The MacNeil/Lehrer NewsHour

MR. MacNeil: Good evening. The Middle East still leads the news. Pres. Bush accepted an offer from Baghdad to address the Iraqi people. Mr. Bush said he will do whatever it takes to force Saddam Hussein from Kuwait. The Soviet Union said now favors a U.N. military force in the Persian Gulf, and Iraq said the crisis will drive up oil prices to as much as $50 a barrel. We'll have details in a moment. Judy Woodruff is in Washington tonight. Judy.

MS. WOODRUFF: Tonight on the Newshour, Charlayne Hunter-Gault continues her [NEWS MAKER] reports from the Persian Gulf with an interview with Iraq's oil minister, next Tom Bearden looks at the impact of the [FOCUS - CHOPPY FLIGHT] Persian Gulf confrontation on the nation's airlines, then we hear from Israel's foreign minister who met today with President Bush [NEWS MAKER], and we close with a conversation with a leading conservative critic of the Bush administration's Middle East policies, [CONVERSATION] American Spectator editor Tom Bethel.NEWS SUMMARY

MR. MacNeil: President Bush today accepted Saddam Hussein's offer to speak directly to his people on Iraq's state run television. Spokesman Marlin Fitzwater said the President would take the opportunity to explain U.S. policy in the Gulf. He said Mr. Bush would record the message in the next few days and deliver it to Iraq's information minister. This afternoon, the President spoke about U.S. goals at a political fund-raising event in Topeka, Kansas.

PRES. BUSH: The events are still unfolding, hard choices remain, but of this we are certain, when some ask where does America stand, our answer is America stands where it always has, against aggression, and America will not be intimidated. Five weeks ago, these beliefs prompted me to take action in the Middle East toward restoring the sovereignty of Kuwait, and deterring those who threaten, who threaten friendly countries and the vital interests of America. Those objectives are unchanged today and they will remain unchanged and we will not stand by while one country devours another. We will do whatever it takes to help our men and women restore peace, and thus complete their mission.

MS. WOODRUFF: Mr. Bush also said a new level of cooperation between the U.S. and the Soviet Union has been highlighted during the Persian Gulf crisis. In Moscow, foreign ministry spokesman Gennadi Gerasimov said that his country now favors sending a United Nations military force to the Gulf. He said the Soviets would consider joining such a force. He said President Gorbachev may raise the issue at this weekend's Helsinki summit with Pres. Bush. The U.S. military buildup in the Gulf is believe to have now surpassed 100,000 troops but Defense Sec. Dick Cheney said today that it was too soon to stop the deployment. He also criticized nations which benefit from Middle East oil that have not contributed to the military operation. He said, "We need to have some of our friends step up to the counter. There is no free lunch here.". British Prime Minister Thatcher said today that she plans to send more troops to the Persian Gulf. The announcement was quickly challenged by members of the opposition Labor Party. But in a debate on the floor of the House of Commons, Mrs. Thatcher said it was no time to back down to Saddam Hussein.

MARGARET THATCHER, Prime Minister, Britain: We hope that economic sanctions will prove to be sufficient. That is why they must be strictly enforced, but we are not precluded by reason of any of the Security Council resolutions from exercising the inherent right of collective self-defense in accordance with the rules of international law.

TONY BENN MP, Labor, Chesterfield: This is the nub of the whole debate, and as I understand it, what she has said is that the U.N. Charter and the resolutions that have already been passed have already here and now given her legal authority, if it comes to it, if it's decided, to take military action against Iraq, because she knows the real anxiety. People think America may go to war and Britain which is quite a minor part of the operation will be dragged into it before the House resumes.

MARGARET THATCHER: The nub of the debate is to secure the withdrawal of Iraq from Kuwait and the legitimate restoration of the government of Kuwait. To undertake now to use no military force without the further authority of the Security Council would be to deprive ourselves of a right in international law, especially affirmed by Resolution 661, it would be to do injustice to the people of Kuwait who are unable to use effective force themselves, it would be to hand an advantage to Saddam Hussein, and it could put our own forces in greater peril, and for these reasons, and may I say that every single thing I say on this matter I have the full legal authority. For these reasons, I am not prepared to limit our legitimate freedom of action.

MR. MacNeil: An American man has been shot and wounded in Kuwait City. He was shot in the arm by an Iraqi soldier while trying to sneak out of his apartment window to avoid Iraqi capture. He's now in a hospital in Kuwait City and is described as in good condition. Iraq said the shooting was not intentional and said U.S. embassy officials in Baghdad would be allowed to see the man. The State Department called the shooting "outrageous behavior". The U.S. government reached an agreement with Iraq today to air lift Americans from Kuwait beginning tomorrow. An Iraqi Airlines plane has been chartered to carry the U.S. citizens. The State Department estimates there are about 2200 Americans in Kuwait, 1200 of them women and children. The Voice of America has been broadcasting messages about evacuation plans to those being detained in Kuwait. They've been told not to attempt to leave over land. Today this new message broadcast by the Voice of America.

VOICE OF AMERICA: [Message to Americans in Kuwait] The following is an advisory for U.S. citizens in Kuwait. You are again warned not to attempt to go to the embassy compound where Iraqi military are still positioned. On Friday, September 7th, we may begin to fly American citizens from Kuwait through Baghdad to Amman, with subsequent flights to be arranged. Iraqi authorities have said that only women and children will be permitted to leave, but we are continuing to urge that all American citizens be permitted to leave Kuwait and Iraq.

MS. WOODRUFF: Sec. of State Baker arrived in Saudi Arabia today for talks with King Fahd. Baker said he will ask Saudi Arabia to help pay for the Persian Gulf forces out of its new higher oil profits. The Saudis are expected to make an extra $100 million a day as a result of increased production and higher prices. In Baghdad, Saddam Hussein held a second day of meetings with Jordan's King Hussein. No details of the meetings were disclosed. Iraq's deputy prime minister was in Beijing today for meetings with Chinese officials. A Chinese government spokeswoman said China does not feel that the embargo against Iraq should apply to medicine and food for humanitarian purposes. She did not say whether China would send those products to Iraq. Coming up, Charlayne Hunter-Gault talks with Iraq's oil minister, the impact of the Gulf crisis on U.S. airlines, then Israel's foreign minister, and finally a conversation with American Spectator editor Tom Bethel. NEWS MAKER

MR. MacNeil: First tonight we have another in Charlayne Hunter- Gault's series of reports from the Middle East. As we reported, Iraq's oil minister, Isam Abdul Rahim Al-Chalabai, said today that the embargo on shipments of his country's oil would continue to force up the world price. He said that in an interview taped in Baghdad. Mr. Minister, welcome. Thank you for joining us.

ISAM ABDUL RAHIM AL-CHALABI, Oil Minister, Iraq: It's my pleasure.

MS. HUNTER-GAULT: You, Iraq, with the annexation of Kuwait, are in control of 20 percent of the world's oil and yet because of the blockade, it's just sitting here, it can't get out. What is that doing to your country?

MR. AL-CHALABI: Well, it's a pity that it is still underground because it is certainly affecting the world market much more than it is affecting Iraq. Before the 2nd of August, as you well know, we had quite a bit of the reserves ourselves, and we had quite a bit of production. Our share of the production was almost 14 percent, and we were supplying the world with over 3 million barrels a day, and that helped quite a bit to ease the demand on oil, a growing demand on oil. At the same time it helped quite a bit the level of prices. The revenue that we were getting from that export was distributed in three different categories. The major part was, in fact, used to pay debts. Over 40 percent of the revenue was paid for countries for whom we have sizeable amount of debts. Over 30 percent was used in investing in new projects. Most of those projects were contracted with companies from Europe, the United States and Japan, so that stopped also, and the rest of the revenue we used to import some commodities, most food stuffs, again, mostly from the United States, Australia, and Europe. We stopped most of that because of the embargo. So really the stoppage of the export of oil is not affecting the Iraqis much. It is affecting more the outside world.

MS. HUNTER-GAULT: But isn't oil critical to your economic health, indeed your survival? I mean, before the invasion, were you not planning to along with Kuwait increase production so that you could meet some of those obligations you just described?

MR. AL-CHALABI: Well, as I said, Those revenues were used in those three different categories. Now that we do not have the revenues, we are not doing any of those things. We are not paying debts. We are not paying for the projects that we are trying to build, and we are not buying. So we are just trying to do with what we have inside of our territory, so really we have not been affected much. In the future, certainly oil is there, we have not lost it, we will be able to start exporting it again. We are keeping intact all the production and export facilities ready at a short notice to be used for exports. So once we can start again, we will be able to generate the money we need, so it will be there.

MS. HUNTER-GAULT: So none of your oil is getting out at this point, there are no leaks in the --

MR. AL-CHALABI: No, there are no leaks whatsoever nowadays.

MS. HUNTER-GAULT: Do you expect the embargo to hold?

MR. AL-CHALABI: Well, as far as food stuffs and medicine, I don't expect that it will hold, because it is not considered to be legal. It is against the rules and regulations of the United Nations, so there should not be any embargo on medicine or food stuff. It's as simple as that.

MS. HUNTER-GAULT: I was speaking of oil.

MR. AL-CHALABI: With oil, I think the world will suffer more. As we will proceed, winter will come, there will be more demand in oil. There is normally over 2 or 3 million barrels a day extra demand on oil, and that cannot be met by anybody else. As you see, three or four weeks ago, when we met in Geneva, we decided to have a certain ceiling with regard to the production of oil from the orbit countries. Those orbit countries are the only countries in the world who can produce more oil.

MS. HUNTER-GAULT: But just last week they decided to do that.

MR. AL-CHALABI: So after that and after the events in the Gulf, after the crisis, what happened was that oil prices went up. They went as high as $32, 31 to 32 dollars for WTI or Brent. So there was call by Saudi Arabia and Venezuela, after appeals made by Pres. Bush, himself. They went a long way in making telephone calls and asking everybody and appealing for increase in production of oil from those countries. So they decided to increase the production, they did. They went all to the maximum. They went all the way. So what happened? They thought that the prices will go down. It did for one day. Prices went down for 4 dollars, 5 dollars. What is the price today? It went up to more than $31, so it went back to what it was a few weeks ago. So it cannot be reduced. The price of oil will continue to increase. Of course, it will increase more and more if the crisis will develop to a worsening situation, so the only way will be to have more oil available to the market, and the only other oil that is available for the market is the Iraqi oil, and we are talking about almost 5 million barrels a day.

MS. HUNTER-GAULT: But aren't there tremendous reserves, strategic reserves, all over the world?

MR. AL-CHALABI: Why haven't they used it?

MS. HUNTER-GAULT: It hasn't been necessary.

MR. AL-CHALABI: It was not necessary when the prices go up from $18 to $31? Why didn't the DIA decide to use the strategic reserves? Why didn't the United States decide to use the SBR? So certainly they need more oil, and I think what's happening now is that the consumer is mostly affected. In your country, in Europe, in Japan, prices have gone up. Why? Because the blockade, the embargo, they have stopped the flow of oil from these areas.

MS. HUNTER-GAULT: So what do you see happening? Do you see pressure from the consumers on governments to end the embargo, or what do you foresee as a scenario?

MR. AL-CHALABI: Well, I think that if they are after the interests of the consumers, then they need to ease the embargo, they need to ease the flow of oil for their own sake. It is more for their own sake than for my sake. Okay, even if I get the money, what would I do with it?

MS. HUNTER-GAULT: If the crisis continues as it is, if there is no negotiated solution any time in the foreseeable future, what do you see happening to the oil price?

MR. AL-CHALABI: It will increase. It could go to $40, $50, even more. There will be no end to it, and there will be more of a negative effect on the consumer.

MS. HUNTER-GAULT: But can't the rest of the world get along without the oil from Iraq better than Iraq can get along without having it go out to the world?

MR. AL-CHALABI: Well, this is the question. I mean, can Iraq continue without the revenue of its oil, or the world can continue without your oil, and I believe that the first is the proper answer. Iraq can stay out and can stand without the revenue for as long as it requires. It will be the world that will suffer more, which will be the industrialized world which will suffer more. Of course, the developing world will also suffer more, and the consumer is going to pay heavily for that very quickly.

MS. HUNTER-GAULT: What do you think the natural price of oil should be?

MR. AL-CHALABI: In 1979, we made it clear officially and in writing, in public announcements, that we were not after price shocks. That was very clear as a policy from this government. Let's make the adjustment catering for the inflation, and the changes that is happening and the rate of change vis-a-vis the dollar. So that would have taken the price in 1990 and '91 to $21. That was in '89, early 1990. The price of oil today, or let me say before the 2nd of August, when it was $20, it meant, in fact, about 5 to 6 dollars in terms of the value of a barrel of oil in 1975. In fact, it was almost 2 to 3 dollars in the beginning of the '70s, so the value of a barrel of oil was eaten up by the inflation that has taken place, so we could not continue with that. In certain places, the oil was produced and exported, and getting revenue much less than the actual cost, not in Iraq, but I say in certain parts of the Middle East. So the price of oil was not the proper one, but we should not allow the prices to go extremely high, because that will generate alternative sources of energy and then that will damage the oil as a major source of supply for the energy.

MS. HUNTER-GAULT: Well, even with this crisis, I mean, how concerned are you that, you know, this is not the first crisis that the West has suffered because of this control of oil in the Middle East? I mean, are you concerned that this one, if it is prolonged will, in fact, lead to a weaning away by the West from the oil, which could be far more devastating?

MR. AL-CHALABI: We hope that this will be something of a temporary nature and that things will get back to normal, and then we will talk about normal level of prices.

MS. HUNTER-GAULT: Now Iraq combined with Iraq now, as I said earlier, controls 20 percent of the world's oil. I mean, how does this change the game for setting prices? How does it change the game, indeed, for OPEC? Is Iraq the boss now?

MR. AL-CHALABI: People were talking about Iraq being the boss or the policeman in the Gulf a few months ago. This is not the case because we are still the second largest producer. We will be as influential as we were a few months ago, but we are extremely influential.

MS. HUNTER-GAULT: Given what's at stake here on all sides, how do you assess right now the prospect of war?

MR. AL-CHALABI: Well, let me tell you this, as far as Iraq is concerned, we are certainly not looking for war. We certainly hope for a peaceful solution of the crisis, but if war is to be there, then it will not be us who will start it.

MS. HUNTER-GAULT: Is any compromise possible? At this point do you see for example separating the issue of Kuwait from the issue of American presence in the Gulf, you know from the issue of the hostages?

MR. AL-CHALABI: As far as Saddam Hussein, there have been a number of proposals, initiatives that have been made. We've received no answer from the United States, or Britain, or the allies, except a simple no.

MS. HUNTER-GAULT: In a word, as we speak today, with the price of oil up to $31 a barrel, are you optimistic or pessimistic about a solution to this crisis anytime in the near future?

MR. AL-CHALABI: By nature, I'm always optimistic. I hope if everybody is going to review what's been happening for the past few weeks, then they will find out that there have been some hasty decisions made and there is still some opening for a peaceful solution.

MS. HUNTER-GAULT: Hasty decisions on both sides?

MR. AL-CHALABI: No, I would say from the other side. We've been making some proposals and it was mentioned that we would be willing to sit down the way that this is going to be made to find out a solution. But if every time we make a proposal, we receive a "no" for an answer, then how can we continue?

MS. HUNTER-GAULT: Well, Mr. Minister, we thank you for being with us.

MR. AL-CHALABI: Thank you.

MR. MacNeil: Still to come on the Newshour, reaction to the Gulf crisis from the American airline industry, Israel's foreign minister, and conservative magazine editor Tom Bethell. FOCUS - CHOPPY FLIGHT

MS. WOODRUFF: Rising oil prices have already had a dramatic impact on this country's airlines. Last Friday, they raised domestic ticket prices 5.3 percent to offset increased fuel costs. Today the price of West Texas intermediate crude went up another $1.66 a barrel. It now sells for over $10 a barrel more than it did before the invasion, but as Correspondent Tom Bearden reports, that is not the airline's only problem these days.

MR. BEARDEN: Early in the deployment of forces to the Middle East, the Defense Department activated the Civilian Air Reserve Fleet known as CRAF. About half the cargo and virtually all the troops went to the Middle East on civilian airliners. It's the first time the Pentagon has activated CRAF since it was established 38 years ago. Thirty-eight jumbo jets, DC-10s, 747s, and L10-11s belonging to 29 companies are flying military missions. That's a small percentage of the U.S. aircraft fleet, but helping the Pentagon still presents the airlines with major challenges. This is American Airlines' operation center in Dallas where the company juggles crew schedules and arranges replacements for aircraft that break down. Even in normal times, it's a tough job maintaining American's worldwide timetable, but the Gulf crisis has made it even tougher. In the command center overlooking the main operation's facility, managers are trying to find crews to fly the military missions.

SPOKESPERSON: [On Phone] When sending, I'll be positioning six more Monday, and then on Tuesday possibly only three, again because everything changes constantly and there's no way. At this moment, that's what we're looking at and I'll stay away from your bases as much as possible.

MR. BEARDEN: Don Carty is executive vice president at American.

DON CARTY, Vice President, American Airlines: When we run a mission for the military, we have got to devote some people and some resource to flight planning and crewing and catering those flights at places where we frequently have no commercial licenceship, so we've got to go and work things out on a unique, one time basis. That's people intensive. That's a lot of people on the phone doing a lot of things.

MR. BEARDEN: Another problem is the planes, themselves. Planes are too expensive for the airlines to have a lot of extras sitting around. The few spares they do have are normally used to fill in for other aircraft while they're being serviced. It's the spares that are now being used on the military missions. Non-critical maintenance is being deferred in the rest of the fleet.

MR. CARTY: You can do that in the short-term for relatively modest requests. You can't do it in the long-term and you can't do it for any significant requests, so what we've got to do is begin to work out which of our segments would we adjust capacity on, would we reduce or cancel airplanes to free up the lift that we have to commit to the military, and of course a lot of activity going on in this company to do that and I'm sure it's true of the other airlines too.

MR. BEARDEN: No serious domestic disruptions are anticipated in the current stage one activation of the CRAF fleet, but what if the Pentagon is forced to ask for more help? American has 8,000 pilots. Twelve hundred are members of the military reserves. Some have already flown military missions as volunteers. If the situation escalates, their reserve units could be activated and the Pentagon could requisition even more planes. Transportation Sec. Samuel Skinner.

SAMUEL SKINNER, Secretary of Transportation: If they activated the CRAF fleet up to the second level, I think that would impose a substantial amount of restriction on the capacity of the domestic airline industry and the international airline industry in the cases where they would activate 747s and the big jumbo jets. Right now that's not predicted and hopefully won't be necessary, and if that's the case, I think the impact will be minimal on the traveling public, other than the fact they'll have some increase in ticket prices.

MR. BEARDEN: That's where travelers are most likely to feel the impact of the crisis. The reason is jet fuel. Rapidly escalating oil prices will cost the airlines dearly.

LEE HOWARD, Airline Economics, Inc.: Every dollar a barrel of crude oil price increase means $575 million added operating cost for the airline industry.

MR. BEARDEN: More than $1/2 billion.

MR. HOWARD: Yes.

MR. BEARDEN: Lee Howard is the CEO of Airline Economics, Incorporated. He says the industry wasn't in good shape even before the crisis.

MR. HOWARD: Having entered this thing in a rather weakened condition, the impact will be rather severe. In fact, we have changed our recent forecast from one which would have shown a meager operating profit of some 400 to 500 million to a new forecast of a loss operating of approximately $1 billion.

MR. BEARDEN: That leaves the airlines little choice but to raise fares, and even then a price hike can't come fast enough to make a lot of difference.

MR. CARTY: The entire industry has sold product in advance. We tend to sell tickets for the next couple of months. We've got 45 percent, 50 percent of the next couple of months activity already sold at the lower prices and we expect, in fact, it's a virtual certainty we'll see more price increases over the next week or two.

MR. BEARDEN: Somebody has to pay for that fuel. Business travelers are virtually excluded from discount fares by heavy restrictions and most agree it will be that group and airline stockholders who will take the hint. High fuel prices will severely impact several airlines that were already financially vulnerable. USAir has already announced layoffs. Overseas carriers like Pan Am and TWA have been in financial trouble for years. The fuel they buy overseas is even more expensive than it is here and will only add to their troubles. Eastern Airlines is in bankruptcy. The crisis could also derail union efforts to buy United Airlines. Many analysts believe all of that will hasten the ultimate consolidation of the industry after deregulation. Mergers and takeovers of shaky airlines could lead to four or five mega carriers controlling 95 percent of the business within the next year. NEWS MAKER

MS. WOODRUFF: Next tonight we hear from one of the countries that stands to be most affected by the crisis in the Gulf, but which has kept its public comments to a minimum until now. Israel's Foreign Minister, David Levy, is visiting Washington, where he met yesterday with Sec. of State Baker and today with President Bush, the first high level talks between the two countries since Iraq invaded Kuwait. This afternoon I interviewed Levy through an interpreter provided by the Israeli government at a Washington hotel. Mr. Levy, we thank you for being with us. You had meetings today with President Bush, yesterday with Sec. of State Baker. Were these meetings successful from Israel's standpoint? Did you get what you came to hear?

DAVID LEVY, Foreign Minister, Israel: [Speaking through Interpreter] I think the atmosphere was very good, understanding too, and we have much in common, our two countries. The crisis is a very serious one and the decision of President Bush to stand up to aggression by Saddam Hussein was quite correct, quite good. Israel stands besides the USA. We are an ally in these times too, perhaps especially in these times.

MS. WOODRUFF: What specifically did you come to discuss with them?

MR. LEVY: [Speaking through Interpreter] We need to have an exchange of views. The very low profile of Israel doesn't mean that Israel is not there, or that its might and strength is whittled down, or that our friendship is to be in the shadows. We understand America. We understand the coalition that has been martialed around the USA in which President Bush is trying to get together, but with all that, we're not having new demands. We'll also be in the shadows, meetings about our existence. All we are doing and especially all we are not doing, notwithstanding the dire threats and danger we are faced with is done or not done through our being fully conscious and fully responsive to America, with our wish not to be in the way, not to throw things into the works of President Bush's efforts.

MS. WOODRUFF: What we are hearing about these meetings has to do, for example, today you reported that the United States has promised Israel an additional supplies of advanced weapons, including the patriot antiballistic missiles, you've also been asking for the F- 16 jet fighters and so forth. Why does Israel need all this additional equipment?

MR. LEVY: Well, we need to understand that we are there in the area in which danger is threatening Israel. If Israel were to be weak or seem to be considered weak, the attack would be directed towards. Whoever is considered to be weak there will pay the price. Israel is the only really democratic country in that area and thus, it is open all the more so to the dangers and threats. Saddam Hussein's rich in armaments. He has missiles, he has warheads, chemical, bacteriological, and other kind as well, and we need to, we necessarily must have to have those details, items of warfare that can deter. If we can deter, when we can deter, we can also defend ourselves. We cannot be inferior, have an inferiority, and that is why this full awareness of the United States and openness and braveness of the United States to maintain the qualitative edge of Israel over its adversaries, this remains as it is. I was very happy to hear the President and Sec. Baker tell us that this undertaking, this commitment, stands and will continue to stand.

MS. WOODRUFF: Do you expect that Iraq will attack Israel?

MR. LEVY: I don't want to see that, but it is also a possibility. We are facing here a man who is not rationally motivated, and if he feels he wishes to obtain some goal, he is certainly able, liable to attack Israel, has said so, and Israel can, therefore, must, therefore, not be in any subservient position, in any position where it cannot defend itself.

MS. WOODRUFF: You've also been quoted as saying that the Bush administration, you are convinced that the Bush administration will forgive Israel's $4 1/2 billion military debt to the United States as it is attempting, I guess the Bush administration, is attempting to get the Congress to forgive Egypt's $7 billion debt. What makes you convinced that this is going to happen? Did the President, did Sec. Baker or someone else tell you this directly?

MR. LEVY: We have been discussing this subject matter. I can only express hope, hope that the equilibrium will be maintained, that it were unthinkable that Israel with all its problems have a different yard stick applied to it, a different measure. We need to understand that Israel finds itself in a very difficult stance, both from economically and from a security point of view. We have had a good echo to this, our statement, and we can hope. Nothing has yet been finalized, but we understand there's understanding and we are looking forward to finalizations. Thank you.

MS. WOODRUFF: There is now this idea that's been raised by Saddam Hussein and others. Now the Soviets have said they like it, of having an international conference where not only there would be discussed the future of Kuwait, and the occupation of Kuwait, but the occupation of the West Bank and the Gaza Strip by Israel. What is Israel's reaction to this?

MR. LEVY: [Speaking through Interpreter] Well, there is no need for any mediator to agree to the terms which have been formulated by Saddam Hussein, not even the Soviets. He invades, he annexes, and he tells the whole world this is it. In Europe, one would call it capitulating, that is, surrendering lock, stock, and barrel all the way, and one needs to be very, very careful not to fall for the bait of this dictator. This is not a matter of an idea. This is a matter of aggression. This is a matter that if it maintains itself and carries on will appeal to the masses, will put in jeopardy and in danger the regimes that are called moderate, and the USA will have a standing order always jumping in, getting a blockade, have another armada, have another coalition to again stop somebody with appetite, therefore, aggression should be rooted out from its grass roots. This concept of Saddam Hussein, which Saddam Hussein does represent, needs to be rooted out now. To peace, we don't need any clever formula if the others desire peace and Israel desires the peace more than anybody else. Well, let's go ahead, direct contact, direct negotiations with the Arabs, what's so terrible? We want to talk about peace without any conditions, precedent.

MS. WOODRUFF: You said Saddam Hussein should be removed. What does Israel view would be a successful outcome here, just to get Saddam Hussein out of Kuwait, is that enough, or does Saddam Hussein have to be removed from power in the view of Israel?

MR. LEVY: First of all we need to distinguish, very much distinguish, between what Saddam Hussein has done and what you call the territories in Israel. Israel was attacked, Israel was the victim of an attack with a desire to destroy Israel. Israel was attacked and wishes for peace. Saddam Hussein invaded and annexed and is now putting down the law and making conditions. Now what does Israel wish for? Israel is not giving any advice. The decision to have a blockade was proper to the USA alongside its interests. Israel would not like anybody to think that the USA is fighting our wars. We have always stood alone in our wars. We've had some domestic help. We've had some supplies, but we've fought our wars all on our own, let nobody forget that. Now what would happen in the Middle East with one way of a solution or another? If Saddam Hussein is made to leave Kuwait, some arrangement is arrived at, that would mean that as crime does pay, aggression does pay, he can start again, he can start again, be helped left, right and center. That would be a permanent danger, so we're not talking about individual Saddam Hussein. It's the very concept of aggressivity, of fostering these festering falls, of having the idea, the Pan- Arab dreams resurging again and again and causing interminable wars and aggressions. Indeed, it's Israel who's standing against it, but it is a danger for everybody, for Egypt, for Jordan, for Saudi, for all those who are in the Saudi Arabian Peninsula. It is dangerous in the point of view of its very concept of the great strength, of the great might wielded by them, the stance, the reach and the show of strength, as it were, to overwhelm America.

MS. WOODRUFF: So you're saying Saddam Hussein has to be removed for there to be a successful outcome?

MR. LEVY: [Speaking through Interpreter] I'm not saying anything. You're asking me what I think will happen, so I'm giving, I'm offering some commentary. I'm not pushing anybody to overthrow the individual Saddam Hussein. Let America make its own calculations. If Israel is forced into acting, well, he'll have a proper reaction. I hope he'll not be tempted to try. What America is to do, let her take counsel with those who go along with him, not with Israel, with those Arab regimes which the USA terms as "moderate", according to the strategy, according to the whipping up of feeling which Saddam Hussein but yesterday started whipping up against them, Egypt, Saudi Arabia, et cetera.

MS. WOODRUFF: Mr. Minister, we thank you for being with us. CONVERSATION

MR. MacNeil: Finally tonight we continue our series of special conversations about the Gulf crisis. Tonight we're joined by Thomas Bethell, Washington editor of the American Spectator Magazine. Mr. Bethell, thank you for joining us.

THOMAS BETHELL, American Spectator Magazine: Thank you.

MR. MacNeil: Your position as published is roughly this, am I right, you oppose the embargo on Iraq and the big Bush military build up in the Gulf, correct?

MR. BETHELL: Yes. I'm definitely uneasy about what happened in the month of August, which I have been in Washington for 15 years, and it seemed to me it was really unprecedented. I hadn't seen anything like it. With the Congress away, with the President, himself, away on vacation, the Vice President away, the Secretary of State away, there was something close to a war fever that descended on the city and the liberals, who normally act, as it were, as a break to check this kind of international activism by the U.S. seemed to be nowhere around. And I don't know, maybe they were on Martha's vineyard or something. At any rate, they were to some extent even encouraging it.

MR. MacNeil: How does it make you feel, a card carrying conservative, if I may say that, to find yourself pretty well in agreement with the Iraqi oil minister we've just heard saying that hasty decisions were made?

MR. BETHELL: Well, I saw the interview and it did make me feel rather strange, because I did agree with a lot of what he said, and this is really one of the points is that the justification for our action, it seemed to me, did not entirely make sense. I mean, the justification was always presented in terms of oil about how such and such a percentage of the world's oil was controlled, and the word "control" was always used, by Iraq now that they had seized Kuwait. But what no one really ever went on to say was that they were clearly planning to sell this oil. They weren't just going to keep it in the ground. I mean, Saddam Hussein needs the money for than the Emir of Kuwait ever did. So if he is going to sell the oil, what exactly is the problem? Why did we suddenly have this tremendous reaction that we had to organize collective action and so on in order to repel the aggressor?

MR. MacNeil: Well, the answer I suppose to that would be, and Mrs. Thatcher repeated it very forcefully today, and the Israeli foreign minister just repeated it, and so did Mr. Bush today, that it stands, Mr. Bush said, "America stands where it has always stood, against aggression.".

MR. BETHELL: Well, the principle really that is being defended here is the principle of the sanctity of national borders, and it doesn't seem to me -- it's the principle of sovereignty really -- and it doesn't seem to me that this is really a conservative principle. I mean, it really comes down to the idea of governments coming to the aid of other governments. One's reminded of in ancient Rome that Papal Familius was able really to do whatever he wanted to do within his own family, including killing his own children, but he couldn't go outside his own family and do something to another family, and in the same way with the situation in nations now is that governments can do more or less what they'd like to their people just as long as they don't cross borders into another country. Now that is not -- and the U.N. particularly was set up to preserve the sanctity of borders. But I don't see why this is something that conservatives should be particularly enthusiastic about.

MR. MacNeil: So when you hear people saying aggression unchecked now in the post war cold war period will set a tone similar to that of the '30s when Hitler's aggression was unchecked?

MR. BETHELL: Well, you know, this analogy with Hitler was used constantly and it was one of the things that ginned up the whole far fever. I mean, I just don't see. The border again, to quote the Iraqis, the border between Iraq and Kuwait was drawn by the British colonial office in 1922, and I don't see why in 1990 America should suddenly should get into this tremendous state about preserving the sanctity of that border, frankly.

MR. MacNeil: Everybody has praised the unprecedented international consensus that Mr. Bush has forged, the Israeli foreign minister did it again just now. Doesn't that impress you?

MR. BETHELL: No. I mean, I think this whole notion of collective action with which this ball has gotten rolling is not necessarily a terribly good one. I'm much more in favor of the idea of nations acting in their own self interest and if necessary, independent of other nations. I mean, we jumped into this saying that there was going to be a collective action to deter this aggression. And now we find ourselves in the uncomfortable position where the Germans and the French and some other countries in Europe, the British, who are essentially very much the beneficiaries of what we are going, according to the theory that they did threaten the oil supply, and they're not really going to pay for it, and they're not paying for it because we're already paying for it. It's like having a group of people at a restaurant and you get one check at the end of the meal and one person reaches for the check and says, well, I'll pay for it, and then he says to the others as they're walking out of the restaurant, would you mind helping pay a little bit, and there, it's already too late.

MR. MacNeil: Well, the fact that they haven't shown the alacrity the United States in sharing the cost, does that make the U.S. action wrong?

MR. BETHELL: No, it doesn't make the U.S. action wrong, but I just think it makes the principle of collective action wrong. I mean, we should be calculating things in terms of what is in our own national interest, not acting for the good of the world, not acting as the sort of world policemen. This is another thing that I think many conservatives are uncomfortable with is the idea that we're going to be the world policemen now and particularly now that the Soviet Union, we don't really have to worry too much about that, that this sort of frees us up to act in this very sort of unrestrained kind of a way, and we could end up in quagmires, in a new sort of Vietnam really. I don't quite see how we get out of the position that we're in right now in Saudi Arabia.

MR. MacNeil: So now that the United States and the President, himself, has made an enormous investment in terms, political investment, of American prestige, and financial investment in this, what can it do about it?

MR. BETHELL: I don't know how we're going to be able to persuade some of these other countries to help pay. One of the things we could do, of course, is we can let the NATO countries know that we're going to be pulling our troops out of Western Europe, and we have been there since World II, supposedly defending them against the Soviet threat which doesn't exist anymore, and if they think it does, then they're going to have to pay for it themselves, we're not going to pay for it, that's one thing that we could do and should do.

MR. MacNeil: How do you explain that this crisis has produced such a sharp split among conservatives? Because some of your fellow conservatives are taking quite a contrary view, some of them are calling for military action to get rid of Hussein, Saddam Hussein.

MR. BETHELL: There are definitely, there is a conservative streak which is in favor of basically the U.S. acting fairly, intervening around the world. When I first became a conservative, it was in the mid '70s, was at the time of the American defeat in Vietnam, and the sort of general gloating that was going on, I was appalled by it, and I sort of find myself almost unexpectedly becoming a conservative at the time and thinking that, you know, America should get a bit tougher, and so I can see that that is, you know, there is definitely a strain of thought to that effect, but I can also see what was it that Dr. Johnson said the goal of human endeavor should be to be happy at home, and there is also that strain of conservatism, which I find myself leaning more and more towards.

MR. MacNeil: You mean, now that the cold war is over, America should turn its energies inward?

MR. BETHELL: Yes, I think so, yes.

MR. MacNeil: Which has led to the charge by some of your fellow conservatives that you are neo-isolationists and that you want to return to the attitudes many Republicans held before the Second World War, is that correct?

MR. BETHELL: I don't regard myself as an isolationist. I believe in free trade, I believe in free travel, and I believe in free migration, which actually quite a few conservatives do not. It seems to me that the charge of isolationism is intended to impugn, I mean, it's worth considering what kinds of actions is the charge of isolationism intended to impugn, and I think that it's really the use of force, and I don't think that if America is going to prevail in the world that it can do so by initiating the use of force. It has to do so by example.

MR. MacNeil: Why is this split in conservative ranks not reflected among Republicans in the Congress, or is it and it just hasn't surfaced yet?

MR. BETHELL: I think that my feeling is that the split is, in fact, a little bit deeper than is appearing right now, and I know that talking to one or two friends that there are people who also feel uneasy about what's going on, but they also feel uneasy about saying anything, because they don't want to really go against the President in a potential war situation, and I think that this may well be the case in Congress.

MR. MacNeil: So if you fear and you share the view with Patrick Buchanan, the broadcaster and columnist, that this has the makings of a quagmire and could be the beginning of another Vietnam, spell out your fears tonight. I mean, Sec. Cheney said there are 100,000 American personnel there now, but it isn't time to stop the build up, there aren't enough forces there tonight. As you view it tonight, what specifically are you afraid the U.S. is going to be led into?

MR. BETHELL: I'm afraid that there could be a war for one thing. I mean, it seems to me that one of the reasons why people like Saddam Hussein are so dangerous is they are surrounded by people who don't really tell them the truth, they don't really necessarily know what's going on, and I don't think he necessarily understands the dangerous situation he is in and the extreme response that was made to the invasion of Kuwait, therefore, he could easily do something which would, and I somewhat disagreed incidentally with your Iraq oil minister tonight because he's implying that they're really not being hurt by this and that I thought was propaganda, but I think they probably are being hurt. But there could be a war and, you know, if the U.S. goes in and flattens Baghdad or there is one conservative columnist who actually recommended a nuclear attack on Baghdad or that we should threaten that, it's a great mistake to imagine that there's going to be dancing in the streets of Cairo, because the community of nations has acted in the spirit of Woodrow Wilson to repel the aggressor, as one of the neo-conservatives put it in another column, there would be a tremendously strong anti-American reaction throughout the region, and it would be very difficult for us to extricate ourselves from the position because the Saudis and the other Gulf states are going to want us to stay there, because I think they recognize the precariousness of their own situation if we leave.

MR. MacNeil: And very briefly, if there's no resort to military action, what do you fear from this expedition?

MR. BETHELL: Again, if there's no resort to military action, we're just stuck there. That would be better. I think we're just going to be stuck there indefinitely. Maybe we should remove our troops, as I suggested, from Europe, and put them in Saudi Arabia, and that at least would minimize the cost.

MR. MacNeil: Well, Mr. Bethell, thank you very much for joining us.

MR. BETHELL: Thank you. NEWS SUMMARY

MS. WOODRUFF: In other news, a 17 year old high school student held nine classmates at gunpoint for 5 1/2 hours today. The incident took place in Cumming, Georgia, 40 miles North of Atlanta. Family members and students waited outside before the 10th grade student surrendered to local police. He was armed with a shotgun and a pistol. He fired at least two shots, but no one was injured. NASA officials said that they will replace a fuel pump on the Space Shuttle Columbia. Columbia's mission was delayed for a third time yesterday after a fuel leak was discovered. If the new pump corrects the problem, NASA will make a fourth attempt to launch the shuttle in mid September. Commerce Sec. Robert Mosbacher announced that he will lead a delegation to the Soviet Union next week to help that country out of its economic crisis. The delegation, which includes the heads of 15 U.S. companies, will offer advice on reviving Soviet oil and food production. There have been acute shortages of bread and other food staples in the Soviet Union in recent weeks. RECAP

MR. MacNeil: Again recapping today's developments in the Middle East, President Bush accepted an offer to broadcast a message to the Iraqi people. The President said in a speech that he will do whatever it takes to force an Iraqi withdrawal from Kuwait. Saudi Arabia agreed to contribute several billion dollars to the cost of the U.S. deployment in the Gulf. The Soviet Union says it sees the possibility of sending a U.N. force to the Persian Gulf. Britain said it will send more troops to the region. An American was slightly wounded after being unintentionally shot by Iraqi troops in Kuwait. The State Department said an air lift of Americans from Kuwait would begin tomorrow, and Iraq's oil minister told the Newshour that the crisis will eventually drive up oil prices to as much as $50 a barrel. Good night, Judy.

MS. WOODRUFF: Good night, Robin. That's it for the Newshour tonight. Tomorrow our coverage will include our regular political commentators, David Gergen and Mark Shields. We'll be back tomorrow night. I am Judy Woodruff. Thank you and good night.