Updated

This is a rush transcript from "Hannity," May 19, 2011. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: The president stepped forward earlier today to unveil his vision for the Middle East, a region that has been plagued by despotism and terrorism now for decades.

Now after proclaiming his belief in freedom and self-determination for everybody in the region, he dropped this bombshell about our ally, Israel, and it's Palestinian neighbors.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: The United States believes that negotiations should result in two states with permanent Palestinian borders with Israel, Jordan, and Egypt and permanent Israeli borders with Palestine. We believe the borders of Israel and Palestine should be based on the 1967 lines with mutually agreed swaps so that secure and recognized borders are established for both states.

(END VIDEO CLIP)

HANNITY: All right, you heard that right. The president is calling on Israel to give back the land that it won in a war, now, one that began when its enemies vowed to drive Israel into the sea. Now, here's what Israel would look like if the president's dreams came true. Now, everything in yellow would become part of a Palestinian state, including East Jerusalem, the holiest part of the Israeli Capitol. Now that's where the Wailing Wall and the Temple Mount, both Jewish holy sites, are located. Now, Israel is now 45 miles wide. It would be reduced to just a width of eight miles.

And in the wake of the president's speech, former Massachusetts governor, GOP presidential candidate, Mitt Romney, charges, "President Obama has thrown Israel under the bus."

Well, more like a bus full of suicide bombers. And I wonder if the members of the Nobel Committee over in Oslo are scratching their heads tonight wondering why one of their Peace Prize recipients is abandoning a key Democratic ally.

Joining me with analysis to the president's new plan for the Middle East, Arizona Senator John McCain.

Senator, as always, welcome back to the program. Thanks for being with us.

SENATOR JOHN MCCAIN, R-ARIZ.: Thank you Sean.

HANNITY: I think it's deeper than throwing Israel under the bus. We promised Israel, I have a 2004 letter from U.S. President George Bush to Prime Minister Sharon promising America would never do this to Israel. Your reaction Sir.

MCCAIN: Yes. That was in exchange for, as you know, the Israel turning over the West Bank and Gaza to the Palestinians. First, could I mention I was pleased to hear the president speak for democracy. I wish he had -- and the demonstrators. I wish he had done that in behalf of the demonstrators in early 2009 who were saying Obama, Obama, whose side are you on, and he came out and he said he didn't want to jeopardize his chances to negotiate with the Islamic Republic of Iran. So, I was pleased to see him speaking up for democracy in these Middle Eastern countries.

I think they're making the same mistake that they made at the beginning of the administration. As you may recall, as a pre-condition, President Obama called for a freeze on all settlements and then, of course, later on, dropped that -- that as a requirement but the Palestinians kept it as a requirement.

And, so, this is setting a limitation on the boundaries of the state of Israel without regard to the Israelis having a country that they are -- that they can defend militarily. And when you look at one of the partners or one of the -- one of the groups, Hamas, who control Gaza, are committed to the extinction in the state of Israel, then you can certainly understand why Prime Minister Netanyahu would be very reluctant to support such a proposal.

We all want peace talks. We all want a settlement. We all want that. Why can't we just say everybody sit down and you can work this out, the right of return, water, there are many a myriad of issues and if you truly are committed, the first thing you need to do is commit to your recognition of the right of the state of Israel to exist.

HANNITY: You've hit the key point in my mind here. Before you can have any negotiations, now, we have a Unity Pact between Fatah and Hamas. Hamas' charter calls for the destruction of Israel. Seems to me that we took our closest ally and we emboldened those that they're supposed to negotiate with because their position now will forever be, well, even the United States agrees with us and, meanwhile, it will compromise their security in a multitude of ways.

Why would the president insist that our allies, our very close ally, sit down with people that have in their charter the call for Israel's destruction. Why would the president do that?

MCCAIN: Well, I guess the president is assuming that Hamas will abandon their commitment to the destruction to the state of Israel.

HANNITY: Big assumption.

MCCAIN: See, this is a -- I guess -- but, this is one in a series where we ask the Israelis to make unilateral concessions in return for promises of Palestinian commitments that would be commensurate in consonance with it and would move forward with the peace process. Consistently, the Israelis have made concessions at our insistence and there has not been any -- any cooperation on the part of our Palestinian friends.

Now, I think there's some good people in Palestine, I think that there are some who are committed to peace. Prime Minister Fayyad is a very fine individual and there's some there. But, the rulers of Hamas and Hezbollah in the North, as you know, have made no bones about their commitment that they have to destroy Israel. Look at their commemoration just the other day of the founding of the state of Israel as they rushed the borders of Israel.

HANNITY: Yes. Lebanon's taken over by Hezbollah, which is the guerilla wing, basically, of Iran. You've got Gaza now, the Gaza strip by Hamas dedicated to Israel's destruction. You've got Syria, a mortal enemy. You've got the Muslim Brotherhood now, as I predicted and the administration got wrong and even repeated it today, they seem in line with an agreement with the military to be the front-runner. They said prepare for war with Israel during this so-called democracy movement, and Jordan has been weakened.

So, now, what are we talking about protection-wise for Israel in the end and how dangerous do you think it's going to be for them and what do you think Bibi Netanyahu ought to do?

MCCAIN: Well, first off, could I point out that the Syrians trucked Palestinians down to the Israeli border a couple of days ago on the anniversary of the founding of Israel and that was an active participation by the Syrians. Why? Because they wanted to divert attention from this brutal dictator that's massacring his own people that, up until recently, our secretary of state and others said was a "reformer." You might recall that.

This guy is a butcher and, I'm talking about Bashar al-Assad and -- and, obviously, we should be calling for his removal from office and I'm not talking about military means but we should be standing up for the people of Syria. I think that, you know, timing is interesting on all of these things. As you know, Prime Minister Netanyahu's due to come to Washington this week.

HANNITY: Next week.

MCCAIN: This weekend -- this weekend to give a major statement and, so, a major speech to APEC.

HANNITY: Here's my final question, Sir.

MCCAIN: What's happening in the Arab world -- go ahead. I'm sorry.

HANNITY: Only because I'm running out of time and I'm -- I'm --

MCCAIN: Sure. Sure.

HANNITY: -- going to be interviewing Prime Minister Netanyahu, but this is really important.

Fundamentally, it seems that the president, somehow thinks that we can have peace in our time. He really believes that if people are calling for your destruction and thousands of rockets are being fired into your cities -- this is what bothers me. He doesn't seem to understand the danger of Islamic radicalism, terrorism, the Muslim Brotherhood, Islamic Jihad, radicalism, Hezbollah, Hamas, I -- I -- there's something missing here, Senator. What do you think it is?

MCCAIN: An appreciation of the nature of the people who are bent on the destruction of the state of Israel and, at least, we should expect a recognition of the state of Israel's right to exist, everything on the table, every issue on the table, and sit down and people of good will who really want peace can come to an agreement and there is urgency to getting a peace agreement because we don't know how things are gonna turn out in the Middle East. It could easily -- what has, so far, been pro-democracy could turn into an anti-Israel sentiment and that could lay the grounds for further conflict if we're not careful. I share the president's sense of urgency.

HANNITY: Yes. But weakness, history has proven, incurs aggression and does not -- appeasement doesn't work. This seems very appeasement oriented.

Senator, good to see you. I know you have a big event you've got to run to. Appreciate your time tonight.

MCCAIN: Thanks for having me on.

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