U.S.-Saudi Relations in a World Without Equilibrium: Panel I

A full transcript of the first panel from New America's April 27 conference on U.S.-Saudi relations, is available below.

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Steve Clemons: Thank you very much for joining us. My name is Steve Clemons. I direct the American Strategy Program at an institution called the New America Foundation.

For many of you who don't know our think tank...There are many new faces, hopefully new friends, and members of the media, other think tanks, and people who have flown in from all around the world for today's program.

The New America Foundation is a think tank full of what we call radical centrists. We try to take a pragmatic solutions oriented approach to public policy questions around a wide variety of issues.

I have had the pleasure of building with my colleagues the foreign policy and national security programs of the organization and working as well on our interactive economic activities.

The reason that both of these strands of work are important is that we are going to be dealing with both of those today in our forum called U.S.-Saudi Relations in a World without Equilibrium.

We will be taking a look at and discussing both the geo-economic and geo-strategic consequences of the relationship on a whole wide variety of levels. And we have what I think is really a world class program. And we have had a world class partner in the committee for international trade for the Saudi Chambers of Commerce.

I want to introduce Abdulaziz Al-Fahad who is the incoming new chairman for the Committee for International Trade. He is in partnership with Akin Gump Strauss Howard & Feld out of Saudi Arabia, a lecturer on international law, and our partner, and I have invited him to say a few words. So please welcome Abdulaziz Al Fahad.

[applause]

Abdulaziz Al-Fahad: Thank you. And my biography is about five years old that you read. I am not a partner of Akin Gump, although I like them. Let me start by thanking everybody for coming to our conference. I also would like to thank specially Steve and The New America Foundation for all the tremendous efforts they have done to ensure the success of this conference.

Also, let me thank you colleagues at the CIT. They have been working for months on this and hopefully we will see the rewards today. All I can say today is welcome and thank you.

[applause]

Steve Clemons: Thank you so much. The reason we did this program...And I want to make one special mention. There are so many people to thank today and to recognize; folks that were former Senators and former ambassadors. We will get to most of them.

Abdullah Alireza, there are a lot of Abdullahs here, the minister of commerce right now of Saudi Arabia is really one of the godfathers in the committee of international trade. A couple of years ago I challenged him and he challenged me.

I said, "You know, this relationship sort of hides in the shadows. It is not something that is discussed warts and all, strengths and weaknesses, where we are going in a more public way."

He says, "Well if you will help produce a forum that is fair..." In fact, Prince Turki who is here said, "Steve, I know you are going to be a taskmaster, " and we will. We are going to work today through a lot of these important questions. But I want to personally thank my friend Abdullah Alireza, the minister of commerce, for actually coming through in a huge way for us.

This relationship is one where whether you are looking at Pakistan today, I understand there are a number of envoys today or on there way. Of course, Secretary of State Clinton is in the region. George Mitchell is in the reason.

There is a lot of stuff up right now, whether it is the AFPAC issues, the solvency of the Arab Peace Initiative, whether it is looking at what we just saw unfold in the last couple of days in the IMF. So this is very important and I want to thank all of you for being here.

We are going to have a number of moderators today. I have the pleasure of moderating the next session with our very distinguished panel, each of whom are going to speak here for a few minutes.

I have asked the co-chairman of the U.S. Saudi Arabian Business Council, so our chamber essentially in Saudi Arabia, Peter Robertson, who is the Vice Chairman of Chevron, to help say some remarks very quickly to help set up the context. Then we will invite Senator Hagel to join us and I will say a few words about our next panel.

Thank you and please welcome Peter Robertson.

[applause]

Peter Robertson: ...so we can get a few words from the sponsor. Good morning. I am Peter Robertson. And as you just described, I am Vice Chairman of Chevron Corporation. But maybe more importantly, since I am retiring from Chevron on Thursday, I am co-chairman of the U.S. Saudi Arabian Business Council.

In this first panel we would like to offer a forward projection of what the U.S. Saudi Arabian relationship should look like and needs to achieve. We are fortunate that this relationship can build on strong building blocks from the past.

Ever since FDR and King Abdulaziz met on the SS Quincy in 1945, our two countries have been the closest of allies in promoting peace and security in the wider Middle East region, and in promoting energy and economic security throughout the world.

Indeed the roots go back further to the earliest years of the modern kingdom of Saudi Arabia when the grandparent of Saudi Aramco and Chevron Standard Oil came to California was the first to discover oil, and ship oil from the kingdom.

These are two major pillars, but the relationship we build today, and in the future, promise to be an even more all embracing one; to extend to economics, politics, security, and society on a global scale.

And as the world's economy revives from the greatest recession since World War 2, Saudi Arabia plays a crucial role in terms of energy investment, trade, and development.

As the world confronts political and security challenges from Israel and Palestine to Afghanistan, Iran, and Pakistan, the kingdom again plays a critical role, as is evidenced by King Abdullah's path breaking plan for regional peace.

As more and less developed nations prepare their youth for the new challenges and opportunities of science, technology and development, the new economic cities and academic cities of the kingdom, from vocational training to advanced research, play a really dynamic role.

Looking to the future, energy and environment will continue to be key issues for Saudi Arabia and the U.S. Ali Al-Naimi, Saudi Arabia's long time controlling minister, had some excellent advice for some of us in Houston last month.

Minister Al-Naimi supports the development of renewable energy with a vision that includes large scale solar development and power generation not only for the kingdom, but for the region.

But he reminds us that the world will continue to depend on oil and gas supply to meet most of its energy requirements for decades to come. And he warns that underinvestment there could lead to a major supply crunch and escalation in energy prices.

His words are well worth pondering as our two countries pursue bilateral and global dialogues of this vital resource. To quote Mr. Al-Naimi, he said, "In years to come, if traditional energy supplies should prove inadequate because capital expenditure was curtailed due to unsustainable prices, unreliable indications of future demand, and our hopes for a substitute for oil that can deliver, such as a supply crunch would be catastrophic."

In this increasingly globalized era in which all of these initiatives take place, Saudi Arabia and the United States have an unprecedented opportunity for leadership.

I would just like to add my two cents to the comment that was just made, because this relationship is one that just doesn't get talked about enough. We see it all the time in our industry. Steve just mentioned it. I think many of the leaders of Saudi Arabia have started talking a lot more openly about this relationship, and I think on our side we need to do the same thing, because this is a critical relationship that has, for some reason, and I guess reasons that a lot of us can understand, seems to have been talked about in the back room.

We need to talk about this relationship in the front room with the public from here on out. So we are fortunate to have a fantastic panel of people to help us discuss this. So let me turn it back to Steve, who is going to introduce the panel and moderate. Thank you so much.

[applause]

Steve Clemons: We have a very cool panel. This is going to be exciting. It is an outstanding of people. If we could assemble anyone in the world to have a discussion like this, we have got the right folks.

I am not going to say a lot about our hosts. Most don't need introduction. But I do want to thank former Senator Chuck Hagel of course, who led so ably in the U.S. Senate for many years as a Senator from Nebraska.

He is now serving as the distinguished professor in the practice of national governance at Georgetown University. And of course importantly, he is chairman of the Atlantic Council of the United States.

We have next to him Prince Turki Al Faisal. Prince Turki was ambassador of Saudi Arabia to the United States for a number of years, and also headed, as we learned last night, for two decades the Saudi intelligence services.

And he is the chairman of the King Faisal Center for Research and Islamic Studies in Riyadh.

I have had the pleasure of visiting that center; I recommend that everyone do. It is a fascinating scholarly facility looking at culture and history in the Islamic world.

We have Rita Hauser, who is chair of the director's council of the New America Foundation, a very well known activist, philanthropist, a legal mind, just recently an immediate past board of the Rand Corporation, one of the country's leading national security thinkers.

She is chair of the International Peace Institute, of which Prince Turki is also a board member.

And the man who really needs no introduction, but I am so pleased and want to personally thank him.

Last night, we had the opportunity at a small dinner to have General Brent Scowcroft join us. Zbigniew Brzezinski, national security adviser to Jimmy Carter, is really one of the world's most profound and I think important strategic thinkers.

I was among a group of people who helped convince these two gentlemen, Brent Scowcroft and Zbigniew Brzezinski, to write an instruction manual and playbook, if you will, that if you were going to be the next president of the United States, how could you get things more right than wrong? What are the top strategic choices?

Not hanging blame on the past, but this book that was called "America and the World: Conversations on the Future of U.S. Foreign Policy" with Dr. Brzezinski, Brent Scowcroft, and David Ignatius, was a New America Foundation book which the New York Times' Michiko Kakutani picked as one of the top ten books of all books, that includes the fiction, too, of the year, and it was outstanding.

Of course, Zbigniew Brzezinski is a counselor and trustee of the CSIS, Center for Strategic International Studies Advisory Board. He is the Osgood Professor of American foreign policy at Johns Hopkins, and he is chairman of the Center for Middle East Public Policy at the Rand Corporation, and he is often on "Morning Joe, " which we'll let him talk to on MSNBC.

[laughter]

Steve Clemons: That is the more fun stuff, and I will just say, there was a great line. I put it on my own blog, The Washington Note, recently, where he was on there with Joe Scarborough and his daughter, Mika Brzezinski, and he was talking about the Middle East peace process, and he says, "Taba. Taba - read up on it;you might learn something, " to Joe Scarborough.

And, of course, my friend Abdullah Alireza, Minister of Commerce of Saudi Arabia, former state minister, National U.S.-Arab Chamber of Commerce co-chairman, and really one of the godfathers of this event today. I want to thank all of you for being here.

Without further ado, please welcome Senator Chuck Hagel, who is going to make some opening comments. Senator Hagel.

[applause]

Senator Hagel: Steve, thank you. Thank you. Steve, thank you, and to each of you this morning, good morning. Thank you for attending and your continued attention and leadership to the great issue of our time.

I also want to note those who are on the stage this morning and have been introduced. It is obvious that I am the weak link in the group this morning, but I acknowledge that. I wanted to thank them for their continued leadership at a very critical time in our world.

And to so many of you in the audience who have devoted much of your lives to, not just the peace process in the Middle East, but to public service.

We have a number of ambassadors here with us this morning: current ambassadors, former ambassadors, many former U.S. ambassadors, some former U.S. ambassadors to Saudi Arabia and other Middle Eastern countries. To each of you, we thank you for your continued service.

I was very proud and pleased that Steve asked me to be part of this, now that I am but a mere mortal. Once again, having no standing in life, no one pays attention. I'm not sure anybody did.

[laughter]

Senator Hagel: We senators think they do, and we always had access to, if nothing else, the floor of the Senate. I don't get invited often to these important events, and I appreciated denoting that I have a couple of jobs.

I don't have one real job; it is honest work what I am doing now, and the association with Georgetown is particularly important for me, although terming my new job there as a distinguished professor, in the words of one of my brothers who is a real professor, a professor of law at the University of Dayton, he believes I have set back education in America by generations.

[laughter]

Senator Hagel: But he is two years younger, always been quite envious of the heights that I have achieved, and I have learned to live with it, as many of you have had that issue with your families. But I am very proud to be associated with Georgetown, and of course the Atlantic Council and other organizations, institutions that I am involved with.

Last important point this morning before I share some thoughts on why we are gathered here today on a very important topic.

I was rejoicing this morning. I know, like many of you who follow the NFL draft, some of you think that is beneath your status, I know, to acknowledge that, but nonetheless, I know you do follow the NFL draft.

We, in Nebraska, worked our way through and maneuvered around some rather difficult times over the last few years, the Cornhuskers, and we are proud now this morning that the Washington Redskins one of our players.

So there is great joy in the heartland this morning. My phone was ringing off the hook. Bouquets, champagne was being popped in Beaver Crossing this morning at 3:00 for Cody Glenn. That was a particularly important thing to share with you all this morning.

[laughter]

Senator Hagel: But I am still working my way through bad habits I picked up in the Senate - being completely superfluous at important times.

[laughter]

Senator Hagel: As Steve restrongd in his opening comments, we have many of the Obama administration key foreign policy figures in the Middle East and in that region today. If nothing else points us to the seriousness of that region, then that should.

We have a new administration, in office less than 100 days, but yet, this one issue of the peace process, the larger framework of all the dynamics that fit within that arc, is now in play, like we have not seen in a long time. What I mean by that is let's just, as we must always do in any review or inventory of great challenges, is let's look at the facts.

It is my opinion, and I have said so over the years, is that I think the Middle East is more dangerous today than it was five years ago or eight years ago or 10 years ago. I think it is more combustible today. I think there is far less margin of error today, for the reasons that we all accept.

If we, the United States, and our allies, and especially the nations that reside in that region of the world are to be successful in moving this issue to some higher ground, the higher ground to get to the objective of some resolution of this issue, then it is going to require a new frame of reference.

It is going to require what I think President Obama has been doing in his foreign policy theme the last 100 days, and that is constructing a new diplomatic platform to deal with these 21st century challenges.

20th century infrastructure is not going to work. 20th century realities are not 21st century realities, and as we examine the world with some clarity and reverse the optics, as we must do, which we often do not do when we're dealing with other countries, we understand fully that we all, six and a-half billion people on the face of the Earth today, live in a global community.

That global community is underpinned by a global economy. It is fueled by energy.

And every challenge America has today is global; it's international. They are not, these challenges, somehow specific to or indigenous to us, whether it's environmental issues, energy issues, terrorism, proliferation of weapons of mass destruction.

Look at what dominates much of the news this morning: swine flu; the possibility of a global health pandemic. These are very clear indicators that no longer can we direct foreign policy or frame foreign policy, implement foreign policy, any policy, in narrow channels.

It is going to require a higher platform of understanding that the world is completely interconnected. That is going to require a much wider-lens view of our relationships.

I think, and I have said for many years, it's going to require a new twenty-first century set of alliances that are going to be required to bring the interests of nations together, the common interests; building on those common interests, not building on our differences, to build this new array of twenty-first century coalitions of common interests.

After World War II, that's what we did. Marshall, Eisenhower and Truman, Acheson, Cole and Vandenberg, came together with our partners around the world and built these new coalitions of common interest, based on common interests.

We didn't define those relationships on our specific differences. We have differences. We have differences with Saudi Arabia. We have differences with a lot of countries, but we need to be far wiser in how we come at these great issues today.

As powerful as America is, we can't solve one of these issues alone. We can't get close to finding a resolution by ourselves. It is folly to believe that.

And the further we find ourselves working ourselves into cul-de-sacs that we can't get out of because we have dissipated our resources, because we have wasted our influence and our focus, because we have not prioritized on the big issues, we must get the big issues and the big relationships right.

Saudi Arabia is a big relationship. It's an important relationship. Saudi Arabia's interests are wrapped around our interests, not just in the Middle East, but surely in South Asia. We all know in this room, there is no resolution or beginning of a resolution in Afghanistan without Pakistan. In fact, the epicenter of the greatest threats in the world today is in South Asia and Central Asia. They never were in Iraq. They are not in Iraq.

We must be very careful, this administration, that they do not get further bogged down in occupying countries. And I believe now that we are bogged down in two countries, and the President is going to have to make some more difficult decisions on Afghanistan and Pakistan, it further erodes our ability to maneuver diplomatically and militarily.

And it all comes back to this larger framework and platform of a new twenty-first century understanding of the realities of the world that we live in, and then how do we move this up onto a higher ground?

Two points to this and I will then be very interested in hearing what my colleagues have to say.

This is something that can't wait. There is an immediacy to this. There is an urgency to this and the longer that the President waits before he moves, specifically on a plan for the Middle East...

And I would suggest, as I have before, that the 2002 Beirut Declaration that was laid down by, then the Crown Prince of Saudi Arabia, now the King, was a spectacular starting point. Why we walked away from that is astounding. I know, and you know, we were planning an invasion of Iraq. But that was a remarkable document for many reasons.

Taba, 2001, needs to be reviewed, but the President needs to move on this quickly.

Second, we know from history that presidents and leaders of nations, and nations, become entangled and become drug down into the underbrush by the force of events. And if you don't get out ahead of this and on top of this and move quickly on these areas and these issues and these dynamics, then the force of events will essentially strangle leadership. And partly that's not just status quo, but it's other issues as well.

So, I would conclude with this comment: I think we have a remarkable opportunity here. It won't, this opportunity, be on the table for a long, unending time. There is a confluence in the world today of events, of crises, of dynamics, that make things possible, but it's going to take American leadership, direct presidential involvement, committed leadership working with our allies, asking our allies for more help, and asking our allies to participate in something definitive.

And it's a false choice to believe that somehow we have to take the side of Israel against the Arabs, or we take the side of the Arabs against Israel. That is a false choice. We've lived with that false choice too long and it has produced a very dangerous stalemate that we need to break and get above.

Well, with that, again, I thank our panel. I thank, certainly, the two founding organizations here and appreciate an opportunity to say hello and will be glad, when it's my time, to respond to questions.

Steve Clemons: Thank you, Senator. Thanks, very much.

[applause]

Steve Clemons: I never go with the order we say we're going to. I'm going to ask Dr. Zbigniew Brzezinski now to share his thoughts. Dr. Brzezinski.

Dr. Zbigniew Brzezinski: Steve. Professor Hagel. Ladies and gentlemen.

[laughter]

Dr. Brzezinski: I have a very simple message. It seems to me that there is an urgent need for an American/Soviet/Arabian genuine alliance for peace in the Middle East. We haven't had that.

[applause]

Dr. Brzezinski: We have, at times, worked together. We have, certainly, many shared interests. We have historical bonds of friendship. But we have also had disagreements.

Some of our activities have been out of joint or out of time, and lately the United States has not engaged itself seriously in the promotion of peace in the Middle East.

And I think it's fair to say that while the 2002 Saudi Initiative was most historically important, it could have come sooner. But that's the past.

I think we need to work together and we have to draw some fundamental lessons from the experience of the previous century. In the previous century - the twentieth century - Europe twice committed suicide. And it took a lot of effort, including American effort, to help bring Europe to its feet.

It committed suicide because it couldn't handle nationalist, ethnic, territorial, and yes, even also religious conflicts, on its own. It succumbed to the easy temptation of trying to resolve conflicts by force. But force tends to produce unpredictable consequences. It tends to escalate. It tends to get out of hand.

But this is why it is so urgent to recognize in regards to the Israeli Palestinian conflict or the problem with Iran, or the issues involving Afghanistan and Pakistan, or the growing tensions within various countries in the Middle East, political, social, and religious. External threats, as for example, Saudi Arabia recently expressed concerns about threats emanating from South Yemen, religious differences, not only between Jews and Christians, or Jews and Muslims, or Muslims and Christians, but also among Muslims, the Sunni and the Shiite that none of these issues in the present context in the middle east can be constructively resolved by conflict.

But if there is not to be conflict, peace has to be institutionalized, it has to be reinforced, and it has to be built with deliberate effort, and as Professor Hagel said, "with a real sense of urgency, " because in fact a number of problems in the Middle East, Middle East proper and Middle East at large, are getting out of hand.

The opportunities for a solution to the Israeli/Palestinian conflict are beginning to fade away. If we don't move soon, there will be no peace. But if there is no peace, what will there be?

There will be a presumptual conflict and we had a little preview of it last December in Gaza, and we know what the consequences are. That will require a major American commitment stemming from the very practical realization that the two parties in the conflict cannot resolve it on their own. We know that.

If 30 years of experience is not evidence of that, then I don't know what evidence is. The United States has to be actively engaged as a peace maker, and that means that the United States has to be willing to spell out at least the minimum parameters of peace so that the parties are then propelled toward serious negotiations.

We need to do that. Saudi Arabia needs to help. We can do it from the outside. Saudi Arabia is in the region. Saudi Arabia can influence the Arabians, the Arab countries, and the Arab political movements. Saudi Arabia can mitigate some of the tendencies towards extremism within the population, and particularly within some of its more fundamentalist religious manifestations.

We need this initiative to be comprehensive, large scale, and mutually reinforcing. And if we don't do it together, we and the Arabs around Israel and Palestine, it is not going to happen. And if it doesn't happen, it will become worse.

War is not a solution, but a problem posed in the region by Iran. There is a conflict with Iran either provoked by someone or initiated by us. The consequences for the region will be devastating. They will be devastating for us as well. There is no doubt about that.

There is no solution to the problem in Iran, in a narrow sense, the nuclear program of Iran, in a larger sense, the role of Iran in the region that can be achieved by war. Let's not be tempted by it. Let's not have anyone urge us privately to do it, even if not publicly. And let us not have anyone else provoke it.

I think we are conscious about this imperative. We can avoid a conflict which will be self destructive to the region, not to mention the fact that it will probably undermine America's role in the world. And whether one likes it or not, a constructive American role in the world is the only alternative to global chaos from which everyone suffers.

So the stakes are enormous. And we could go on and on and talk about Afghanistan, Pakistan, but Senator Hagel has mentioned that and very aptly.

My central message is very simple. If we want to deal with these problems, we have to work in concert. We have to take certain initiatives that we have long delayed in taking. And Saudi Arabia has to provide affirmative, assertive, outspoken leadership and not wait for others to act, but to be a partner.

We need in brief an American, Saudi Arabian, genuine alliance for peace in the Middle East. Thank you.

[applause]

Steve Clemons: Dr. Brzezinski, thank you very much. Let me know invite Prince Turki Al-Faisal.

Prince Turki Al-Faisal: Thank you. Ladies and gentlemen, to follow Chuck Hagel and Dr. Brzezinski is not an easy task. I must say, if there is anything you can say about Chuck Hagel, it is that he's not superfluous.

I remember on your visit to Riyadh many years ago, he insisted on having a swim at seven o'clock in the morning. We had to find him a swimming pool because Riyadh in those days didn't have too many swimming pools. Fortunately we did, and events after that justified his swim, because then we worked on working together to rid Afghanistan of the Soviet occupation.

But it is nice to see many familiar faces in this room. I would say that I would like to see unfamiliar faces as well. I am an ex, and I think there are lots of exes here. We would like to see more people who are engaged in the decision making of the United States, and not just from the administration.

The Congressional leadership, I think, and the representation is sorely missing in the relationship between Saudi Arabia and the United States since September 11th, 2001.

When I was an Ambassador here, I tried my best to get Senators and Congressmen to visit the kingdom without much success. And I am sure my successor is having the same difficulty.

So if any of you have any influence with the Congress, please use that influence. We need to have Senators and Congressman to come to Saudi Arabia. It is not enough for the administration to send envoys. We need those two chambers to be fully engaged in the alliance that Brzezinski proposes in Saudi Arabia and the United States.

I would make this a theme because I see the difference between having an engaged Congress and not. That is one aspect I wanted to mention to you. And those of you in the business community and the economic world, and all of the walks of life in America, please, whatever influence you have, exercise.

Let me just go on to briefly mention some topics that are on my mind and I think perhaps on other peoples' mind. One of course is the Palestinian/Israeli issue. We don't need more plans from Obama. We have all the plans in the world. Let's get them all implemented if it is possible.

It has been encouraging to hear Mr. Obama talk about his commitment to finding peace in the Middle East. It has been encouraged to see Hilary Clinton engaged as she is. It is encouraging that George Mitchell is doing his rounds in the area. But I think the time is drawing short when we will need to see implementation and not just simply verbal expressions of commitment.

That is something we had a lot of in the past. We don't want anymore of that. Another aspect, I think, of this is on Lebanon as well. I have proposed that the United States should immediately ask Israel to withdraw from Shaban [sp] and the other areas still occupied by the Israelis in Lebanon.

That is a crucial step for all of us to accomplish, and it is only the United States that can get the Israelis out. There is no excuse whatsoever that the Israelis say they buy from Syrian courses back in 1967 and that they were no handed back unless they have Syrian/Israeli agreement.

That is a fall pretense that needs to be checked and it needs to be nullified by direct U.S. intervention. I think the U.S. can achieve that. Who these territories should be handed to, I think they should be handed to the United Nations.

If there is any dispute, between Lebanon and Syria about them, that's a Lebanon/Syria dispute and should not have Israel in the middle of it.

By removing that issue from the table, you remove the issue of national liberation from the Lebanese politics. And when you do that you make it much easier for Lebanese political forces inside Lebanon to actively engage in national reconciliation. And if you like, the results of the coming elections in Lebanon.

On Afghanistan, Pakistan as well. Has been mentioned that many times. I'm not going to repeat it here but I think the United States policy at the moment is correct if it is implemented correctly. President Obama identified the problem of the area, which is the terrorists, whether they be on the Pakistani side or on the Afghan side.

I think he should canvas world wide support to get there terrorists and provide the necessary resources for that, military, economic, political and otherwise. Achieve the objective of either capturing or killing the terrorist leaders in the area there. Declare a victory and get out.

It is no good to have NATO and U.S. forces on Afghan soil. Nor is it good to have American Predator aircraft bombing Pakistani villages and killing Pakistani civilians, although they may be also killing some terrorist leaders among them.

Because that only increases the antagonism towards America and it undermines the glue that keeps Pakistan together, which is its armed forces. The armed forces are the only viable institution that keeps Pakistan together. The government is working very hard to try to accomplish things, but it will not be able to do that if the Pakistani armed forces are undermined.

And they are being undermined by these attacks. I think United States can get worldwide support in going after the terrorists if it simply declares that that is it's end objective in Afghanistan, not national building, not democracy, not the other very attractive slogan that people may hear about intentions in Afghanistan or Pakistan.

I would conclude by saying that Saudi Arabia in the past 81 since we began our engagement with Americans through Arthur... come on Peter, tell me. Charles R. Crane, the American philanthropist who visited Saudi Arabia in 1928. When King Abdul Aziz had him for dinner, and talked about water resources he promised to send the king one of his geologists to look at these water resources.

And he sent at these water resources. And he sent a man called Carl Twitchel [sp] who spent more than six months in Saudi Arabia traveling from north to south and from east to west.

He came back with a report to the kind and he said, "King, you have no water." [laughter] And he also said, "Don't believe anybody would tell you that you do. But you have oil." And the rest is history.

So energy matters, I would say that politicians in the United States are... I'm not going to use the word criminally but I think I would use the word sorely deficient in proposing that United States can be energy independent.

I think they are deceiving their people by saying that. There needs to be a comprehensive interdependent energy program. Not just for the United States, but for the rest of the world community. And Saudi Arabia is willing and able to do its part in any such endeavor. And I leave you with the grace of God.

Thank you.

[applause]

Steve Clemons: Thank you, Prince Turki. He'll be back with some of those issues. Now welcome my boss and who works me hard, Rita Hauser.

Rita Hauser: Thank you.

[applause]

Rita Hauser: thank you very much ladies and gentlemen. For those who are not present at dinner last night, I'm sorry you missed it. I had the pleasure of introducing our speakers, my good friends Prince Turki and Brent Scowcroft. Brent sends his regrets. He had to be elsewhere today.

But since I was a polite host, I couldn't take issue with some of the comments that each of them made so I'm going to use my time here to do that. Particularly on the Palestine/Israel issue. Brent and I have arguing and discussing this for I can't tell you how long. He summed up his position by stating last night that it's all up to the American president.

Well, I would say a conditional yes, a conditional maybe. It is not sufficient. A president's engagement of course, without that nothing happens. But in our history in this area and the Palestine/Israel conflict, each time an American president has taken a very active role, it has alas been to the exclusion of other players.

We have generally tended to push aside others who have interests and who can bring something to the table, particularly the European Union and the host of Arab countries which I can say was summed up in King Abdullah's very original and very wise approach in '02.

Now I fear that that may well happen again, given the engagement thus far by Obama, Mitchell, Clinton, etc. and in my opinion it simply won't work. And I would like to start out by talking first about Hamas, which to me is the central element in unlocking the deadlock at the moment between the Israelis and the Palestinians.

Hamas is on the ground and will control whatever happens on the ground in Gaza. And I don't know many of you here have been to Gaza since the war. It is lamentable beyond lamenting. And there is no way that any reconstruction can take place without the involvement on the ground of Hamas.

This means in my way of thinking that you have got to get Hamas and Fatah back into operation together. Now, that's very difficult for U.S. president to propose for all the reasons that are self-evident to everyone in this room. Therefore, it seems to me a good way to start doing this is to let the Europeans continue their tentative dialog with Hamas.

I would urge upon my friend, Prince Turki, that rather than as he said last night, having the Egyptians do it who have lots of conflicts with Hamas, that the Saudis and the other Arabs come back into the picture and try to seek a reconcile government between Hamas and Fatah.

From my way of thinking nothing is possible on the Palestine/Israel front until you have a unified Palestinian government. And I think it is very much in the interest of the current Israeli government to prevent that from happening.

As I always thought and said long ago, that Sharon would pull out of Gaza, not only because of the demographic considerations but because he believed it would lead to chaos among the Palestinians.

Therefore, preclude having a real partner that he would be compelled to deal with. And that is how the events played out. So that's the first thing that I would urge an American administration now to do, which is to let others do the task with Hamas.

Secondly, yes of course we have to press on the Israelis. I find that's going to be a very difficult task, given the make up of the current Israeli government, which is not exactly a normative kind of government that we are used to. It is a very right wing government, very much hinged in the coalition on parties that are not interested in the peace process.

So it's going to be very difficult and merely having George Mitchell, whom I admire greatly run around the area and propose various things is not going to produce any effective result. A lot of it is going to have to come from within the area and with the support of Saudi Arabia and others of the Arab nations in the region.

And there I share Zbigniew's view that we really need an effective U.S.-Saudi working alliance. The other question that Prince Turki just briefly touched on which is Lebanon/Syria, I would like to come to that.

Lebanon hopefully will have peaceful elections in about six weeks. I can't project the outcome but I think it will be fairly to safe to say that Hezbollah will score as well, perhaps even better and be very much a part of a Lebanese government.

And so I always put the question, if we deal with Lebanon and there in the American body of politics there is a general view that we want a unified Lebanon, we deal with Hezbollah and that government. I don't understand why it becomes so taboo to think of dealing with the Palestinians including Hamas. And my prediction as I said before, we will get there but we will get there painfully.

Lebanon is going to face a series of very difficult challenges, worst among them is the result of the tribunal which will shortly hand down its conclusions as to the Hariri assassination setup under the UN resolution. From what I am hearing from the prosecutor, whom I spoke to in New York, I think there will clearly be indications of Syrian involvement. The only thing that is not clear is as yet how high up will be those who will be named in the, what we would call indictment in the United States legal system. That's going to be a difficult issue to deal with but it will have to be confronted.

I believe the Israelis, if they are pressed by this administration, they will always as they try to do deflections say let's do Syria first, Syria is easy to do, let's leave the Palestinian issue second. I don't share that view, but that's the way they will probably approach the question.

On that one too, I find it difficult to see how we are going to have any kind of a breakthrough given that both Bibi Netanyahu and Lieberman in the course of the campaign repeatedly said that Golan will not be given up and they have not had any forthcoming approaches with some of the other territorial issues including Shebaa Farms as has just been mentioned.

So the U.S. on those two key issues has got some very heavy duty going and I don't believe as I said at the outset that we can do it alone. It is inconceivable to me that with all the goodwill and the devotion that Obama and company will have to this question, that we will get anywhere without the support of others, particularly Arabs and the European Union.

And I would urge a direct shift to bringing in lots of partners in order to accomplish what has been the most elusive, the most difficult and in many ways the most depressing foreign policy challenges we have faced. It is now right past 40 years of an occupation by Israel of the West Bank and Gaza.

And as you have heard and I know you know that in many intellectual circles, in Palestine particularly, there is a view that this has become a permanent occupation, and that it will never be resolved by the forces of diplomacy but only by the long term demography in which the Palestinians will ultimately outweigh the Israelis. That's a very doleful view, but it is one that is gaining currency given the perpetual stalemate they have had over all these decades.

So those are my comments about what we have to do on a realistic basis to get this process moving in the right direction. Thank you.

Steve Clemons: Thank you Rita.

[applause]

Steve Clemons: You know there is nothing better than a panel discussion amongst ultra realists who slightly disagree. So we were going to enjoy this! Now I will welcome the Minister of Commerce & Industry of Saudi Arabia, Abdullah Alireza.

[applause].

Minister Abdullah Alireza: I am faced with a dichotomous situation. It is never that easy to be the last speaker after such a distinguished panel, but it makes life easier because everything that you need to say has already been said. So, I am approaching this from a different angle, but before I do, I really would like to thank my friend Steve for the effort that he has put in coming up with this conference.

When I threw the gauntlet at him couple of years ago, he thought about it, but then he thought about it in a sense that it was really opportune for the Saudi-U.S. relationship to be able to be exposed after such long hibernation for the last eight years. To be able to do that, that took a great deal of risk. But I am happy that the New American Foundation, a very prestigious think tank, has partnered with the Saudi CIT to have partnership and collaboration between these two augurs well for the relationship. And I would like to thank you again Steve.

I am approaching this from a different angle as I said. It is my fervent hope that today's discussion will help today the cornerstone for a new value-added relationship between our two countries. Without a doubt we have been told and I will repeat that the U.S. Saudi partnership is solid, withstanding the trials and the tribulations of the recent past, but U.S.-Saudi relationship must be built on shared value, mutual respect and the commitment to collaborate in developing new value-added element of our relationship.

Together, we can strongly focus on building intellectual capital, a knowledge-based economy, educational reform promoting and encouraging deeper institutional collaboration in order to reinvigorate our mutual interest. The values voiced by President Obama are warmly welcomed in Saudi Arabia as a serious glimmer of hope. We need to be sanguine, however, at a time when pessimism is pervasive in the region. We need to work together to reverse past failures.

However, we are now entering a new epoch, a new era and be paced by two visionary leaders, President Obama and King Abdullah. Remarkably, both leaders share a common path. In their own way, they have embarked on a campaign forward to achieving greater harmony in the global arena. President Obama's message of renewal and collaboration with the Arab and Muslim world and especially Saudi Arabia has positively left an imprint in Saudi Arabia.

King Abdullah's initiative of the Arab peace plan as well as the initiation of the interfaith dialog both in Spain and in the United Nation represents the Kingdom's radical proposition to the world of nations. King Abdullah has also pursued reconciliation within the Arab world and has established himself as a respected champion on humanitarian and just causes.

We simply cannot afford to waste the opportunity to have our two nations benefit from greater interaction. King Abdullah and President Obama speak the same language and understand that through dialog and persuasion, peace and stability can be achieved. Our shared history and mutual interests have brought our nations together into partnership. Both our nations have a deep respect for value. We both seek stability in the Middle East without which, and as we have been told today by all the distinguished panelists, we cannot make any progress in the region either at the political or the economic level.

We both have fought against the spread of terrorism based on the shared values we hold regarding peace and stability. All aspects of our partnership play an important role where as your former Secretary of Commerce, Mickey Kantor said, "Strategic considerations have made us allies, but the ties of trade have brought us truly together."

Indeed, Saudi Arabia is America's biggest trading partner in the Middle East and America is our largest trading partner both in terms of imports and exports.

Last year our bilateral trade volume exceeded $68 billion compared to $160 million in 1970. But at the same time we live in a very challenging and turbulent world as a result of the impact of the financial crisis. Much needs to be done as much as has been damaged.

We cannot succumb to the temptation of begging thy neighbor policies which are an anathema to global trade. Protectionism will threaten he prospects for recovery and prolong the global downturn.

All too long, we lived in a world that prized short term gains based on greed, avarice and irresponsibility without considering the long term consequences. We need to look at the global architecture that at the core is carrying and responsible.

When I talk about adding value to our relationship, first and foremost, we need to move beyond the current notion of region building through creative destruction to one in which soft power is wielded intelligently by integrating countries into the clubs of good citizenship at the global and the regional level.

Creative destruction as we will mention, must be replaced by creative restructuring and creative engagement. Both King Abdullah and President Obama are committed to this cause. Therefore, the challenge with the U.S.-Saudi relations is creating conditions for this type of collaboration within and across countries.

All the speakers spoke about the need to be able to move in that direction. We must structure U.S.-Saudi relations in a way that allows for more broadly defined bilateral interests which also supports the institution of global and regional clubs of good citizenship.

Together, we need to explore ways of blending private and public capital, leveraging part and private and civil society networks and ingenuity organizational skills and access to market to improve the lives of real people.

Elite centric approached to foreign policy will no longer suffice. But there is not substitute for domestic institutions. Hence, U.S.-Saudi bilateral relations must be broadened to reflect new priorities, mainly the creation of intellectual capital and knowledge sharing as the only real guarantee of equality of opportunity for citizen or our countries and stability for the rest of the Middle East.

The gain of this initiative would be to foster the creation of knowledge societies, to share information and research tools in education enhancement. Saudi financial capital and U.S. expertise in research and development could be combined in a way to address some of the most pressing scientific, social and economic challenges.

Saudi Arabia is moving away from simply being a gas station of the world toward a sophisticated laboratory of excellence, innovation and knowledge. We know that we have a long way to go. But we have embarked on that path. And we're not looking back.

Our economy is being transformed and the youth is our strength. Let me try to cut it off here because part of the problem I have with being the last speaker, I don't want to overstay my welcome.

So I think if all of us get the general drift that we have to build a very strong foundation to this bilateral relationship, what happened in the last eight years would not have happened in putting U.S.-Saudi relationship back into the closet. So I thank you very much.

[applause]

Steve Clemons: Thank you very much. Thank you. Now we have some time for discussion. I need to add that the beginning of this discussion is a little dangerous here. Let's not fall.

Dr. Brzezinski has an appointment and will be leaving a bit early. So I'm going to begin to open the discussion with him. And throw it out there a bit. And use Prince Turki as a bit of a prop in this question.

Not too long ago, Prince Turki wrote a very provocative op-ed in the Financial Times. And in that op-ed, he basically said, our patience is being tested that there is a time limit as it were, on the so-called King Abdullah Arab peace initiative.

And President Obama stunned a lot of people by giving his first formal press interview to Al Arabia and in his comments he referred specifically not to Prince Turki but to the notion that that might be taken off the table.

He basically requested patience. There's a bit of a difference how Zbigniew Brzezinski has said this, the Arab/Israeli peace arrangement is really neither about the Palestinians nor the Israelis. It's about our geostrategic future. And Rita has said that's the wrong place to start. You have to have...

But Dr. Brzezinski, when you look at Asia, and you look there, we have an Oseon [sp] regional forum, which is sort of a loose network, not alliance, but at least a talking foundation among states with competing interests. What do you think when you look through the portal of the Arab peace initiative this question about perhaps growing impatience of the process.

Do you think it's possible to shoot forward to something like an Oseon regional forum with the key stakeholders in the Arab region and that is the prospect of what might be lost if we don't move the Arab initiative forward?

Dr. Brzezinski: I'm not quite sure I really quite understand the analogy with Oseon, especially. It seems to me that in the Middle East we have very specific two problems. Which are paramount and the others are associated with it.

One is the Israeli/Palestinian conflict, which of course brings to the surface a lot of historical memories and issues and problems. And these are not easy to resolve and we have to overcome that by working together.

And second, of course, is the question of the regional role of Iran, which happens to have different cultural definition but at least in some respects is even, to some extent religiously differentiated from the Arab Middle East.

Now these two problems I don't see the analogy to the Oseon Regional Forum, for dealing with them. I think they have to be resolved, largely on the basis first of all for the collaboration of key players. And we are included for better or for worse, as a player, in part because we stumbled I think unintentionally into an excessive assumption of a role previously played by Great Britain in the region.

In recent years the way we manifested that reinforced impression then in some respects we are a foreign intruder that is trying to impose our will on the region. This was not our subjective inclination but it was the objective consequence of some of our acts. In that setting it seems to me, it's simply essential that we what we need to do.

This is to act as the real mediator between Israelis and the Palestinians, along the lines of what Chuck Hagel was saying, that is to say we really are the mediator but not a mediator who is doing this out of some charitable inclination, but because we have a vital interest in that problem being resolved.

And if it is to be resolved, it has to be resolved fairly. If it is resolved fairly there is a chance that reconciliation will take root and endure.

If it is not resolved fairly, it will not endure. And the two basic problems that have to be resolved in order for it to be fair is the problem of the right of return and here I think we have to be realistic, even though it is painful and difficult for our Palestinians friends to accept this.

There is not going to be a right of return in any real sense, except the most limited and symbolic right of return to Israel of the descendants of the Palestinian refugees and [inaudible].

But there can be some compensation and there can be arrangements for their settlement elsewhere. There can be some acknowledgement of responsibility for what happened to them. That's one issue that has to be resolved.

The other issue that has to resolved is, of course, Jerusalem. Jerusalem has to be shared fairly between the Israelis and the Palestinians. That is to say, two capitals in one city, a special regiment for the old city. Because if that isn't settled, one of the major sources of conflict, between the Palestinians and the Israelis, but more generally the Arabs and the Israelis, is going to continue festering.

We can only do that. And that is an issue that we have to address. If we address it, more or less along the lines that I have mentioned, then in time the national community will support it. I trust the Arab League will support it. And I think that that will create a degree of momentum that can actually create a breakthrough in the Middle East.

On the Iranian business, I think the key issue to realize is that it's a long term process which will require progressive accommodation. Eventually over time a political evolution, which should not be put front as a slogan, regime change, because actually that delays the change.

But a political evolution which gives a legitimate role in the region to the country of 70 million people with some significance, great historical traditions, but not as a revolutionary dominant force. That will require patience. We have to be involved in that but the region has to be supportive and helpful. This is why there is significant Jewish strategic room for a genuine American-Saudi Arabian alliance for peace in the Middle East.

And that means commitment by both sides. And not rehashing past disagreements. Were we too passive? Were we over partial to Israel? Where the Arabs slow in forthcoming? We can each have our list of disappointments with the other.

We have to work together on this Jewish strategic for the sake of the region, because otherwise this region will replicate in the 21st century what Europe experienced in the 20th century. But in the nuclear age with potentially much more destructive consequences.

Steve Clemons: I'll work on my [inaudible] regional forum, distracting metaphor another day. Rita?

Rita Hauser: Well I can only share Zbigniew's view. We have also talked about it for decades it seems to me. I'm not as optimistic as he that just by outlining affairs solution... I know the solutions have been outlined also for decades and I think everybody understands what they are.

The problem is getting the parties to that solution. That has always been the dilemma. So I don't think as Prince Turki said, we need more solutions. We have them.

I am still very skeptical about whether or not we are going to have a willing partner in the current Israeli government in any meaningful way, whether or not there is a Palestinian partner, because at the moment it is fractured.

Steve Clemons: Can I push you on that for just a moment? Dr. Brzezinski said on Scarborough's show that to some degree that the leadership in Israel but also the Gaza crisis essentially removes the fig leaf, if you will, the notion that you can earnestly achieve this balance. Because neither side can achieve any balance on their own.

So doesn't having Netanyahu and Avigdor Lieberman actually help convince people...

Dr. Brzezinski: Since I have to leave can I just clarify one point. The response to recap. The issue is not that the solutions have been articulated, because they have been dribbled out in bits and pieces, here or there. Kind of subtle [inaudible].

The need is for an explicit American position of the highest level on the fundamental issues indicating what in our views the fair solution is. That has not been stated, ever. We didn't do it in Camp David I. We didn't do it in Camp David II. We have never done it.

Moshe has done various letters to Hamas, to the Israelis, but we haven't articulated our position. Once we did, the ballgame would change significantly.

Steve Clemons: We're going to continue ... Let's give a quick round of applause to Zbigniew Brzezinski. Thank you for being here.

We have a lot of folks... thank you, Dr. Brzezinski. Rita, can you pick up from there?

Rita Hauser: Yeah, I sorely hope Zbigniew as right, I have some hesitancy about whether that is the real answer to this [inaudible]. Any lawyer in the group here will readily recognize that you have parties to any kind of dispute, we all know what the end game is going to be. You can tell the clients on both sides, this is how it's going to wind up. And you can never bring them to accept.

That's always the hardest dilemma. How do you bring people to what is fairly self evident proposition? So I start with the difficulty of how do we get players to the table here on the Palestinian side and on the Israeli side. I think it's going to be a hard go, but as I said in my opening remarks, people may disagree with me. I would start on the Palestinian side, which I think is simply the most dysfunctional.

It is in total dysfunction at the moment. And there is an opening because Hamas must accept some outside help in large amounts to begin the reconstruction of Gaza which has been totally and completely decimated. So you do have an opening there that can bring them perhaps, or some elements of Hamas into a more working relationship with Fatah.

So I would spend a lot or time on that end. Yes, talk to the Israeli government, of course. I said to all the other partners, I don't see the Israeli government being broadly forthcoming at this point. Not certainly this government but I would begin that process.

And I think anybody who thinks that it's just going to happen very quickly is not realistic about the state of the facts in the region. If we make some small gains over this next period it will be great.

It's very interesting George Mitchell spoke to a good friend of mine who Prince Turki knows well when he took on this assignment, and he said, "My wife was not too keen about this because it took me five years in Northern Ireland."

I said to her, "Don't worry dear, I'll be back in a year." I think that is probably as he, George, himself admitted, the most wildly bizarre optimism. I think if George could get Hamas and the Palestinians together in the course of the year, I would say [inaudible].

Steve Clemons: Prince Turki.

Prince Turki Al-Faisal: There are several issues here that are interconnected. One of course is the issue between Hamas and Fatah. There are two reasons in my view of why there are more difficulties today, particularly after the Gaza conflict recently [inaudible].

One is that if you look at the surveys that were done after that conflict, the popularity of Hamas on the West Bank sky rocketed. And of course, with Fatah plummeted. And in Gaza it wasn't that clear, but quite clearly what was indicated was that Hamas did not gain as much support in Gaza as it did in the West Bank.

So in terms of legitimization in the eyes of Palestinians and particularly the average Palestinian, the Hamas came out winner on this Israeli assault on Gaza.

The other side, Mahmud Abbas Fatah, has been suffering from consistent and persistent Israeli denigration. As such, it's legitimization in the eyes of the Palestinian people as a promoter of a peaceful solution to the Palestinian problem with Israeli has not been received well among the average Palestinian population.

So there are things that can be done practically on both sides to encourage more legitimization if you like for Fatah by conceding to Feta demands on issues like the freeing of prisoners, the lifting of road blocks, the more increased economic and business activity in the West Bank and other indications that what Mahmud has espoused a philosophy which is peaceful engagement with Israel is paying dividends to the average Palestinian citizen.

On the Hamas side I think what the senator and Miss Hauser and Mr. Brzezinski have mentioned, you have to engage with Hamas. You cannot simply ostracize and keep apart a legitimate representative of Palestinian opinion. And it is from that aspect as well that by engaging with Hamas, you draw them into the various channels and the talks that are taking place.

I would go further than what Rita mentioned, simply leaving it to the Europeans to do that. I think there is a requirement, an imperative rather than a choice on the United States to do that. And you're right, the United States has dealt with the Lebanese government which has Hezbollah within it.

Why not with a Palestinian Authority government that was elected in, what was it, 2005, 2006, and yet the U.S. ostracized that government. There's no justification for that whatsoever. Whether legislatively or politically within the United States, that is something for the administration to push for and to get through.

I would add to Brzezinski's comments on the two issues that he mentioned, Palestine and Iran, which is still festering, which is the issue of Iraq. I think Iraq deserves the attention and the continued not just support but clear definition of where the interests are. Not just of the United States, but of the area in general.

The Kingdom has supported all regional inclusive talks on Iraq. It was the first to call for the neighboring countries to come together in 2003 soon after the fall of the Saddam regime. And to invite Iran and Turki and other countries in the area to sit down together on that. That's expanded now and it includes the United States and Great Britain and other players including the United Nations and the Iraqi government.

I think more has to be done on that sense as well too. My government has been reluctant in engaging with the Iraqi government, particularly in sending representation to Iraq. Because if there is going to be a Saudi ambassador in Baghdad, he's going to be the target of immediate hijacking efforts, assassination efforts, you name it. No government will risk the lives of its own citizens as representatives and send them, as it were, to slaughter in a place like Baghdad.

But nonetheless I think there are ways that Saudi Arabia can do that, either by having intermittent representation in Baghdad for specific periods of time just to show that we are sending a representative for the Iraqi people. And not leave the stage, as it were, free for the Iranians to do whatever they wish for.

Steve Clemons: Thank you.

Prince Turki Al-Faisal: Iran, let me just say something about Iran, if I may. I know I'm taking too much time on that. The platform from which the negotiations between the West and Iran on the nuclear issue started on the wrong foot. It started on the foot of carrot and stick. That's a term I think that should be expunged from political and diplomatic language.

When you come to a people and say I'm going to give you a carrot or I'm going to wield a stick on you, the first thing they're going to do is they're going to slap you in the face and tell you go to hell. So please for American politicians and any administration, just remove that phrase from your lexicon.

And make it, on the issue of the atomic energy, a uniform and a proposal that includes all the countries by declaring the Middle East free of weapons of mass destruction. You can provide incentives and sanctions for the countries that join or do not join. The incentives are a nuclear umbrella of protection like Europe and Japan enjoys today from the United States including economic and technical aid.

And for the sanction side, for the countries that don't want to join that grouping, you can have not just economic and other administrative sanctions, travel sanctions et cetera. But also the proposition and the potential for the use of military force. And I think that can be justified if everybody comes on board.

Steve Clemons: I may invite you to guest blog at the Washington Note on that. That might be interesting. We're under some time pressure and I'm going to apologize in advance to everyone. But I want to quickly ask and ask for brief responses from Senator Hagel and Abdullah Alireza.

Senator Hagel has often said that when you go around the world, you meet world leaders, you talk to people, that there's some doubt about America's ability to achieve its objectives today. That there are countries that have been allies who feel like our mystique has been punctured somewhat, so they can't quite count on us as much and enemies are moving their agendas. And this was very much, when you were speaking, this was very much in my mind when we titled this "In a World without Equilibrium."

Do you think that the various measures we're talking about today are substantial enough and that the United States can play a winning hand in this enough to get back to being a believable nation with leverage in the world?

And to Minister Alireza, there's a lot of talk, and let's just be candid, about Iran's meddling in the region. And to some degree if you go back to the old Cold War days and the Soviets would talk about correlation of forces, things haven't looked that good for our side, your side, in the sense that of people begin feeling as if the influence of Iran is clearly on the rise. That the meddling inside other countries is on the rise. The Taliban is on the rise in Afghanistan and Pakistan.

Are there things that Saudi, in your world, commerce, industry, technology, can do that are genuine that affect the broader gulf region in an inspiring way to sort of be more compelling as an alternative vision? Now I've asked you a big question, but I'm going to ask for a very brief response because we're at the... Senator Hagel?

Senator Hagel: Steve, thank you. I began with this point. I think we, the world, are all living through one of the most defining times in the history of man. I think we are seeing a reorientation of world affairs and dynamics we have never seen before at a rate of change we've never seen before. I think we are seeing a diffusion of geopolitical economic power that we have never seen before. That then, if any of that is right and I think it is, is creating a new geopolitical center of gravity.

Nations, events, issues, influences are all now coming together, what I noted in my earlier remarks, at a historic convergence that history rarely sees. Now we can enter, we the world, American leadership, an era of engagement and accommodation. Or we can go the other way and see an era of chaos in the world. And I think we are right on the line.

The region of the world that we're talking about here represents that center of gravity. Because Iran, the Israeli Palestinian issue, Iraq, Pakistan, Afghanistan are all folded into the same envelope. They are woven into the same fabric. You can't disconnect any of these issues from the other issues. Why? You have religious issues, ethnic issues, cultural issues, geopolitical issues, economic issues.

So to your question, I think America has an opportunity to regain and recapture that high ground of leadership. But it has to be on the basis, and I noted this again earlier, of reorienting our frame of reference, listening, turning our receivers on, turning more transmitters off, developing partnerships, alliances, relationships defined by common interests.

It will be raggedy, it will be imperfect, it won't be exactly like we want all the time. But we can no longer go around the world and dictate to mankind and invade and occupy and say you'll do it our way. If for no other reason than this reason, every relationship in the world is maturing.

Look at our relationships with Turki and South Korea. They are not the same countries, nor do they have the same relationship with America today that we had 25 years ago. They have now graduated into their own realms. Relationships are that way and those relationships must be relevant to the dynamics of the day's challenges and today's world.

So, yes, I detected what you have noted. I've written about it, I've spoken about it. I think we have an opportunity to change that, but I do think that the time here is now right on the line on how much time we have to do that.

Steve Clemons: Thank you.

Mr Minister.

Minister Abdullah Alireza: Let me just say something that pertains to Iraq and the initial stages. Please do not fall for the same trap that you fell in going to Iraq - that the road to Jerusalem goes through Baghdad. That's how you would embark on your biggest folly that you have ever made.

If we do the same thing now by saying the only way we can get to Jerusalem is through Iran, then we have really opened up a wild west, if you will, in the Middle East.

The question that either we ask ourselves: do we have the capacity that the United States, with Saudi Arabia and its allies in the region, to work out a plan by which we will be consulted like we were not consulted on the Iraq situation. Even when we were consulted, it was put aside.

So whatever we do that we have to do it together and recognize that our interests in keeping the region in a stable situation so it does not go into a destructive mode through a push of a button.

Saudi Arabia probably would be one of the first casualties in an attack on Iran by certain quarters. This is the only thing that they could actually do and be heard. And I think it is important that this consultation takes place at the highest level, and I am happy to see that it has been done.

Like tomorrow, Dennis Ross is going to be there; George Mitchell was there. But that consultation, especially with King Abdullah, he knows the region. He has the respect of the leaders in the region, and the region will follow him because they recognize that Saudi Arabia will do what is best for the world community.

Steve Clemons: I know we are pushing it. I am going to get the support of all of you in this marathon day. I don't believe in ever having a program without questions, so I am going to go grab a couple of quick questions, we will just go a little bit over, and we will make it work.

So, I am just going to quickly look here. This gentleman here sitting, really fast, I am going to take you, and before any response, Catherine Teethan[?], where are you? Over this far, this gentleman right here, right in the middle. Go ahead, Shoop [sp], but make it brief.

Shoop: OK, [inaudible] newspaper, Saudi Arabia. Prime Minister Netanyahu is coming to town in a couple of weeks. What should the president tell him? This is a question for Senator Hagel.

Steve Clemons: Thank you. Excellent, and there was a gentleman right here. Grab the microphone. Go ahead.

Man: Yes, Senator Hagel, this question is about U.S.-Saudi relations. How do you value your own personal position on the fact that the U.S. has really been in bed with the Saudi government for such a long time, a government that everybody knows is xenophobic, against women, against Shi'a, and to the degree that the practice of marrying children, made popular by their own family, is the only country that legalized that?

So I want your own personal position given that extremists have said the U.S. has been hypocritical about they are a democratic nation and have spent time supporting this medieval government. Thank you.

Steve Clemons: Thank you. A works question. One other question over here - Imad, did I see your hand up? No? OK. Right there, the lady in the back. Is that Elise?

Elise Labber: Yes.

Steve Clemons: Elise Labber, CNN.

Elise: Thank you. I guess this would be for Prince Turki. Not withstanding everyone's desires for the Obama administration to kind of push a settlement between Israelis and Palestinians, we're also hearing a lot, especially since King Abdullah of Jordan just visited, about possibly trying to institute some kind of incremental step by step approach where while you are pushing negotiations, you also have the Israelis take some steps such as halting settlements or easing the daily hardships that the Palestinians face so that the Arabs could then take some reciprocal steps.

And as the minister has said, perhaps Saudi Arabia could lead something like this because the Arabs would follow him. Do you think that that is something that the Arabs would be willing to do while you push forward on negotiations?

Steve Clemons: My piggyback is: does sequencing the Arab initiative help it or kill it? So, Senator Hagel?

Senator Hagel: Which question?

[laughter]

Steve Clemons: Any you would like. This gentleman here who asked about this is something that I thought about a lot in having this relationship is I am very familiar with questions raised, and I think it is one of the reasons why.

I was watching Harry Potter the other day, and the bad guy in Harry Potter, I'm not very good at pop culture, is the guy whose name can't be mentioned or can't be talked about, and this is ridiculous.

The U.S.-Saudi relationship is vital at every strategic turn that we take, and we hide it. So, to some degree, that is my response. But, Senator Hagel, your view?

Senator Hagel: I will be very brief and direct. I generally noted in my earlier comments that nations have differences. We, the United States, have differences with other countries, with other governments.

It is my opinion that the world can achieve mutual objectives if we work on some kind of cooperative plane to develop influences within a government, within a country, within a society to try to correct certain issues that we think are important.

So those differences we have on social matters, with any country including Saudi Arabia, will be there, but I have always believed that what is most important is the larger dynamic of the relationship.

What is most important? Essentially trying to avert blowing up the world, and some of the big issues that we have got to deal with up on top, or constantly redefining relationships based on differences down at a society level?

Doesn't mean they are not important, not at all, and there will be differences, continue to be differences, but I also think, as Prince Turki said, and I think he is right, you don't exhibit or develop influence in a country with another government by beating the hell out of them publicly or embarrassing them.

There is an entire inventory of instruments that you use to try to develop influence for your country, your values, your standards. You do it the smart way or you do it the dumb way. Now, there is a question over here.

Audience member: Netanyahu.

Senator Hagel: I would say that as the Prime Minister comes to talk with President Obama, first, I would listen carefully, if I was President Obama. What do you think, Mr. Prime Minister, is the course of action? Where do we go? How do we do it?

We are going to do something, if for no other reason than there is not a country in the world that the reconciliation, the efforts to achieve some stability and security in your area of the world, is more important than for Israel. Israel is the biggest benefactor of any country in the world to find a new dynamic of peace.

I would say to the Prime Minister, "We all, the community of nations, intend to lead a new effort, and I, President Obama, am going to put my own imprimatur on this. I am going to engage myself on this. I have put some of the best people we have on this. But this is not just a press conference or press op every 30 days. This is getting it done, and it is going to be based on the common interests of the region and your countries."

I would make that very clear, and I would listen to the Prime Minister and work it from there.

Steve Clemons: Prince Turki, quick response on whether sequencing the Arab initiative helps or hurts.

Prince Turki Al-Faisal: The [inaudible] described here, the Arab Peace Initiative is the result of negotiations and not a negotiating tool. It is a vision of where the world will be once the negotiations are finished between the Palestinians and the Israelis, Syrians and Israelis, and the Lebanese and Israelis, countries that still have territories occupied by Israel.

So my answer would be that sequencing in this matter, and particularly when it comes to issues like borders between Palestine and Israel, Jerusalem.

As Brzezinski said, and the refugee problem, is not going to be a sequential arrangement whereby if Israel, for example, lifts a roadblock in the West Bank in trying to show some kind of good will towards the Palestinians, Saudi Arabia will establish a consulate in Jerusalem.

That's not going to work. And it's going to complicate matters rather than make them easier.

Steve Clemons: So I think the answer is it will hurt.

Abdulaziz Al-Fahad: Definitely it will hurt. Now I would just say something, if I may, in response on the question that was posed to Senator Hagel about what Netanyahu should expect to hear.

I never thought I would disagree with the Senator on anything, but on this case I would. And that is when Netanyahu comes and begins to talk to Mr. Obama and begins to say, "Mr. President, this is what I...," the President should shut him up immediately and say, "Mr. Netanyahu, you have to listen to me first..." and this is what I think should be done to make the proposal come true.

[applause]

Abdulaziz Al-Fahad: And the same with Arab leaders as well. This is, I think, what has been missing in this American, Arab, and Israeli dispute. There has not been an American position put forward, as Brzezinski said, as an end vision for peace in the area.

Steve Clemons: I'll just paraphrase, just to Elise's comment real quick and paraphrase Scowcroft whose comments last night were on the record, where he basically addressed this and said beware of process and code words that undermine the objectives and goals that are out there. Rita Hauser, any final comments?

Rita Hauser: Well, I would, like my friend Turki here, I would be very blunt with [inaudible]. I would say I'm committed to a two state solution. Are you? We believe the Annapolis accords are binding. Do you? Since during the course of the campaign there was a lot of blather about they're not bound by the Annapolis accords.

And what concrete are you prepared to do to alleviate the plight in Gaza so that something could be announced positive at the end of their meetings to say, the Israelis are going to open some border crossings, let food and other things move in and so on.

I think [inaudible] needs to know, and there I do disagree with you Chuck. I think [inaudible] needs to know that the president means business. If he doesn't know that, he has his own business and will figure out very quickly how to wiggle around any president as has been done before.

Now at settlements, you'll get the same stuff. We're not expanding. We're enhancing, we're enriching. It's population growth, any number of metaphors and expressions that the Israelis have used to constantly expand the settlements. I personally wouldn't get involved in that mish-mash now, because I don't think that the President's going to get anything on it.

I would concentrate on a concrete resolution of some of the pressing issues in Gaza, which would give a very strong statement to the Palestinians that the President of the United States understands their plight and what has to happen next. But it would also be something that he won't get a tremendous amount of flack from from the Congress, which is always a problem for any American president in this business.

Senator Hagel: May I just respond quickly, because I did emphasize in my second point, Rita, the absolute, I used the word I'm going to put my imprimatur on that. So I don't want to make sure you're confused by that.

Steve Clemons: No, I'm saying that Obama should be casual through this.

Senator Hagel: No, I made that pretty clear. But I do think it is important to listen.

Rita Hauser: Yes, of course.

Senator Hagel: And that's I think a matter of just courtesy. When President Obama bowed to the king, that was a gesture of courtesy.

Prince Turki Al-Faisal: Absolutely.

Senator Hagel: And I do believe, and maybe it was my mother who reinforced this, I don't think it costs much, a little courtesy. And I think when you're dealing with an elected official of another country, and they are your guests, you listen to them. Then you can say what you want to say, but don't make any mistake about...

Steve Clemons: You're saying drop the swagger.

Senator Hagel: My serious point is don't make any mistake that I backed off where I've been publicly on this many many years. The absolute leadership of an American president saying we are going to do it. I'm going to be involved in it and laying out those parameters.

Steve Clemons: I'm going to ask Peter from his chair, and also as we close this up. Are you, we had a forum a couple of years ago at New America Foundation with some very important international economic thinkers and players and people who are in the Obama administration now. And we had our geostrategic discussion. Our geostrategic discussion was about as gloomy as Rita Hauser's prognosis on things.

Our geoeconomic forum three years ago, people saw no trouble on the horizon. And it was fascinating. I said either our world's going to be a lot better, or your world's going to get a lot worse. So from, for both of you just very quick, a commerce and the economic viewpoint, would you be investors in your neighborhood? Do you see things really improving on the political and geostrategic side? The hope of that and the hope sincere, or is why you're here today is you're worried about further deterioration?

Peter Robinson: Well we are investors in the neighborhood, and we certainly are going to continue to be investors in the neighborhood. The only thing I'm not going to try and match these giants. The only thing I would say at the end here is that for myself and my company Chevron and my council, the U.S.-Saudi Business Council, we're proud to have been a part of this discussion.

The two things that I heard were partnership for peace, which I think is a wonderful concept that I could feel very strongly about. And the other one really is get to know each other better. I mean I just don't think we know each other sometimes. The public of our country and the public of the kingdom of Saudi Arabia.

And getting to know each other better is critically important. There's no better way to get to know each other than through trade and investment. And we are part of that just by the nature of our business, the U.S. - Saudi Business Council, obviously that's their role. But trade and investment, there's a blight of people moving to Saudi Arabia today to invest in Saudi Arabia.

The opportunities to invest there are fantastic. So I think...

Steve Clemons: Thanks.

Peter Robinson: I know you want me to stop, but I think that getting to know each other and people getting together in public and talking about this issue is the only way forward.

Steve Clemons: Thank you so much Peter. Minister, last word.

Minister Abdullah Alireza: What I'm saying very simply in today's world, it's people to people, civil society working with each other. Organizations work together in order to enhance the understanding. There's got to be more of a glue, and the glue can be provided through trade and investments. It would be a mistake to think that trade and investment are not that important.

The more people you have, there's a huge multiplier effect, as more Saudis here, we have 20,000 students now in the U.S. These are people who will understand the United States and will understand how to deal with it. Likewise, you have to understand how to deal with us. And it's done through outfits like [inaudible] and Desmond [inaudible].

You know, you cannot impose exogenous values on any country without having a backlash developing that would create the animosity and the mistrust. In the last eight years that animosity and mistrust was very apparent. And it's got to take a long time to be able to unwind that misconception that we went through.

The idea that you could impose democracy, that was synonymous with lets have chaos, so that we can continue to do what we want.

Steve Clemons: Thank you very much, please give a round of applause to Senator Chuck Hagel, Prince Turki Al-Faisal, Rita Hauser, Zbigniew Brzezinski, Abdullah Alireza, and Peter Robertson. I want to thank our panel very much. And I want to encourage...