AMBASSADOR RABINOVICH: Thank you very much, Steve, for these very kind remarks. You were kind enough to mention that my academic work was even- handed. Let me assure you all that in my diplomatic work, in my negotiations, I do not strive to be even-handed. (Applause.)

We all heard the prime minister marshall his eloquence to convey to you the very high esteem in which he holds AIPAC and AIPAC's work. The hope he had had of being here with us today, in order to convey these feelings, in order to deliver the principal message, the principal public message that he had had during this visit--and you will have noticed that there was no other occasion planned prior to this one to keep this a unique occasion. And I would say, after being here for the first time in my life in an AIPAC policy conference, to draw strength from you. This is something that happens to us when we watch you. Some of that may have been transmitted by satellite, but hopefully next year both to give and to take.

But leadership is about being there when one is needed. The mood in Israel is such and the challenge, not just to the security of the country, but to the personal sense of security of the individual citizen, that the prime minister felt that he had to be there and he had to take the decision. I'm glad that he could at least via satellite to you and transmit part of the message.

And he asked me to speak to you about the peace process, about what it is, what it means to us, and what lies ahead in the months to come.

When the present Israeli government was formed last July, it defined to itself three major tasks: to reform the economy, the rehabilitate the tense relationship with the United States, and to infuse life into the peace process with a view to turning it into a real peace-making process, with a view to putting an end to over 45 years of the Arab-Israeli conflict. Relationship with the United States had gradually been improved and put on a very promising track with the previous administration when the loan guarantees and when the peace process was put on a different track. It continued through the last month of '92, the early month of '93, and culminated in last week's visit here in Washington and with the establishment of the excellent working relationship with the president and with his administration.

I will not speak about the economic reform in Israel today, but we have to bear it in mind and it's obviously not something that will be achieved overnight. It remains an awesome task for this government.

The third task, infusing life in the peace process, and converting it into a genuine peace process that will eventually and hopefully lead to peace, is the third task, an important one, a crucial one. Our government and our country want peace. We feel that after 45 years and more of armed conflict, military conflict, violence and sacrifice, we deserve peace. We also feel that conditions have been established in the aftermath of the convening of the Madrid conference that may make this peace feasible.

Our desire for peace is not a matter of a vague yearning or a fuzzy dream. It is a matter of policy. We have made a policy decision that we want to give the Madrid framework, the Madrid conference, the current peace process, the best chance. And we want to get peace settlement, quiet reconciliation out of them.

And as a matter of policy decision, not a vague yearning or a fuzzy dream, this is a qualified peace. Peace, yes, but peace with security. (Applause.)

The Arab-Israeli conflict is not over, as we have been rudely reminded this week. There are dangers to Israel in the Middle East beyond the Arab-Israeli conflict, represented primarily by Iran and the policy and the hatred that it radiates, the high-grade weapons that it is procuring. And we will not compromise on security in order to have peace. We think that peace and security can come down together and we'll strive to get them both.

Secondly, peace has to be based on compromise. There is no peace for peace. Peace has to be based on compromise, but compromise has to be mutual. Conference cannot be reached by just Israel making concessions. (Applause.)

Both parties will have to make concessions. Compromise will have to be mutual. Compromise will have to be genuine. We do not believe in concessions for concessions' sake; we do not believe in concessions, period. We believe that in order to have peace we will have to take some risks. We will have to pay a cost. And we'll have to make some concessions. (Scattered applause.)

But this will all have to be--I know it's difficult to applaud concessions. (Laughter.)

But let us applaud the concessions that the other side will have to make. (Applause.)

I'm not here to pull wool over anybody's eyes; I mean, peace will not come out of nothing. There will have to be, as I said, some compromise, some concessions, some risks. They will have to be balanced, they will have to be compensated for, they will have to be mutual, they'll have to be reasonable. And if all these conditions are met, we can have peace in the Middle East.

Now, how do we go about having this peace, how do we go about making this peace? We have the Madrid formula, we have the Madrid framework. There are four tracks of bilateral negotiations. There are five tracks of multilateral negotiations. How does it all translate into actual peace- making?

First of all, let me say that the cutting edge of the peace process are the bilateral negotiations. The multilateral negotiations have their own importance. They have to create an atmosphere. They have to help Arabs and Israelis normalize their relations. Let us remember that when the deportee issue was sorted out in the United Nations, there was a president of the Security Council who played a constructive role; he was the ambassador of Morocco. We have reached a point in which an ambassador of Morocco can be helpful to resolving such a problem in his capacity as president of the Security Council. We need the multilateral talks in order to help that happen.

But the multilateral talks will not resolve the issue. The issue will be resolved, if it is resolved, in the bilateral negotiations. In the four tracks, two are in the front row--the Syrian negotiations and the Palestinian negotiations. We do not assign precedence to either track. We assign precedence to the track in which progress can be made and will be made. And it is up to our negotiators, up to our counterparts, our interlocutors, to try to do the best and to achieve the best results on their tracks.

If the Syrians come up with reasonable proposals, they may be the first. If the Palestinians come up with a negotiating posture that is more reasonable than what we saw during the past few months, there may be earlier an agreement on the Palestinian track.

So we do not assign a priority. We think that the process should be moved; we think that it has to be sequential; there will have to be a first agreement somewhere. And the first agreement will occur wherever and whenever it can occur.

We also believe in partnership with the United States in promoting this peace process. The role of the United States has been defined as that of a full partner. A full partner, we have been told, and we are reassured, means an intermediary, an honest broker, somebody who offers good offices. It is not the role of a mediator or that of an arbiter. Having heard this definition and having heard in detail from the president and from the secretary of state, who lead this process, and from the officers who work with them, what the United States thinks about the peace process--having worked together with this administration on the deportee issue and on the prime minister's visit, we are encouraged that we will see eye to eye, that the United States will serve as the honest broker after having established a rock-solid foundation of an understanding with Israel on where that peace process ought to lead.

And we are looking to the resumption of the peace process on April 20th in this town. And we are looking forward to four delegations on the Arab side showing up for these negotiations. We have reason to believe that progress can be made in the spring. Between August and December we have made some progress in our negotiations with the Syrians and the Palestinians. We also felt that the Jordanians and the Lebanese were negotiating faithfully with us, would like something to happen on either the Syrian or Palestinian track before they can move forward.

And we therefore feel that next spring, if the Syrians define peace to us and tell us explicitly that peace means full peace, normalization, diplomatic relations, open borders, commercial ties, airline flights, then we'll know that they are offering real peace.

Secondly, if Syria translates this position into open diplomacy, public diplomacy, and if we become persuaded that the Syrian leadership is saying all of this not to us in a closed room but to its own public and to our public, then I think the negotiations with Syria stand a first chance of taking off in the spring.

With the Palestinians we would like to feel that the Palestinians are finally addressing the autonomy model that we are proposing to them. The Palestinians accepted in the Madrid conference to talk about an interim solution. They came to the negotiations in August in this city and found an Israeli delegation offering them an autonomy model, a time table, and a willingness to hold elections.

They have not responded yet to these offers. They were trying to negotiate other things. If they come back on April the 20th and in the weeks that follow April the 20th respond squarely to these proposals, then the negotiations with the Palestinians can move. If these negotiations move, it will not be very difficult I believe to move with the Jordanians and the Lebanese as well and to begin to have real progress in the peace process.

We are not looking for peace around the corner. We know that full peace in the region will take time to establish. One does not reach peace overnight. But we would like to see the first progress, we would like to reach the first station. We believe that this can be done in 1993. We believe that in the spring, after April 20th, there can be a beginning that will lead us to that breakthrough that eventually may lead us to a state of peace.

This is going to fill our agenda in the months to come. Israel is going to be preoccupied with the peace negotiations. But as the prime minister reminded us, also with the ongoing Arab-Israeli conflict. Our relationships with the administration are going to be governed to a great extent by the peace process. Our posture in the media and in the public in this country is going to be influenced by that. This means a tall order for all of us. For us, the government representatives, it means long and arduous negotiations; for the Israeli public, it means stamina to live up to the challenges of peace-making and the ongoing Arab-Israeli conflict; for you members of AIPAC, leaders of AIPAC, activists in AIPAC, our friends, it means that we want to count on you. We will be engaged in this difficult project in months to come, and we will need you. We will need you in this city and we will need you in the places in which you live. We need you in Congress, we need you in the media, we need you for support, we'll count on you and you know that we will be there.