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Condoleezza Rice on Fox News Sunday

Following is a transcripted excerpt from Fox News Sunday, May 5, 2002.

TONY SNOW, FOX NEWS: Another frenzied week in world affairs: Yassar Arafat goes free, Israeli Prime Minister Ariel Sharon prepares to visit the U.S., and now comes word of a peace conference this summer. What does it all mean? We'll quiz National Security Advisor Condoleezza Rice.

Meanwhile, new concerns about security within our borders. Congress say the administration isn't doing enough to keep us safe. What do the critics want? We'll find out from the chairman of the Senate Intelligence Committee, Bob Graham.

Plus, Brit Hume, Mara Liasson, Bill Kristol and Juan Williams with opinions aplenty. This is the May 5 edition of Fox News Sunday.

Good morning, and welcome to Washington. We'll talk with our guests after the latest from Fox News.

Federal investigators say pipe bombs found in rural mailboxes in Illinois, Iowa, and Nebraska are similar in nature. All 14 bombs included anti-government propaganda, were placed in the boxes rather than sent through the postal system, and warned of more so-called attention-getters. An FBI spokesman describes the bomb-planting spree as a case of domestic terrorism.

Israel's Prime Minister Ariel Sharon is heading to Washington today for meetings with President Bush and other top American officials. According to reports out of the Middle East, Sharon is bringing a peace plan that leaves untouched Israeli settlements in Palestinian areas, a position at odds with that of Yasser Arafat. Sources say Sharon also is carrying a 100-page document that shows Arafat's direct link to terrorists.

And in Bethlehem, negotiators hope soon to find a way to end the siege at the Church of the Nativity. Israeli forces have surrounded the compound. More than 120 people reportedly remain inside, including as many as 30 Palestinian gunmen.

And now joining us to talk about the latest in international affairs, National Security Advisor Dr. Condoleezza Rice.

Thanks for joining us.

Let's first talk about Ariel Sharon's upcoming visit to the United States. It's reported he's bringing 100 pages of documents that detail extensively financial links and direct involvement by Yasser Arafat in ongoing activities such as financing terrorist bombings, even also financing small manufacturing facility for weapons. Have you seen those documents yet?

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISOR: We've not seen the documents. We've seen some documents that have been made available to various U.S. officials.

But we believe that this is an extremely important opportunity to talk with a close friend and ally, the Israeli prime minister. We have a lot to talk about because a lot has happened in the last few weeks. And this will be an opportunity to share ideas for the president and the prime minister to chart a way ahead, and that's really the key to this meeting.

SNOW: Palestinians have been saying that the documents produced by the Israelis are forgeries. Do you have any reason to believe they're forgeries?

RICE: Look, we are going to look at whatever it is that Prime Minister Sharon would like to show us.

Let me just say, the United States has long been concerned about the potential ties between terrorists and the Palestinian Authority. We were the most aggressive in insisting on a full investigation of the Karine A, the ship that arrived from Iran bearing arms in clear contravention of the Oslo Accords. And so, we've been very concerned about it. We've also said to Chairman Arafat, you have to do something about any support for terrorism that may be coming from within or, frankly, without the organization of the Palestinian Authority. So this is not new.

SNOW: This is not new. Is it your sense, then, that these are not forgeries but legitimate documents?

RICE: I don't know. I assume that the Israeli prime minister is going to give the president documents that he believes to be true. That's, good enough for us.

SNOW: OK. Now, there has been a lot of speculation that the administration, once presented with these, is going to be placed in a bit of a box because the president has said he opposes terrorism. If you have a long history of terrorist activities on the part of somebody who's supposed to be a bargaining partner, how can you deal with him?

RICE: Well, first of all, let's see what the prime minister's actually coming to do. I think I've learned, as all of us should have, that they're always lots of reports about what a president or prime minister intends to do. We'll wait and see what the prime minister really wants to talk about.

But in terms of links with terrorism or support for terrorism, we've been very clear that Chairman Arafat has been disappointing in his efforts to lead the Palestinian people. We've been very clear that, as the president said in his September 20 speech about terrorism, that you cannot support terrorists of one kind and be with us in the war on terrorism against Al Qaeda.

Now, the president did say that it is important that you not continue to support terrorism. He made very clear that we were going to expect new behavior in the war on terrorism, and we are bringing new factors to bear on Chairman Arafat.

SNOW: Such as?

RICE: We have had serious discussions with the Arab states about their responsibilities to pressure the Palestinian Authority and leadership to do what is right.

RICE: We also are making a major push to talk with the entire world about getting the kind of leadership for the Palestinian people that they deserve -- one that is not corrupt, one doesn't cavort with terrorists, and one that is democratic, transparent, and respects human rights. So this is a long game.

SNOW: You also gave me about 58 things to talk about in that one answer, so I'm going to try to get at several of them.

RICE: Sure.

SNOW: First, you said that the president made it pretty clear, you're with us or against us in the war on terror. Yet an anonymous aide quoted in today's New York Times says that this administration wants to, quote, "convince the Israelis it's in their long-term interests to deal with Arafat no matter how reprehensible he may be."

That makes it sound as if the administration's position is, even if he commits acts of terror, he's still seen as the head of the Palestinian Authority and therefore we're going to deal with him no matter what.

RICE: Tony, I can't account for what anonymous people say to the newspapers.

SNOW: Yes, I figured you'd say that. So that's not the White House position?

RICE: The White House position is that we're not going to try to choose the leadership for the Palestinian people. Chairman Arafat is there. He's there out of the Oslo Accords.

But he does have responsibilities that he has not been meeting. And we're going to press him. We're going to call on Arab allies, the Europeans, and others to press him. And we are going to be very clear that the Palestinian leadership that is there now, the Authority, is not the kind of leadership that can lead to the kind of Palestinian state that we need. It has got to reform, it has got to make changes in the security apparatus, in the constitution, in the way that it leads.

SNOW: You said...

RICE: That is the agenda ahead.

SNOW: You said "democratic, transparent, and non-corrupt." That's a pretty interesting catalogue, the implication being that Yasser Arafat is not democratically elected?

RICE: Well, the key is here to look ahead and to say, what would form the foundation for the Palestinian state that the president has spoken about, that Prime Minister Sharon has spoken about, that everyone is talking about? And that foundation must be one that is transparent. It's what we ask of every government in the world. And we're going to start demanding of the Palestinian leadership that it become a kind of leadership that can really do for the Palestinian people what they need done.

SNOW: I still want to do the first adjective, then I'll get to the second. OK, democratic. Not democratically elected, you'd like to see a democratic election?

RICE: The Palestinian Authority will eventually have to deal with constitutional matters, the Palestinian people will have to deal with constitutional matters. And we think that's an extremely important step on the road to peace.

SNOW: Transparency, you mentioned that just a moment ago. In other words, have good record-keeping, allow people to examine them, and you link that with corruption. It's your sense, then, that the Palestinian Authority's been taking money from the West and using it either for purposes for which it was not intended or at least hiding its use from the people who've been the financiers?

RICE: I think that we can only lay out the important principles here and expect people to live up to them. Good governance is at the core of what President Bush has been talking about around the world. When he made new resources available for financial assistance to the developing world in the Millennium Challenge Account, he said there has to be good governance. We cannot expect any less for the Palestinian people than we expect for other people around the world.

SNOW: Does that mark a change in the way in which we look at their accounting?

RICE: Well, I think it does mark a change in the emphasis on this issue.

But I will say that we're not the only ones who are making these demands. There was a very good interview with Javier Solana of the European Union, in which he emphasized the importance for transparency. The European Union puts a lot of money into the Palestinian Authority. People need to know where that money is going.

If you're going to have to rebuild Palestinian institutions, security institutions, for instance, they need to be rebuilt with transparency, they need to be rebuilt on a foundation that would make sense moving forward.

SNOW: Ariel Sharon, according to today's Jerusalem Post, is going to come here and argue that Yasser Arafat, based on the information he's going to present to the administration, is not a proper negotiating partner. Is the administration going to entertain that thought at all?

RICE: The administration is not going to try to choose the representation for the Palestinian people. We can't do that.

SNOW: If that's the case, what do you need to tell Ariel Sharon?

RICE: What we need to say to Prime Minister Sharon is that there are responsibilities on all sides. The Palestinian Authority has certain responsibilities. We are going to take a new approach, including bringing, we hope, greater accountability and pressure from the Arab states on the Palestinian Authority to do what it needs to do for its own people.

This is not just for the benefit of Israel. The Palestinian people are suffering. We are very concerned about their plight. But they cannot move to prosperity and well-being in conditions of terror. They cannot do it in conditions in which there is great distrust and hatred between Israel and its neighbors. This is also for the Palestinian people.

SNOW: That having been said, and the president has been pretty clear on that point, you've mentioned several times pressure from Arab allies in the EU. Does this mean financial pressures, saying to Yasser Arafat, "If you don't change your accounting, if there are further reports of terrorism, we're going to cut you off"? Do you expect them to do that?

RICE: I'm not going to speculate about what means we might use. The first thing is to put a new emphasis on getting the kind of leadership for the Palestinian people that they need.

SNOW: The reason I asked that is, the secretary of state, has -- who's not an anonymous source, has said that Yasser Arafat knows exactly what we expect him to do. Does he know what we would do in return?

RICE: Well, he knows exactly what we expect him to do. I think he probably understands that there are a number of levers available.

But we're going to look forward here, and we believe that this is a time, this is something of a new window of opportunity in which, if all parties will take the responsibilities on -- and, look, Israel has responsibilities too. The Palestinians have responsibilities, and the Arabs have responsibilities. If we can get people to step up to that, as the president said on April 4, we're going to have a very good chance to get back on the path to peace.

SNOW: Let's discuss Israeli responsibilities. The key sticking point of settlements. Let's show people a couple of maps and give a sense of what we're talking about.

First, in the Gaza Strip area there are a number of Israeli settlements and outposts. This has been a sore spot. There is our Gaza map, if you can look at a monitor. And in addition, also on the West Bank even more extensive Israeli outposts or settlements or built-up areas.

Now, what the Palestinians are saying is, those all have to go. What Ariel Sharon is saying is, none of them will go. Is it not the administration's position that the Israelis are going to have abandon some of those settlements?

RICE: Well, lets take one thing at a time. We are going to get together with the Israelis to talk about a way forward. When the Mitchell plan was being discussed with the Israelis and the Israelis said that they signed on to the blueprint that was the Mitchell plan, there is a time in that that is contemplated for settlement activity to stop. So, yes, settlements will eventually be an issue.

But I think we have to get the context right here. We need to end the terror, create a situation in which there is better security and no violence, and we need to look forward to a political solution that will serve all sides.

All of the parties will have responsibilities. The president mentioned the settlements in his April 4 speech. But we're not going to get ahead of ourselves. We're going to look at where we are, we're going talk to the prime minister about what he has in mind, and then we will see what the next steps are.

SNOW: All right. The president has said that he'd like to see settlement activities cease now.

RICE: The president, in his speech on April 4, said that Israel will have to address the issue of settlements. But we have not put a timetable on that, and we will talk to the Israelis about what makes sense for Israeli security and for the establishment of a Palestinian state down the road.

SNOW: There will be some international ministerial meetings. Can you tell us exactly what this meeting is going to be and what its suppose to accomplish?

RICE: Well, Tony, this meeting is one in a series of activities that have really been taking place since the president's April 4 speech. If you remember, Secretary Powell went to the region. He took the temperature of the region, did a good job in calming what was a very difficult situation, and he heard a lot of interests in having an international conference.

But we believe that a conference would have to be very well prepared. This is not Madrid, this is not the big peace conference. We anticipate a meeting at the ministerial level to share ideas, to see where we are. But it, too, is a part of several discussions that are going on, including the ones that the president is having with King Abdullah of Jordan and with prime minister.

SNOW: So, what we're talking about is a process that will lead to a process that will lead to talks?

RICE: We will see where we are after these series of discussions. A lot has happened in the Middle East. We do need time to take stock to see where the parties are. I think everyone understands that we have a window of opportunity here and we'd like to move forward. But we want to move forward in a way that is going to succeed.

SNOW: If it will succeed, is it conceivable to you that there will be any kind of settlement to this matter, border security, within the next year?

RICE: Well, I'm not going to try to put a timetable on it. I think that would be a mistake at this stage.

But I do think that we have a lot of new elements on the table. The Saudis were very clear, not just with us, but in all of the interviews that they were giving, that they expect to take a new, more active role in trying to bring peace to the region. Together with the Egyptians and Jordanians, that gives us a very powerful Arab, Israeli- neighbors presence in the peace negotiations that had not been there before.

SNOW: Have the Saudis changed their approach toward the Israelis?

RICE: The Saudi crown prince said something very important. Yes, he talked about the need for a long-term political settlement. Yes, he talked about need for a Palestinian state as they see it. But he also said that in that context, the normalization of relations with Israel would have to be done. That's a very important statement, and it's one in which we intend to build on.

SNOW: Did he and the president get along better than they did before the meetings last week?

RICE: Well, they had not met before the meetings last week. They talked by phone, but their personal chemistry was terrific. And I think on they found a lot of common...

SNOW: Is it because they blunt with each other?

RICE: I think it's because they were candid with each other. This president is not someone who pulls his punches. He's straightforward, he speaks in plain language, and so does the Saudi crown prince. And even through translation, I think they gained a respect for each other because they felt they could be honest.

The friendship with Saudi Arabia, the relationship with Saudi Arabia is strong. And on the basis of strong relations, you can have candid and straightforward discussions.

SNOW: The United States is preparing to present evidence to allies of a new long-range missile program being conducted by the Iraqis. Is it still your firm conviction that Saddam Hussein is getting ready to develop weapons of mass destruction and now also possibly to figure out ways to deploy them across Eurasia?

RICE: I don't think there is any doubt that Saddam Hussein has been -- ever since he came to power back in the '80s, he's been trying to figure out how to get ultimate weapons of mass destruction. We don't have any doubt it. He's trying to make progress. That's why he wanted the inspectors out, and it's why the status quo is not acceptable in...

SNOW: Do you think the evidence would be enough to persuade our European allies of his intentions?

RICE: I don't see how anyone could doubt Saddam Hussein's intentions. This is a man who had weapons of mass destruction, chemical weapons, and used them on his own people -- used them on his neighbor and then used them on his own people. I don't see how anyone can doubt his intentions. He didn't kick inspectors out because he needed the hotel rooms. He kicked them out because he wanted to hide something. And this is a very dangerous man...

SNOW: And that provides a proper cause of action for us?

RICE: The president has made no decision as to how he is going to deal with Saddam Hussein. We're in consultation with our friends and our allies. But we have felt, the president has felt, that it's extremely important to make clear that the status quo is not acceptable with this regime.

SNOW: All right. Condoleezza Rice, national security advisor, thanks for joining us.

RICE: Thanks. It's very nice to be with you, Tony.