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Special Event

Israel Decides: Sharon Defeats Barak in Landslide

Aired February 6, 2001 - 3:00 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JONATHAN MANN, CNN ANCHOR: Two ex-generals at the polls for Israeli voters. Public opinions suggest they are going for the less gentle of the two. I'm Jonathan Mann at the CNN Center in Atlanta with our extensive coverage of Israeli election day. CNN's Christiane Amanpour joins us now -- Christiane.

CHRISTIANE AMANPOUR, CNN CORRESPONDENT: Jonathan, as you say, a choice between Ehud Barak, the prime minister who appears to be trailing by a hefty percentage point in the opinion polls. He saying that his aim is to continue the Oslo peace negotiations. And we are going to now go to Israeli channel one as the polls close with their exit poll predictions.

As you can see, this is a projection.

UNIDENTIFIED FEMALE: ... a landslide I'd call it, a knockout landslide victory; practically 20 percentage points difference, and the pictures speak for themselves. Channel two reports exactly the same result. We hear now from 59 1/2 compared with 40 1/2 percent.

AMANPOUR: As you can see, both Israeli television channels are projecting, based on exit polls, 40.5 percent for the incumbent prime minister Ehud Barak; 59.5 percent for his opponent, Ariel Sharon, the leader of the Likud Party.

Joining me now here in Tel Aviv is our political analyst Chemi Shalev.

Briefly, Chemi, this appears to be a huge margin according to the exit polls.

CHEMI SHALEV, POLITICAL ANALYST: It's a huge margin. It's a crushing defeat for Prime Minister Barak. It's an amazing victory for Sharon and an amazing political comeback for Sharon. And I assume that this will immediately raise tensions in the area. Mr. Sharon's first task will be to diffuse these tensions.

AMANPOUR: Now we're going to go to the Likud Party headquarters where CNN's Jerrold Kessel is standing at a very excited headquarters there -- Jerrold.

JERROLD KESSEL, CNN CORRESPONDENT: Christiane, that's an understatement. This is a celebration that will raise the roof of this hangar in the Tel Aviv fairground. It's the victory in the Super Bowl, victory in the British soccer cup final, victory in the Melbourne cup round into one. The young and not-so-young party faithful here in the Likud headquarters absolutely jubilant. They've been waiting for the last building up to this crescendo of the last half hour, 40 minutes, soothed, as you will, by that jingle that has accompanied Mr. Sharon's campaign throughout: Ariel Sharon will bring you peace, will look after us, will protect us. Now they're absolutely sure he'll have that opportunity. They're delighted, they're frenzied.

Some of the slogans that have been held aloft are quite interesting: Ehud, go home. Ehud Barak, go home, end of Oslo, end of the peace process. Thank you, God, for this turnover. Those are the signs being held aloft. Absolute pandemonium, jubilation, and the results bear that out because this -- if it is borne out, of course -- only projections. They don't believe these are only projections here. They believe it absolutely true. And if these projections are borne out, it would be the biggest victory ever in an Israeli election for one side or another -- Christiane.

AMANPOUR: Jerrold, thank you.

Chemi, if this projection is borne out, how did it get to this point when Ehud Barak was elected by a landslide last time? And how bad is this margin if it turns out to be an accurate margin?

SHALEV: I think there are two main reasons for this amazing result. The first is the peace process, the Israeli disappointment with the peace process, and the feeling of humiliation, I think, that the Israeli public has at the continuing Israeli violence which the government has been unable to stop.

The second reason has to do with a lack of confidence in Ehud Barak personally. He took this huge mandate that he got in 1999 and he spent it on what I think can actually be termed amateurs political maneuverings. He didn't consult with his colleagues. He alienated them. He alienated the Israeli public by constant zigzagging on the issues.

AMANPOUR: And now we're going to go to CNN's Mike Hanna, who's at the Labor Party headquarters.

Ehud Barak was hoping at least to narrow the gap, Mike.

MIKE HANNA, CNN CORRESPONDENT: Well, Christiane, the music may be loud here, but the morale certainly dampened by those projections that we saw, a 19 percentage point difference. That is a massive defeat. We had heard throughout the day from Ehud Barak's campaign that the gap had been narrowing between him and Ariel Sharon; however, these projections indicate precisely the difference it had been throughout the weeks of the campaign.

I'm joined now by Labor Party, member of the Knesset, Collette Avital.

Thank you for joining us, Collette. This is a massive defeat, is it not? COLLETTE AVITAL, LABOR KNESSET MEMBER: I think it probably is a massive defeat if the projections are right. But I will say that we had the outer orthodox both en mass and the fact that the Arabs did not vote. Those are the two segments of the population and the ways which brought down Ehud Barak.

HANNA: What of Barak's future at this point? We must stress this is preliminary results that you're seeing here. It's an exit poll, but this margin of defeat surely puts his leadership of the Labor Party at risk.

AVITAL: I think we're all united behind him right now. We have to sit back, learn the lessons of what happened. Obviously, part of it was courtesy of Chairman Arafat; part of it may have been our own mistakes and of some of the people around him. I believe that this scene being what it is in Israel, it is not impossible that within the year, we will be back.

HANNA: And would Labor consider joining a unity government that Sharon has stressed that he wants to try and attempt to do?

AVITAL: To the best of my understanding, this is not the case right now. Most of us oppose it unless there is a change of heart or a policy of Mr. Sharon and he comes up with a plan that is acceptable. We don't think there's a point in getting into such a government which will be run probably by extremists.

HANNA: Collette Avital, Labor Party MK, thank you very much indeed for joining us.

Once again, we hear -- although these results are merely exit polls at this particular point, the very margin of this defeat, 19 percentage points, is extreme. The Barak campaign had been hoping it would be a lot narrower. But 19 percentage points, well, that's a massive defeat, a crushing defeat. And no doubt, the knives are going to be out. No doubt, the Labor Party is going to be re-examining its laborship. And no doubt, Ehud Barak's career not only as prime minister but as politician itself and as leader of the Labor Party is now going to be in doubt -- Christiane.

AMANPOUR: Mike, thank you very much.

And we're getting preliminary word that the prime minister, Ehud Barak, will speak in about an hour, and we'll wait to see what he has to say.

But clearly, Chemi Shalev, what everybody is now going to be looking to with this enormous margin projected if it holds: Will Ehud Barak be able to hold on to the leadership of the Labor Party? You heard Avital say that they're all behind him but is that realistic?

SHALEV: No, they're not all behind them. I think Mr. Barak is making up his mind as we speak or at least he has been making up his mind in the past hour. Before he knew of this huge gap, he was intent on not resigning. This may change his mind, although I doubt it very much. If he decides not to resign, we're going to see a long, bloody struggle in the Labor Party as Barak's enemies now, after the campaign is over, come out into the open and openly challenge his leadership, probably led by Shimon Perez.

AMANPOUR: And if he does not resign and if this blood letting goes on as you suggest, what does that mean for any attempt to try to form a unity government? And do you think Labor will want to go into one?

SHALEV: Well, there's going to be a lot of fighting inside Labor about whether to join or not to join the National Unity Government both on an ideological level because there are doves who oppose it adamantly, and also because many of Barak's enemies will want to deny him he refuge of being a defense minister or another minister in Sharon's government and thereby saving his own skin.

So on the assumption that Barak does not resign and he wants to join the National Unity Government, he's going to have a very tough time persuading his own Labor Party to do so. That's the reason why it was said that Ariel Sharon, in fact, was not interested in such a large majority, and he would have felt satisfied if he would have won by eight, 10 percent, a situation which would have left Barak in control of the party and able to negotiate on the National Unity Government.

AMANPOUR: We'll continue the discussion. We're going to go to a break now and show you pictures of the partying, the jubilation at the Likud Party headquarters. They believe that the exit polls will be borne out. And it is both Israeli channels that are projecting exactly the same numbers. When we come back, we'll hear about the Arab Israelis who boycotted the vote and traditionally vote Labor.

(COMMERCIAL BREAK)

AMANPOUR: Welcome back to our special Israeli election coverage. As we've been saying, both Israeli television channels giving exactly the same projections. Nineteen points ahead for Ariel Sharon, the Likud Party leader.

We're going now to CNN's Jerrold Kessel, who's at Likud Party headquarters.

KESSEL: Christiane, let's look at the pictures. Let's listen to the noise. The noise is of crescendo value. They have been singing that song as you'll hear in the background of Sharon, the man of peace, the leader of peace who will bring peace to the state of Israel. And he is a strong leader, they say, but a leader who will bring security and peace. That message that has been Mr. Sharon's campaign now up to decibel .07 in the singing as it's lifted up. We're trying now to get some reaction immediately from some of the leading members of the Likud Party. Most of them who are inside are being mobbed by the crowds here behind us. Shortly, we will have some reaction. But no doubt about it, nobody here believes that that prediction and the projections from the televisions are anything but accurate and perhaps even an underestimate, they say. This is Ariel Sharon's day; Ehud Barak has been, in the words of one of the slogans that are being held up aloft, will be going home -- Christiane. AMANPOUR: Jerrold, you say this is Ariel Sharon's day. And if, indeed these numbers are borne out, isn't it incredible that this, for a man who just weeks ago was considered unelectable in Israel? How did they manage to make this campaign succeed so well?

KESSEL: It's the big question. I guess it'll be a campaign that will be studied in the PR world. But more than that, it's a campaign which was the most curious ever fought in Israeli politics, I'll wager, because Ariel Sharon literally didn't fight the campaign; he was virtually absent. He didn't state what he wanted to do with Israel, he was very general in his impressions. They were left to the dissatisfaction of Ehud Barak to sink in with the Israeli people, and that was the primary factor.

At the same time, Ariel Sharon managed to get across to the people of Israel not the message that Mr. Barak said this election was about -- peace or war -- but that it was about security, and that he was able to convey to the people of Israel that he was the man who would do quite the reverse of what they believed Ehud Barak had done and building insecurity, he would be able to bring security just by dint of his record and by dint of the fact that Mr. Barak had failed to do so.

Now we've managed to extricate from the crush one of the top Likud leaders, Limor Livnat, and she's joined us.

Thanks very much, Limor. I hardly need to say. Your smile is as broad as it can be possible. But let's hear what you think of these results as they're being projected.

LIMOR LIVNAT, ISRAELI KNESSET MEMBER: Well, first of all, I'm very happy, but you could see that. The fact is that the situation is quite very complicated, though. What the Israelis have said today two basic things loud and clear. One, we definitely want very, very much to have peace, but this is not the way to get peace. Barak's way is not the way. Two, we want unity government. We want to go together in order to gain peace to go on the right way.

And I think that after the results of the election today, Sharon will call tonight for a unity government. He'll try to go on and negotiate with the Palestinians under different terms, though. And I believe that the state of Israel is now in a better situation.

KESSEL: If you can hear me, there is a point here that Mr. Barak lost out partly because the Israeli Arab citizens stayed away completely from this vote. Does that in any way make a dent in the victory, the boycott by Israel's Arab citizens?

LIVNAT: Well, no, that's not true. Even if hundred percent of the Arab -- Israeli Arabs would go to vote today, it would have changed in seven to eight percent more to Barak. That's all, no more. As the gap is 20 points as it looks now, it wouldn't change anything.

KESSEL: Now you said...

LIVNAT: What I'm saying is -- and this is very, very clear now -- that, yes, the Israelis want peace, but no, the Israelis do not support the way that Barak went.

KESSEL: Now the campaign is over, the election is over. The votes will soon be tallied themselves. If the results are true, you're saying that they want peace. You're saying they want unity. You want unity. But that's the election slogans. How are you going to do it? How is Mr. Sharon going to do it in practice?

LIVNAT: What I'm saying is not only I want unity, but this was part of Sharon's statement again and again and again. He wanted -- we want unity. Barak said, no. The Israelis said yes to unity. Of course, the first step would be to stop the terror attacks, to stop the terrorism here in our country. This is a basic element to any further negotiations, that there will be no further negotiations under fire under terror attacks. It must be clear.

The second phase would be that the Palestinians would live up to the promises. They have to fight against terrorism. They have to take back the weapons. They have to stop these incitement, the anti- Semitism. Then we can go on negotiating, but with low expectations, expectations of the Palestinians.

KESSEL: OK, thank you very much, Limor Livnat. And the message here from Likud headquarters are the meaning of Ehud Barak's defeat and or Ariel Sharon's victory.

Christiane, back to you.

AMANPOUR: Jerrold, thank you very much.

Chemi, this is being called by a lot of people a gut reaction election, that the Israeli people are voting because they're confused, they don't know where to go next, they've tried they think everything in terms of the peace process. What are the elements and the voting blocks that have led to this situation that we're seeing projected right now?

SHALEV: First of all, there is the Arab factor that we've spoken about. The Arabs have boycotted this Israeli elections. It's the first time they've done so in the history of the state. It's probably a watershed in relations between the state and its Arab minority having to do both with their anger over the killing of 13 demonstrators in the October riots and over Barak's continuing neglect of them after they gave him such big numbers in the previous elections.

But we see that Barak, in fact, won a majority, according to these numbers, in all of the sectors of the Israeli public. He won...

AMANPOUR: Sharon.

SHALEV: Sharon, excuse me. Among the Russians and especially, I think, among veteran Israeli Jews were according to the polls before the ballots opened, he was leading by about 20 percent. And according to these figures, that's about the numbers that Sharon got. He must have won about 60-40 among veteran Israeli Jews and must have won by about 10 percent among Russian Jews. And, of course, he carried a hundred percent of the ultra orthodox vote because the ultra orthodox declared Barak to be their mortal enemy.

AMANPOUR: Chemi, thank you very much.

We've been talking a lot about the Israeli Arab vote, and we go now to Jerusalem and CNN's Rula Amin, who's been to a village, an Arab village in Israel to get the temperature there -- Rula.

RULA AMIN, CNN CORRESPONDENT: Christiane, indeed today Israeli Arabs made their voices heard by not voting despite last ditch effort by the Labor Party, by the prime minister himself, who had the recorded message that was sent through the telephone at 7:00 a.m. this morning to thousands of homes of Israeli Arab homes urging the people there to go to the ballots to vote for him. The former prime minister Perez himself also heard the recorded message that went to about 80,000 houses asking them to take up their responsibility in order to prevent Ariel Sharon from assuming power in Israel he said because that would mean war. Still, despite all these efforts, the turnout among Arab -- Israeli Arab voters was very low compared to previous years.

(BEGIN VIDEOTAPE)

AMIN: At this polling station, this Arab town of Um Al-Fahem, very few voters showed up. And even some of those who did cast a blank ballot. There were more playing children than voting adults. Residents were having coffee in the sun.

Less than two years ago, more than 70 percent of eligible voters in this town went to the ballots. More than 95 percent of them chose Ehud Barak as Israel's prime minister. But Barak seems to have lost almost all his popularity among Israeli Arabs.

(on-camera): In October, Israeli Arabs took to the streets in solidarity with the Palestinian uprising Intifada in the West Bank and the Gaza Strip. The protest turned into clashes with Israeli security forces and 13 people were killed.

El Jabarin (ph) family was among those who voted for Ehud Barak. They have lost a 24-year-old son during the recent clashes and another is still in Israeli jail.

Israeli Arabs blame the incumbent prime minister for the killings and for failing to achieve peace with their Palestinian brothers.

"I didn't know him when I voted for him," says one aunt. "Now we know his true face."

On Sunday, Mr. Barak said he felt sorry for the loss of life and took responsibility for the killings. This family, like most people we talked to here, say it's too late.

Israeli Arabs make about 20 percent of Israel's population and more than 12 percent of its eligible voters. Their support was crucial for Barak's landslide victory in the last election.

UNIDENTIFIED MALE: They betrayed us. They were giving us promises and nothing was fulfilled. Nothing was given to us. Nothing was given to our people. And there is no reason why we should back them.

AMIN: People here say it's time for the Israeli Labor Party leaders to take them seriously.

UNIDENTIFIED MALE: If we will not vote, they will not win. And for the next election, they will learn to treat us as equal.

AMIN: Here, activists went in a convoy of cars carrying Palestinian and black flags. The two different Israeli Arab towns encouraging people to boycott the elections.

There was a minority who voted for Barak fearing his right-wing opponent, Ariel Sharon.

UNIDENTIFIED MALE: My concern that we start from scratch right from the beginning. What we have built through -- I mean, throughout this 10 years will be abolished.

AMIN: But most of the residents here feel little loss for losing Ehud Barak.

(END VIDEOTAPE)

AMIN: Now this low turnout was throughout the Israeli Arab villages according to the Israeli Arab center for equality. The percentage, the average percentage of turnout did not exceed 15 percent. In Nazareth, the biggest Arab town, it was seven percent according to the center. And they are telling us that in one of the villages, Romani (ph), after the polls were closed, after the boxes were closed, among three of 304 eligible voters, 84 voters vote, among them, 63 voters voted with a blank ballot. Now these people are trying to protest by voting with a blank ballot. Now 14 percent, 14 of them voted for Barak and seven for Sharon -- Christiane.

AMANPOUR: Rula, thank you very much, indeed.

When we come back after a break, we're going to explore the Palestinian side. Some Israeli observers have said that Arafat helped to topple Barak. We'll talk to Saeb Erakat about that. In the meantime, we will leave you with pictures of a very subdued Labor Party headquarters.

(COMMERCIAL BREAK)

AMANPOUR: What a difference 21 months makes. May 1999, Ehud Barak was elected by a landslide. There were jubilant crowds at the Labor Party headquarters. Not so tonight where we find CNN's Mike Hannh.

HANNA: Thank you very much, Christiane. Well, the size of the defeat, the projected defeat, a major shock to those in the Labor Party and those who supported Ehud Barak. Well, with me is one such minister in the Barak government, Michael Melchior. Thank you very much for joining us, rabbi. Basically, does this projected result put the future of Barak's leadership of the party at stake?

MICHAEL MELCHIOR, ISRAELI MINISTER OF DEVELOPMENT: There's no doubt that the party will have to deal with personality questions. But what for me is much more important is that this is a major blow not only to Barak -- it's not a blow to the peace process. I want to stress that. Sharon could not have been elected if he hadn't presented himself as Mr. Peace over the last two months. And what I think happened is that Barak did not understand Israeli society to be inclusive towards the big minorities, the traditional minority, the Arab minority, the Russian minority, and therefore, they paid him back today with the same way he's treated them for the last year and a half, not because he wanted but because he was one track towards peace and didn't see the necessities -- the token necessities of the Israeli society.

HANNA: You say this is not a blow to the peace process? Do you think Ariel Sharon is capable of pushing this process forward?

MELCHIOR: Well, that's a good question. That, I don't know. I pray that what Ariel Sharon had promised the people here, that that will come true and that he will bring peace. I doubt if he will be able to do it with the kind of coalition he is going to sit with -- from the next couple of weeks. But I'm talking about the people in Israel, the people in Israel want the peace process to continue, and that is an important part of this vote today, also.

HANNA: You say that he may not be able to do it with the kind of coalition. Do you think that he's looking at a narrow coalition?

MELCHIOR: Well, there's no doubt that he wants a broad coalition because a narrow coalition won't survive more than a few months. Whether Labor Party can go in with its leadership problems or whether it's possible to bring a program together, platform where they can agree on something which is sensible enough that can continue a positive process and can stop the violence from the Palestinians because they've also contributed to this situation, whether that's possible, I don't know.

HANNA: Rabbi Michael Melchior, thank you very much indeed for joining us, a member of the Barak government, a government that will effectively go with Ehud Barak as the likely winner, according to the projected exit polls, will be Ariel Sharon.

Back to you, Christiane.

AMANPOUR: Mike, thank you. And one other statistic we've just received is that the Israeli voters turned out 62 percent today. That's extremely low, one of the lowest, perhaps the lowest turnout in the history of Israeli elections. Usually here, they turn out more than 80 percent when they go to vote.

When we come back, we'll go to the Likud Party headquarters and explore the idea: Will Sharon be able to cobble together a unity government?

(COMMERCIAL BREAK)

AMANPOUR: Welcome back. The Israeli polls closed half an hour ago and both Israeli channels are projecting a massive victory for the Likud Party leader Ariel Sharon: 59.5 percent according to the exit polls, compared to 40.5 percent for the incumbent prime minister, Ehud Barak.

Also, we understand, according to the statistics we're receiving, that the voter turnout was exceptionally low: 62 percent compared to 78 percent last time around in 1999. This has been an exceptionally subdued election, an exceptionally apathetic electorate. But now, if these projections hold to be true, Ariel Sharon must form a government. We got to the Likud Party headquarters with CNN's Jerrold Kessel.

KESSEL: Christiane, the party continues, a forced double barrel party. In addition to celebrating Ariel Sharon, they're dancing in a discotheque. We're joined here by the man who masterminded the campaign of the Likud, Uzi Landau.

Thank you very much, Uzi, for joining us. How did it happen?

UZI LANDAU, ISRAELI KNESSET MEMBER: Well, lots of work but above it all, a clear attitude of the Israeli people that a prime minister who has preferred to give up Jerusalem is illegitimate in his post here in Israel, and that's why Mr. Barak was ousted (UNINTELLIGIBLE).

Secondly, I think it's important to note that in this country, there is total disillusion with the Oslo process. In the perception of our people, it's clearly a process that doesn't bring to peace but rather to more terrorism and more war and will have to be replaced by a different peace process.

KESSEL: Now so often in the campaign, it's been stated that you want to continue some kind of political process with the Arab side and you want national unity with Labor. Are the two things possible together?

LANDAU: I think so. I believe that Labor will have to come to grips with the political reality and the partisan reality in Israel. Basically, the Israeli people does not prefer to believe in this process anymore. And I guess it's only for Labor to decide how long is it still wishing to go on with something that is going to bring us to a dead end.

KESSEL: What's the message to the Palestinians? What kind of peace do you think you can try and strike with the Palestinians?

LANDAU: I mean that's a real peace, a peace with give and take. That you don't sit with someone that at the same time with negotiation he's running terrorist activities against you, that is also teaching his kids from a very young age for Jihad in order to obliterate you off the face of the earth. I mean, if we pay hundreds of millions of Israeli shekels every month to the Palestinians so that they will raise up the future generation to war, that's not peace.

KESSEL: Thank you very much, Uzi Landau. You have the confidence that's expected here after such a victory. But now comes the hard part: Ariel Sharon trying to form a new government and trying to plow ahead with a credible policy.

Back to you, Christiane.

AMANPOUR: Well, Jerrold, yesterday Ariel Sharon's aides told us that one of the first things that he would do once the projections were made, the exit polls were revealed was to talk to Prime Minister Barak. We understand from both channel one and channel two that that conversation is going on right now.

Chemi Shalev, those were quite extreme comments we just heard from Likud Party member Uzi Landau. First of all, he said that this shows that the Israeli people are totally disillusioned with Oslo. But the facts don't bear that out, the polls don't bear that out.

SHALEV: Well, the fact is that the peace process is much more popular than Ehud Barak, that even Barak's far reaching concessions enjoyed much more support in the public than he himself did. And I think these elections generally should not be misinterpreted as an overwhelming mandate against the peace process. The fact is that this was more than anything else a question of confidence and no confidence in Ehud Barak, and that's exactly the reason why Sharon conducted such a low-key campaign because he knew that he was not the issue. The issue was Barak, yes or no. And the Israeli public voted no on Barak. That does not necessarily mean that they will vote no on the peace process.

AMANPOUR: And that peace process is at the heart of the matter. And we go now to Jerusalem where Saeb Erakat joins us. He is one of the chief Palestinian negotiators.

Mr. Erakat, what do you see ahead in terms of the peace process now with this projection?

SAEB ERAKAT, CHIEF PALESTINIAN NEGOTIATOR: We have been engaged in the last 15 months serious, in-depth negotiations and (UNINTELLIGIBLE) status for the first time. And we came a long way. And this election in Israel is their business. We want to make peace with all Israelis, not with this party or that party in Israel. We hope that we can resume the negotiations where we left off. But if what I hear tonight from Mrs. Livnat and Mr. Landau about the kind of peace they talk about, you know, keeping the occupation over Jerusualem, keeping the occupation in the Jordan Valley, and maintaining occupation of 50 percent of the West Bank, I think this will not fly. This will not be a starter.

And at the end of the day, I'm really surprised to see that 70 percent of the Israeli people say yes to the peace process and they do the elections with such a party that announces such a mandate, such a non-starter for peace. It's confusing and the point is are we facing a society of Jeckel and Hyde. And as far as the peace process is concerned, we want all Israelis to understand our commitment to peace, but our peace will mean to terminate the Israeli occupation, to end this occupation and to have Israeli withdrawal to the June 4th sovereign border.

AMANPOUR: Saeb, you say that you're surprised at what has been the turnout and what has been the results of the election. But the Israelis say they're surprised at what the Palestinians have done with the Intifada. You know that they say that they've had a prime minister who's put on the table the most far-reaching concessions ever. And they simply do not understand why they weren't accepted or at least the negotiations weren't continued along that line, Saeb.

ERAKAT: Christiane, as I said, Mr. Barak was not given the chance. You have to keep in mind that before he went to Camp David to meet the summit with President Clinton, Shas Party, Meval Party, Sharansky's party, Israel Ba-Aliya, they all left him after he came back from Camp David. David Levy and his brother left and then recently the people in the center like Dan Maridor (ph) and Ronnie Welo (ph) left. So they left him without a government.

We have been engaged seriously in the negotiation that has not resulted in an agreement. We came a long way. Barak was not given the chance. He ended up with no votes in the Knesset to stand up for his government. And now, with this vote, I'm afraid that it reflects that the Israeli society is not really ready for peace because if the peace they are talking about is to keep their occupation and to keep their occupation of Jerusalem and to intimidate us, I will tell them that the shortest way to security and peace is not by harming the Palestinians more, by hurting the Palestinian more, by killing the Palestinians more, it's ending your occupation. That is -- that is what we expected that this peace process would lead to.

AMANPOUR: Saeb, how do you expect Ariel Sharon, if he forms a government, to continue the negotiations where you left off? I mean, clearly, there was a great deal of progress made according to both the Palestinians and the Israelis, but Ariel Sharon has said that he will not honor those agreements or those negotiations at Camp David or Taba, and that he does not want to dismantle settlements, that he does not want to share Jerusalem. I mean, what are you expecting as the starting point now?

ERAKAT: Well, if this is the case, if he comes to us and he wants to take us to eat the apple from the beginning, to go back to the zero point, I'm afraid that we will not have a peace process anymore. I'm afraid that I would say God help the Palestinians and Israelis, because to have a meaningful peace process means that we will continue where we left off. He has to adhere to the implementation of the Israeli Security Counsel resolutions that provide the terms of reference for this peace process meaning two for two and three-three (UNINTELLIGIBLE), meaning Israel withdrawal to the June 4th (UNINTELLIGIBLE) border. But if he comes now and it's payback time to those who elected him from the settlers and the extremists in Israel, I'm afraid we will see more settlements. Sharon in the '70s and '80s, he put obstacles in the face of my generation that prevented us to make an agreement. As of tomorrow maybe or the day after his government is formed, he'll stop putting obstacles to the new generation of Palestinian, Israeli and Palestinian negotiators to prevent them of reaching any peace in the future. And this is not a way to talk about peace or security. The Israeli society must understand that this occupation must end and this is the shortest way to provide security and peace for both peoples.

AMANPOUR: On that note, we have to leave it there, Saeb.

We're going to go to Gaza where CNN's Ben Wedeman is standing by for a view from the Palestinian authority there -- Ben.

BEN WEDEMAN, CNN CORRESPONDENT: ... of the brave. Now joining us this evening in Gaza is Dr. Nabil Sha'ath, the Palestinian Authority's minister for planning an international cooperation.

Dr. Nabil, we've spoken a lot about the Palestinians and their relations with the Israelis. Will the Palestinian authority be able to deal with Mr. Sharon?

NABIL SHA 'ATH, PALESTINIAN CABINET MINISTER: The Palestinian authority will deal with him as it dealt with Mr. Netanyahu and with Mr. Barak, and all of the earlier leaders of the Israel. We have to because we are have to negotiate a full peace. Whoever is elected by the Israeli people as their representative, their prime minister, we will have to deal with him.

WEDEMAN: But Mr. Sharon, of course, has a long history with the Palestinians and not necessarily happy one. Will it be easy for Mr. Arafat to deal with a man of that -- with that history?

SHA'ATH: It is hard if we judge him by his history. It's dismal. And if we judge him by his campaign proposal, that gives us not much more hope. However, people have been known to change once they become in responsibility. And therefore, we cannot judge him just by the past. We have to see what he offers on the table and we have to assess that when we come to it.

WEDEMAN: But certainly, if we judge him by his campaign promises, by his statements during the campaign, the indication is that what he's going to offer is going to be far below the minimum that the Palestinians are demanding.

ERAKAT: If he comes to the table with those measly proposals, I don't think there will be much chance to push that peace forward. And it will not be because we are not committed. We are. But we cannot really just wipe the slate and go back to where we were 20 years ago. And we are not alone. Israelis are not isolated and he is not isolated from the world and from the United States, the sponsor, and everywhere else. Everybody knows where we stand now. Everybody knows how far we have reached. He knows what are the terms of reference. And really he has the choice of either making peace, as he had promised his countrymen in his campaign, or really leading his country and all of us into a very, very troubled period. WEDEMAN: And Mr. Barak, he was your partner in the peace process for, what, about a year and a half. Where did Mr. Barak go wrong as far as the Palestinian authorities is concerned?

ERAKAT: Mr. Barak really was elected by the -- those people in Israel who wanted peace. He formed a government at least, the 11 that remain out of it call themselves the peace cabinet who really wanted the peace process. But his tactics, he went to Camp David with a take-it-or-leave-it offer that we could not take. And the way that he reacted to our insistence or our demands was the use of excessive force that killed Israelis Arabs as well as Palestinians; 69 kids were killed just for throwing stones which transformed the Intifada altogether. And then he vacillated and hesitated. He simply did not really come to the table and negotiate properly and continue to do so until we would have reached results. Unfortunately, we're now facing a prime minister who might want to take us somewhere else. But that will get us nowhere and will get him nowhere.

WEDEMAN: All right, thank you very much, Dr. Nabil Sha'ath of the Palestinian authority. Clearly here, people are going to be watching very closely how the next steps go in the peace process.

Back to you, Christiane.

AMANPOUR: Ben, and people will be watching all over the world, especially in the United States. How can we expect a new, U.S. administration to work with the new Israeli administration? We'll explore that and we'll go back to the party headquarters after this break.

(COMMERCIAL BREAK)

AMANPOUR: Welcome back to our coverage of the Israeli elections where we've been reporting that the Likud Party leader Ariel Sharon is projected to be the next prime minister of Israeli by a landslide. We're also receiving reports that Ariel Sharon has called Ehud Barak and has asked him to join a unity government.

Chemi Shalev. How likely is that?

SHALEV: It depends now on what happens inside Labor. If Barak does not resign, he will probably be willing to at least enter into negotiations with Sharon. The problem is that many people inside Labor will want to see Barak out of office, and therefore, will try to sabotage any negotiations that he has. It's an open question. It depends on what happens inside Labor. One has to say, though, that Mr. Sharon has already made good on his first campaign promise. He said the first thing he would do would be to call Barak. And he's done that.

AMANPOUR: And how hard was that?

SHALEV: Well, living up to campaign promises is not that frequent anyway. So he's already got one for one.

AMANPOUR: And what will happen if there is no unity government? SHALEV: Probably he will try to set up a narrow government. That will be a very difficult government for him to run, because it will be made up of moderate centrists and right-wing extremists. And they'll run into trouble very soon. And that will be bad news I think for the region, because it will be a government with more extreme policies but it will also be especially bad news for Sharon. It will probably mean that he will not enjoy political stability and that his tenure might be short lived. So he will be seeking a national unity government both for national reasons but also for personal reasons.

AMANPOUR: Chemi, we'll be hearing a lot more from you throughout the evening.

We've been talking about what the impact will be on the peace process. We don't know yet. We do have some video, though, of the Palestinian authority president Yasser Arafat in Gaza watching the returns on television tonight. We've already heard from Nabil Sha'ath, a key negotiator, as well as Saeb Erakat on where they think that the process will go.

The United States has been obviously instrumental in the entire peace process here since the Oslo accords were first agreed to. We go now to CNN's Andrea Koppel at the State Department for reaction to what appears to be a win by Ariel Sharon.

ANDREA KOPPEL, CNN CORRESPONDENT: Christiane, the Bush administration even before it came into office two weeks ago made no secret of its desire not to get roped into the Middle East peace process as the Clinton administration did. The concern and the worry within the Bush administration now that Ariel Sharon has been elected the next prime minister of Israel is that that not only will increase the ramp up essentially, the rhetoric within the region, but it could also increase the risk of increased violence, not only within Israel and the Palestinians territories, but throughout the Middle East region. And for that reason, the message of this administration not only to Israel's new prime minister, but also to the United States Arab allies within the region is to exercise restraint.

(BEGIN VIDEO CLIP)

COLIN POWELL, SECRETARY OF STATE OF THE UNITED STATES: Job owning is not a bad term. And as a practical matter, that's pretty much all we can do right now and hope that the leaders in the region recognize the absolute importance in controlling the passions and controlling the emotions. And if they do that, and if they give the next Israeli government time to establish its policies, then good things will flow from that eventually besides just job owning.

(END VIDEO CLIP)

KOPPEL: For the time being, the Bush administration says it's important to give Israel's new prime minister time to form his new government. In the meantime, Christiane, it says it plans to sit on the sidelines, keeping its fingers crossed that Ariel Sharon will, himself, exercise restraint and won't be tested anytime soon -- Christiane. AMANPOUR: Andrea, thank you very much indeed. And joining us here in Tel Aviv is CNN's political analyst Bill Schneider.

You heard what Andrea Koppel was saying about the Bush administration sort of perhaps sitting on the sidelines for the moment. What can we expect now in terms of the U.S. being the mediator?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: I think the United States will essentially hold back. The Bush administration has said all along they think the Middle East peace process is time for a reassessment. Look, if Bill Clinton tried this and pushed very hard, and the process didn't work, George Bush is hardly likely to stake his career and reputation on pushing this process. With the rejection of the concessions by Yasser Arafat and now Israelis at least setting aside their illusions about the peace process, it's hardly like that this process is going to go far in the immediate future.

AMANPOUR: Will there be a shift in dynamic? You know, the Bush name in the Middle East, particularly in the Arab world, is very, very well-respected. Do you see a shift in dynamic in the way a Bush administration will deal with this situation compared to a Clinton administration?

SCHNEIDER: I think a Bush administration will put less emphasis on the Israeli Palestinian process and more emphasis on the overall strategic balance in the region, particularly possibly pursuing a new relationship with Syria, trying to isolate the rogue states of Iraq and Iran and looking for a different constellation of forces, perhaps even reassessing the relationship with Egypt. But less emphasis on the Israel Palestinian peace process which right now looks like a nonstarter.

AMANPOUR: Let me just ask you briefly, a final question. Clearly, the Arab world feels that a Bush administration might pressure the Israeli government more than Clinton. You remember that incredible, indelible image of former secretary of state James Baker holding up a peace of paper and saying, "Call me, Mr. Prime Minister Shamir."

SCHNEIDER: "Here is the phone number of the White House. If you have any plans, just call me, Mr. Prime Minister." He did do that. And I think the view in Israel and the in the Arab world is that Bush was probably the -- former president Bush was probably the most even handed, least pro-Israel American president in recent years. But also remember Ronald Reagan is remembered as a very strongly pro-Israel American president, also a Republican president. So I'm not sure -- at the moment, Israelis are waiting to see: Will Bush -- this President Bush be more like his father or more like Ronald Reagan? They don't know yet.

AMANPOUR: We'll wait and see. Thank you very much, Bill Schneider.

SCHNEIDER: Sure.

AMANPOUR: And we're going to go now to CNN's Jerrold Kessel at the Likud Party headquarters.

KESSEL: Christiane, yes, thank you. Well, as you can hear, the partying is going on in a deafening level, so it is difficult to hear. But there are some who are not only parting, they're thinking ahead, thinking ahead to tomorrow and the week after. We're joined by one of those, Meir Sheetrit, one of the Knesset members who is known to be close to Ariel Sharon.

Mr. Sheetrit, what about this victory? What does it mean?

MEIR SHEETRIT, LIKUD KNESSET PARTY: I think that the victory signifies very clearly that the people of Israel with a large gap decided to elect Ariel Sharon, which will lead a different way from Mr. Barak. But I want to assure the people of Israel and the people in the world that we mean to make peace. It was not just a wonderful campaign. And we mean to make a unity government. Tonight, Mr. Sharon will call Mr. Barak and ask him to join the united government because we still are in an emergency situation, and we have to tackle it together. I believe that the victory in the election is the easiest part. The hard part will start from tomorrow. We are going to do our utmost to have peace and security in a large government.

KESSEL: OK, thanks very much, Meir Sheetrit. We have to leave it there. Is the Likud and Ariel Sharon, that of Uzi Landau we heard earlier or that of Meir Sheetrit. We shall know in the days ahead. Back to you Christiane.

AMANPOUR: Jerrold, thank you. And we shall know also whether the defeated -- appears defeated prime minister Ehud Barak will agree to join the unity government. And we'll go to Labor Party headquarters after this break.

(COMMERCIAL BREAK)

AMANPOUR: Welcome back to CNN's continuing live coverage of the Israeli elections. I'm Christiane Amanpour in Tel Aviv. The polls closed an hour ago, and both the Israeli main television channels are giving Ariel Sharon, the Likud Party leader, a massive victory, 19 points: 59.5 percent projected for Ariel Sharon; 40.5 percent projected for the incumbent Prime Minister Ehud Barak.

We know that Ariel Sharon immediately called Ehud Barak to ask him to join a unity government. We have been told that Barak has not yet responded to that call. We also understand that Barak may be coming to the Labor Party headquarters within the next 10 to 15 minutes.

We go now to CNN's Mike Hanna at Labor Party headquarters.

HANNA: Well, Christiane, supporters here are putting on a brave face in the wake of this projected defeat and a massive defeat it would appear to be. The prime minister on his way here to speak to his supporters. Should be arriving, as you said, within the next 10 to 15 minutes.

With me is the campaign adviser for Ehud Barak, Eli Goldschmidt. Thank you for joining us, Eli.

Mr. Sharon has asked Ehud Barak to join a unity government. No responses yet. What are you expecting?

ELI GOLDSCHMIDT, LABOR KNESSET MEMBER: I am expecting that Ariel Sharon is inviting Ehud Barak for discussions for negotiation on national unity government. Ehud Barak should respond positively. This is my advice, but we have to see if we have common ground in keeping the peace process going on. Without that, there's no way. There's no reason to join a national unity government.

HANNA: Do you think that common ground is findable with Mr. Sharon as prime minister?

GOLDSCHMIDT: This question is completely up to Mr. Sharon. But the views -- his views about the peace process, as we know, cannot be a common ground for national unity government. But if he changes his view, if he's ready to follow the Camp David understanding, the Taba understanding, then we can do it together. Without that, we are going to serve him the opposition.

HANNA: What went wrong with the Barak campaign? Nineteen percentage points projected, that's a big defeat.

GOLDSCHMIDT: First of all, if we lost, then everything was wrong with our campaign. You know, either you win or you explain. Now, we have to explain. But I think, basically, to be serious, it was the problem of the national -- of the president security of the citizens in Israel. The response of the Palestinians after the concessions, the big concession, that Barak was ready to make. The answer in terrorism, in shooting, in the intifada, was something that most of Israeli citizens couldn't bear.

That's why -- it's not because they don't support the peace process. I still think that most of the Israeli people support the peace process, but they want to see the Palestinians respond in another way, and they think, maybe, that Ariel Sharon can do it better.

HANNA: So you say that the Israeli people still support the peace process, despite the fact that the majority have supported Ariel Sharon?

GOLDSCHMIDT: Yes, because most of the Israeli people in all of the polls, even during the campaign, the majority is in favor of the peace process. But they couldn't bear the situation, and it was the main obstacle of our campaign that day by day, we had to bury Jews from all around the country because of the terrorist acts of the Palestinians. The Palestinians made it that Ariel Sharon became prime minister. This is the very glum fact of this campaign.

HANNA: Eli Goldschmidt, the campaign manager for Ehud Barak. Thank you very much for joining us.

GOLDSCHMIDT: Thank you. HANNA: So there we hear that Ehud Barak on his way here. He has received the invitation from Ariel Sharon to join a government of national unity. We hear there that there are going to be intense discussions and negotiations in an attempt to find whether Ehud Barak and Ariel Sharon can find a common ground to keep the peace process moving.

Back to you, Christiane.

AMANPOUR: Mike, thank you. We've heard that Ehud Barak has yet to the leave the hotel, not far there from where we are right now, and come down to you at Labor Party headquarters. Obviously when he gets, we will take what he has to say live.

In the meantime, we've said, projected, a 19 point defeat for the incumbent Prime Minister Ehud Barak.

Our political analyst Bill Schneider; does that give Ariel Sharon a massive mandate?

SCHNEIDER: Well, it looks like it would. But remember this, turnout is only about 62 percent. Normally, in Israel, it's close to 80 percent. Most of the voters who either cast blank ballots or did not vote today were Barak voters who couldn't bring themselves to vote to reelect him, but were unable and unwilling to vote for Sharon.

So what it means is there's a vast number of Israelis who wouldn't vote for Sharon and who will be there watching and waiting for him to fail. Remember, Sharon is the fifth Israeli prime minister in a little over five years. That -- it doesn't indicate a lot of stability. Will he last?

Well, the size of his mandate means he may have trouble attracting the Labor Party into a national unity government. They may let him form a minority government. There are a lot of Israelis waiting for him to fail, and one of the most conspicuous is a man named Benjamin Netanyahu, who did not run this time and who expects the Sharon government to be short-lived. He thinks there will be another general election, including the parliament, before the end of this year and he intends to run.

AMANPOUR: And in the meantime, the knives are out for Ehud Barak, you think?

SCHNEIDER: Yes, indeed, in the Labor Party. That's one of the reasons why it'll be hard to form a national unity government. If he decides he want to join that government, it could split the Labor Party. The Labor Party Central Committee will have to endorse that.

So, if you have a narrow-based Sharon government despite the size of that vote and if he has to form a government based mostly on the right wing, that government is expected not to last very long. We could have new elections with a whole new cast of character, a new Labor leader and Netanyahu as the leader of the Likud instead of Sharon.

AMANPOUR: Bill, briefly, the only democracy in the Middle East here in Israel, but a pretty messy one at times?

SCHNEIDER: It's a very messy democracy, but look, it is a democracy. It's a democracy which the people cast their vote, they pass judgment on their leaders and they have been extraordinarily dissatisfied over the past five years or so. Rabin, Peres, Netanyahu, Barak, now Sharon; I mean, you've had this passage of leader after leader. Well, in a way, that's a sign of democracy. They throw the leaders out. What other country in the Middle East does that?

AMANPOUR: We'll wait and see what happens in the future weeks and days of this democracy. And we're going to the Likud Party headquarters for CNN's Jerrold Kessel. Already it seems that the national unity government is so far not being responded to?

KESSEL: Well, Christiane, some of the people here are not just partying, they're looking beyond today, looking to see whether such a unity government can be formed. One of those who believes in that is Meir Sheetrit, one of the leading members of parliament in the Likud and who's very close to Ariel Sharon.

Thanks very much, Meir, for joining us. We just saw Yasser Arafat on the screen, people gave him a thumbs down. Is this the end of the peace process as far as you imagine it?

MEIR SHEETRIT, LIKUD KNESSET MEMBER: The people of Israel are very angry from what happened with Arafat during the negotiation. When you have a partner to peace -- we signed the agreement, to stop the incitement, never to use violence, to uproot the terror and as a matter of fact he did exactly the opposite.

He used violence against citizens. He's -- the incitement is terrible everywhere. The people are very angry. That's the reason why this election finish with such a gap. So, the people will feel angry about Arafat, but the people here are not going to manage the negotiation with Arafat.

But we are going to, the government. It is a responsibility. We want to make peace, not because we are in love with the Palestinians and not because the Palestinians are in love with us, but because we are living together on the same piece of land.

KESSEL: Is there a platform for a national unity government?

SHEETRIT: Yes, 100 percent. And the platform the unity government will say that our quest for peace will continue, and Mr. Sharon, when he makes a commitment to make peace, he means it. You know, we have in our area a paradox that I call it the hawks of peace and the doves of war. Only hawks can make peace with the national consensus, and only doves can make war with the national consensus.

KESSEL: That's a good slogan, but practically, can Ariel Sharon pull that off?

SHEETRIT: We have been there in 1977 when Begin had been elected. He was the first one who made peace with Egypt. Sharon being warrior all his life, understands better than anyone else the horror of wars and...

KESSEL: But give us some details of how you envisage some kind of political dealing with the Palestinians now?

SHEETRIT: First, let me tell you the connection with the Palestinians have started already with Mr. Sharon. Secondly, Mr. Sharon will ask the Palestinians to stop right away any violence, any incitement, then we will negotiate.

In the campaign, we are not negotiating. We're not negotiating the media. But we're willing to negotiate everything. And I believe that the Palestinians understand that as well. There will be no games in the middle. They can not shoot us and at the same time and expect us make more concessions. That will not work.

KESSEL: What's your estimate? Will Mr. Barak respond? Will Labor respond to your overtures, to Mr. Sharon's overtures to join you?

SHEETRIT: Look, I say this sincerely, and you know that a few months ago, I was negotiating for a united government with Mr. Barak on behalf of the Likud. Let show you something. I have in my pocket here the agreement. This agreement had been passed and agreed with Mr. Barak and Mr. (UNINTELLIGIBLE) when I was negotiating from the Labor Party.

KESSEL: But now Mr. Sharon has even more power. Why should he want such an agreement?

SHEETRIT: Because we want to have a united government. We can create a narrow government. We prefer a large one, because we are in the same boat. Left and right. And I believe that if the Labor Party cares about benefit of Israel, they should forget the personal agenda and join to us on the national agenda for peace, for security, for making out of Israel the best place in the world.

KESSEL: Meir Sheetrit. In contrast to some of the other people we heard speaking here from the Likud headquarters. Very conciliatory tones both towards the Palestinians and towards Labor. The next few days may determine which way the Likud and Ariel Sharon will go -- Christiane.

AMANPOUR: Jerrold, thank you very much. Some Labor members there saying -- Likud members, rather -- saying that Ariel Sharon will make peace, but how will Ariel Sharon make peace with the Palestinians offering less than they've already rejected. We get reaction to today's projected results from Yasser Arafat in Gaza.

(BEGIN VIDEO CLIP)

YASSER ARAFAT, PRESIDENT, PALESTINIAN AUTHORITY: We are insisting to continue from our side as Palestinians and Arabs -- we are insisting to continue our process, the peace process, the peace of the brave, not only in the Palestinian track, but in the Lebanese track and the Syrian track also, so that we can have a new Middle East. QUESTION: Would the new Israeli leader?

ARAFAT: We hope so.

(END VIDEO CLIP)

AMANPOUR: We're going to take a short break now, and then we're going to come back and go to the Labor Party headquarters, the defeated -- it appears, the defeated Prime Minister Ehud Barak is on his way to Labor headquarters, after a break.

(COMMERCIAL BREAK)

AMANPOUR: Ehud Barak, the prime minister, has left his hotel here on the Tel Aviv coastline, where he was watching the exit poll, and he is heading now to the Labor Party headquarters. Right now, we go to CNN's Mike Hanna, who is there.

HANNA: Thanks, Christiane. I'm joined here at Labor Party headquarters by Justice Minister Yossi Beilin. Thank you very much for joining us, sir.

What impact do you think this will have on the peace process that you have worked so hard for?

YOSSI BEILIN, ISRAELI JUSTICE MINISTER: I don't believe that the peace process will stop. But I do believe that what happened today in Israel is its biggest political gamble since 1948, and I hope and pray that this gamble will not become a disaster, and that the peace process will continue.

We will have to remain in opposition rather than to join Sharon's government, because he's not going to make peace tomorrow. But if he goes for peace, surprising us, we will have to support him from the opposition. If he doesn't go for peace, we should show the alternative to our people.

HANNA: Are you ruling out any idea of joining a national unity government with Sharon at its head?

BEILIN: It will be the biggest mistake for my party if we join Sharon. Sharon should show his people, our people, what does he want to do? Sharon should actually divorce his past political views if he really wants to make peace. If we go with Sharon, I believe that in many ways it will be more difficult for him to make peace, because he will use us as a fig leaf for not making peace.

HANNA: What of the future of Ehud Barak, this projected loss of 19 percentage points -- a crushing defeat? Is this the end of his leadership of the Labor Party, as well as his tenure of prime minister?

BEILIN: Not necessarily. I don't think that one day we can present Ehud Barak as the future leader of our country, and next day to say that he cannot be the leader of our party. I do think that he should continue to be the leader and, according to our party constitution, after 14 months we have primaries for the new leader, where himself can run, too.

HANNA: Now, you have been an intimate part of this peace process for many years now, you know well, the people who Ariel Sharon is likely to gather around him. Do you think that they're capable of negotiating honestly with the Palestinians?

BEILIN: I don't think so, and that is why I hope that his government will become an episode; his coalition will be very small if we don't join him. And I think that the people will understand that his dreams, his so-called plans, were really, really visual plans.

HANNA: And what happens next, now? What do those who support a peace process, who support a full peace with the Palestinians, what do they do? What home can they find?

BEILIN: We will never, we'll never give up. We know that eventually there will be peace. If it happens after half a year, two years, five years or 10 years, we know the solution; it will be two states for two people, we know, generally, what should be the guideline. The only question will be, whether God forbid, both people will have to pay a death toll, a higher death toll than they have paid so far.

HANNA: Justice Minister Yossi Beilin, thank you for joining us. A man who has been an integral part of the peace process -- a peace process that now, may not change as such, but it may change certainly in the nature of it.

But in the heart of Yossi Beilin, the hope still beats that peace is possible, despite this apparent change of prime minister. Back to you, Christiane.

AMANPOUR: Mike, thank you very much. Let's not forget that throughout this election campaign, despite the violence, despite the confusion and despair, that 69 percent of the Israeli people still say, they support the peace process.

Chemi Shalev, Yossi Beilin just said, today, Israel took its biggest political gamble since 1948. That is a dramatic statement.

SHALEV: Well, I'm sure that Yossi Beilin views the situation dramatically. He is an ideological leftist. This must be a terrible disappointment for him. And if Ehud Barak does decide to enter negotiations with Ariel Sharon over the establishment of a national unity government, Yossi Beilin will probably leave the party if these negotiations are successful, and cause an historic split in the Labor Party because he has said he'll not join such a unity government under any circumstances.

AMANPOUR: A lot of people are talking about a national unity government as a way of healing the divisions, as a way of moving forward united. But what about the other view, that a national unity government could be a fig leaf to really splitting away from the entire peace process?

SHALEV: Well, it's very difficult to see what common ground Labor and Likud could find, which could also at the same time move the peace process forward. That's true. Nonetheless, one has to consider the alternative, and from the peace process point of view, at least, they might be able to succeed in having some sort of holding pattern, perhaps they could move the peace process with the Syrians, advance it, after many months it's been paralyzed.

The alternative to that is a right-wing government of Ariel Sharon, which is much more likely to lead the whole area towards confrontation and perhaps, even war, and we have to remember that the Israeli public overwhelmingly supported a national unity government yesterday, and I think that, waking up tomorrow morning, understanding finally that Ariel Sharon is prime minister, support for a national unity government will be even much bigger and I think Labor will find it very difficult to oppose such a public sentiment.

AMANPOUR: Help us understand; Ariel Sharon has run a campaign -- only Sharon will bring peace. But he is -- he has no desire to do anything on Jerusalem other than keep it undivided, to dismantle settlements; all the things that most people consider necessary for a peace deal. What is his plan, even though they haven't talked about it?

SHALEV: Well, his plan, as it's been published and leaked to the press in the past few weeks, is a plan which cannot achieve -- is a nonstarter, as the Palestinians say. It talks about a Palestinian state on 42 percent of the territory and even that Sharon is stipulating that the Palestinians declare end of conflict in order to achieve that.

Obviously, that's not something that will fly. But there are people, even inside Barak's government, we must remember, such as Shimon Peres who oppose the whole attempt to achieve a final status settlement and rather prefer going to another interim stage. It's quite possible that Sharon, Peres, perhaps Barak, will be able to find some common ground about a new interim settlement. Whether the Palestinians will agree to talk about that is another matter.

AMANPOUR: Chemi, thank you. And we're going now to Likud Party headquarters where Jerrold Kessel is standing by with Moshe Arens. Perhaps we can get a few more details about just what their peace plan will look like?

KESSEL: Christiane, I don't quite know if I heard your question amid the deafening discotheque noise that is this Likud celebration here. But clearly what is happening is there are many people considering where the Likud goes now.

One of those is Moshe Arens, the former Likud defense minister and foreign minister. Thanks very much, Professor Arens, for joining us. Where does Israel go? Where does the Middle East go with this?

MOSHE ARENS, LIKUD PARTY MEMBER: Well, you know, this is the end of an unprecedented period in any democratic country. A prime minister has conducted a policy that clearly did not have the support of parliament, did not have the support of the people of Israel and that's been made crystal clear here today. So, we're going to have a change of course.

KESSEL: We heard Secretary of State Colin Powell suggesting -- or there are reports that he is saying there is no more peace process between Israel and the Arab world. There could be peace negotiations. Do you see anything interesting in that distinction?

ARENS: Well, peace negotiations are good enough, and I think that this may indicate a somewhat more realistic attitude on the part of the new secretary of state, and I think he'll find on the part of Sharon, our new prime minister, also a more realistic attitude to the problems in the Middle East.

KESSEL: What can he offer, Mr. Sharon, the Palestinians and the Arab world?

ARENS: I'm sorry. I didn't hear you.

KESSEL: What can Mr. Sharon offer the Palestinians and the Arab world?

ARENS: Well, first of all, he offers a very important suggestion: There has to be a cessation of violence before we continue talking and I hope the Palestinians will understand that.

KESSEL: Six months ago, I don't think you'd find five people here, if you're lucky, who would have predicted this, who would have predicted anything like this. What happened?

ARENS: Well, nobody could have predicted that Mr. Barak, in what was a very stubborn approach, would continue down a path when the people of Israel were simply not behind him. He just turned almost everybody against him.

KESSEL: Thank you very much, Professor Moshe Arens, former minister of defense and foreign minister under the Likud government.

Back to you, for now -- Christiane.

AMANPOUR: Jerrold, thank you. And we're going to take a break, but when we come back, we're going to get the reaction from the White House from CNN's John King and we expect to go to the Labor Party headquarters for a speech by Ehud Barak.

(COMMERCIAL BREAK)

AMANPOUR: We've been talking a lot about how a new U.S. administration would deal with a new Israeli administration. For the reaction from the White House, we go to CNN's John King.

JOHN KING, CNN WHITE HOUSE CORRESPONDENT: Well, Christiane, no official reaction as yet because here at the Bush White House they are awaiting that concession speech by Mr. Barak. Only after there is an official concession, we are told, will the new president, President Bush, place a phone call to the winner, the projected winner at this hour, still Mr. Sharon. In that conversation, we're told by senior White House officials Mr. Bush will stress first and foremost, the United State's commitment to the Israeli democracy and Israeli security as well as the U.S. commitment to a continued peace process. But we're also told at the same time the anticipation here at the White House is for weeks, if not more, of uncertainly.

They say they can't answer many questions about what will the U.S. role be from here on out until they see what type of government Mr. Sharon will form, if indeed he is in the end a winner; whether or not it would be a unity government featuring Mr. Barak or whether it would be a narrow Likud government. So they say they can't answer many of the big questions now as to where the peace process goes from here.

They say, of course, they will be monitoring as well the troubling predictions of unrest in the region. They say they hope that doesn't come true, and we already do know that Secretary of State Colin Powell plans to visit the region by the end of the month. Not only Israel, but Arab neighbors as well, hoping to get an assessment of the landscape in the region.

One significant change in policy, this is a president who wants to leave most of the details to the State Department and to the diplomats. He will call the winner today, we're told. He is likely to call the loser tomorrow morning. No plans as yet to call Mr. Arafat, the Palestinian leader. Secretary Powell has spoken to Mr. Arafat, but as yet now, almost three weeks into the new administration, this president has not. That is a very sharp contrast to the prior administration -- Christiane.

AMANPOUR: John, thank you. And we'll be waiting to see just what the new Bush administration has to say about this. In the meantime, how is this going affect U.S.-Israel relations? Will it?

SHALEV: Well, in the short run, I think there will be the effect that both administrations are getting their act together and perhaps there might be some sort of holding pattern. In the longer run, I think Mr. Sharon might be encouraged if he learns that indeed the president does not intend to take a heavy personal role in the peace negotiations.

I think he might be encouraged to see that there is a Republican administration, which perhaps is more interested in American strategic interest in the Middle East, less in human rights and the Palestinians. They might find common ground -- more common ground on the issues -- on the wider issues of Iraq and Iran, and perhaps also on the Syrian front.

Ultimately, though, as I think happened when the president's father was in power and the last Likud government was in power in 1992, ultimately I think they are bound in a collision course over the Palestinian issue if Mr. Sharon does not find a way to live at peace with the Palestinians.

AMANPOUR: Chemi Shalev, thank you very much. We'll be back right after a break, and when we come back, we will hope to hear from Ehud Barak who is on his way to Labor Party headquarters. We leave you with pictures from there.

(COMMERCIAL BREAK)

AMANPOUR: Prime Minister Ehud Barak is on his way to Labor Party headquarters. He left his hotel here on the Tel Aviv coastline, and heading towards Labor Headquarters. We expect he will give a concession speech. If those exit poll projections turn out to be accurate, it's a crushing, crushing defeat. CNN's Mike Hanna is at the Labor Party headquarters.

HANNA: Well, Christiane, we're still awaiting Ehud Barak's arrival here and certainly the mood is somber, though, the music is loud. All the members of the Labor Party that we have spoken to at this particular point are not willing to say, publicly, that they will abandon Ehud Barak at this particular point.

Each of them has said that at this stage, he will remain the leader of the party. But there's no doubt that there are a number of people standing behind me now, who are plotting exactly what to do next. And part of that plot, no doubt, is to find some in which the leadership of the Labor Party will be examined.

Now, this projected loss of Ehud Barak, 19 percentage points, is truly massive in terms of Israeli history. It is the biggest single- ever defeat, if this projected poll, was -- is confirmed in the next week or so, or in the final confirmation actually comes on February the 13th. However, the result will, itself, be confirmed within the next couple of days, but if this 19 percentage points is correct, it is an absolutely massive blow, not only to Ehud Barak, as prime minister, but to Ehud Barak as politician. It is a massive sign of dissatisfaction with the policies of the man.

Now we have heard person after person speaking to us here and saying that this does not necessarily mean a threat or the end of the peace process. They have attempted to separate out that peace process from the individual who has been directing it for the past 18 months. Well, that will be a very difficult thing to see what happens in the days ahead.

In terms of the Labor Party leadership -- well, as I said, there will be some new contenders to take over from Ehud Barak, although none is prepared say publicly at the moment. One of the key issues will be whether Ehud Barak is willing to enter into the negotiations with Ariel Sharon to form a coalition government; a wide-based government. We heard Chemi Shalev say earlier there, if that was the case, there could be a major split within the Labor Party.

And I think now, as we are talking, that we hear that Ehud Barak is nearing the arena. We will, of course, stay here while we wait for him to come and make what is probably likely to be a concession speech. But also, Christiane, what we are hoping to hear is exactly what he has in mind now. 18 months ago -- some 20 months ago, he won the prime minister's election. He pledged that he would introduce peace within a year, not only with the Palestinians, he pledged that he would enter the negotiations with the Syrians as well.

Well, after 20 months, since then, nothing has happened. He has not managed to achieve a peace and certainly, he has not managed to achieve the security in the eyes of many Israelis. And once again, we are still awaiting here, Christiane. But the bottom line that does appear to emerge, is that, at the moment, Ehud Barak is safe in the leadership of the Labor Party. Well, that is what his supporters say, but we know, and it would appear from many analysts around here, that at this very moment, the ideas are being formed in some leader's minds of contending the leadership of that party -- the 19 percentage point blow as projected at the moment, a massive -- a massive disaster for Ehud Barak, the politician, as well as the prime minister, Christiane.

AMANPOUR: Mike, stand by. We will be back to you as soon as Ehud Barak comes up to the podium. In the meantime, Chemi.

What do we expect him to say?

SHALEV: First of all. We expect him not to resign. We expect him to not be clear about his intentions, about a national unity government. He won't shut the door on such a possibility. He won't give Ariel Sharon much room for hope. He'll bide his time and we'll have to wait a few days to see how exactly Barak plans to handle the national unity issue.

AMANPOUR: But how can he bide his time? I mean, surely, this is a sort of, an urgent matter, if these projections turn out to be true. How much time does he have with that huge amount of loss?

SHALEV: Well, according to the Labor Party Constitution, the elections for the leadership of the Labor Party have to be held within 14 months. Mr. Barak, if he is not resigning, will definitely want to postpone it for as late as possible, while his rivals will want to bring it up and hold such a contest as soon as possible.

I think that there might be a race if Mr. Barak decides to engage Mr. Sharon in the coalition negotiations, and what will come first. Will Mr. Barak be able to secure some sort of deal with Mr. Sharon, or will the other leaders of the party force him to hold a contest for the party leadership before he can join a new government.

AMANPOUR: What would be in his best interest? I mean, if it's survival as a politician by joining a unity government, or not?

SHALEV: Some people might say that the best interest is to resign, and thus spare himself, perhaps, the kind of bitter fight that he is going to face. But Mr. Barak is not a man who listens to the advice of other people. He usually does what he believes, and he intends to fight on, and believing confident of his victory. He's a very self-confident man. He's a man who, until just yesterday at least, used to boast, that he was never defeated in any elections, and I think, for him to surrender -- to resign now would seem a, sort of, surrender and he intends to fight on, waiting for Mr. Sharon to tumble and then to make a comeback.

AMANPOUR: Well, clearly, there are people who are watching this -- obviously in the Labor Party, who think that a Sharon government can be an episode. We heard that from Justice Minister Yossi Beilin tonight. Is that likely? Sharon could gather a right wing coalition and last, couldn't he?

SHALEV: Conventional wisdom is that a right-wing government, because it has such strong internal contradictions between religious and secular and between right wingers and moderates, will not last long.

AMANPOUR: OK. And we will go back, on that note, to Labor Party headquarters and Mike Hanna, because Ehud Barak, the prime minister, is about to come in.

HANNA: Yes, we are waiting for Ehud Barak to come in. We hear the crowd behind me, the crowd have been putting the best face onto this -- what appears to be this resounding defeat. But at the moment, we are waiting for the prime minister to come in to make what could possibly a speech of concession.

Let us wait.

UNIDENTIFIED FEMALE (through translator): Outgoing Prime Minister Barak on the podium facing, I think, the hard core of his camp. His real political supporters, those who remained at his side, apart with whom Barak has a lot of scores to settle. The crowd is now crying, stay! stay! That's the question, says the commentator. Will Ehud Barak stay and run for the leadership of the Labor Party in a very vehement campaign, an unparalleled one that opening this evening, but in the light of these results.

And at the side of Barak, as through his whole campaign, his wife Navah Barak, who's been very much involved in his activities, who's really contributed to him as a result of the great affection that people have for her, but it hasn't helped, says the commentator. It's a very happy, very festive atmosphere and it's that atmosphere that really has been the victor in this campaign.

The prime minister to speak. The sign says, "Ehud, with you the whole way." The commentator says that the further results of the sample were heard this afternoon. They were outlining possible scenarios, didn't include victory, but a far more modest loss and analysis with the future responsibilities, and I don't think that they understood how great the gap would be either.

EHUD BARAK, ISRAELI PRIME MINISTER (through translator): My friends, good evening.

(APPLAUSE)

The electorate have spoken, and I respect the verdict of democracy. And from here, I want to express my gratitude to the vast numbers of Israeli citizens who have expressed their trust in me by voting for me.

I greatly appreciate their support, and this helps me to look forward for their sake, together with all of us, to fight on along our path for the sake of the children of Israel. Not long ago, I telephoned member of Knesset Ariel Sharon and I congratulated him on his election.

(BOOING)

BARAK (through translator): Please, no booing.

Just a short while ago, Ariel Sharon didn't even imagine that this evening he would be elected as prime minister, and he stood at a Likud conference and he said he wanted to see me as his minister of defense, and then there was booing. And there shouldn't have been booing then and there shouldn't be booing now.

I promised Ariel Sharon that with the establishment of a new government under his prime ministership, and with his obtaining of the confidence of the Knesset, the government would be transferred in an orderly fashion, as in a proper, democratically run, civilized country.

My friends, we have lost the battle, but we will win the campaign, the war.

Accepting the will of the electorate does not undermine our confidence in the rightness of our path. The path that we have chosen is the sole right path. It is the path which will ultimately lead the state of Israel to peace and security through the power to decide to become separate from our Palestinian neighbors and to place a boundary between them and us. Only a boundary will bring tranquility, only a border will bring personal security, only a border will bring deterrence and only a border will bring mutual respect.

This path is the one which will maintain the Jewish and democratic nature at the state of Israel as a free and enlightened society in the family of nations that will bring an end to the struggles with our neighbors and that will allow us to be a light unto the nations. This is a path which requires the readiness to make sacrifices, and perhaps the public is not entirely yet prepared to accept the painful truth that we have revealed to it.

More than that, on the other side too, on the Palestinian side, there is not yet sufficient maturity and a willingness to take decisions in order to confront what is also a painful reality for them, too. And violence has become the refuge of desperate people.

My friends, to some extent, we have been ahead of our times, but the time will come, and I have no doubt at all that that time will come.

(APPLAUSE)

BARAK (through translator): The truth will conquer in our circles as well in theirs, because there is no other path.

I bear the overall responsibility for the path of my government and its policy and I am proud of both.

(APPLAUSE)

BARAK (through translator): I'm also responsible for this electoral campaign and its results. And I regret the result, but I respect it. We have acted as a government a great deal in the last 18 months, in order to advance the state of Israel. We have taken the Israel Defense Force, the IDF, out of Lebanon.

We have had the determination to decide to get the army out of Lebanon and to decide to get the economy out of the recession, and to insist that Yossi Sarid, the best education minister the country has ever had, should jointly set new standards for education for children age 3 and 6 and to reduce tuition fees for university students.

But our government was, above all, based on the political issue. And we will always be proud of our government efforts to come to grips with the Palestinian-Israeli conflict, so that we could determine the framework once and for all within which peace arrangements would be reached with the Palestinians and the Syrians at the same time.

Secondly, we took off all the masks from our neighbor, who's both a participant and a rival, without conceding anything, being however prepared to talk about the most far- reaching areas which governments of the past have never touched upon in order to make sure once and for all whether it is possible to achieve an agreement, a settlement or not.

Not only did we strip off the masks from our rival, but also the illusions that we ourselves have veiled ourselves in with regard to the possibility of achieving a solution with the Palestinians, the price of achieving that solution, which would be a painful one, which would not enable us to achieve all our dreams.

And we also managed to take away the masks with regard to our illusions as to the nature of our neighbor. We found out that our neighbor is, in fact, less than we thought, and we found that the lack of maturity is a very painful situation for all of us, but just as adolescents, growing up for all of ourselves and of all of our children is an inevitable and vital part of the process of growing into responsible adults.

And fourthly, we have prevented a terrible tragedy of entering into another bloody round with our Palestinian neighbors where some of our people are not sure that the responsibility for the situation lies not with the Palestinians, but with the Israeli government. And we've done all of this showing responsibility in how to tackle the situation and our use of force.

And quite often I am charged with the idea that the current violent results from the concessions made by the Barak government. I tell you that the opposite is true, this violence is because when it comes to the readiness to talk about far-reaching concessions, we talked about this prior to the outbreak of violence.

In my phone conversation this evening with Prime Minister-elect Sharon, he proposed to me that we establish a national unity government. I am aware of the desire among the people for such a government, but unity cannot be a substitute for a path.

(APPLAUSE)

BARAK (through translator): If it is possible to work out a joint realistic plan of action for genuine promotion of policy to have proper economic and civil agreed principles and a proper way of making progress along the path of peace, then a national unity government should not be ruled out.

But if that is not possible, the Labor Party will be a combatant opposition, and it will fight for its principles using all democratic and parliamentary resources in order to convince the people of the rightness of its path and to replace the government that will come into being during the next few weeks as soon as possible.

My friends, let me express my gratitude here, my loving thanks to my wife, my darling wife, Nava, who is by my side always...

AMANPOUR: So, Ehud Barak, Chemi, has just given his concession speech and he's continuing.

BARAK (through translator): ... who's been by my side for decades now, and to our daughters and to our family, who've always been steadfast anchor of support and love.

From the bottom of my heart, thank you to the hundreds of activists, to our ministers and the members of Knesset of the Labor and Meretz Party. To the wonderful Meretz people who have been the most wonderful, the warmest discovery for me throughout this election campaign. To the people from the organization and information and ground force people from the Meretz and Labor Youth Parties, warm thank you to all of you.

To Roman Bronfman, Michael Melchior and the people from the (UNINTELLIGIBLE) Party, to everyone who's helped us in this election campaign, and first and foremost, the wonderful young people who have totally swamped the country with their support and devotion. And I'm convinced that we have to keep this wonderful human complex alive and breathing for the day that we will be able to give them further orders.

When I look at you here, I have tears in my heart. I love you. I'm proud of you. You are the trustees of my truth forever, and I know that we will meet in every struggle in the future that we will share.

AMANPOUR: Chemi Shalev, Ehud Barak...

BARAK (through translator): I have the responsibility for the political path of my government, and I believe in its vital nature in historical terms, in my determination, after establishment of the new Knesset, to resign from my position as the head of the government and from the Knesset, and the head of the Labor Party, of course.

CROWD (through translator): Remain. Remain. BARAK (through translator): I intend to resign from the Knesset and from my position as leader of the Labor Party. And to remain -- just a moment -- and to remain a member of the Labor Party and its institutions, and for a certain amount of time to leave political matters behind me.

After 41 years in the service of the country, I think Nava and I have earned this.

I will not sever my commitment to the path I have followed and my determination in believing this is the right path for the country. And consequently, I know that it's possible that one day we will also come back, because our path is the only path. It's the true path, the right path, and ultimately, the truth will win.

Thank you very much.

AMANPOUR: Ehud Barak, the defeated prime minister of Israel, has just given and concluded his concession speech. The most important piece of news, probably, out of that is that he says that he is resigning as leader of the Labor Party. He is resigning his seat in the Israel parliament, but he will remain part of the party, he says.

He also said that he had been approached to form a national unity government by the prime minister-elect, Ariel Sharon. He said that he seemed to leave room open for the negotiation if they could find a platform, a policy, that they could agree on. Then, perhaps, Labor would join a national unity government. If not, Labor would remain in opposition, committed to what he called the path, the only path that he believed was right.

He said that sooner or later, the path that he had forged for peace would be the one that would bear fruit. He said that perhaps he and his party and his plan were ahead of their time, but he assured the Israeli people that they time would come and that the path to peace would look very much like the one he had on his table.

CNN's Mike Hanna is at the Labor Party Headquarters.

HANNA: Well, Christiane, once again, Ehud Barak has resigned as leader of the Labor Party. He is to resign his seat in the Knesset. He says he will stay on as a member of the Labor Party for the foreseeable future. A dramatic end to a dramatic day.

Ehud Barak now, ironically, following the same path that his predecessor, Benjamin Netanyahu, walked some 20 months ago. When Ehud Barak defeated Netanyahu, Netanyahu resigned as head of the Likud Party and went into political obscurity for a period of time.

And Ehud Barak, though, says, it's still time to reconsider the possibility of forging a unity government under Ariel Sharon. He says that this may be possible if a joint platform for forging that peace process can be established. And, Ehud Barak says perhaps they were ahead of the time, but he believes that that time soon will come.

Also, word of criticism for his Palestinian partners in the peace process. They (UNINTELLIGIBLE) he said, show a sense of immaturity. A criticism on his way out, for it was those negotiations with the Palestinians and the failure in them that ultimately brought Ehud barak out of power -- Christiane.

AMANPOUR: Mike, thank you very much. Ehud Barak defeated as prime minister of Israel. The new prime minister-elect, Ariel Sharon, with about 19 percentage points, according to the exit polls now, will be the new prime minister of Israel.

We go to a break, and we'll come back with much, much more.

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