SPECIAL REPORT

How damaging is UN resolution to US relations with Israel?

This is a rush transcript from "Special Report with Bret Baier," December 26, 2016. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIPS)

BEN RHODES, DEPUTY NATIONAL SECURITY ADVISER: When you see the facts on the ground, again, deep into the West Bank, beyond the separation barrier, we feel compelled to speak up against the actions.

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: As I told John Kerry on Thursday, friends don't take friends to the Security Council.

SAEB EREKAT, SENIOR PALESTINIAN OFFICIAL: This is a day where the international community has utterly rejected the settlement activities, the policies of dictation, the policies of apartheid being employed by the current Israeli government.

ALAN DERSHOWITZ, HARVARD LAW PROFESSOR EMERITUS: After an election it's the most undemocratic thing a president can do to tie the hands of his successor.

TZACHI HANEGBI, ISRAELI CABINET MEMBER: Thank god in 25 days we will see a change in the American administration and also a change in America policy.

(END VIDEO CLIPS)

DOUG MCKELWAY, GUEST ANCHOR: A significant international crisis erupted on Friday when most Americans were paying attention to the holidays when the United States in an unprecedented move decided to abstain on a U.N. Security council vote, a resolution that would condemn Israel for its settlements in the West Back. It is a vote that will have lasting consequences, or will it?

Let's bring in our panel now: Steve Hayes, editor in chief of The Weekly Standard; Mara Liasson, national political correspondent of National Public Radio; Mollie Hemingway, senior editor at The Federalist, and syndicated columnist Charles Krauthammer. How much damage is done as a result of this?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: This is very serious damage. It cannot be undone because you can't change Security Council resolution without the acquiescence of the Russians and the Chinese and you are not going to get it.

But the Ben Rhodes statement you showed is so disingenuous. First of all, the ideas that the Israelis didn't have a hand in this, the resolution, shows up and they decide to abstain, is ridiculous. Does anybody think that Venezuela and New Zealand spent nights slaving over the wording of this resolution? They were the ones who introduced it. Of course no. This was a U.S. operation all the way.

And the problem is, if Rhodes is right, this was only about the settlements deep in the West Bank, way beyond the separation barrier, you can understand the vote perhaps. But it's not. Every Israeli left to right has agreed that when there's a settlement, those settlements, in other words when there's a peace, are going to be abandoned and torn down.

Avigdor Lieberman, who is the rightwing minister of foreign affairs, lives in one of these settlements. He has said openly to journalists, I know it's so because I was in the room, that he would - and he lives in one of the settlements, that he would evacuate and tear it down in return for peace. So there's no argument about that.

But there are two other categories are settlements. The other are the close end blocks near Israeli territory. Everybody agrees on all sides that in the event of a peace, they will go to Israel and Israel will give back in a land swap some of its territory to make the Palestinians' home.

The pernicious part of this is the inclusion of the resolution of the term "east Jerusalem." That was totally unnecessary and it's completely illogical. It turns the holiest site in Judaism, the Temple Mount, the western wall, into foreign territory. People say it's the third holiest shrine in Islam. It's the first holiest shrine of Judaism. It's as if the U.N. passed a resolution declaring Mecca and Medina to be sovereign Jewish or Christian territory. It's absurd. It's an insult to the intelligence of the world and is supremely damaging to the Israeli claim to its own holy places.

MCKELWAY: You heard Charles say this. You heard Ambassador Dermer earlier in the program say that the United States was directly behind this and that Israel has direct evidence, or words to that effect, that the United States is behind this, something that the United States government, the Obama administration is vehemently denying. What do you make of this?

MOLLIE HEMINGWAY, THE FEDERALIST: I think it actually isn't that important because what we know is that this happened. The U.S. could have stopped it if the U.S. wanted to stop it. You have the U.S. engaged in some pretty breathtaking -- the Obama administration engaged in some pretty breathtaking dishonesty. They are saying that they warned Israel that this could happen, that they couldn't do anything to stop it. In many ways this is Israel's fault.

The U.S. had every incentive to keep this from happening and they had at built to keep it from happening. So whether or not there's this other information is kind of irrelevant. We know that the U.S. wanted it to happen because they allowed it to happen. And this causes huge problems for all sorts of relations with Israel, it goes against U.S. policy. We have never said before settlements are illegal as this policy does. It makes things very difficult going forward. We have gotten 25 years of concessions from Israel on the condition that we would never allow something like this to happen. This is a major mistake by the Obama administration.

MCKELWAY: What are the practical effects of this?

MARA LIASSON, NATIONAL PUBLIC RADIO: I think actually they might be not as bad for Israel as people think because the Trump administration has a completely different idea about what to do going forward. Donald Trump has nominated an ambassador who is not for a two-state solution, at least that's what he said. And we know Donald Trump says he wants to make this deal in the Middle East. But maybe the U.S. policy on Israel will be completely different, and maybe, as people are talking about in Israel today, that Netanyahu will have to decide whether he is for or against a two-state solution, which he has paid lip service to but people don't know if he's really, really for that.

MCKELWAY: Steve?

STEVE HAYES, THE WEEKLY STANDARD: I think there are two points to make here, one looking backward, one looking forward. The first is about the Obama administration. This fits the pattern of the Obama administration, punishing American allies and accommodating American enemies.

At the exact same time that this controversy was unfolding, we posted a piece on The Weekly Standard website about new revelations in the Iraq nuclear deal that the Obama administration had sought to keep quiet. They were revealed in part in this piece we posted on The Weekly Standard website by the IAEA, new documents showing that the Obama administration had given special accommodations to Iran as it pursues its nuclear program. This is the way that the administration has happened. It perfectly encapsulates the administration's approach to the region, I would argue.

The second point looking forward is the United Nations, and I think this has the real potential to be a breaking point for the U.N. This is the kind of thing that will bring together a center right coalition of isolationists, non-interventionists like Donald Trump sounds like he will be, along with conservative internationalists who have just had it with the United Nations. You look back at the history of the United Nations, it's a history of presiding over genocides, accommodating authoritarians, excusing dictators. Think back to the oil for food scandal under Saddam Hussein. Kofi Annan went into that scandal and said we can do business with Saddam Hussein's Iraq. And in fact they did do business with Saddam Hussein's Iraq. This is what the United Nations has become, and its obsession with Israel I think is emblematic of a broader misplace of its priorities.

MCKELWAY: To that point, Ted Cruz tweeted on Christmas Eve, quote, "Spoke with Israeli Prime Minister Netanyahu tonight to wish him happy Hanukkah and assure him of strong support in Congress. No U.S. dollars for U.N. until reversed." Charles, what do you make of that? And what kind of a movement do you see building in Congress or in a new Trump administration to start pulling money from the United Nations?

KRAUTHAMMER: Most Americans are not aware of the fact that we pay about a quarter of the freight of the U.N.

MCKELWAY: It's 22 percent.

KRAUTHAMMER: We're paying an organization that spends half its time, more than half its time and energy and resources and bureaucracy trying to attack the only Jewish state on the planet, a tiny little spec, while genocide, mayhem, murder, terrorism is going on all over the world. It's an obsession that to an outside observer appears to be insane. Why are we doing this?

And the rest of the time is spend undermining the United States and democracy and our allies around the world. It is an organization that exacerbates tensions, it does not assuage them. It was born in hope, the end of the Second World War. It turned out to be a disaster. Any move to minimize our support for it, any move to get it out of the U.S. -- imagine if headquarters were in Zimbabwe, the amount of weight and coverage it would get would be zero. I think it's good real estate in downtown New York City and Trump ought to find a way to put his name on it and turn it into condos.

Content and Programming Copyright 2016 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2016 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.