updated 7/24/2006 10:31:49 AM ET 2006-07-24T14:31:49

Guests: Kevin Peraino, Mark Regev, David Frum, Al Sharpton, Terry Jeffrey

CHRIS MATTHEWS, MSNBC HOST:  Is Israel going to a ground attack and how far will it go?  will the Israeli assault on Lebanon unite the Arab world?  Will Sunni back Shia in this war with the Jewish state?  Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Welcome to HARDBALL.

Tonight, a senior western intelligence official has told NBC News that his government expects Israeli troops to move into Lebanon sometime overnight.  All day Israel has been massing troops and tanks on the Lebanese border. 

And serious questions remain unanswered.  Will Israel pull off surgical strikes using special forces on the ground, or could Israel launch a full-blown invasion of Lebanon?  We‘re watching this volatile situation very closely tonight.  We have NBC correspondents throughout the region and we will keep you posted on any new developments. 

Plus, today in Washington, there was movement on the diplomatic front.  Secretary of state Condoleezza Rice announced she will go to the region on Sunday.  Can the U.S. help craft a diplomatic solution to this crisis?  In a moment, we‘ll talk to the man who composed Bush‘s axis of evil speech.

But first, we go to northern Israel where troops an tanks are massed at the Lebanon border.  NBC‘s Mark Potter joins us now from Haifa with the latest.  Mark, tell us, on two fronts, how is it going on defense and what‘s up on offense for the Israelis? 

MARK POTTER, NBC NEWS CORRESPONDENT:  Well, what I can tell you right now is that with thousands of Israeli troops and tanks massed along the border—and there‘s been a lot of reporting about that today, and we‘ve seen some of it—the Israeli officials say they are determined to take out Hezbollah to the degree that they can, and to end the rocket attacks against the Israeli cities, also to shorten the time that Israeli citizens have to sit it out in air raid shelters. 

Israeli forces have gone into Lebanon, and we know about that.  There have been fierce engagements with Hezbollah fighters, they‘ve been looking for the hideouts, and there is lots of talk tonight about even more incursions and bigger incursions, perhaps as early as tonight and in the days to come. 

But Israeli military officials are also very clear to stress—and they do this over and over again—that while they intend to go into Lebanon after Hezbollah, they have no intention of occupying Lebanon. 

Now, today they say Hezbollah that fired 85 rockets into northern Israel.  Eight of them landed here in the Hezbollah area.  One of them hit a four story building in the downtown area, injuring several people.  There were no reported deaths today, however, related to those rocket attacks. 

Earlier today, Chris, we spent some time along the northern border ourselves.  We visited an Israeli artillery unit and their mission is to stop those rocket attacks. 

(BEGIN VIDEOTAPE)

POTTER (voice-over):  The Israeli artillery battery is nestled in the upper Galilee Mountains separating Israel from Lebanon.  When we visited, it was a busy time, with the 150 manned guns firing toward the north one after the other, on a day when Hezbollah was once again blanketing northern Israel with rockets. 

(on camera):  The Israeli Defense Force says these artillery units are firing against mobile Hezbollah rocket teams on the other side of the Lebanese border, trying to stop them before they launch further attacks against Israel. 

(voice-over):  A military spokesman says once Israeli intelligence locates a Hezbollah rocket team, the Israeli gunners have only two or three minutes to lock on them and fire before the guerrillas are able to move for cover.  The ultimate aim is to reduce, if not stop, the rocket attacks against Israeli cities which have become a frightening part of daily life here. 

(END VIDEOTAPE)

POTTER:  Now, Chris, I want to correct something I said a moment ago. 

I said the eight rockets fell in the Hezbollah area.  Clearly, I misspoke.  I‘m talking about the Haifa area behind me, Haifa, the third largest city here in Israel. 

A few hours ago also in Tel Aviv to the south, there was a bit of a scare.  The entrances into the city were closed and roadblocks were set up because of a report that a suicide bomber, a woman, might be targeting the city.  Ultimately, two arrests were made and in time that security alert was dropped—Chris. 

MATTHEWS:  Why were there so many rockets hitting that area you‘re in right now, and no mortalities?  It seems odd that all those numerous rockets coming into a highly populated area and no one got killed. 

POTTER:  In part, because some of the rockets fell—I don‘t know if you can see out here.  There‘s the city and then there‘s the bay.  Some of them fell into the water today, so that‘s explained, and then others fell into areas where there were some people—there were injuries.

But most people, Chris, are off the streets and there were air raid sirens, at least in connection with some of those attacks, so people, they take those very seriously and they get inside, and that may explain the numbers. 

But this is a normally busy city.  Right now it‘s a ghost town.  People are here, but they are clearly staying inside and it‘s having the effect that you‘re talking about.  Not as many people are being hit as you might think. 

MATTHEWS:  Well, it‘s great civil defense in Israel.  Thank you very much, NBC‘s Mark Potter in Haifa. 

Now let‘s go to Lebanon.  NBC‘s Ann Curry is on the phone with us from Beirut.  Ann, it is so great to talk to you.  Give us your sense of just the human side of this war. 

ANN CURRY, NBC NEWS CORRESPONDENT:  You know, Chris, it‘s great to talk to you as well.  There actually is a huge human side to this war.  There is a sense of siege in the city of Beirut, and as you know, with so many attacks in Lebanon in the southern part of the city, the U.N.  humanitarian czar, Jan Egeland, has announced a kind of corridor that he‘s trying to implement into Lebanon. 

Some 300 -- more than 300 people in Lebanon have been killed so far, some 30, I understand, in Israel.  There is a tremendous humanitarian need now.  In fact, the international committee of the Red Cross is planning a trip into the southern part of Lebanon—I‘m hoping to be a part of that trip—to take a look at what the needs are and try to address those. 

Let me tell you, here in Beirut, in the city, I can already begin to see that with the roads, also by sea and also by air, supplies are now being squeezed.  We can start to see that the ways in are being squeezed and, in fact, there‘s a feeling that they‘re going to be cut off. 

And you can start to see that while there is plenty of food, the choices are becoming more limited.  Stores are closed.  People are feeling a sense that coming soon, it will become much worse.  So in Beirut, it hasn‘t hit—that kind of thing hasn‘t hit so much, although I will say also that in some parts of Beirut, they have. 

Today I was in a Hezbollah stronghold in the southern part of Beirut,

a suburb there called Khret Rake (ph).  It‘s a basically a place full with

a residential area, but also where the Hezbollah leadership has been operating and block after block, Chris, apartment buildings were completely destroyed and overpasses collapsed on to the street. 

I mean, it looked like—and you and I both know, and we‘ve all seen, everyone has seen the images from 9/11.  It looked like and smelled like 9/11, block after block, just completely down, smashed down.  This is an area targeted by Israeli airstrikes, because it is a stronghold for Hezbollah.

And we can tell you, however, that area was evacuated by Hezbollah and so there are—we don‘t have massive—also just like we just heard from Mark Potter in Israel, we cannot report and luckily we cannot report massive deaths in that area because of those airstrikes, Chris. 

MATTHEWS:  Let me ask you about being there yourself as a correspondent.  Is this like a lottery where you don‘t know where the incoming is going to hit? 

CURRY:  You know, Chris, to some degree, yes, but to a larger degree, no, because Israeli airstrikes are incredibly well-targeted.  They are smart in their bombing, in that they—they‘re very predictable.  We don‘t go out at night, Chris, because we know that the risks are higher, except when we have to go live and we‘re in very specific areas when that happens.

We know that the bombing will probably happen in the region that I just mentioned.  We know that the bombing will probably happen again around the airport, so there is a sense of not knowing exactly when they‘re coming, but there‘s a degree of predictability as to where the bombs will go. 

That however, that game is changing to some degree, because now that we know that a lot of Americans are out—the U.S. Marines as you know, helped evacuate some 5,000 more Americans today—the Americans who wanted to get out, the vast majority of them, we‘re understanding from the U.S.  embassy, have been able to get out by today. 

So now we‘re expecting, there‘s a sense in the city, Chris, that now the worst is going to come, and so we don‘t know how this game is going to change in terms of where things are going to fall. 

MATTHEWS:  Are you expecting a ground assault from Israel at this point? 

CURRY:  You know, I can tell you that Lebanon is certainly on notice, given what we‘re hearing from Israel.  The idea that Israel has dropped by air leaflets today, warning people in southern Lebanon to get out of the way, that Israel has called up a limited call up of its reservists.  Lebanon‘s defense minister has heard all this information, and is saying that Lebanon‘s army will defend Lebanon‘s border. 

There is a growing sense that there will be a ground assault.  Certainly we are hearing the word here that it may be tonight, but there is no clear certainty about it.  And so it‘s about what we see from Israel at this point, here as reporters watching what‘s going to happen and what Lebanon, the government of Lebanon, sees and how it‘s going to react. 

MATTHEWS:  OK.  Take care, my colleague.  NBC‘s Ann Curry in Beirut.

Now let‘s go to Newsweek‘s Kevin Peraino, on the phone from Jerusalem. 

Kevin, will it be tonight? 

KEVIN PERAINO, NEWSWEEK JERUSALEM BUREAU CHIEF:  It‘s possible, Chris. 

It was being debated today.  When I talked to my sources today, they said,

It‘s possible.  They said there‘s a debate within the government, there‘s a

this division of troops up there, they‘ve been doing these cross border special-ops raids for days now. 

But there is a lot of nervousness among the Israelis.  I talked to at least some of them, who feared two things:  one, tactically, it‘s dangerous, and Israeli soldiers have been dying inside Lebanon for the past few days.  There was two killed on Wednesday, two killed yesterday, so that‘s, I think 19 Israeli soldiers dead so far.  That‘s 10 times the number of soldiers kidnapped.  They know it‘s going to be dangerous. 

Strategically, they know if they go into Lebanon, if columns of Israeli tanks roll into Lebanon, up to the Litany river, 25 miles into Lebanon, they know they‘re going to look like occupiers.  And I talked to Ehud Barak, the former prime minister, who presided over the withdrawal from Lebanon in 2000, earlier this week and he said, Look we created Hezbollah with our occupation there in the ‘80s, and that‘s a mistake that they don‘t want to repeat again. 

I think it‘s possible, but there‘s a lot of reluctance amongst some Israeli policymakers here. 

MATTHEWS:  I know Israel is known for going it alone and doing what it has to do and not really caring about Arab opinion, but could it be they‘re worried about the fact if you invade an Arab country like Lebanon, the whole Arab world sees you again in the role of invader? 

PERAINO:  That‘s exactly what they‘re afraid of.  Not only in Lebanon, where there are Lebanese moderates, where over the past year the anti-Syrian opposition forces have taken control of the government now—they‘re worried about those people.  And as you say, they‘re worried about the wider Arab world.

Although, you know, I have heard some Israeli officials, over the last few days, saying, Well, we largely feel like we‘re getting support from Cairo, from Amman, even from Saudi Arabia, because they fear—they fear Iran, in some ways, as much as we do, and so they say, usually, you know, they say—they feel like we‘re getting a lot of slack from the U.S., maybe even more than we expected.  But they say that it‘s because in past conflicts, they feel like a lot of—it‘s the—it‘s places like Cairo and Amman and Saudi Arabia who put pressure on the U.S. for them to stop and that‘s not happening this time. 

MATTHEWS:  Thank you very much.  Newsweek‘s Kevin Peraino, who‘s in Jerusalem.

Mark Regev is a spokesman for the Israeli Ministry of Foreign Affairs.  Mark, thank you very much for joining us.  You may have been hearing our conversation about your government‘s decision-making now.  What can you tell us?

MARK REGEV, ISRAELI FOREIGN AFFAIRS MINISTRY SPOKESMAN:  I think our attacks will continue to be surgical.  Hezbollah is the enemy, not the Lebanese people.  The enemy are the terrorists who are trying to kill our civilians and we‘re trying to neutralize that threat.  But we won‘t do anything, no great invasion of Lebanon. 

The Lebanese people are not our targets.  Our targets are Hezbollah. 

MATTHEWS:  How successful is your air campaign, as of this moment? 

REGEV:  Well, we‘ve been successful in reducing the number of missiles, incoming missiles coming into Israel.  We‘ve been successful in targeting Hezbollah positions. 

But I think one of the reason we‘re talking about using ground forces more extensively—not an all-out invasion, we‘re talking about surgical incursions to deal with fortresses.  You‘ve got a situation where, over the last decade, Hezbollah has received a lot of support from Iran and from Syria.  They‘ve built installations that are highly fortified, bunkers right under the ground, and unfortunately air power isn‘t enough to deal with all these military installations.  And we have to, unfortunately, send in surgical ground units to deal with this threat. 

MATTHEWS:  If you‘re successful with your combined air and ground incursion—the bombing campaign, whatever limited incursions you undertake—you also have to prevent resupply of those rockets from Tehran.  How will you do that? 

REGEV:  That‘s the challenge, and that‘s the challenge that I think all the diplomats will be dealing with next week.  Because as you know, we‘ve got Dr. Rice visiting the country next week, we have got European foreign ministers.  And the idea is, if we have a cease-fire—and ultimately, that‘s the goal, because everyone understands the solution is diplomatic and not military.  But how do you stop, the first day of the cease-fire, from those trucks coming across the border from Syria, full of Iranian missiles, Iranian explosives, Iranian military advisers.  And then we just go back to square one.

So the idea is to create a situation on the ground whereby Hezbollah is taking some blows, Hezbollah is weakened, and the cease-fire will not allow them to restrengthen their forces, to regroup and prepare for the next round. 

Ultimately, no one wants to have a situation where Hezbollah once again at whim can start this sort of regional crisis that we‘ve seen over the last few days. 

MATTHEWS:  OK.  Let‘s talk about getting it done.  You‘re a diplomat, a professional.  Can you put enough pressure on Bashir Assad to do what you want him to do, stop being a doorway, a gateway for arms into Lebanon? 

REGEV:  Israel can put a certain amount of pressure, but I don‘t think we can do it by ourselves.  And that‘s why it‘s just so important that the international community, led by the United States, stands firm here.  We had a good statement out of the G-8 in St. Petersburg.  We had a good statement out of the European foreign ministers.  We‘ve got the Saudis, some of the moderate Arabs, the Jordanians, the Egyptians, saying the right things. 

I think it‘s very important that we all lean on the Syrians with this message.  The U.N. Security Council has decided that Hezbollah must be disarmed.  That‘s a U.N. Security Council decision, that‘s decision 1559.  Now if Syria and Iran are acting to keep arming Hezbollah ultimately, it has to be obvious, they are acting in stark contradiction to what is a U.N.  Resolution, and there should be consequences for such behavior. 

MATTHEWS:  Can you crack the axis between Syria and Iran? 

REGEV:  It‘s difficult:  you have got two very extreme regimes, two regimes that support terrorism, two very radical anti-peace regimes, regimes that support Hamas and Hezbollah and other extremist elements.  I think if we get Lebanon right, and there‘s a good chance it will come out right, once again we‘re weakening Hezbollah now through our military actions and hopefully the international community is going to step up to the plate now and bring about the disarming of Hezbollah by diplomatic means—that‘s the implementation of those U.N. resolutions—I think that can possibly get rid of a place where they‘ve caused a great deal of instability.

And I‘d remind you, Chris, what the son of the assassinated Lebanese prime minister said, just two days ago.  He said he‘s sick and tired, as a Lebanese—he‘s sick and tired of having the Syrians and the Iranians fight Israel in his backyard.  And I think he‘s speaking of most Lebanese, who are just fed up with Hezbollah.  Ultimately, if you think about it, Chris, Hezbollah isn‘t just holding two Israeli servicemen hostage, they‘re holding the entire country of Lebanon hostage.  And through that, they‘re holding the region hostage and we have to create a political situation, a diplomatic situation, where they can‘t once again initiate this sort of regional crisis.  We have to neutralize their ability to have the finger on the trigger with all these rockets. 

MATTHEWS:  Could it be that this crisis ends up favorably to your country?  Could it be that you‘re able to crush Hezbollah‘s rocket capacity, you prevent its resupply, and you, to some extent, neutralize—

Finlandize, if you will—Syria—is that all possible coming out of this conflict? 

REGEV:  I‘d say it the following way.  I‘d say, is it not possible to hand sovereignty over Lebanese territory fully to the Lebanese government?  Is it not possible to dismantle this military structure which ultimately is a proxy for outsiders, for extremists in Iran and Damascus?  Is it not possible to create a situation where Lebanon becomes truly free and independent and democratic?  Surely that‘s in Lebanon‘s interests, and it‘s in the interests of most of Lebanon‘s neighbors, Israel included. 

MATTHEWS:  What went wrong with Bashir Assad?  We all thought that when he took over from his father, that there was a chance that a new generation would look openly at the world, like Libya has, and said, wait a minute, why don‘t we join the international community?  Why has he been unable or unwilling to become a modern Arab? 

REGEV:  I think there‘s a fear there in that regime that if they reform, then the whole regime falls apart.  I mean, ultimately, they‘ve got a very extremist ideology, they‘ve got a very very authoritarian system.  And I think they‘re afraid that if they move a bit, the house of cards falls altogether.  Ultimately, it‘s a regime without a lot of internal legitimacy. 

But it‘s not Israel‘s job to talk about regime change in Damascus.  All we‘re asking them to do is stop aiding people who are killing our citizens.  Stop those truckload after truckload of Iranian arms, explosives and missiles landing at Damascus airport and reaching Hezbollah.  If that stops, we can live and let live.

MATTHEWS:  That seems to be the heart of it.

Mark, you‘re going to be staying with us, I appreciate that. 

We‘ll all be right back, later, with Mark Regev of the Israeli Foreign Ministry. 

Later, just as diplomatic efforts appear to be gaining steam, a senior (INAUDIBLE) intelligence official—we can‘t tell you who or what government—says an Israeli ground invasion of Lebanon is expected overnight tonight.

(INAUDIBLE).  You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  We‘re back with Israeli foreign ministry spokesman Mark Regev from Jerusalem.  Mark, as you‘ve laid it out for us so far.  Let me capsulize it.  The military operation along the border with Lebanon is to try to destroy Hezbollah, its rockets, the whole works.  Your diplomatic efforts are following that.  Those are to try to neutralize or in fact end the role that Syria is playing in allowing the transport of any resupplied rockets into Lebanon.  Is that about it? 

REGEV:  That‘s about it, correct. 

MATTHEWS:  Let me he ask you about the two soldiers.  Your ambassador to the United States, Daniel Ayalon has said that if your country gets back those two Israeli soldiers being held right now by Hezbollah, the action stops.  Is that it? 

REGEV:  Well, that‘s an important part of stopping the action.  But I think there‘s an understanding, not only in Israel, but in other parts of the world, America, Canada, Europe, other places, that we can‘t go back to square one.  You can‘t have a situation where Hezbollah sits on the border, and can orchestrate this sort of regional crisis whenever they decide to do it, and you know, Chris, they could do it for all sorts of reasons.  They could do it because it‘s in the Syrian interest.  They could do it because it‘s in an Iranian interest.  It might not have anything to do with Lebanon. 

It‘s just so important that the international community steps up to the plate and implements what ultimately is on the books of the U.N. and that is to disarm this very extreme, very dangerous, Jihadist terrorist organization called Hezbollah. 

MATTHEWS:  Well the question I have, and you‘ve raised it there very well, Mark, is who are you worried about?  Are you worried about a situation where you have to stop Hezbollah or are you worried about a situation where the people in Tehran are calling the shots?  Your vice prime minister Mr. Shimon Peres was on our show the other night, and he said there may well be a coincidence here between the decision by Ahmadinejad to say no to the latest western efforts to limit his nuclear arms program and a day later Hezbollah grabbed your two soldiers.  Do you see a connection? 

REGEV:  I think that evidence is clear, what you just said is totally factual and there‘s no doubt, if anyone looks at the historic relationship between Hezbollah and Iran, between the government of the Ayatollahs and these extremists in south Lebanon, you see he a very, very close relationship and it‘s much, much more than ideological friendship, than sharing the same Jihadist extreme dream.  There is on the ground support by Iran for Hezbollah. 

You have Iranian Revolutionary Guards in south Lebanon, in Lebanon as a whole, you have Iranian missiles.  I‘ll give you just one example.  We had one of our naval vessels was taken out by a very advanced sea to shore missile, Iranian supplied state of the art technology.  Their ability to hit deep into Israel with these missiles going as far south as Haifa, Nazareth, that‘s because they have missiles given to them by the Iranians which can go deep and we‘re concerned that actually they haven‘t used all their heavy equipment, that we could still see more deep attacks. 

These bunkers that are just so difficult to take out in the south.  They‘re built with the advice and with the aid of the Iranians, who have a lot of experience in these matters.  In many ways, Hezbollah is the puppet of the Iranians and that‘s why I think many people in the Arab world are just, have just drawn a line in the sand and they‘re saying no, we‘re not going to allow Hezbollah an Iran to dictate the agenda of the Arab world and that‘s why I‘m actually quite pleased to see more and more Arab leaders stand up and say no more. 

MATTHEWS:  Let me ask you about a report from al Arabiya television that said today that the Israeli army has found the body of an Israeli soldier who had been declared missing.  Do you know about the identity of that soldier? 

REGEV:  I know about that story and Chris, you‘ll have to excuse me, I can‘t comment about that publicly.  In my country, there‘s very serious rules until families are notified and so forth about talking about such information and I hope you‘ll respect that. 

MATTHEWS:  I do.  Let me ask you a larger question now.  The press, as you know,  has been largely favorable to Israel in this whole war that started a couple of weeks ago.  In fact, almost without exception, there was a paper, there was an account though, however, the other day on the front page of “U.S.A. Today” that said Israel should be concerned about the number of casualties in Beirut, the destruction of the infrastructure, and it may look like overkill.  Are you concerned that that might lead to a unification, a reunification of Arab opinion, Sunni as well as Shia against Israel‘s performance in this campaign? 

REGEV:  Yes, it‘s incumbent upon us, Chris, to be as surgical as we can possibly be.  In a real shooting war, often mistakes happen, often innocent people are caught up in the crossfire, but we have a moral obligation and a political obligation to be as surgical as we he can.  Ultimately the Lebanese people are not our enemy.  We hope for peace with Lebanon. 

We hope for a better relationship with Lebanon, and so while we target Hezbollah and we will continue to do so, we‘ll make a maximum effort to do everything we he can to make sure, as your reporter from Beirut said, to be as surgical as possible and at the same time we‘re working together with the international community, to make sure that aid, medicine, food, and so forth meets Lebanese, is received by Lebanese civilians.  We‘ve got no interest in seeing unnecessary suffering there north of the border. 

MATTHEWS:  OK.  Thank you for very much.  It‘s great to have you on.  We hope to have you back on again.  Mark Regev of the Israeli foreign ministry.  Coming up, is the Bush doctrine, remember that, for the Middle East broken beyond repair?  We‘ll ask the man who wrote the speech, the axis of evil man, former Bush speech writer David Frum.  You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  After September 11, 2001, George Bush set out to democratize the Middle East. 

Here to talk about it is former Bush speechwriter David Frum.  He‘s now the resident fellow at the American Enterprise Institute.

Let‘s take a look at the whole target list of Iran, Iraq and North Korea, as we see, as events unfold right now.  David, let me ask you, what do you think the United States policy should be in the current crisis on the northern Israeli border? 

DAVID FRUM, FMR. WHITE HOUSE SPEECHWRITER:  I think the president is doing the right thing.  I think what he sees—and it‘s a hard thing to see what you‘re distracted by all of these terrible images of violence—is the Iranians have really made a decision to turn on the level of violence in the Middle East. 

You stressed very shrewdly that the attack on that Israeli outpost by Hezbollah happened the day after the Iranians got the ultimatum from Paris about their nuclear program.  Not only did they turn on the violence in Lebanon, though, they turned it on in Iraq. 

July 9th, three days before, they—you see this terrible massacre, a uniformed Shiite militia, supported and trained by the Iranians, goes into a Sunni neighborhood of Baghdad, locks off the neighborhood and starts massacring people, kills 60 people, triggers a set of reprisal and counterreprisal that leaves over 600 dead over the ensuing days, some of the bloodiest days in recent Iraqi history. 

The Iranians are there to show, look, we have control of a lot of the violence taps in the region.  And I think one of the thing the president sees is behind the images on television is a very serious strategy starting in Tehran. 

MATTHEWS:  How does Condi Rice, who arrives in the region on Sunday, use U.S. power and muscle and diplomatic strength to address that concern of Iran and also Damascus?  How does she use our muscle in the week ahead - - let‘s just be very limited here, David—to get something done good for the region?

FRUM:  Well, she gave a great statement today before she departed where she said, look, the United States is it not interested in prematurely calling off Israel.  I mean, I think one of the ways to see what‘s been going on in this month of July is this the Iranian Tet Offensive. 

This is the moment where they say we are going to exert as much power as we can, both in Iraq and on Israel‘s northern border, in an attempt to break the morale of the American people, to make them give up on Iraq, to make them intervene early in Lebanon, to hand Hezbollah a victory, and then we the Iranians, we emerge as looking powerful and scary and intimidate our Arab neighbors. 

And what Condoleezza Rice said today before she got on the plane is we have—the United States has no interest in bringing this to an early halt before Hezbollah is handed a victory, before—handed a defeat, before the Iranians are beaten and seen to be beaten. 

MATTHEWS:  OK.  That is pretty clear right now, we don‘t want to forestall a conclusion which has good long-term results.  That given, what can we do in this emerging ethnic struggle in Iraq right now, because it‘s so much a part of this region? 

FRUM:  Look, in Iraq, the United States is going to have to probably reinject itself into the daily policing of the capital city.  American troops have been pulling back more and more.  I was there in March and everybody, all the officers said very proudly how they had—the United States was handing more and more of the job of policing the city over to the Iraqis. 

Obviously, that has not been a big success and whatever happens to the total American troop level in the country of Iraq, Baghdad is going to remain a special American concern and, I think, it‘s just becoming more and more apparent that this is the center of a regional struggle. 

You know, when the president he gave that list in 2002 of the countries he would not allow to acquire the world‘s deadliest weapons, he didn‘t say that he was going to use violence against all of them, that he was going to go to war against all of them.  He said that he would stop it using whatever means it took. 

With Iran, this week I think we are actually—this is a hopeful week in a funny way, because you see the possibility of building a true diplomatic coalition to stop Iran from going nuclear. 

MATTHEWS:  So you believe their support or their triggering of Hezbollah may backfire? 

FRUM:  We have to make sure that it does.  Look at the positive diplomatic news.  In June, the five permanent members of the Security Council plus Germany agree on a package of incentives to Iran.  In July—the Iranians spurn it.  In July, that same group of six countries says there will be sanctions. 

It‘s reaffirmed again in St. Petersburg on the 17th of July.  And the Chinese and the Russians are being corralled into this.  The French have been very helpful, the Germans have been very helpful.  It really does look like American diplomacy has been gaining some traction on this.  And I don‘t know, I think it‘s kind of scary to be alone in the room with those six countries, and this war in Lebanon may help to isolate Iran even further. 

MATTHEWS:  Interesting perspective.  Thank you very much, David Frum, former speechwriter for President Bush. 

FRUM:  Thank you, Chris.

MATTHEWS:  Up next, we‘ll talk to MSNBC‘s Tucker Carlson who is in Haifa, where Hezbollah rockets rained on the city again today.  You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

(MARKET REPORT)

MATTHEWS:  Welcome back to HARDBALL.  The northern Israeli city of Haifa was hit again today by Hezbollah rockets, wounding at least 19 people.  MSNBC‘s Tucker Carlson is in Haifa and joins us now.  Tucker, you‘re if a war zone.  Is Israel going to launch a ground attack overnight, do you know yet? 

TUCKER CARLSON, MSNBC ANCHOR:  I don‘t think there‘s any question, it is.  I spoke to actually an enlisted man, sometimes you get the best information from the enlisted guys, the officer is too clever to tell you anything who said yes, tonight is the night we‘re moving in.  Israel has had soldiers in Lebanon for the past couple of days.  They are pounding the hell out of southern Lebanon. 

We spent a good part of the day with a tank unit up in the hills, right on the border of Lebanon and watched them send shell after shell, 155-millimeter shells, into southern Lebanon.  Interestingly as we were driving up, we saw three Katyusha rockets come from Lebanon, went right over our car and they were moving so slowly, you could see them, you could actually see the rocket and make it out exactly what it looked like.  It was really the most vivid example of the difference between munitions.  You know, one side is using these almost homemade rockets, which by the way are deadly and the other side is using very high tech munitions. 

I talked to one of the officers at the tank detachment and asked him what exactly they were shooting with these rounds and he said that they were trying to hit mobile Katyusha launchers in southern Lebanon, which, of course, is not all that plausible.  Israel would most likely send up a black hawk helicopter to do something like that.  If they knew where a mobile launcher was, they wouldn‘t use a tank round to hit it over a hill.  No instead, I think it‘s pretty clear they‘re shelling what they think are Hezbollah encampments, which are in villages in southern Lebanon, and it gives you some sense of how profound the fighting is.  Israel is just really, really pounding that part of Lebanon.  Any civilians left in that area are in deep trouble tonight, if they are, in fact, still there. 

MATTHEWS:  So your bet is the balloon is up, as they say? 

CARLSON:  I think the balloon, there‘s no question the balloon is up and it‘s interesting, a lot of this you learn by tone.  You know, the IDF doesn‘t tell anybody anything, certainly nothing they don‘t want you to know.  Do you learn?  Of course.  But here‘s the difference I‘ve noticed in the past 24 hours, army officers we‘re talking to are being much less reticent about telling what is obviously true.  Yes, we have a number of men behind the border in Lebanon.  No, we‘re not going to tell you exactly what they‘re doing, but yes, they are going to be there for a while. 

They are saying that, up front.  We are going to be in Lebanon as long as we need to in order to crush Hezbollah.  I think at this point the number I heard he today is 800 men, most of the special forces moving in under the cover of night, most likely to kill Hezbollah forces they think are still there.  Again, you would not want to be a civilian anywhere near the Israeli border in Lebanon. 

MATTHEWS:  OK, thank you for that great report from the front, Tucker Carlson in Haifa.  Up next, what can Condoleezza Rice do when she goes to the war zone this Sunday?  Can she broker a diplomatic deal without calling for a cease-fire?  What‘s up in our policy.  This is HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  After nearly ten days of deadly fighting in the Middle East, the Bush administration is setting up peace talks in Rome next week. Can Condoleezza Rice broker an end to the fighting?  Can she do it without calling for a cease-fire?  Terry Jeffrey is an editor for “Human Events” Magazine and the Reverend Al Sharpton is president of the National Action Network.  Reverend Sharpton, what are you rooting for Condi Rice to do this Sunday with she gets to the region? 

REV. AL SHARPTON, NATIONAL ACTION NETWORK:  Well I think all of us would like to see some type of peaceful end to what we‘re seeing now.  Many people are afraid that we‘re on the verge of a full scale war, even beyond the Middle East, we‘re certainly there.  I think that clearly we have the problem of this administration, in my judgment‘s, moral authority in the area, because of such disagreement over what they have done in Iraq, but I would hope that some kind of way Secretary Rice can bring the parties together and respect human life.  We are seeing citizens, non-military citizens being killed.  We need to see that stopped and I think that‘s beyond politics. 

MATTHEWS:  Terry Jeffrey, do you share that ambition of an end to the fighting? 

TERRY JEFFREY, EDITOR “HUMAN EVENTS”:  Well eventually, Chris, but I think here that out of this tragedy, there‘s a lot of opportunity.  First of all as David Frum was pointing out earlier, the administration has managed to put together a united front with the Europeans and the Russians and the Chinese to try, at least, to pressure Tehran diplomatically on its nuclear program, but at the same time what you see happening within the Middle East is that Arab regimes that have been historically friendly to the United States, Egypt, Jordan, Saudi Arabia, the Arab Sheikhdoms of the Persian Gulf, are actually condemning what Hezbollah has done.  They‘re understanding that Iran can be a threat to it and there‘s an opportunity her to isolate Syria and say to Syria you have a choice, either you come back on board and go more in the direction of Jordan and Egypt and Saudi Arabia or you continue this alliance with Iran and helping them cause trouble with Hezbollah.  And then secondly to isolate ...

MATTHEWS:  I love that objective, how do you reach it.  How do you get Bashar Assad to tell his uncles to go to hell and say, damn it, I‘m going to join the west and the peacekeepers?  How do you get him to do it?

JEFFREY:  Well look, as a spokesman from the Israeli foreign ministry pointed out, Assad is in a very tenuous situation.  As you said Chris, we thought this guy was going to come in and he was going to be different from his old man.  Hopefully there is one way he similar to Hafez al-Assad.  Hafez al-Assad was a realist.  They‘re a member of a very small sect, the Alawite sect.  Sunnis are the majority population in Damascus.  This guy rules by terror himself.  He‘s got to understand that he himself can be in a difficult situation if he finds himself perpetually at odds with his Arab neighbors because he wants to help Iran cause problems in Lebanon. 

SHARPTON:  I don‘t think the answer though, Chris, is to back anybody into a corner.  I think that we‘ve really got, again, I think that it‘s good the administration is trying a diplomatic unity approach with other nations.  I wish they had done that in Iraq, but I don‘t think to go in with an attitude of backing someone in to a corner or trying in any way to put someone in a position other than understanding that the world does not want to see what we‘re seeing now, the verge of an all out regional war and private citizens, including children, killed. 

MATTHEWS:  Do you think, Reverend Sharpton, that the United States, I‘ll ask you this same question, Terry, should have it as our national interest, the survival of Israel or should that be something resolved by the contending parties?  Do you think our absolute position, Reverend Sharpton, should be that Israel should exist, what happened in 1948 should persist and we should make sure that it does happen or should we let the nations of the region decide these issues?  What‘s your position? 

SHARPTON:  I think my position is that we should go back to the accords, that we had agreed to, and that all of the parties had agreed to and I think where the debate comes in how that is best served, and I think that where the parties have disagreed, is Israel existing in what boundaries, others in the region existing in what boundaries and how we secure everyone that is involved.  I don‘t think there‘s a question among most of the region and certainly in the United States about Israel‘s right to exist.  The question becomes existing with what boundaries and what are going to be the rules that would protect all of the sovereignties that are involved.  That‘s the debate. 

JEFFREY:  Chris, can I respond to that? 

MATTHEWS:  Terry, I want to ask you the same question.  Do you believe that the Arab countries of that region, all of them, if they were able to vote without our attention too close to them, do you think they would vote for the end of Israel, that would be their ultimate goal? 

JEFFREY:  Well no.  Egypt is at peace with Israel.  Jordan is at peace with Israel.  I don‘t think Saudi Arabia has any interest in war with Israel.  I think most of the people in Lebanon are happy to be at peace with Israel.  The problem and we have a moral commitment, Chris, to the survival of Israel.  The United States helped Israel come into existence.  They are a moral as well as a strategic ally.  The problem is Hezbollah, which is a Shiite terrorist group, in southern Lebanon, it does not represent the majority of the Israeli people, is in fact dedicated to the destruction of Israel. 

By the way, one of their mottoes is death to America.  This is also the view of the regime in Tehran.  President Ahmadinejad has said he wants to destroy Israel.  So I think the opportunity here really is to align the Sunni traditionalist Arab regimes, that have historically been friends of the United States, Egypt, Jordan, Saudi Arabia and those forces in Lebanon who don‘t enjoy what Hezbollah is doing, to isolate the Syrians and by extension, isolate Iran, which is the mastermind of all this and score a real diplomatic coup, basically, by saying look, you‘re either with us or against us, not just the Europeans, Russians and the Chinese, but the Egyptians, the Jordanians, the Saudi Arabians, Qatar, Kuwait, Bahrain and the United Arab Emirates.  It‘s all of us against the proxies of Iran in this region. 

SHARPTON:  But I think what happens to human life in the process?  I think that the mission of Condoleezza Rice, when she goes Sunday, is not to play checkers with just putting together coalition and trapping somebody off.  I think it‘s to first try to bring down the violence and protect lifts.  I don‘t think that we can be so insensitive to the fact that killing is going on.  We just saw Tucker Carlson‘s report.  People are being bombarded.  How do you stop that while you‘re pursuing you‘re diplomatic strategy. 

JEFFREY:  You disarm Hezbollah and you cut off the flow of arms from Iran through Syria into southern Lebanon.  That‘s how you stop the violence. 

SHARPTON:  Through military action? 

MATTHEWS:  We‘re coming back.  Gentlemen, we‘ll have to stop.  We‘re taking just a short break.  Both of you will be back.  Terry Jeffrey and the Reverend Al Sharpton.  We‘ll talk more about the Middle East conflict and how it affects our politics in the U.S., and I bet it will.  You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  We are back with Terry Jeffrey and the Reverend Al Sharpton.  I have an honest question, sometimes I think I know the answer, this time I don‘t.  Reverend Sharpton, how will this war in the Middle East effect the elections in America in November? 

SHARPTON:  I think that it can effect it in several ways, none of it clear.  I think that if it continues you will have those that will be calling for some type of peace to be established, and a negotiated, diplomatic end to this.  And then you will have those that will say this is an opportunity to go in and wipe one side out.  I think that it‘s far, in my judgment, they are underestimating a lot of what it would take to do that and the danger that is involved.  I‘ve been to the Middle East.  I don‘t think that you can wipe out any group without it, in my judgment, coming back and blowing it into an all out war. 

MATTHEWS:  Thank you for that, Terry? 

JEFFREY:  Well, I agree with you, Chris.  It‘s not easy to figure out how this is going to affect American politics.  It may have very little at all.  It possible it could help the president because it will remind people that there are other security problems in this world and especially in the Middle East that aren‘t directly in Iraq, and the president, for whatever failings he‘s had in the conduct of his foreign policy is very decisive and I think we‘re going to see very decisive action from the president in the days ahead on the diplomatic front.  And I do believe there is the potential for great fruit to be born here in advancing our cause through the Arab world.

MATTHEWS:  Thank you very much Terry Jeffrey and thank you very much Al Sharpton.  Right now it‘s time for Tucker, tonight from Israel. 

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

END   

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