• This is a rush transcript from "The Journal Editorial Report," December 1, 2007.

    PAUL GIGOT, FOX HOST: This week on the "Journal Editorial Report," after Annapolis, can President Bush achieve in his final year in office a goal that has eluded U.S. presidents for decades?

    City of Arabia. Abu Dhabi bails America's largest bank out of its subprime mortgage mess. Is that cause for concern?

    Senator Trent Lott joins the long list of Republicans retiring from Congress. Our panel looks at GOP prospects for regaining the majority, after the break.

    (NEWSBREAK)

    GIGOT: Welcome to the "Journal Editorial Report." I'm Paul Gigot.

    President Bush convened a new round of Arab-Israeli talks this week trying to achieve in his final 14 months in official a goal that has eluded U.S. leaders for decade. The summit signaled a shift for Bush who, since taking office in 2001, has shunned that kind of hands-on role in peacemaking taken by his predecessor Bill Clinton.

    John Bolton is former U.S. ambassador to the United Nations and author of the new book "Surrender is not an Option: Defending America at the United Nations and Abroad."

    Ambassador Bolton, thanks for being here again.

    JOHN BOLTON, FORMER U.N. AMBASSADOR & AUTHOR, "SURRENDER IS NOT AN OPTION": Glad to be here.

    GIGOT: Let's start with the Annapolis summit aftermath. This is a reversion a role in direct peacekeeping in this Arab-Israeli dispute. How do you explain the switch?

    BOLTON: It is, unfortunately, in my view, one of several U-turns the administration has taken in the past year or 18 months on dealing with North Korea's nuclear program, the Iranian nuclear weapons program and now the Middle East. They have really adopted policies that the State Department bureaucracy has been advocating for some time. I think it is explainable because Secretary Rice is now channeling the State Department views and she is, without any doubt, the dominant voice individuals advising President Bush on foreign policy in the second term.

    GIGOT: What happened to Vice President Cheney? I thought he was the de facto foreign policy president? Is he taking a reduced role?

    BOLTON: So much for conventionalwigs.com. I don't know what the story is there. The vice president, I think, commendably, has always kept his dealings and advice to the president confidential. So whether he is giving less or is being heeded less often, I don't think we can tell from the outside.

    GIGOT: Let's take this Arab-Israeli dispute. Some people say this is a good thing because we need to shore up the Palestinian moderates. You have in President Abbas somebody who we think we can deal with. He is not Yasser Arafat, doesn't have the same terrorist history. If we can deliver something, help deliver some kind of peace that Abbas can show the Palestinian people, then he will be able to control — defeat Hamas. What's wrong with that argument?

    BOLTON: Well, I don't buy that argument. I think when the Palestinians voted Hamas into power in the elections a few months ago, that in effect what they were saying was not simply that they wanted to support a terrorist group, but that they thought that Abbas faction, Fattah, was fat, corrupt and incompetent. And I don't think they have become any less fat, corrupt and incompetent in the intervening months. I think the Palestinian Authority, clearly broken, and may be irreparably broken. And propping up Abbas doesn't make the situation better. You don't have a Palestinian Authority that can make commitments or keep them at this point.

    GIGOT: There is a strategic rationale, I am sure you heard, from many inside the administration. You talk to them privately, they will say this is also about Iran. That is, if you can create a kind of moderate alliance with the Sunni regimes in Saudi Arabia, Egypt and even Syria, then perhaps we can — and you can show them that we are trying to help their concerns, addressing their concerns in Palestine, they are more willing to help us in Iran. Is there anything to that, in your view?

    BOLTON: I think that's bad logic as well. Look, the states, Arab states of the Persian Gulf are already terrified of Iran. They don't have any option other than to work with us. What they are worried about in the Persian Gulf is a precipitation withdrawal from Iraq by Americans. What will calm them down is continuing success of the surge.

    If you solved the Arab-Israeli problem tomorrow, which, of course, won't happen, but even if you did, extremism in the Islamic world would still be there, the extremists among the Sunnis, the Wahhabis, al Qaeda and the extremists among the Shia in Iran, principally. These are conflicts within Islam and debates and conflicts that have been going on for centuries that have little or nothing to do with Israel and the Palestinians.

    GIGOT: Where does this leave the U.S.-Syria — the U.S. policy toward Syria because they were invited in? The U.S. worked hard to coax them to sow up. Finally they did with a rather junior official. But this, again, is a big reversal from two years ago when we tried to isolate Syria, drive it out of Lebanon. What — what do you think the United States is trying to accomplish with Syria? Is it trying to peel it off from Iran?