As I look at the faces of some of the journalists who have accompanied this process from the outset and some of whom have been on the recent trip, I feel that I could always get up and say that we have had constructive talks and serious engagement, and this would be a short and safe way of describing the status of the negotiations, but this is not the purpose of the exercise.

At the same time, I think that the Washington Institute is precisely the middle ground at which one can look at the negotiations like this and in a somewhat reflective mood, remember that we are not strictly in an academic seminar dealing with a negotiation that is over or took place 20 years ago; we are looking at an ongoing negotiation. And of course we'll discuss about -- discuss it in the flesh, but I think the mode would be to look at this in some perspective and to deal with it with some reflection and not to focus exclusively on what exactly did the secretary of state produce in his stay in Damascus.

There is a level of detail that we will not be able to get into. I think we all understand that. I will try to be as forthcoming as I can within the boundaries of diplomatic decency and the rules of the game that we have all established.

I vividly remember my previous presentation at the Washington Institute seven months ago on the eve of the resumption of the Syrian-Israeli negotiations in the summer of 1995, a negotiation that then took the form of the second meeting between the Syrian and Israeli chiefs of staff. The purpose of my presentation then was to try to put that negotiation and what could be expected in it and of it in some perspective.

As you will recall, we had first established a format in which delegations negotiated face-to-face in the State Department building. The first Israeli delegation was formed and led by the Likud government, and then there was a change in the delegation after the election of the late Yitzhak Rabin as the prime minister of Israel, and the new phase began in August 1992.

We then shifted to smaller meetings between heads of delegations in which Ambassador Muallem, Ambassador Allaf and myself met in the winter of '94. There was an important breakthrough in the negotiations in the spring of '94 when a fresh lease on life was given to the negotiations. The Israeli position was then couched in terms of the famous table and its four legs. This led to another change in format, the so-called "ambassador's challenge," in which Ambassador Muallem and myself negotiated throughout the summer and part of the fall of 1994. We then both reached a conclusion and recommended to our governments, as well as to our American partners, that we needed to talk to the security component of the negotiation, and recommended that high-ranking military officers be sent to Washington to try to build a dialogue between the Israeli military and the Syrian military as what we all thought was a prerequisite for a successful negotiation.

This led to the first meeting of the chiefs of staff in December of 1994. The Israeli chief of staff then was General Ehud Barak, who is presently the Israeli foreign minister. He met with General Shihabi, who still is the Syrian chief of staff. That meeting had no follow-up. It was followed by a Syrian- Israeli disagreement over the next step and the meaning of the meeting and a hiatus in the negotiations.

It then led us to negotiate a short paper called "The Aims and Principles of the Security Arrangements," in which a number of general principles that should govern a Syrian-Israeli agreement on security arrangements was agreed upon between us, and it served as the foundation for the second meeting of the chiefs of staff in which the same General Shihabi, but no longer General Barak, but General Shahak, participated on the Israeli side. That was the event ahead of which I came and addressed this forum.

We all felt at the time, certainly the Israelis, that the meeting between the two chiefs of staff was actually a good meeting. No major agreement was reached in the meeting, but our feeling at the end of the meeting was that both chiefs of staff identified in each other partners and that the ground was laid for further work. This clearly was not the feeling of President Assad, who defined the meeting subsequently as an unsuccessful meeting. The trip by the U.S. peace team in the region that followed the meeting ended with an impasse, and it led both President Assad and the late Prime Minister Rabin to what I can define as a crisis in confidence. Both suspected each other of not really seeking an agreement before the Israeli elections of 1996. And that remained the case for several months.

In the weeks and days preceding the assassination of Prime Minister Rabin, an attempt was afoot to renew the negotiations that I believe would have been successful, at least technically, mainly in setting up a new mechanism for negotiations on the security issues. But that effort was of course cut short, like so many other things, by the assassination.

We now are in the midst of an entirely new phase defined by the assassination and by the formation of a new Israeli government, headed by Prime Minister Peres, but not just by this. I think it would be erroneous to define the present phase as formed only by the assassination or by the formation of the new Israeli government. There are at least two other elements at work, and let me say something about them.

The first is the time element, as an objective factor at work. We are in 1996. It was one thing to speak about the elections of 1996 -- let me emphasize, both in the United States and in Israel from the certain perspective at 1994 and 1993 before this, but time did go by, and as we have entered the year of 1996, this is something that everybody has to figure into his or her calculus. I don't think I want to speculate at any length on how that calculus operates, either on the Israeli or on the Syrian side, but let us accept it as a fact, and an important one, that this is a factor at work and it has affected and does affect the negotiations.

Secondly, events in progress on other tracks of the Arab-Israeli peace process. The Syrian-Israeli track has never been conducted in isolation from other tracks, and events on other tracks have affected the negotiation -- first and foremost, the conclusion at the end of September of Oslo II, the Israeli-Palestinian agreement. We are on the eve of the Palestinian elections, and on the whole, these developments have had a very beneficial effect on the Syrian-Israeli negotiations. They facilitated the development of the concept of comprehensiveness, on which I will dwell later, and they have created a better atmosphere for the negotiations. They have freed the Israeli calendar or agenda from the need to deal in any great detail with other tracks, and it has enabled us to focus on the Syrian track.

The fact that there was a very successful economic regional conference in Amman last November, the fact that there is another such conference planned for next November in Cairo also facilitates the Israeli-Syrian negotiations. I will elaborate on the comprehensiveness and the economic dimension later.

So these are the two other variables that I wanted to mention in creating the environment within which this new phase in the negotiations is taking place. Let me now move to that third variable with which I began, namely, the formation of the Peres government and the new accent that Prime Minister Peres has given to the Israeli approach to the negotiations.

Let me liken it to a two-story structure. The first story: we have the original package, the famous four legs of the table, and let me mention them or recite them once more. According to that original package, in order for an Israeli deal to take place, four elements need to be addressed and agreed upon: first is peace, second is withdrawal, third is an agreement on security arrangements, and fourth a time structure -- both the agreement on a time frame and an agreement on the interface or the synchronization of the element of withdrawal on the one hand and the element of peace and security on the other. In the original scheme of things, when conditions were to be met on all four, an agreement was to be in place, or a breakthrough was to have occurred.

Now, Prime Minister Peres was a partner to formulating the original package, and of course he sustains the original package, but he added several accents when he became prime minister and when he began to lead these negotiations. One element is an emphasis on comprehensiveness, the comprehensiveness of the agreement or the linkage between the Syrian-Israeli agreement and an end to the Arab-Israeli conflict, or a virtual end, to use a well-liked term in this town, a virtual end to the Arab-Israeli conflict. The prime minister has made it very clear from the outset that this is very much an important priority for him.

Secondly, an emphasis on the quality of peace and an explicit disinterest in a cold peace or in a formal or in a hollow peace with Syria. Given the nature of the Syrian-Israeli relationship and given its place in the scheme of things -- this is not the first Arab-Israeli peace treaty to be concluded when it is concluded; it's going to be the third, and it's going to happen almost 20 years after the first. And what was good and sufficient in 1979, in 1996 hopefully will be less than satisfactory. And therefore in order to be attractive to us and acceptable to us, peace between Israel and Syria needs to have a quality, quality as distinct from being a formal or a cold or -- choose the term -- a peace that is less than a qualitative peace.

Thirdly, an emphasis on the economic dimension of peace to embed a new Syrian- Israeli relationship in an economic context about which I will elaborate some later. The concept or the notion is that in order to be durable, a Syrian- Israeli peace, and durable not in terms of the next few months or the next year, but durable over time, the Syrian-Israeli peace will have to be embedded in a regional economic package that will endow it with the richness and durability that we all want it to have.

Fourthly, I know I have sent word and an appeal to the United States to become even more active than it has been. If previously we all -- or we both, Syrians and Israelis, understood that this was, in a way, a three-way negotiation, that parallel and not less significantly than its negotiations with Israel, Syria was negotiating not peace, but a new relationship with the United States, and the United States therefore has been not just a cosponsor, but in a way a partner, the third partner to these negotiations, and has acted in certain ways that flowed from it, then the prime minister has encouraged the United States to take an even more active role in the negotiations.

This was accompanied by a number of signals to Syria in an attempt to improve the atmosphere that were reciprocated or responded to by the Syrians. There has been a response to that, and let me speak briefly about the Syrian response to this new Israeli initiative.

The response has taken the form, first, of a reciprocity in atmosphere. Since November we have had better music, better signals coming out of Damascus, both in reference, direct reference to Israel and the peace process by the Syrian principals and the Syrian media. To give one example, the statement by the foreign minister, Farouk a-Shara, on the premium that needs to be put on keeping peace and quiet on the Lebanese-Israeli border was an excellent illustration of a positive statement that was very well-received and registered in Israel. That was the first component.

The second component was in a response and agreement to resume the negotiations without preconditions and with elements of flexibility in the form of those negotiations. The Syrians decided not to raise the level of negotiators to a political level, but to empower and increase the authority of Ambassador Muallem and give him and his colleagues a larger mandate both in terms of substance and in terms of atmosphere.

Now, of course we can overdo the discussion on atmosphere, but we have always known that in these negotiations, the atmosphere was a part of substance, and as long as you do not overplay it, you have to read it in substantive terms. The fact of life was that until August 1993, there were no handshakes between the Syrian negotiators and the Israelis, and when a handshake was offered in 1993, that was a substantive signal, and so forth and so forth. So this has been part of the new mandate.

Thirdly, and that in operative terms may have been very important, an agreement to deal for a while with the Israeli side of the equation. We know the Syrian position: offer Israel full peace for full withdrawal. Those who have been with these negotiations for a while remember the argument ad nauseam of "I need to hear first about full withdrawal," and the Israeli response, "You don't begin a negotiation with the bottom line." We found ways, of course, for dealing with elements of the negotiation over time without that commitment, but it has certainly hampered the progress of the negotiations.

This time, consciously, the Syrians have agreed to deal until now with the Israeli side of the equation, which is full peace -- what does full peace mean? That's the question we have always asked. We know exactly what full withdrawal means. We've had a very easily definable geographical expression. Full peace is more difficult to define, it's take more time and more space. And there was a certain disparity in that regard, and we have always asked to redress that disparity.

The Syrians have agreed now to deal with full peace, with the elements that from our point of view make up the notion of full peace. Now, again, I wouldn't want for a moment to create the illusion that the Syrians have changed, softened or removed their insistence on full withdrawal, on their definition of full withdrawal. And they remind in the course of the negotiations every so often that this remains the case. But in terms of facilitating the negotiations, enabling to move forward, they are willing to deal now with the Israeli issues: quality of peace, normalization, water. If we will have presently an occasion or opportunity to discuss the security arrangements, these are issues which Israel wants to discuss, and we can discuss them.

So in terms of opening up the negotiations, the decision to choose this formula, whereby the Syrians every so often and persistently and consistently keep telling us that their demand to full withdrawal remains as potent as it has always been and that without it there will be no deal, but yet they are willing to discuss the other issues for the time being, has made a big difference in the negotiations and then, of course, the issues themselves.

Let me now try to assess what has happened in the negotiations thus far. That is to say, the preparatory trips by the secretary of state and the peace deal, the first Wye conference, and then the secretary's recent trip to the region. There is one issue on which we have agreement, in the sense that we see eye- to-eye; we have not written down anything, so my use of the term agreement is limited by this. We think we know that we agree on comprehensiveness and on the components of comprehensiveness, but we have not drafted anything. we have not written down anything, and we all know very well that when you get down to writing and drafting and you use precise language, you may discover that you need to invest more work before you can say that you have agreed.

But I think that we have agreement in the sense that I described on comprehensiveness, namely, that indeed a Syrian-Israeli agreement should lead to a comprehensive Arab-Israeli settlement in two respects. One is that the Syrian definition of comprehensiveness has since 1994 been an agreement or agreements with Syria and with Lebanon. Given the fact that there is an Israeli-Jordanian peace treaty, there has been an Egyptian-Israeli peace treaty for many years now and that the Palestinians signed with us Oslo I and Oslo II, that means the treaties or agreements with Syria and Lebanon would complete the circle of Israeli -- the end of Israel's conflict with the -- what used to be known in older terminology -- the confrontation states. Let's call it the immediate neighbors or the immediate cycle.

From the Syrian point of view, this would be it. It's been stated already in 1994 and it's been more formalized now. It's been stated, I think in the most eloquent and exquisite fashion, by President Assad himself when he was in Cairo last and spoke at a press conference and spoke at some length about this Syrian view of comprehensiveness, or why agreements with Syria and Lebanon would complete peace in this cycle.

The second component of this is that Syria would be supportive of other Arab states at that point recognizing Israel or normalizing relations with Israel. We don't expect all members of the Arab League to do that at that time, but we very much hope that the majority of the members of the Arab League will do it in that time. And it would be in that respect, from our point of view, an end to the Arab-Israeli conflict. That is to say, agreements with all the immediate neighbors and recognition by the majority of the members of the Arab states for us would constitute the end of the conflict. That is one component of comprehensiveness.

The second component of comprehensiveness would mean no linkage, that is to say. that an agreement between Israel and Syria and between Israel and Lebanon would have its own validity; it would not need to be endorsed by others. And again, I think President Assad explained it very well in the same press conference that I alluded to, and the foreign minister. Farouk a-Shara did that in a couple of interviews as well.

Thirdly is the regional and economic dimension of comprehensiveness. Our assumption is that if all of this materializes, or when all of this materializes, and Israel will have peace and normal relations with a majority of the Arab states, then two things can happen. One is we could have a new politics in the region of the Middle East, and the region could start operating as a region without the elements of the Arab-Israeli conflict. And we have seen beginnings of that. The Casablanca conference and the Amman conference were two regional conferences, still limited by the fact that we don't have a comprehensive agreement, but they were very successful enterprises. The Cairo conference convenes next November, and if we conclude before then, could already be the beneficiary of a new state in the region. There are other regional institutions that are already in place through the multilateral track of the peace process, and political relationships.

I call it the politics of access, not the politics of axes. It doesn't mean that you have to translate the new state into partnerships, alliances and access of one against the other, but it will be access across the region to countries that would want to formulate a new relationship.

We also believe that this should have an economic dimension to it, that this should be the opportunity in which resources could be mobilized and regional plans could be put together in order to transform the region and to deal with questions of water, overpopulation, under-resources, underdevelopment, that are the real problems of the region once the political issues are remedied, if not totally resolved. And we hope that the United States would lead in the international effort -- in which the United States would be the leader and not a contributor. And it is here that I rejoin the piece that appeared on the editorial page of "The Washington Post," which I guess most of you have seen. It referred to a report on Israel's state-run television. Anybody who has the slightest familiarity with Israel and the Israeli government and the Israeli media would smile at the notion that even though public television in Israel is public and is regulated by government law, that it really listens to the government. This is not the East German television of 10 years ago. And also, a report that appears on Israeli television is just like any other media report. It has its origins and its intentions and its validity, such as it is.

So the figure of $12 billion that Israel would expect as a package from the U.S. government, $7 billion for security, $3 billion for some mysterious water projects, and $2 billion for rehabilitating the Israeli residents of the Golan Heights, is taken out of thin air and bears no relationship to what I have just described. When we speak about the economic dimension of comprehensiveness, what we have in mind is something reminiscent, but on a much larger scale, of the donor effort to the Palestinians in which the United States is the leader of the effort, but in terms of its actual financial contribution, is not at all the largest actor. It would be actually -- turn to the international community and originate within the region, in Europe, in Asia, and not necessarily just ask to contribute. Also to invest and to take advantage of these opportunities to transform the economy as well as the politics of the region. This is the third component of comprehensiveness.

Now, all three components that I outlined are acceptable to both Syria and Israel, and this is the area on which we have had the greatest qualitative agreement and progress. Secondly, we have come closer on the quality of peace. I cannot get into details on the discussions with regard to normalization and quality of peace, but certainly the discussions have generated greater agreement and brought us closer.

We have also agreed on the concept and methodology of the negotiations. That is to say, we know that there now is a negotiating core, or group of Syrians, Americans and Israelis who are engaged in these negotiations, who all believe in it, who know how they want to proceed and how to build a concept that would lead us to resolve or come to agreement on the elements that I mentioned before, the four legs of the table and the new elements. And when we all feel that we have reached a sufficient degree of agreement or convergence on them, we can move from what we are doing now, which you can term as pre- negotiations, to full-fledged negotiations with large negotiating teams mainly engaged in ceaseless negotiations without any interruptions until we reach agreement.

[Let us take a look] at what we can expect when the negotiations resume, at Wye and during the secretary's next visit at some point in early February to build upon what hopefully will be achieved at Wye. As you know, there will be a military participation, that is to say, the core group will be joined by senior officers from all three sides, and the security issues will be laid again on the table without preconditions from either side.

There will not be delegates to discuss economy -- or economic issues, or water, but the issues of water and economy are on the table and can be discussed by us, at least conceptually. None of us is a water expert or an economic expert in the full sense of the term, but we will be authorized or empowered to discuss these issues and bring them to the point at which experts could join us. I believe that our Syrian colleagues will be given further mandate to continue the discussion on the quality of peace and to take advantage of what we have already agreed upon in order to move the negotiations further.

These then will be the highlights or the focal points of the negotiations. Two new elements, security and water -- not new in the history of the negotiations, but new in the peace phase of the negotiations, and I believe more innovative discussions of the issues that we have already tackled, mostly the quality of peace, normalization and the economic dimension of the Syrian- Israeli peace.

Let me, before I conclude, emphasize a few other points that derive mostly from my discussion of comprehensiveness. One has to do with Lebanon. I mentioned Syria and Lebanon and the Syrian insistence that an agreement with Lebanon needs to happen together with an agreement with Syria, and that together they would bring us to the point of comprehensiveness.

We all recognize the fact that Syria enjoys a great deal of influence in Lebanon, that there is a Syrian presence in Lebanon. But we the Israelis regard and treat Lebanon as a sovereign, independent, separate state, a state that has its government, its place in the international arena and in the region, and we would like to resume the negotiations with Lebanon as soon as this becomes feasible. We negotiated with the Lebanese when we used to negotiate through delegations. That negotiation was interrupted, it was not renewed, and from our point of view, we'd like to renew the negotiations dealing with the government and the state of Lebanon, and conclude an agreement with them.

We recognize the linkage between the Syrian and Lebanese tracks and we'll not be blind to it. We also recognize the fact that there are elements in Lebanon outside the control of the Lebanese government. The Hizbullah is, in our perception, an arm of the Iranian government and is not under the control of the Lebanese government, and therefore while we want to deal with the government of Lebanon and reach and implement an agreement with Lebanon, of course we have very important security interests, primarily in southern Lebanon, and we will need and will make sure that they are provided for, and that all elements, even those that are not under control of the Lebanese government, will be resolved to our satisfaction. There will have to be a fine balance struck in this, and we hope that we're able to achieve it.

Secondly, with regards to Turkey, there is a Turkish dimension, a Turkish interest in all of this, in a number of ways. First of all, if we speak about the new politics of the region, Turkey looms large in the region; it's a very important state. It has a European dimension, it has a Middle Eastern dimension. It has dominated the region and has been an important player in the region and continues to be so. Israel has a very friendly bilateral relationship with Turkey now. We have a good dialogue. We were visited by the Turkish deputy foreign minister recently and had very good talks with him. And ambassadors in Tel Aviv and in Ankara talk to the governments and there is a dialogue that goes on. We would like to keep that partnership.

There are two elements in which Turkey is mentioned in addition to this general regional sense. One is the Turkish-Syrian relationship. It is a bilateral relationship and will have to be addressed and hopefully improved and resolved by the Turks and the Syrians. It's not something that we need to deal with. And then there is the water issue. The name of Turkey is invoked very often when water is mentioned. Turkey has been a partner to the Arab- Israeli peace process through the multilateral track, and it is fully aware of the work that has already been invested on the question of water in the working group on water. And Turkey has a point of view in all of this. And what we all in all of these countries, in the United States, Syria, Israel, the Turks and so forth, we'll have to do as the discussion proceeds in the coming weeks and months, and comprehensiveness and water are on the table, is that Turkish point of view, Turkish interests integrated into the equation that will have to emerge out of this.

Thank you very much.