The MacNeil/Lehrer NewsHour

MR. MacNeil: Good evening. A historic turn in the search for elusive peace in the Mideast leads the news this Wednesday. Presidents Bush and Gorbachev opened the Madrid conference with a call for territorial compromise, Palestinian rights and security for Israel. Back in the Mideast, there was more violence by opponents of the peace talks. We'll have the details in our News Summary in a moment. Judy Woodruff's in Washington tonight. Judy.

MS. WOODRUFF: On the NewsHour tonight the opening of the Middle East peace conference is our main focus. Charlayne Hunter-Gault is in Madrid where she conducted two Newsmaker interviews of a leading Palestinian adviser, Hanan Ashrawi, and with Israel's prime minister, Yitzhak Shamir. Then on the night of Gorbachev's plea for economic aid for his country, we have a documentary look at why the Soviets are having a food crisis. NEWS SUMMARY

MR. MacNeil: Arabs and Israelis sat down today to talk peace at the historic Madrid conference. Sec. of State Baker said the session had put to rest the old taboo that Israel and the Arab nations could not discuss their differences. Presidents Bush and Gorbachev opened the meeting with a call for a compromise on territorial issues. They also called on all parties to recognize the rights of the Palestinians and the need of Israel to protect its security.

PRES. BUSH: We come here in Madrid as realists. We don't expect peace to be negotiated in a day, or a week or a month or even a year. It will take time. Indeed, it should take time, time for parties so long at war to learn to talk to one another, to listen to one another, time to heal old wounds and build trust. In this quest, time need not be the enemy of progress.

PRESIDENT GORBACHEV [Speaking through Interpreter] Today we have a unique opportunity and it would be unforgivable to miss this opportunity. In my view, the conference can only succeed if no one seeks any victory for one side over the other, but all seek a shared victory over a cruel past. I'm speaking of peace rather than merely a cessation of the state of war and a durable peace implies the implementation of and respect for the rights of the Palestinian people.

MR. MacNeil: Egypt's foreign minister also addressed the conference. He said it could be a last chance to bring enduring peace to the Middle East. But he also accused Israel of maintaining policies that were an obstacle to achieving such a peace. He said Israel should give up what he called its illegal control of Jerusalem. He said the city should be open to people of all faiths and he proposed that its future status be subject to negotiations. He also said it should give back Arab lands it occupied after the six day war and stop Jewish settlements on them.

AMR MOUSSA, Foreign Minister, Egypt: Settlements established in territories occupied since '67, including Jerusalem, are illegal and more settlements will foreclose potential progress towards real peace and cast doubt on the credibility of the process, itself. Settlements have to be halted, for they obstruct peace, undermine the ground work for negotiations on the final status of the occupied territories and erode the will to co-exist.

MR. MacNeil: Syria threatened to pull out of the talks today over the issue of the occupied territories. A Syrian official in Madrid said his delegation would demand that Israel withdraw from the territories and might abandon the peace process if it didn't. He did not specify at what point they might do so. Israeli Prime Minister Shamir took a hard line on the issue of the territories and trading land for peace. He spoke in an interview with the NewsHour's Charlayne Hunter-Gault.

YITZHAK SHAMIR, Prime Minister, Israel: I think any trade, any trading with territories, with land, you know, land is an essential part of your entity, of the national entity of a nation. I don't know of any nation in the world that is ready to give up parts of its territory.

MR. MacNeil: We'll have the complete interview later in the program. Sec. of State Baker, the man who brought the parties together, said the path to peace would not be easy, but he said the day's events proved the parties were committed at least to trying to solve their conflict.

SEC. BAKER: The road to peace will be very long and it will be very difficult, and as I have said before, there will be undoubtedly many, many interruptions along the way. But we have to crawl before we walk and we have to walk before we run, and today I think we all began to crawl.

MR. MacNeil: Baker confirmed that the parties still have not agreed on where to hold the next stage of talks, a series of bilateral meetings where more substantive negotiations are expected to take place. Judy.

MS. WOODRUFF: The conference sparked more violence in the Mideast today. In the occupied territories, more than 50 Palestinians were injured as factions opposed to the talks battled supporters. Palestinians opposed to the talks also battled Israeli police tonight in the West Bank. They set fires and erected makeshift road blocks. No injuries were reported. Earlier in Beirut, thousands of Shiite Muslim radicals demonstrated against the talks. They shouted anti-American and anti-Israeli slogans and burned the flags of both countries. In Iran, a hardline member of parliament called on Muslims to kill all participants at the Madrid conference. Ali Akbar Motashami singled out President Bush as the most hated individual who would be punished. Iran's President, Hafshami Rofsanjani, did not endorse the call, but in separate comments, the country's spiritual leader, Ayatollah Ali Khomeini, said the conference participants were committing treason and would suffer the wrath of nations.

MR. MacNeil: In this country, two economic reports were released today. Sales of new single family homes fell 12.9 percent in September. The Commerce Department said that was the biggest one month decline since February 1989. In a separate report, the Department said consumer spending increased .9 percent, and personal income rose 1/2 percent last month. Chrysler today reported a loss of $82 million during the July to September period. That brings losses for the big three automakers to $1.7 billion in the third quarter. Analysts said today's report virtually assures this will be the automakers' worst financial year ever.

MS. WOODRUFF: The Senate passed a civil rights bill this evening. It was a compromise worked out last week between White House and Senate negotiators. The vote was 93 to 5. The bill makes it easier for minorities and women to receive damage awards for job discrimination. President Bush vetoed a similar measure last year, calling it a quota bill, but he agreed to sign this version. The bill extends protection to employees of the Senate and Executive Branch. Damage awards against Senators would have to be paid from the Senator's own pocket. That's it for our summary of the day's top stories. Just ahead on the NewsHour, News Maker interviews with two key players at the Mideast peace conference, Hanan Ashrawi and Yitzhak Shamir, and a documentary look at why the Soviet Union isn't able to feed its people. FOCUS - PUSH FOR PEACE

MR. MacNeil: The Middle East peace conference is our major focus tonight. In a moment, we'll hear from two of the major participants, the Israelis and Palestinians. But like the Madrid conference, itself, we begin with some opening words from one of the conference co-sponsors, President Bush. In an 18-minute address, the President set out a vision for the Middle East and his hopes that after decades of war, the next generation of Middle Eastern children would enjoy peace, but Mr. Bush also put forward some precise guidelines for reaching what he called a real peace that would include treaties, economic and diplomatic relations, trade and even tourism.

PRES. BUSH: Peace will only come as the result of direct negotiations, compromise, give and take. Peace cannot be imposed from the outside by the United States or anyone else. And while we will continue to do everything possible to help the parties overcome obstacles, peace must come from within. For Israel and the Palestinians, a framework already exists for diplomacy. Negotiations will be conducted in phases, beginning with talks on interim self-government arrangements. We aim to reach agreement within one year and once agreed interim self-government arrangements will last for five years. Beginning the third year, negotiations will commence on permanent status. No one can say with any precision what the end result will be. In our view, something must be developed, something acceptable to Israel, the Palestinians, and Jordan, that gives the Palestinian people meaningful control over their own lives and fate and provides for the acceptance and security of Israel. We know that peace must also be based on fairness. In the absence of fairness, there will be no legitimacy, no stability. And this applies, above all, to the Palestinian people, many of whom have known turmoil and frustration above all else. Israel now has an opportunity to demonstrate that it is willing to enter into a new relationship with its Palestinian neighbors, one predicated upon mutual respect and cooperation. Throughout the Middle East we seek a stable and enduring settlement. We've not defined what this means. Indeed, I make these points with no map showing where the final borders are to be drawn. And, nevertheless, we believe that territorial compromise is essential for peace, boundaries should reflect the quality of both security and political arrangements and the United States is prepared to accept whatever the parties, themselves, find acceptable.

MS. WOODRUFF: President Bush said the talks should go on two tracks, Israel and the Arab states and Israel and the Palestinians. The Madrid conference is the first in which Palestinians and Israelis have talked to each other formally across a table. The Palestinians are officially part of a delegation with Jordan, one of several elaborate compromises arranged by the United States to gain Israeli acquiescence to their presence and to avoid any direct dealings with the Palestine Liberation Organization. The Palestinian spokeswoman in Madrid is Hanan Ashrawi. She spoke earlier today outside her hotel with Charlayne Hunter-Gault.

MS. HUNTER-GAULT: Dr. Ashrawi, thank you for joining us.

HANAN ASHRAWI, Palestinian Spokeswoman: A pleasure.

MS. HUNTER-GAULT: Just briefly, I'd like to know since this thing was so long in coming, what will your heart, head and mind tell you as you watch this meeting unfold this morning with Arabs and Israelis sitting at the table together?

DR. ASHRAWI: Well, I really can't describe it. First of all, it comes at the end of a hectic time, a sort of frantic last few months in which we've tried everything possible to make it work, to make things come together. And I think I was deeply moved, frankly, to see Palestinians there, to see our people there, because for the first time in our history we are being recognized as people, as a nation, and we are standing there on par with all other nations.

MS. HUNTER-GAULT: How did you feel seeing --

DR. ASHRAWI: And we are narrating our story.

MS. HUNTER-GAULT: How did you feel seeing Prime Minister Shamir there?

DR. ASHRAWI: Well, he has the right to be there because he is the one with whom we have to make peace.

MS. HUNTER-GAULT: And was that encouraging to you?

DR. ASHRAWI: It is encouraging. What was always amazing to me is how people can always avoid, evade and try to destroy the possibilities of peace, and the fact that they're there, of course, is a positive step, but it doesn't mean that he's going to support the process, or is going to do everything possible to make it work.

MS. HUNTER-GAULT: How do you feel about the fact that he came as opposed to allowing his foreign minister? Because there is so much speculation that this signals a harder line position, it signals that he's willing to give up something. How are you reading it?

DR. ASHRAWI: I think he wants, he wants it for the record, for history, to say that he's the one who got Israel to sit down face to face with Arab countries. But I doubt whether he wants to be the one to make any compromises, because it is not within his ideology or within his internal ethos to make compromises as an ideologue. But at the same time, it does signal a hardline politics, and it also does signal, it is an expression of domestic politics probably that I will be between him and maybe the Orient and Jew, Western Jew controversy. There are many, many issues at stake here.

MS. HUNTER-GAULT: But before the conference actually convened, there were many statements, mostly confrontational, from both sides, and there have been observations made that those statements became more and more conciliatory the closer one got to the opening of the conference. Do you read it that way?

DR. ASHRAWI: Well, you see we have been making conciliatory statements actually. We worked out the whole political program based on a peace offensive, what we call the peace initiative in November '88. Israel has been escalating. Shamir has been in a sense laying the ground work and then preparing a maximalist stance with which to enter negotiations. Once he did mention something about negotiating the land but then very recently just a few hours ago he talked about that this whole land by right belongs to them and he's not going to negotiate the land. So in a sense, I think that they're now starting with the most extreme position, while the Palestinians are starting with the most conciliatory position. We have made tremendous sacrifices and very painful decisions in coming to this conference.

MS. HUNTER-GAULT: What do you see as the conciliatory position that you've taken?

DR. ASHRAWI: I'll tell you something which is extremely painful to me is not to see our legitimate leadership recognized in this conference.

MS. HUNTER-GAULT: You mean the PLO?

DR. ASHRAWI: Yes. It's not to see the, East Jerusalem represented in this conference. You see, the Palestinian people have been torn, have been torn for a long time. One-third of us are under occupation and two-thirds are in exile, and both states are equally painful. And we have had to come and the people under occupation to negotiate under the extremely adverse conditions while Israel holds captive our whole Palestinian population to negotiate with our occupiers who have the power of life and death over us.

MS. HUNTER-GAULT: There are those who are reading some of the things that your principal negotiators have said as being another sign of conciliation that they're talking about autonomy for the occupied territories now rather than emphasizing an independent Palestinian state. Is that actually a conciliation in the making?

DR. ASHRAWI: Definitely. We have accepted, and that goes back actually to '88 also, we have accepted the idea of phases and of interim solutions and of transitional steps as a gradual way of reaching independence and statehood. That doesn't mean that we accept these interim arrangements or transitional arrangements as permanent standards. We accept them as interconnected steps within a defined time frame to lead to a defined conclusion on the basis that they will not in any way prejudice or predetermine the outcome.

MS. HUNTER-GAULT: But the goal of this conference is not a Palestinian state?

DR. ASHRAWI: No. The goal of this conference is they went out in two phases. First of all, negotiations have to discuss the transitional phase, which is the transference of authority from the Israeli occupation, military occupation to the Palestinian people under occupation. Now this again is liable to create confidence to end this, what we call this fatal proximity, to end the asymmetry in power where an occupied people negotiates with its occupier, and will enable us to exercise control over our land, our resources, our lives. Then gradually, once the transitional phase is over, then we begin negotiations on permanent status at the beginning of the third year. So what we have accepted is a sort of gradual approach to independence. We haven't said you have to get Israeli withdrawal overnight and the Palestinian state will be set up the next day. We're being very realistic and we're being extremely pragmatic in dealing with realities.

MS. HUNTER-GAULT: How did you hear or greet President Bush's words this morning as he outlined the position of the United States and its role in this process?

DR. ASHRAWI: Well, I was heartened by several basic things that he said, the attitude, itself, which is an attitude of determination that they are willing and are going to do their utmost to make sure that this thing works, that we will get results, and that they will not withdraw from it, and that they will guarantee the outcome and support and give some sort of recognition to the outcome. Also, I felt that for the first time President Bush talked about fairness and legitimacy as a basis of peace. See, these are two key words to the Palestinians.

MS. HUNTER-GAULT: What does that mean?

DR. ASHRAWI: This has been our call all along. We need fairness and legitimacy, fairness in terms of justice. And that is expressed through the legitimacy of the will of the international community who are willing to abide by all U.N. resolutions pertinent to the Palestine question. We are willing to abide by international law in every form. We are willing to abide by international humanitarian law. And we said this time and time again, just implement these resolutions because they are liable to bring about a fair settlement.

MS. HUNTER-GAULT: So you think --

DR. ASHRAWI: It's no longer the politics of power and domination that runs the show. Right now we feel that there is some sort of modest stance involved of a sense of even-handedness. We'll see if that can work out.

MS. HUNTER-GAULT: How did you feel about his essentially throwing the ball into the Arab/Palestinian/Israeli court, that the United States is out of it, out of the process now, it's up to you guys?

DR. ASHRAWI: They can never be out of the process because they started something. They opened up a Pandora's box. They raised hopes and they stirred up, as I said, the hornet's nest. We cannot let them go. It's going to be extremely dangerous if you start a process and they say, okay, we leave you to your own devices. You see, left to our own devices, the Palestinians and the Israelis have not been able to make peace. They are the occupiers; we are the occupied. We need a third party. And this third party we've always asked for the U.N. as the will of the community of nations. But we are willing to accept co-sponsors. We are willing to accept any kind of international neutral participation to make sure that there's a buffer zone between occupiers and occupied.

MS. HUNTER-GAULT: So that even with these bilateral talks that are to follow this initial and ceremonial opening, you say the U.S. has to stay involved?

DR. ASHRAWI: And they will stay involved.

MS. HUNTER-GAULT: And the Soviets?

DR. ASHRAWI: Both. I think both powers, both co-sponsors and the Europeans are willing to stay engaged.

MS. HUNTER-GAULT: To those who would say that the PLO is controlling this delegation, what would you say in response?

DR. ASHRAWI: Well, everybody knows that there is Palestinian allegiance to the PLO as a representative, as a system of government. They may censor our words and they may forbid us from belonging to any political party or organization, but one thing they cannot do is censor Palestinian loyalty and allegiance, therefore, whatever they would like to say or not say, to see or not to see, the fact of the matter is it is the people who choose their national symbols, it is the people who choose their leaders' interlocutors, and it is not Israel who is a source of legitimacy for us. It is the voice of the Palestinian people that legitimizes the PLO role.

MS. HUNTER-GAULT: How concerned are you about the latest violence in Israel? Because Yasser Arafat, himself, issued a statement saying that extremists who are opposed to these talks, opposed to your participation and the other Arabs in this peace conference, could threaten, if not derail, these talks, and there has been violence, Israelis killed this past week. How much does that worry you and how much do you think that threatens the process?

DR. ASHRAWI: I think that brings the point home that we have to work very urgently too. There's a real urgency to the issue. We have to make peace before the situation degenerates because the alternative to peace is something which is horrible. It's horrific. The implications are negative not just for us but for the whole region. So let me tell you, violence is something that has characterized the region for a long time. It took a tremendous effort, an act of will on the part of the PLO and others, on the part of the U.S., to put together a process which might promise a peaceful settlement. Now, if we allow extremists and rejectionists on both sides, and we have had death threats from Iran, and as well as from Tel Aviv, so --

MS. HUNTER-GAULT: Are you worried personally?

DR. ASHRAWI: I don't have time to be worried but I know that my daughters and my husband and my family are very worried.

MS. HUNTER-GAULT: Finally, two questions: What do you see happening tomorrow? Are there any surprises from the Palestinian side, any bold initiatives, anything that we might not be anticipating in your, in the speeches that will be given?

DR. ASHRAWI: I just think you will hear from the Palestinian side the genuine voice of the Palestinian people. You will hear a cry from the heart, if I may so. You will hear the real presentation of what the Palestinians not just think, but they feel and what they hope for and what they fear. And I think it is important to listen to the Palestinian voice, because for the first time we are presenting our case.

MS. HUNTER-GAULT: What do you say to those who say that the Arabs, Palestinians, and the Israelis, for that matter, have nowhere else to go, that this is the last chance for peace?

DR. ASHRAWI: I think, well, it's very hard to be so final about things, but I would say it would be very difficult, the conditions would be extremely difficult and dangerous for us, for the region, and for the world if we don't succeed in making peace. So I would say this is an extremely important chance and we have to try our utmost to make it work. If it doesn't work, everybody will pay a heavy price, but we will continue working to find another chance. Let's hope it will work.

MS. HUNTER-GAULT: Well, Dr. Ashrawi, thank you for being with us.

DR. ASHRAWI: Thank you, my pleasure.

MS. WOODRUFF: Ever since it came into existence in 1948, Israel has said it wants to talk directly to its Arab neighbors. During all that time only Egypt had taken up that offer. After much cajoling from the United States, Israeli Prime Minister Yitzhak Shamir today led his country's delegation to the Madrid peace conference room filled with Palestinians, Syrians, Jordanians, and Lebanese. For Shamir, leader of the right wing Lekud coalition, and for his country, it was an historic day. Charlayne Hunter-Gault talked to him after today's conference opening.

MS. HUNTER-GAULT: Mr. Prime Minister, thank you for joining us.

MR. SHAMIR: Thank you.

MS. HUNTER-GAULT: I was watching you this morning as the meeting began to take place at the palace and I was having a difficult time reading your face or your mind, and, obviously your heart. And I was curious as to what was going on on all of those levels.

MR. SHAMIR: But, you know, you cannot find out many, many, many things watching my face. You know, it's, it doesn't reflect anything.

MS. HUNTER-GAULT: That's why I asked you what was going on behind the face.

MR. SHAMIR: It was nothing. But in the beginning, it was the speech of the President, President Bush. I was pleased with this speech. It was all right. And was it reflected on my face? I don't know.

MS. HUNTER-GAULT: I was wondering because this was, indeed, such a historic moment, the first time that Arabs and Israelis have sat down together. Did you feel that historic moment?

MR. SHAMIR: For -- I must say it's not exactly the first time that we met with Arabs. We have met already several times but maybe without all this show and this propaganda, we have met with the Egyptians and we have negotiated about a Camp David agreement and then afterwards about the autonomy and we have the negotiations with the Lebanese in '83 and well, it's not the first time.

MS. HUNTER-GAULT: But for the first time for all them together.

MR. SHAMIR: Yes.

MS. HUNTER-GAULT: Did you feel a sense of history?

MR. SHAMIR: Now we have several countries together. We have the great involvement of the United States. It gives much importance for all this build-up. And the Soviet Union, of course, altogether becomes a great show.

MS. HUNTER-GAULT: Is that all it is?

MR. SHAMIR: Well, I wouldn't say so. Maybe we will get some positive results. It's not yet known but there is a chance.

MS. HUNTER-GAULT: Based on what you heard Presidents Bush and Gorbachev say this morning in the speech, which you said you reacted favorably to, what did you see in those speeches that were positive, as far as you were concerned?

MR. SHAMIR: First of all, it was positive what we have not seen in these pictures. There was not an attempt to impose something on us. And the President has underlined it and it's very important because what we don't want is that somebody tries to impose on us something we don't want to get. We understand the great interest of the United States to support the process of negotiation, to help the parties to come together, get peace. It's an American interest that we understand and we accept, but we don't want the United States or the Soviet Union getting toward details. The agreement, the agreement's understandings have to come to from we think the region, from the parties, otherwise, it will not be sound.

MS. HUNTER-GAULT: But some of the parties, particularly Syria, have insisted that the United States and the Soviet Union be a part of those bilateral talks. Is that going to happen?

MR. SHAMIR: Yes, the position of Syria is something that complicates to a great extent all the process, because they don't want that people say they are sitting with Israel tete a tete. They don't want to have in their history such a chapter that there were negotiations between Syria and Israel, direct negotiations.

MS. HUNTER-GAULT: Will you resist allowing the U.S. to come in?

MR. SHAMIR: I think that, we think that it is important by principle that we do business with them face to face.

MS. HUNTER-GAULT: Without the U.S.?

MR. SHAMIR: Without any other presence.

MS. HUNTER-GAULT: So if they insist upon this, does this mean there will be no bilaterals between --

MR. SHAMIR: Of course, you are right. We will not have bilateral negotiations and there will not be any continuation and there will not be any practical results.

MS. HUNTER-GAULT: But if you don't have bilateral relations with Syria, does that, what does that mean in terms of the whole process? Because having all the Arabs signed onto it on the basis of you negotiating with everybody?

MR. SHAMIR: It must not be together with all Arab countries. It could be between Jordanian-Palestinian group apart. It could be with the Lebanese and with the Syrians it will come afterwards. We have not to do everything together, but what happens is that the Syrians try to impose on the other Arab parties their position and this is negative.

MS. HUNTER-GAULT: You said that you were very pleased with what you heard this morning. Does that mean that you are convinced that the United States is an honest broker, can function as an honest broker, and has Israel's best interest at heart?

MR. SHAMIR: Anyhow, what the President told me was in a personal conversation, but this is his line. He doesn't want to impose the American principles. What he tries to do is to bring the parties to come together to negotiate and to get an agreement. And that's important. I am pleased to see such an approach of the United States. Of course, the Soviet Union thinks the same way. They are working together.

MS. HUNTER-GAULT: But this morning the President also said that territorial compromise is essential for peace.

MR. SHAMIR: Well, this was the only, the only expression the President, it was an exceptional expression that he expressed his view about the character of the solutions. I am not forced, I am not obliged to accept it.

MS. HUNTER-GAULT: So that disturbed you?

MR. SHAMIR: Well, it doesn't disturb. I know what he, what other parties, the other Arab parties want, but it will not bring me to change my positions.

MS. HUNTER-GAULT: Positions about not giving up land for peace?

MR. SHAMIR: Of course, this is my position.

MS. HUNTER-GAULT: But the President also said that the United States was willing to guarantee Israel's security if Israel gave up land for peace. Why wouldn't that be --

MR. SHAMIR: He didn't say it in this speech this morning. I don't think he said it. Of course, we have a close relationship with the United States about security matters and about the security of Israel. This term of guarantee, we don't like it, and we don't trust it. We are not relying on any guarantees or foreign countries for our security. We will have ourselves to protect our security.

MS. HUNTER-GAULT: Is it inconceivable then to think that Israel would ever give up any amount of land to secure peace if Israel could have secure borders?

MR. SHAMIR: We are not making any trade, any trading with territories, with land. You know, land is an essential part of an entity, of the national entity of a nation. I don't know any nation in the world that is ready to give up parts of its territory.

MS. HUNTER-GAULT: But one of the, the one Arab partner that you have so far, Egypt, in its speech today, said that echoing other Arabs, that Arab rights to Arab territories cannot be compromised. That is the Arab position that was well known before this meeting. I mean, did you come here knowing that and, if so, what is the purpose of all of this?

MR. SHAMIR: I know that they could change their position. It was always, you know, when the Arabs said 20 years ago, 30 years ago, 40 years ago, Arab land, they meant by that all that we have now in the state of Israel, not as they say occupied territories, territories conquered after the six day war. All, all of Israel was in their eyes Arab land and there are many, still there are many Arabs who, this is their belief, therefore, we cannot take it that this will be always the Arab position, after all, the Arabs have at their disposal 14 million square kilometers in the Middle East. And what does it mean for them, the 20,000 square kilometers, or 5,000, the difference? You know, what they want is 5,000.

MS. HUNTER-GAULT: Before you came here though you said you were willing to take risks for peace. Now you speak to the conference tomorrow. Are you going to spell out any risks or any compromise that Israel is willing to take?

MR. SHAMIR: I don't think I will get it into all the details. When I say that we are ready to take risks for peace, it's true. There are some risks we will take always for peace. For instance, we accept the idea of self-government for the Arabs. We risk disputed territories. This is a risk because if the Arabs will get a self-government or a full autonomy as it was written in the Camp David agreement, they can tomorrow decide something and say this is a Palestinian state. It's already a risk. Of course, we will not allow it.

MS. HUNTER-GAULT: How about the risk, are you willing to take the risk, the President has called for it, others have called for it, in fact, the United States has put pressure on Israel to at least temporarily freeze expansion in the settlements, is that in the cards?

MR. SHAMIR: The President didn't say a word about it. He knows already our position. Our settlements are a part of the territorial problem and when this problem will be negotiated and discussed through the negotiations, it will include also the problem of settlements, because it is a part of this problem and, therefore, I will not accept any special position or concession on settlement freeze. I cannot, I cannot accept it.

MS. HUNTER-GAULT: President Bush also said today that this is going to be a long hall, that it's going to be difficult, there are going to be obstacles. How prepared are you to go the distance and how personally involved do you plan to be in the next phases of this process?

MR. SHAMIR: Of course, the President was right when he said it could be and maybe it will be a long process. The negotiations will be complicated. They will take time and I think that if they will take a long time, it will be a good sign, a good omen, because this will be proof that this, that it's making progress toward a solution.

MS. HUNTER-GAULT: In a word, are you optimistic or pessimistic or what?

MR. SHAMIR: I am not pessimistic and I still hope that we could expect positive results if there will be on the Arab side the political will to get peace with us.

MS. HUNTER-GAULT: The political will exists on the Israeli side?

MR. SHAMIR: Sure. There is no doubt about it.

MS. HUNTER-GAULT: Well, Mr. Prime Minister, thank you.

MR. SHAMIR: Thank you. FOCUS - CHARITY CASE

MR. MacNeil: The other co-host of the Mideast conference is the Soviet Union. And it is to events there that we turn next. President Gorbachev joined President Bush in Madrid, his first trip out of the country since the August coup attempt, but in a surprising turn, Mr. Gorbachev used this international forum not only to talk about the Middle East, but to dramatize the economic and political break-up of his country.

PRESIDENT GORBACHEV: [Speaking through Interpreter] A great country is going through a great transformation. It's a painful and arduous process which has brought about personal tragedies and interethnic and regional conflict. Much in the world depends on how our crisis will be resolved. We are the ones who will shoulder the main burden of achieving the recovery and prosperity of our country. This job is for us to do. Our people will have to go through a difficult period of transition, but it's important that under the new conditions created, because it was our country that launched the initiative to end confrontation and to join up with the rest of the world, but the world too has not remained indifferent to our great cause. The world community is becoming increasingly aware that what is happening in the Soviet Union has a larger bearing than any regional conflict on the vital interest of the greater path of today's world.

MR. MacNeil: In recent weeks, the Soviet Union has asked the U.S. for a $3.5 billion aid package. Today in Washington, Agriculture Sec. Madigan said most of the aid, some $2 1/2 billion, would be used to guarantee the purchase of U.S. farm products. Madigan didn't say whether the U.S. would grant the full request, but he said an aid package would be ready in two weeks. We look now at the problem the Soviets are facing in agriculture through the story of one Soviet citizen. Brian Stewart of the Canadian Broadcasting Corporation's Journal Program has this report. FOCUS - BUCKING THE SYSTEM

MR. STEWART: For everyone a vital task is in the countryside, even the vast lands surrounding Moscow. Their only land reform, the privatization of collective farms, can offset chronic food shortages. But for private farmers like Vladimir Plotnikov, operating just Southwest of the city, it has been a lonely fight to survive. An interesting man, Plotnikov, son of kulaks, those private farmers driven from the land by Stalin's purges. Though city bred, five years ago he gave up his job as an art exhibitor at the Ministry of Culture to try and make it as a private farmer. He was only allowed to rent, not own, 15 acres that the local collective farm couldn't be bothered with.

VLADIMIR PLOTNIKOV, Farmer: [Speaking through Interpreter] The first thing we had to do is dry up the swamp. One of our tractors sank here as we tried to plow. Look, the collective farm never once tried to cultivate the land, even though it's so close to a market, never used. Instead, they turned the land into a garbage dump. In the past, it was just a junk heap, scrap metal and iron from the city. It took me two years to clear it away. We filled up two railway cars of iron scraps alone.

MR. STEWART: In fact, when private farmers like Plotnikov ventured out of the city, they discovered an astonishing 1 million acres of key farm land within the Moscow region was not even cultivated. Now, as a private farmer he's starting to make it. He's finally borrowed enough to get a new tractor and a secondhand truck. And he has raised a good 400 pigs. He employs six local farm laborers and together each year they turn out 50 tons of pork. That's more than half as much as a neighboring collective farm with 2,000 workers. And that's how it goes here. Private farmers hold only 3 percent of the land but produce a third of the food, a remarkable record which means they're thoroughly detested by the Communist Party bureaucrats who still control agriculture across the nation.

MR. PLOTNIKOV: [Speaking through Interpreter] We've been at it for five years, but you know I've scarcely had time to farm. We've had to organize and fight the bureaucrats for everything, fight every inch of the way, fight for the land, the suckling pigs, fight for the construction material. The situation was utterly difficult.

MR. STEWART: But what was difficult before is now turning rather dramatic. For Plotnikov is now in a make or break legal battle with the local collective, where his lease is up this year. It's a war of paper work and maddening red tape. He wants to buy the land outright, add another 15 acres and 1500 more pigs. He can't borrow money to expand unless he owns the land. But the collective farm wants him out altogether and tomorrow they'll fight it out before the Belashinsky Regional Council.

MR. PLOTNIKOV: [Speaking through Interpreter] I remember very well how they treated us private farmers before, like eccentrics. They gave us some land just for fun. Look at those guys, they want to be like America. But all of a sudden, they saw that it worked. They, of course, wanted us to fail, so private farming would stop. But we managed it and now we're ready to expand. But we need investment money to go any further.

MR. STEWART: Plotnikov, a child of kulaks, is haunted by the fear that he too could be driven from the land.

MR. PLOTNIKOV: I want my own land. There must be a civilized way to develop our land. I have to invest money to restore it. I have to construct my own farm on land where my family can live. But if I can only lease it for say five to ten years, I'm never sure that they won't just throw me out. It's not only for me. My son should be able to inherit my land. Maybe even a grandson should work this land some day.

MR. STEWART: But suddenly Plotnikov is no longer fighting on his own. Back in Moscow, within the democratic bedlam of city hall, he's got some energetic allies. Arnold Litvinov is one of the new breed of reform activists. He heads the Moscow Regional Land Reform Commission, covering an area the size of Holland, which believes only rapid privatization of land can defeat chronic food shortages.

ARNOLD LITVINOV, Moscow City Government: [Speaking through Interpreter] This winter is going to be much more difficult than last year. It's going to be tough right through the spring. But the harder things are with the food situation, the more it will push the land reform movement.

MR. STEWART: But Litvinov knows privatization is lagging, it needs a symbol, a victory over the old system. And he believes our farmer, Plotnikov, is the perfect test case.

ARNOLD LITVINOV: [Speaking through Interpreter] Yes, because in his situation he is important. He is in a very high profile battle. We're throwing all the power we can into his case. It's going to set a terrific example. This is the situation. They'd be happy if he got some useless land way off somewhere where no one could see, you know, anywhere but here. But the fact is he could be successful, and that's the point. He could really win.

MR. STEWART: It is now the afternoon of Plotnikov's hearing before the Belashinsky District Council which by law still controls all land in his area. It decides, not Moscow. He's excited though that his application to privatize more land is supported by Litvinov and Moscow officials in person. They're up-beat, hopeful the Council will be swayed by the new mood in the country. But when he enters the hearing room, there's clearly something wrong. The whole room is packed with figures from the local Communist Party machine, all here to discuss a simple pig farm? And after the party-controlled Council calls for discussion, one speaker after another insists Plotnikov should not get more land. Many feel he should even lose the lease he has. The party never cared for churches before, but this man angrily insists Plotnikov is too close to an historical church and should be moved. And the party never cared about ecology, but suddenly there's an environmentalist in to argue that his pigs pollute and should be banished. The man who started the collective farm under Stalin insists any land should be strictly for collective farm workers, no one else. Litvinov tries to rise to Plotnikov's defense. But the mood here is hostile towards outsiders and he flounders. As the hearings drag on, it's fascinating to watch the old party machine at work. All here pay lip service to democratic reform, but the fix is in. The room is full of party plants. The party may be officially dissolving but its network of patronage remains. Notice this man, Gennady Likanov. He never opens his mouth. He is the local party boss, the Council chairman, and he controls it all. And he orchestrates the meeting through his co-chairman, Vyachislav Ivanov. Ivanov by nods and signals to the party plants smoothly turns the meeting into a trial of Plotnikov. Ivanov can scarcely contain his glee as the party official calls privatization a scandal. "Oh sure," the man says, "let's hurt our own collective farmers to help the private farm, help them and hurt ourselves. Why such condescension?" In vain, Plotnikov pleads his case. The country has a food emergency, private farmers can help and can invigorate the whole area by prospering. But soon, the hearing takes on the sleazy innuendos of a show trial. This members asks, "And where did you work before farming? Ah, yes, the Ministry of Culture. Yes, your hands did look a little soft perhaps." But it is this party functionary who has the ultimate weapon, volumes of old laws and regulations, enough to bury any emergency reform action. On and on she reads.

PARTY OFFICIAL: [Speaking through Interpreter] It's clear from the decrees that the land reform should be carried out stage by stage initially and that local councils should retain the right to manage the land. At the same time, administrative order should be more precise.

MR. STEWART: Over how many decades did the party simply read reform to death? But, in fact, Russian laws still give such bodies the power to do what it now does -- votes down Plotnikov's plea for more land and votes to study whether his lease should be cancelled. As he leaves, Plotnikov is again told he could always move somewhere else. Outside, he's bitter.

MR. PLOTNIKOV: [Speaking through Interpreter] It's almost everywhere, in every district. This kind of action is commonplace. Now you've seen it with your own eyes, how it's still possible for them to keep someone kind of nowhere.

MR. STEWART: But Ivanov, the man who orchestrated the whole meeting, says reform is all just a matter of time.

VYACHISLAV IVANOV, Belashinsky District Council: [Speaking through Interpreter] No, we don't have a single private farmer owning land yet in this region. That's very true, however, there are many complicated factors, too little land, architectural monuments everywhere, environmental concerns. So it's very difficult and complicated and takes time.

MR. STEWART: The next morning, a wary Litvinov, the new breed reformer, analyzes how the party's rigged meeting made fools of them all.

ARNOLD LITVINOV, Moscow City Government: [Speaking through Interpreter] It really was a disgusting feeling. I felt horrible there. It's like they tied Plotnikov's hands and legs and he was helpless. And I went there because I wanted to show other farmers that they too had a chance.

MR. STEWART: He underlines the lesson, however unpopular the party it is still in a position to manipulate such local councils to block land reform.

MR. LITVINOV: [Speaking through Interpreter] The head of the collective farm, the head of the regional government, the local workers, all of them, they're all old party people, and they're all in it together. What you're seeing is a drive to change ownership of land and that never happens without a battle. Nobody ever wants to give up their ownership rights, certainly not the old party. Let's be clear. They won't surrender easily.

MR. STEWART: A final word then from Plotnikov. Neither Gorbachev nor Yeltsin, he says, have changed much. After years of talk, all land is still rigidly controlled by government. But while he may lose his lease and go under, his fight continues.

MR. PLOTNIKOV: [Speaking through Interpreter] You know, to me it's almost like, like a competition. My anger alone keeps me going. I feel I have to cross the finish line no matter what it takes. It's no longer a matter of profit. I want to bring state of the art private farming to the Moscow area, and I will continue whatever happens.

BRIAN STEWART, CBC: Reform so far is mainly visible in the city. But even this negative power of the party to sabotage and delay change in the countryside could be broken within a year or so, for new governments here prodded by the West are expected to soon give private farms firm new legal protection to expand. And that will offer small farmers at last a clear role in this extraordinary reform revolution. RECAP

MS. WOODRUFF: Again, the main story of this Wednesday was the Madrid conference on Middle East peace. Presidents Bush and Gorbachev opened the meeting with a call for territorial compromise, Palestinian rights and security for Israel. Good night, Robin.

MR. MacNeil: Good night, Judy. That's the NewsHour tonight. We'll be back tomorrow night with continuing coverage of the Middle East peace conference. I'm Robert MacNeil. Good night.