Major World Powers and the Middle East

Washington, D.C.


Shibley Telhami Anwar Sadat Professor for Peace and Development, University of Maryland; Non-Resident Senior Fellow at the Saban Center, Brookings Institution

Robert E. Hunter Senior Adviser, RAND Corporation; Chairman, Council for a Community of Democracies; Former U.S. Ambassador to NATO (1993-98)

Mark N. Katz Professor of Government and Politics, George Mason University; author, Russia and Arabia: Soviet Foreign Policy toward the Arabian Peninsula

Chas W. Freeman, Jr. Chairman, Projects International, Inc; former president, Middle East Policy Council; Former Assistant Secretary of Defense and U.S. Ambassador to Saudi Arabia


Thomas R. Mattair
Director of Research, MEPC; author, Global Security Watch - Iran: A Reference Handbook

U.S. Capitol Building
Room HC-6
Washington, DC
Friday, October 23, 2009


FRANK ANDERSON: Good morning, everyone. I think the probability is that there are no more stragglers in the adventure course that was established between the visitors' center and here. I want to welcome you all. I'm Frank Anderson; I'm the new president of the Middle East Policy Council.

Since this is the first time I'm going to be speaking - actually, this is the first time I'm speaking in public as the president of the Middle East Policy Council. I'll be here to tell you who we are. I see some friends of our programs in the audience, but in case there are any others who don't know us, the Middle East Policy Council was founded in 1981 as an independent, nonprofit, nonpartisan educational institution to foster public discussion of the political, economic, cultural and security issues that affect U.S. policy in the Middle East.

We have striven particularly to be independent - to the extent that we have a point of view about various conflicts and disputes in the region, you can count on us to come down on the American side.

We've pursued this through a triad of programs. The first is the Middle East Policy Journal. Dr. Katz has published in it nine times - Dr. Hunter - everyone here is published in it! (Laughter.)

AMB. FREEMAN: Except me. I've never published.

MR. ANDERSON: Well, we have Ambassador Freeman's speeches. And the 101st journal, or issue of the journal, hit the streets. It has. And it's become a respected source of information and analysis from a diverse range of scholars and practitioners of Middle East policy. Anne Joyce, who's the journal editor and our vice president, is not here today but Zach Vono is actually at this moment charging through the streets to get a copy of Ambassador Freeman's remarks.

AMB. FREEMAN: Which fell out of my pocket somewhere between the taxi and here - (laughter) - and are being read by some perplexed guard who's wondering who the owner is. (Laughter.)

MR. ANDERSON: The second leg in our stool is our educational outreach program. Barbara Petzen, who's not here, directs a - she travels around the country conducting seminars that provide materials, curricular guidance, for teacher workshops - they enable teachers, and we've done it for thousands of teachers now, reaching hundreds of thousands of students, to enable them to engage and excite kids to study the history, the culture, the religion and politics of the region.

Barbara's most recent accomplishment - and there's some data on it on the table outside - is the launch of our Web site. It's an interactive teaching tool called, and I encourage you to take a look at that.

We're here this morning to participate in the third leg of the stool. This is the 58th of our series of Capitol Hill conferences on U.S. Mideast policy. Dr. Tom Mattair, our moderator, has been associated with the council for over 20 years. And I'm going to take credit for this - I recently recalled him to full-time service as our director of research again.

And before I turn it over to Tom to introduce the speakers, I want to point out to everyone here the debt that I owe to my predecessors in this job. Ambassador Freeman came to the council over 12 years ago expecting it not to be a long and onerous job. And they held onto him for a very long time, during which he used experience, exceptional, maybe unique, intellectual power, and remarkable political courage to carve out a space in this dialogue on U.S. policy that, I frankly - it's going to be a major challenge to fill any part of it.

Chas's contributions, you probably know, were preceded by those of Sen. George McGovern, who followed his heroism as a young bomber pilot with decades of heroic efforts to advance the cause of peace and American interests in the world. One of those decades was serving as president of the Middle East Policy Council.

And all of this was started by a visionary Foreign Service officer, George Naifeh, who just wouldn't quit. He started this thing from donors, and would not abandon his vision until it was accomplished. This collection of diplomats and politicians - and for what it's worth, my government service was in the Central Intelligence Agency, so I guess, count me as another odd one - was interspersed by retired generals who occasionally gave us a little firmer management and straightened things out in between, and that would be Lt. Gen. Charlie Brown and Maj. Gen. Bill Nash.

I'm standing on the shoulders of greater men; I appreciate that and now we're going to hear smarter men have the discussion of world powers and their interests and activities in the Middle East. Thank you very much. (Applause.)

THOMAS MATTAIR: Welcome to all of you. We thought this was an interesting subject because the United States is about to make some very important decisions. And before it does, it should know what the interests and objectives of other major world powers are, and how much cooperation we can have and how many constraints we're going to face as we do that.

So we will begin today with someone to speak about United States interests in the Middle East. For that I've turned to someone I've known since graduate school, Dr. Shibley Telhami, who has taught at many of the country's best universities, is the Anwar Sadat Chair for Peace and Development at the University of Maryland, a non-resident senior scholar at the Brookings Institution, and the author of a lot of important literature in our field, including a book called The Stakes: America and the Middle East, which was named by Foreign Affairs as one of the five best books of 2002. He is a highly-sought-after commentator and advisor, and, so Shibley, welcome. (Applause.)

SHIBLEY TELHAMI: Thanks so much, Tom. Tom, as he has mentioned, is an old friend; someone that I enjoyed associating with in graduate school; and also is an expert, really, on the very subject we're talking about. He could have been one of the speakers here today.

When we look at the hand the Obama administration inherited in the Middle East, it's a very tough hand. The President came to office with two challenging wars, with an economy that is going through the most important crisis it has witnessed in a half a century, and, on day one, he said, "I want to deal with the Arab-Israeli issue." There has not been a president coming into office saying he wants to tackle the Arab-Israeli issue in his first term.

Presidents are told to avoid it if you can until there's a crisis, or advisors try to tell a president, maybe it's important, you need to pay attention to it. But they see it as a huge headache, and Obama certainly had a lot of excuses not to deal with it because he does have a very crowded agenda. And yet, this president decided to tackle it on day one, and declared the pursuit of Arab-Israeli peace as an American national interest. I think it's very important, to look at why.

I want to do something other than talk about the immediate strategic choices. I would like instead to put it in some historical perspective, about how tough the hand is, even in terms of choices. We're commemorating the 30th anniversary this year of the Camp David accords between Egypt and Israel mediated by the United States. And I think it's very interesting to reflect on the contrasts, the choices, and the challenges that the U.S. faces, and how America dealt with other powers in relation to the Middle East.

I wrote a book on the first Camp David Accords- Egypt's agreements with Israel. And one of my arguments in that book when I looked at the Camp David accords closely was that Israel and Egypt actually went to Camp David, Maryland, first and foremost, with the objective of not getting an agreement as much as building a closer strategic relationship with the U.S. at the expense of the other. Carter understood that and used this insight with both parties to pressure them to, in the end, reach an agreement. There was actually a genuine strategic competition between Israel and Egypt for the relationship with the U.S. That is something that we don't have now.

Part of that, of course, had to do with the fact that during that period we had the Cold War and it was in the context of Soviet-American competition in the Middle East. The other part was that Egypt itself had military weight and had fought wars with Israel and, in fact, was arguably the only Arab party that had a credible fighting force vis-à-vis Israel. And so, in that sense, it was a catalyst; there was a balance of power locally, but there was also the global balance of power, both of which pushed in to create a different dynamic. And when you look also at American strategy in the Gulf - although that was the year of the year of the Iranian revolution -it wasn't reliance on the presence of large, American forces, although there was an American presence. It was much more reliant on a balance of power between Iran and Iraq during that period. So you had a different game. The third point I want to make about this particular episode at Camp David is something that we forget, the process that ended up leading to American involvement, and ultimately to increased American influence in the region from that point.

That point is the Arab-Israeli issue. That, in the end, is what drove the calculation on the Arab stage - what drove even the decline of Soviet influence in the Middle East before the decline of the Soviet Union as a superpower, before the end of the Cold War. The Arab-Israeli issue, starting with the 1973 War, the Arab World embargo that pushed the powers to intervene, particularly, the U.S., ultimately led to a different kind of process for American involvement that generated an agreement that we now take for granted. It had anchored American policy in the Middle East and really began the expansion of American interest there even before the end of the Cold War. When you look at that period - the expansion of American influence dramatically increased after the end of the Cold War because the end of the Cold War almost coincided with the Iraqi invasion of Kuwait.

Then came the first Gulf War which the U.S. won, decisively, and seemed to have won internationally, and led to the presence of major American forces in the Middle East, in the Gulf region in particular. And with that, we have the 1990s, which might be called the decade of Pax Americana, or unparalleled American power and influence in the Middle East with other powers in the world not having considerable influence in that region, including Russia and China and even, arguably, Western Europe, an era of American influence.

That was the 1990s. In the past decade, we've had another transformation and we find ourselves in a really changed picture. Obviously, much of it is a direct function of the Iraq war. The Iraq war has done two things. One, it has clearly changed the balance of power in the Gulf. We no longer can seriously contemplate a strategy that is primarily based on an Iraq-Iran balance of power. That's just not in the cards.

Even if Iraq gets it together, as I hope it does, it is hard to envision Iraq as a serious military power in any foreseeable future in a manner that would be instrumental for a policy of balance in the Gulf. And that really calls for a different kind of strategy. So what might the strategy be? Clearly, a challenging strategy, for now, heavily reliant on the presence of American forces. And whether or not that's sustainable, given the resentment of the large American presence by majorities of the Arab public, requires an a serious assessment.

The second thing that came out of the Iraq war is that the influence - the aura that the U.S. had in the 1990s has changed dramatically. It's changed dramatically not only because the American projection of power, as it came out of 1991 war to accept an admirable victory and dominance, has been jeopardized by the challenges in Iraq and Afghanistan. We've had, really, a transformation of the way the region looks at America, particularly after the Iraq war, in part because we have somehow succeeded in the past eight years, to simultaneously threaten governments and people at the same time. You know, if you look back - to the 1990s, or back in 1980s, you can say that Arab public opinion was somewhat angry with the U.S. always, over the Arab-Israeli issue, to varying degrees, not quite the extent to which it has become over the past decade, but certainly, generally very angry, particularly on the issue of the Arab-Israeli conflict.

But governments in the region have seen themselves as having a stake in American success in the region. And I think what the Iraq war and the initial rejection of "regime change" theory had generated concerns among many regimes that are traditionally at odds with the U.S. In some ways, you had the oddity of the regime and publics who are at odds with each other, almost both rooting against an American success.

That is really amazing, actually, how we can create an environment where the gap between publics and governments in the Middle East is widening on foreign policy and yet, we have alienated governments, alienated publics, both of which are not really rooting for an American success. That is a big challenge. And that challenge, I think, has opened up a new possibility for aspiring powers.

First, even at the public level, if you look at the past decade, remarkably, public opinion consistently showed that France was the preferred power of all major powers, in a large part, because it was shown that Jacques Chirac during 2003, 2004, was the named the most popular leader in my polls in the Arab world. China has been rising as a preferred power.

So clearly, the U.S. doesn't have that status and even worse, from the American point of view, at the level of public opinion, when you have publics in the six countries where I poll name the two countries that are most threatening to you, personally, the vast majority of people in every country - actually over 70 percent, including in the 2009 poll, named Israel first and the United States second. Even Iran was a very distant third on that list. Only 13 percent identified Iran in the 2009 poll as one of the two most threatening states. So you can see the challenges of these - at the level of public opinion at a time when we have empowerment of non-state organizations, including militant organizations in the Middle East.

In that environment, you have some new challenges coming from not just Europe, but clearly from Russia and China. We know, first of all, of China's expanding interest in the world and clearly, they are following a very quiet strategy of investment and cultivation of relations of the oil-producing states because they see themselves as needing that down the road.

And we see Russia as being assertive in its foreign policy and we see it as being assertive also in the Middle East, clearly in trying to cultivate different kinds of relations across the board but one of the most obvious cases is the case of Iran's nuclear program, in which it's playing a key and central role and obviously now, it's made itself an indispensable player in however this thing is solved.

And here's the dilemma. Whereas the choices that are facing the U.S. are all difficult, whether it's in the Gulf or in Iraq or in Iran or on Arab-Israeli issue, a power like Russia-- which is obviously not in a position to directly compete with the U.S. in the Middle East and has some common interests with the US, but is extending its influence rapidly--has a win-win situation on issues like Iran, because if you have a nuclear deal in which they are the key player and the uranium's processed in Russia and they're cultivating commercial and political ties with Iran, they stand to win. If it fails and there is a military confrontation, either between Israel and Iran or the U.S. and Iran, they stand to win big because Iran will then embrace Russia and suddenly the next morning, Russia will wake up with oil prices going through the roof and obviously, they'll pocket the income from the oil prices.

So for them, in a way, it's a win-win situation, and it's very hard for them to lose. It is a very different set of choices than the one that the U.S. faces. And when you analyze all of that and you look at the challenges that the U.S. faces and there are many, from pulling out of Iraq while maintaining Iraq as a unified, stable state, dealing with the Iranian issue, to addressing the Arab-Israeli issue, all the polls and all the history that I outlined, it is the case that in much of what happens in the region, at the public level but also at the government level, the Arab-Israeli issue remains a central prism through which Arabs see the United States.

It's very difficult for the U.S. to conduct an effective policy in the region while there is an intense conflict between Israel and Arab states. And we have taken for granted the 30-year old Egyptian-U.S. and the Egyptian-Israeli treaty, which has been an anchor of American policy, really, for the past three decades.

I think it's been a stable treaty. It's likely to be maintained. But Egypt will also be going through a transition and I think that there's a lot of discomfort within Egypt about where the state is strategically. And we are on the verge of some interesting dynamics in the region.

If we look at public opinion polls, almost all the polls consistently show, for the past seven years, that most Arabs see America first and foremost through the Arab-Israeli issue. And last year, when I was in the region lecturing - in places like Saudi Arabia and Egypt, people were fascinated by our elections, they wanted to know more about Barack Obama and they wanted to know more about Hillary Clinton and - John McCain.

The first question was not what are they going to do about democracy, or what do they stand for on global issues. The first question always was: what is their position on the Arab-Israeli conflict? That is something that is a driving force. I think in many ways, the President understood that from day one. He clearly decided that he wants to deal with it.

There's no question that, for this administration, the Pursuit of Arab-Israeli peace has been connected to American credibility beyond the Arab-Israeli arena, particularly in the Arab and Muslim world but even beyond the Arab and Muslim world. The Arab-Israeli issue is important for American interests in the Middle East and beyond.

This administration should be commended for trying to resolve it. We're obviously in a very difficult place right now and I don't think the administration thought it would be here at this point, but I think there is going to be a lot of testing.

Just one final point that I want to make pertaining to the administration policy on Arab-Israeli issues, specifically. I think one cannot fault it for assuming that a deal was possible, and to try to work with both the Palestinian authority and the Israeli government. You can't start an effort assuming that one party or the other is not capable of an agreement. That's not a way to conduct diplomacy. So you have to go through an exercise of testing and giving the benefit of the doubt. But I think the time is coming very soon when an assessment has to be made of the intentions of the parties, the prospects of a deal, and the different approaches that are available to American foreign policy.

Thank you very much. (Applause.)

THOMAS MATTAIR: Thank you, Shibley. I note in particular your point that the resolution of the Arab-Israeli conflict is in the national interest of the United States. And I'd like to explore that in the Q&A session. If you turn to the back of your invitation, you'll see detailed bios for our speakers and for the sake of time, I will not repeat everything.

But our next speaker is going to speak about European interests in the Middle East and that is Ambassador Robert Hunter, who is now a senior advisor for the RAND Corporation, chairman of the Council for Community of Democracies, and a senior consultant to Lockheed Martin. He served as the United States ambassador to NATO under President Clinton and that was an important reason for asking him to come -- because of his knowledge of the area - his first-hand knowledge of the area.

And he has also served other presidents, mainly President Carter on the National Security Council. He was actually the principal author of the Carter Doctrine for the Persian Gulf. He has also served - he's also been on the staffs of Senator Edward Kennedy, Vice President Hubert Humphrey and so many other things that I'll ask you to read the rest of the bio since we don't have all morning to talk about Dr. Hunter.

ROBERT HUNTER: Tom, thank you very much. It's an honor to be here with you and the folks in the audience. I see a number of people out there who ought to be sitting up here doing the talking. And with this extraordinary group, panel, I've just got to say to Shibley, I hope you know what you were doing this morning because now you're going to have to take over negotiating between the Israelis and the Palestinians. (Laughter.)

I say that because if Chas had gone first, were giving the talk, or our good friend over here from George Mason - but not me. I worked on this issue for 42 years now, Arab-Israeli. And some day I've got to start getting it right. I got into it because of my reading of the Sermon on the Mount: Blessed are the peacemakers for they shall never be unemployed. (Laughter.) It's also great to be in this building. I thought I was coming to the U.S. Capitol until we went underground.

I go back to the day when it was possible just to park your car in front of the Congress, walk up the steps there and go into the Rotunda. Times have changed, in part because of the Middle East. Historically, if you're interested, there is a tunnel right outside the door here. That's the one on April the 12th, 1945, when Harry Truman was having a drink with Sam Rayburn, the speaker, he got a call to get the hell back to his office; he ran through that tunnel to get to his Senate office to discover he was president of the United States.

So maybe his ghost is still going through there. We started off with Arab-Israeli - I'm going to argue that it is now a derivative issue rather than a central, strategic issue for the United States, derivative in the sense that it's important to get on with it because of the efforts and support we need from others in order to do other matters that I would argue are of greater strategic significance, namely those areas where the United States is now fighting two wars and where the security and stability of a lot of things we care about in this broader region are going to be affected.

We supported Arab-Israeli peacemaking during the Cold War, not just because of our concern for Israel, concern for peace in general, but also because of the role that the Arab-Israeli conflict played in the Cold War -- and that's between us and the Soviet Union. The risk that there could be a conflict between Israel and its neighbors that could escalate to a confrontation between the United States and the Soviet Union or worse, which we saw at its most extreme in the Yom Kippur War in 1973.

That dramatically changed with the Egypt-Israel peace treaty, which took Egypt out of the strategic and the military balance and dropped the risk of a war between Israel and its Arab neighbors -- except by utter accident or, as we saw in the Lebanon war, when it took Israel's initiative -- virtually to zero, and has dropped the chances of a U.S.-Soviet confrontation virtually to zero. Between then and 9/11, prosecuting Arab-Israeli peace, as presidents did, was essentially a discretionary act, derivative act, that is, to try, one, to continue to build security for Israel, but also to demonstrate to Arabs and to Europeans that we were taking something serious that they took serious in regard to responding to us on other things that mattered.

9/11 changed that and dramatically increased the requirement, in my judgment, for the United States to be able to build support elsewhere in order to do what we needed of greater strategic significance.

Whether what happened on 9/11 and with terrorism afterwards has something to do with the Arab-Israeli conflict, we could debate all day. In terms of 9/11 itself, I think the case -- and we can argue this, Chas Freeman and I, I don't think that was a serious issue -- was that Osama bin Laden, et cetera, had a great time exploiting this issue, but I don't think it was central in terms of direction or motivation.

And for us to try to do something about Arab-Israeli peace can indeed help condition the circumstances within which terrorists plant their seeds, but it's not something that we should therefore say, okay, we now have to sell-out Israel or take heroic steps that might otherwise go against our national interests. And I just wanted to say that at the outset.

Secondly, I think it's very important for the United States to get over the habit of seeing the bits and pieces of the Middle East as though each one was an individual case; it's all part of the same set of issues from the Levant and maybe even farther west. You can go perhaps as far as Algeria or even Mauritania if you want to look at NATO's relationships with these countries all the way up to the Hindu Kush and maybe beyond. There are different aspects of it - but they have to be seen together - the great spiritual, "The leg bone connected to the thigh bone, now hear the word of the Lord."

The problem is we tend to look at them as individuals but they aren't; they are together. And this administration, like previous administrations, in my judgment, still hasn't gotten it strategically correct in terms of having a focus that will get that policy with the interactions that are required. Third, I think we have to recognize that this area of the Middle East in which we are engaged, while important to the United States, for reasons I don't think I need to repeat to anyone here, is only one issue that we're facing in the outside world.

And, in fact, it may not be the most consequential for the long term. Yes, if something really goes wrong, if you had a weapon of mass destruction in the hands of someone out there that might actually be predisposed to use it. If there were threats to the flow of oil, if there were threats to Israel, if there were threats to the capacity of Westerners to operate in the area, yes, if there were a risk of death, a major wave of terrorism that was exportable, yes.

If I had to do a hierarchy of what is really of interest and concern in the world - and it's not necessarily a timeline - I'd start with global warming; I'd say the global economy; I would say dealing with China, with Russia, India and several other factors. And in fact, we pay - I believe - a significant opportunity cost for our preoccupation in the Middle East. And I think it's time we started looking for a way in which we can fulfill our interests in that region, some on our own and some with others, to a degree we haven't done in the past, in part so that it will be at less risk and at less cost in both blood and treasure.

And, also, related to this, so that our engagements in the Middle East for the long term can gain the support of the American people. One thing we are always saying, we're fighting two wars now: one in Iraq, which was one of the great follies of American history, the other in Afghanistan, which derived from a great hurt as a nation we suffered on 9/11. Whether, in retrospect, invading Afghanistan was the right thing to do, well, we can debate that.

Whether we should have driven that to closure rather than going into Iraq - closure in terms of dealing with al-Qaida, in particular - I think is almost indisputable that the diversion into Iraq was a strategic diversion from our central purposes. And what we should be doing in Afghanistan today, I'm not going to address because frankly, I don't have an answer. I think that this is an issue that does not have any good choices at this point.

We do have to weigh, quite significantly, what are our real interests and what we really have to achieve in what we now call Af-Pak - I love that, we always have an acronym for everything -- which also ties in India, et cetera, et cetera. As opposed to those things we're doing out of inertia. One of the worst things this society has ever faced when they get into conflict is finding a way to reverse course when they get to the point of deciding, if we do in this case, that it's not necessarily the thing in their interest they should do.

Clausewitz, who was the person who probably was the seal of the strategists, said that societies have a tendency to escalate their political goals in order to justify casualties already taken. We have to think very seriously about that. Now, I'm not going to recommend anything in particular.

Now, one of the things we have to face is that we have to get all of this right for a variety of reasons, including America's reputation. We were able to have an outcome in Vietnam that we did 40 years ago and, frankly, except for the 58,000 Americans who paid with their lives and a lot of other people who suffered during that conflict, it didn't have that much strategic impact on us because we were doing right the other things we had to do and were perceived to be doing right the other things we had to do.

The great brilliance of Richard Nixon going to China was to give us a way of disengaging from Vietnam without paying a penalty in the central framework, which was the prosecution of the Cold War.

What's going on in the Middle East today is, at least in the short-term, the central front. And, therefore, what the United States does in particular with regard to Iraq and Afghanistan will be perceived in terms of the capacity of the United States to have staying power, to think things through clearly and the like. Madeleine Albright is often pilloried for a statement she made: She said America is the indispensable power. Well, one doesn't like to get into hubris, but people do look to us to do things effectively in the outside world.

A major reason for prosecuting the Arab-Israeli conflict now is precisely because - leaving aside the concern of Arab states, et cetera, to folks more knowledgeable than I - but to deal with the European dimension. It was no accident that four days before the war in Iraq the president of the United States spoke at AEI to a great extent about Arab-Israeli peacemaking.

And in the Azores meeting with Tony Blair and some others he focused, to a great extent, on that - why? Because Tony Blair needed that, because he needed a sense that somehow the United States was not going to neglect something, because it matters in his society. And for many Europeans, it is necessary for the United States to prosecute Arab-Israeli peacemaking because of the incredible influx of Muslim migrants - many from North Africa, fewer from the Maghreb or the Mashriq. But still, because of concerns about the tie-in there.

Now, with regard to the Europeans, we now face, in my judgment, a very fundamental concern with regard to the future of NATO, which we're facing right now. Despite the idea that we're having this new strategic concept that NATO is going to have for the Lisbon summit next year, I think that's not going to add up to very much unless we get the Middle East right - and particularly getting Afghanistan right. It's sort of the greater Middle East, too, and Southwest Asia.

And here we have a difference of views between ourselves and the allies in terms of focus. I'm going to overgeneralize now. Most of the allies in Europe want us to be riveted as a European power and dealing with the future of Russia - underscored by what happened with Georgia last year, by energy, cyber security, still the Balkans. They want to know that the United States will fulfill the pledges we made in the 1990s after the Cold War as a European power.

But for us, however, the strategic focus has now moved onward. We had an undersecretary of state who said, a couple of years ago, the United States' interest in Europe is no longer in Europe; it is with the Europeans elsewhere. She should never have said that; it just made a lot of people upset, but there was a lot of truth to it. And we, to see the value of our relationship with NATO, expect our allies to be helpful to us in the area of greatest strategic and, yes, practical focus because we have Americans fighting and dying in two wars.

I did not go into the Iraq war. Many of the allies, including the French and the Germans who opposed what we did, did so because they were worried they were going to end up in the exact place where we did. Just as the allies in particular supported us after 9/11 in Afghanistan not because they think - except for a few of them - that if there is somehow, quote, "failure" in Afghanistan, terrorists are going to be visited, again, on Europe, as they have in some places, but because somehow that will lessen the capacity of the United States to do things that are required elsewhere or the United States will turn against the Europeans or take NATO less seriously.

This is the big issue right now, whether there will be a new grand bargain between us and the Europeans, for us to be riveted to Europe as much as in the past, in different terms of course, and will they be engaged with us in the Middle East. And the Arab-Israeli issue is one of the leavening elements within that, but not, I would say, the primary one.

Now, I want to say something else now more directly about the region. I think we need to find a way to promote America's interests that are sustainable for the long term, with the United States as a permanent Middle East power at lower risk and lower cost - blood, treasure and opportunity cost.

If we had any doubts about having to be there, that was ended with the Iraq war. What passed for a security structure or a security system at the time was shattered by that war. We've already heard reference to the balance between Iraq and Iran and this extraordinary policy we practiced for a number of years called dual containment, which was, in effect, kick the can down the road.

The invasion of Iraq, incidentally, was simply taking the dual-containment doctrine to its logical conclusion, one that Bill Clinton had managed to avoid and which Bush the first had managed to avoid. In fact, when we hear talk that Iran would have gone on the list next after Iraq, that relates to that very much. So it wasn't a dramatic change of goals; it was a change in methodology -- of course, a dramatic one.

Well, we're now responsible for what happened in the region. I say to my European friends as well, you maybe didn't like the war and I heard you debate the war. But as soon as we hit May 1, 2003, history for the future was closed. We have no choice but to be responsible for putting something else together for the long-term strategic future of the region. And the allies have to be there with us because they cannot avoid - they cannot avoid the consequences, whatever they may say now, if it doesn't work. It's not just the consequences the United States faces, but the consequences for themselves. I think what we need to do, therefore, is develop a new strategic framework for the region.

Now, one thing we have to decide right off, however, is do we want to be the dominant power in the region forever to run a kind of a, let's say, soft neoimperialism? I hate to use a phrase like that. I don't want to de-rationalize it from its psychological aspects. Do we want to do that? Or would we rather be able to do some disengagement while still being able to fulfill our interests, to go back or forward to having a greater over-the-horizon presence, less risk, less cost, less visibility and less lightning-rod effect. If there was one thing we did, in my judgment, that did help provoke 9/11, it was by keeping those troops in Saudi Arabia.

I was against it. I said that's ludicrous to keep those folks in there and be seen as infidels in that particular country. And, yes, indeed, that was a rallying point. Well, we're in Qatar now and let's hope - and, to an extent, in Bahrain - and I hope that works. I'd rather most of these people would be in the Diego Garcia island but that's something we can work to.

Okay, what do we need for the various elements of this? I say there are basically - I'll go through them - five basic problems: How do you end the Iraq war in a positive way within a regional context - a regional context engaging others and with the United States' reputation intact? Number two, dealing with Iran - and let me focus right now. The relationship with Iran is only in part about the nuclear question and maybe that's the less-important part if we can get that right.

If we get it wrong, obviously, it's the most important. But otherwise, let's face something. The United States is in the Middle East to stay and this region to stay - and so is Iran. The idea of Iran being a hegemonic power in the Persian Gulf is ludicrous unless, for some reason, we left. But we are also going to have to deal with Iran. And I'd rather try to see if there are some positive things that we could - if we could use Iran effectively in Iraq, if we could find some compatible way to do it, and certainly in Afghanistan.

In fact, we were working with Iran, not because they love us, but in their interest, after 9-11, up until that egregious speech on the axis of evil, which drove them away, and today, the Iranians suffer more from poppies than anybody else. And the chances of the Iranians having a compatible interest within Afghanistan are important. But we won't deal with them on this basis. We need a holistic process policy dealing with Iran, not just, and also with the region itself. And, in fact, when we talk about the new security structure, one of the big questions is, would Iran be willing to play a positive role? Or would Iran not be willing to play a positive role? And it could go either way.

Number three, asymmetrical threats: terrorism, WMD, Iran, the Afghanistan-Pakistan and, yes, the relationship of Arab-Israeli. Now, I'm going to present seven elements to a security structure, different from the system. System is what happens anyway. Structure is actually getting something that people will invest in for the future for predictability and stability.

Political framework - it needs basically to be homegrown. And then you have to decide how much of a role for the United States and outsiders and how much is useful and how much is counterproductive. Number two, look at your various models and possible partners. But, again, watch that caveat about outsiders. There are a number of models - the Istanbul Cooperation Initiative; NATO's Partnership for Peace; the Euro-Atlantic Partnership Council; the role for the European Union, better than having Americans; CSCE, a Conference on Security and Cooperation in the Persian Gulf. Incidentally, that's contained in the Israel-Jordan peace treaty, an idea of that. ASEAN, the Organization of the Islamic Conference (OIC).

Number three, cooperation: confidence-building measures in arms control, creating political and military commissions with everyone represented, creating an incidents at sea agreement, including the Iranians. I think that could be easily negotiated. Freedom of shipping, a counter-piracy compact where these countries are now suffering from it, if you read the daily papers, a counterterrorism compact.

You could take the OIC compact on that, but you have to drop out one item, which is, if you are a freedom fighter, that's not terrorism. Well, that limits that. Limits on arms or at least calculations about the role that arms could play in stability or instability; role for conflict resolution; the external training and engagement of locals with outsiders; and then economic issues and social development over time.

Now, three other issues: Number one, the United States is going to have to provide some kinds of assurances - whether Iran is in or whether Iran is out. And that will be determined, to a great extent, by the Iranian position, confidence in the United States - but you've got to be careful what those assurances are, where they are, how they're denominated - formal, informal. And it's America's reputation for power and influence and intelligence that is most important.

Role of other external powers: China, Russia, India, the Europeans, et cetera, we can talk about that. Arab-Israeli. Yes, it is instrumental to all of this, but if we recognize that it is instrumental and not become the all and end-all, because I will say something - I'm sorry - I don't expect an Arab-Israeli or an Israel-Palestine agreement anytime in the near future.

The Israelis are so traumatized by what happened in Lebanon and Gaza and you don't have a coherent element on the Palestinian side. I thought the President of the United States should not have taken on the settlement issue as the test with Israel. He should have taken on the opening of Gaza. You're not going to get anywhere as long as Gaza is in the circumstances that it is today. Final point - everything I'm talking about is evolutionary, needs to work over time, but I think we need to start thinking about a new security structure and see everything on a holistic basis. Otherwise we're going to be stuck in a region doing everything with others kibitzing and it will not serve our long-term interests. Thank you. (Applause.)

THOMAS MATTAIR: Thank you, Ambassador. Our third speaker will address Russian interests and policies in the Middle East. He is Professor Mark Katz of George Mason University and he has a doctorate from MIT, has been awarded many post-doctoral fellowships and published very extensively on Russian relations with virtually the whole host of Middle Eastern countries, Iran, Turkey, Libya, Saudi Arabia, Qatar. And some of those articles have appeared in our journal. I doubt that there's anyone who's published so widely on this subject, so we're happy to have you.

MARK KATZ: Thanks very much, Tom, for your introduction. I want to thank the Middle East Policy Council for inviting me to speak today. I think that the Middle East Policy Council truly has done an excellent job in terms of providing fair and balanced analysis of events in the Middle East. I think that over the years, it really has done tremendous work and I'm very proud and pleased to have had my articles appear in its journal. I think there've been nine, and I'm hoping for at least nine more over the next few years.

Anyway, I'd like to talk today about Russia and the Middle East. At present, Russian interests in the greater Middle East sometimes coincide with American interests on some issues, while they collide with them on others.

For most of the Bush era, Moscow worried that the U.S. was gaining influence in the Middle East, and that this, of course, would be bad for Moscow. But for the past couple of years, Moscow has been less worried about the prospect of America gaining influence in the Middle East.

Instead, it has had to contemplate what it means for Russia if American influence declines, for while Moscow has perceived that Russian interests suffer if American influence increases, there's also growing understanding there that if America loses influence in the Middle East, Russia will not necessarily benefit. But, of course, being the pessimists that they are, Moscow still can't help but worry that American influence could somehow increase in at least some parts of the Middle East.

And I'll look at the various issue areas, starting with the Af-Pak military campaign. Moscow is now genuinely concerned that America is losing it in Afghanistan. Moscow fears that if America leaves, the Taliban will return to power and it will aggressively work to promote Islamic radicalism in Central Asia and Russia itself. Thus Moscow has been well-motivated to allow the U.S. to transport not just nonthreatening, nonlethal supplies, but now also military supplies, via Russia to Afghanistan. And we have seen, especially since President Obama has been sworn in, tremendous progress on this.

But Russian cooperation with the U.S. on this issue does not mean that it will cooperate with it on others, especially Iran. There seems to be a sense in the past few months that because the Russians were cooperating with us on Afghanistan, that they are coming to see other things our way, they will cooperate with us on Iran, as well. And this, I don't think we're going to see.

Moscow does not wish to see Iran acquire nuclear weapons, but Moscow is not as concerned about this as the U.S. is. For even if Iran does acquire nuclear weapons, Moscow does not see Russia as being an Iranian target.

Further, Russia has benefited enormously from the longstanding Iranian-American hostility. American economic sanctions against Iran, as well as American pressure on its Western allies to limit how much they invest in Iran, has meant that Russia has made - and hopes to make - exports to and investments in Iran that might not have been possible had it faced Western competition.

Similarly, Iranian-American hostility has resulted in America blocking Iran as an export route for Caspian-based oil and gas, as well as discouraging Iranian gas exports to the West. This has helped Moscow. But Moscow fears that at some point, there will be an Iranian-American rapprochement that results in an end to all these benefits for Russia. Moscow is especially reluctant to cooperate with a U.S. effort to increase sanctions on Iran, which will worsen Russian-Iranian relations when the Obama administration has declared its desire to improve U.S.-Iranian relations.

In other words, they basically see Washington as trying to trick them - you do something to help us worsen your relations with Iran, and then, ha-ha, we're going to improve relations with Iran ourselves, and you'll be out in the cold!

Moscow, though, has long proposed that Russia enrich Iran's uranium as a solution to the Iranian nuclear issue. Russia would gain financially, and the West would need Russia as a guarantor that Iran is not enriching uranium to weapons-grade. Thus, Moscow has a strong interest to participate in the latest proposed diplomatic effort on Iran, which calls for Tehran to ship most of its low-enriched uranium to Russia for further enrichment.

While Moscow may end up supporting further sanctions if Iran backs out, it won't support anything that actually harms Tehran or Moscow's relations with it too much. They're just not going to help us that much with Iran.

Now, with regard to Iraq and the American withdrawal, Moscow, of course, was opposed to the 2003 U.S. intervention in Iraq and has been critical of American actions there. Now that the U.S. has agreed to leave Iraq, Moscow is worried about what the consequences for it will be after the U.S. departure. Moscow is fearful that radical Islamists, especially Sunni forces, will gain strength and will target Russia's nearby North Caucasus.

Since Iran is also fearful of Sunni fundamentalism, Moscow is less concerned than Washington about the growth of Iranian influence in Iraq. And, to this end, I'd like to talk about an episode that didn't get an awful lot of attention in the press here, but did get in Russia, in 2006.

June 2006, I believe it was. You remember - al-Qaida in Iraq. These are busy boys. They're fighting against the Americans; they're fighting against the Shiites; they're fighting against their fellow Sunnis. But what did al-Qaida in Iraq do in June 2006? They kidnapped five employees of the Russian Embassy in Baghdad - killed one out of hand and then announced that they would release the remaining four only if Russia withdrew all its troops from Chechnya within 48 hours. This did not happen. And al-Qaida in Iraq, being true to their word; they killed the remaining four employees.

These people are very busy fighting Americans, fighting Sunnis, fighting Shias in Iraq. Yet al-Qaida in Iraq found time to think about Russia. As America leaves Iraq, they may find more time to think about Russia, and the Russians know that. They are very, very, very worried. The North Caucasus are very close by; they are very fearful about that continued hold on this part of the world.

Now, at the moment, Moscow is focusing on its economic interests in Iraq in attempting to gain or regain access to the Iraqi petroleum sector. Moscow has tried especially hard to regain for Lukoil the West Qurna II contract signed in the Saddam era, which Saddam cancelled at the end of 2002 in retaliation for Moscow seeking reassurance from the U.S. and others that it would be honored after his overthrow. He didn't have a sense of humor.

Moscow forgave most of the Saddam-era debt to Russia but not quite all, perhaps as an incentive for Baghdad to cooperate with Russian firms. But Baghdad is playing hardball with Russian as well as other petroleum firms - nor does the current Iraqi government appear terribly concerned about pleasing Moscow on the debt issue.

Turning next to GCC security, since 2003, Saudi-Russian relations have been better than they have ever been before. Moscow has come to value Riyadh as an economic partner. Some Russian firms are already working inside the kingdom. And Moscow hopes for more Russian participation in the Saudi petroleum sector, as well as arms sales to Riyadh.

Further, Moscow especially values Saudi Arabia for its understanding since 2003, of Russian policy in Chechnya. Indeed, Saudi Arabia has played host and made much of the Russian-appointed Chechen strongman, Ramzan Kadyrov, and it's difficult to overestimate how much Moscow values this.

Still, Riyadh appears to be holding Moscow somewhat at arm's length. The Saudis have indicated their willingness to buy Russian arms, but they've also intimated that they will only start doing so once Moscow distances itself from Tehran. And this, of course, is something that Moscow doesn't want to do.

The Saudis appear to have a theory about Russian policy that is commercially driven. Essentially, their attitude is that they are selling weapons and other technology to Iran because they want the money; and the Saudi attitude is that we'll essentially replace those contracts. In other words: what you lose from ceasing these sales to Iran, we'll will more than make up for.

Russia, of course, what they want to be able to do is to sell to both Iran and to Saudi Arabia. The latest rumor reported in the Russian press is that the Saudis have made it clear - they value the current sale expected - in other words, Russia and Iran have signed an agreement whereby Russia is to provide some 1 billion (dollars) worth of these S-300 air defense missile systems to Tehran. The Saudis have indicated that they don't want Russia to do this.

If Moscow will cancel this $1 billion deal, Riyadh will buy $2.7 billion dollars worth of Russian weapons. They've made the math very clear for the Russians. But the Russians, they haven't yet taken this step. And so far, the deal hasn't - I think each side expects the other to back down; so far they haven't.

In my view, Moscow is not trying to displace Washington in Saudi Arabia or elsewhere in the GCC. Moscow knows that it cannot replace the U.S. as the GCC's principal defender. Indeed, Moscow seems to see close U.S.-GCC ties as serving to protect Russian investments there.

Especially of interest, I think, though, is Russia's relations with Qatar. With its enormous gas reserves and with its liquefied natural gas capability, Qatar is, in Russian eyes, a competitor in the world gas market. This past summer, Qatar signed a deal with Poland that will result in Qatar supplying 10 percent of Poland's gas needs via liquefied natural gas. This is, of course, is a market that Russia has totally monopolized up till now.

And while we in the West worry about Russia becoming the dominant gas supplier to Europe as a whole, Russia worries about little Qatar, as well as others - Algeria, Libya - encroaching on the markets in Eastern Europe that Russia has dominated up till now.

Turning to the Arab-Israeli peace process, Russia's policy in the Arab-Israeli arena is to maintain good relations with all parties - the Arab governments, Fatah, Hamas, Hezbollah and with Israel. Moscow holds out hope that because, unlike the U.S., it can talk to all parties, including Hamas and Hezbollah, all parties will turn to Moscow as a mediator. If they did, Moscow might also be valued by the West for their service. So far, though, none of the parties appear any more willing to make concessions to Russia for the sake of Arab-Israeli peace than they are to the U.S. or anyone else.

Yet, even if it doesn't bear fruit, Moscow values its role as part of the Quartet - the U.S., the EU, the U.N., Russia - of officially-recognized peacemakers both for bolstering Russia's image as a great power and for facilitating Moscow's efforts to trade with and invest in the countries of the region. And certainly they have been doing an awful lot of this.

Especially of note is the close Russian-Israeli relationship that has developed since Putin came to power; the Russian arms exports to India and to other countries are enhanced with Israeli technology, which plays an important role in helping Russia keep these customers. Israel has recently begun selling unarmed aerial vehicles to Russia; Moscow is buying them from Israel, one Russian commentator recently noted, because the Russian defense industry cannot produce them itself anymore. And he sees Russian dependence on Israel for military technology growing further.

There are also very close cultural contacts between the two countries; something like over a million Russian speakers now that live in Israel - and it really is quite interesting. Jews leave Russia because they don't like how they're treated in Russia. They move to Israel and they fall in love with Russia. (Laughter.) It's really quite remarkable.

I went last year as one of three Americans who participated in a Russian-Israeli conference in Jerusalem; the former Russian foreign minister, Igor Ivanov, was there, as was Yevgeny Satanovsky, the head of this pro-Israeli research institute in Moscow, which appears to be very close to Putin himself. And there were presentations on this. And I had not realized just the depth of the contact, not just on a government-to-government level but on a human-to-human level between Russia and Israel.

And it's the one place, if you are a well-to-do Russian, that you can go on holidays; it's warm, and virtually everyone whom you could need to do business with speaks Russian; and this means an awful lot of these people.

I have argued elsewhere that Russian restraint with regard to providing S-300s and other weapons systems to Iran may well be more due to Russian concerns about maintaining good relations with Israel than about Russian concerns about maintaining good relations with the U.S.

Now, looking at Russian policy for the Middle East as a whole, I think I can say the following: While Russian foreign policy interests sometimes cooperate and sometimes clash with American ones, there are a couple of constants which Moscow seems to always pursue. One is that Russian foreign policy is strongly concerned with advantaging the interests of Kremlin-connected Russian business, especially the petroleum, arms and nuclear reactor industries, but also others: railroads, mining, others as well.

Second, Russian foreign policy seeks good relations with all actors that oppose Sunni extremist forces which could support anti-Russian causes in the North Caucasus and elsewhere in Russia and Central Asia. Thus Moscow is willing to work with both pro- and anti-American governments in the Arab world, is willing to work with Shiite Iran, is willing to work with Israel, Fatah, and even Hamas, which, though Sunni Islamist, has aims that are limited to Palestine.

Russia is even willing to work with the U.S. against Sunni extremism, but as Yevgeny Primakov's recent book Russia and the Arabs, which Tom has just had me write a review of for Middle East Policy, as this book makes clear, what Moscow especially fears about American foreign policy is that, through supporting the Afghan mujahedeen in the '80s through mishandling both Afghanistan and Iraq in recent years, Washington has done more to foster Sunni extremism than to combat it. Thank you very much. (Applause.)

THOMAS MATTAIR: Thank you, Mark. The final topic to be discussed before our question-and-answer session is Chinese interests in the Middle East. For this we have Ambassador Chas. Freeman, Jr., who is our former president - former president of the Middle East Policy Council - until earlier this year. He's still on our board of directors and we're happy to have him there.

He is currently chairman of the board of Projects, International, which is a Washington-based business-development firm. And he has a long and illustrious career in the United States government. I can't really name everything, but the highlights are, he served as the United States ambassador to Saudi Arabia during Operation Desert Shield and Desert Storm - 1990 and 1991 - a really, really critical time in our relations with Saudi Arabia.

And he subsequently served as assistant secretary of defense for international security affairs in the mid 1990s. And there's much more, and you can read it here, but we're grateful to you for coming.

CHAS W. FREEMAN, JR: Thank you, Tom. Good to see you, Congressman. I'm tempted after listening to Mark's excellent presentation to speak about Afghanistan, where many of the concerns that the Russians are developing about our staying power are shared by the Chinese, who have made it pretty clear in recent days that under the right circumstances, they would be prepared to train and equip Afghan forces and to facilitate logistical support of combat operations in Afghanistan by NATO forces, in part as an offset to the hammerlock that the Russians have gained on our logistical operations in support of Afghanistan. But I won't talk about that.

And I also - as I sat here listening to, particularly, Shibley Telhami and Bob Hunter, who spoke at length on various aspects of the United States interests and policies, I realized that they said everything that I would have said or, maybe, wouldn't have said. (Laughter.) And this leaves me, really, with no alternative but to address the topic I was assigned. So I apologize for that. (Laughter.)

I had lost the text of - I had written out my remarks so that I'd be able to keep them short - and therefore you would have faced a long, rambling superficial and incoherent presentation, which wouldn't have bothered me at all. But now I've got the text, so now you face a shorter superficial and incoherent presentation. (Laughter.)

Distant as they are from each other, the peoples of the Middle East and China have interacted since well before Islam. One of the first things that the newly established Han dynasty - and it was actually during the caliphate that it did - was to exchange emissaries. And in fact, Uthman ibn Affan sent - who was the third caliph - sent one of the prophet Muhammad's companions as an emissary to the newly established Han dynasty. That was in 650.

That marks the beginnings of Islam and China. Muslims have ever since played a very important role in Chinese society. One example which most people are familiar with is the great Ming admiral, Zheng He, who was a Muslim and who was - and who spoke Arabic - and therefore, when he brought the great Chinese fleet to the Indian Ocean, was, in a sense, coming to an area that he knew indirectly, but quite well.

A lot of Chinese Muslims have been active in other ways over the years in sustaining contact between Chinese, Arabs, Persians, Turks and other Muslim peoples. But this cross-cultural liaison was, of course, interrupted by the reorientation of international relations that was imposed by Western colonialism. And in the post-colonial era in the Middle East and with the rise of China through wealth and power, these ties are being, in effect resumed.

The prophet Mohammed, peace be upon him, advised Muslims to seek knowledge even on to China. But it would be fair to say that Islam is far more familiar to Chinese than Chinese culture is to Arabs, Berbers, Kurds, Persians, Somalis and Turks.

Official statistics count about 25 million active Muslims in China. But there is a lot of evidence that suggests that the number of people who consider themselves to be Muslim is well over 100 million. Meanwhile, some of the several hundred thousand Chinese who are now working in the Middle East will take Middle Eastern versions of Islam home with them when they return. They have converted to Islam.

In China there are already 33,500 Quranic schools, nine Islamic universities and at least 28,000 mosques. This year China overtook the United States as the largest exporter to Arab markets. This has created a lot of job opportunities for Chinese with expertise on the contemporary Middle East. Dozens of Chinese universities and institutes now teach Arabic and hundreds of Chinese are enrolled in Arabic median courses in Arab universities. And in a few commodity centers in China like Yiwu in Zhejiang Province in Eastern China, Arabic now rivals English as the second language for Chinese traders.

This past summer Chinese Central Television inaugurated a 24-hour Arabic language satellite service. And the appearance of Chinese officials who speak fluent Arabic on satellite news services like Al-Jazeera is no longer a novelty. Unfortunately, it is a novelty when Americans appear.

In the Middle East, interest in China is also growing very rapidly. China is the fastest-growing market for the region's oil and gas as well as energy-intensive industries like cement, steel, fertilizer and petrochemicals. There is intense Arab interest both in downstream investment in China and in industrial development in the Middle East that could add value to exports destined to China. Some farsighted Arab institutions like Saudi Aramco began to send students to China some years ago. And the result is a growing cadre of Chinese-speaking engineers and, of course, Saudi Aramco's new refinery in Fujian. That refinery will shortly be joined by an even larger investment in South China from Kuwait.

There is, I believe, only one Confucius center in the Middle East. And that is at Suez Canal University in Egypt. But there are now thousands of Arab students studying in China. The ranks of those on the Arab side familiar with Chinese ways are thus rapidly growing. And this trend, although it's in its early stages, seems likely to accelerate and intensify.

All of this is happening with the enthusiastic welcome of governments on both sides, but also entirely unguided by them. It's a product of individual and business interests and decisions guided only by the invisible hand. Even in the case of state-owned enterprises, their behavior doesn't differ in any important respect from that of their large, publicly held corporate counterparts and rivals in the West.

The way in which ties between China and the Middle East have developed is impressive, but it has not been without difficulties. The refusal of Middle Eastern oil producers to allow foreign partners to do very much of anything upstream on their territory has driven Chinese companies toward the more accommodating commercial environments of sub-Saharan Africa.

But Arab and Iranian nationalism are not the only impediments to expanded business between the Middle East and China. Among other things, the cultural divides to be bridged are vast. In fact, if substantial amounts of money weren't at stake for both sides rapprochement would probably quickly bog down. Arab casualness about time and meeting preparation does not mesh well with the obsessive punctuality and meticulous planning of Chinese in general.

Chinese boisterousness clashes with Arab reserve. Middle Eastern deference to vertical allegiances contradicts Chinese emphasis on social equality and face. Chinese agnosticism contrasts with Arab and Persian religiosity. Muslim fatalism gainsays Chinese optimism. Frankly, in my experience, it's easy for the two sides to drive each other nuts. (Laughter.)

And that creates a role for foreign intermediaries who understand both cultures to help them find ways of doing business with each other. Now, I'm personally fascinated by the way in which mutually advantageous commercial cooperation between the Middle East and China is developing. But this is Capitol Hill, where politics are always in command. The military-industrial complex pays the piper and calls the tune. And the favorite dish of the inhabitants, pardon me, is globaloney.

So let me join all who are here present today in relegating history, culture and commerce to the boonies beyond the Beltway, where they belong. Instead, I will plunge into the geostrategic mists that waft across the Potomac from the Pentagon to Foggy Bottom and accumulate in Gucci Gulch on K Street. (Laughter.)

Foreigners often remark on the extent to which the Chinese gravitate to the long view. Chinese political culture does in fact seem to predispose those who participate in it to think strategically and to reason about foreign relations in terms of their own countries' especially long historical experience.

In the early 1970s, President Nixon and his faithful Indian companion Dr. Kissinger were entranced by the extent to which Chinese officials thought and spoke like the leaders of a world power even though the country they led was then, at best, a rather weak regional power very much on the defensive against its and our enemy, the Soviet Union.

China has changed in many ways, but not in this one. From the Chinese perspective, the Middle East is not just where over 60 percent of the world's oil and 40 percent of its natural gas reserves are found. It is also the strategic point where Asia, Africa and Europe converge. It is where the trade routes and lines of communication connecting Asia and Europe intersect, a fact that last year produced the first Chinese naval deployment in the region since the 15th century.

The Middle East is a major source of global investment flows. Its markets, including its capital, arms, and consumer markets, are prizes for the world's great powers to compete in. Its political economy is a central determinant of the global future. What happens in the Middle East affects the vital interests and foreign and defense policies of great powers on three continents. In recent years, no region has played as great a role in the devaluation of American global power.

The Middle East is also, of course, as I mentioned, the epicenter of Islam, an expanding faith that touches the lives of nearly a fourth of humanity including, as the recent race riots in Xinjiang attest, many in China. Its quarrels, as we Americans have learned to our sorrow, can easily spill over to affect the domestic tranquility of nations far from the Middle East.

China seeks to pursue economic and social development rather than getting sucked into political or military controversies. Its foreign policy seeks to foster - this is the phrase they used - the peaceful international environment that China believes it needs to do this. This gives China a vital interest in the stability of the Middle East.

That interest and the vacuums created by American policy failures there are now driving China warily toward greater involvement, engagement, in the region's affairs. China understands the causal link between the Israel-Palestine issue and the terrorism with global reach that has taken root among the world's 340 million Arabs and 1.2 billion other Muslims.

It also understands Israel's strategic dilemmas and is acutely aware of America's special relationship with the Jewish state and the burdens that imposes on us. Its own relations with Israel remain quiet, but productive, especially in the area of high-tech trade. But unlike the United States, China has not delegated the formulation of its policies toward the Middle East to Israel or any other third party. It remains free of passionate attachments in the region and careful to avoid entangling alliances.

China avows that it seeks peace, commerce and friendship with all nations. If these phrases sound familiar, it is because in many respects China is acting as the United States acted in a comparable period of rise coupled with relative weakness.

China wishes to avoid becoming embroiled in whatever quarrels break out between the nations of the Middle East. Like Muawiya, the founder of the Umayyad dynasty, and his management of the famous hair that connected him to others, Chinese leaders are careful neither to pull too hard nor to yield too easily in their relations with other states.

And, having been subjected to decades of sanctions itself, China both objects to them in principle and dismisses them as usually counterproductive. These traits are most clearly exemplified in China's handling of Iran. The United States encouraged China to collaborate with Iran under the shah as part of the global effort to contain Soviet expansionism.

Beijing's relationship with Tehran, unlike ours, survived the Islamic revolution. China has not been averse to reaping whatever benefits it could from the contention between America and Iran, but it has tried very hard to keep its distance from the confrontation itself. When China became a net importer of oil in 1993, a major new rationale emerged for it to cultivate Iran. Unilateral efforts by the United States to isolate Iran squeezed out our companies and those of our European allies from that market and created a vacuum in Iran's oil and gas sectors that Chinese, Indians, Japanese and others could and did fill.

About 15 percent of China's oil imports now come from Iran. China does not want to see a nuclear Iran. But it will not take direction from the United States or Israel, abandon its principles or deny itself access to Iranian energy supplies to prevent Iran from mastering the complete nuclear fuel cycle or to preserve Israel's regional nuclear monopoly.

Somewhat ironically and perhaps besides the point, the United States is now said to be urging Saudi Arabia and others to step up oil and gas exports to China in order to undercut Chinese dependence on Iran. The Saudis, Kuwaitis and other Gulf Cooperation Council members don't need much urging to do things with China. In many respects they, rather than the Chinese, have provided the impetus for the rapid strengthening of Sino-Arab ties. As I mentioned, China is now the largest source of their imports.

The International Energy Agency predicts that in 2015 China will buy 70 percent of its imported oil from the GCC. McKinsey, a consulting firm, projects annual two-way trade between China and the Middle East in 2020 as somewhere between $350 and $500 billion dollars - most of it with the GCC.

To put this in perspective, annual trade between the United States and the GCC today is a bit over $70 billion. The Chinese relationship with the Gulf Arabs and Iran seems destined to become a significant factor in the global economy. Strengthened relations with China, meanwhile, suit the strategic purposes of the countries in the region. In the case of Iran, the stable relationship with China is a hedge against pressure from the United States and the EU. In the case of GCC countries like Saudi Arabia, China is a supplement and an offset to perceived overdependence on the United States - and, by the way, so is India.

What China is not - and is not likely to be in the foreseeable future - is either a substitute or a counter to American military power in the Middle East. On a related matter, in the short term, the competition to American and European dominance of arms sales to the Gulf Arabs is likely to come from Russia, not China. China is not a major factor in the international arms trade. It is not dependent on arms exports to sustain its defense-industrial base nor has it emerged as a technology leader with state-of-the-art equipment of the sort Gulf defense ministers find irresistible.

It will likely take a couple of decades for this to change substantially. In the interim, the United States will remain the central element in the balance of power in the Middle East. European, American and Russian companies will control the arms market and the Gulf Arabs, Iran and China will all continue to rely on the United States Navy to guarantee freedom of navigation and the security of their energy trade. I will stop here. (Applause.)

DR. MATTAIR: Well, we have almost 45 minutes for a question and answer session and, as the moderator, I'm going to start it off.

I think we have a difference of opinion here that I would like to explore. It seemed that one of our speakers, Shibley, was indicating that resolution of the Arab-Israeli conflict is essentially a central national interest of the United States, whereas Ambassador Hunter argued that it is a secondary or derivative issue, meaning that resolution would help us in other areas with other partners.

And I don't dispute at all that resolution of this conflict would help us in other areas, but if we go back to 1993 and the first attempt to bomb the World Trade Center, the people who did that explained their rationale. They said, we did it because we're upset about American support for Israel.

I know at least - I know there are other panelists who take Osama bin Laden very seriously when he explains his rationale. So he has been writing since the 1990s about his anger about American support for Israel as well as American military power on the Arabian Peninsula.

And very, very recently, as Ambassador Freeman pointed out last week, Osama bin Laden said that the purpose of 9/11 was to focus American intention on the atrocities committed by Israel with American support.

So as I think about Arab-Israeli policy, is it not in the national interest of the United States, is it not really about security interests, about protecting the American people from the scourge of terrorism, as well as being important in bolstering our relations with other states in the region so that we can deal with other problems like Iran more effectively?

There is a debate - I mean, can you elaborate on - Shibley, do you want to say something first and maybe you could elaborate, Bob?

DR. TELHAMI: Let me just say something about what you said about al-Qaida and Osama bin Laden and his calculations. I don't know what he calculated. I do know that he did speak about the Arab-Israeli issue very early on, but clearly al-Qaida arose largely in reaction to the American presence in the Gulf.

And public opinion showed that that is a very, very important issue, that the Arab-Israeli issue is important, but particularly in the Arabian Peninsula, in Saudi Arabia in particular, the presence of foreign troops really is a big issue and that probably was a mobilizer.

But what I want to say is that regardless of what really motivated them - I don't, you know, doubt that there are people who are just fanatical, motivated by religious beliefs. I mean, we have them in all societies - Muslims, Christians, Jews, we have people like that.

The real question is, regardless of what motivates the group or its leaders, why would they employ the language of the Arab-Israeli issue? They employ it because they know, whether or not that's motivating them, that motivates the vast majority of the public in the region.

So it doesn't really matter what motivates them. The fact is it is an instrument of mobilization because that's what the public, including the public that doesn't agree with al-Qaida, the public they're trying to attract, that's what mobilizes them.

And we so forget that. We dilute it by saying, well, this is up to them. Well, it doesn't matter. I don't care. I buy that they're fanatical. I don't have a problem with that. And maybe they're motivated by political issues, for sure. Fanatics are also motivated by political issues.

But the reality of it is it's the mobilizational issue, and when you look at the mobilizational issue in the 21st century, because of the information revolution, which intensifies reporting of issues - as we saw in the Gaza war, we saw in any other war, where governments no longer have control -- it is extremely important as a mobilizing instrument and extremely consequential for governments, and even governments that have had the ability to control the public - they have.

I mean, I'm not one who thinks revolutions are common or easy, and I think that governments in the region, including ones who have gone against the public opinion, have been able to do it. But in many cases, there's indications that they are behaving as if they're more and more concerned about the public opinion, even separate from the militancy aspect of the non-state groups that are empowered and that are eroding the public authority in various places, and it might be one reason why we ended up having mobilization and increasing failed states.

So there is no question in my mind that this is an issue. And we see it in the public opinion polls. It is clearly a central issue in the way Arabs view America. I call it the "prism of pain" because I think in some ways it's even a subconscious issue. It's not that people love Mahmoud Abbas or even love Hamas, or even love Palestinians next door.

I think it's an identity issue that has to do with the history of the 20th century, how people see themselves. They see this issue as reflective of their aspirations, subconsciously. When they make an evaluation of the outside world, they make the evaluation, what is the position of this country or what is the position of this leader on the Arab-Israeli issue? And when you look - that's why when you look at some of the questions that I asked in my public opinion poll, that it's specifically intended to get at the prism to which Arabs see the world. I ask indirect questions.

So when I asked them whom among world leaders do you admire most, an open question, throughout the last several years when you were talking about Islamic fundamentalism, clash of civilization, clash of values, they hate us because of who we are - in 2002, 2003, 2004 -- Jacques Chirac of France is the most admired leader, not because of his values, and we know where people stand on France and the Middle East or even about France and its domestic issues pertaining to immigration, but because they saw him as being more sympathetic to the Palestinians and his stand on Iraq.

In 2006 and 2007 we start seeing Hassan Nasrallah of Hezbollah being the most popular leader in Egypt, Morocco and Jordan, two Sunni majority - three Sunni majority countries at a time we're talking about the Sunni-Shiite divide as driving public opinion in the Middle East.

In 2009, the most popular leader in the Arab world as identified in my poll is Hugo Chavez of Venezuela, by virtue of the fact that he took his stand on Gaza and cut off relations with Israel.

So there is no question that at a public level, I think, this issue is a central driving force, and I think if we don't have an Arab-Israeli peace agreement, particularly one based on the two-state solution anytime soon, I think we're going to have continuous confrontation for the coming generation between the Israelis and the Palestinians.

Israelis will not accept the one state. Palestinians will not accept occupation. It's going to drag everyone into a state of tension that's inevitably consequential for America's interests in the Middle East.

DR. MATTAIR: And, Bob, can you elaborate on your argument that you don't really think Osama should be taken at face value?

AMB. HUNTER: I always resist single-factor analysis in just about everything, and certainly in the Middle East. And I also resist taking people necessarily at their word unless it correlates with other things. There's an awful lot of politics that goes on and appeals to what people think will be effective, even if it's not what motivates them. And it's very difficult sometimes to decipher.

I recall being in the Persian Gulf at the time of Gaza, and at least the people I heard from weren't terribly upset, weren't terribly worked up about it. Some of them thought that maybe if Hamas got a bit bloody, that wouldn't be such a bad thing, right? There is not a lot of consistency there.

Now, that doesn't mean that I somehow play down the importance of Arab-Israeli peacemaking. As I said, I've been involved in this for 42 years. I think it's important to try to drive it to closure. But I don't think we should go and say this is the be all and end all and therefore ignore other things we have to do. One of the most important things I think we need to face - and you almost never hear this debated in public - is the role that some people in Saudi Arabia play in fomenting terrorism.

Probably the most important supporters of terrorism today are private individuals there who pour endless amounts of money into the Taliban and to madrasahs and a lot of other things that have fostered this all over the place, particularly in Pakistan and for a long time in Afghanistan. We just don't pay enough attention to that, for reasons I just don't understand.

I think it's also important to understand the role that poverty, lack of opportunity, corrupt governments, including a number that we support for perhaps good and sufficient reason, have played in all of that.

And so I worry that bringing it down to the Arab-Israeli conflict as though somehow if we were to drive that to closure that would end in significant fashion where recruiting sources of terrorism were able to operate, I think is probably creating the wish as father to the thought.

Now, I do believe, again - let me come back to that in some detail - the need to press for Arab-Israeli peace, in which case I think we need to go about it in an intelligent fashion. This is the only conflict in the world that I know about - correct me if I'm wrong - in which we know the answer - it's called the Clinton Parameters - and have also made the leap from what so many of us worked on for so many years, called step-by-step, which was you take step X and that validates itself and then leads to step Y.

Well, that may have worked with Egypt-Israel, which was more strategic than anything else, and with regard to Oslo and with regard to the agreements between Israel and Jordan, but we're now at a point where we have to leap the other way and start at the end and work backwards.

Now, how do you do that? I think that the Israeli government of the day is not being helpful and one still has to work on confidence building with regard to the Israelis. I would not do that, however, in terms of buying its view, for example with regard to Iran, to the point of attacking Iran. If you want to destroy NATO, that's the quickest way to destroy NATO.

I should have mentioned that before. There is almost universal opposition in Europe to an attack on Iran. Now, admittedly, Sarkozy is much more supportive today of a hard line on Iran, the British a bit more, but the Europeans initially went into the negotiations with Iran not because they wanted to press Iran but to keep us from attacking it, so that something would be going on in order to keep us and the Israelis from going to war. And if you want to find out, just ask them.

On the other side, as I said earlier, I don't believe you're going to get very far on the Palestinian side until you find a way to bring the people of Gaza into it. To go by and pretend somehow there can be a valid process between Israel and the West Bank, so to speak - the Palestinian Authority - I think is nonsense.

We made, I think, a gross error after Rabin - not Rabin - after Sharon got out of Gaza. I proposed at the Munich International Security Conference the following year, on the floor - I said, I've just made up a figure but let me come up with this. Let's validate what Sharon did with a $6 billion immediate investment program - call it stimulus if you want - 2 billion (dollars) U.S., 2 billion (dollars) European Union, $2 billion (dollars) oil producers.

The man in the chair said, I like the idea. I've got my 2 billion (dollars) if the others will match it. That was Javier Solana. The United States Congress put up 150 million (dollars) with a bunch of strings attached and the oil producers did nothing.

And as a result, Hamas won the election. Well, either Karl Rove or Dick Daley would have known you had to have some walking around money. And then when the election was over, we said, okay, we can't do anything. We'll freeze - we'll permit them to have the Gaza ghetto. You can't do that. You've got to start weaning people away from Hamas. Give them an alternative. You don't do that; it's not serious. I'm afraid it's not serious.

Incidentally, the Palestinian refugee camps could have disappeared 20 or 30 years ago, if Saudi Arabia and the others didn't see an instrumental value in keeping them going, and if they put up the money to move them. That's where we ought to be pressing.

So I want to see Arab-Israeli peacemaking, not because I'm confident that that is the way to defeat terrorism. It would be instrumental. It would be a great thing. Maybe it would be. I'm not smart enough to know the answer to that. I want to move on with it, but if we're going to - we've got to do it in a serious way that has a chance of success, and I don't think we are.

DR. TELHAMI: Can I clarify just one thing? You know, certainly my position is not that the Arab-Israeli issue is the be all, end all. I certainly don't believe that, or that if the Arab-Israeli issue is resolved, then we don't have problems in the Middle East. I think that our problems will be easier to manage and, you know, you can contrast. We have problems in Latin America. We don't have an Arab-Israeli issue. We have problems in Africa. We have problems in Asia.

And we're going to have to continue to have challenges, and obviously the Middle East is a strategic area, and we will still continue to be challenged. And I don't think terrorism - the terrorism issue broadly -- is going to be resolved as such. The question is the extent to which people will remain determined to attack American interests. It's a question of degree and determination.

But in general, I think - you know, think about the principle. You don't even have to think about the opinions or how it's unfolded. We call it the Arab-Israeli conflict. It is a conflict between Israel and the Arabs. And we are committed to Israel and Israel's security, a country that will continue to provide support. And we have interests in the Arab world, and significant interests in the Arab world.

We are - just on the issues that you raised, even aside from the commercial interests or from the war that we are fighting in Iraq -- the major presence, the heavy footprint that we have in Kuwait, in Bahrain, in Qatar, in the United Arab Emirates, in Saudi Arabia, all of that is absolutely consequential for what we do and how people deal with this.

And it is hard to see - whenever you have an escalation between Israel and the Palestinians, the likes of which we've witnessed, or between Israel and the Arabs or just Israel and the Palestinians, Israel and the Lebanese, in the past couple years, three years - we've had two major confrontations - it poses serious challenges to everything else we do. It doesn't matter.

And if we don't address it, we're at a very important juncture where I think the two-state solution, which has been the issue, the solution that has been put on the table really since Camp David, is coming to an end as a possible solution because of the changes on the ground, because people have given up both on the Arab and Israeli side, and frankly there is no other practical realistic solution in this generation, and if we don't have it, I think we are in for a whole new course of confrontation between Israel and Arabs the likes of which we really don't, we can't easily define, but we know there will be no other peaceful solution on the horizon and we are going to be dragged in. So I think it is not only important, by the way, Tom, but it is urgent because I think that if this administration fails in its efforts, I think the prospects of the two-state solution will have diminished significantly in a manner that will put us on a brand new course just as we are witnessing significant coalition changes in the region, including changes in places that have been an anchor of our policy in the past few decades. So that's why I think it's important - not because I think it ends everything else but I think its an urgent issue as consequential for everything we do.

DR. MATTAIR: Yes, it's not the whole problem, but it's part of the problem. And the resolution is not the whole answer, but it's part of the answer. And time is of the essence. And Chas has something to say.

AMB. FREEMAN: I thought Ambassador Hunter's statement was an eloquent recapitulation of the conventional wisdom in the United States, but there are a lot of problems with it. For one thing, money is not the life blood of terrorism, it's not a capital intensive activity. Money is not very important. And the fact that so much is made of money is also ridiculous in that whereas the United States never put a control on, for example. contributions to the IRA, Saudi Arabia and other Arab states have controlled mosque contributions to foreign causes including charities. So I think that is both an incorrect connection and dated information.

Second, there is no connection whatsoever between so-called madrasas - that just meaning a school in Arabic- and terrorism. Every study that has been done has shown zero connection. The people who tend to do terrorism are not the people who are so poor they have to go to religious academies.

They tend to be more middle class. Very often they're married. They have a technical background. And for this I refer you to the work of Marc Sageman, who has done the best examination of profiling terrorists and their motivations and their demographics. So I don't agree factually.

Second, I don't think one should confuse the cynicism of anti-Hamas leaders in the Gulf with the mass opinion. Of course the leadership in the Gulf is anti-Hamas because Hamas' argument is that the alliance between power and religion that some of these regimes, particularly the Saudi regime, represent is inherently illegitimate, and that they, by combining democracy and Islamism, have found a way to bypass the requirement to rely on princes, generals, dictators, thugs or whoever to advance moral agendas.

So they are seen by the ruling families in the Gulf, correctly I think, as a threat. But at the mass level, this is not the perception. And here is where the function of government in Islamic societies has to be taken into account. The charge against the regimes in the Gulf is that they are not meeting the requirement of government to defend the ummah, the Muslim community.

The Muslim community is under attack, notably in Palestine but now elsewhere, and that these governments, far from rising to the occasion and defending the ummah, are actually in collusion with those who are - or complicitous with those who are attacking it. And that, in fact, is the transformative mechanism which turns the Israel-Palestine issue into the central motivating force that it has become.

I think, in fact, what began as a struggle between Jewish colonists and indigenous Arabs in the Holy Land has now become a global struggle between Jews and Muslims and their respective allies. And I think this is therefore something much bigger than simply Israel and Palestine, and it is as Shibley suggested approaching the dimensions of something similar to Sam Huntington's conjecture about a clash of civilizations. From the American perspective, therefore, to neglect this issue is to pretty much guarantee endless trouble for Israel our ally but also for ourselves, and long term terrorism. Having said all this I think if I were running the session I would try to hear some discussion of great powers and the region, rather than rehashing issues that concern only to Arab-Israeli.

DR. MATTAIR: Exactly, we did probably draw a little too long on that. So, I had another question I won't ask because it is your turn, but I do hope we get into who benefits and who loses in terms of outcomes in Iran and Afghanistan, and Mark is here to field some of those questions. Frank has a question.

FRANK ANDERSON: I am going to slip into Islamic fatalism rather than Chinese optimism, and a cold blooded assessment of our strategic strengths in Arab-Israeli issues, Afghanistan, Iraq, and Iran is not yielding a lot of optimism, and in fact I don't think it would be outrageous to say we need to address the possibility that over the coming 5 to 10 years the United States will fail miserably in all of these places. Arab-Israeli: I do agree with Chas and we should leave it there -- the time for this to be resolved is running out, and I don't see a lot of options there. Just the numbers of forces that we have available to deploy, the amounts of resources we have available to deploy, and the expertise that is necessary to deal with Iraq and Afghanistan are lacking. And therefore reasons to be optimistic about how those places will turn out for the United States are quite few, and the possibility that Iran will recede into a strategic position that neither they, I think, either want nor we ought to want, without our being able or maybe them being able to prevent it. What is going to be the European, Chinese and Russian response to the possibility of across-the-board American failure?

DR. MATTAIR: Well, making up for the erosion of American global power and much more business opportunity for all those other powers is one part of the answer.

DR. MATTAIR: Well, first we have a question here. Yes?

Q: I want to say -

DR. MATTAIR: I just want to say, we have about 10 minutes. I hope we can go a little bit - I hope we can go a little bit after. We do have to give the room up at 12:30 but, I mean, it has to be broken down. But I would like to try to get a few more questions if we can. Yes-

Q: I just wanted to say that I did not immigrate to America, this great country, to be a fatalist. We have the answers to all the questions; we have solutions to all the problems. But I see our elites are ignorant of their power. We're more like a giant who doesn't have any direction -- how to go or what to do in this interaction in our alliance with NATO.

The European Union, they're our allies, but they are at cross purposes with us in the world. They're our sharpest competitors. France and England continue to consider the focal point their fresh colonies and then bridge it with their commonwealth as their preserves.

But those are areas where we need to compete to bring American jobs and expand American technology. America has won the war. The war has become recognized. There is no way China, Russia or anybody else can ever take the place of America. It's not going to happen. America has a deep ocean of goodwill among humanity.

It's just a question for us to understand these problems, to understand how to address them, and I'm here, I'm committed to see that America is number one and to remain a great power and to continue to lead humanity.

AMB. FREEMAN: I actually wanted to respond to Frank's comment. I think optimism in this context means the will to persevere in intelligent policy. It does not mean that - existing policies may be unintelligent, in which case persevering in them leads to disaster, but optimism means some confidence that with careful thought we can come up with policies that might work, and if we apply the resources to make them work, they will.

The question was asked, what would the Chinese reaction be, or the Russian or the European reaction be, to U.S. failure in Afghanistan in the first instance, or more broadly in the Middle East in general. And I would say that it would be multiple and most unfortunate, that is, the reaction.

First of all, the Chinese rely on U.S. power in the global order that the United States is the lynchpin of. They don't like the fact that they have to rely on us anymore than we like the fact that we had to rely on the Royal Navy for our protection in the 19th century. We didn't like the British. And many Americans, if given a choice, would have gone the other way in World War II rather than supporting the British, so anti-British were we at the time.

But the Chinese understand that they need the world order that the United States guarantees, and they would be very upset if that order were to collapse in any part of the world, in particular the Middle East.

Why? Because, as I said, they have their own very substantial Muslim population and they have indeed people being trained in Afghanistan, or now presumably Pakistan, to blow up things. That is how the unfortunate Uigher population in Guantanamo originated.

Instability is bad, from their point of view, and if the United States fails, there will be much more instability, not only in the Middle East but more generally. So they look to us to manage our extrication of ourselves from Iraq in a way that does not totally unhinge Iraq. I think they recognize the prospects of instability in Iraq are considerable, but they would like to see that minimized. They want to see us manage the problem with Iran without conflict, without war, because they see war as inherently destructive of the global order.

Relations with Europe, relations with countries in the Middle East, would be unhinged, and finally they expect us to maintain some kind of constructive military and political relationship with the countries of the Gulf Cooperation Council in order to sustain the stability of the Gulf.

If in fact the United States fails in any of these arenas, the Chinese will be forced to step forward at their own expense, which they do not like to incur, to acquire power projection capabilities they do not have, to act directly on their own behalf rather than deferring to the United States. That's not a good thing for China. It's not a good thing for the United States. It's not a good thing for the world. So I think a lot is at stake.

The final point is, in many respects, I think I referred to the fact that no region had made a greater contribution to the diminution of American power or the devaluation of American power than the Middle East. Our political power has suffered greatly because of our isolation on all the issues in the Middle East. We have very little international sympathy for most of our positions. Economically we are in grave difficulty, and I couldn't agree more, that our recovery is central to global prospects, including those of countries like China.

What we have left is military hegemony, but we've got to pay for that. It's expensive. And fundamentally what we need is a strategy that uses force effectively rather than the use of force as a substitute for strategy, which is what we are in many ways doing, in my view, in Afghanistan now.

DR. MATTAIR: Well, we want to bring Dr. Katz in with a comment and then we'll come to you for the final comment, I'm afraid.

DR. KATZ: Okay. Thank you very much. It strikes me that domestic politics are changing. I'm in my 22nd year now as a professor at George Mason University.

And one of the things I have seen during that time is a tremendous increase in the number of Arab-American, Muslim-American students who are fully integrated as Americans and who interact with other students, and that among young people certainly their view of the Middle East is very different than, I think, that of the older generation. I see many Arab-Americans, Muslim-Americans imitating what Jewish-Americans have earlier done in creating organizations and connections, lobbing for their interests.

And I think that, you know, there are also Jewish-Americans - I'd like to point out there is now the J Street organization that does not see Israel's interests as being served through continued occupation.

And I can't help but feel that at a certain point, these changes in views are going to be reflected in congressional politics, and that - in other words, that American domestic politics, which in a certain sense drives this American foreign policy now, I think is going to almost mandate certain changes in the future; in other words that, you know, we do things - the Congress does things because it's in the interests of individual congressmen and senators and that that is changing, I think, over time. And so I'm hopeful.

And just quickly on the point that, you know, how will the great powers react if America fails, certainly with regard to Russia I think that they will be in trouble, that as much as they dislike the American order, without it they're in very serious trouble.

I think that - Ambassador Freeman talked about, you know, fatalism versus optimism. I think of myself as an optimistic pessimist. I remember how in the 1970s we withdrew from Indochina, and then there was Marxist revolution after Marxist revolution in the third world. There was a real sense that, you know, we were on the decline, that the Russians and their allies were on the march and, you know, culminating with a Soviet invasion of Afghanistan in 1979.

Ten years later the Berlin Wall fell. And one thing that strikes me about, you know, even now, even if the worst happens, even if Islamist extremists take over one or two or three or many countries, like the Marxists, they don't have a satisfactory program to run their own countries.

And so while I'm not advocating that we give them the opportunity to show that, but I have a feeling that we can mess up to a tremendous extent. They can win in the short run, but in the long run, like the communists, they don't have a program; in other words, that defeat in the short run, even if we go that far, is not defeat in the long run. Thank you.

DR. MATTAIR: Thank you. Ambassador.

AMB. HUNTER: - That was a wonderful conclusion. I'm not a fatalist. In fact I have always worried about fatalists Yes we hit the low year at the time of the invasion in Iraq, when America's standing in the world fell to the lowest point in ages. We are on our way back. Whatever your politics are and however you felt about the Nobel award in Oslo, we now have a president whose very election and whose very demeanor and approach towards so much of the outside world is an amazing American secret weapon. And he is reestablishing the beacon that we have been, that we sometimes get a little subconscious about, in which people look to the United States, as Lincoln said, as the last best hope on earth. That does not mean that we are alone in that or we are necessarily the best, but we have something going for us, and that includes in the Middle East.

One thing about the region is, I know Chas was just talking about terrorism, money does matter and approach matters. I would be careful about what we do in this region and elsewhere and start thinking strategically and seeing things on a holistic basis and get people who are prepared to see the priorities and put money behind them and get rid of some of the intellectual and emotional and ideological baggage that has kept us form looking at things clearly.

How we should be dealing with Iran is a serious issue, but it shouldn't be on the basis of the fact that the American people got rid of me in 1980 through the hostage crisis, when I worked in the White House.

And they, frankly, shouldn't be operating on the basis that we got rid of Mossedeq. This is a kind of a mutual hate relationship that ought to be transformed to something else. Iran to get the bomb would be a white elephant. It would be stupid.

Now with regard to Afghanistan, with regard to the allies. There is an awful lot that now needs to be done in a non-military sense. Everybody has been saying that but you can't get NATO and the European Union to work together because the Turks veto that cooperation. The Europeans, we keep talking about, will they put in more troops? We don't need more troops. Really! What we need are a lot of aid workers, development people, police trainers, people on the judiciary, great numbers of them.

Where do we get a lot of the extra money? People talk about how American wealth for oil purchases which go to a limited number of countries, who look to us for security. How about fifty or a hundred billion dollars from these countries to Afghanistan and Pakistan?

Or we ought to make a bill to start doing that. So I am kind of optimistic about what we can do, and why don't we start thinking clearly and start pursuing policies that others are desperately interested in our pursuing and which we have the capacities for leadership to do if we will only wake up and move in that particular direction. It's been an honor to be with you.

DR. MATTAIR: Thank you, one last short comment from Shibley.

DR. TELHAMI: Thanks very much and I also am not a fatalist. Change comes either through some crisis that we don't anticipate that reshuffles the deck, or through unusual acts of leadership. This is either a crisis moment or a leadership moment. And I think we have a choice and we will see how it ends. Thank you.

AMB. HUNTER: Well-done.

DR. MATTAIR: Thank you. And I think we have a leader who can make it a leadership moment.

I'm sorry; we have to give the room up. So thank you very much to the panel. Thank you very much to the audience. The video and audio and print transcript will be on our website next week. That is Thank you. (Applause.)