Part I: An Analysis

Key Points. The main thrust of President Bush's speech marked a distinct departure from longstanding international efforts made toward Arab-Israeli peace. For the first time, the United States has declared that progress in Middle East peacemaking is dependent on the internal political development of one of the actors; in other words, democracy must come before U.S. support for statehood...At the same time, the president effectively rejected a timeline-focused negotiation process in favor of performance based diplomacy. While the president noted the possibility of fulfilling all requirements for statehood within three years, the wording of his comments was subdued and noncommittal; the agreement, he said, "could" -- not "should" -- be reached within that timeframe. The president also introduced a new idea -- "provisional statehood" -- as a waystation between the current Palestinian Authority and the eventual creation of a sovereign state according to the vision of "two states, side by side." Originally, this idea was conceived as a diplomatic inducement for Palestinians to reap an early reward for choosing diplomacy over terror. But no part of the president's speech indicates that Palestinians are likely to earn even this new interim status anytime soon, as he offers no dates, only prerequisites...

Democracy, beyond Arafat. Although the conceptual shift in U.S. policy enunciated by the president was profound, most headlines are sure to highlight his call for Palestinians to replace Arafat and his colleagues with a new breed of leadership. ... With this call for leadership change, the president may have opened himself up to criticism by some in the Arab world who would protest American interference in internal Palestinian national decisions. Nevertheless, he is sure to be cheered by vast numbers of Arabs and Muslims whose disappointment will be that the president did not extend his call for leadership change and democratic transition to their countries as well...

Questions for U.S. Policy. While this bold presidential statement laid out a general agenda to guide U.S. efforts in the  coming months, the speech left unanswered several key questions. These include:

*  Will the United States continue to deal with Yasir Arafat as the "democratically elected leader of the Palestinian people," in the words of Secretary of State Colin Powell, now that President Bush has called for the Arafat's replacement? Operationally, will U.S. diplomats discuss implementing the president's call for reform with Palestinian leaders that the president has said must go?

*  How will U.S. policy respond should Israel decide to bring about leadership change before a Palestinian election next February, in order to secure the protection of its citizenry?

*  Are there any circumstances under which the United States will recognize the legitimacy of an election victory by Arafat?

*  What role will various actors -- American, European, Arab, Israeli -- play in fulfilling the supervisory and oversight functions outlined by the president? Who will determine the certification benchmarks and what constitutes ongoing satisfactory performance?

*  What lies behind the awkward construction, twice repeated, that the incipient Palestinian state must reach an agreement on security with Egypt and Jordan, in addition to Israel? Does this suggest that the provisional Palestine may enjoy some form of early "border control" responsibilities?

*  What actually triggers Israeli conciliatory moves, such as a settlement freeze and redeployment of forces to the positions held prior to September 2000, before the start of the Palestinian uprising? The text suggests that Israel need only remain committed to its previous promises to implement the Mitchell Commission recommendations on both these issues, which require substantial Palestinian action before Israeli counteraction.

Political Context. This speech represents a major gamble for the Bush administration. Prodded by Arabs and Europeans to lay out a detailed vision for moving forward in the Middle East, the president presented a plan that will satisfy neither; after all, the president focused heavily on the need for leadership change (i.e., no more "last chances" for Arafat) and on adding a new (and, in legal terms, uncertain) stage of provisional statehood before the prospect of Palestinian statehood becomes real. At the same time, the president committed his office to intensive engagement on the details of Palestinian reform, in all its aspects. Avoiding the slippery slope toward becoming "trustee" of a new Palestinian "mandate" while fulfilling this commitment will be a tricky enterprise. Perhaps most difficult of all: guiding this process through sure opposition both from Arafat (despite rhetorical acceptance) and the avowedly antipeace organizations within the Palestinian community. For the silent Palestinian majority, the president offered a hopeful, democratic future - one that will be built with the full support of the United States; for the atavistic leadership of the Palestinian Authority and its tacit colleagues in antipeace organizations like Hamas and the alAqsa Martyrs Brigades, fighting the president's vision through terrorism and violence will be a high priority...

Part II: Reactions

Jewish Council for Public Affairs:  "...President Bush made it clear that the Palestinian people would get a state through reform and not through terrorism.  The president is correct that there can be no reward for those who use violence and terrorism in an attempt to advance a political agenda, and for recognizing that Yasser Arafat has become a clear obstacle to peace who must be replaced.  We agree that a Palestinian state cannot be considered until there is a ‘sustained' fight against the terrorists and the dismantling of the terrorist infrastructure."

Senate Republican Leader Trent Lott, R-Miss.:  "I support President Bush's desire to see that all Israeli and Palestinian people in the Middle East live in peace.  President Bush's address also sends a strong message to the Palestinians that the way to peace is not paved with acts of terror, but with good faith negotiations and acceptance that Israel has a right to exist.  We in Congress will work with the President to bring peace, at long last, to the Middle East."

Senate Majority Leader Tom Daschle, D-S.D.:  "...The President is right to note that, provisional or not, statehood not only confers rights, it imposes responsibilities.  As a number of us have been saying, statehood requires leaders that seek the betterment of their people, and not the perpetuation of their own power.  Since the current leadership has repeatedly failed in this regard, I, like the President, believe that peace requires a new and different Palestinian leadership.  I also agree with the President that other Arab states have a critical role to play. They can help bring the Palestinian people a state, but they can only do so by choosing peace, renouncing terror, and abandoning support for those who seek Israel's destruction.  Finally, there must be a universal understanding that suicide bombing can only end this process, and not advance it.  We must not allow a Palestinian state to be built on the backs of suicide bombers..."

Speaker of the House Dennis Hastert, R-Ill.:  "I think the President has struck the right balance with his proposal to bring peace to the Middle East  His call for a new Palestinian state that works to end corruption and stop terrorism makes sense.  But the President also understands that creating such a state will require time and a new, democratically elected Palestinian leadership...Terrorism must never be rewarded..."

U.S. House Minority Leader Richard Gephardt, D-Mo.:  "I agree with President Bush that the Palestinian people need a new leadership that is both willing to fight terrorism and negotiate a just and lasting peace with Israel...we shouldn't expect that the Palestinian people will be able to accomplish these steps on their own...We must work intensively with the parties in the region to implement these measures, and provide the technical and financial assistance needed to do it...I therefore urge the Bush Administration to intensify its level of engagement to fundamentally change the situation on the ground..."

Israel:  Israeli Prime Minister Ariel Sharon:  "Israel is a country that desires peace... when there is a complete cessation of terror, violence and incitement, and when the Palestinian Authority enacts genuine reforms, including new leadership at the top, such that a different Authority is created, then it will be possible to discuss how to make progress on the political tracks."

Israeli Foreign Minister Shimon Peres:  "The speech contained some very clear and important things.  But problems still remain that need to be handled, and handled seriously...An important part of the speech was the clarity concerning the vision about the solution of the conflict between us and the Palestinians.  What is needed in addition is how to arrive at all those forthcoming steps."

The Palestinian Authority:  Chairman Yasser Arafat:  "[Bush] spoke about a Palestinian state and elections...The Palestinian people can decide who should be their elected chief.  They are the only ones who can determine this...We will respect all the principles the Palestinian people support."

United Nations:  UN Secretary-General Kofi Annan: "...forcing a change in the Palestinian top command could backfire...You could find yourself in a situation that the radicals are the ones that get elected, and it would be the result of a democratic process and we have to accept that...I hope the Israelis and the Palestinians will have the courage, the wisdom, and the strength to seize this moment for us to work on the establishment of a Palestinian state, living side-by-side of an Israeli state with security."

European Union:  EU Foreign Policy Chief Javier Solana:  The EU is ready to help organize elections that would give the Palestinians "an opportunity to choose their leaders...The elected leaders are the elected leaders and we will deal with them...An early international conference...is more than ever necessary."

Britain:  British Foreign Secretary Jack Straw:  "We deal with leaders who are elected...If President Arafat were re-elected by the Palestinian Authority, we would deal with him...Both parties have a duty to take up President Bush's initiative.  There is no other way forward..."

Russia:  Russian Foreign Ministry Spokesman Alexander Yakovenko:  "This initiative shows that the United States wants to actively promote normalization of the situation in the region."  (Prior to the speech, President Vladimir Putin said it would be "dangerous and mistaken to remove [Arafat] from the political arena.")

Japan:  Japanese Prime Minister Junichiro Koizumi:  "[The proposal] is something we appreciate. And it's important for Japan to contribute to the debate on the creation of a Palestinian state."

Egypt:  Egyptian President Hosni Mubarak:  "Bush's speech was balanced to a great extent...The Palestinian Authority supported this statement, and if the Authority itself supported the statement, then we support it, because it is balanced to great extent...I did not see any indication in the statement that calls for ousting Arafat, just calls for reforming the Authority and finding a new administration, and this has a very wide meaning.  We are waiting for Powell to come and explain to us some issues, how to implement these ideas and to learn what is meant by reform."

Jordan:  Statement issued by the Jordanian government:  "We see this as the beginning of the end of the conflict between Arabs and Israelis.  Bush's speech is in line with our position that an endgame and a timeline should be defined so that the political process can be re-launched."

Jordanian Foreign Minister Marwan J. Muasher:  "The president was very tough on Arafat and the Palestinians, certainly, but once we look beyond the tough words at the framework he set out, it is a positive framework.  We have a goal to end the occupation in three years.  It comes with a lot conditions, sure, but we are ready to take this."

Saudi Arabia:  Saudi Crown Prince Abdullah:  "When the elections happen in the Palestinian territories it is the Palestinians themselves who will choose their leader in a democratic fashion. Only the Palestinians can choose their own leaders.  Whoever they choose should be acceptable to the international community."

Arab-American Anti-Discrimination Committee:  "...It's even more unrealistic to talk about creating a democracy among non-citizens of a non-state under foreign military occupation without sovereignty...There is no freedom of speech, no freedom of movement.  Any of the kinds of things that could make an election meaningful in practice...What I [Hussein Ibish, national communications director] had gathered about [the speech] is that it would be a set of unrealistic set of proposals (sic), but I'm surprised by how unrealistic they are and by how one-sided the speech is...My conclusion from this is that the president is still basing his Middle East policy more on domestic political considerations regarding the power of the pro-Israel lobby than on the natural interests of the United States..."