WASHINGTON - After three and a half years at the nerve center of U.S. defense policy under President George Bush, former undersecretary of defense Dr. Dov S. Zakheim decided to quit and try his luck in the private sector. In his first interview since he left the Bush team, Zakheim insisted that, when viewed from the Pentagon, the situation in Iraq does not look so bleak. The causes for the war were entirely plausible, he says - and insists most Iraqis support the United States.

In the end, he predicts, Iraq's situation will stabilize, and the country will move forward. Yet while he is sanguine about Iraq's future, Zakheim's take on the Israeli-Palestinian dispute is grim. He believes Israel is missing an opportunity to leave the territories, and has squandered possibilities under the administration of an extremely sympathetic president.

"It's a huge mistake," says Zakheim, referring to the widely held view that the Bush administration isn't eager to take steps to promote a solution to the dispute. In his opinion, Israel is wrong to interpret affirmations of unqualified support on security issues made by the Bush administration as America's desire to preserve the status quo, or even as a lack of interest in the dispute.

Zakheim, an Orthodox Jew who defines himself as a friend of Israel, speaks as though he knows exactly where the problem is to be found, and what to do about it. The problem, as far as he's concerned, is the settlements, and the solution is to negotiate an agreement, the sooner the better.

"I think Israel has in the past three years lost a strategic opportunity to make progress with the Palestinians," he said, seated in his new, Washington area office as vice president of the large consulting firm Booz-Allen-Hamilton. "The right approach is to say, `look, we have a White House that supports us, we have a president who cares about Israel's security and whom we trust. Now, using that as a strength, what need we do to solve the Palestinian issue."

Zakheim's last visit to Israel was in March, a short time before he left his post as Defense Department Comptroller. This visit, like preceding trips in recent years, made Zakheim feel uneasy. "Every time I go to Israel it looks dirtier than before," he complained. "Jerusalem is a disgrace to look at. Each time I go there it looks more and more like a garbage can."

Zakheim's grievances are not limited to aesthetics. He believes Israel's situation is deteriorating in all respects because of its investment in settlements. "You're taking money out of education, money out of welfare, money out of jobs, money out of infrastructure, and pouring it into the West Bank," he said. "Israel's society is suffering a lot as a result of the settlements."

Settlers out

Framing his arguments as an economist, he calls for Israeli withdrawal from the territories. Asked as to whether the U.S. should help pay for the removal of settlements, he shrugs his shoulders. "We should pay for their mishugas," he says of the settlers.

Before his departure, Zakheim was one of three prominent Jews in the Defense Department, alongside deputy secretary of defense Paul Wolfowitz, and undersecretary of defense for policy, Douglas Feith. In contrast to Wolfowitz and Feith, Zakheim is not readily identified as a neoconservative. He calls himself a conservative from the old school and he admits to being troubled by the growing chorus of voices in the U.S. which blames Jewish neocons for promoting the war in Iraq.

From the time when reports about the Bush administration's intention to go to war started to circulate, critics have charged that Jewish neoconservatives in the Pentagon were responsible for dragging the U.S. into war with Iraq, with the intention of protecting Israeli, not American, interests. Proponents of this claim hail from all parts of the political spectrum, starting with arch-conservative Pat Buchanan, and continuing with two Democrats from Capitol Hill, Congressman Jim Moran (Virginia), and Senator Friz Hollings (South Carolina).

"Pat Buchanan, in my view, is an anti-Semite," said Zakheim. "I'm sorry, but you cannot keep saying what he says, and say he's not an anti-Semite. He is an anti-Semite. I know one when I see one."

Brushing aside claims that Jews were behind the war in Iraq, he cites a policy-making core of neo-cons who are not Jewish - Vice President Dick Cheney, Defense Secretary Donald Rumsfeld, and National Security Adviser Condoleezza Rice. Asked to elaborate, he denies that Jews persuaded decision-makers that America should go to war. "Did the Jews brainwash Donald Rumsfeld? Are you kidding? And President Bush? He's not a fool, or he would not be president."

Zakheim believes attacks against senior U.S. officials who are Jewish about responsibility for the war are a new form of anti-Semitism. "It's some sort of the `Protocols of the Elders of Zion' all over again," he claims. "This has become the fashionable way to be anti-Semitic. It's like saying `some of my best friends are Jews, but those neo-conservatives...'"

Zakheim says claims about the war in Iraq being orchestrated to help Israel are ridiculous. Were this to be the case, he explains, Bush would have referred to the plan during the 2000 Presidential elections, and promised that he would fight against Saddam Hussein in order to save Israel. After his more than three years in the Pentagon, Zakheim believes that the toppling of Saddam Hussein didn't have much impact on Israel - the war in Iraq did little to improve Israeli security, he claims. Asked specifically whether Israel is safer today because of the war in Iraq, he said: "No. Israel's problem is with the Palestinians."

Four years ago, when Zakheim was on presidential candidate George Bush's foreign policy planning team, he told Haaretz the U.S. did not need to play policeman around the globe, and that American military involvement overseas should be reserved for extreme situations, such as the prevention of genocide.

Justified war

Since then, Bush was elected to the White House, Zakheim became under secretary of Defense, and America sent 150,000 soldiers overseas to topple Saddam's regime. "I wasn't in policy," Zakheim says, referring to these dramatic developments. "I was trying to implement the policy."

Although he says he objects to "nation building" as an objective in American foreign policy, he believes the war in Iraq was justified. In his view, if Iraq becomes a positive presence in the Middle East within the next year or two - that is, if Iraq lives in peace with its neighbors and opens relations with Israel - it would be a major accomplishment. "It is much more than what was expected from Saddam Hussein, or from Uday and Qusay."

Zakheim dismisses criticism about the rationale for America's involvement in Iraq. The suspicion that Saddam Hussein harbored weapons of mass destruction was reasonable, he says. Saddam, says Zakheim, "acted as though he had weapons of mass destruction. It would have made much more sense for him to let the UN inspectors do their jobs, and to keep enjoying money from the `oil for food' program that built his palaces while his people were starving."

During a visit to Iraq last year, Zakheim recalls, he entered one of Saddam Hussein's palaces, and witnessed a room in which the Iraqi dictator stored a collection of prized whiskey. "From the floor to the ceiling, he had stored up crates of the best single malt, all from `oil for food.' So why should he lie to the world?"

Alongside such claims about corruption in Saddam Hussein's regime, Zakheim brings up the issue of terror. Given Saddam Hussein's well-known support for Palestinian suicide bombers, "why is it so hard to believe that he had ties with Al-Qaida," Zakheim wonders. "If you make the connection - Iraq, weapons of mass destruction, terrorism - then it definitely becomes a world problem," he concludes.

The situation today, he continues, is not bad at all. In terms of the big picture, the Middle East is better off without Saddam Hussein. The majority of Iraqis support America's presence; and the world is starting to stand behind the U.S. effort. Resistance by rebel groups will be defeated, Zakheim predicts. "So the balance is definitely positive."

Zakheim says he is troubled by analogies drawn between the U.S. role in Iraq, and France's in Algeria during the Cold War. The French ruled in Algeria whereas government power in Iraq is being transferred to Iraqis. "In fact," Zakheim clarifies, "the case of Algiers is more like Palestine and I think the people in Israel should so some more reading about it."

Israelis who worked with Zakheim are full of praise for his professionalism. Though he always upheld American interests, they say, he had a warm place in his heart for Israel and he did as much as he could to help. For instance, after the start of the intifada, when it became clear that Israel's police force lacked equipment to defuse bombs, Zakheim found funds, and arranged a transfer of $28 million for automatic gear used by sappers. Zakheim is proud of his close relations with many Israelis - recently his son was married in Jerusalem, but at the time, a stepson who went on a photo-shoot in Hebron was beaten by settlers.

He intends to continue to visit Israel. Scars left by the Lavi project, he adds, have vanished. Zakheim was understood to be responsible for scrapping U.S. support for the project - this happened after then secretary of defense Casper Weinberger asked him to analyze the plane's worthiness. Zakheim concluded that the Lavi project was a mistake. "All those who were in [Israel's] cabinet, even the ones who voted for the Lavi, have come to me since then and told me I did Israel a big favor."