updated 8/1/2006 11:36:55 AM ET 2006-08-01T15:36:55

Guests: Dan Gillerman, Michael Smerconish, Amy Goodman, Jonathan Alter, Anne Kornblut

CHRIS MATTHEWS, MSNBC ANCHOR:  From Rockefeller Plaza in the city that never sleeps, especially on the 10th anniversary of MSNBC.com...

CROWD:  ... Let‘s play HARDBALL.

MATTHEWS:  Here we are at Rockefeller Plaza.  Look at these people.  I think our crowd‘s getting bigger than it was the first show tonight.  That‘s a wide view of us.  We‘ve got some interesting debates tonight.  This is a city with so much diversity.  We‘ve got people who are pro-Israeli, people who are pro-Hezbollah, almost, not quite, definitely pro-Arab.

A lot of good debates.  We‘ve got the ambassador to the U.N. from Israel here, Dan Gillerman, he‘s going to join us.  He‘s sitting right next to me.  We‘re also going to be going to the top of the rock, to the top of 30 Rockefeller right now.  You see the view looking downtown to the Empire State Building.  We‘re going to be talking to NBC anchor Brian Williams there later tonight, in fact in a few minutes. 

But right now we‘ll go over to Haifa, same as always.  Tonight we‘re going to go to the Middle East and to Martin Fletcher.  Let me go to Martin Fletcher in Haifa.  Martin, thanks for joining us.  Is this war continuing as it is gone for 20 days?

MARTIN FLETCHER, NBC NEWS CORRESPONDENT:  Yes, Chris, absolutely.  You know, Israel‘s security cabinet tonight approved widening the ground operations.  But Israel is honoring its promise to stop most attacks from the air for 48 hours.  Since the fighting began, the Israeli war planes have had 173 attacks a day.  Today according to the Air Force, just two, both against Hezbollah targets.

(BEGIN VIDEOTAPE)

FLETCHER (voice-over):  International pressure is growing on Israel to stop the war.  The prime minister today was defiant.

Ehud Olmert made it clear, no cease fire until Israel achieves its goals, removing the rocket threat from Hezbollah, saving its two kidnapped soldiers.  Today Israel and Hezbollah were locked in more fierce battles after Israel launched another incursion into Lebanon.  Israel moved more forces to the border today while reserve troops trained for a possible ground invasion.

(on camera):  This is an Israeli artillery unit, moving into position.  Despite calls for a cease fire, the Israeli defense minister has already said Israel will continue into south Lebanon with more troops.

(voice-over):  After pressure from the United States, Israel halted most of its air raised, a two-day suspension except to provide cover for its ground troops.  Hezbollah also hit the pause button.  After 150 Katyushas fired yesterday, not one fired today, only two mortars.  Israelis in Haifa are almost relaxed, venturing into the streets.

UNIDENTIFIED FEMALE:  It feels just a little bit normal and not all the time in war.

FLETCHER:  Israeli analysts say if the fighting did end today, it would look like a defeat for Israel.

ALON BEN DAVID, ISRAELI ANALYST:  It seems like the military was unsuccessful in achieving the objectives for the war.

FLETCHER:  But at the U.N. in New York, a critical meeting is scheduled today to plan a new peacekeeping force in Lebanon was indefinitely postponed, another blow to hopes for a cease fire.  As if there aren‘t enough problems, the Syrian president tonight ordered his army to be on higher alert.  He‘s worried about Israel‘s call up of three reserve divisions.  Chris?

MATTHEWS:  Let me ask you, Martin, is there any reason to believe Israel will invade or take any kind of military action against government or the country of Syria?

FLETCHER:  No.  I think there‘s no reason at all.  They have enough problems on their hands obviously in Lebanon.  They‘re having a very hard time defeating Hezbollah, making real progress there.  But the Syrians are very worried.  And the Israelis are very worried too, that they don‘t send the wrong signal to Syria because that reserve—those reserve divisions of Israel is calling up.

When they move into Syria, the Syrian border, Syrian/Lebanon border, which is where many of those troops will be operating, it is only about 20 kilometers from the Syrian cabinet in Damascus.  And Damascus has always been very concerned.  Any time Israel is in Syria, all they have got to do is take a quick right turn, head straight to Damascus.  Syria‘s in real trouble.

So they‘re worried.  But Israel is sending all kinds of messages through United States through all kinds of intermediaries, they don‘t want trouble with Syria.  Syria, as I say, they‘re putting their army on high alert.  And by the way, there was one event tonight, Chris.  There was a bomb exploded on the border between Israel and Syria.  That‘s the first time that I can remember that ever happening, for at least 15, 20 years.  So a very nervous, volatile part of the equation too, Chris.

MATTHEWS:  Thank you very much, NBC‘s Martin Fletcher in Israel.

NBC News chief foreign affairs correspondent Andrea Mitchell joins us now by phone.  She‘s back in Washington with the Secretary of State Condoleezza Rice.  Andrea, how far is the United States from Israel diplomatically in terms of our separate positions on a cease fire? 

ANDREA MITCHELL, NBC NEWS CHIEF FOREIGN AFFAIRS CORRESPONDENT (on phone):  The U.S. and Israel actually are on the same track, they say, but I‘ve seen a lot of divisions.  We just landed back in Washington. 

Secretary Rice is now heading to the White House for a dinner briefing for the president.  And you could see the tensions.  They denied it, we had several briefings with her on board on this long 15-hour flight back. 

But you can see the differences at several points, Chris, as we were at key meetings with the prime minister and then she was with the foreign minister.  Key moments along the way, where the Israelis would say one thing, the Americans would say another.  And they in fact, from the plane, the minute we took off today, had to call back to Israel and say, what are these air strikes?  Have you suspended 48-hour suspension already of air strikes?

And they were informed that no, these were just close air support for ground operations.  But twice or more during this flight they had to check back with Israel to make sure that Israel is not going off the program.

MATTHEWS:  Andrea, what would the United States government, the president and the secretary of state like Israel to do that it is not doing right now?

MITCHELL:  They would like Israel to be much more restrained, I believe, in their air attacks and in the other military operations.  And be much more sensitive to the ramifications of what can take place.  We‘ve talked a lot about whether or not the U.S. has given Israel a green light.  The U.S., Rice‘s people insists they haven‘t.

There was one moment when she had met with Prime Minister Olmert and the Israeli police afterwards and gave a briefing that was completely contradictory to what the U.S. says is actually the policy.  The Israelis said that the U.S. was encouraging them and in fact Rice‘s people said that was not the case.  So there was a moment of anger there.  There was another time when she was together with the foreign minister.  The first day she was in Israel back last Monday, a week ago. 

And unexpectedly, the foreign minister started speaking in Hebrew without a translator present and she said, oh, don‘t worry, I was just speaking in Hebrew what I just said in English.  But in fact, a translation proved she was giving a completely caustic message for a domestic political audience.  So there have been some tensions along the way. 

As they move toward the cease fire, I think you‘re going to see in the next couple of days that the tensions though with Israel are not anything compared to the tensions with the French.  Just now, I was talking to a senior official about what‘s going on tonight.  The French foreign minister is in Beirut, meaning with the Iranians and the Syrians and the French have put out a statement that their proposal for a cease fire has completely different priorities than the U.S.

So this official said to me, just now at Andrews Air Force Base, while the French are being the French again, and someone said, “Well how long will it be before we‘re eating French—we‘re talking about the French fries again.”  And considerable tension.  They were talking about a U.N.  resolution, freedom fries instead of French fries.  They were talking about a U.N. resolution possibly Tuesday or Wednesday, Chris.  Now they‘re talking about maybe Friday or Monday at the earliest.

MATTHEWS:  OK, got to go, Andrea, but thank you for that great report.  You must be exhausted.  Thank you very much, Andrea Mitchell, chief foreign affair correspondent for NBC News.

Daniel Gillerman is the Israeli ambassador to the U.N.  Sir, thank you.

DAN GILLERMAN, ISRAELI AMBASSADOR TO THE U.N.:  Thank you.

MATTHEWS:  And it is a difficult job for you.  I see all the security around.  And I‘m watching myself.  Thank you for coming here.  This is a very diverse city, you should know.  It may be the most ethnically diverse city in the world.  A lot of arguments going on.  Does Israel feel the pressure of the world right now?

GILLERMAN:  No.  I don‘t think that we‘re feeling the pressure of the world.  Certainly not in this very friendly city and very diverse city.  As you know, there is probably more Jewish people here than any Israeli city. 

But even at the United Nations, we don‘t feel the pressure.  We may feel some more impatience.  We may feel more urgency.  But I think most of the world still realizes that we‘re fighting its war for it.  We‘re doing the dirty work for the rest of the world.  At the end of the day, we are the ones who are paying the price, but not just for ourselves.

MATTHEWS:  What do you think Condoleezza Rice wants from your government she‘s having trouble getting?  Because she keeps saying like the other day, that you‘re going to have an air cease fire.  At least an air cease fire, no more air attacks, and then you continue to do air attacks.  And then she says well the Israelis say that‘s just ground cover, that‘s just covering in support of troop on the ground, which could be seen by some people as a vocabulary difference.  It looks to me like the United States is trying to be agreeable to Israel, but Israel isn‘t willing to pull a little bit closer to us to make it clear that they are.

GILLERMAN:  I think Israel is very close to the United States.  The United States is our greatest ally and our greatest friend.  We have great confidence in Secretary Rice.  We think she‘s doing great work in the region and I think both she and us want the same thing.  We want to create the conditions on the ground which will never again allow Hezbollah to terrorize either us or Lebanon.  We don‘t want a forced cease-fire, which would just be like deja vu all over again.  We want a cease-fire which will make sure that Hezbollah is being disarmed, that it is never again capable of launching rockets and killing Israeli civilians, women and children, as it has done over the last few days. 

MATTHEWS:  That‘s a Yogi Berra expression by the way, deja vu all over again. 

GILLERMAN:  Yes, I know.  Yogi Berra, right.

MATTHEWS:  Let me ask you about the force.  Everyone talks very casually and easily about an international force.  Btu an international force would have to come up against directly Hezbollah.  They would have to say, you can‘t be here, you can‘t put a rocket launcher here.  In fact, we‘re going to put you under arrest if you try to do it.  They‘d have to engage them militarily. 

What countries of the world would be willing to send forces to take on Hezbollah on behalf of an attempt to keep them away from the Israeli border? 

GILLERMAN:  Well, we were hoping that the Lebanese government will take care of Hezbollah.  We were hoping that the international community would heed to Resolution 1559 of the Security Council, which demanded not only that the Syrians leave completely, but that Hezbollah is disarmed. 

Now that it hasn‘t happened and after the Hezbollah attacked us blatantly, from an area in a country which we have totally withdrawn from over six years ago, we have to go in and defend ourselves. 

And what we discovered, which we knew was there and we‘d warned the international community about it, is that they have managed over the last six years to amass a lethal arsenal of weapons and terror and missiles, a maze of bunkers and tunnels, and we need to put an end to it. 

And I think that if an international force, a serious, professional international force goes in, as they have in Kosovo, as NATO has done in other places, then we have a chance of disarming Hezbollah and not only making Israel safe again, but making Lebanon free again, and making the whole region free of terror. 

MATTHEWS:  I want you to paint me a scenario, Mr. Ambassador.  You represent Israel.  Israel would like to defend its border.  If we have an international force placed in the southern part of Lebanon, all well equipped, good morale, good food, good weapons, and Hezbollah decides to move in with a rocket attack or start shooting over them, what would that force do? 

GILLERMAN:  Well, I think first of all, the force would have to make sure that Hezbollah is disarmed and is not capable of doing so.  It would also have to guard not just the buffer zone between Israel and Lebanon, but also the Lebanese-Syrian border, to make sure that there is no arms shipments from Iran and Syria, who are the two main sponsors and perpetrators and harborers of Hezbollah.  If they do that, then the Hezbollah will be incapable of doing it. 

(CROSSTALK)

MATTHEWS:  ... Hezbollah shoots rockets right over the force any time they want to.  They got 90-mile range.  I was thinking, you have got a 20-mile cordon (inaudible) between the two countries.  You equip everybody, but behind that cordon is Hezbollah shooting the rockets off right into Israel.  What would stop it? 

GILLERMAN:  Well, what would stop it is the international community, which will have at one point say enough is enough.  That international force will have to have a mandate where it is not just a buffer force, but a force that can actually enforce the Security Council resolution. 

MATTHEWS:  So enforce the military rule over the territory of Lebanon, of the Lebanese army. 

GILLERMAN:  That‘s very true.  We hope that the Lebanese army, which could be capable of doing it eventually, will enforce its sovereignty over the whole of Lebanon. 

MATTHEWS:  Do you have any confidence that the Lebanese government will insist on a military monopoly? 

GILLERMAN:  I hope so very much. 

MATTHEWS:  They never have. 

GILLERMAN:  Well, they never have.  They‘ve let their freedom be snatched from them.  I mean, we all remember Lebanon as a fun-loving, thriving, prosperous, entrepreneurial country.  That has been seized away from them by the Syrians in the north and by terrorists in the south.  For 30 years, Lebanon hasn‘t had one minute of peace.  I think it is time not just for us but for the Lebanese people to regain their freedom, and I think they‘re actually capable of doing it. 

MATTHEWS:  Mr. Ambassador, is your intelligence on the ground and the skill and accuracy of the Israeli air force capable of isolating rocket launchers within a crowded population area, the way they‘ve done this with Hezbollah? 

GILLERMAN:  Well, we try to very much.  One of the reasons this is taking so long is because we‘re being very cautious, very measured and very careful.  But when you‘re fighting a brutal, cynical, ugly and horrible enemy that does not care for human lives, that uses humans as human shields, that uses women and children as hostages, sometimes, unfortunately, innocents get hurt.  The difference is that while we regard every dead Lebanese child as a mistake and a tragedy, for them every dead Israeli child is a victory and a cause for celebration. 

MATTHEWS:  Thank you very much, Mr. Ambassador. 

GILLERMAN:  Thank you, Chris. 

MATTHEWS:  Good luck.

GILLERMAN:  Good to be here.  Thank you very much. 

MATTHEWS:  Thank you very much, Ambassador Daniel Gillerman.

Coming up, Brian Williams, the anchor of “NBC NIGHTLY NEWS” (inaudible) on the top of the Rock, that‘s up there, where MSNBC.com 10-year celebration is going on.  You‘re watching HARDBALL from the plaza of Rockefeller Center, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re coming back from Rockefeller Plaza in the city John Lennon called the center of the consciousness of the universe.  Back with more HARDBALL.

(END VIDEOTAPE)

MATTHEWS:  Welcome back to HARDBALL.  We have, as you can see in a moment here, spectacular views from the top of the Rock at 30 Rockefeller Plaza, and we‘re here to celebrate, as I‘ve been saying for a while, the 10th anniversary of MSNBC.com, with our MSNBC.com friends Charlie Tanenhaus (ph) and Jennifer Sizemore (ph). 

And who better to celebrate with us tonight than “NBC NIGHTLY NEWS” anchor and veteran MSNBC.com blogger, Brian Williams, probably the most famous blogger in the world up there, next to the DailyKos.

Brian, you‘re up there.  I have got a loud crowd down here, and they‘re going to quiet down at any second.  Brian, see, they‘re cheering you in name.  As you hear that applause from the people.

(CROSSTALK)

MATTHEWS:  Yes, I‘ve got a question.  It is the biggest picture. 

The president had a plan in Iraq.  He had a plan that he is persistent with even through difficulty and the insurgency and the potential civil war.  He has stuck with that plan, that he can democratize in Iraq and start something new in the Mideast democracy.  How has the war between Israel and Hezbollah affected that plan? 

BRIAN WILLIAMS, NBC NEWS ANCHOR:  Chris, I think, and some of this is up to the president, some of it is up to events, obviously—I think everything is in play.  And my current fear, having just come back from that region, is that this is bigger.  This is bigger than we‘re playing it.  It‘s bigger than media coverage in general of Katyusha landings per day, Israeli air and artillery strikes and retaliation per day.  I don‘t know how this Israeli military operation proceeds from here.  I don‘t know how they go about killing an idea.

Let‘s say they go about finding all of the tunnels, all of the Katyusha, the medium and long range rockets, and the fighters themselves.  But that‘s why the worry. 

So Bush administration policy, I think they‘re going to continue on a dual track, Iraq and Israel.  Remember that as you and I have this conversation, the secretary of state, exhausted, has just landed at Andrews Air Force Base, and is having dinner tonight with the president.  Face to face, these two old friends and colleagues talking about what‘s next. 

Some of the free world calling on the United States to step up, assume that traditional role, and lead the fight for a cease-fire, while at the other end of the world, the Israeli prime minister says, no time soon. 

MATTHEWS:  Has this president—maybe this is too opinionated a question but I‘ll try it—historically, American presidents have worn two hats.  Friend of Israel for a lot of historic reasons and political reasons, and also the big power broker in the region, the referee who gets to blow the whistle when it gets too hot.  Is Bush ready to play that second role? 

WILLIAMS:  Chris, you were right in hesitating, because you are not going to get me to bite on that one.  As you know, I don‘t do opinion because of my job, my day job, calling balls and strikes. 

But I think this—I will say this does present a second front no one was looking for, least of whom the president. 

MATTHEWS:  Let‘s talk about what we‘ve come to understand as almost the red state/blue state differential in that part of the world, the Shia and the Sunni.  Hezbollah is Shia.  The countries we‘re most friendly with are Sunni—Egypt, Jordan, Saudi Arabia, et cetera.  Do you think that we‘re seeing a threat to them in this violence? 

WILLIAMS:  Well, I keep watching, as I know you do, the statements from what we always lump together as the moderate Arab nations in the region, their capitals and their leaders, to see if the rhetoric changes at all, to see through the vehicle of the United Nations, perhaps, if the rhetoric changes at all. 

So far, I think you would agree for the most part, that holds.  And I would love to be a fly on the wall, or a tap on the wire of the hotline phone calls between Washington and those friends of the United States in the Arab world, the so-called moderate nations because your question goes to one of the great unknowables of this news cycle.  And that is, what is going on on that front? 

MATTHEWS:  And the reason you have a question is because you‘re hearing that the people in the streets of those countries may have a different view of Hezbollah than their leaders. 

WILLIAMS:  Well, I hear very smart people on television.  I would point everyone to the interview Tim Russert conducted with Tom Friedman.  It is an endorsement of Tom Friedman‘s view, which is decidedly one way, the veteran of that region and veteran of “The New York Times” news and op-ed pages.  Such a fascinating view of the region by Tom Friedman this weekend. 

And yes, very smart people have said, Hezbollah enjoyed nowhere near the statue, standing or popularity that it does as we stand here and have this conversation tonight because of how this has gone on.  And just tonight, on “NIGHTLY NEWS,” David Gregory took on a special assignment to answer the question, did Israel miscalculate in this war against Hezbollah? 

All of this is changing.  Tomorrow will bring a new storyline.  But again, my fear is that the basic storyline is bigger and perhaps deadlier and perhaps much more worrisome than it is occurring to us right now. 

MATTHEWS:  Brian, please stay with us.  You‘re at the top of the Rock.  An amazing backdrop to your words here tonight.  We‘ll be right back with Brian Williams, anchor of the “NBC NIGHTLY NEWS” with HARDBALL from Rockefeller Plaza, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Going back to HARDBALL from Rockefeller Plaza in New York.  We got a lot of people out here, but we got one up on the roof there, Brian Williams, anchor of “THE NIGHTLY NEWS.”  He‘s joining us from the top of the Rock, it‘s called. 

Brian, you are a very famous blogger.  Tell us about how you try to use the blogging you do to complement your news reporting. 

WILLIAMS:  Well, today—well, Chris, thank you for the compliment. 

I‘ll accept the part that I am a blogger, not a very famous one. 

I did have to be talked into it.  I‘ve done it for over a year now every day.  And I call it kind of the viewers‘ guide to “NIGHTLY NEWS.”  It really is a companion of the broadcast. 

And I put it this way: As a kid in upstate New York, watching Walter Cronkite every night, unable to start the evening meal until he said “that‘s the way it is” and “THE EVENING NEWS” was over, I would have given anything, anything for a daily document to see what went into the editorial decision-making that I saw reflected on the screen. 

The color graphic early film from the Vietnam War.  What did you cut out?  What did we not see?  What was its journey from Saigon through Tokyo in the pouch to Hawaii and then Los Angeles to get on the air?  All the tritest, the stuff of news gathering. 

Today, I happened to write, here‘s the part of it that‘s transparent and leads to perhaps more of a conversation than we ever banked on.  Today, I happened to write that when I turned on my cell phone this morning, there was a voicemail on it from David Gregory, “call me before I get on the shuttle to Washington.”  A woman writes in, what was your cell phone doing off?  I have a home phone.  Everything is fine.  Company knows where to reach me.  But it‘s the kind of thing this conversation that never existed.

This technology was always one way.  We pushed out.  People took in at home.  And now it is leading to kind of a democratization.  Much more of a conversation than it ever was. 

MATTHEWS:  How did you put—where did you put the Mel Gibson story in the budget tonight?  Where did that go? 

WILLIAMS:  That was a close call.  Because I could argue either way.  I could argue that the Mel Gibson story was high interest, we can‘t be above what people define as news.  And I could also argue that it entails a whole lot of other societal aspects.  I could have argued, had anything happened late, had Andrea Mitchell landed with the secretary at 6:00 at Andrews, come bounding off the plane, as she is wont to do after 15 hours and say, I‘ve got a story, the secretary came to the press compartment on the plane, goodbye to all elective stories off-topic.  But as it was tonight, that was our call.

MATTHEWS:  How much time did you give the Mel story, the Mel Gibson story?

WILLIAMS:  Oh, less—just a little bit over a minute and a half, I think.

MATTHEWS:  Yes, I love the way you work.  Thank you very much, Brian Williams, a great inside look there that you can get on his blog every day.  See you at the top of the rock after the show, Brian.  Up next, could 2008 be an old New York showdown, a real subway series?  Rudy Giuliani, Hillary Rodham Clinton.  Could that be the game?  HARDBALL‘s Amy Goodman and Michael Smerconish are here at Rockefeller Plaza and you‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

(NEWS BREAK)

MATTHEWS:  We‘re back with Amy Goodman, there she is of Democracy Now radio and television and WPHT, radio talk show host Michael Smerconish, who‘s based in the city of brotherly love.  He‘s come to the Big Apple tonight.  I want to ask you both.  Is there a—let me go to Amy.  When you‘re on the radio, is there a lot—where is there more interest?  Is it in the Middle East between Israel and Hezbollah or is it between the United States and who we‘re fighting over there?

AMY GOODMAN, DEMOCRACY NOW RADIO:  I mean, I think it‘s all together.  And the kind of people that we‘re hearing from are people like an Israeli Air Force captain who is saying that Israeli soldiers should refuse to participate in this.  There are a lot of Israeli peace voices that are out there that are not being heard.  People like Mafa Goldvaser (ph), whose son is one of the two soldiers who was kidnapped by Hezbollah and she‘s calling for peace.  She‘s saying war is not the answer.

MATTHEWS:  So you‘re for a cease fire now?

GOODMAN:  I mean, I think there is no question. 

MATTHEWS:  How many here would like to see a cease fire immediately? 

How many would not like to have a cease fire right now?  OK, I can‘t find anybody.  Michael, in Philly, how‘s the debate going on the Middle East part of it, Israel versus its enemies in Lebanon?

MICHAEL SMERCONISH, WPHT TALK RADIO:  It would be Israel versus the situation in Iraq.  And Israel has far more attention.  But the proper question would be Mel Gibson versus the situation in Israel and I hate to tell you, there probably would be more interest in what‘s going on with The Mel Gibson controversy.

MATTHEWS:  Why?

SMERCONISH:  Because it‘s got all the elements.  You know, you‘ve got a Hollywood celebrity apparently hammered saying anti-semitic things, proof positive in some folks way of looking at this for all the concerns they had when he was doing “Passion of the Christ.”  And I think that whole pop culture mentality is something that‘s even more pervasive than the world events in the Middle East.

MATTHEWS:  How many here think that Mel Gibson‘s drunkenness and comments are more important than the war in the Middle East?

UNIDENTIFIED MALE:  MSNBC does.

MATTHEWS:  I haven‘t mentioned it all day, brother.  Let me ask you. 

Why do you think it‘s a big story?  Why is it bigger story than war?

SMERCONISH:  Well I think if folks are unfortunately fatigued by what they‘re watching on television with all the violence in the Middle East, the situation in Iraq having gone on for three years. 

By the way, let me be clear.  I‘m not defending it and saying Mel Gibson is a more important story.  I don‘t think that it is.  But the reality is...

MATTHEWS:  ... Is that a candy story?  It‘s just too easy to eat and enjoy.

SMERCONISH:  Absolutely.  Especially in the summer.

MATTHEWS:  Why do you think people would go to a story that‘s so high concept, so easy to understand, rather than a difficult problem that we have in the war in the Middle East and Iraq?

GOODMAN:  I think people deeply care about what‘s going on in the Middle East and Iraq.  I think we‘re talking about our sons, our daughters, our mothers, our fathers.  I look at young people here and I think about the kids in Qana that were just bombed in this Israeli air strike.  It‘s not enough for Israel to say we‘re sorry when the cabinet votes to expand the ground offensive.  We‘re talking about living in the 21st century.  There has to be an answer other than war.  It is only going to make Israel unsafe.  It‘s only going to make the United States unsafe.

MATTHEWS:  How does Israel make itself safe when it‘s got Hezbollah on its border?

GOODMAN:  Negotiation is the only answer.  It is true for Iraq.

MATTHEWS:  What is the base of negotiating with a country...

GOODMAN:  ... It‘s true for Hezbollah.  It‘s true for Gaza and West Bank.

MATTHEWS:  OK, Michael, do you want to get in this?

SMERCONISH:  Yes, how do you negotiate with folks who are going to send missiles in your direction from the middle of a civilian neighborhood?  I mean, it‘s an unfortunate, it‘s terrible what transpired.  But the reality is that there is no other way to combat terrorism.  And that‘s who we‘re combating.

GOODMAN:  You don‘t negotiate with your friends.  You negotiate with your enemies.  You come up with viable solutions that both can live with.  What we‘re talking about is not even Hezbollah.  We‘re talking about more than 700 Lebanese civilians, overwhelming civilian.  Did they deserve to die over these last few weeks?

MATTHEWS:  So as the Katyusha rockets are shot into Haifa, the Israelis should do what, nothing?  They should sit on their hands?

GOODMAN:  It is terrible that the Katyusha rockets are flying into Israel and it is terrible that Israel is bombing Lebanon.  Right now we‘re talking about civilians.  And Israel has the capacity to call for a cease fire and the United States should not be sending bombs to Israel, which is exactly what they did, even over the objections of one of the British cabinet members.  They should not be sending bombs to Israel.  They should be demanding an immediate cease fire.  This is about our national security and it‘s about the national security of countries all over the Middle East.

MATTHEWS:  OK, who wants to ask a question of one of these people?  Do you have a question, miss?  Address it to Amy or to Michael.

UNIDENTIFIED FEMALE:  Hi.  My question is for Michael.  You speak about how American citizens would be more interested in this controversy, or in the war in the Middle East that‘s currently going on if there was some celebrity figure.  Do you think that the news plays any role in kind of hiding or not totally presenting the various historical perspectives?

SMERCONISH:  No.  I don‘t blame the media.  I think that MSNBC by way of example, is going to give you whatever it is you want to watch.  All they‘re there to do is fulfill your appetite.  I‘m just making the point that I think it‘s a sad commentary on the United States that Chris asks the question about which is there most interest, the situation in Iraq or the situation in Israel, and my response is neither.  The Mel Gibson story is the story of the day.  I‘m not proud of that, but that‘s the reality. 

GOODMAN:  Americans are so much smarter than that.  And Americans are a compassionate people.  And if they saw the images on the ground, if they saw people, kids dead on the ground in Lebanon, if they saw Israeli kids dead on the ground, they would say no, this is not the answer.  We need a media in this country that is open to the voice of (inaudible).

SMERCONISH:  I want to respond to something that you said before that I‘d like to—I hope that you‘ll agree with me—that the 50 civilian deaths, most of whom are children, is the fault of Hezbollah, not of Israel, because Hezbollah used those kids as human shields.  Would you agree with that? 

GOODMAN:  I would say that right now, we‘re talking about terroristic tactics on both sides, and we, talking in a civilized way, can be a model for how this has to be negotiated. 

Listen, ultimately, face it.  It is going to be negotiated.  It is just a matter of how many kids have to die. 

MATTHEWS:  Let me give Michael a chance.  OK, what‘s your take on Mel Gibson? 

SMERCONISH:  Mel Gibson, do I have to say allegedly before...

MATTHEWS:  Whatever you want to say.  You‘re bringing him up twice. 

SMERCONISH:  He‘s a drunkard and an anti-Semite.  And I feel like this is confirmation of what many of us believe.  And by the way, Chris, I say this as a Catholic who enjoyed to the extent anyone could enjoy “Passion of the Christ.”  But I always had concerns.  You know, seed of the father.  He didn‘t disavow those comments to my level of satisfaction when dad went off on that rant.  And the reality is—wait a minute, when you‘re drunk, except for if you‘re slobbering over the company secretary, when you‘re drunk, I say you say things that you really believe.

MATTHEWS:  I believe it‘s truth serum.  We know that.

SMERCONISH:  Right.

MATTHEWS:  We‘ll be right back with Michael Smerconish, speaking the truth soberly, and Amy Goodman.

(COMMERCIAL BREAK)

MATTHEWS:  Coming up, the subway series.  Hillary against Rudy, when HARDBALL returns.

(COMMERCIAL BREAK)

MATTHEWS:  Tonight is the, as I said about a thousand times tonight, the 10th anniversary of MSNBC.com.  We‘re here at Rockefeller Plaza, one of the most interesting, iconic spots in New York, where “THE TODAY SHOW” always does its broadcasts.  And at the top of this building, I think you‘re looking at pictures of the party that‘s going on on top of the Rock.  We‘re going to be up there later. 

I want to keep these questions going because we‘re talking—it‘s like being in the world community here, right near the U.N. here and we see all these flags up here.  And we‘re going to go to you, sir. 

UNIDENTIFIED MALE:  Hi.  My question is, because this entire rivalry, if you call it that, is fundamentally religious, you know, it is something deep seated in these people‘s beliefs, is this problem ever going to be fixed? 

GOODMAN:  Well, I just wanted to say one thing before I answer that question.  You said—since you said all the executives are on the top of the Rock.  I want to congratulate you, Chris, on 10 years of MSNBC.  But I wish standing with you was Phil Donahue.  He shouldn‘t have been fired for expressing an anti-war point of view on the eve of the election.  His point of view and the people he (inaudible)...

MATTHEWS:  I don‘t know what the reasons were, but I doubt it was that. 

GOODMAN:  Well, we have the NBC memo that was a secret memo that came out that said they didn‘t want him to be the face of this network, an anti-war face at a time when the other networks were waving the flag. 

(CROSSTALK)

MATTHEWS:  ... remember me when you answer it.  What?

SMERCONISH:  The answer to the question is, and I say this as one with four kids, I don‘t think it is going to be solved in our lifetime, because they are raising their kids to hate and want to kill our kids.  And that‘s the reality.  And until those madrassas are solved and they stop preaching hatred against the Jews and the Americans, we‘re never going to get beyond this. 

MATTHEWS:  Well, if being against the war was a problem here, I would have been out of here about four years ago, because I‘ve been against this war from day one, and that didn‘t cost me my job.

GOODMAN:  I congratulate you, Chris...

MATTHEWS:  So let me just say, they‘re not against anti-war people.  But there‘s so much conservative tendencies in corporate America.  You know that.

Yes, sir.

UNIDENTIFIED MALE:  Regarding the cease-fire, I‘m sorry, why doesn‘t Hezbollah just return the two Israeli soldiers? 

GOODMAN:  Well, this is about a negotiation.  I mean, I‘m not here to condone Hezbollah.  I‘m not here to condone the state—the state of Israel‘s tactics right now.  I think what we have to talk about is a negotiated settlement. 

We‘re talking about the world at stake right now.  Hezbollah has managed to do something that no one thought they could do before.  They have united Shia, they‘ve united Sunni, they‘ve united Maronite Christian.  The levels of Hezbollah popularity in Lebanon are skyrocketing, because the people of Lebanon are being bombed.  It‘s indiscriminate.  It‘s civilian.  It is not about who we support.  It is about what is possible in the world today.  What are we—are we willing to see an explosion in the Middle East like we‘ve never seen before? 

I think we have to be civilized about this.  I don‘t care your political persuasion.  I think we care about peace. 

SMERCONISH:  The short answer, if I can get in on this, the short answer is, you ask an excellent question.  There is so much “who shot John” relative to what goes on in the Middle East.  But not with the last 20 days.  I mean, the reality is that this entire war was begun because Hezbollah captured those two soldiers by crossing the line, didn‘t return them, still had not returned them. 

GOODMAN:  Negotiation.  Settlement.  Cease-fire.  That‘s what is going to save the lives of hundreds of people. 

MATTHEWS:  Let me ask everybody one last time, how many here are completely for Israel‘s way of fighting this war?  100 percent? 

(SOME CHEERS AND APPLAUSE)

MATTHEWS:  How many think—how many have a little problem or a big problem with the way Israel is fighting this war?  

(CHEERS AND APPLAUSE)

MATTHEWS:  How many are with Hezbollah?  I think that was muffled. 

GOODMAN:  I also the urge the media to cover the peace movement. 

MATTHEWS:  Amy Goodman, thank you...

GOODMAN:  Two thousand people marched in Tel Aviv last weekend. 

People are saying no to war, both in this country and in Israel. 

MATTHEWS:  Amy Goodman, thank you very much, from Democracy Now.  And Michael Smerconish, the best voice in Philadelphia.  (inaudible).  We‘ll be right back with the people (inaudible) MSNBC.com 10th anniversary from Rockefeller Plaza.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back here with the crowd and we have a couple of new people to join the crowd.  And I said , this is the most international crowd you‘re likely to find in the free world.  Anne Kornblut writes for “The New York Times,” front page stuff, straight reporter, no opinion.  Jonathan Alter, a mix of opinion, analysis and history.  You wrote a great book  It‘s called...

JONATHAN ALTER, AUTHOR:  “The Defining Moment.”

MATTHEWS:  It‘s about FDR.  He also writes every week a great column for “Newsweek.”  Let me ask you both, you can‘t take a prediction, but you can assess the situation.  As things stand now, who will win the Democratic primary for senator in Connecticut?

ANNE KORNBLUT, THE NEW YORK TIMES:  That is the $64,000 question. 

It‘s neck in neck.  All the polls...

MATTHEWS:  ... It‘s next Tuesday.

KORNBLUT:  Next Tuesday.  All the polls show them running neck and neck.  Some show Lamont up a little bit, the anti-war challenger.  Some show it just to be a dead heat.  So we don‘t know.

MATTHEWS:  Jon?

ALTER:  I think it‘s a question of whether the unions and Bill Clinton can drag Joe Lieberman over the finish line.  Lamont has all the momentum.  He‘s got all the passion.  And remember, there are a lot of people out of town the beginning of August.  And so the committed activists are the ones who show up at the polls, that favors Lamont.

MATTHEWS:  OK, it‘s the most interesting political contest of the summer.  What will be the implications in Lieberman loses the primary?  For the country?

KORNBLUT:  Absolutely huge, absolutely huge.

MATTHEWS:  What will happen to the Democratic Party?

KORNBLUT:  Well, it will go on.  Connecticut is not a state...

MATTHEWS:  ... I mean all across the country, what are the reverberations?

KORNBLUT:  I think Democrats look at this as a litmus test of the war in Iraq and how you run it and also the power of not just the blogs, but the anti-war activists, don‘t you think?

MATTHEWS:  What about fund-raising?

ALTER:  No, I don‘t think—I think it would make a huge mistake to suggest that the blogs somehow gave Ned Lamont this victory.  So it‘s important not to over-read what happens.

MATTHEWS:  Well it could be read by the magazines, your magazine, if Lamont beats Lieberman, could it be Democrats declare anti-war stance or take Democratic...

ALTER:  ... Yes.  I think what it will do is it will put some starch in the Democrats on the war issue.

MATTHEWS:  Will Hillary flip after this if Lieberman loses?

KORNBLUT:  Well, flip how?

MATTHEWS:  Flip toward the anti-war position?

KORNBLUT:  She has actually been a lot more critical of the war than Lieberman has.  She has backed away from it in a way that Lieberman never would.

MATTHEWS:  It‘s like the electric slide.  It‘s like moving over there to the left.

ALTER:  What they‘re going to do is go hard on the incompetence of the execution of the war and try not for look backwards at whether we should have gone.

MATTHEWS:  In other words, they‘re going to hedge their bets.

ALTER:  No, but a lot of Democrats, I think, will be tougher on this now.

MATTHEWS:  OK, in other words, it‘s the right war, but the wrong fighting of it.

ALTER:  That‘s...

MATTHEWS:  ... What‘s wrong with that argument, John, is if you think George Bush made the toughest decision of his life, to go into Iraq and it was the smart decision, he deserves to have a place in history.  You can‘t say he did the right thing but he didn‘t quite do it right.

ALTER:  That‘s where I think all these ‘08 candidates are going to eventually have to do what John Edwards did, which is to say...

MATTHEWS:  ... Do the back flip.

ALTER:  I made a mistake, I made a mistake, if I would have known what I know now.

MATTHEWS:  And Kerry hasn‘t quite done that yet, has he?

ALTER:  No, Kerry has done it, but Hillary has not and she‘s going to have to do it sooner or later.

MATTHEWS:  So sooner or later, you‘ve got to do one of these Mel Gibson‘s, I was dead wrong.

ALTER:  Right.  I don‘t know about that comparison.

MATTHEWS:  I like that one because I did everything—I don‘t even believe what I‘m saying.  I know it‘s all stupid.  I like public relations people.  Thank you.

Let‘s get into the crowd here.  Are you trying to talk to mom or what?  OK, who wants to get into this fight here?  A position on the politics of this election—anybody from Connecticut here?  Anybody from New York?

OK, let me ask you.  Do you think Hillary, if she ran against Rudy Giuliani, in what we used to call in baseball, a subway series, who would win?

UNIDENTIFIED FEMALE:  Hillary.

MATTHEWS:  In the country?

UNIDENTIFIED FEMALE:  Yes.

MATTHEWS:  You want Hillary to win.

UNIDENTIFIED FEMALE:  Absolutely.

MATTHEWS:  Have you ever been objective in your life?

UNIDENTIFIED FEMALE:  Yes.

MATTHEWS:  No, you haven‘t.  You have never been objective.

UNIDENTIFIED FEMALE:  Yes, I have.

MATTHEWS:  Let me ask you, sir, where are you from?

UNIDENTIFIED MALE:  Florida.

MATTHEWS:  What‘s your position on the Hillary versus Rudy likelihood?

UNIDENTIFIED MALE:  Well, I prefer Rudy.

MATTHEWS:  Well, we‘re even so far.  Do you know who Rudy Giuliani is?

UNIDENTIFIED MALE:  No.

MATTHEWS:  Do you know how to spell his name?

UNIDENTIFIED MALE:  No.

MATTHEWS:  Let me ask you, do you have a position on Giuliani over Hillary Clinton?

UNIDENTIFIED FEMALE:  I would say Rudy.

MATTHEWS:  Two to one.

UNIDENTIFIED MALE:  I‘m going to Hillary.

CROWD:  Hillary, Hillary.

UNIDENTIFIED FEMALE:  Absolutely, Rudy.

MATTHEWS:  Rudy 3-2.

CROWD:  Rudy.

(CROSSTALK)

UNIDENTIFIED MALE:  Rudy.

UNIDENTIFIED MALE:  Rudy.

MATTHEWS:  5-2, 6-2.

UNIDENTIFIED MALE:  Rudy.

MATTHEWS:  7-2.

UNIDENTIFIED MALE:  Hillary.

MATTHEWS:  7-3.

UNIDENTIFIED MALE:  Hillary.

MATTHEWS:  7-4.

UNIDENTIFIED FEMALE:  7-5, getting even here.

MATTHEWS:  Hillary or Rudy?

UNIDENTIFIED FEMALE:  Giuliani.

MATTHEWS:  I think you prompted that.  I only give you one vote. 

That‘s 8-3.

UNIDENTIFIED FEMALE:  Hillary doesn‘t stand up...

MATTHEWS:  ... Hillary doesn‘t what?

UNIDENTIFIED FEMALE:  No, she doesn‘t stand up for women.

MATTHEWS:  Sir, Hillary or Rudy?

UNIDENTIFIED MALE:  Neither.

MATTHEWS:  Oh, how cruel.

UNIDENTIFIED MALE:  Rudy, definitely.

MATTHEWS:  10-4.

UNIDENTIFIED FEMALE:  Rudy.

MATTHEWS:  11-4.

UNIDENTIFIED MALE:  Rudy.

MATTHEWS:  12-4.

UNIDENTIFIED MALE:  Rudy.

MATTHEWS:  13-4.

UNIDENTIFIED MALE:  Hillary.

MATTHEWS:  13-5.

UNIDENTIFIED FEMALE:  Hillary.

MATTHEWS:  13-6. 

UNIDENTIFIED FEMALE:  Hillary.

MATTHEWS:  13-7.

UNIDENTIFIED FEMALE:  Hillary.

MATTHEWS:  13-8.

MATTHEWS:  It‘s getting close.

UNIDENTIFIED FEMALE:  Hillary.

MATTHEWS:  13-9.

UNIDENTIFIED MALE:  Hillary all the way.

MATTHEWS:   13-10.

UNIDENTIFIED FEMALE:  Rudy.

MATTHEWS:  14-10.

UNIDENTIFIED MALE:  Rudy.

MATTHEWS:  15-10.  Oh, she‘s pulling her eye out.  Yes, sir?

UNIDENTIFIED MALE:  Hillary.

MATTHEWS:  15-11.  You know, this is going to even out.

UNIDENTIFIED MALE:  Rudy.

MATTHEWS:  16-10.

UNIDENTIFIED MALE:  Hillary. 

MATTHEWS:  16-11.  You counted twice.  You‘re a typical New Yorker, you voted twice.  That‘s about it.  Anyway, thank you.  Where are they?  Where did they go, where did they go?  Jon, what are the chances of Hillary being the nominee?

ALTER:  I don‘t think they‘re as great as a lot of people say.  Here‘s why.  Democrats want to win and they‘re not going to go over the cliff with her.  So if she‘s trailing in the polls against Giuliani or McCain or whoever the Republican is, a lot of Democrats are going to say, we want to win and they‘re going to go with somebody else.  So don‘t bet the ranch on Hillary being the nominee.

MATTHEWS:  Do you think, Anne Kornblut, studying this as an objective front-page reporter, that women are thrilled at the prospect of a woman president?

KORNBLUT:  I think a lot of women are enthusiastic.  The polls show they‘re enthusiastic about the idea of a first woman president.  Whether or not that‘s Hillary remains to be seen.  I liked your scientific poll, though.

MATTHEWS:  No, that‘s as good as most.  “The New York Times” poll would probably be a finer version of it.  Let me ask you this, does this city feel safer for you to live there than it did—well let‘s say, has President Bush helped make this city safe?

ALTER:  President Bush?

MATTHEWS:  Yes.  There hasn‘t been a hit since 9/11.

ALTER:  He doesn‘t get the credit for it, whether it did or not. 

MATTHEWS:  Do you give him credit?

ALTER:  Giuliani and Bloomberg are the ones who get the credit right now.  So no, I don‘t give him the credit for it, because I think if you took a hard look at the management of the homeland security department, and a lot of the decisions they‘ve made, they haven‘t protected the chemical plants out in New Jersey, a lot of other things.

MATTHEWS:  We‘ve got to go.  Jon Alter, thank you sir, “Newsweek.”  I read you every day.  Anne Kornblut, front-page reporter for “The New York Times.”  There‘s a big party going on upstairs at the top of the rock.  We‘ll be joining them.  We‘re at Rockefeller Plaza.  The reason we‘re here tonight, it is a big night for us, the 10th anniversary—the 10th anniversary of MSNBC.com, the most successful Internet spot there is. 

Everybody uses it, keep using it.  Good night from New York, the nation‘s -

no it‘s not the nation‘s capital.  It‘s metropolis, Gotham, the Big Apple, the city that‘s so nice they named it twice, New York, New York.  From New York, good night.  Coming up next, Keith Olbermann, “COUNTDOWN.”

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

END   

Copy: Content and programming copyright 2006 MSNBC.  ALL RIGHTS RESERVED.  Transcription Copyright 2006 Voxant, Inc. (www.voxant.com) ALL RIGHTS  RESERVED. No license is granted to the user of this material other than for research. User may not reproduce or redistribute the material except for user‘s personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon MSNBC and Voxant, Inc.‘s copyright or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.

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