Thank you. Jack Bendheim, Cynthia Friedman Tom Smerling. I want toacknowledge the presence of the ambassadors from Israel and Yemen andother members of the diplomatic community. It's an honor to be heretoday among so many people who have contributed so much to the cause ofpeace in the Middle East. And I'm deeply grateful to the Israeli PolicyForum for inviting me. This organization is making a real difference asthe peace process goes forward.

At the outset, I'd like to try to put to rest one false debate - beforeI bring to life a real one. The false debate is about how tocharacterize the current role of the United States in the peace process.This issue has been with us for several months now, and I've consideredit an artificial question from the beginning. But labeling seems to bethe order of the day, and so labels there have been: Are we or should webe "facilitators," or rather "mediators," or perhaps "brokers,""partners," "catalysts," or "middlemen"? I view this discussion asacademic because it is wholly divorced from reality.

We will be central to the peace process not only because the partieswant it that way, but because it is a strategic imperative for theUnited States. For our role in the Middle East has never been afunction of whim or of whimsy. It is dictated by our nation's criticalinterest in promoting a comprehensive peace and by our assessment of howbest to achieve it. In other words, our role has been derivative ofU.S. strategic interests and of the regional strategic picture.

And so, let me turn to what I consider the real question, one we mustnever lose sight of: what are our interests in the region, what is theregional picture, and how do both shape U.S. policy toward the peaceprocess as we move into a new century?

I will start from the proposition that a Middle East that is stable andat peace is critical to America's national interests. It is essentialto remember that what happens in the region has a direct bearing onAmerican security and prosperity. Conflict in the Middle East presentstoo great a threat to be ignored: that was true in 1956 and 1967, againin 1973, once more in the 1980s in Lebanon and, most recently, in 1991with the Gulf War. On each occasion, the lethal combination ofpolitical, religious, ethnic and state-to-state conflicts with a surplusof deadly weaponry - both conventional and unconventional - dictated astrong U.S. engagement. The fact is that with the possible exception ofSouth Asia, the Middle East is the most dangerous region in the worldwhen it comes to weapons of mass destruction and one of the regions mostlikely to see them used.

The Middle East also is home to Israel, one of our closest allies, andone with which we enjoy a special bond -- rooted in history; founded oncommon interests; sustained by shared values. To protect Israel'ssecurity is to protect our own - which is why our commitment isiron-clad and everlasting. And the Middle East is the location of twothirds of the world's oil resources, making it a region critical notonly to our economic well-being, but to that of friends and alliesaround the globe.

That's why every single U.S. President since Harry Truman has considered

the Middle East to be vital to our national interests, and why every onesince Dwight Eisenhower has invested considerable time, energy andresources in seeking to resolve the Arab-Israeli conflict.

These abiding interests are brought into sharper focus when one looks attoday's regional landscape. For we are witnessing a region that is at ahistoric crossroads. Simply put, the Middle East with which we will bedealing ten or twenty years from now will bear only surface resemblanceto the one with which we are familiar today.

The most salient feature of the current landscape is the new, albeitfleeting, opportunity for peace. Throughout the region are leaders withthe power - and, I believe, with the will - to make peace. In PrimeMinister Barak, we see someone with the determination, the convictionand - equally important - the electoral mandate to reach agreements andto implement them. In Chairman Arafat and President Assad are twoleaders - one, the embodiment of Palestinian nationalism; the other, thepersonification of the Syrian state -- who can make tough decisions andthen make them stick. And in President Mubarak and King Abdullah aretwo leaders capable of steering the others and creating a propitiousenvironment for peace.

For this moment of history, however brief, even their respectivetime-tables are lining up. Each for his own reason, Prime MinisterBarak, Chairman Arafat and President Assad have their eyes riveted onthe next twelve months. Hence the ambitious, even daunting, goals : aFramework Agreement between Israel and the Palestinians within fourmonths; a permanent status agreement within eleven; and, by next summer,an Israeli withdrawal from Lebanon in the context of agreements withSyria and Lebanon.

These objectives reflect a welcome sense of seriousness, but there ismore to it than that. They also reflect a sense of urgency, therecognition that absent rapid progress on peace, today's opportunitywill give way to tomorrow's vast uncertainties. For the conclusion isunmistakable: the Middle East is in the midst of a transition unlikeanything we have witnessed in living memory. From North Africa to theWest Bank, the region is changing in ways small and large that willaffect every single aspect of people's lives.

Tomorrow's Middle East will be a region in which nearly every countrythat is key to our interests will have undergone some form of politicalsuccession. Already, we have seen transitions in Jordan, Bahrain,Morocco, and Algeria. But more than a change in leadership is at issue;at stake is the passing of a generation. Consider this: King Abdullahof Jordan is 37; King Mohammed of Morocco 36; half of all Saudis areunder the age of 15; sixty five percent of Iranians are under 25; and inAlgeria, 70% of the population is under 30. This new generation hasexperienced neither colonialism, nor war with Israel, nor the heyday ofArab nationalism. Its outlook has yet to be formed; its politicalaspirations yet to be defined.

But here's the concern: unless there is a climate in which reformers cantake charge, tomorrow's Middle East could be a region of explodingdemographics and imploding economies; of overpopulation andunderperforming educational systems. In fact, in places like Egypt,Jordan or Morocco, reformers are taking courageous steps to modernizetheir societies. But, fearful of globalization and diverted byconflict, too many other nations are being held back and are resistingthe necessary political and economic changes. The result has been lowlevels of foreign investment, low rates of regional trade, low growthrates and a wasteful diversion of resources to the military.

One illustrative example: the Middle East ranks dead last among theregions of the world in terms of Internet usage. Only about a millionpeople are on line in the entire region of roughly 250 million people -and about half of those live in Israel. Contrast that with the 88million internet users in the United States, 26 million in Asia and 5million in South America. Those who remain disconnected from the globaleconomy - literally and figuratively - are destined to fall further andfurther behind.

How the Middle East evolves matters. It matters, of course, mostdirectly, to the people of the Arab world. It matters to the Americanpeople as well, because of the strategic, political and economicinterests that are at stake. It also matters - profoundly -- to thepeople of Israel. For them, the difference between a Middle Eastfocused on economic development and looking to the future and a regionmired in poverty and in hatreds inherited from the past is thedifference between peace and conflict . . . lasting security andperpetual threat . . . a normal life and the lives they have been forcedto live.

Will tomorrow's leaders bear the traits of a King Hussein - or those ofa Saddam Hussein? Will tomorrow's generations heed the calls foreconomic reform, democracy and human rights - or will they listen to thesuperficial appeal of religious fanaticism and political intolerance?Will tomorrow's Middle East be a region in which Israel feels welcome -or threatened by neighbors who deny its very right to exist? Thoughthere can be no sure answers, there is one thing of which I amabsolutely confident: no variable will have a greater impact on thesequestions than the state of the peace process.

By advancing peace, we can boost a new generation of Arab leaders, moreattune to economic and political reform, closer to our values and lessvulnerable to anti-Western and anti-Israeli bashing . . . we can allowthem to focus their energies on festering economic problems, reducingthe risks of upheaval and depriving extremist forces of the fodder thatkeeps them going . An Israeli-Palestinian peace would dry up theemotional and ideological well-spring of the Arab-Israeli conflict,thereby de-legitimizing Arab hostility against Israel and the U.S.Agreements between Israel, Syria and Lebanon would provide calm andnormalcy on all of Israel's borders . . . resolve the situation inSouthern Lebanon . . . deprive terrorists of key resources and placesof refuge. In his meeting with President Clinton last week, KingAbdullah put it well: by taking Jordan down the road of peace, he said,his father had made it possible for him to take Jordan down the path ofmodernization and reform.

Now consider for a moment the alternative. A Middle East that is aneven more dangerous tinder box, a blend of real grievances, falsesolutions and opportunists willing to feed on both. A Middle East inwhich groups can continue to use the Arab-Israeli conflict as a rallyingcry for the disenfranchised, recruiting the destitute by mingling actsof terror with acts of charity. A Middle East in which the perpetuationof conflict will make it that much harder to attend to other pressingneeds.

And ask yourself this simple question: if a country like Iraq or Iranwere to acquire a nuclear arsenal, would Israel be better off surroundedby a buffer of peace or trapped within a deadly circle of hatred?

And so, what about America's role? I think we need to keep all of whatI have just described clearly in mind - our abiding national interest inpeace as well as the urgency of the region's current circumstances. Foras I said at the outset, our role must be dictated and shaped by both.This has always been the case - from the disengagement agreements theU.S. helped broker in 1973 and 1975 to the peace accords we mediated atCamp David or at Wye . . . from the conflicts we helped defuse inLebanon in 1993 and 1996 to the forces we have contributed in the Sinai.Our role has had to adapt, and we have had to show flexibility. Butthroughout, our compass has remained one and the same: protecting ournational interests by promoting Middle East peace.

Perhaps the most useful way to look at this is to compare the U.S. rolein two recent agreements: the agreement signed at Wye in October 1998and the agreement reached in Sharm el-Sheikh in September of this year.

Wye came about at a time of deep mistrust and shallow communicationbetween the parties, a time of skepticism regarding the viability andthe very premises of the journey begun at Oslo. With Israelis andPalestinians showing too much appetite for recrimination and too littlestomach for compromise, we stepped in to prevent a collapse. If theywouldn't actually talk to each other, then they would have to talkthrough us. The President brought the two parties together; closetedthem at Wye; helped draft the agreement. For nine largely sleeplessnights, the President walked patiently from one side to the other until,at long last, they found common ground.

With Ehud Barak's election, the parties no longer need an interpreter -they began speaking to each other in a common language, even if it meantdisagreeing in a common tongue. And so, we played a different role atSharm el-Sheikh - different, but not lesser. I would divide it intothree parts. The prologue began with Prime Minister Barak's victory andthe President's sustained efforts to help Barak and Arafat understandeach other better. In meetings that lasted over 12 hours with the newPrime Minister and countless telephone calls to both, he would sendparallel messages: to Chairman Arafat, that the Prime Minister wasseriously committed to peace, that he was a man of his word, and thatthe Palestinians ought to listen to his proposals with an open mind. ToPrime Minister Barak, that he had to take account of what the past threeyears had done to sap the Palestinians' confidence.

Now part two is where the real differences between Sharm el-Sheikh andWye emerge. In a mere five weeks, Israeli and Palestinian negotiatorssat together and drafted a new agreement. We may have offered ideas orsuggestions, but this would be their agreement - an agreement morelikely to be implemented precisely because both sides wrote every wordand understood every nuance.

Finally, as we approached the end-game, President Clinton and SecretaryAlbright helped the parties cross the finish line, encouraging them tomake the leap from agreement in principle to signature on paper.

What we have witnessed since then is powerful evidence that having thetwo parties work together directly while maintaining a robust Americanrole is the most effective way to advance peace. And that evidencecomes from the only source that counts - the Israeli and the Palestinianpeople. More has been done in terms of peacemaking during the pastthree months than in the preceding three years. Security cooperationbetween Israel and the Palestinian Authority is yielding real results,enhancing the safety of both. Israel has turned over another 7% of theWest Bank to full Palestinian control. One hundred and ninety ninePalestinian security prisoners were released a few weeks ago; anotherone hundred and fifty one this past Friday. Issues long postponed ordeferred - like the safe-passage between Gaza and the West Bank orconstruction of the Gaza seaport - finally are seeing concretemovement.. In other words, peace is doing what it ought to do: bearingfruit.

But now comes the moment of truth. On the Palestinian track, the partiesat long last have agreed to address the core issues that have definedtheir conflict for the past fifty years . . . and that will define theirpeace for generations to come: Jerusalem, refugees, settlements, water,borders, sovereignty and security. On the Syrian track too, it is timefor hard decisions: on the content of withdrawal . . .on the characterof peace . . . and on the substance of security arrangements that arenecessary to conclude a deal.

On both tracks, these truly are existential questions. Hard questions.All the good will of the world will not make them any easier. But allthe time in the world will not make them any easier either. And withthe clock ticking on so many fronts - leaders about to pass the baton,;new generations ready to take charge; an economic environment undergoingmomentous change - it must be now or it may be never.

Regardless of how one characterizes our role, it should not obscure thisbasic fact: we, the United States, have vital strategic interests atstake and we are at a pivotal strategic moment. Our interests areserved when agreements are signed - and implemented - by Israel, itsArab neighbors and the Palestinians. There is no greater priority forthis Administration and there is no greater priority for this Presidentthan to bring about that just, lasting and comprehensive peace for whichso many of you have given so much for so many days and years of yourlives.

When all is said and done, it is not how we choose to characterize ourrole but how we choose to play it that counts. It must not be said thatwhen the parties were prepared to do what we all along have pressed themto do, America opted for the sidelines. Peacemaking is not a spectatorsport. Israel, the Palestinians, Syria and Lebanon all have difficultdecisions to make. The broader Arab world also must shoulder itsresponsibility by supporting those decisions and reaching out to Israel.And we must do our share.

And we should start by following through on our own commitments. Thatmeans full and immediate funding to implement the Wye accords. Thisweek, the President vetoed the foreign operations bill that was sent tohim by the Congress. He vetoed it, in part, because the bill would haveprovided neither the $800 million requested this year for Wye fundingnor the $500 million requested for the coming year. The bill sent theworst possible signal to our friends in the Middle East, and thestrongest possible encouragement to those in the region who would do usharm. As we have made clear, the President will not sign a foreignoperations bill that does not contain this funding.

But the President also vetoed the bill because it would have recklesslyreduced funding for many other programs. For the need to fund Wye ispart of a far larger proposition: that protecting American interestsrequires global leadership. And that global leadership cannot bemaintained on the cheap. We need the resources for Wye, just as we needthe resources to fund our foreign policy as a whole. Preserving theseother programs is central to our national interest. They would reducethe nuclear threat from Russia . . . provide debt relief for thepoorest countries . . . meet our obligations to the United Nations andthe multilateral development banks . . . in other words, defend oursecurity by promoting peace and economic opportunity abroad.

But there is more: by failing to adequately fund our foreign policy weharm not only America's interests, but also Israel's interests and theinterests of all those dedicated to peace in the Middle East. Thinkabout it: roughly half of all our bilateral assistance to the world nowgoes for support to the Middle East peace process. If we add Wye andsubtract the rest, the picture will become so unbalanced that currentlevels of Middle East assistance will, in my judgment, becomeunsustainable for the American people. To put it plainly: it is in theinterest of friends of Israel to fight not only for Wye but also for ouroverall foreign policy funding, for the weaker our overall funding, themore vulnerable our assistance to Israel, to Egypt or to Jordan. I knowthere are many friends of peace in America, including those of you whoare here today, who support the Administration as we persevere to dowhat is right.

Tomorrow, Israel will commemorate the fourth anniversary of a day thatis etched in our memories like few others - the day Yitzhak Rabin wasassassinated. Two weeks from now, a city that symbolizes peace willhonor a man that stood for peace; Oslo will honor Yitzhak Rabin.Leaders from around the region and the world will be there to paytribute to a great leader. I am happy to tell you today that PresidentClinton will be among them. So will Prime Minister Barak. So willChairman Arafat. And they will honor the memory of Yitzhak Rabin in thebest possible way: they will meet to rededicate themselves to the peaceprocess, give it added momentum, and set their sights on the goal forwhich Rabin gave his life: a permanent peace between Israel and thePalestinian people.

The bullet that took Rabin's life also had another target of course: thepeace process. We lost a true hero. But the peace process lives on.And as we celebrate the anniversary of the death of one of Israel'sgreatest leaders, let us resolve to do everything within our power torealize his vision in the coming year.

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