This is a partial transcript from "The Beltway Boys", Nov. 13, 2004, that has been edited for clarity.

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FRED BARNES, CO-HOST:I’m Fred Barnes.

MORT KONDRACKE, CO-HOST: I’m Mort Kondracke. We’re “The Beltway Boys.”

Well, the hot story of the week is shuffle the deck, the cards. That is, the, the Cabinet and the White House staff, and truth to tell, we only know about five cards, and one of them is Andy Card himself.

The White House chief of staff, who is staying on, Karl Rove is the guru in chief, is staying on at the White House staff. John Ashcroft, attorney general, and Mr. Invisible during the campaign, is out as attorney general. Alberto Gonzales (search), the White House counsel, is in. And Don Evans (search), secretary of commerce, is out.

The rest is entirely speculation. But let’s do it.

So I say Colin Powell and Don Rumsfeld stay on for a while, as Secretary of State and Defense, therefore Condi Rice (search) stays on for a while, as national security adviser. And, when there is a shift, I think it would be wise if Condi Rice became secretary of state, not secretary of defense.

BARNES: Yes, so who’s secretary of defense?

KONDRACKE: Don’t know. We’ll have to see.

BARNES: Look, I hope you’re right. I think it would be a huge mistake to have some wholesale, you know, throwing out of the first-term people and bringing in new people. Bush really has a chance here to avoid the pitfalls of a second term. And one of the ways you do that, you know, these pitfalls that have, you know, a lot of presidents have gotten in trouble in second terms, Bill Clinton for one, most recently.

One of the things you need to do is, is hold onto as many of your best people from the first term as possible. You know, these are the first choices. Why bring in a second string if you really have a serious agenda in your second term?

I think the most important person to keep is Karl Rove (search), because he’s not only the politics guy, but...

KONDRACKE: He’ll stay.

BARNES: Yes, I know that, but he’s also the policy guy. He is really the glue in the White House and in the administration and, and makes a lot of things happen in both politics and policy. So that’s one thing. Keep your best people there as long as you can.

And secondly, have a large and important and bold agenda. And Bush really has one, particularly with his whole ownership society agenda, and meanwhile fighting the War on Terror, and winning in Iraq and so on. That will keep people busy so that they can’t get in trouble.

So what I would say is, so far so good. But what is this invisible stuff about John Ashcroft? Obviously he didn’t campaign. He’s the most visible attorney general since, say, Ed Meese.

KONDRACKE: Quieted down during the campaign, nowhere to be seen.

BARNES: OK. Hot story number two is opportunity knocks. And the opportunity, of course, is for some sort of a peace settlement between the Israelis and the Palestinians now that Yasser Arafat has died, and of course we know he was an impediment to any peace settlement we could. We talked about it many times, what he turned down at Camp David in 2000, and then even a better deal at 2001 in the Oval Office just before Bill Clinton left office.

So there is an opportunity here, but not quite yet, not immediately. I mean, Tony Blair, the British prime minister, to whom Bush owes a lot for his support in Iraq, came to Washington on Friday, and he’s got this idea of having a Middle East conference with all the big powers in January. January, this coming January and Bush appeared, appeared not to go along. And he shouldn’t have gone along. Watch this, and read between the lines.

(BEGIN VIDEO CLIPS)

TONY BLAIR, BRITISH PRIME MINISTER: The bottom line has got to be that if you want to secure Israel, and you want a viable Palestinian state, those are two states living side by side, and they are democratic states living side by side. And we’ve got the chance over the next few months, with the election of a new Palestinian president, to put the first marker down on that.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I believe we’ve got a great chance to establish a Palestinian state, and I intend to use the next four years to, to spend the capital of the United States on, on such a state. I believe it is in the interests of the world.

(END VIDEO CLIPS)

BARNES: Now, did you read between the lines what, what Blair was saying and Bush was saying? No, I think, to having this thing.

You know, Bush owes Blair a lot. He doesn’t owe him Israel. And so first what we need is a credible Palestinian government that can only be achieved through a democratic election, an honest democratic election. And that’s what Bush and Blair ought to be for at the moment.

KONDRACKE: Yes. This, this was the scene at, at Yasser Arafat’s burial, a total chaos. I mean don’t these people understand that if you fire bullets up into the sky that people are going to get hurt when the bullets land on, on the ground?

BARNES: Are you sure that’s Ramallah and not Fallujah?

(LAUGHTER)

KONDRACKE: That’s right, that is Ramallah, and they are, you know, they’re celebrating. I mean, it’s madness.

Anyway, look, Yasser Arafat created no groundwork for either a democracy or peace among his followers. And I’m afraid that what’s going to happen is violence in the aftermath of Arafat’s death, with the Islamists and his old cronies jockeying for succession and probably, probably killing each other.

Look, the, the best thing that could happen is for the, the Palestinians to seize an opportunity, which they have, of, of grabbing onto what Sharon has proposed, disengagement from Gaza (search), and, and parts of the West Bank (search). That’s what the, that’s the White House hopes will happen, followed by elections, followed by a control of the violence, followed by real peace talks with, with the, with the Israelis.

This is all possible, but I’m afraid the, the Palestinians aren’t ready for it and that they’re going to blow it.

BARNES: Yes, but don’t you think the Europeans are going to come in, Blair and other Europeans come in and insist on, on getting Israel to offer that deal Clinton and Barak offered in 2001?

KONDRACKE: There’s no way that they’re going to do it. Sharon will never do it.

BARNES: OK. Coming up on "The Beltway Boys," the long knives are out for Republican Senator Specter. And will he and other moderates survive in the new Congress? That’s what we’re going to talk about after the break.

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