War on Terror

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GEORGE WALKER BUSH, PRESIDENT OF THE UNITED STATES: Chairman Arafat has said that he intends to fight terror, bring those to justice who are killing, murderers in the Middle East, and now is his time to perform. The world expects Chairman Arafat to lead, and so do I.

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SCOTT: Less than a month after President Bush issued that warning to the Palestinians, an alleged senior member of Yasser Arafat's Palestinian authority was caught smuggling tons of weapons and artillery from Iran and confirms Palestinian leaders gave him marching orders.

The smuggler details his mission in a Fox News exclusive with Jennifer Griffin.

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SCOTT: So how will this foiled plot impact the Middle East peace process? Joining us now from Philadelphia is Daniel Pipes, director of the Middle East Forum.

Daniel, this can't be good news for Yasser Arafat.

DANIEL PIPES, MIDDLE EAST FORUM: Not at all. He's lost a major shipment. He's shown up in the world for who he is, someone whose word can't be trusted. Not good news at all.

SCOTT: Well, he's apparently been caught saying one thing, preaching peace, while shipping in a gigantic arsenal.

PIPES: It's a gigantic arsenal. It is-it has weapons that the Palestinians have never had before, such as anti-tank missiles and Katyushas. It suggests that the Palestinian authority is now seeking an offensive capability, not just a defensive capability, vis-à-vis the Israeli forces.

SCOTT: But they wouldn't try to take on Israel in a war, would they?

I mean, Israel's got the superior air force and far superior army.

PIPES: Absolutely. There's no question that the Israeli forces are far greater and far superior to those of the Palestinian authority. But this could change the balance of power. For example, until now, Israeli tanks have gone into the PA areas with impunity. If the Palestinians have anti-tank missiles, then that impunity no longer exists. Furthermore, with the Katyushas, the Palestinians could create a barrage of attacks on the Israeli heartland, demoralizing and deterring the Israelis. It could have a big effect.

SCOTT: So this goes beyond the suicide bombers that have been their weapon of choice up till now.

PIPES: It would seem to be an alternative or a follow-up on the suicide bombing. That is no longer going to work. The wrath of the United States and other countries will descend on Arafat if that continues. Here is an alternative.

SCOTT: What about the theory, though, that these arms were intended for Hezbollah in Lebanon?

PIPES: I think that's fairly nonsensical. As we just heard in the interview, the Palestinian captain in the coast guard is an employee of the Palestinian authority, works for it, is not likely to be transiting weapons from Iran to Hezbollah. He's taking it from Iran to his own military authority.

SCOTT: The Israelis have called Yasser Arafat irrelevant, and that was well before this incident took place. Does this make him even less relevant to the peace process?

PIPES: I'm not quite sure what the Israelis mean by irrelevant. The question really is not Yasser Arafat. The question is, is there going to be diplomacy with the Palestinians at this time or not? Personally, I come to the conclusion that it doesn't make much sense, given the deep hostility towards Israel that one finds in the leadership and in the population of Palestinians. That has to moderate before any meaningful negotiations can take place.

SCOTT: Well, so why is President Bush sending General Zinni, his personal envoy, back to work there?

PIPES: Well, President Bush sees it in another way than I do.

SCOTT: But you don't think there's much for Zinni to do.

PIPES: I think there's nothing for him to do. I'm convinced that it's a failed-not only a failed mission, but it's actually counterproductive in that it creates the hope that this kind of, you know, building up the arsenal or suicide attacks can be combined with negotiations. I think it's the wrong signal to be sending them.

SCOTT: But there is a widespread perception that the unresolved conflict between Israel and the Palestinians is responsible for much of the Muslim world's anger at America, true?

PIPES: It is true that there is that perception. I don't think it's true. There are a range of issues-the Israeli conflict is one, Iraq is another, there are plenty of other ones, as well-where the Muslim world is unhappy with the United States. I don't think, however, the real cause of the terrorism we saw on September 11th and the other acts of terror that have been executed against us are due to specific policies the United States undertakes.

I think it has much more to do with who we are as a country-a liberal country, a democratic country, a country with the rule of law, individualistic country, consumer country. We are an abiding thorn in the side of a-of a militant Islamic outlook that fundamentally disagrees with us. I mean, we, the United States, are basically the enemy of anyone who's a totalitarian, anyone who has radically utopian ideas, such as the militant Islamic groups.

SCOTT: Well, you're not holding out for much diplomacy between the Israelis and the Palestinians. If not diplomacy, what do you do?

PIPES: I think there is a real chance for diplomacy, but it has to have the right premise. In other words, the Palestinians-and the Arabs more broadly-need to accept the existence of Israel. When that happens, then all sorts of useful diplomacy can take place. Before that happens, it's counterproductive.

So what we need to see now is a deep and abiding acceptance of Israel, not happily necessarily, but nonetheless an acceptance of Israel by its Arab opponents. That was increasing the over the years. It has diminished recently, and I think the goal of the Arab leadership, the American leadership, Israeli leadership, must be together to work on repairing the damage over the last decade, so that one finds a greater acceptance of Israel, so that negotiations can take place again in a favorable environment.

SCOTT: Daniel Pipes, Middle East Forum, thank you.

PIPES: Thank you, John.