The fourth meeting of the steering committee which will take place in Japan next week will be the first one in which we are going to deal with the question of the future of the Middle East while peace prevails. Since the last meeting of this steering committee in Moscow in May, many things have happened in the Middle East, and especially the agreement with the PLO on September 13 this year which enables us to move from the usual way in which we dealt with the issues, with specific projects and so on, to a more ambitious question of the vision for the Middle East. It was our suggestion in Moscow to deal with it, and the different parties to this meeting prepared their visions. Israel is going to present the vision for the Middle East, and I hope that we will be able to refer not only to our vision, but to the visions of the Arab states and to the vision of the co-sponsors.

We are going to present the picture of the Middle East in the future in two steps the short range and the longer one.

For the short run, we are speaking about infrastructure investing in infrastructure, in telecommunications, in energy, in water, in roads, in railroads. Here we believe that investing here in the infrastructure will create the right way to develop the interdependency among the countries of the Middle East and create a kind of a ‘safety net’ for the peace treaties which are going to be signed in the future in the Middle East, hopefully next year.

It is a must for us to think already about the morning after, because all of us understand what it means, a ‘morning after effect’. We feel today, after the expectations of the agreement of September 13, the continuation of violence is creating some skepticism on all sides about the agreements, about the ability to implement the commitments. Hence it is very very important to know already now what we are referring to when we are speaking about the future Middle East.

That was our first coordinated effort in Israel to create one picture about all the five areas with which we are dealing: water, environment, refugees, economic cooperation, and arms control. In all those areas we are referring to the first step of infrastructure and the next step of cooperation on a higher level, which may be perhaps conducive so something like a common market in the Middle East. But that will not happen in the coming years. It will only happen, according to our way of thinking, on the basis of a common infrastructure which is still not there. The fact that there is an incompatibility of the economies of the Middle East, the fact that there are such huge gaps of development between the Israeli economy and the economies of our neighbors is creating an inhibition, a problem for all of us to think already now about a common market.

We should know where we can cooperate immediately, what should we do towards the second phase, and where should we invest. Because when we are speaking about 65 joint projects in the multilateral level, in all those five working groups, and about 35 joint ventures in the economic cooperation working group, the question is: where should we invest immediately, and where should we invest later on. We moved already from the stage of seminars and long talks about the future Middle East to very concrete steps of pre-feasibility studies, of feasibility studies, and of allocating resources to the projects. We are speaking here about billions of dollars. And once we are speaking about such huge sums of money which are involved, I think that a common ground about where to put the money first is a must, in order to coordinate our work in the Middle East.

The second thing which is important for us is the venue of the meetings of the different working groups on the multilateral level. We hope that it will be possible to have all those meetings in the Middle East, or at least most of them. We already had a meeting of the refugee committee in Tunisia, we had a meeting of the environment group in Cairo, and we would like to have the coming meetings in the Middle East. This is another small contribution to the positive atmosphere in the Middle East towards peace and cooperation, which is linked to peace.

So those challenges of dealing with the visions, comparing the visions of all of us in the Middle East, and trying perhaps in the next meeting of the steering committee after Tokyo to mold something common for all of us, and to have for the first time an agreement between Israel, the Arab world and the co-sponsors and the other participants in the multilateral groups, about the future of the Middle East beyond the words. That will be the biggest challenge. Another challenge is to have all the meetings in the Middle East, which will be, as I said, a contribution to the difference and the new step which has been taken in the area since September 13.

Q: Briefly, what is Israel’s vision of peace? What exactly are you going to present to the conference? Second, you talked about a positive atmosphere of peace and cooperation. There is no such atmosphere here right now, and I was wondering if your concern is that the violence by one side or the other could actually sabotage this whole operation?

A: About the vision, I wouldn’t like to go into details, but we are speaking about specific things in all those areas. What can be done, for example, about water desalination vis-a-vis a division of water, which may be conducive to conflicts which are totally redundant. Speaking about environment, what are the prospects for cooperation. You cannot actually deal with environment, especially in the Gulf of Aqaba, if you don’t have cooperation between Saudi Arabia, Jordan, Israel and Egypt. If you speak about energy, for example, the idea of connecting the electricity grids of the Middle East is obvious. It will save us billions of dollars. Speaking about Israel, it will save us 700 million dollars a year. It is easy to do, relatively speaking. It can be done in the first phase, because we are not speaking here about a huge investment in money, so that is something which is feasible, which is easy, which should be referred to as part of the first phase. Speaking about the second phase, it is something else. The idea of a Red Sea – Dead Sea canal, for example, can be referred to as part of the second phase, because here you speak about billions of dollars and a very very profound feasibility study which is needed in order to understand in advance whether this issue is profitable or not. Speaking about the connection of the electricity grids, it is obviously profitable. What was important for us is to divide the vision into two, and not just to speak about how nice it will be to cooperate, but also what should be done, what are the preferences. And the question of preferences, when money is involved, is vital. If you don’t have preferences, you have a conflict. If we agree about the preferences and I cannot tell you that we agreed already but if there is room to agree about preferences, we did much. And that is our aim, now, in Tokyo: to begin to coordinate the visions, not only about the nice words, but also about the preferences of joint projects in the Middle East.

Speaking about violence: Violence for us was not a surprise. We knew, when we talked with the PLO people in Oslo, that once there is an agreement, the Palestinian opposition would do whatever possible in order to hard the agreement, in order to prevent its implementation. And we knew that the HAMAS and the Jihad and the other groups would attempt violence against us and against the PLO. Submitting to violence is the last thing that we should do, if you would like to make peace with the Palestinians. The demands to stop the negotiations today, which are heard in Israel, is I believe the biggest mistake, and the government of Israel will never agree to it. Because that means submitting to terrorism. That is exactly what HAMAS wants us to do: To say, ‘OK, there is no big difference between the more moderate Palestinians, the more extreme ones they are all the same. Violence is there, we cannot go on.’ That’s why our task is to go on, to intensify the talks, to do whatever possible in order to, on the one hand, of course, keep the security needs of Israel. But on the other hand, to get to an agreement with the Palestinians and to implement it as soon as possible.

Q: Mr. Peres is going to meet Yasser Arafat tomorrow in Granada. Is he going to ask him for a delay in the 13th of December?

A: This is not on our agenda. We do not want to ask the Palestinians for a delay. Our dream is not to postpone it. If it is possible to find a solution and agreement about the issues on the agenda, we will be the first to stick to this timetable. The meeting between Mr. Peres and Mr. Arafat was not planned in order to deal with the process now. They are participating in a very unique and important meeting of intellectuals from the Middle East in Granada. I am sure that once they meet, they will also refer to the political problems now, on the way of an agreement between us and the Palestinians, and I am sure that Mr. Peres will clarify to Mr. Arafat how we see the situation and what are the issues which for us are very very important.

Q: Is there any way to implement or start implementing something on Monday, to give people some form of movement in this process, even if you don’t finalize every little detail of the handover agreement that’s supposed to be signed on that date?

A: I would like perhaps to refer to Monday. The decision to have negotiations about the details of the self-rule in Jericho and Gaza only in two months was taken because we understood that the Palestiniani opposition will try to prevent the implementation of the agreement by violence, and because we did not want to expose ourselves to a very lengthy period of violence. That is the secret behind the two months. We knew that it would be very difficult to agree upon all the things in two months. You can justify such negotiations also for three years or ten years. But we said to ourselves that it is very important to shorten this period, and to try to agree on all the issues. December 13 is a target date. It is not a date on which one side is committed to do something or to give something to the other side. It is a target date to conclude the negotiations between us. If until then it is possible to conclude the negotiations, we will stick to the timetable. If this is not the case, and there is no agreement about a list of issues, so what should we do? Should the Palestinians, for example, agree to what ever we want them to agree, just because it is December 13? Should Israel agree to whatever the Palestinians demanded us to do, just because it is December 13? I don’t think so. It won’t be fair for us, it won’t be fair for them. Since on both sides we understand the importance of sticking to the timetable, of not prolonging this process too much, we should do mutually whatever we can in order to stick to the timetable. But if it takes another week, I do not believe that it is the end of the world. That is an agreement between us, to conclude to the negotiations between us. I understanding the symbolic side of it, but I do not believe that we should attribute too much to this date, because it is very very difficult, objectively, to agree on all the issues. And it is a very complicated and unprecedented situation, this kind of self-rule that is going to take place very soon in Gaza and Jericho. So it is understandable that we did not, until now, agree on all the details. I believe that all the issues on the agenda are surmountable and bridgeable, that we are going to find a solution for all the problems, and I hope that it will be as soon as possible.

Q: Is that yes or no?

A: I believe that here the question of yes or no is not the most important one. It is important to understand why did we decide about two months at all.

Q: The question was about some partial things, to take out the army from Jabalya or something like that.

A: I can’t tell you. I don’t know, and I don’t believe that it is very important. What is important is to agree on all the issues on the agenda and to implement the autonomy in Gaza and Jericho, and not just to have some symbolic act. Theoretically it is not something that I would exclude, but I wouldn’t like to attribute to December 13 such importance that if we don’t agree about it, we should symbolically evacuate two houses in Gaza and say, OK something happened. Who are we going to deceive by that? What we have to do is to agree upon the details, and not to do something which is perhaps symbolic but also not so important.

Q: There are some people in Israel who are saying that the entire interim agreement is just going to be a lengthy period of violence and that you might have to move much faster towards talking about the final status. Do you agree with that?

A: I think that it is a mutual interest of the Palestinians and of Israel to have this interim period of five years. I can tell you that from talking to the Palestinians, most of them I am speaking about the leadership feel that they need those five years. So it’s not just an Israeli demand. I believe that for us it is also very important to see what is happening. The question will be in the future, whether the PLO can control the situation. What is the authority, what is the power of the PLO? We made an agreement not with a government but with an organization, and it is important for us and it is important for them to see what is the development of such an agreement.

Q: What would constitute a failure of that test? Everyone says the main test is can the Palestinians police control violence. What would constitute a failure of that test, and do you believe that the Palestinians are going to be any better able to control violence than the IDF is, this week say?

A: I do not believe that it will be fair to compare the situation today with the situation in the coming years, when there is the PLO leadership in Gaza and Jericho, when there is a Palestinian police. I think that the framework will be a very different one when Israel is not there at all in the city of Gaza, in the areas of Gaza, in the area which will be agreed upon in Jericho. When we are not there as occupiers, and there is no justification politically or whatever for the Palestinians to say: ‘We are fighting against the occupiers’, but it’s their own people, it’s a very different ballgame. If violence continues, if, God forbid, terrorism continues in the same dimensions in the coming months, before we talk about the permanent solution, I think that the failure of this agreement will be obvious. I believe that it is not going to be the situation. I believe that once Palestinians are controlling Gaza and Jericho, they will be able to control terrorism also. But I’m not sure. This is my conviction. I think that I’m right, I’m not sure. All of us believe that we did the right thing, but we have to test it. And the test will take place in the coming months, and in the two years until the beginning of the negotiations about the permanent solution.

Q: You said the Palestinian violence is not a surprise. How about the Jewish violence? How much of a surprise is the reaction by settlers, and to what degree is Israel’s ability to control them Israel’s test?

A: I think that neither opposition is a surprise. We knew that there are people who would not accept it, who believe that the leadership of both sides betrayed their national interest, and that it is for them to fight against their leaderships which went wrong. Of course, the kind of opposition in the Palestinian camp and in the Israeli camp is not the same. What you see here is most of all demonstrations and parliamentary opposition. Regretfully, you also see something else. And what we have to do, is to do whatever possible in order to put an end to it. I think that the lessons of the last week were learned already, and that we will do in the future whatever is needed and whatever possible in order not to let those people who are of course a small minority but a very visible one to take the law into their hands.

Q: You said that when there will be Palestinian police force, you expect violence to subside. But what happens if it goes on, and it will go on of course, in all the areas where the PLO is not in control in Hebron and other places? We understand that right now the PLO is not in control and can’t do very much about the violence. But how come that the mighty Israeli army and police obviously can’t do anything about the Jewish violence, or at least not much?

A: First of all, the Israeli army, the IDF, is able to deal with many issues, including the question of Jewish violence. As I said, we learned the lessons of the last week, and we will do whatever possible and much is possible in order to prevent the repetition of such events in the future. One hundred percent doesn’t take place anywhere. But we will do whatever possible for us to prevent it in the future. You are asking very difficult questions about the other areas which are not part of the agreement. You know that we are going to negotiate with the Palestinians about elections. Once they have elections, they have their elected council, they will be able to control the whole of the West Bank and Gaza, and then this question will not be relevant any more. If elections do not take place on time, and if there is still a difference between Gaza and Jericho and the other areas, we will have to deal with the question of early empowerment, for example, in some areas, so that they will be able to control their own business in a partial way. I must admit, also, that we do not have answers for all those questions. We took upon ourselves the responsibility to agree with the PLO about something which has not occurred in other places in the world. This kind of self-rule is a precedent. It won’t be easy for them, it won’t be easy for us. But since, on both sides, I believe there is a belief that there is no better way for us to accomplish our national interests but by an agreement, but by peace, I believe that both of us will do whatever possible in order to prevent those who want this agreement not to be achieved, not to be implemented, to fail in their efforts. It’s not so easy, it is not something that we know in advance all the details and all the developments. We knew all the years that once we have an agreement with the PLO, it won’t be a happy end, it will be only a beginning. It is a new beginning, a risky one, but much less risky, in our view, than the perpetuation of the current situation of the status quo.

Q: There are 40 shopkeepers in Jericho who have been summoned before a court on December 21, one week after the target date, to explain why they haven’t paid taxes. It seems slightly insensitive, and I wondered if this is government policy or if this is just an aberration?

A: I don’t know about it, and I can’t tell you the answer. What I can tell you is that this government decided not to be the occupier of the territories and to solve the problem of the territories. I always say that as long as we are there, an occupier is an occupier is an occupier. There is not something like a benevolent occupation, regretfully. All those charges part of them are right, part of them are wrong will not exist once there is an interim solution, and hopefully, eventually, in five years, a permanent solution, and nobody will be able to charge us with anything because we will not be responsible for the future and for the daily life of the Palestinians in the territories. In the meantime, I suspect that such things may happen. What I hope is that, as soon as possible, we will not be there, as a part of an agreement between us and the Palestinians; and that the Palestinians will be able to control their own issues.

Q: What role do you see for the U.S. in this period leading up the 13th, in bridging the gaps between the Israelis and the Palestinians?

A: I think that the main mission of the Secretary of State in his visit now to the area is to try and see whether it is possible to renew and to reestablish the Israeli-Syrian channel. Of course, it is very important for the Americans to get the information and to deal with issues like Lebanon, Jordan and the Palestinians. But speaking about Syria, that is the most important target of the Secretary. I think that on the Palestinian level, we are having very intensive bilateral talks. We had this agreement in the Oslo, we are talking to each other on economic issues, we are talking to each other on political issues today and in the coming days, and I hope that it will be possible for us to find an agreement with the Palestinians on a bilateral level.

Q: You and others have downplayed the importance of the December 13 date. I would be interested in hearing your description of the importance of the April 13 date, whether or not that’s obtainable?

A: April 13 is obtainable, and it is more important in my eyes than December 13. Speaking about December 13, it is the conclusion of the negotiations. Speaking about April 13, 1994, it is the implementation of the agreement itself. And implementation, I believe, is more important than just the conclusion of the negotiations. If we can stick to April 13, it will be very important, of course, and I believe that there is no reason to think that we won’t.

Q: Warren Christopher had the opportunity to see both the mass demonstrations during his current tour. I’m wondering, does the political unrest weaken the government’s hand regarding both dealing with the negotiations and dealing with the Americans as a partner for the continuation of the policy of peace that the government is pursuing?

A: I think that linkage politics between internal and external issues is always there, and that the American administration understands very well the difficulties that all of us are having. Nevertheless, it is not a surprise, neither for us nor for the Palestinians, and of course not for the Americans. When it happens, when it is visible, it is of course much more tangible than the theoretical expectation that something like that would happen, and that does something to all the decision-makers in the area, and to the Americans. But maybe more than anything, it is for all of us a sign that we have to move fast, and a kind of a demand that we won’t wait too much. Of course, we have to do whatever possible in order to defend the relevant national interests. But we do not have too much time. The window of opportunity is not a very big one. There is the opposition in the area, which would do whatever possible on its side to prevent us from accomplishing this target. So, instead of submitting to this opposition and to wait a little, what we have to do is to intensify the talks and to try to prove that with all the obstacles on the way, we can do that.

Q: Do you see the abandonment or evacuation of some settlements as being inevitable?

A: Not at all.

Q: How do you expect there is going to be a living together of these two sides?

A: First of all, speaking about the interim of the next five years, this question is not on the agenda. We agreed on Oslo that all the settlements will remain where they are and will be protected by the IDF. Speaking about the permanent solution, I think that even from those areas which will be evacuated by the IDF, there is no reason why the settlements there will be dismantled. There are a million Arabs who live in Israel. Why should Israelis not live under an Arab sovereign, if they wish? If they won’t, it will be our responsibility to care for their well-being. But if they wish to remain there under a foreign sovereignty, I do not believe that we should repeat the precedent of Yamit and destroy the settlements or evacuate them. It should be up to the settlers. I do not think that it will be wise on the Arab side to demand that no Jew, no Israeli, will live under their jurisdiction in the permanent solution.

Q: You have related so far to the calls for violence from HAMAS and the opposition groups within the Palestinians. Three weeks ago today the PLO issued a leaflet which was widely reported, from the FATAH, calling for Palestinians to kill settlers. Since then there are have been four more leaflets issued of that kind, and today there has been no condemndation from the mainstream of the Palestinians of the attack near the Tomb of Rachel. I’d like to know the response of the government of Israel to the PLO leaflets calling for the killing of settlers.

A: Generally speaking, the PLO sticks to its commitment, and as a result of the order given by Yasser Arafat, the PLO activists in the territories are not involved in terrorism but in the one event of Mizrahi who was killed. I’m not sure where those leaflets were published by the PLO but I’m not aware of it. The question is whether the PLO published something like this. To the best of our knowledge, the commitment is fulfilled by the PLO. Yasser Arafat also condemned in some events the killings. I believe that it would be wise for the PLO to condemn terrorism in the territories, and it is not done enough.

Q: If it comes to the issue of compensating the settlers, what is the view of this government and what is your personal view about whether you should embark on a program to offer those who want to return some compensation?

A: I do not believe that it would be wise to suggest anything like this today. We are not dealing now with the permanent solution. We can speak about guidelines, but all those questions, if at all, should be raised only when there is a permanent agreement with the Palestinians, a permanent agreement with the Syrians. It will be totally premature, in my eyes, to deal with such a question today before we know what would be the permanent boundaries between us and the Syrians, between us and the Palestinians.

Q: You spoke repeatedly about the permanent solution. You’ve also mentioned the fact of Israelis living under Arab sovereignty. I was wondering whether you could draw for us what you think the permanent solution will look like: is it a Palestinian state, is it a confederation, a three-way confederation?

A: I can say one thing: All of us would like to see some kind of a solution. There is a preference for the Palestinians to have a Palestinian state, for the Jordanians perhaps to have a federation, for Israel or for the Labor Party to refer to a Jordanian-Palestinian framework as it appears on our platform. But all of us also refer, in our resolutions, to the idea of a confederation a Jordanian- Palestinian confederation. I refer to the Jordanians, I refer to the Palestinians in ’83, and I refer to the Israeli Labor Party in ’91. Since this is something that all of us referred to, I do not exclude the possibility that some kind of a confederation of Jordan and those areas in the West Bank and Gaza from which Israel would withdraw will be a part of a joint Jordanian-Palestinian confederation. The question of the interpretation what does it mean exactly, what is the extent of self-rule for the two components of this confederation will be, I presume, the most important issue during the negotiations about the permanent solution.