Transcript from Fox News:
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BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: I didn't retract any of the things that I said in my speech six years ago calling for a solution in which a demilitarized Palestinian state recognizes a Jewish state. I said that the conditions for that today are not achievable.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: I indicated to him back given his statements prior to the election, it is going to be hard to find a path where people are seriously believing that negotiations are possible.
(END VIDEO CLIP)
WALLACE: Israeli Prime Minister Netanyahu denying he ruled out creation of a Palestinian state the day before elections and President Obama refusing to let him off the hook. And we're back now with the panel. Bob, it seems to me the most interesting development this week was not Netanyahu's on again, off again, on again relationship for support for a two-state solution. It was President Obama's decision, clear decision to ratchet up the tension between his administration and Netanyahu. How do you explain that?
WOODWARD: Yeah. Well, I mean that's a move, but I suspect if we had a transcript of the Obama/Netanyahu phone call a couple of days ago, it would contain the elements they say. But they need each other. And Obama remembers, a politician, and he realized Netanyahu did some things to stay in office. And I think ...
WALLACE: But wait a minute. I mean you had that, but then the day after and even after he seemed to walk things back on Thursday, you had the State Department, you had the White House spokesman, now you have President Obama all in effect saying, no. You know, he said and Obama said I take him at his word, he doesn't support a Palestinian --
WOODWARD: Yes, but his word is he is riding both horses, as we know is documented. And I don't think this is the really central thing going on if I may disagree with you.
WALLACE: It's a lie ....
WOODWARD: I thought the most important thing going on is the Iran negotiation. And very interestingly, just yesterday, I guess, it was "The Huffington Post" put out an interview with Obama. And he said, yeah, we expect maybe we'll get a deal in weeks, and then he said two things. He said, we need Iran to make more concessions. Have you ever been involved in a negotiation? In a negotiation you don't go public and say, oh, yeah, we want concessions from the other side. As we know, there is politics in Iran. And in Iran, there are hard liners and soft liners.
WALLACE: Forgive me.
WALLACE: But I want to talk about Israel. And I think you're glossing over what I think is a fairly remarkable statement. You even had the administration, Liz, talking about the possibility of abandoning Israel at the U.N. and letting a resolution pass that would recognize a Palestine state?
CHENEY: Look, the administration has now I would say since 2009 been looking for any excuse possible to distance the United States from Israel. You now have this unbelievable situation where we are aligning ourselves more with the Iranians than with the Israelis in the Middle East. And I just noticed something else in that interview that you showed, which is stunning to me that demonstrates this total lack of familiarity on the part of the president of what's happening around the world. He said we have got to evaluate what other options are available in terms of a two-state solution. To make sure we don't see a chaotic situation in the region. What in the world does he think is going on in the region? And from the Israeli perspective, I think you've got to say it makes complete sense that they at this point would not trust their security to an American president who doesn't have their interests in mind, who has done everything he can to distance himself from them and seems to be totally unaware at best of the complete and total mess his policies have created in their neighborhood. It's really breathtaking.
WALLACE: You know, Judy, White House chief of staff Denis McDonough is going to speak to J Street tomorrow. This is a pro-Israeli, but liberal democratic group that has been very critical of Netanyahu and it just seems to be one more indication, you know, we don't know what McDonough is going to say, but the fact that he would talk to this group would seem to indicate they're going to continue to ratchet this up.
WOODRUFF: Well, it looks that way. But I think, you know, I think as Bob said and I think as Liz is suggesting, there's so much at stake in the relationship between the United States and Israel. It's hard to believe that people like Denis McDonough and people who were making decisions in this administration aren't taking the long view.
Yes, there clearly is a short-term peak over what happened. And I think people are looking both at the politics of it because it's clear -- I mean, it's clear to me that Republicans are going to do better with the Jewish vote in the future, given what's happened in the last few weeks with Netanyahu. You know, one can assume there are going to be more votes, more money from Jewish voters who maybe thought they would never be voting Republican are seriously considering doing that now.
At the same time, I think what Netanyahu has helped to do is to create questions about this historic bipartisan support for Israel in the United States. And I think the younger generation of Jewish voters from talking to people who know the American Jewish community well, younger Jewish voters, Jewish voters who just are not comfortable with Netanyahu's, some of his domestic positions are questioning whether they're going to continue to support Israel like they have.
WALLACE: I have got to say, I'm a little bit stunned here. Because it seems to me there's been a fairly dramatic development here. Am I crazy?
INGRAHAM: No, you're absolutely right. This is what Obama treats Netanyahu similarly the way he treats the Tea Party. But in this case, it's dangerous, it's irresponsible, and it's incredibly immature. His petulance after Netanyahu clearly steps back a little bit from his statements about the Palestinian, you know, the two-state solution, unclenching his fist and reaching out back to the United States. Now, the president made that big speech early on in this administration to the Muslim world, if you unclench your fist I'll take your hand. Here it is a slap across the face to a man who won a solid victory in a democratic election in the Middle East.
WALLACE: But wait, wait, wait. Now, you're going, to me you're going a little bit too far the other way. Don't you think Netanyahu bears some responsibility for going to Congress and speaking there? I mean it isn't as if he's been the innocent victim in this ratcheting up of relations.
INGRAHAM: The president brought David Cameron here to the United States to do phone a friend in Congress to try to move congressional opinion.
WALLACE: That's a little different than ...
INGRAHAM: Well, we're bringing outside people into the United States a lot, the Congress, OK. Have a disagreement with him about that. That's fine. You know what would have been the mature thing for him to have done? He said, you know something, you're in town to give this speech, I'm not thrilled by it. Let's come - let's talk. I want you to come over to the White House and let's talk. That would have been a mature thing. That would have been good for America. It's supposed to be what's good for our security and regional security. This approach has been counter-productive.
WOODWARD: The dynamics at all. I mean serious disagreement, but as everyone has said, including President Obama, in the phone conversation with Netanyahu, they agreed that the military intelligence and diplomatic alignment remains. That's what's important. This is not going to change the overall.
WOODRUFF: I think it clearly -- sorry, Bob, but I think it clearly does change the overall relationship. You know, I was in Israel last year and they are stunned. They cannot comprehend why the president of the United States is obviously doing more to align American policy with Iran than with Israel. And you've got a situation now where it's not just the Israelis that are just completely baffled. It's the Gulf Arabs. You know, in the Brennan interview, he said oh, the Gulf Arabs know that we will be there to defend them. They don't believe that anymore and the Israelis don't believe it anymore.
WOODWARD: It just is not true that the president has aligned himself with the Iranians on this. Come on, he said, look, we're going to have intrusive inspections, is that alignment?
WALLACE: It's the Middle East, we're never going to agree. But thank you for disagreeing so agreeably. Thank you, panel. See you next Sunday.
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