This is a rush transcript of "Special Report With Brit Hume" from May 9, 2008. This copy may not be in its final form and may be updated.



RICHARD CHENEY, VICE PRESIDENT OF THE UNI TED STATES: This anniversary of Israel's founding is an occasion for deep admiration and respect. What started as a tiny struggling country is still tiny, but has seen six decades of unceasing accomplishments. ...Israel has never had a better friend in the White House than the 43rd president of the United States.


BAIER: That was Vice President Dick Cheney last night talking about the 60th anniversary of the founding of Israel. President Bush will head to Israel to mark the celebration next week for a three-day conference hosted by Israel's President Shimon Peres.

What about the State of Israel and the challenges it faces ahead? Some analytical observations from Fred Barnes, executive editor of The Weekly Standard, Mort Kondracke, executive editor of Roll Call and syndicated columnist Charles Krauthammer, FOX News contributors all.

Charles, let's start with you. The celebrations this week in Israel and obviously this three-day conference next week that the president will attend.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Well, it's an opportunity to stand back and reflect the vice president spoke about admiration and respect. We forget how miraculous the establishment of Israel is. It is the first time ever people have returned to their homeland after two millennia and we established independence and sovereignty.

I mean Israel is the only place on earth where you have people living in the same land, worshipping the same God, and speaking the same language as they did 3,000 years ago. — That just hasn't happened anywhere else.

And it is not just the restoration of sovereignty. For example, Israel revived Hebrew, which had been a dead language, like Latin, read and studied but not spoken. It's now the everyday language with a rich literature and poetry of 6 million people and thousands and millions around the world.

All of this has been accomplished by — in 60 years. People, of course, they speak about the challenges and the clouds and the violence. Let's remember one fact: sixty years ago, Israel declared independence and was invaded by five Arab states who sought to extinguish it and failed. Six months earlier, the UN had decided that the only fair way to end the British Mandate in Palestine was establishing a Jewish state and an Arab state. — The Jews accepted it and the Arabs rejected it. That remains the central fact of this conflict. The Jews accepted it and the Arabs have rejected.

Sixty years later, it remains the central issue. It's not about occupation or settlements or checkpoints. It's about will the Arabs ever accept a Jewish state, and if they do, peace is possible. In the absence of that, we're going to have only war and terror and bloodshed.

BAIER: Mort, President Bush is heading to this conference. What can he hope out of this? What should the White House prepare for? You wrote an article about this.

MORT KONDRACKE, ROLL CALL: Well, exactly what's going to happen there, I don't know. I suspect that there is going to be a lot of maneuvering about the Mideast peace process to try to get the Palestinians and Israelis to get together and there may be minor moves. The Israelis would like the president to give — to start a research project, which is a good idea on, like, laser pulses and such things to knock down Katyusha rockets but that's miles and miles away.

My idea — it's not my idea. Actually it's Mark Kirk of Illinois and Jane Harman got 65 of the bipartisan members of Congress together to propose that the Israelis be put completely within the U.S. missile defense system as a counter to the Iranian nuclear threat, which is, you know, imminent, and the idea would be that we would put X-band radar, the same kind we've got in Japan and scheduled for Poland and the Czech Republic in Israel, and it would quintuple the warning time of a missile heading toward Israel, be able to knock it down with Arrow missiles that already exist in Israel, over maybe Iranian territory and not over Israeli territory. So, that would be a really birthday present to the Israelis. I don't know whether the president is going to do that or not.

BAIER: Fred, this three-day conference, the Israelis invited Arab representation but there is no sign there will be serious Arab representation. But so far there is no sign that there'll be any serious Arab representation.

FRED BARNES, WEEKLY STANDARD: Well, there's no reason to be surprised by that. I mean Charles pointed out, they have not yet accepted the existence of Israel. You know, there are a number of things that have happened. One, even with its survival under a threat for 60 years, Israel has advanced as an amazingly successful and innovative, economically stronger country now and it's done that, as I say, with its survial threatened all the time. It has attracted millions of immigrants, millions of tourists. — I've been there twice, and then look at the Palestinians who have chosen to live in squalor and rage rather than move on as a society and accept Israel and accept an Arab state. — You see the other Arab other countries have really, while they pretend to back the Palestinians they have never done anything to help them, to support them, and the most discouraging thing is when you see Europeans and one of my daughters lived in Europe recently and discovered there is a great hatred of Israel among a lot of Europeans. I think it's completely irrational, but it can only be based in one thing, and that's anti-Semitism.

BAIER: Quickly down the line. Will there be significant movement before this president leaves office on the Mideast peace process?

KONDRACKE: I don't think so. I think the Israeli government is too weak, and the Palestinian government is too weak.

KRAUTHAMMER: Absolutely not.


BAIER: All right, that's it for the panel. When we return, oil-producing countries contribute the least amount of money to the World Food Program. Why is there such a discrepancy between what America gives and what other countries give? Stick around. We'll be right back.



KY LUU, USAID: We have had some successes in certain crises, and in others, where it has not been a priority for them they have not been forthcoming. But the point being here is that I think that under humanitarian principles, under humanitarianism, that we would hope all donor states to view this to be in their best interests.


BAIER: That's a senior USAID official talking about efforts to get OPEC countries, oil-producing countries, to pony up to the World Food Program. As you take a look at the numbers, here's the breakdown. The U.S. is, as you can see, the top donor there, more than $360 million this year to the world food program, and you see the list there.

Now, the second page here OPEC countries, $50,000. United Arab Emirates, $50,000. Saudi Arabia isn't even on this list: [they're at] zero.

What about this and is there world outrage about the fact that rising food prices tied to high oil prices and yet the oil producers are not ponying up. Fred, what do you think?

BARNES: I think I'm not surprised. I mean, look, we've known for a long time in regard to food aid and other emergency aid and medical help and other supplies they come from the countries that are generous. And the United States is the most generous country in the history of the world. Remember the tsunami in Thailand and Indonesia which killed, I forget how many thousands of people, Saudi Arabia is a lot nearer to that, and so are all the Gulf States and the Iranians and other big oil-producing nations. They are a lot closer to the tsunami. They could have gotten help there. They didn't even lift a finger. It's all the U.S. that did it.

Now, the Japanese have done a lot, too. They're very generous and have a great deal of foreign aid. But look, this is who the United States is, and this is who these other countries aren't. It's not just Saudi Arabia, but it is the Iranians and the Gulf States and Nigeria and others like that.

KONDRACKE: I agree with that. Our aid, however, could be delivered much more efficiently and our generosity have much more impact if we didn't use the money to buy our own grain from the United States which is already at a very high price, and ship it, you know, thousands of miles in U.S. bottom boats and taking a long time to get there but instead went to the region and bought their grain, thereby — when our food gets there, it depresses the price of locally grown agriculture. If we bought their agriculture, we would encourage their farmers to develop. We have no reason to be buying surplus American grain. I mean, the price of our grain is already sky high.

BAIER: But on this issue, on the oil countries, the revenues .

KONDRACKE: There's no question about it. But what else is new? Those people, all they do is pump oil and spend the money on, you know is pump oil and spend the money on jewels and trips to Europe where they violate their own religious principles, for heaven's sake.

KRAUTHAMMER: Mort is right about the buying of the grain locally, but there is an easier fix. Abolish the insane ethanol mandate here at home. A quarter of the crop of corn in the United States ends up in the fuel tank instead of on the plates of Americans and poor people abroad. The price of food has risen as a result, — a foreseeable result of this folly in the United States, and obviously abroad — and it's basically stealing the food from everybody around the world. It was a mandate done as a way to get energy independence, but it was obvious that it would divert food and corn, everything from Rice Krispies to meat in the U.S. is more expensive. If we abolished that, and restored the corn to what it is, something you and cows eat, it would reduce the price of food abroad and would help the starving people abroad. Food aid is good. But that ought to be done as well.

BAIER: Any hope of pressuring OPEC, Saudi Arabia, anybody, for pitching in more?

KRAUTHAMMER: As I said earlier on peace in the Middle East, absolutely not.

KONDRACKE: They are unshameable.

BARNES: They do export things. They export oil and terrorists.

BAIER: That's it for the panel.

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