The politics of Trump's Middle East strategy

This is a rush transcript from "Special Report with Bret Baier," May 14, 2018. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIPS)

PRESIDENT DONALD TRUMP: Jerusalem is the seat of Israel's government. Today we follow through on this recognition and open our embassy in the historic and sacred land of Jerusalem.

ISRAELI PRIME MINISTER BENJAMIN NETANYAHU: President Trump, by recognizing history have you made history. We are in Jerusalem and we are here to stay.

JARED KUSHNER, WHITE HOUSE SENIOR ADVISER: Israel is a sovereign nation with the right to determine its own capital, the same right that is enjoyed by every other country in the world.

SAEB EREKAT, PALESTINIAN NEGOTIATOR: We also witnessed today a ceremony of the prime minister of Israel and the administration of President Trump burying the peace price, burying the two-state solution, killing the hope in the minds of the people of the Middle East as a whole for the possibility of peace.

(END VIDEO CLIPS)

BRET BAIER, ANCHOR: It was a campaign promise and it has been delivered. The U.S. embassy moved from Tel Aviv to Jerusalem. Other countries have followed suit or are in the process of doing that. The United States is the first one, but Guatemala this week, Paraguay, Honduras, Romania has a proposal to move its embassy, would be the first EU member to do so very soon. Democrats supporting this. Chuck Schumer, the Senate minority leader, saying "In a long overdue move we have moved our embassy to Jerusalem. Every nation should have the right to choose its capital. I sponsored legislation to do this two decades ago, and I applaud President Trump for doing so."

Obviously there were other people who had a real problem with it, including many Palestinians who took to the streets today. Some 40,000 Palestinian staged demonstrations along the border. More than 50 people were killed in the rioting there, 2,300 wounded, and some of the Arab street weighing in on all of that today as well.

Let's bring in our panel: Steve Hayes, editor in chief for The Weekly Standard; Mara Liasson, national political correspondent for National Public Radio; Mollie Hemingway, senior editor at The Federalist, and we welcome former National Security Council spokesman Michael Anton.

Michael, let me start with you. This was the plan for a long time. Has it gone as planned, do you think?

MICHAEL ANTON, FORMER NATIONAL SECURITY COUNCIL SPOKESMAN: It's more than a campaign promise. First of all, this is U.S. law for, I think, 23 years, passed in 1995. And this is one of the things, I just want to point out, that I think drives middle America, the average American crazy about Washington. Congress passes a law with overwhelming bipartisan support, puts a waiver provision in it so the will of the people through their elected representatives is that this should happen. And every six months every president waives it, waives it, waives it, and it never happens. It's a kind of theater in a way.

And then a president finally fulfills the terms of the law, and you saw this, yes, he's got some support, but a lot of his domestic political critics level all kinds of accusations at him when I thought as the terms of the law this was bipartisan consensus for two decades.

BAIER: So on the bigger picture, Mara, on the Middle East peace process and where this goes, what does this do to that?

MARA LIASSON, NATIONAL PUBLIC RADIO: Well, I think that's the big question, kind of now what? It's not unlike getting out of the Iran deal. OK, now what are you going to do next? The Middle East peace proposal from the Trump administration has yet to be unveiled. As you heard the Palestinian leader, they are not inclined to enter talks now they feel the United States is no longer an honest broker. It's just totally on Israel's side.

So I think now the ball is in the president's court. And he has to come up with the next steps for Middle East peace if that's what he wants. If he just wanted to fulfill a campaign promise, he has certainly done that.

BAIER: Mollie?

MOLLIE HEMINGWAY, THE FEDERALIST: I think it is awful to see what we saw, the loss of life with so many Palestinians being killed. And The Washington Post had reported that they were told, that Hamas had told them that Israel was not manning these sites on the border and it was causing people to rush, and then they was found that they were manned. That is a very sad to see and it's not fun to watch.

It is also true, though, that I think that this could, in the long term, lead to a greater chance for peace. We have the reality that Jerusalem is the capital of Israel. And it is important that everyone acknowledge that, and it's time for Palestinians to acknowledge that, and that dealing with reality is a good way to get move forward towards a peace agreement which people hope for.

BAIER: Steve?

STEVE HAYES, THE WEEKLY STANDARD: There are other things taking place behind the scenes around the subterranean level that suggest that there is some move toward peace. When you talk about the talks that are happening out of public eye between Israel and the Saudis, or the support, the common values on the Iran deal between Israel and the Saudis, Israel and UAE, the Bahrainis stepping up and speaking out in favor of the withdrawal of the Iran deal. I think you're seeing these moves. This gets a lot of headline particularly because of the loss of life, but there are other indications that are much more positive.

And this is something that Donald Trump campaigned on. This something that he said. I think Mike is exactly right. This is something that you had presidents of both parties saying for literally decades, and they didn't do it. He did it.

BAIER: The equation of pulling out of the Iran deal, then moving the embassy, and those two things together, how do they interchange? How do they interlock? How do they affect each other?

ANTON: Well, I think that -- first of all I just want to follow up on a point that Steve made there. I think when you missed an opportunity, I don't think this -- it's really the Palestinians that are missing the opportunity. It's really the Palestinians that need to come back to the table. That's what's important here.

If the Palestinians, if Mahmoud Abbas would just come back and talk to this administration, talk to this president and sit down, I think he would fight an incredible willingness and eagerness to get a deal done. I have heard President Trump talk about this so many times. There's an old saying that goes around Washington, people who have dealt with this issue, that the Palestinians never miss an opportunity to miss an opportunity. And that's what they are doing now.

I think it's also interesting that what you are seeing is a lot of this is coming out of Gaza, which is controlled by Hamas and run by Hamas, right, and you are not seeing this intensity come outs of the West Bank. This is clearly being ginned up for political purposes. And the White House is so concerned. Look, what's only a couple weeks ago that the White House hosted a conference on the future of Gaza and how to improve its infrastructure and improve the lives of the people. Got the Gulf Arab states to show up and pledge some aid. These are states that don't like to talk to one another in some respects because of the dispute in the Gulf and don't like to be in the same room with Israeli representatives, and they were all there. I think that was another positive and hopeful sign if only the Palestinians would embrace the possibilities that I think President Trump is opening up for them.

BAIER: I guess the question is, does the Arab street change now because of the different relationship with the Trump administration and the Gulf states as far as how they react to both things, the Iran deal and this move?

HEMINGWAY: There is, it does seem a reshaping in the Middle East from what we had seen in the previous administration with an effort to make Iran more dominant and the -- but I think it remains to be seen how they respond.

BAIER: Mara?

LIASSON: I come back to this question, if the United States is going to be the leader and is going to put forward a peace plan it needs to do that. The Palestinians will come to the table if they see a good plan where there is something in it for them. Right now they don't know what it is.

HAYES: For years, Middle East peace has been used as something to block progress in other areas in the region. The foreign policy establishment says you have to solve Middle East peace first, and then you can address threats from Iraq, you can address jihadism, you can address Iran, you can address all these other things. I think this sends a message pretty clearly that's not going to be an obstacle anymore. Take that, set to the side, and deal with threats like Iran on a realistic basis.

BAIER: So it changes the paradigm, it changes the starting point?

HAYES: Brit said it earlier in the show. You are dealing with reality here. This is a more realistic look at the way that the Middle East is unfolding.

BAIER: Final word.

ANTON: One thing, too, is keep in mind that Iran is a big supporter of Hamas. A lot of the wealth that Iran is able to take in because of the Iran deal on frozen assets and then the wealth that they were able to generate by being allowed to do business with countries that used to sanction them, they are spending that to destabilize the Middle East and fund terror. They're funneling in to Hamas and other groups like this. And hopefully with the U.S. out of the Iran deal, perhaps some new sanctions and some other secondary sanctions going back into effect, some of that resource funnel gets choked off, gets reduced, and Iran doesn't have the resources, or it has fewer resources to spread mayhem, chaos, and violence the way it has been doing.

BAIER: We will see.

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