Dr. Aaron Lerner - IMRA:

"How Israel deals with the rocket attacks I would hope is done in a way that
not only protects herself, but worries about innocent life. And I'm
convinced the Prime Minister does. He understands he has an obligation to
protect Israel. He also understands that he's got to be circumspect and
reasonable about how he does it, so that innocent people don't suffer."
President Bush

English speaking Israeli reporters covering this item from Channel One and
Channel Two both somehow thought that this remark represented some kind of
green light for an Israeli operation in the Gaza Strip.

But the words above are hardly a "green light". If anything they are a
flashing "red light" against any truly effective Israeli operation in the
Gaza Strip.

It also serves as an important warning to Israel regarding Washington's view
of Israel's right to defend itself should a Palestinian state be created in
the West Bank.

--------------------------
President Bush and Prime Minister Olmert Participate in Joint Press
Availability
Prime Minister's Residence
Jerusalem
www.whitehouse.gov/news/releases/2008/01/20080109-4.html
9 January 2008 6:36 P.M. (Local)

PRIME MINISTER OLMERT: Good evening. I am proud and delighted to welcome
President Bush to the Prime Minister's home in Jerusalem. We spent more than
two and a half hours talking privately and with the delegations, and this
was a very interesting and I think very important meeting, Mr. President.
I think your visit is timely and is very important to encourage the process
that you and Secretary Rice helped start in Annapolis a few weeks ago, and
that we, both sides, I believe, are very seriously trying to move forward
with now, in order to realize the vision of a two-state solution, a
Palestinian state for the Palestinian people and the state of Israel, the
homeland of the Jewish people and the Jewish state.

I want to thank you, this opportunity, for the friendship and the support
for the security of the state of Israel that you have manifested for a long
period of time, throughout your tenure as President of the United States of
America. This last year you decided to increase the annual support for the
state of Israel for an overall package of $30 billion, which is remarkable
and important and is very helpful for the future of the state of Israel.

We discussed regional issues and the bilateral relations between Israel and
America and, naturally, of course, the progress that we envisage for the
negotiations between Israel and the Palestinians. And I hope, Mr. President,
that you felt through these talks that the Israeli team is absolutely
committed to carry on these negotiations in a very serious manner, to deal
with all the core issues that we need to deal in order to bring about an
agreement that will have to be implemented, subject, of course, to the
implementation of the road map, as we agreed with the Palestinians and as
you have announced in Annapolis in the international meeting. That was a
very important and encouraging meeting, with the participation of so many
countries coming from the region and from all parts of the world.

We are dealing with serious security problems. Only today the terrorists
were shooting many Qassam rockets on the southern part of Israel, and mortar
shells, and a few of the rockets landed inside the city of Sderot. This is a
serious problem. Israel does not tolerate and will not tolerate the
continuation of these vicious attacks on uninvolved and innocent civilians
living in our cities. And we made it clear to everyone that we'll take all
the necessary measures in order to reach out for those who are responsible
for these attacks, and we will not hesitate to take all the necessary
measures in order to stop them.

There will be no peace unless terror is stopped, and terror will have to be
stopped everywhere. We made it clear to the Palestinians; they know it, and
they understand that Gaza must be a part of the package, and that as long as
there will be terror from Gaza it will be very, very hard to reach any
peaceful understanding between us and the Palestinians.

Mr. President, I want to thank you for your visit, for your efforts, for
your friendship, for the power that you used for good causes for this region
and for the world. Welcome.

PRESIDENT BUSH: Mr. Prime Minister, thank you. I view this as an historic
moment. It's a historic opportunity, Mr. Prime Minister, first of all, to
work together to deal with the security of Israel and the Palestinian
people -- matter of fact, the security of people who just simply want to
live in peace.

We're in conflict with radicals and extremists who are willing to murder
innocent people to achieve a dark vision. And this is an historic
opportunity for the world to fight that -- to fight those terrorists. It's
an historic opportunity to spread freedom as a great alternative to their
ideology, as a society based upon human rights and human dignity, a society
in which every man, woman and child is free. And it's a historic opportunity
to work for peace. And I want to thank you for being a partner in peace.

I believe that two democratic states, Israel and Palestine, living
side-by-side in peace is in the best interests of America and the world. I
believe it's in the long-term security interests of Israel, and I know, to
provide a more hopeful society for the Palestinians. And that's why I
articulated this vision early in my presidency. And that's why I'm so
pleased to have -- to watch two leaders, you and President Abbas, work hard
to achieve that vision.

It's in the interests of all of us that that vision come to be. I'm under no
illusions, it's going to be hard work. I fully understand that there's going
to be some painful political compromises. I fully understand that there's
going to be some tough negotiations. And the role of the United States is to
help in those negotiations.

It's essential that people understand America cannot dictate the terms of
what a state will look like. The only way to have lasting peace, the only
way for an agreement to mean anything, is for the two parties to come
together and make the difficult choices. But we'll help, and we want to
help. If it looks like there needs to be a little pressure, Mr. Prime
Minister, you know me well enough to know I'll be more than willing to
provide it. I will say the same thing to President Abbas tomorrow, as well.

I come -- you know, people in America say, well, do you really think these
guys are serious? We've heard a lot of rhetoric in the past, a lot of grand
proclamations. I wouldn't be standing here if I did not believe that you,
Mr. Prime Minister, and President Abbas and your negotiators were serious.
It is my considered judgment that people now understand the stakes and the
opportunity. And our job, Mr. Prime Minister, help you seize that
opportunity.

In the rest of my trip I will be talking about the opportunity for Middle
Eastern peace, and remind people in the neighborhood that if they truly want
to see two states living side by side in peace, they have an obligation,
Arab leaders have an obligation to recognize Israel's important contribution
to peace and stability in the Middle East, and to encourage and support the
Palestinians as they make tough choices. I'm an optimistic people -- people
say, do you think it's possible during your presidency, and the answer is,
I'm very hopeful and will work hard to that end.

We also talked about Iran. Iran is a threat to world peace. There was a
recent intelligence report that came out that I think sent the signal to
some that said perhaps the United States does not view an Iran with a
nuclear weapon as serious -- as a serious problem. And I want to remind
people, Mr. Prime Minister, what I said at the press conference when I
discussed that National Intelligence Estimate. I said then that Iran was a
threat, Iran is a threat, and Iran will be a threat if the international
community does not come together and prevent that nation from the
development of the know-how to build a nuclear weapon. A country which once
had a secret program can easily restart a secret program. A country which
can enrich for civilian purposes can easily transfer that knowledge to a
military program. A country which has made statements that it's made about
the security of our friend, Israel, is a country that needs to be taken
seriously. And the international community must understand with clarity the
threat that Iran provides to world peace.

And we will continue to work with European countries, Russia and China, as
well as nations in this neighborhood, to make it abundantly clear that --
the threat that Iran poses for world peace.

So we've had a very constructive dialogue, and I'm not surprised. This isn't
the first time we've had a chance to visit. Every time we've had I've come
away impressed by your steadfast desire to not only protect your people, but
to implement a vision that will lead to peace in the long-term. Thanks for
having me.
Q Mr. President -- -- (inaudible) -- Iran and Israel's finding about Iran
are completely different than the NIE report. Given the duration and the
unpopularity of the war in Iraq, thee is a fear, a concern in Israel that
your administration will not take the necessary action against Iran.

And the question for Prime Minister Olmert: Did you perhaps present to Mr.
Bush positions that run counter to those of the Americans, and perhaps you
are concerned that what he said now actually indicates that his hands are
tied when it comes to Iran.

PRESIDENT BUSH: Let me remind you what the NIE actually said. It said that
as far as the intelligence community could tell, at one time the Iranians
had a military -- covert military program that was suspended in 2003 because
of international pressure. My attitude is that a non-transparent country, a
country which has yet to disclose what it was up to, can easily restart a
program. The fact that they suspended the program is heartening in that the
international community's response had worked. The fact that they had one is
discouraging because they could restart it.

Secondly, there are three aspects to a weapons program. One is the capacity
to have -- enrich so that you can have the materials necessary to make a
bomb. They're claiming they're enriching for civilian purposes. I believe
that knowledge gained for civilian purposes could be transferred for
military purposes. Therefore, our efforts are to stop them from enriching.

Secondly, the knowledge of how to convert any materials into a bomb. We
don't know whether they have that knowledge or not. However, for the sake of
peace, we ought to assume they do, and therefore, rally the world to
convince other that they're a threat. Third, they've got missiles in which
they can use to deliver the bomb. So no matter how you might have
interpreted the NIE, I interpreted it to mean you better take the Iranians'
threat seriously.

Secondly, I have always told the American people that I believe it's
incumbent upon the American President to solve problems diplomatically. And
that's exactly what we're in the process of doing. I believe that
pressure -- economic pressure, financial sanctions -- will cause the people
inside of Iran to have to make a considered judgment about whether or not it
makes sense for them to continue to enrich or face world isolation. The
country is paying an economic price for its intransigence and its
unwillingness to tell the truth.

The Iranian people -- we have no qualm with Iranian people. I'm sure Israel
doesn't either. It's people with a proud history and a great tradition. But
they are being misled by their government. The actions of their government
are causing there to be isolation and economic stagnation. People went into
office saying, we promise you this and we promise you this economic benefit,
but they're simply not being delivered. And so we'll continue to keep the
pressure on the Iranians, and I believe we can solve this problem
diplomatically.

PRIME MINISTER OLMERT: (As translated.) We had a very thorough discussion,
which, of course, also covered the Iranian subject, as President Bush said.
And we discussed all aspects of this issue, and of course, it goes without
saying that we shared with one another what we know and what we -- what the
Americans know when it comes to this topic. And without my sharing with you
right now all the details, of course, despite the natural curiosity, which I
appreciate, I believe that what has just been said now by the President of
the United States is particularly important. The President of the largest
power in the world, the most important power in the world, is standing right
here, and he has said in no uncertain terms that Iran was a threat and
remains a threat.

And the fact that it has certain technological capacities is a fact. And
through this, it is capable of realizing that potential and creating nuclear
weapons. And considering the nature of the government there and the type of
threats that they are voicing, one cannot possibly disregard that power, and
we must do everything possible to thwart them.

Of course, the United States will decide for itself just what steps to take.
I can only say one thing, namely, my impression based on this conversation,
as well as previous talks that we had -- and we talk quite frequently, apart
from the face- to-face meetings -- my impression is that we have here a
leader who is exceptionally determined, exceptionally loyal to the
principles in which he believes. He has proven this throughout his term in
office in his preparedness to take exceptional measures in order to defend
the principles in which he believes, and in his deep commitment to the
security of the state of Israel.

Inasmuch as I could sum up all of these impressions this evening, I would
say that I certainly am encouraged and reinforced, having heard the position
of the United States under the leadership of George Bush, particularly on
this subject.

MS. PERINO: Anne Gearan of the Associated Press, please.

Q Mr. President, are you disappointed that the Israelis and the Palestinians
haven't made more specific progress since Annapolis, and is it maybe time
for you to apply some of that direct pressure you referred to earlier?

And for the Prime Minister, did you offer any new assurances to the
President, or do you plan to, that Israel will stop disputed settlement and
construction activity?

PRESIDENT BUSH: Step one of any complicated process that is going to require
a lot of hard work and serious dialogue, is whether the mind-set is right.
It's one thing for somebody to say to the President, sure, we're for a two
state -- just to make the President feel okay. That's not the case here. The
fundamental questions that I was seeking at Annapolis and on my return trip
is the understanding about the power of what a vision will do for peace.

You know, one of the concerns I had was that -- whether it be the unprovoked
rocket attacks or the issues of settlement, that the leaders would be so
bogged down in the moment that they would lose sight of the potential for a
historic agreement. And I've come away with the belief that while those
issues are important, and certainly create consternation amongst the
respective constituencies, that both leaders are determined to make the hard
choices necessary.

Now, implicit in your question is whether or not the President should butt
in and actually dictate the end result of the agreement. In my judgment,
that would cause there to be a non-lasting agreement. In my judgment, the
only way for there to be a vision that means something is for the parties to
seriously negotiate that vision. If you're asking me, am I nudging them
forward -- well, my trip was a pretty significant nudge, because yesterday
they had a meeting -- and by the way, the atmosphere in America was, nothing
is going to happen, see, that these issues are too big on the ground;
therefore, you two can't get together and come up with any agreements. You
just heard the man talk about their desire to deal with core issues, which I
guess for the uneducated on the issue, that means dealing with the issues
like territory and right of return and Jerusalem. Those are tough issues --
the issue of Israeli security. And they're going to sit down at the table
and discuss those issues in seriousness.

I've been briefed today from the Israeli perspective of those discussions.
Tomorrow I'll be briefed by the Palestinians about their interpretation.

There's three tracks going on, by the way, during this process. One is the
vision track. Let me make sure everybody understands, in our delegation, the
goal.
The goal is for there to be a clear vision of what a state would look like,
so that, for example, reasonable Palestinian leadership can say, here's your
choice: You can have the vision of Hamas, which is dangerous and will lead
to war and violence, or you can have the vision of a state, which should be
hopeful.

The second track is to help both parties deal with road map issues.
Settlements is a road map issue; security is a road map issue, in a certain
limited sense. Third issue is to help the Palestinians, one, organize their
security forces so that they can better assure their own people, and equally
importantly, better assure Israel that they can deal with the extremists in
their midst. That's what General Dayton is doing here, for example. Or, an
economic track. Listen, the best way to make sure that the Palestinians
realize there's a hopeful future in which it's in their interests to live at
peace with Israel is for them to realize that they've got an economy in
which they can make a living. And Tony Blair is helpful on that. And so is
America.

And so you're watching three tracks parallel each other. And the one, of
course, you're asking about is whether or not the leadership has got the
willingness and the desire and the drive to design a state, compatible to
both sides, and my answer is, yes, I think they will.

PRIME MINISTER OLMERT: I hope that I don't disappoint anyone, certainly not
the President, because we talked at length, if I will say that the President
didn't ask for me to make any commitments other than the ones that Israel
made already with regard to the peace process and as I addressed, pointed
out on many different occasions, including in Annapolis, which, was, as I
said, a very important event. The commitment of Israel is absolutely to
carry on in this process in order to realize the vision of two states living
side by side, as I said before.

Now, there are many issues; settlement is one of the issues. We made clear
our position. And I know that sometimes not everyone is happy with this
position, but we are very sincere. We were never trying to conceal any of
these facts from anyone, starting with President Bush and Secretary Rice,
and of course, our Palestinian partners.

They know that there is a moratorium on new settlements and the new
expropriation of land in the Territories. And they also know, and we have
made it clear that Jerusalem, as far as we are concerned, is not in the same
status. And they know that the population centers are not in the same
status. And there might be things that will happen in the population centers
or in Jerusalem which they may not be allowed with, but we will discuss them
and we will not hide them. We are not going to build any new settlements or
expropriate land in the Territories. We made it clear and we will stand by
our commitment. And we will fulfill all our commitments as part of the road
map because this is an essential part for any progress that will have to
take place in the future.

But there are some aspects only just realized which one can't ignore, and
everyone knows that certain things in Jerusalem are not in the same tactical
level as they are in other parts of the Territories which are outside the
city of Jerusalem. And so it's true about some population centers. So there
was nothing that happened that was not known in advance to all our partners
in this process. We made clear our positions; we made clear exactly what we
can do, what we can't do, what we want to do and what we will not be able to
do. And I think that they all know it and they, at least even when sometimes
they disagree with us, they at least respect our sincerity and openness
about these issues.

Q Mr. President, regarding the issues of rockets and settlements that you
mentioned before, what should, what could Israel do regarding the
ever-growing threat from Gaza? And regarding the settlements, did you get
any new assurances from the Prime Minister regarding the removal of illegal
outposts? Do you believe that this time it will be implemented? Do you care
about it?

PRESIDENT BUSH: Yes.

Q Mr. Prime Minister, are you concerned that the core issues are going to be
affected? Because a member of Knesset, Mrs. Lieberman, is going to withdraw
from the coalition.

PRESIDENT BUSH: As to the rockets, my first question is going to be to
President Abbas, what do you intend to do about them? Because ultimately, in
order for there to be the existence of a state, there has to be a firm
commitment by a Palestinian government to deal with extremists and
terrorists who might be willing to use Palestinian Territory as a launching
pad into Israel. So I'll be asking that question tomorrow. And what can we
do to help you?

I believe that he knows it's not in his interests to have people launching
rockets from a part of the Territory into Israel. Matter of fact, maybe the
Prime Minister can comment on this in a while, in a second, but at least
he's told me that he fully recognizes in order for there to be a state, he
cannot be a safe haven for terrorists that want to destroy Israel. You can't
expect the Israelis, and I certainly don't, to accept a state on their
border which would become a launching pad for terrorist activities. That's
why the vision of a democracy is an important vision.

How Israel deals with the rocket attacks I would hope is done in a way that
not only protects herself, but worries about innocent life. And I'm
convinced the Prime Minister does. He understands he has an obligation to
protect Israel. He also understands that he's got to be circumspect and
reasonable about how he does it, so that innocent people don't suffer. He
just gave you the answer on the settlements.

In terms of outposts, yes, they ought to go. Look, I mean, we've been
talking about it for four years. The agreement was, get rid of outposts,
illegal outposts, and they ought to go. And --

PRIME MINISTER OLMERT: (As translated) -- earlier, and I say once again -- I
think it's important to repeat this -- Israel has commitments and the
Palestinians have commitments. We must abide by our commitments, and we
shall do so. I do not want to use this as an excuse, as a pretext, and
therefore I say, we demand of the Palestinians that they uphold all of their
commitments.

And some have not been upheld, not a single one; particularly the most
important things that have to do with terrorism, that have to do with the
security of the state of Israel -- not only in Gaza. The fact that we, over
the past year, have had fewer casualties from terrorism than in any year of
the recent years previously is not because the Palestinians have made fewer
attempts, but because we have been more successful, in a very sophisticated
and courageous way, of our general security service and our ideas in
preventing these terrorist acts.

I'm not using this as a pretext. I'm saying we must uphold our commitment. I
believe that the President has said this fairly and appropriately. We have
made commitments; we should uphold them, and we shall. But let us present a
balanced picture. By the same token, we will not refrain from demanding and
insisting that the Palestinians abide by all of their commitments. And their
commitments when it comes to terrorism are the central key, the pivot to
bringing this negotiation process to a successful conclusion. And I hope it
will happen this year, as all of us hope.

I very much, sincerely, hope that all of those in the coalition will remain
in the coalition as full partners, and I would certainly not like to have a
political crisis. I don't think that anyone who is responsible -- has a
responsibility such as I have would like to see any kind of an undermining
of the stability of this government. It is a stable government, a government
that has been operating in many different directions, with very impressive
achievements, which the party of Avigdor Lieberman, Yisrael Beytenu, is part
of this effort, part of these achievements; whether it's in the economic
field or the political one, or when it comes to security, or the deterrence
ability of the state of Israel.

And everyone knows that this government has had some very impressive
achievements on its record over the past year. And Lieberman's party was
certainly a partner in this process, and I'd like them to stay part of the
process. I think that the gap between us is smaller than it appears, and I
will do everything within my power to ensure that the coalition remains
stable. The state of Israel must be part of a serious peace process. We
cannot forego this; we cannot obscure it; we must not delay it. It would be
wrong to delay it.

Let me say something in Hebrew -- since I know that the President does not
speak Hebrew, I'll say it in Hebrew, because, after all, you know, you're
not supposed to praise people in their presence, so I'll say it in Hebrew.
Well, then, what I'd like to say is, thank God I can conduct political
negotiations with George Bush at my side as one of my partners. Thank God we
can conduct political negotiations when the largest and most important power
in the world, and the most important for us, is headed by such an important
friend of Israel.

We have no interest in delaying matters. We don't want to procrastinate with
the negotiations, lest changes for the worse take place on the Palestinian
front. And we certainly don't want to delay the negotiation process when we
have such political assistance, assistance with respect to our security,
too, when it comes to the most important power in the world, being led by a
person who is so deeply committed to the security of the state of Israel,
and to realizing the vision of two states; a person who is fair, who does
not hide his viewpoints, who speaks openly about his will to establish a
Palestinian state alongside Israel, a state that will be secure not at the
expense of the interests of the state of Israel.

I believe that any responsible political leader in the state of Israel will
understand that this is a moment that must not be missed. This is an
opportunity that must not be passed up. We must do everything we can --
okay, we can have occasional internal arguments. The President has said that
some very difficult decisions must be made. He is right, but I am not afraid
of difficult decisions. I am willing to contend with difficult decisions. I
am willing to make decisions that will entail painful compromises, so long
as they enable us to reach the goal that we have dreamt of for so long, to
ensure ourselves of security, and to give the Palestinians the state of
their own that will be vibrant, democratic, open, and living in peace
alongside Israel.

At the head of our negotiating team is the Deputy Prime Minister and Foreign
Minister. She bears a very heavy responsibility. We work in full
cooperation, and I am convinced that she will wisely succeed, together with
Abu Allah, head of the Palestinian team, in navigating through these
negotiations in such a manner that the vital interests of the state of
Israel are served well on the basis of a deep understanding.

PRESIDENT BUSH: The interpreter got it right. (Laughter.)

PRIME MINISTER OLMERT: Thank you, Mr. President.

PRESIDENT BUSH: Yes, Toby.

Q Mr. President, what is the United States prepared -- what action is the
United States prepared to take if there is another confrontation with
Iranian ships in the Strait of Hormuz? Your National Security Advisor this
morning spoke about consequences if there was a repeat.

And, Mr. Prime Minister, why is there no three-way meeting scheduled on this
trip?

PRESIDENT BUSH: The National Security Advisor was making it abundantly clear
that all options are on the table to protect our assets.

She's referring to, Mr. Prime Minister, the fact that our ships were moving
along very peacefully off the Iranian border in territorial water --
international waters, and Iranian boats came out and were very provocative.
And it was a dangerous gesture on their part. We have made it clear
publicly, and they know our position, and that is, there will be serious
consequences if they attack our ships, pure and simple. And my advice to
them is, don't do it.

Q Why is there no three-way meeting on this trip?

PRIME MINISTER OLMERT: We had a three-way meeting in the United States just
a month ago. We are starting now a serious process directly with the
Palestinians. The President met with the Israeli delegation and with me
today. He will meet tomorrow with President Mahmoud Abbas, and I'm sure that
all the necessary information will be provided and all the curiosity of the
President will be satisfied. And ideally, this is a very good and
comfortable -- (inaudible.)

I don't rule out, by the way, trilateral meetings. Maybe in the future we'll
have trilateral meetings. We are not against it. We just found out at this
time in life, considering what we have achieved already and what we are
about to start now in a serious manner, that it was not essential in order
to fulfill the desires that we all share, which is to move forward in this
process between us and the Palestinians.

I can reassure you, and perhaps through you, many of your people in America,
that we think -- and I'm sure that the Palestinians think -- that the visit
of the President is very, very helpful to the process that we are engaged
in, and that it contributes -- and it will contribute a lot to the stability
and the very comfortable environment within which we will conduct our
negotiations.

And, therefore, I again want to take this opportunity, Mr. President -- now
you don't even get -- (laughter) -- to thank you very much; really to thank
you for your friendship and your support and the courage that you inspire in
all of us to carry on with our obligations. It's not easy. You know,
sometimes it's not easy, but when I look at you, and I know what you have to
take upon your shoulders and how you do it, the manner in which you do it,
the courage that you have, the determination that you have, and your loyalty
to the principles that you believe in -- it makes all of us feel that we can
also -- in trying to match you, which we can, we can move forward. Thank you
very much.

PRESIDENT BUSH: Thank you, sir.

END 7:17 P.M. (Local)