ANNOUNCER: From Washington, Crossfire. On the left, Mike Kinsley. On the right, Pat Buchanan. Tonight, Middle East Mayhem. In the crossfire, Israeli Ambassador to the U.S. Moshe Arad. And Egyptian Ambassador to the U.S. Abdel Raouf El-Reedy.

MIKE KINSLEY: Good evening. Welcome to Crossfire. Only yesterday some were saying that the two-and-half-year-old Palestinian uprising in Israel's occupied territories might be dying out. Tonight the territories are aflame and rioting has spread to Israel proper. It started when a deranged Israeli, reportedly upset over a sour love affair, opened up with an automatic rifle on a group of unarmed Palestinians. Seven were killed. Within hours, seven more Palestinians had died and 650 were wounded as Israeli soldiers attempted to quell the resulting riot. Today, three more died and over a hundred were wounded. In Jerusalem, an Israeli restaurant owner was murdered and Islamic fundamentalist group claimed responsibility. And in Jordan, a Palestinian opened fire on a tour bus wounding 10 French tourists. The Palestinian Liberation Organization, the PLO, which had publicly forsworn terrorism, now says, quote, 'Any action against Israel is justified.' So, yesterday's peace hopes are shattered, an old story in the Middle East. What next, Pat?

PAT BUCHANAN: Mr. Ambassador, in the two and a half years Michael mentioned, I mean, it's something like 700 Palestinians killed, thousands have been imprisoned, the number of wounded and injured is in the tens of thousands. You got 800 injured or wounded in the last 48 hours. What do these people have to do, the Palestinians, to prove they have a right to be free and independent?

MOSHE ARAD, Israeli Ambassador to the U.S.: We think that the Palestinians have a right to -- they have legitimate political rights and Israel has offered this both in its peace initiative offered a year ago in April and suggesting that the Palestinians would have elections, free elections that they would be able to elect their own leadership. The fact that the PLO refuses to accept any such plan because they are against elections because they feel that once elections will be held, their power, the power of the gun would actually --

BUCHANAN: Ambassador Arad, Israel prides itself on being the only democracy in the Middle East. For 23 years, you've ruled over these people. How many really free elections have you permitted them to have? I know they elected some mayors and the mayors were all thrown out of the territory. How many -- why haven't they been allowed to have elections in 23 years?

AMB. ARAD: But let me tell you that Israel has -- is a country that has an excellent record in keeping free elections. It has offered such free elections. I don't think the Palestinians had ever had an opportunity to have free elections, and when they are offered the PLO and the terrorists acting on behalf of the PLO are actually trying to assassinate any such Palestinian which is trying to entertain the idea of negotiations.

BUCHANAN: All right. Let me -- let me read a statement from your own -- a famous foreign minister, Abba Eban. He said our land is a land of two histories, two tongues, two faiths, two national dreams, two identities. Why not two countries?

AMB. ARAD: Because we feel that separating the Palestinian issue from the wider conflict which the majority of the Arab countries still refusing to come to terms with the reality of Israel and with the existence of Israel and suggesting that you can separate the -- the attitudes, the warlike attitude of the Arab world, with the exception of Egypt, against Israel, and separating it from the Palestinian issue, that's a mistake that many people are falling into the trap, that you can address only the Palestinian issue, resolve it by establishing a state which would be used as the platform for the PLO and for other Arab states to initiate another war against Israel, but from different borders and not from the areas in which we are in now. And let's not forget that Israel is in these territories as an outcome, as a result of a war of aggression against it in 1967 initiated exactly by those same Arab countries and by the Palestinians.

KINSLEY: Mr. Ambassador, in February, nine Israeli tourists were murdered in a- in a terrorist attack on a bus in your country. Now, if Egypt is not responsible for that occurrence, why is the Israeli government for what this madman did yesterday?

ABDEL RAOUF EL-REEDY, Egyptian Ambassador to the United States: We are not very concerned -- of course, we are concerned about the killing which took place yesterday and what happened in Cairo, what happened in Amman and so on. But the real focus is not on the -- what this deranged man did. The real focus on -- is on the behavior of the Israeli army forces afterwards in Gaza, where you have seven or eight people who have been killed, 700 people have been injured. And what happened yesterday in Gaza and is still happening is -- sums up the whole situation in this country, that you have here one people, Palestinian people, who have the right to live free, have their own self-determination but you have a foreign army who is trying to suppress their rights by force. But this is --

KINSLEY: The first thing Mr. Shamir said when this happened was this is absolute appalling and terrible. The second thing he says is, we hope it doesn't become an occasion for rioting and chaos. Both those things seem quite correct to me. Why doesn't the Israeli -- excuse me, the Egyptian government say the same thing, especially the second? Why don't you call on the Palestinians to cool it?

AMB. EL-REEDY: We call on everybody to -- to keep its snares. We have been calling on the -- only the Arab side to be -- to be cool. But also the most important thing is that those who are shooting, who is shooting in Gaza? It is the Israeli government forces. It is Israeli soldiers, excuse me. The Israeli soldiers are shooting on these civilians who need nothing but to get their freedom, their right to self-determination and to be free and not to be ruled by another --

AMB. ARAD: Mr. Ambassador, I find that this --

AMB. EL-REEDY: This is an illegal occupation of West Bank and Gaza --

AMB. ARAD: I find that this --

AMB. EL-REEDY: -- which is 20 percent of original Palestine. That is the issue.

BUCHANAN: All right, Mr. Ambassador.

AMB. ARAD: This appeal to calm on behalf of an Arab dignitary is the first one I hear it in the last 36 hours. Prime Minister Badran of Jordan, in a statement which he made yesterday, several hours after the incident, actually called this is an act which --

BUCHANAN: Ordered by the government, yeah?

AMB. ARAD: Initiated, ordered by the Israeli government --

BUCHANAN: Mr. Ambassador --

AMB. ARAD: And he regard Israeli authorities as terrorist authorities.

BUCHANAN: Mr. Ambassador, let me ask you this question in that light. To what extent has Israeli -- the hard-line Israeli policies, Mr. Rabin said, we're going to use force, might and beatings. Others have called the Palestinians high in the government, grasshoppers. To what extent, has the attitude of the Israeli government that these people have to be crushed to end this thing, has it set a climate in which agreed this crazy, deranged individual acted?

AMB. ARAD: Well, to try to attribute responsibility for the -- for an action by a deranged individual to the Israeli government, I think this is setting double standard. We did not attribute any responsibility to the Egyptian government when a deranged Israeli soldier -- Egyptian soldiers, pardon me, in 1985 shoots seven Israelis to death in Rasbuka [sp.] near the Israeli-Sinai border --

AMB. EL-REEDY: Well, that's not the issue --

AMB. ARAD: The issue is that we did not assume for one moment then that the Egyptian government is responsible for these acts --

KINSLEY: But what --

AMB. ARAD: How should anyone assume that the Israeli government is responsible for --

BUCHANAN: We didn't say responsible, sir. But to what extent, has the climate been created -- I mean, look, let's take what happened -- the seven -- look, shooting down, I mean, to Americans and we're not there, but shooting down seven or 800 people in two days, I mean, sounds like an army on a rampage. Now, maybe -- maybe it's not, we're not there. But that is a tremendous number of wounded people.

AMB. ARAD: Well, let me clarify it. Out of -- first of all, as far as I know and I checked those figures just before coming here, there were about 600 people wounded. Out of them 100 spent the night hospital. And today 50 of them left for home. In other words, let's not exaggerate. The figures are high as they are. And I would say that every Israeli leader and every Israeli citizen is saddened, is shocked by what happened. So, I'm not -- we are not condoning and I'm not trying to get any sympathy for this act. I think we are the first to express our shock and we are the first who are interested in reestablishing law and order. Now, if we are faced with a massive demonstration, violent demonstration aimed at Israeli soldiers, aimed at Israeli civilians, and we are at the same time instead of having appeals for calm down from Mr. Arafat, Mr. Rabushari [sp.], from the Prime Minister of Jordan. Actually statements inflaming these people and calling for further acts of violence. What do you expect these people to do?

BUCHANAN: Okay. We'll be back with the question, what happened to the Sadat-Begin accords at Camp David and to the Middle East peace we all thought was at hand?

[Commercial break]

BUCHANAN: Twelve years ago President Sadat and Prime Minister Begin joined hands in the Rose Garden with Jimmy Carter in the peace agreement that would win the Egyptian and the Israeli a Nobel Peace Prize. But today peace seems more elusive than ever as a Sunday massacre by a deranged ex-Israeli soldier reignited the Palestinian uprising leading to an Israeli army crackdown that has left 18 Palestinians dead and perhaps as many as 800 wounded. Here to discuss the latest bloodshed and what it means for peace are Abdel Raouf El-Reedy, the Egyptian Ambassador to the United States. And Moshe Arad, Israel's Ambassador to the United States.

Mr. Arad, as you know, in the U.S. Congress they are not only getting ready to- to give Israel the more than three and a half billion dollars in aid it's annually given, they have added $ 400 million in housing guarantees for Soviet refugees coming into to Israel. Why should the United States maintain this extraordinary generosity when Mr. Shamir responds to our requests not for new settlements on the West Bank by constantly building new settlements on the West Bank?

AMB. ARAD: Well, I think that the U.S. aid to Israel derivates from a basic consideration of its U.S. strategic needs and second from the Israeli needs confronting an economy which it has to continue to absorb over 100,000 Soviet Jews this year. And mostly by the need which Israel confronts to continue to maintain its military guard against a number of Arab countries like Iraq which is threatening --

BUCHANAN: Mr. Ambassador, that explains -- that explains 1.8 billion in military aid. But we give something like an additional $ 1.8 billion last year in economic aid.

AMB. ARAD: No. I think it's 1.2. And most of this is being returned to the United States, repaying for former military debts that we received from -- by loans that we got from the United States for the needs of Israel coming out of the Camp David agreement and the peace agreement with Egypt.

KINSLEY: Mr. Ambassador --

AMB. ARAD: We withdrew from Egypt, we had to rebuild the military infrastructure inside Israel and therefore that's what the money is --

KINSLEY: Mr. Ambassador, Egypt controlled the Gaza Strip for 20 years approximately until 1967. Jordan controlled the West Bank. If -- if it is so obviously just that there be a Palestinian state for the Palestinians, why didn't you create one at that time when nothing was stopping you?

AMB. EL-REEDY: Let us not talk about history. That question now is the following, we can talk about history when we have more time in a seminar. But right now we have -- we have a very dangerous phenomenon that is happening. It is the only part in the world now where the people are not responding to the winds of change. You have Eastern Europe now, we're going for freedom. In South Africa, you have Mandela being freed and so on. Why can't the Palestinian people in the West Bank and Gaza be free and not to be ruled? The real problem is, let us focus on the real problem, which -- which created the incidents and the massacres of yesterday. The real problem is Israel's occupation of the West Bank and Gaza and the refusal to allow these people to be free to have their own --

AMB. ARAD: My colleague --

AMB. EL-REEDY: -- to have self-determination and to have their own --

AMB. ARAD: I'm willing to accept that it's right --

BUCHANAN: All right, hold it.

AMB. EL-REEDY: -- and to be treated as human being, not as sub-human.

KINSLEY: Okay. Your turn.

AMB. ARAD: Well, I think that's totally incorrect, totally divorced from reality. The real problem is that President Saddam Hussein is threatening Israel with destruction, is amassing arms --

AMB. EL-REEDY: That is confusing the issue. I am sorry --

AMB. ARAD: It's not confusing the issue --

AMB. EL-REEDY: We are talking about --

AMB. ARAD: Excuse me, Ambassador.

BUCHANAN: Go ahead, Mr. --

AMB. ARAD: I'm sorry, Ambassador. You may not like what I say but I think you should listen.

AMB. EL-REEDY: I'm listening. We know, but the issue is the Palestinians --

AMB. ARAD: The problem cannot be resolved in separation from the overall Israeli-Arab conflict. And as long as Arab countries like Iraq and like Syria and Libya refuse to accept Israel's right to exist and they're actually only waiting for Israel to move to the Arab borders, that's what would --

KINSLEY: Go ahead, Mr. Ambassador.

AMB. EL-REEDY: All Arab countries, all Arab countries have accepted the Security Council's Resolution 242. They have admitted, they are willing to live with the state of Israel.

KINSLEY: Well, now, wait a minute --

AMB. EL-REEDY: There is no question about it. The point -- the point -- let us not confuse the issue of what happened yesterday. We are in here discussing what happened yesterday, what happened yesterday and --

AMB. ARAD: And stop yesterday, Mr. Ambassador.

AMB. EL-REEDY: It can happen again. And the -- it is the result of a policy of occupation --

KINSLEY: But, see, you just --

AMB. ARAD: Mr. Ambassador, what you are trying now to --

AMB. EL-REEDY: But you --

AMB. ARAD: -- the Israeli government the responsibility for the actions of a deranged person --

AMB. EL-REEDY: -- and through the negotiations of the Palestinians --

BUCHANAN: Let me ask you, Mr. Ambassador --

AMB. EL-REEDY: -- and Israel --

BUCHANAN: -- a hard question. We read in The New York Times, I believe, that Israel has given Egypt a guarantee that it will not strike Iraq first or Libya or any Arab country. Is that true?

AMB. ARAD: Israel -- I'm not aware of any such commitment. I can tell you --

BUCHANAN: Did you read about the story on that?

AMB. ARAD: I did read the story but let me clarify. Israel will not initiate, has no interest to initiate any war in the Middle East. It is on the course of trying to secure peace with its neighbors the same way in which we secured peace with --

BUCHANAN: Let me ask you about one of those neighbors. Ethiopia. Why are you giving cluster bombs and sending military advisers to a Stalinist regime --

AMB. ARAD: It's a --

BUCHANAN: -- which is on the ropes?

AMB. ARAD: Israel did not supply cluster bombs. Ethiopia is not a neighbor. But let me clarify one issue.

BUCHANAN: Are you giving -- are you giving military advice to the regime of Colonel Mengistu --

AMB. ARAD: We have not given any military supplies. We have reestablished diplomatic relations with Ethiopia. The main interest with Israel has in reestablishing diplomatic relations with Ethiopia is the release and the immigration of Ethiopian Jews. The first time ever that black people came out from Africa to liberty to --

BUCHANAN: I know, but right now -- hold it. Right now, a Stalinist regime is on the ropes and I just read in the Washington Times, I got it, there are reports that you got military advisers in there, that you've given them cluster bombs, that you're advising the Ethiopian army in its final days.

AMB. ARAD: I can categorically tell you that we did not supply any cluster bombs and we don't have any --

BUCHANAN: Any weapons? No weapons?

AMB. ARAD: -- military advisers.

BUCHANAN: No weapons either?

AMB. ARAD: As far as I know, to the best of our -- maybe some light weapons. No military advisers and no military presence, Israeli military presence and no cluster bombs.

KINSLEY: Mr. El-Reedy, you know, speaking of friends, people's friends, your country is very close to Iraq and the Israeli Ambassador asks why can they really count on peace with the Arabs while a country like this is around a country that just last week hanged a Western journalist that was caught smuggling nuclear mechanisms into their country?

AMB. EL-REEDY: Iraq has accepted -- has accepted the non-proliferation treaty. Let us not forget that. Iraq has accepted commitments legally, is committed to -- not to produce nuclear weapons --

KINSLEY: You don't --

AMB. EL-REEDY: And when --

AMB. ARAD: This agreement with Israel --

AMB. EL-REEDY: Israel attacked Iraq in 1981. It was an act -- a premeditated attack against Iraq in 1981. The whole --

AMB. ARAD: Iraq had attacked --

AMB. EL-REEDY: -- United Nations, the Security Council, the Security Council --

KINSLEY: Iraq --

AMB. EL-REEDY: -- international --

AMB. ARAD: -- since 1948.

AMB. EL-REEDY: We are --

AMB. ARAD: And Iraq sent troops --

KINSLEY: All right --

AMB. ARAD: Iraqi troops -- KINSLEY: Excuse me. All right. Ten more seconds for you and then a little bit for you.

AMB. EL-REEDY: Non-proliferation treaty. And is bound by it. And we have proposed the creation of a zone in the whole of the Middle East free from nuclear weapons, from -- from chemical weapons, from all weapons and Iraq has accepted that --

AMB. ARAD: So that --

KINSLEY: Stop --

AMB. EL-REEDY: Israel has not accepted --

KINSLEY: Stop. Wait a minute. Wait a minute. You'll get a chance. I'm learning how hard it is to negotiate in the Middle East. We'll give Ambassador Arad a chance to respond when we come back.

[Commercial break]

KINSLEY: Mr. Arad, you were going to explain to us very briefly why you don't care to trust Iraq quite yet.

AMB. ARAD: I don't care to trust Iraq because Iraq has invaded Israel upon the establishment of its independence. Iraq has continued to send forces in the wars against Israel. Iraq has threatened to destroy Israel just -- the president threatened to destroy Israel just a few weeks ago. And it's a country which is on the verge of establishing, trying to establish its leadership all over the Arab world and calling for a war against Israel.

KINSLEY: All right. Mr. El-Reedy, the U.S. peace plan in the Middle East which you accused the Israelis of holding off on was premised on the idea that Arafat, Yasser Arafat had renounced the use of terror. But he now says, or the PLO now says, all actions against Israel is justified. Doesn't that undermine the basic precondition of peace talks?

AMB. EL-REEDY: During the last two and a half years, the Palestinians have been- have been asking for their right to self-determination and to end occupation and Arafat and the PLO has accepted that. And Arafat has supported and encouraged moderation. And as you know, Arafat and the PLO in 1988 they declared accepting to live side by side with Israel, accepted Security Council 242 --

KINSLEY: But now they say, all action against Israel is justified. AMB. EL-REEDY: They have -- they have been faithful to the commitments to which- which they have made. And let us -- let us sum again the question. The question is Israel's occupation of the West Bank and Gaza --

BUCHANAN: That's what I want to bring up.

AMB. EL-REEDY: -- and the refusal to negotiate with the Palestinians.

BUCHANAN: Hold it --

AMB. EL-REEDY: Let us --

BUCHANAN: Ambassador, the final question is for you.

AMB. ARAD: Mr. Arafat has been very faithful to what he committed and this is why over 200 Palestinians were killed by Palestinians because these 200 Palestinians killed by Palestinians in the West Bank and Gaza were Palestinians who indicated their wish and their willingness --

AMB. EL-REEDY: This is propaganda -- I'm sorry to tell you --

AMB. ARAD: These are the facts --

KINSLEY: All right. Excuse me, gentlemen. Excuse me, gentlemen. We're out of- excuse me, gentlemen, we're out of time.

AMB. EL-REEDY: -- not Palestinian aggressor --

AMB. ARAD: The renouncement by -- by Mr. Arafat --

KINSLEY: Okay. Thank you very much, gentlemen. Thank you, Ambassador Arad. Thank you, Ambassador, El-Reedy. Pat and I will be back in a moment.

[Commercial break]

BUCHANAN: Michael, certainly you can't blame Israel for the act of that single deranged ex-soldier. But don't you think given all the suffering the Palestinian people have endured, they have earned the right to be free and independent?

KINSLEY: I tend to think so. Of course, they've endured suffering not just at the hands of Israel but at the hands of the Arab nations for decades and decades. And this Palestinian nationalism is actually quite recent. And that is why the Israelis are suspicious of it with some good reason. From the left, I'm Mike Kinsley. Good night for Crossfire.

BUCHANAN: From the right, Pat Buchanan. Join us tomorrow night for another edition of Crossfire.