The Democratic Leadership Council is really a think tank. It is a group of moderate, and I trust some might say, conservative democrats, who got together in 1985 after the election. These democrats were fairly young at the time, in their forties, and they said their goal in forming the organization was to see whether America could, in their lifetime, ever again elect a Democrat as president. Their aim was to regain public confidence in the Democratic party by re-establishing an intellectual base for the party.

One of the issues of concern was security, and particularly, international security, and foreign and defense policy. Senator Sam Nunn was one of the founders of the group, and the then-governor Bill Clinton was also a founder. This group continues to try to play a role in developing within the Democratic party a core group of new ideas, supported by a growing group of Democratic members of Congress that are internationalists and who are mindful of the importance of America's involvement in the world.

I want to say a few words about foreign policy in general and then go to the Middle Eastern trip I just returned from. I wish to assure you that despite the relative lack of attention on the conduct of our foreign affairs that was paid during the just-completed 1996 elections, that many of us in Congress are committed to preserving and strengthening America's role in the world. We know that role strengthens and improves American life here at home.

We understand that, although the immediate issues facing us may have changed with the collapse of the Soviet Union and the end of he Cold War, the fundamental reality to which our foreign policy must respond has not changed. The United States is the world's indispensable country. I do want to add to that my own belief that involvement in the world by America is indispensable to the quality of life we lead in America. That profound reality is an expression of the unique global leadership role that we occupy at this time. We have to use all the tools at our disposa;: diplomacy, trade, moral persuasion, and where necessary, military might to protect and build the foundations of a stable and free world. We need to lay the foundations for freedom and growth in the next century.

I want you to know there is growing recognition among members of Congress and in the media that the United States is structurally and organizationally ill-prepared for the international challenges of the next century. Our foreign affairs agencies are underfunded and poorly organized. Since 1984, the amount of money we spend on international relations has declined as a perentage of the federal budget by 51 percent. In 1984, the amount of money we spend on international relations has declined by 51 percent as a percentage of the federal budget.

In 1984, we spent roughly 2 percent of our budget on international relations which is a lot less than most people in his country think we spent. Today we spend just about 1 percent of our budget on foreign relations. The result has been to shift much of the burden for international engagement to the military and to the intelligence community which are better funded. If that trend continues, the paradigm for the next century will be America as enforcer, not as diplomatic leader of the world.

We cannot allow short-term budgetary concerns to back us into a corner from which we are going to find ourselves struggling to emerge. It is imperative that we restore the State Department and other foreign affairs agencies to fiscal health. They are, as much as I support the strength of our military, intelligence functions. The State Department and our foreign affairs agencies are the first line of our defense and the forward projection of our diplomatic and moral leadership.

Senator Richard Lugar, Republican of Indiana, and I have signed a blood oath to work together on a bipartisan basis with colleagues in the Senate and House to urge that American not be shortsighted and foolishly thrifty in this case by underfunding those foreign agencies that are so critical to our diplomatic strength and economic health.

We are also beginning some work together on an attempt to force the re-evaluation of the structures through which we implement our foreign policy. The maze of institutions, so many of them born during the height of the industrial age, makes it time to bring all of them into the post-industrial age. Senator Luger and I hope to be making some proposals in that regard in the very near future.

I visited the Middle East in December. I had the opportunity to be in Israel, Jordan, and Gaza. I emerged from the visit perhaps amazingly optimistic and let me explain why. Let me go very briefly back to the initial decisions that were made by Prime Minister Rabin and Chairman Arafat. Prime Minister Rabin decided the peace movement was not going anywhere. The conflict between the Palestinians and Israel was growing, and Israel was an unhappy occupier. Support from the Israeli public for that occupation was diminishing, and there was not practical alternative except peace.

One might argue for expulsion but that was a decision morally and politically impossible so that Prime Minister Rabin had the courage and credibility to reach the conclusion that there was no practical alternative to peace. It was clear that one had to go to the leadership of the PLO, those who had been enemies, and Rabin said often, "One does not make peace with one's friends. One makes peace with one's enemies."

In a remarkable series of events that are history to us now, the Oslo process began and culminated in the signing of the Declaration of Principles on the White House lawn on September 13, 1993, and a year or so later, the signing of the Peace Treaty with Jordan.

What I found, amidst all the ups and downs, was reason to hope this process would continue. When I came back on December 20, I felt confident the agreement on Hebron would be signed within days. Today is January 14, and the agreement may be signed today. I think that if, and when, it is signed it will be a remarkable accomplishment whose significance may be lost becauseit has been so long in coming.

A Hebron agreement will stand for the very important fact that the Oslo Accords can survive a fundamental change in the government, not just of personalities, but to a governing coalition that has been skeptical of the Oslo process, and some of the members have been downright opposed to it. The fact is that as the months have gone along, the Israeli government of Prime Minister Netanyahu have taken a series of significant steps forward in the peace process, which I believe did not receive adequate credit for both here in the United States and throughout the world.

The fact that the Netanyahu government has not received adequate credit is in some sense caused by the Netanyahu government itself, which while taking two steps forward will occasionally take one step back or one step to the side and it mixes the message. But if we look at the course, there has been an explicit acceptance by the new prime ninister of his obligation to implement the agreement signed by his predecessor.There has been, and some of us may say it has been too long in starting after the Israeli elections last year, there has grown up an acknowledgment that Chairman Arafat and those around him are in fact the partners. Those are the words that Netanyahu has used, his partners in the peace process. From what I heard in the Middle East, some personal relationships are developing between the principals and between their most important assistants. That argues well for the future of the peace process. We are certainly miles away from the Israeli campaign rhetoric of little more than a half year ago. Netanyahu and his government are now fully engaged with others in moving this process forward.

Hebron should not be seen as a mere technical achievement. It is a significant very difficult achievement. It is not simply the transference of one more West Bank city to Palestinian authority and control because we've seen it in stark pictures on our screens and even in blood. There is an honest passion, both on the Israeli and the Palestinian, on the Jewish and the Muslim side about Hebron because of the tomb of the patriarch that exist there.

As many people said to me, Hebron is second to Jerusalem as a city around which there is so much emotion and contention and claim existing. The fact that an agreement has about to be reached is a very significant step forward in itself and particularly from the point of view of Prime Minister Netanyahu. For him, it represents a statement to the Jewish settlers in the West Bank about the limits of the reality of their future there. They will have a future there, but it will not be what they hoped it would be. I want to argue today that took some political courage and involves some domestic political risk for Prime Minister Netanyahu.

Obviously this is not a perfect world. The fact that the agreement was essentially concluded in December but was not signed because Chairman Arafat added terms, conditions and other concerns he had beyond Hebron. It was an expression that there is obvious still mistrust. But our negotiators worked very hard to convince Chairman Arafat to take the final step, sign the agreement, understand that in additing the additional terms in the negotiating process, he had effectively broken one of the strategic underpinnings of the Oslo Agreement. This was to say that trust would be built step by step so that you could go on to the next step. This is not as far advanced as he or anyone would like.

There is reason for growing trust. There is reason in the conduct of the Netanyahu administration and even more so in some of the stories underneath the stories of the negotiators that don't get much attention. I was very impressed in meetings I had with leaders of the Israeli defense forces tohear them, and I heard this again on the other side from the leaders of the Palestinian authority talk about the growing, very positive, trust relationship that has developed between the Israeli military and the Palestinian security forces. Joint patrols in several areas as called for by Oslo, but beyond that a growing level of regular communication between the leaders of the military and security forces on both sides.

One of the Israeli generals, who occupies a central position, said to me that in September when the terrible disturbances occurred after the opening of the tunnel, Palestinian police fired at some Israeli soldiers. The general told me that he met with his Palestinian counterpart to review what had happened during the day and they planned how to control the conflict the next day. That was in addition to constant communication while the battle was going on.

In December, when the Isaeli soldiers fired on the Palestinians at the market in Hebron, and the Israeli general and the Palestinian security force leader went and talked immediately on the phone. They went together to the market publicly as a mutual statement to people on both sides that they should "cool it" and no overreact. These are relationships. Unfortunately, life moves so quickly that we tend sometimes not to appreciate what we should appreciate. But we would have thought if some had predicted this five years ago that they were insane, that as head of the Israeli central command and the head of the Palestinian security would be meeting to maintain order among both of their peoples - a remarkable development. I offer it to give us hope, but I also say I hope that Chairman Arafat will derive some hope and the confidence to go ahead and sign the agreement.

Within Israel, the support for peace remains remarkably strong. In fact, my wife and I were almost apologetic because we came at a time after the murder of a woman and her child, a settler in a terrorist attack by the roadside, and the decision by the government to extend certain financial incentives to the settlers suggested the process was going off track. The general mood in Israel was quite depressed and anxious. As I say, we felt apologetic because we were so optimistic in the midst of all of this. Maybe coming and going like this, you see things more clearly.

Two weeks ago, the leading Israeli pollster asked a simple question: Do you support the peace process? Seventy five percent said yes. In a way it shows how significant this dialogue is.

Where does one draw the line in the West Bank as to what goes over to Palestinian authority control and what remains in Israel? What do you do about refugees? What do you do about Jerusalem? These negotiations are known, but the content of them is not known, which is in itself a remarkable accomplishment in Israel or any other democracy.

One of the participants in the discussion said to me that if you came into the room and you didn't know which of us was Labor and which was Likud, you would not be able to guess based on what you heard each of us say. That is very encouraging, and I say that when you break through the political rhetoric on basic issues, there is a very broad spread of agreement within Israel. I hope that will give confidence not only to Chairman Arafat to sign but to all of us as we watch the process.

I use the term indispensable to describe America's role in the world. America really is indispensable in this process. Why is it important to us? It is important to us because the stability of the Middle East is important to us. It is important to us economically, strategically, and morally. In the conversations I had with the leaders of the Israeli defense forces, they're looking beyond the horizon or beyond the immediate neighborhood. In their opinion, the long-term threat, or perhaps the not so long-term threat to Israeli security is from Iran. Iran has the resources and the ideological, perhaps even theological motivation to try to become the power in that region.

I think the Israeli leaders, from the security point of view understood what Prime Minister Rabin said to us so often when he came to visit Washington, which was that one of the benefits of the peace process was not just to secure peace for the people of Israel but to redefine the conflict in the Middle East. To change it from an Israeli versus Arab, Jew versus Muslim to a conflict between the moderate law-abiding states, both Jewish and Muslim, Israeli and Arab and the more fanatical states including Iran, and in a different way, Iraq.

I think we have an extraordinary opportunity now. There'll be moments of disappointment along the way ahead. It will be difficult, but it is critically important to us. I do want to say two final words. I'll start with the disappointing news and then go to the good news. There was a genuine sense among people in the American Embassy involved in these negotiations, and certainly among the Israelis, a real sense of disappointment over the role Egypt has played in recent times. The Egyptian leadership has been making some very unsettling statements and seems to have played a rigid role with Chairman Arafat and the Palestinians.

The encouraging and good news is the remarkably resilient and constructive role layed by King Hussein.Long before it became visible Hussein was very active on the phone. We have to be grateful for him. If the leaders in the region continue to have courage and are capable of resisting those more extreme and violent forces within their own constituencies, then I think we do have the opportunity for the peace that I am convinced the majority of people, Israeli and Palestinian so deeply desire.