Tuesday marked Israeli Foreign Minister Avigdor Lieberman's first official visit to Washington in 18 months and he made extensive rounds, meeting with State Department officials and a host of lawmakers on Capitol Hill.

In the morning, Lieberman met with Secretary of State Hillary Clinton for the first time since 2010. There were no official statements made after the meeting, but Lieberman told Haaretz it was a "very good" meeting that included a lot of substance. "We are waiting for Iran to give up its nuclear ambitions and we express our appreciation for the support of Israel," he said. "We appreciate the very crucial decision [by the Obama administration] of sanctions against Iran, and we continue to monitor it closely."

State Department spokeswoman Victoria Nuland said Tuesday that the meeting spanned the gamut of issues, including U.S.-Israeli relations, Iran, Egypt, Syria, Middle East peace, Turkey, and Iraq... all in about 30 minutes.

"With regard to Iran, they talked extensively about the impact that the new sanctions are having and our efforts to work with countries around the world to wean them from Iranian oil and, obviously, our mutual commitment to prevent Iran from getting a nuclear weapon and to increase the pressure through these sanctions," Nuland said.

After Iran, the most oft discussed topic in Lieberman's Washington meetings was the new agreement between Fatah and Hamas, but Nuland said the State Department has not made a judgment on that agreement or what it will mean for the U.S. involvement in the region.

"They did discuss the fact that it's not particularly clear what this agreement will change. In particular, we still have President [Mahmoud] Abbas at the head of the government; we still have Prime Minister [Salam] Fayyad responsible. And so frankly, any impact this may or may not have is unclear," she said.

That issue came up often in Lieberman's meetings on Capitol Hill Tuesday. After meeting with Senate Foreign Relations Committee chairman John Kerry (D-MA), Lieberman sat down with the triumvirate of Sens. John McCain (R-AZ), Joseph Lieberman (I-CT), and Lindsey Graham (R-SC).

In a brief interview Tuesday with The Cable, Senator Lieberman said the Palestinian agreement was a major issue for him personally.

"Surprisingly, we didn't talk that much about Iran. The conversation was about the Hamas-Fatah agreement, Syria, and Egypt," Senator Lieberman said. "It's very troubling. Hamas is still on our terrorist list and still committed to the destruction of Israel... If this agreement means that Hamas and Fatah are together running the government, then it puts in real jeopardy American assistance to the Palestinian Authority."

Senator Lieberman also weighed in on reports that Fayyad will lose his position. "Fayyad has enormous credibility in the U.S. Congress, he has more credibility than any other of the Palestinian leaders," he said. "If he's gone, it's a real step backward."

He also said the portrayal of Foreign Minister Lieberman in the press, which sometimes includes accusations of anti-Arab racism, are not accurate. "The reality of the Avigdor Lieberman is better than his portrayal in the media. He's a thoughtful man, he has a big world view," Senator Lieberman said.

The Israeli foreign minister then sat down for lunch with several members of the House Foreign Affairs Committee before meeting one on one with House Speaker John Boehner (R-OH).

In attendance at the HFAC lunch were Chairwoman Ileana Ros-Lehtinen (R-FL), ranking Democrat Howard Berman (D-CA), Gary Ackerman (D-NY), Elliot Engel (D-NY), Steve Chabot (R-OH), Dana Rohrabacher (R-CA), Ted Deutsch (D-FL, whose chief of staff is named Josh Rogin), Dan Burton (R-IN), Allyson Schwartz (D-PA), David Rivera (R-FL), David Cicilline (D-RI), Gus Bilirakis (R-FL), Frederica Wilson (D-FL),  and Eni Faleomavaega (D-Samoa).

"We share your deep concerns about Iran, and I would appreciate your thoughts on how much time you believe there is before Iran enters into a zone of immunity," Ros-Lehtinen said at the top of the lunch meeting, before reporters were ushered out of the room. "On Iran, do you think the U.S. and Israel are on the same page, with regards to how much time we have left?"

We were told by multiple staffers that Iran dominated the discussion at the lunch but Lieberman said nothing new about Israel's intentions regarding striking Iran. (The lawmakers also served Lieberman a lunch of couscous and chick peas, traditional Middle Eastern fare, which struck some as odd considering he can probably get better versions of both foods at home.)

"Foreign Minister Lieberman made very clear the serious and present danger Iran presents to Israel, the region, and the world," Berman said in a statement. "It was clear that the Israeli government has not taken any option off the table vis-à-vis Iran."

The Syrian people have the right to fight back against their government and the international community has several options to help them in that regard, Senate Foreign Relations Committee chairman John Kerry (D-MA) said Saturday.

As the tempo and intensity of Bashar al-Assad regime's violence against civilian accelerates and the U.N. Security Council remains paralyzed, the United States and its partners are planning their next steps. As a press conference Saturday night at the 2012 Munich Security Conference, several members of the U.S. congressional delegation laid out several ideas under consideration for protecting the Syrian people.

"There are many different options as to how we can do that," said Kerry. "There are the early beginnings of a civil war taking place in Syria. And if the government is going to kill randomly, people deserve the right to defend and fight for themselves."

Kerry declined to specify what steps Washington might take to directly support the internal Syrian opposition or the Free Syria Army, the ragtag defectors who have taken up arms against Assad, but he warned the Syrian government and its supporters Russia and China that the United States would not stand idly by.

"Syria is not Libya," Kerry said. "But nobody should interpret that statement to suggest that it means that Syrian leaders can rely on the notion that they can act with impunity and not expect the international community to assist the Syrian people in some way."

He also insisted that there will be another round of negotiations on a Security Council resolution regarding Syria, despite the vetoes by Russia and China that followed last week's efforts to build world consensus on the way forward.

"I'm confident this will be revisited," Kerry said. "Secretary [of State Hillary] Clinton and Ambassador [to the U.N. Susan] Rice are prepared in a competent way to embrace Russian and Chinese concerns, but not in ways that would undermine the ability of the people in Syria to have their voices heard or to be oppressed or create a longer stalemate."

He continued: "I think that balance can be found, I'm confident it will be found. There will be another shot at the effort but it is really important for Russia and China, critical leaders in the world today [to join us]. They have an opportunity in the next days to step up and were inviting them to do so. I hope they will join us on such a critical statement with respect to rights of innocent people."

Speaking at the press conference in Munich Sunday night, congressional delegation leaders John McCain (R-AZ) and Joseph Lieberman (I-CT) laid out more specific ideas on how the international community can help the people of Syria.

"There's a lot we can do to provide moral support and to provide material support, along with Turkey and other nations, in assisting these people with medical care and other assistance," McCain said. "I do not know how Russia and China can represent themselves as members of the world community and still oppose a resolution that would help bring this bloodletting to an end."

Lieberman said he hopes some sense could be talked to the Russians and the Chinese and that the Security Council would work on another resolution.

"But if that doesn't work I don't think we can just stand by. I hope the international community and the U.S. will provide assistance to the Syrian Free Army in the various ways we can. I hope we will work with Turkey and Jordan to create safe havens on the borders of those two countries with Syria," Lieberman said. "What's happening in Syria today is exactly what we got involve in Libya to stop from happening.... I understand Syria is more complicated, but one choice we don't have is just to stand back and let the government kill people who are fighting for their own freedom."

Speaking on Monday in Bulgaria, Clinton laid out the most specific ideas to date about how the Obama administration plans to move forward on the issue.

"So what do we do?  Well, faced with a neutered Security Council, we have to redouble our efforts outside of the United Nations with those allies and partners who support the Syrian people's right to have a better future.  We have to increase diplomatic pressure on the Assad regime and work to convince those people around President Assad that he must go, and that there has to be a recognition of that and a new start to try to form a government that will represent all of the people of Syria," she said.

The Obama administration will seek new regional and international sanctions against Syria and will try to expose those who are still funding and arming the regime, Clinton said. She also promised to increase contacts with the Syrian opposition and provide humanitarian relief to the Syrian people.

Clinton didn't, however, promise another run at the Security Council, indicating only that more diplomatic efforts were on the way.

"Over the coming days, I will be consulting closely with our allies and partners in Europe, in the Arab League, and around the world," she said. "So we will be consulting with the foreign minister here and others about what we can do to rescue this deteriorating situation before it's too late."

MUNICH - Secretary of State Hillary Clinton and Russian Foreign Minister Sergey Lavrov gave opposing public speeches Saturday on what should be done in Syria, and then took their dispute behind closed doors in a heated bilateral meeting, in advance of Saturday's U.N. Security Council action in New York.

"As a tyrant in Damascus brutalizes his own people, the U.S. and Europe stand shoulder to shoulder," Clinton said in her speech at the 2012 Munich Security Conference. "We are united, alongside the Arab League, in demanding an end to the bloodshed and a democratic future for Syria. And we are hopeful that at 10 AM eastern standard time in New York, the security council will express the will of the international community."

Well, the 10 AM deadline has come and gone, but State Department officials insist the U.S. is committed to holding a vote on the latest draft resolution on the situation on Syria today, despite persistent Russian concerns over the text, which were outlined by Lavrov in his speech only minutes after Clinton left the stage.

Lavrov said that Russia stands by the Syrian people but not the "armed groups" in Syria that he alleged were contributing to the violence. He said Russia would not agree to any resolution that amounts to outside interference or presupposes the political outcome in Syria other than supporting a dialogue between the two sides.

"The problem is, the peaceful protesters have our full support, but they are being used by the armed groups, who create trouble. And this is reaching quite dangerous proportions," Lavrov said.

Lavrov said Russia had two main problems with the current draft of the resolution. He said the current draft resolution "left the door open to military intervention to the outside," because it does not include a Russian drafted statement that would explicitly say a military intervention is not authorized.

He also said the draft resolution seeks to prejudge the results of a national Syrian dialogue because it refers to the Arab League Initiative's report and says the process should follow the Arab's League's schedule for resolution of the transition of power in Syria.

"If this resolution is adopted and Assad doesn't go, we asked the Americans and the Europeans ‘What is the game plan?' They say, ‘Well in 15 days we'll consider this issue again in the security council.' My question is, ‘After that, what are you going to propose?" Lavrov said.

"It's not a serious policy," he insisted.

Lavrov heavily criticized the Arab League monitoring mission and defended Russian arms sales to the Syrian regime, which continue to this day. Lavrov said the U.N. charter does not allow interference in internal domestic affairs and that without Russian support, any plan devised in the security council would not be viable.

The Cable asked Lavrov whether Russia was concerned about ending up on the wrong side of history in Russia by supporting Syrian President Bashar al Assad.

"We are not friends or allies of Assad," Lavrov responded, "We try to stick to our responsibilities as permanent members of the security council and the security council doesn't by definition engage in the internal affairs of states, it's about maintaining international peace and security."

The Cable followed Lavrov out of the conference hall and into his bilateral meeting with Clinton. Clinton was joined in the meeting by Director of Policy Planning Jake Sullivan, Undersecretary of State for Arms Control Ellen Tauscher, NATO Ambassador Ivo Daalder, and Spokeswoman Victoria Nuland.

A senior State Department official said the meeting went longer than planned, 45 minutes, and two thirds of that time was spent discussing the U.N. Security Council situation regarding Syria.

"The secretary and the foreign minister had a very vigorous discussion," the official said. "The secretary made clear that the U.S. feels strongly that the U.N. Security Council should vote today."

The official would not going into the details of the bilateral discussion on Syria but said it's safe to assume that Clinton and Lavrov did not resolve their differences over the way ahead.

"Foreign Minister Lavrov did not dispute the urgency of the situation and the action now moves to New York," the official said.

The Cable has obtained a copy of the draft resolution on Syria currently being discussed inside the U.N. Security Council. It calls on Syrian President Bashar al-Assad to hand over power to his deputy and says additional measures would be taken if he doesn't comply within 15 days.

U.N. Security Council diplomats are meeting behind closed doors on Friday to discuss what's being called the Arab-European draft resolution on Syria. The Moroccan ambassador is presenting the draft resolution, which is designed to implement the recommendations of the Arab League transition plan laid out on Jan. 22.

The draft resolution condemns "the continued widespread and gross violations of human rights and fundamental freedoms by the Syrian authorities," demands that the Syrian government immediately put an end to all human rights violations, and calls on both sides to end attacks and violence immediately.

The resolution then lays out a political roadmap that matches the Arab League initiative intended to pave the way for a transition  "leading to a democratic, plural political system" through the formation of a national unity government, the handing over of all presidential authority to Assad's deputy for a transition period, and then the holding of free and fair elections with international supervision.

Importantly, the draft resolution requests that U.N. Secretary General Ban Ki-moon report on the implementation of the resolution every 15 days and also directs the Security Council "to review Syria's implementation of this resolution [in] 15 days and, in the event that Syria has not complied, to adopt further measures, in consultation with the League of Arab States."

Representatives from the State Department and the U.S. mission to the United Nations did not immediately respond to requests for comment. But State Department spokeswoman Victoria Nuland spelled out the broad goals the United States has for the final version of the resolution.

"We are looking for a resolution that reflects the commitments that the Arab League was seeking from the Syrian government, that -- in its November 2nd agreement, which unfortunately has not been lived up to by the Syrian side," Nuland said.

She indicated the United States was hopeful that Russia, which has been openly supporting Assad and sending him weapons, will work with the rest of the Security Council to produce a resolution that is strong and effective. Russia and China vetoed European resolution on Syria last fall and Russian Deputy Foreign Minister Gennady Gatilov said Friday that Russia would veto any resolution that seeks to remove Assad from power.

"We continue to want to work with the Russians so that the whole U.N. Security Council is united in sending the strongest possible message to the Assad regime that the violence has got to end, and we've got to begin a transition," Nuland said.

President Barack Obama's administration is working on the details of how it will implement crippling new sanctions against Iran, and the two senators who wrote the legislation warned the White House today not to water down the measures.

"We understand that the administration is drafting rules to guide the implementation of the law and we hereby seek to convey the legislative intent underlying certain terms and phrases in the amendment and to ensure that the positive developments that have occurred as a result of the amendment are buttressed  by the administrative rules," wrote Sens. Robert Menendez (D-NJ) and Mark Kirk (R-IL) in a letter today to Treasury Secretary Timothy Geithner, who traveled personally to Japan and China this month to discuss the issue.

The State Department has sent teams to several countries urging them to comply with the new measures imposed by the Menendez-Kirk amendment, but the administration's recent enthusiasm for the sanctions is at odds with their attempts to water down the sanctions language while it was going through Congress. The law would punish any country or bank that does business with the Central Bank of Iran (CBI), or with Iran's state-controlled oil sector.

That's why Kirk and Menendez, along with their allies, are now worried that the Obama administration will try to implement the rules in such a way that will allow some countries that refuse to stop doing business with Iran to wiggle off the hook, by delaying implementation for months or claiming that other countries' adherence is more robust than it really is.

Obama, for his part, has hailed his administration's success in establishing a broad-based coalition aimed at isolating Iran.

"When I came into office, what we had was a situation in which the world was divided, Iran was unified, it was on the move in the region. And because of effective diplomacy, unprecedented pressure with respect to sanctions, our ability to get countries like Russia and China -- that had previously balked at any serious pressure on Iran -- to work with us, Iran now faces a unified world community, Iran is isolated, its standing in the region is diminished. It is feeling enormous economic pressure," the president told Time in an interview released today.

The Menendez-Kirk letter list several concerns about the forthcoming rules, which could be unveiled as early as next week. Their two main worries are that the administration will allow countries to avoid being penalized by saying they have achieved "significant reductions" in their dealing with Iran, and that Obama will postpone implementation of the sanctions on national security grounds.

The implementation rules will define exactly what the term "significant reductions" means. Menendez and Kirk want the administration to use the same definition as was used for the last round of Iran sanctions, as dictated by the Comprehensive Iran Sanction, Accountability, and Divestment Act of 2010 (CISADA), to avoid any confusion.

"To ascribe more variable terminology to the definition of ‘significantly reduced' would diminish the ability of countries to understand and comply with the amendment," the senators wrote. "An unevenly applied interpretation would also call into question the seriousness of the sanctions policy and send mixed signals to both Iran and our allies."

The senators' other main concern is that Obama will avail himself of the "national security waiver" found in the law to postpone implementing the new sanctions altogether for another 120 days. If he doesn't invoke this waiver, sanctions against countries that do business with the CBI could take hold Feb. 29. If Obama uses the waiver, he won't have to sanction any countries until late June, which tracks with the timeline the law specifies for the imposition of the oil-related sanctions.

The senators also don't think Obama should be able to waive all the sanctions with one stroke of the pen. They want him to have to waive sanctions for each country on a case-by-case basis. That's one of the things the forthcoming rules will address.

"We would welcome an opportunity to discuss these points with you prior to the publication of the final rule for the Menendez-Kirk amendment," the senators wrote -- a nice way to complain to the administration that they are not being properly consulted.

A senior Senate aide who works on the issue was more direct with The Cable.

"There's been little to no consultation or communication on this rule," the aide said. "There is growing concern that the administration may be moving toward a broad and non-specific definition for ‘significant reduction,' and the intention of the authors is that every bank that is in violation of the law would need its own national security waiver in order for the president to exempt them."

The actual rule writing is done at Treasury's Office of Foreign Assets Control (OFAC), run by Adam Szubin.

"The administration is hard at work drafting the regulations implementing the legislation.  We are already using this law, in concert with our other efforts, to reduce Iran's access to oil revenue, both by working with our partners to significantly reduce their imports of Iranian crude and by impeding the CBI's ability to receive payment for whatever oil Iran is able to sell," a Treasury Department spokesman told The Cable. "We will continue our intensive engagement to ensure that the maximum amount of pressure is exerted by the international community against Iran's illicit nuclear program."

President Barack Obama is prepared to give the order to strike Iran to prevent it from getting a nuclear weapon if sanctions and international pressure prove ineffective, said Sen. Joe Lieberman (I-CT), who just returned from a whirlwind trip around the region.

"[Obama] is definitely capable of ordering a military strike on Iran's nuclear facilities," Lieberman told The Cable in a Friday interview. "Do I know that he will? No. But the Iranians and others will be foolishly mistaken if they assume that he will not in any circumstance order a strike on Iranian nuclear facilities if the sanctions don't work."

"I don't know that the president will order a strike on Iran's nuclear facilities even if the sanctions don't work, but I know that he's capable of doing that and I believe he's prepared to do that," he said, adding that he doesn't think Obama would ever send ground troops to Iran.

Over the New Year's break, Lieberman visited Israel, Iraq, Tunisia, and Libya, and he said Iran was the number one concern of leaders in the region. In previous meetings, Israeli officials had focused almost entirely on U.S. red lines and their concern over whether Obama would really attack Iran if push came to shove, emphasizing that Israel would attack if the United States doesn't. But now the Israeli government seems more willing to let the sanctions strategy run its course, Lieberman said. Israeli Prime Minister Benjamin Netanyahu said in an interview this week that Iran is beginning to show signs of cracking under the international sanctions regime.

"Not only do the Israelis believe the U.S. and the international community has to go through every economic effort to change the mind of the Iranian leadership, but now they believe it might actually work. They believe that the economic sanctions are having an effect on the Iranian economy and beginning to have an effect on the regime," he said.

Lieberman himself doesn't believe that the Iranian regime will ever transform into a constructive member of the world community, but he holds out hope that the sanctions, due to their effect on the Iranian people, could force the regime to rethink its strategy.

"The only thing the Iranian government cares more about than the development of their nuclear weapons is the survival of the regime," he said.

The Obama administration has been adamant that regime change per se is not the goal of U.S. sanctions. On Wednesday, a Washington Post article initially quoted an anonymous U.S. official as saying "regime change" was the goal, but then was quickly corrected to say "public ire" was the sanctions' goal, not regime change. Today, a U.S. official told AFP that the goal of the sanctions was to "close down" the Central Bank of Iran (CBI).

When the Menendez-Kirk amendment -- which imposed sanctions on the CBI and eventually became U.S. law -- came up the Senate, the administration resisted the measure, warning it could harm the U.S. economy and aid Iran's economy. These days, the administration has changed its stance and is now embracing the sanctions.

Treasury Secretary Tim Geithner traveled to Japan and China this week to encourage them to cut off their dealings with the CBI, and the State Department instructed all of its ambassadors to meet with their host governments to explain the new law and express the administration's intention to enforce it.

Back in Washington, pro-sanctions senators aren't taking any chances that the administration might back off its newer, tougher stance vis-à-vis Iran. Congress is encouraging the EU to implement a full oil embargo, and the Senate plans to bring up a new round of Iran sanctions legislation for consideration as early as next month.

Lieberman and Sen. Lindsey Graham (R-SC) also plan to introduce a new Senate resolution to express the sense of Congress that a containment strategy for Iran that falls short of doing everything possible to stop the Islamic Republic from obtaining a nuclear weapon is unacceptable.

"Now the Iranians are clearly hurting. We have to make clear to them that if they don't respond to the economic and diplomatic pressures, that containment is not an option. We're not going to just sit there and let them become a nuclear power," Lieberman said about his forthcoming resolution. "I think is a way for Congress of saying with all the options on the table, containment cannot be one [of the options]."

But isn't the Senate's action also directed at the Obama administration, to make it clear to the White House that Congress does not accept a containment strategy for a nuclear Iran?

"Yes, exactly," Lieberman said. "But the first target of the resolution is Iran."

The Obama administration first urged Senate leaders to compromise on new legislation that would sanction the Central Bank of Iran (CBI) -- but then came out today against that very compromise, angering and alienating a key Democratic Senate ally.

Two senior administration officials testified Thursday morning that the current bipartisan amendment to impose new sanctions on the CBI and any other bank that does business with them is a bad idea that could alienate foreign countries, make it more difficult to pressure Iran, and raise oil prices, which could actually help the Iranian economy.

The administration's strategy of working behind the scenes to change what's become the Kirk-Menendez Iran sanctions amendment, only to publicly oppose it today, angered several senators, including Robert Menendez himself. The New Jersey Democrat took seven minutes at the Senate Foreign Relations Committee hearing to chastise Undersecretary of State Wendy Sherman and Treasury Undersecretary David Cohen at Thursday's Senate Foreign Relations Committee meeting for asking him to negotiate on their behalf, and then criticizing the compromise he struck with Sen. Mark Kirk (R-IL).

"At your request we engaged in an effort to come to a bipartisan agreement that I believe is fair and balanced. And now you come here and vitiate that agreement.... You should have said we want no amendment," Menendez said. "Everything that you have said in your testimony undermines your opposition to this amendment. The clock is ticking."

Menendez said he regretted working with the administration on the issue, and said that perhaps he should have just agreed to Kirk's original Iran sanctions amendment, which was more severe and provided the administration with less room to maneuver than the compromise amendment that is set to be voted on and passed in the Senate as early as tomorrow.

"This certainly undermines your relationship with me for the future," Menendez told the administration officials. He also urged for more drastic measures, such as a gasoline embargo on Iran. "If the Europeans are considering an embargo, we shouldn't be leading from behind, we should be leading forward."

The break between this Democratic senator, who is up for reelection next year, and the Obama administration comes two days after the administration sent three very senior officials to meet with senators to try to get them to scuttle the amendment. On the morning of Nov. 29, Treasury Deputy Secretary Neal Wolin, Deputy Secretary of State Bill Burns, and Deputy National Security Advisor Denis McDonough called an emergency meeting on Capitol Hill, multiple Hill sources told The Cable.

They sat down with Sens. Kirk, Menendez, and SFRC Chairman John Kerry (D-MA). The officials argued that the Kirk-Menendez would get in the way of their efforts to build a multilateral coalition designed to increase pressure on Iran, and they warned the amendment might cause severe disruptions to the world oil markets and therefore have negative effects on the U.S. economy. Kirk and Menendez flatly refused to back down, our sources said, while Kerry reportedly said exactly nothing in the meeting.

The officials' sentiments were echoed in a letter sent today to Senate leaders by Treasury Secretary Timothy Geithner, who we're told is personally invested in the administration effort to thwart the Kirk-Menendez amendment.

"I am writing to express the administration's strong opposition to this amendment because, in its current form, it threatens to undermine the effective, carefully phased, and sustainable approach we have taken to build strong international pressure against Iran," wrote Geithner. "In addition, the amendment would potentially yield a net economic benefit to the Iranian regime."

Geithner argued that because the Kirk-Menendez amendment would force foreign banks to choose between doing business with the U.S. or Iran, some might choose Iran and resist going along with American unilateral efforts, thereby helping the Iranian economy and hurting our own.

Menendez addressed that point by saying that the amendment allows the implementation of the sanctions to be waived if the president determines there's not enough supply in the world oil market, or if he determines a country is making progress in divesting itself from Iranian business relationships.

"So we basically say to financial institutions, do you want to deal with a $300 billion economy, or do you want to deal with a $14 trillion economy? I think that choice is pretty easy for them," Menendez said at the hearing. "So I find it pretty outrageous that when the clock is ticking, and when you ask us to engage in a more reasoned effort, and we produce such an effort in a bipartisan basis, that in fact you come here and say what you say."

One GOP Senate aide told The Cable today that while the amendment was crafted to avoid disrupting the world economy as much as possible, administration officials' warnings of economic consequences could have an effect of their own.

"The administration is going to spook the oil markets themselves in opposition to an amendment that would not," the aide said. "They could create their own self-fulfilling prophecy of driving up oil prices, so their strategy seems to be self defeating."

UPDATE: The Kirk-Menendez amendment passed the senate late Thursday by a unanimous vote of 100-0.

The State Department is still trying to convince Congress to restore funding for UNESCO, which was cut off after the U.N. cultural agency's members granted full membership to the Palestinians -- but there is little chance lawmakers will change the provision preventing U.S. funding.

State sent an unofficial memo to key congressional offices today titled, "How the Loss of U.S. Funding Will Impact Important Programs at UNESCO." The memo, which was passed to The Cable by a congressional source, argues that UNESCO programs will have to be cut back severely due to the loss of U.S. funding.

State Department spokespeople have said they are working with Congress in the hopes of amending the laws that cut off U.S. funds to any U.N. organization that admits Palestine as a full member, but there is broad bipartisan support for the funding cut-offs and no real congressional effort to change the law.

"The cut-off in U.S. funding may not directly affect extra-budgetary programs funded by other donors, but it will weaken UNESCO's presence in the field and undermine its ability to take on and manage such projects and programs," the memo stated (emphasis theirs).

UNESCO will lose $240 million of funding for fiscal years 2011, 2012, and 2013 -- roughly 22 percent of its budget -- and will have to scale down programs in Iraq, Afghanistan, Pakistan, the Horn of Africa, and South Sudan, the memo states.

The memo also lists several ways that UNESCO supports U.S. national security interests. These include "sustain[ing] the democratic spirit of the Arab Spring" and democratic values around the world, promoting nation-building in South Sudan, and encouraging Holocaust education in the Middle East and Africa.

Read the full memo after the jump:

Read on

A group of House lawmakers is making the case for continuing U.S. support to the Palestinian Authority (PA), despite the Palestinian bid to seek full membership in the United Nations.

"Maintaining U.S. assistance to the Palestinian Authority is in the essential strategic interest of Israel and the United States," wrote 44 lawmakers, all Democrats, in a letter today to House Appropriations State and Foreign Ops subcommittee heads Kay Granger (R-TX) and Nita Lowey (D-NY). The letter was spearheaded by Reps. David Price (D-NC) and Peter Welch (D-VT).

Ever since the Palestinians began their statehood drive this summer, Congress has been attacking the $550 million of annual aid given to the PA by U.S. taxpayers. For fiscal 2011, Congress had already provided the Palestinians with about $150 million in direct budget support -- also known as cash -- but $200 million in security funding and about $200 million in humanitarian funding has been held up.

House Foreign Affairs Committee chairwoman Ileana Ros-Lehtinen (R-FL ) released her hold on the security funding last week, but she and Granger are still holding up the non-security funding. Also, Congress is set to consider whether to allocate a whole new tranche of aid to the PA as part of the upcoming negotiations over the fiscal 2012 State and foreign ops spending bill. That bill could come up in the Senate this week or next, leading to a House-Senate conference behind closed doors to iron out a final compromise bill.

"We understand the developments that have led some to call for a suspension or termination of aid to the PA," the 44 lawmakers wrote. "However, these legitimate concerns must be weighed against the essential role that U.S. assistance to the PA plays in providing security and stability for Palestinians and Israelis as well as critical humanitarian relief to the Palestinian people - and the potential consequences if this assistance is terminated."

Currently, the House version of next year's foreign aid bill would terminate all aid to the PA unless the Palestinian government drops its statehood bid at the United Nations and enters into direct negotiations with Israel. The Senate version is less strict; it would only withdraw the funding if the Palestinians actually succeed in joining the United Nations, which isn't likely due to the U.S. veto power at the Security Council. The Senate bill would also give the president a waiver over cutting aid to the PA.

"The prospect of continued assistance depends on the actions of Palestinian leadership, which can choose to pursue a path of direct negotiations rather than a counterproductive and destabilizing push for statehood through the UN and affiliated agencies," Matthew Dennis, spokesperson for Lowey, told The Cable.

"The chairwoman takes the views of all members into consideration," said Matt Leffingwell, spokesman for Granger.

President Barack Obama's administration has been clear that it wants U.S. aid to the PA to continue, because the assistance impacts Israeli security. Sen. Lindsey Graham (R-SC), the ranking Republican on the Senate Appropriations State and Foreign Ops subcommittee, told The Cable last week that he agrees that aid to the PA is important but will fight to end it anyway because of the politics surrounding the issue.

"I don't think that's in our near-term or long-term interest, but that's what's going to happen, that's where this thing is headed," Graham said.

The Democratic lawmakers who are making the case for the aid, along with some non-governmental organizations such as J Street, want to make sure top appropriators know that there is some support for aid to the Palestinians in Congress.

"The Price-Welch letter puts down a marker that there is a difference of opinion on whether aid to the PA should continue in Congress," Dylan Williams, J Street's director of government affairs, told The Cable today.

Williams said that many of the letter's signers supported House Resolution 268, passed in June, which threatened to cut off aid to the PA if it continued to seek U.N. membership. But seeing as how the Palestinians were able to join UNESCO with overwhelming international support, forcing the United States to stop contributing to that organization, he said those threats no longer makes sense.

"The situation has changed since HRes 268 and the bid to keep the Palestinians away from the United Nations has failed," Williams said.

Bahrain's government is under pressure -- not just from protesters in Manama, but also from parts of the Washington foreign policy community, who want to delay U.S. arms sales to the country. Bahraini Foreign Minister Shaikh Khalid bin Ahmed al-Khalifa has been in town for over a week meeting with officials and lawmakers to assuage U.S. concerns over the kingdom's domestic crackdown, and sat down for a lengthy interview with The Cable.

Khalifa's message was clear: The Bahraini government is sensitive to international concerns about its treatment of protesters, pledges to follow the recommendations of an upcoming commission report on its actions, and wants to reinforce that the international community should not lose sight of the broader security situation in the region, characterized by the Iranian threat.

"I'm here to see our friends in the administration and Congress to try to explain what's happening in Bahrain," he said. "We are just before the issuance of the commission of inquiry's report. I'm here to show our commitment to that, how we will accept it and do all that is necessary to implement it."

That report, being written by Bahraini Independent Commission of Inquiry (BICI), was established by King Hamad bin Isa al-Khalifa and is chaired by human rights advocate and professor M. Cherif Bassiouni. It is expected to be released on Nov. 23. Bassiouni has faced some criticism for making statements that appear to be to conciliatory to the regime, but he recently promised his report will give the Bahraini government "some bitter pills to swallow."

After five U.S. senators wrote to Secretary of State Hillary Clinton earlier this month to protest the pending $53 million sale of armored Humvees and missiles to Bahrain, the State Department wrote a letter to Congress last week linking the arms sale directly to the BICI report.

Khalifa said his government has been alarmed by congressional opposition to the arms sale, but said that he trusts the Obama administration to judge the outcome of the commission's report fairly. He also argued that a delay in completing the arms sale would not be in the interest of regional security.

"What worries us is that we don't need to delay any requirement for the necessary architecture to protect the region. Bahrain is a cornerstone of that," he said. "That's what I'm talking about here and I'm finding very listening ears."

Of course, one component of that emerging regional security architecture is the Peninsula Shield Force, made up of dozens of tanks and approximately 40,000 troops that came to Bahrain via Saudi Arabia, Kuwait, and the UAE during the height of the unrest in March. Those forces are still there but are "purely to deter external threats," Khalifa maintains.

Opposition groups claim that 30 protesters have been killed by the government during its domestic crackdown, and more than 1,000 have been arrested. Independent organizations such as Human Rights Watch have reported that the government has employed brutal tactics, including using masked thugs to sweep up lawyers and other activists in nighttime raids.

The Obama administration has several interests in Bahrain, the fact that the U.S. Fifth Fleet is stationed there being chief among them. Bahrain is also a client state of Saudi Arabia and policymakers have voiced fears that a victory by the protest movement would strengthen Iranian influence in the country.

Khalifa didn't meet with any of the senators who signed the letter, but he did meet with Sens. John McCain (R-AZ), John Kerry (D-MA), Lindsey Graham (R-SC), Mark Kirk (R-IL), Marco Rubio (R-FL), and Rep. Steve Chabot (R-OH).

Rubio, a strong supporter of the U.S.-Bahrain relationship, sent his own letter to Clinton arguing that the administration should delay the sale of the Humvees, but not the missiles. Rubio wrote that the administration should delay the sale of "any items within the proposed weapons package that could be used to disrupt peaceful dissent."

Khalifa told The Cable that no military hardware has been used against protestors. "Our soldiers did help the police under the banner of the police...  but no military hardware was used," he said. Several videos have surfaced of armored troop carriers allegedly firing on protesters and journalists.

So what is the urgency of the U.S. arms sale? Khalifa said that if the United States wants to advance deepening security ties with the Arab Gulf states, any delays would only send the wrong signal to the region's adversaries, principally Iran.

"The claims of torture, that is in the hands of the commission of inquiry," Khalifa said. He said that all government police are clearing identified and sometimes they use overwhelming force during arrests because of the chaotic situation in some Bahraini towns. "If the arrest happens at night, some of the villages are not in a very orderly place. So maybe the arrest was to minimize chaos," he explained.

Khalifa said he didn't have any information on the specific case of Jaleela al-Saman, vice president of the Bahrain Teachers Association, who was reportedly arrested for the second time last week in a night-time raid. Khalifa said that any federal employee who was unfairly dismissed will be rehired.

Khalifa acknowledged that dozens of Shiite mosques and other religious structures have been destroyed by the government in recent months, a step that President Barack Obama condemned in his May 19 speech on the Arab uprisings. However, he said that the structures were demolished for violating building codes or infringing on property that didn't belong to them, not as part of a crackdown on protestors.

"What wasn't helpful was the timing of that happening," he said. "Why were those structures targeted during the national safety situation? That's a serious question. It was ill-timing. It should not have happened in association with restoring law and order in Bahrain."

He added that some Sunni religious structures were also destroyed, and he pledged that the government will pay for the cost of rebuilding structures if they are in adherence with laws and codes, and that "will start soon."

It's too early to tell if Khalifa's charm offensive has had any impact. Rubio spoke with The Cable after meeting with the foreign minister, and said he hadn't changed his view on the arms sales package ... yet.

"We have a special obligation to our allies to encourage them on the road to democracy. I don't expect them to get there overnight," Rubio said. "Bahrain is a country that is friendly and helpful to us, but I believe that their status quo politically is unsustainable and in the long term undermines their ability to resist the pressures put on them not just internally, but also from Iran."

The Obama administration, meanwhile, continues to point to the BICI report as a key element that will inform the next steps in its relations with the kingdom. State Department spokeswoman Victoria Nuland repeated that mantra today following Khalifa's meeting at the State Department with Clinton.

"This investigation, we hope, will speak not only to individual incidents, but also to systemic changes that can be made to prevent future such abuses," Nuland said. "And we will look not only for a full, transparent, independent report, but also for the government to take steps to redress shortcomings that are found."

Khalifa struck a confident note that, in the end, it will all work out between the United States and Bahrain.

"We're allies, we're friends. If your friends don't give you advice, what kind of friends are they?" he said. "I think definitely, with commitment, we will sail through this."

Tonight, when Palestinian Prime Minister Salam Fayyad comes to Washington to speak at the annual gala of the American Task Force on Palestine (ATFP), he will be endorsing an organization that is punching well above its weight in the U.S. policy debate over the Israeli-Palestinian conflict.

ATFP, a non-profit, moderate pro-Palestinian organization that has been in existence since 2003, has only five permanent staff members in its downtown D.C. office, but has managed to vault itself to the fore of the Washington foreign policy discussion over the Middle East peace process. "They've been critical in getting sustained and high levels of support from both Republican and Democratic administrations," an administration official told The Cable. "They have pretty high access, they can pass messages, they can work quietly with the Hill, they're not media attention seekers, they are trusted and they try to work behind the scenes."

ATFP's willingness to play the Washington game, on Washington's terms, has earned it both praise and scorn, but there is no doubt that it has given the organization a prominence in the Israeli-Palestinian debate that other pro-Palestinian groups have failed to achieve over the years.

The group is led by president and founder Dr. Ziad J. Asali, Ghaith Al-Omari, a former foreign policy advisor to Palestinian President Mahmoud Abbas, and Senior Fellow Hussein Ibish. The trio has managed to attract high-level administration favor (Secretary of State Hillary Clinton keynoted their gala last year) and praise from the pro-Israel community. The downside of their strategy, however, has been a notable absence of grassroots Palestinian support and a recent backlash from parts of the Palestinian establishment, including a break in relations with the Palestine Liberation Organization (PLO) mission in Washington.

"We have chosen to work within the establishment," Omari said in an interview with The Cable. "Basically we believe the two-state solution is in the U.S. national interest. When we came up with this mission nine years ago it was groundbreaking. Now it is policy."

Omari noted that ATFP has framed its policies in terms of the U.S. national interest and its willingness to engage with parts of the Washington establishment that other pro-Palestinian groups have neglected.

"What we have discovered, much to our surprise, is that we were knocking on open doors," Omari said. He coined the strategy as one of "mainstreaming Palestine."

Some media reports have compared the group to the American Israel Public Affairs Committee (AIPAC) because of ATFP's lobbying tenacity on Capitol Hill and its interwoven relationships with administration officials and Washington interest groups on all sides of the political divide. But Omari rejects that comparison.

"We are very different from AIPAC. We're not lobbyists, we're a non-profit organization," he said.  "I wish we had the Palestinian-American community as such an organized political presence."

ATFP's policy positions often deviate from the orthodoxy within the Palestinian community. The group's board narrowly voted to stay neutral on the issue of Abbas's bid to seek member state status for Palestine at the United Nations (a bid Fayyad was rumored to oppose). It also doesn't currently support the idea of a unity government between the Palestinian Authority and Hamas, Omari said.

But can ATFP help defend against congressional cuts in U.S. funding for Palestinian institutions? That's the main mission of the group right now, he said.

 "There are tons of pro-Israel organizations in Washington that engage in the debate; in the pro-Palestinian community I could argue we are the only one," he said. "There is a hunger in this town for a voice that understands the Palestinians and can speak about their interests in a way that takes into account the way that Washington operates."

ATFP's clash with the Palestinian establishment has come into public view in recent weeks. Board member Daoud Kuttab broke ties with the group after it refused to endorse Abbas's U.N. strategy.

"The paternalistic attitude that Americans including American Palestinians know what is best for Palestinians and their leadership is an arrogant attitude that I can't agree to be part of," he wrote. "Whenever a lobbying organization reaches the position that it has to worry about its own existence and how the local powers consider it, that is the day that such an organization has lost its mission statement."

Then, last week, Politico reported that the PLO mission in Washington led by Maen Rashid Areikat had sent a letter to ATFP announcing that the mission was severing all ties to the group.

In an interview, Ibish confirmed the existence of the letter but said it didn't make sense to him because ATFP never had formal ties to the PLO mission in the first place.

"Why the PLO sent us this cryptic letter and gives no context whatsoever is really something that I can't explain," Ibish said.

Like Omari, Ibish rejected the comparison to AIPAC. "It's in a sense flattering. I think if we had the kind of resources they do, we'd probably look more like WINEP [Washington Institute for Near East Policy] than AIPAC."

Ibish said that the majority of ATFP's funding comes from Arab sources, but he acknowledged that the organization has Jewish donors as well, who are welcome to give as long as they support ATFP's goal of a two-state solution.

Josh Block, former spokesman for AIPAC, said that ATFP is respected in Washington policy-making circles, including the pro-Israel community, "because they are seen as serious players with ideas and access -- on the Hill, with the White House, and in the region."

"One of the things that distinguishes them from the other actors in the Arab pro-Palestinian camp is their willingness to challenge corruption, condemn terrorism without equivocation and meet with other stakeholders without precondition," he said. "Credibility in Washington is hard to come by, and Ziad Asali has certainly earned it."

Even Israeli Ambassador Michael Oren, who would have attended tonight's gala if not for the fact that he was observing the Jewish holiday of Shemini Atzeret, had kind words for the group.

"We interact very frequently and on a friendly basis with the ATFP," he said. "We view them as partners and as friends."

And if you are at the gala tonight, stop by and say hello to your humble Cable guy. I'm usually seated somewhere near the back of the room. 

The Obama administration is scrambling right now to find a way around the fact that existing U.S. law could force the United States to stop participating in the U.N. cultural agency UNESCO if the Palestinians are given member state status, setting a precedent that could repeat itself in a host of other U.N. organizations.

The administration is contending with a 1994 law (P.L. 103-236, Title IV), which would bar U.S. contributions "to any affiliated organization of the United Nations which grants full membership as a state to any organization or group that does not have the internationally recognized attributes of statehood."

Another law (P.L. 101-246, Title IV), from 1990, states that, "No funds authorized to be appropriated by this act or any other act shall be available for the United Nations or any specialized agency thereof which accords the Palestine Liberation Organization the same standing as member states."

The Palestinians cleared a hurdle this week when the UNESCO executive board approved their bid to join the organization, sending the matter to a vote by UNESCO's 193-nation General Conference. Secretary of State Hillary Clinton criticized UNESCO on Wednesday for taking up the issue.

"I think that that is a very odd procedure indeed and would urge the governing body of UNESCO to think again before proceeding with that vote," Clinton told reporters in the Dominican Republic.

She acknowledged the "strong legislative prohibition that prevents the United States from funding organizations that jump the gun, so to speak, in recognizing entities before they are fully ready for such recognition."

The U.S. has not yet paid their bills on UNESCO for 2011, about $80 million, which is 22 percent of UNESCO's budget. If the law is triggered and the U.S. does not pay in 2012, the U.S. would lose its vote in the organization. Plus, UNESCO officials have told the U.S. that if U.S. funds are not expected over the next two years, they may have to initiate massive layoffs beginning in January to account for the shortfall in funds.

Palestinian membership in UNESCO would also grant them immediate membership in the World Intellectual Property Organization (WIPO) and the United Nations Industrial Development Organization (UNIDO). The U.S. would have to stop contributing to WIPO but America is not a member of UNIDO.

We're told that the State Department is currently having their attorneys draft a legal opinion on how U.S. laws would affect U.S. participations in U.N. bodies that grant the Palestinians member state status. Their ruling will have ramifications not only for UNESCO, but for all other U.N. specialized agencies that the PLO is expected to submit their application to, such as the IAEA, WTO, WHO, World Bank, and others.

State Department spokeswoman Victoria Nuland said Thursday that the administration was "still working" on what the legislative triggers regarding funding would mean. But a State Department official said that the administration has not been able to find a way around the law.

"We have a suicide vest padlocked around our torso and the Palestinians have the remote control," the State Department official said. "They get to decide whether they blow us up or not. It's 100 percent up to them."

Meanwhile, Congress is ratcheting up its own involvement on the issue. Later today, 10 House appropriators will call on UNESCO not to move forward with consideration of Palestinian membership, in a letter to UNESCO Executive Director Irina Bokova obtained by The Cable.

"We... respectfully request that you do everything in your power to ensure that the Palestine Liberation Organization's application to become a Member State does not come before the UNESCO General Conference," states the letter, prepared by the office of Rep. Steve Rothman (D-NJ). "Any recognition of Palestine as a Member State would not only jeopardize the hope for a resumption of direct Israeli-Palestinian negotiations, but would endanger the United States' contribution to UNESCO."

Signatories of the letter include the heads of the House Appropriations State and Foreign Ops subcommittee, Kay Granger (R-TX) and Nita Lowey (D-NY), Jerry Lewis (R-CA), Tom Cole (R-OK), Jesse Jackson Jr. (D-IL), Steve Austria (R-IL), Charles Dent (R-PA), Mario Diaz-Balart (R-FL), and Adam Schiff (D-CA).

One senior Republican staffer pointed out the irony that it was President George W. Bush who brought the United States back into UNESCO, and now the United States might be forced to leave the organization by Obama -- a president who came to office promising to reverse what he argued was Bush's tendency to ignore the international community.

"Remember, we joined UNESCO in part because we needed them to help de-radicalize textbooks particularly in the Muslim world after 9/11 and as a platform to counter expanding anti-American attitudes in academia," the staffer said "And now, by de-funding UNESCO, we lose all the leverage we had gained."

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Israeli Prime Minister Benjamin Netanyahu responded again Sunday to charges that he was responsible for failures in the peace process leveled against him by former President Bill Clinton in remarks reported exclusively on The Cable.

Netanyahu, who first responded to Clinton on Friday evening on ABC News, was again confronted with the former president's accusations on Sunday morning on NBC's Meet the Press. Host David Gregory drew Netanyahu's attention to this passage in our story:

Clinton affirmed that the United States should veto the Palestinian resolution at the U.N. Security Council for member-state status, because the Israelis need security guarantees before agreeing to the creation of a Palestinian state. But the Netanyahu government has moved away from the consensus for peace, making a final status agreement more difficult, Clinton said.

"That's what happened. Every American needs to know this. That's how we got to where we are," Clinton said. "The real cynics believe that the Netanyahu's government's continued call for negotiations over borders and such means that he's just not going to give up the West Bank."

Here's how Netanyahu responded:

You know, I regretfully and respectfully disagree with former President Clinton. He should know, more than anyone else, that in the peace conference he presided in at Camp David in 2000 with [Yasir] Arafat and former Prime Minister [Ehud] Barak, it was the Palestinian side who walked away from his own parameters. And in 2008, President Bush can tell you how the Palestinian side led by President Abbas walked away, just would not close in on another prime minister's suggestions.

In the two-and-a-half years since then, anybody conversant with the facts knows that I made these offers again and again, called for two states for two peoples, froze the settlements -- nobody did that, ever -- for nearly a year. They didn't come. They don't want to come. And they go around to the U.N. I disagree with that.

Gregory asked Netanyahu whether it's true he will never give up the West Bank.

"No, we could arrive at an arrangement that takes care of Israel's security needs and gives the Palestinians a life of dignity for themselves," Netanyahu said. "But they have to have leaders who are prepared to do that. You know what? I hope they do, not just for our sake but for their sake too."

The Israeli newspaper Haaretz reported that Netanyahu was so mad about Clinton's remarks that, "he asked his aides to request that the White House issue a statement distancing itself from Clinton's statements."

The White House declined to say whether they had received a formal or informal complaint about Clinton's remarks from Netanyahu's staff. Asked for a response to Clinton's remarks by The Cable, White House spokesman Tommy Vietor sent along this statement, which just repeated the administrations standard talking points.

"President Obama expressed his views clearly Wednesday at the outset of his meeting with Prime Minister Netanyahu when he said that peace must be negotiated and cannot be imposed on the parties," Vietor said. "Actions at the United Nations will achieve neither statehood nor self-determination for the Palestinians. The Israelis and Palestinians must negotiate through these very difficult issues that have kept the parties apart for decades to achieve the ultimate goal of two states, side by side, living in peace and security."

Who's to blame for the continued failure of the Middle East peace process? Former President Bill Clinton said today that it is Israeli Prime Minister Benjamin Netanyahu -- whose government moved the goalposts upon taking power, and whose rise represents a key reason there has been no Israeli-Palestinian peace deal.

Clinton, in a roundtable with bloggers today on the sidelines of the Clinton Global Initiative in New York, gave an extensive recounting of the deterioration in the Middle East peace process since he pressed both parties to agree to a final settlement at Camp David in 2000. He said there are two main reasons for the lack of a comprehensive peace today: the reluctance of the Netanyahu administration to accept the terms of the Camp David deal and a demographic shift in Israel that is making the Israeli public less amenable to peace.

"The two great tragedies in modern Middle Eastern politics, which make you wonder if God wants Middle East peace or not, were [Yitzhak] Rabin's assassination and [Ariel] Sharon's stroke," Clinton said.

Sharon had decided he needed to build a new centrist coalition, so he created the Kadima party and gained the support of leaders like Tzipi Livni and Ehud Olmert. He was working toward a consensus for a peace deal before he fell ill, Clinton said. But that effort was scuttled when the Likud party returned to power.

"The Israelis always wanted two things that once it turned out they had, it didn't seem so appealing to Mr. Netanyahu. They wanted to believe they had a partner for peace in a Palestinian government, and there's no question -- and the Netanyahu government has said -- that this is the finest Palestinian government they've ever had in the West Bank," Clinton said.

"[Palestinian leaders] have explicitly said on more than one occasion that if [Netanyahu] put up the deal that was offered to them before -- my deal -- that they would take it," Clinton said, referring to the 2000 Camp David deal that Yasser Arafat rejected.

But the Israeli government has drifted a long way from the Ehud Barak-led government that came so close to peace in 2000, Clinton said, and any new negotiations with the Netanyahu government are now on starkly different terms -- terms that the Palestinians are unlikely to accept.

"For reasons that even after all these years I still don't know for sure, Arafat turned down the deal I put together that Barak accepted," he said. "But they also had an Israeli government that was willing to give them East Jerusalem as the capital of the new state of Palestine."

Israel also wants a normalization of relations with its Arab neighbors to accompany a peace deal. Clinton said that the Saudi-inspired Arab Peace Initiative put forth in 2002 represented an answer to that Israeli demand.

"The King of Saudi Arabia started lining up all the Arab countries to say to the Israelis, ‘if you work it out with the Palestinians ... we will give you immediately not only recognition but a political, economic, and security partnership,'" Clinton said. "This is huge.... It's a heck of a deal."

The Netanyahu government has received all of the assurances previous Israeli governments said they wanted but now won't accept those terms to make peace, Clinton said.

"Now that they have those things, they don't seem so important to this current Israeli government, partly because it's a different country," said Clinton. "In the interim, you've had all these immigrants coming in from the former Soviet Union, and they have no history in Israel proper, so the traditional claims of the Palestinians have less weight with them."

Clinton then repeated his assertions made at last year's conference that Israeli society can be divided into demographic groups that have various levels of enthusiasm for making peace.

"The most pro-peace Israelis are the Arabs; second the Sabras, the Jewish Israelis that were born there; third, the Ashkenazi of long-standing, the European Jews who came there around the time of Israel's founding," Clinton said. "The most anti-peace are the ultra-religious, who believe they're supposed to keep Judea and Samaria, and the settler groups, and what you might call the territorialists, the people who just showed up lately and they're not encumbered by the historical record."

Clinton affirmed that the United States should veto the Palestinian resolution at the U.N. Security Council for member-state status, because the Israelis need security guarantees before agreeing to the creation of a Palestinian state. But the Netanyahu government has moved away from the consensus for peace, making a final status agreement more difficult, Clinton said.

"That's what happened. Every American needs to know this. That's how we got to where we are," Clinton said. "The real cynics believe that the Netanyahu's government's continued call for negotiations over borders and such means that he's just not going to give up the West Bank."