[Daryn Kagan, Cnn Anchor:] Joining us right now is former U.S. ambassador to Egypt, Nicholas Veliotes, who joins us from Washington with his insights. Mr. Ambassador, good morning thank you for joining us. We appreciate it.
[Nicholas Veliotes, Fmr. U.s. Ambassador To Egypt:] Good morning.
[Kagan:] What do you make of the latest coverage that we are seeing, especially what is taking place outside the U.S. Embassy in Beirut, the anger and the violence spreading far beyond the West Bank of Israel.
[Veliotes:] And it is not surprising. The situation in the West Bank and Gaza is an obscenity, and the perception throughout the Arab world and beyond is that the American
[Kagan:] What about these alleged documents that the Israelis said that they found inside Yasser Arafat's compound? Do you make anything of that? Did that provide a link to you that he is, indeed, part of this terrorist activity, and that he has been sponsoring it and
[Veliotes:] You know, I can't really comment on the veracity of that document. We know that General Sharon has announced that he has found a document, and we know that the Palestinian leadership has claimed that it was a forgery. And as far as I am concerned, it just depends upon which liar you want it believe.
[Kagan:] And you know the region so well. As we mentioned, you were the U.S. ambassador to Egypt, so I want to focus on that country specifically. President Hosni Mubarak, where has he been? He has been pretty much MIA, especially going back to last week, when he chose not to go to the Arab summit in Beirut.
[Veliotes:] Well, I believe that there are a number of reasons why President Mubarak did not go to the Arab summit in Beirut.
[Kagan:] And those are?
[Veliotes:] Well, one, he was certain nothing would come out of it that would have any real impact on the Israeli-Palestinian situation. Secondly...
[Kagan:] And yet, they voted on this historic proposal by Crowned Prince Abdullah.
[Veliotes:] Yes. Yes, they did.
[Kagan:] I mean, that's one of the hugest steps we have seen in a long time.
[Veliotes:] He has already endorsed that. More importantly, I think he was concerned that there would be pressures on him at the summit to take some actions against Israel in his relationship with Israel.
[Kagan:] Well, let's look at that relationship, sir. This president is one who has worked diligently over his years in office in trying to come up with some peace-making proposals, and also Egypt, the country that has the legacy, of course, of Anwar Sadat and Camp David and being the first of those countries to step forward and make peace with Israel.
[Veliotes:] President Mubarak 100 percent has endorsed the legacy of President Sadat. And that legacy was peace with Israel and the strategic alliance with United States. But he also has carried out faithfully Sadat's vision that the peace with...
[Kagan:] OK. It appears I'm sorry, Mr. Ambassador, because we are just having a little bit of audio trouble. But you were talking about the strategic alliance between Egypt and Washington. And by the way, sir, it is not just a strategic alliance. It is a financial alliance, Egypt being just second to Israel in receiving financial aid from the
[U.s. Veliotes:] Absolutely. And I believe if you talk to our strategic planners, they will think it is money well-spent, given the role that Egypt plays in the Middle East with the United States. But the key here is to understand that Mubarak, as Sadat, expects the United States to deliver on the Palestinian part of this problem. It has been for 20 years. Now, if he is feeling isolated, as the media has indicated recently, it is not because he is being upstaged by Crowned Prince Abdullah.
[Kagan:] It's not?
[Veliotes:] It is not, because he is feeling ignored personally. It is because the perception in his own country is that he has no influence on American policy.
[Kagan:] Well, let me just try this final point on you here, sir, and that is a president who feels squeezed by two sides, pressure from the U.S. to do more and to be more visible, but also looks to his own streets and sees demonstrations and riots on the streets, the people and the anger, very different to what U.S. policy would like to propose.
[Veliotes:] Well, absolutely. If you have seen those demonstrators, I believe they are all at the entrance to Cairo University. No one wants to hurt their own kids, and Mubarak is finding himself under pressure. Now, he has made clear publicly, within the last six months, and I think this was a remarkable thing that he felt he had to do, state there will be no war with Israel. Now, this has never worked in the past, and Egypt should not go down that route.
[Kagan:] Well, Mr. Ambassador, I just want to...
[Veliotes:] But the fact that he had to say that is very important.
[Kagan:] I just want to jump in, because we do have breaking news here. We are seeing on our wire services, Associated Press is reporting that Egypt is announcing it is suspending some ties and some contact with Israel. Would this move surprise you?
[Veliotes:] No. They have already brought their ambassador back. They are going to take those moves that they feel they can take without irreparably breaking the relationship in their own interest.
[Kagan:] Do you actually think that that would be a good move? Or is that going to help or hurt the situation?
[Veliotes:] I am not sure it will help anything, but it may take pressure off of Mubarak at home, until or unless the United States gets into gear in the Middle East and offers a peace plan.
[Kagan:] So you say all roads lead to the U.S. and to Washington and to the White House to do more, to be involved more.
[Veliotes:] Absolutely.
[Kagan:] All right. The former U.S. ambassador Egypt, Nicholas Veliotes sir, thank you for your insights. We know that you know that region very well appreciate it. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com