DEPUTY FM NETANYAHU: Good morning. I have a brief statement to make before we take your questions. Ambassador Shoval will add a few words as Mr. Gans (ph.) said. The whole world knows that Israel is going to have its delegations ready in Washington by Monday. The Arabs knew that today, too. They are playing games, they are going to a room that they know in advance is going to be empty, but they have not picked up the phone in response to our phone calls and our various requests to try to arrive at agreements both on the questions of time and the questions of procedure, and ultimately on the questions of substance. We have made several such approaches. As of this moment they have refused to do so.

We heard now that they say that Monday is not acceptable to them, a very simple thing that they could do, and simply call us, but they don't do so. They say quite openly that they will talk to the Americans. The upshot of it is that we are not here to negotiate between Arabs and Americans or between Israelis and Americans. We are here to negotiate between Arabs and Israelis, and if the Arabs want to negotiate with us on procedural and substantive matters, they can reach us. We are right here in the Madison Hotel and they have plenty of other ways of reaching us. We are ready to talk if they are ready to move away from the cameras and from the futile point scoring, they know how to reach us.

AMBASSADOR SHOVAL: Well, first of all hello to all the old friends from Madrid and the new friends. Further to what Deputy Minister Netanyahu said, we have heard -- at least we heard yesterday, I don't know if they reiterated it today, that they want to postpone the talks from Monday to Tuesday because Monday is supposedly the anniversary of the Intifada. I don't know if that's the anniversary or not, but if that is the reason, I think that should be a very good reason to start the talks on that very day because after all, it shows -- Intifada and the experience of the Intifada -- shows the futility of violence, the futility of violence certainly to the Palestinians and also I would say the horror of violence from our point of view as well as from their own point of view. And if the purpose of this whole thing is to try to achieve peace after all these years of violence, I think Monday is probably the most appropriate time.

AMB. SHOVAL: Linda.

Q: Mr. Ambassador, Mr. Deputy Minister, it was however, the Arab delegations that showed up at the designated site, at the designated time set by the United States. Are you concerned that the Arab delegations may have scored some points today, and are you concerned that Israel may appear to be the intransigent party at least in this second round of talks?

DEP. FM NETANYAHU: Well, they may score points with the undiscerning, but I think that a more important point to drive home is this. Israel is 50 percent of any of the negotiation that takes place in any of these forums. It cannot be that the Arabs sit back and expect the United States to deliver by fiat or dictate Israeli concessions. What they have to do is talk to us directly both about procedural and substantive questions while keeping the American intervention to a minimum.

Now Israel has said all along that in fact it's going to be ready and it will be ready starting on Monday with delegations. Again, if the Arabs have the reservations about that they can reach us. They know how to reach us.

But going into the negotiations and probing into the substantive issues, we are not going to get very far if the Arabs believe they can simply sit back and have the United States deliver Israel, that's not going to work. And I think in many ways it's important to air that as early as possible, even on a minor matter such as timing. The issue here is to get an agreement, as President Bush said in Madrid, of the parties, from the parties, for the parties, from the parties themselves, and not by outside imposition. An imposed settlement on anything does not work for very long.

Q: As a follow-up, what are you planning to go to the talks next week to discuss? You mentioned substantive issues. What exactly are they?

DEP. FM NETANYAHU: I think there are a number of issues that we have to discuss. We have to create a framework for sustained talks so we don't have this problem of procedure coming up again and again. One of the things we'd like to discuss is the question of a continual venue. This is obviously going to be very difficult to continue halfway around the world. As we get into the issues of substance, it's going to be very hard to have the Israeli delegates that far removed from the government that wants to be intimately involved in questions that affect Israel's very survival. I remind people that Camp David, which was negotiated for a year between Anwar Sadat and Menachem Begin shuttling back and forth from Israel to Egypt, was consummated here; in fact, this hotel had something to do with it as well. But who came here to consummate a deal worked out in the region? Menachem Begin, the head of the government, the Defense Minister, the Foreign Minister of Israel; these were not delegations of second-ranking officials, but the leaders of the government.

When you're dealing with substantive issues affecting the very future of Israel, we're going to have to have the involvement, direct involvement, of the government. That is very hard to do at a distance of halfway around the world. So, from a practical point of view, not to mention the question of legitimacy, we have to bring the talks as close as possible to the Middle East. Our preference is in the Middle East itself.

We've made a number of offers to the Arabs. None have been responded to. We would like to hear their response. If they have other suggestions, they can tell us. But, so far, they're not telling us anything. They're saying to the Americans, you impose, you dictate; we won't talk. If the Arabs really want to talk and not engage in, as I said, in empty point scoring, they know how to reach us, and we can discuss the continuation of the talks. I hope that is what'll begin on Monday.

AMB. SHOVAL: Actually, just a few brief days after arriving from Madrid, I tried personally to establish contact with the Jordanian ambassador here in Washington and to try to get some sort of reaction about the possible venue as well as timetables. We had a very cordial and friendly talk, but we never received a reply. The only reply which we received was from the American government, and this is not the spirit in which to start direct bilateral negotiations.

Q: Yes, thank you. I'm Saul Friedman with Newsday. Ambassador Shoval, as a member of one of the delegations, and Mr. Netanyahu, when we were in Madrid, I recall that you were there when the Syrians did not show up. Could you tell me, really explain to me, because I'm a little puzzled, why you can come here not to negotiate, you are here but not to negotiate, but you have, as I understand, scheduled a series of interviews and press conferences between now and Monday, and yet you refuse the -- (inaudible) --

DEP. FM NETANYAHU: We wouldn't be having this press conference if we didn't know about the attempt to -- the Arab's attempt to play this game in front of public opinion. We're not interested in that. As you heard, Ambassador Shoval has made his own attempt at a private contact. We've made several such attempts, not only in Washington, and all of them were absolutely rebuffed. The Arabs may come in front of the cameras to a room they know is empty, but when they get a phone call or a contact that is not empty, that is substantial, they refuse to take it.

Now, as to the question of Madrid, I think you have to remember that there is a big difference. In Madrid we had an agreement; we had an agreement on place and location. We went there to the meeting, and it turned out at the last moment, literally when our delegations were entering the room, that the Syrians didn't show up. But here the Arabs know that we're not showing up today. They know we're coming on Monday. Again, if they have a different suggestion, it's very easy to reach us.

The question that the whole world has to ask is, why are the Arabs not talking directly to the Israelis? Why are they engaged merely in media events? But why are they not contacting us privately, substantively in order to move these talks forward? The answer to that is that they think they can use the United States as a bulldozer, as opposed to making the kind of direct contacts which are necessary for peace.

AMB. SHOVAL: And the United States has made very clear and I think they're going to make it even clearer hence, that the United States will not act as a mailman anymore. And we welcome that. I think the two sides -- the different sides should talk to each other directly.

Q: There has been the announcement that the multilateral talk will happen in Moscow. Two or three things about this. One, are you pleased, because Israel wanted those talks. Second, is this something that is going to make this process now easier? And the third one, is there a possibility to have this talk if this talk here in Washington are not going on?

DEP. FM NETANYAHU: Yes, we are pleased with the talks in Moscow. We were consulted both about venue and time, and it's perfectly agreeable to us. Moscow has the advantage of being close -- I think it's closer than Madrid to Israel. So that at least gets beyond the logistic problem.

Of course these talks will include not only Arab countries but many other countries as well on matters of development and so on. As far as the ability to have progress in multilateral talks without progress, similar progress in bilateral talks, we're not linking any progress in any delegation, in any forum, to progress in the other. I think from a practical point of view it's going to be difficult to talk about matters, for example, relating to the water problem, with Syria and a host of other Arab countries, and Israel, if Syria doesn't show up. And if Syria continues to show a very hard-line attitude in the bilateral talks, I don't think it speaks well for the possibilities of reducing arms, arranging water agreements and the like, and the multilateral talks. So we're not formally linking it, but I think it's going to be difficult to make rapid and certain progress without some progress on the bilaterals as well.

Q: (Name inaudible) -- work for the Georgian Times. Mr. Netanyahu, you're creating the impression that you are here -- are you here as a delegate whom no one is talking to -- (inaudible) -- saying that you are come to negotiate in peace, and you're here to talk to the Arabs. However, there are delegates in the State Department or in their hotel whom you could have approached in your official capacity as a negotiator. It seems -- I'm a bit confused as to why you're here, why you say --

DEP. FM NETANYAHU: Talk into the microphone --

Q: It's not picking up --

DEP. FM NETANYAHU: Okay, I'm sorry.

Q: I'm confused as to why you are here. You said that you have the Hanukkah vacation -- celebration, that none of you could come, but then you traveled here to make this. And then you're talking of preparations when you are only here to discuss other venue -- (off mike) -- are you ready now to discuss substantial issues in Washington before another venue is decided upon? And second --

DEP. FM NETANYAHU: That was only one part?

Q: Yes. No, I'm clarifying -- (off mike) -- are you here as a negotiator, and are you representing the Jordanian side as well?

DEP. FM NETANYAHU: Yes, well, let me make clear. I am not a three- delegation single man representation, as you can imagine. I am, in fact, not engaging -- not a member of any one of the official delegations. I will be here coordinating some of the work that we're doing, but I'm not, myself, a member of any of the delegations. I came to Washington yesterday with a message from Prime Minister Shamir to Mr. Baker, and that message was essentially two-fold. The first one was that we do not seek any conflict or confrontation with the United States. I was delighted to hear that the United States does not seek any confrontation with Israel. Apart from anything else, it would push the peace process further backwards by inflating the Arab expectations to even higher levels of inflation, and that wouldn't be a very good idea.

The second thing we agreed on was that the mechanism for the talks, as Ambassador Shoval has said, should be that direct contact between us and the Arabs. Obviously, once we get into the room together, and I assume that after all this is said and done, we will get into the room -- rooms, I should say, together next week. Now, until that point, we are ready -- we means any Israeli official here -- I, Ambassador Shoval or anyone else to entertain suggestions from the Arab delegates if they -- if Monday or Tuesday or Wednesday are not satisfactory to them. And each separate delegation will be happy to listen to other suggestions.

I think the important thing is to stop relying on the United States. What do we need it for? We think the United States has been very helpful. The United States is very helpful. But the United States themselves are saying, "We want you to negotiate. We want you Arabs and Israelis to negotiate." Now we are here. Ambassador Shoval has picked up the phone. Israel has picked up the phone in other places in the world. And so far, the Arabs have refused to pick up the phone. I think that there is still available time between now and next week for the various Arab delegations to make contact with us. But I specifically am not going to be negotiating in the negotiating rooms.

Q: Would you negotiate (substance?) in the --

Q: (Inaudible name) -- Democratic News Agency of London. Mr. Netanyahu -- thank you, that's much better.

Mr. Netanyahu, I'm sure you're very well aware of your own articulate communications skills, which everybody most probably would agree upon. But don't you feel that, if you were to keep a low profile between now and Monday, and if the push of saying that, you know, we're calling the Arabs and they're not answering our calls, et cetera -- if such a low profile was to be maintained, then it is possible that, under certain circumstances, certain elements of the Arab press or certain elements of those near the Arabs could actually begin to bridge the gap which you wish to have because, in my own opinion, I think that if you keep up this very-well approach that you're using, domestic opinion in the Arab world will be reporting that you are saying such statements as, "They won't pick up the phone." And it is very possible that you would be, in fact, pushing the delegations of the Arab -- here, that are here to go back there because in one way or another you might just go a bit too far and offend them too much, and then their leaders might just say, "Well, everybody back home." And we would have missed a real important opportunity.

DEP. FM NETANYAHU: That's a question or a statement?

Q: No, the question is simply, are you going to keep up your approach that the Arabs won't talk to you and, if so, why?

DEP. FM NETANYAHU: It's not an approach, it's a fact. But the other fact, as I said, that the only reason we're here at 11 o'clock is because of the spectacle that the Arab delegations performed at 10 o'clock. I fully agree with you. And this is our desire -- to have the contacts done informally. Now Madrid has been over, some of you -- many of you have been to Madrid. Madrid has been over what? Two and a half almost three weeks ago, and in those three weeks Israel has made several attempts to make contact with the various Arab delegations, various Arab parties, I should say, and none were successful. But again, the crucial question is whether the Arabs are truly interested.

I must say, I can't help resisting the fact that since you represent a movement for Arab democracy, I don't know if I should --

Q: In London.

DEP. FM NETANYAHU: In London. I don't know if I should congratulate President Assad for receiving 99.992 [percent] of the vote in his recent re-election in Syria, but when you talk about popular Arab opinion, I would very much like to have this newscast, as we had -- this press conference -- as I had a previous press conference in Madrid broadcast to the Arab world. We don't fear this kind of direct contact with Arab opinion. We would like to have popular Arab opinion expressed, because I believe that when the Arab peoples are presented with the facts, not with the distortion of the propaganda, but with the facts of the Arab- Israeli dispute and our own efforts here, that they will in fact look much more kindly, more gently shall I say, on Israel and on the prospects for peace with Israel.

Q: I am Ruth Siani (sp.) with the AP. Do you feel that the point you were trying to make, in other words that the Americans can't just snap their fingers and you will show up, has been made? What is it the Americans have told you to reassure you, as Ambassador Shoval said, that they will no longer be acting as a mailman, and do you feel that they might have perhaps misestimated or underestimated the extent to which they could push you to the wall?

DEP. FM NETANYAHU: I am not going to get into interpretation of American assessments. I will say that we were, yesterday, told in very clear and reassuring terms by American officials that the United States does not seek to replace the negotiating process, that it wants to have the Arabs deal directly with Israel. In fact, I was told by one official that the Arabs had made 15 points that they wanted to raise with Israel, and they took it to the United States and this American official said no, take it to Israel directly. That's exactly the right approach. And I think that in addition to the questions of substance, the form of the negotiation, the fact that the Arabs have to talk to us and of course we to them, is as substantive a part of reconciliation as the actual subjects of discussion.

Q: Keenan Block (ph.) with MacNeil-Lehrer. If the sides are still arguing, divided about something as basic as whether or not this round of talks begins today or being Monday, how are you ever going to reach agreement on -- (inaudible) -- and big issues that face all the sides?

DEP. FM NETANYAHU: I don't think that's what we're arguing about, frankly. I don't think the issue is Wednesday or Monday. I think the issue is process. That is, is there a negotiation that takes place between Arabs and Israelis, or is there an Arab idea that somehow the United States will impose conditions on Israel? That's an erroneous idea, both from Israel's point of view and the American point of view. So the issue here is not dates. This is -- you are quite right. The question of dates, from our point of view, is tertiary -- quadrinary -- it's trivial.

What is not trivial is the idea of a direct channel between us and the Arabs where there is give and take, a negotiation between us and not something imposed from above. That is not trivial and that is not secondary.

Q: What hope do you hold out for success on the big issues --

DEP. FM NETANYAHU: The sooner --

Q: -- considering where you are now?

DEP. FM NETANYAHU: -- the sooner we establish this principle proved so successful in Camp David, the sooner we establish the principle that there is an Arab-Israeli dialogue and exchange as opposed to something else, the sooner I think we will have success, perhaps even rapid success. What is important, though is to establish it at the outset. And I think it cannot be established any sooner than today.

AMB. SHOVAL: Let me add, perhaps, I think all these questions about delay are now really water under the bridge. We have made our point, and there isn't a single person in this room who doesn't understand we have made our point loud and clear. And with that, it's finished. The whole question of timetables and venues would have been avoided if the Arab sides had talked to us directly. What chance is there for peace? If the Arabs will understand that they need peace just as Israel needs peace and that the only way to achieve it, especially for the Palestinians, is only with us, talking with us and not to somebody else, there is a good chance we are coming here -- I want to say this to the lady from Jordan -- with very substantive proposals, especially with regard to the Jordanian-Palestinian question but also to others. If they take us up seriously, I believe progress will be made. We have all the intentions because we want to find a solution to their problem. It's not just their problem, it's our problem.

Q: Norman Kempster, the Los Angeles Times. I think the Ambassador just answered my first question, but, just to be sure, I'll place it again. Are you prepared -- if the talks begin on Monday or whenever they begin, are you prepared to discuss substance?

AMB. SHOVAL: Yes. Yes.

Q: If so, how long do you expect this round to last? How long are you preparing to remain in Washington to talk substance?

AMB. SHOVAL: Well, I personally will remain in Washington for quite some time -- (laughter) -- but this is just going to be the start of the second round of conversations, of negotiations. We hope they will move as soon as possible near the region or to the region. I can't specify whether it will be one day or two days or three days or something like that. It will not go on for a long time here. And, as Deputy Minister Netanyahu has indicated before, if we could have settled some of these technical questions even now, even before Monday, then we could really devote all the time for Monday and on just for substantive issues. And that's our intention.

Q: Connie Lawn, Israeli Radio. Mr. Ambassador, do you -- in all of this time, in all the discussions with the Prime Minister and so forth, have any points of substance yet been touched upon? And, also, do you have any guarantee, any assurance, that the Syrians and the other delegations will remain here and talk on Tuesday?

AMB. SHOVAL: We have no guarantee or assurance. As a matter of fact, we have no guarantee whether the Syrians are very, very interested in the peace process. Some of their statements have indicated the contrary. As a matter of fact, we understand that the Syrian broadcasting system never told its own people that we have actually sat across the table next to each other or facing each other in Madrid. But if they are interested, and if it's made clear to them that they should have an interest, hopefully they will remain. We have no assurance of that.

Q: (Name and affiliation inaudible.) Mr. Netanyahu, for decades, consecutive Israeli governments have said that they will meet and talk to the Arabs wherever they want, whenever they want. And yet, at this very moment, three Arab negotiating teams are sitting and waiting for the Israelis to show up and talk to them directly. And yet, the Israelis have not come. Can you explain in a simple, comprehensible way why the Israelis are not there? DEP. FM NETANYAHU: Number one, we are coming to Washington. We weren't consulted in a way with the Arab delegations. We didn't reach an agreement with them on place, but it's very easy to do so. I think our view right now, frankly, is this: we can pick up the thread of peace in Washington, but we have to weave it back into the Middle East to a real tapestry of peace. To do that, we need to have the Arabs talking to us directly. We've had no such discussion. The Arabs can say, "we are coming on Wednesday"; but they didn't talk to us about coming on Wednesday. They can say, "we're not going to be there on Monday"; but they're not offering a different date. What they want is merely a series of fiats directed against Israel. That's not the negotiation that we have said we wanted all those years. We want a real exchange. And the best thing they can do right now is pick up the phone.

Q: Joe Albright from the Cox Newspapers. I wonder whether you can spell out for us in as much detail as you can, giving names and dates if possible, all the Israeli efforts since Madrid to contact the Arabs which you say that they have not responded to.

DEP. FM NETANYAHU: One effort has been described by Ambassador Shoval here in Washington. There were other attempts not in the United States, but I'm not going to get into them.

Q: Well how many and where?

DEP. FM NETANYAHU: There were several -- there were several. We don't necessarily --

Q: Well why are you not able to talk about them? DEP. FM NETANYAHU: Because part of the value of these contacts is the fact that they're in fact not exposed. As the journalist, the Arab journalist from London said correctly, there are certain channels that you want to keep not public for the simple reason that they're useful away from the cameras. And with all due respect to you ladies and gentlemen of the press, there are some contacts that are best kept away from the glare of publicity.

Q: Can I ask you -- since everyone's talking about substance, can you -- the Israeli press this morning is full of reports about precisely what - - (inaudible) -- will be bringing forth on the question of self rule and autonomy for the Palestinians. Can you give us some general, at least, descriptions of what is your substantive, opening bargaining position on the question of self rule, particularly with reference to the thorny questions of water, land and source of authority?

And secondly, can you give us a sense of what is the opening Israeli bargaining position on the Golan Heights? The American letter to you suggested that Israel test the Syrians; offer: "If we are ready to withdraw from all of the Golan what kind of peace are you ready to offer us?" Is Israel ready to go that far?

DEP. FM NETANYAHU: Yes, I will respond to you as best as I can, Tom, but I don't want to begin the negotiation here, as you can understand. Sometimes journalists have a difficulty understanding that, but I think --

Q: Well, I understand. (If they weren't ?) talking about substance, so let's talk about substance.

DEP. FM NETANYAHU: Well, I think that there are two responses to your question. The first considering the territories: Judea, Samaria, Gaza. I think we have a vision in mind of the -- an interim settlement that does the following: That gives maximum security to Israel, alongside minimum interference with the running of the daily lives of the Arab population.

I think that this is the watchword to look at, security for Israel -- maximum security for Israel, minimum intervention in the daily lives of the Arabs. There are many issues that have to be resolved. The general framework of Camp David -- envisioned in Camp David basically said that in this interim settlement, which is what we're discussing now, as you know -- so the question of final borders is not on the agenda at the moment, by agreed-upon consent. When you're talking about an interim settlement of limited self-administration, we're talking about the symbols and prerequisites of sovereignty, of sovereign rule remaining in Israeli hands. That means first military security, security against terror and the question of the foreign policy, the question of the control of the borders, the question of currency. I've just given you the key ingredients of sovereign power. Those remain with Israel by agreement in Camp David.

The question of self-administration, all the questions of self- administration and the precise meeting, the precise juncture between questions relating to the first level and questions relating to the second level have to be worked out in negotiations. The questions of security, for example, are obvious in that regard. What is the span of security? What is the span of the other authorities that each of the two sides will have? That is something that has to be negotiated.

But the concept in general is the prerequisites of sovereign power remain with Israel for the interim period. The Palestinian -- Arab population can move from a position right now of this intifada that Ambassador Shoval talked about to a different arrangement altogether, where they can begin to have much greater control over their daily lives. And I hope to create a different climate between Israelis and Arabs pending the final settlement.

Now, the question of the Golan. I think that in many ways we would like to hear, before I even respond to that question, an agreement on the part of the Syrians to the basic ground rules laid by Presidents Bush and Gorbachev in their statements in Madrid. They said very clearly -- very clearly -- they said we are talking about not just non-belligerency but peace treaties. The Syrians refuse to accept that to this very moment. And obviously unless we some kind of change there it's going to be very difficult to move on with the substantive proposals which we will raise in the delegation talk.

Q: But are you saying -- just to clarify -- that before you present any substantive proposal for dealing with the Golan, you are insisting as a precondition that Syria commit itself to the final objective of a peace treaty?

DEP. FM NETANYAHU: No, I'm saying that the proposals that we are going to present we will present in the context of the delegation, not in this room. But I am saying that we would like, and I think the entire world would like, to see Syria accept the basic framework of peace treaties, an end to the state of war and the contraction of formal peace between Israel and Syria.