'Meet the Press' transcript for Dec. 28, 2008

MR. DAVID GREGORY:  Our issues this Sunday:  He helped secure Barack Obama's presidential campaign victory as chief strategist.  Now he prepares to serve as a senior adviser to the president-elect in the White House.  How is the transition shaping up?  The president-elect and some of his aides have already been interviewed by special prosecutors in the Blagojevich scandal.  Have they managed to put it behind them, or are there more unanswered questions?  And how will Obama deal with an economic meltdown now in full swing?  We'll ask our guest, David Axelrod.

Then, Obama's prescriptions for solving the nation's economic problems.  Can American workers afford to wait?  Can American businesses survive in this tough climate?  Plus, a closer look at how history will judge the Bush administration as the president prepares to leave office in just 23 days.  Our roundtable weighs in:  Rich Lowry, editor of the National Review; Todd Purdum, national editor for Vanity Fair; Michelle Singletary, financial columnist for The Washington Post; and Richard Wolffe, senior White House correspondent for Newsweek.

But first, an Israeli air offensive against Hamas in Gaza has entered its second day.  So far some 280 Palestinians have been killed and 600 wounded in the largest Gaza operation since 1967.  This morning Israel is taking steps that could lead to a ground invasion, amassing tanks on the Gaza border and calling up army reservists.  In response, Hamas has promised a new wave of suicide bombing attacks against Israel.  A short while ago, after an emergency Cabinet meeting in Jerusalem, I spoke with Israel's foreign minister, Tzipi Livni, and asked her how long the offensive would last.

MS. TZIPI LIVNI:  Until we can, until we can change realities on the ground. The situation is a situation in which Israeli citizens are targeted from Gaza Strip, a place that we left few years ago in order to create a new horizon for peace.  But we got Hamas in return.

MR. GREGORY:  A lot of people are watching what's playing out, this air assault, and wondering why now?

MS. LIVNI:  Oh, why now?  Because after Israel decided to leave Gaza Strip a few years ago and we got Hamas in return.  About a half a year ago, according to the Egyptian Initiative, we decided to enter a kind of a truce and not to attack Gaza Strip.  Hamas violated, on a daily basis, this truce.  They targeted Israel, and we didn't answer.  But unfortunately, Hamas misunderstood the fact that Israel didn't retaliate, and only last week we had in a day 80 rockets, missiles, mortars on Israeli civilians.  More than that, they used the field of truce in order to rearm themselves.  They smuggled weapon, they built a small army in Gaza Strip, so the situation was unbearable.

MR. GREGORY:  What is Israel's goal right now?  Is it to re-establish the cease-fire, or is it to invade Gaza and remove Hamas from power?

MS. LIVNI:  Our goal is not to reoccupy Gaza Strip.  We left Gaza Strip.  We took off for the south.  We dismantled all the settlements.  But since Gaza Strip has been controlled by the extremists and since Gaza Strip has been controlled by Hamas and since Hamas is using Gaza Strip in order to target us, we need to give an answer to this.

MR. GREGORY:  Foreign Minister, aren't you making the case for pushing Hamas from power?  The cease-fire, according to Israel, simply hasn't worked.  It hasn't stopped the bombing of Sderot and Israel in the southern areas.  So only the replacement of Hamas by Fatah, by more moderate leaders, appears to be the only answer.

MS. LIVNI:  The goal is to give an answer to our citizens, to give them the possibility to live in peace like any other citizen in the world, and Hamas needs to understand it.

MR. GREGORY:  Is it acceptable to Israel for Hamas to remain in power in Gaza?

MS. LIVNI:  It is acceptable only in time, only if and when Hamas accepts the requirements of the international community.  Right now Hamas didn't accept, is not willing to accept the requirements of the international community, is not willing to accept the right of Israel to exist.  It violates any kind of understandings and is using terror against Israeli civilians.  So it cannot be legitimate and acceptable right now.

MR. GREGORY:  Let me ask you--I know you were in Egypt this past week, you met with Hosni Mubarak.  What did you hear...

MS. LIVNI:  Yes.

MR. GREGORY:  ...in the course of those meetings--the foreign minister of Egypt has criticized Hamas--and what is your message to the Arab world this morning?

MS. LIVNI:  You know that Hamas doesn't serve the interests of the Palestinians or the moderate Arab world.  You know that Hamas doesn't represent the national aspiration of the Palestinians.  You know that Hamas represent this kind of ideology of hatred that they want to spread in the region.  You know that Hamas stands on the--in the way of the Palestinians to create their own state.  So put your--in, in a way, put your mouth--put, put your, put your money where, where, where your mouth is.  I mean, say the right things right now.

MR. GREGORY:  The Bush administration has been supportive of the campaign so far in Gaza but has warned Israel about avoiding civilian causalities.  What kinds of consultations have you had with Secretary of State Rice?

MS. LIVNI:  Well, of course, we are in a very close connection.  I am in a very close connection with Secretary Rice, and we had some talks only last night.  The idea--and this is according also to our values--we are targeting Hamas, we are not looking for civilians to kill.  More than that, during this military operation, we are trying to avoid any kind of civil casualty.  Israel called the population of Gaza to leave places in which they know that Hamas has its own headquarters.  Since Hamas is using the civilian population and is acting and targeting Israel from civilian population centers, we called the civilians to leave these places.  We are trying to make all the effort in order to target only terrorists and Hamas headquarters and places.  But unfortunately, in war, like any war, sometimes also civilian pays the price.

MR. GREGORY:  But if the goal is to change realties on the ground, to change the behavior of Hamas, how much international condemnation...

MS. LIVNI:  Yes.

MR. GREGORY:  ...is Israel prepared to accept and at what level of civilian casualties?

MS. LIVNI:  You know, this is--the one who need to be condemned by the international community is Hamas.  This is a designated terrorist organization, is, is not willing even to give an answer to the international courts to recognize the right of Israel to exist.  He uses terror.  Israel is a state that implements its right to defend itself and its citizens.  So I expect the international community to work accordingly since the moment in which Hamas sees that the international community condemn--condemns Israel and not Hamas, these are--this is the moment in which they become stronger and holding and trying to avoid any kind of changes until the international community forces Israel to stop.  So I expect the international community, including the entire Arab world, to send a clear message to Hamas, "It's your fault.  It's your responsibility.  You're the one who is being condemned.  You are not going to get legitimacy from the international community this way or the other.  The responsibility for the life of civilians in Gaza Strip is in your hands." And then we have some chance, chances to see a change in their, in not only their position, but in their behavior.

MR. GREGORY:  Foreign Minister Tzipi Livni, thank you very much for your time.

Ms. LIVNI:  Thank you.

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