Powell saying yesterday they ought to ease up on his ability to communicate with other Palestinian leaders, i.e. commence...

KEYES: Gentlemen...

LIPSON: ... recommence his command of the terrorist network.

KEYES: ... stay with us.

LIPSON: We just can't do it that way.

KEYES: We're up against a break. Stay with us.

Coming up, I'm going to let us take look at another situation that I think is related to this kind of illogic that, unfortunately, has more than crept into the Bush administration's policy with respect to terrorism. This one in the Philippines, and I think it shows the direct effect of this Euro-Powell mentality on our war on terror.

And later, my outrage of the day, which will be, in essence, about the same situation and how we're undermining our approach to terrorism with this setback, I think, in the Philippines.

We'll be right back.

(COMMERCIAL BREAK)

KEYES: We're talking about the effect that Euro-Powell diplomacy may have on America's war on terror with Jed Babbin and Charles Lipson.

Now, gentlemen, I want you to take a look at something for me. It's a little piece about the situation in the Philippines where there has been an American couple, missionaries, that have been held captive by guerrillas. There's a story out now that apparently these folks who are held hostage for nearly a year by guerrillas in the Philippines are the subject of a mission for their rescue and why finding them now may be harder than ever.

Here's MSNBC's Jim Miklaszewski.

(BEGIN VIDEOTAPE)

JIM MIKLASZEWSKI, NBC CORRESPONDENT (voice-over): In this most recent hostage video, Martin and Gracia Burnham appear thin and frail, held for 10 months by Abu Sayyaf, a Philippines terrorist group with ties to Osama bin Laden.

MARTIN BERNHAM, HOSTAGE: Both U.S. citizens were taken as captives on May 27th, 2001.

MIKLASZEWSKI: Sources now report a complex and highly secret U.S. government mission to free the two missionaries has so far failed. In an operation planned and directed by U.S. authorities, a $300,000 ransom in private money is handed to do a middleman in the Philippines about a month ago.

CHRISTOPHER WHITCOMB, FORMER FBI AGENT: Ransom is a way to bring the hostage takers to the table and offer them something to try and set up the possibility of a hostage release or to set up the possibility of a hostage rescue.

MIKLASZEWSKI: But for the past several weeks, there's been no sign of the money, the middleman, or any firm indication the Burnhams are about to be released.

(on camera): The ransom plan is part of a new U.S. policy that says the government will do everything it can to free American hostages, but even if ransom is paid, the U.S. government will also do everything it can to hunt down the hostage takers.

(voice-over): That effort is already underway. One hundred sixty U.S. special forces are now training and advising the Philippines military to hunt down and dismantle the Abu Sayyaf.

The Pentagon is also considering plans to allow U.S. commandos to actually accompany Philippines troops on the jungle raids, increasing the chance U.S. forces could be drawn into combat.

But the latest news on the Burnhams is not good. Intelligence reports indicate the couple has now been separated, making any rescue attempt even more difficult.

WHITCOMB: Because you can't go after one without getting the other, without directly jeopardizing the lives of either one.

MIKLASZEWSKI: U.S. officials still hold out hope for the Burnhams, but any chance for an early release now appears gone.

Jim Miklaszewski, NBC News, the Pentagon.

(END VIDEOTAPE)

KEYES: Gentlemen, I have a simple question which I think applies to the Middle East and in this situation, though the implications of the latter are pretty awful and the money was going to an al Qaeda network.

Are we at war or at negotiation with these terrorist? Are we in a situation where negotiation is now going to usurp and replace war, even in the case of ransom and hostage taking where you open a marketplace in human flesh?

Jed Babbin.

BABBIN: I am just flabbergasted by this whole thing, Alan. I thought we had a policy dating back to the Nixon administration where we had agreed that America does not pay ransom for hostages. We will do our best to negotiate the release of any people taken. However, we will never bargain with terrorism.

Frankly, this goes along with what Mr. Powell is doing. If we're going to start paying off the Abu Sayyaf, whose leadership actually fought with bin Laden against the Soviets in Afghanistan — that's how closely tied these people were. These guys are bad guys. We don't pay ransom. Until now?

I am shocked beyond belief.

KEYES: Now, Charles Lipson, part of my problem is that, one, we have the coinage of dollars. In the Middle East, we have the coinage of diplomatic concession. But, in both cases, aren't we opening a marketplace with the terrorists?

LIPSON: Well, I think that — I completely agree with you and with Jed. I mean, I think paying ransom is a disastrous policy, and the reason it's a disastrous policy is that it encourages more hostage-taking. It's doubly bad when you pay it to the kind of thugs that have taken these prisoners.

Generally speaking, you want, if you can, to negotiate with other groups if you can find reliable bargains that will hold with them, but, in the case of groups that have just endless aims, the widest possible aims, they want to exterminate western values, they want to throw Israel off the map, they want to push America back, to negotiate with them really is appeasement, and it's a disastrous problem.

And let me say one more thing. This is part of the problem in Israel, that we're at the appoint where reasonable concessions that the Israelis could have made in a negotiated bargain would now be seen as giving in to terrorists, and that would be an awful mistake.

KEYES: Now, Jed Babbin, in a way, I think Charles just made a point I wanted to follow up on in terms of the equation here, money and diplomatic concession, because, in point of fact, a lot of people say they're outraged paying money for hostages, but, in a sense, hasn't Yasser Arafat taken the peace process hostage, and isn't he demanding in exchange for releasing those hostages more and more in the way of diplomatic concession? Aren't the circumstances exactly parallel?

BABBIN: Well, I think they are. They're clearly logically parallel and morally parallel. I don't think we can endorse Mr. Arafat any more than we can pay ransom for the Burnhams.

I think at this point, Alan, things have become so muddled. With this report, I think our entire stance on terrorism is so much in doubt. I think we, frankly, need to hear directly from the president just what he's thinking.

KEYES: Yes. I...

BABBIN: What is he thinking when he's...

LIPSON: Alan...

KEYES: Gentlemen, we are up against a break here. I have got to let you go, but I really appreciate both of you for coming on and sharing your insights with us.

Next, I am going to have a few thoughts of my own on this Burnham episode and what it tells us about the disastrous effects of the Euro-Powell approach in terms of our war on terror. I think it's outrageous, and it is my outrage of the day. So you stay with us. We'll be right back after this.

(COMMERCIAL BREAK)

KEYES: Now time for my outrage of the day.

You heard in my last segment about the U.S. ransom payment, and you said, “Oh, well, it was private money.” No, it was under the sponsorship of U.S. authority, which is all that matters.

And here again it appears that it was the State Department under Colin Powell's leadership fighting against other elements of the U.S. government taking the lead in this kind of a ransom payment.

We seem to have, coming out of Secretary Powell and the State Department, an approach to terrorism that says negotiate, pay the price, open a marketplace in human flesh, open a marketplace of diplomatic concession.

Once you have taught terrorists that terrorism works, where do you think it will end? How safe do you think you're going to be if that's the impression our government leaves all over the world? And that's what's happening.

That's my sense of it. Thanks. “THE NEWS WITH BRIAN WILLIAMS” is up next. See you on Monday.