U.S. President stresses keenness on extending hand of peace for those who are willing

Obama calls for fresh partnership with Muslim world based on mutual respect, interests

Prince Saud Al-Faisal welcomes Oabam's statements, asserts readiness to answer any U.S. questions on Arab peace initiative

Egyptian officials view Obama's contacts with region's leaders as indication of his wish to achieve peace

Clinton says U.S. committed to make peace, diplomacy is the key

U.S. President Barack Obama granted an exclusive interview to the Dubai-based all-news channel Al Arabiya in a first TV interview after his inauguration as the United States' 44th president.

The following is a full transcript of Hisham Melhem's interview with President Obama on Al Arabiya TV:

Q: Mr. President, thank you for this opportunity, we really appreciate it.

THE PRESIDENT: Thank you so much.

Q: Sir, you just met with your personal envoy to the Middle East, Senator Mitchell. Obviously, his first task is to consolidate the cease-fire. But beyond that you've been saying that you want to pursue actively and aggressively peacemaking between the Palestinians and the Israelis. Tell us a little bit about how do you see your personal role, because, you know, if the President of the United States is not involved, nothing happens – as the history of peace making shows. Will you be proposing ideas, pitching proposals, parameters, as one of your predecessors did? Or just urging the parties to come up with their own resolutions, as your immediate predecessor did?

THE PRESIDENT: Well, I think the most important thing is for the United States to get engaged right away. And George Mitchell is somebody of enormous stature. He is one of the few people who have international experience brokering peace deals.

And so what I told him is start by listening, because all too often the United States starts by dictating -- in the past on some of these issues --and we don't always know all the factors that are involved. So let's listen. He's going to be speaking to all the major parties involved. And he will then report back to me. From there we will formulate a specific response.

Ultimately, we cannot tell either the Israelis or the Palestinians what's best for them. They're going to have to make some decisions. But I do believe that the moment is ripe for both sides to realize that the path that they are on is one that is not going to result in prosperity and security for their people. And that instead, it's time to return to the negotiating table.

And it's going to be difficult, it's going to take time. I don't want to prejudge many of these issues, and I want to make sure that expectations are not raised so that we think that this is going to be resolved in a few months. But if we start the steady progress on these issues, I'm absolutely confident that the United States -- working in tandem with the European Union, with Russia, with all the Arab states in the region -- I'm absolutely certain that we can make significant progress.

Q: You've been saying essentially that we should not look at these issues -- like the Palestinian-Israeli track and separation from the border region -- you've been talking about a kind of holistic approach to the region. Are we expecting a different paradigm in the sense that in the past one of the critiques -- at least from the Arab side, the Muslim side -- is that everything the Americans always tested with the Israelis, if it works. Now there is an Arab peace plan, there is a regional aspect to it. And you've indicated that. Would there be any shift, a paradigm shift?

THE PRESIDENT: Well, here's what I think is important. Look at the proposal that was put forth by King Abdullah of Saudi Arabia --

Q: Right.

THE PRESIDENT: I might not agree with every aspect of the proposal, but it took great courage --

Q: Absolutely.

THE PRESIDENT: -- to put forward something that is as significant as that.

I think that there are ideas across the region of how we might pursue peace.

I do think that it is impossible for us to think only in terms of the Palestinian-Israeli conflict and not think in terms of what's happening with Syria or Iran or Lebanon or Afghanistan and Pakistan.

These things are interrelated. And what I've said, and I think Hillary Clinton has expressed this in her confirmation, is that if we are looking at the region as a whole and communicating a message to the Arab world and the Muslim world, that we are ready to initiate a new partnership based on mutual respect and mutual interest, then I think that we can make significant progress.

Now, Israel is a strong ally of the United States. They will not stop being a strong ally of the United States. And I will continue to believe that Israel's security is paramount. But I also believe that there are Israelis who recognize that it is important to achieve peace. They will be willing to make sacrifices if the time is appropriate and if there is serious partnership on the other side.

And so what we want to do is to listen, set aside some of the preconceptions that have existed and have built up over the last several years. And I think if we do that, then there's a possibility at least of achieving some breakthroughs.

Q: I want to ask you about the broader Muslim world, but let me – one final thing about the Palestinian-Israeli theater.

There are many Palestinians and Israelis who are very frustrated now with the current conditions and they are losing hope, they are disillusioned, and they believe that time is running out on the two-state solution because – mainly because of the settlement activities in Palestinian-occupied territories.

Will it still be possible to see a Palestinian state -- and you know the contours of it -- within the first Obama administration?

THE PRESIDENT: I think it is possible for us to see a Palestinian state -- I'm not going to put a time frame on it -- that is contiguous, that allows freedom of movement for its people, that allows for trade with other countries, that allows the creation of businesses and commerce so that people have a better life.

And, look, I think anybody who has studied the region recognizes that the situation for the ordinary Palestinian in many cases has not improved. And the bottom line in all these talks and all these conversations is, is a child in the Palestinian Territories going to be better off? Do they have a future for themselves? And is the child in Israel going to feel confident about his or her safety and security? And if we can keep our focus on making their lives better and look forward, and not simply think about all the conflicts and tragedies of the past, then I think that we have an opportunity to make real progress.

But it is not going to be easy, and that's why we've got George Mitchell going there. This is somebody with extraordinary patience as well as extraordinary skill, and that's what's going to be necessary.

Q: Absolutely. Let me take a broader look at the whole region. You are planning to address the Muslim world in your first 100 days from a Muslim capital. And everybody is speculating about the capital. (Laughter) If you have anything further, that would be great. How concerned are you -- because, let me tell you, honestly, when I see certain things about America -- in some parts, I don't want to exaggerate -- there is a demonization of America.

THE PRESIDENT: Absolutely.

Q: It's become like a new religion, and like a new religion it has new converts -- like a new religion has its own high priests.

THE PRESIDENT: Right.

Q: It's only a religious text.

THE PRESIDENT: Right.

Q: And in the last -- since 9/11 and because of Iraq, that alienation is wider between the Americans and -- and in generations past, the United States was held high. It was the only Western power with no colonial legacy.

THE PRESIDENT: Right.

Q: How concerned are you and -- because people sense that you have a different political discourse. And I think, judging by (inaudible) and Zawahiri and Osama bin Laden and all these, you know.

THE PRESIDENT: Yes, I noticed this. They seem nervous.

Q: They seem very nervous, exactly. Now, tell me why they should be more nervous?

THE PRESIDENT: Well, I think that when you look at the rhetoric that they've been using against me before I even took office --

Q: I know, I know.

THE PRESIDENT: -- what that tells me is that their ideas are bankrupt. There's no actions that they've taken that say a child in the Muslim world is getting a better education because of them, or has better health care because of them.

In my inauguration speech, I spoke about: You will be judged on what you've built, not what you've destroyed. And what they've been doing is destroying things. And over time, I think the Muslim world has recognized that that path is leading no place, except more death and destruction.

Now, my job is to communicate the fact that the United States has a stake in the well-being of the Muslim world that the language we use has to be a language of respect. I have Muslim members of my family. I have lived in Muslim countries.

Q: The largest one.

THE PRESIDENT: The largest one, Indonesia. And so what I want to communicate is the fact that in all my travels throughout the Muslim world, what I've come to understand is that regardless of your faith -- and America is a country of Muslims, Jews, Christians, non-believers -- regardless of your faith, people all have certain common hopes and common dreams.

And my job is to communicate to the American people that the Muslim world is filled with extraordinary people who simply want to live their lives and see their children live better lives. My job to the Muslim world is to communicate that the Americans are not your enemy. We sometimes make mistakes. We have not been perfect. But if you look at the track record, as you say, America was not born as a colonial power, and that the same respect and partnership that America had with the Muslim world as recently as 20 or 30 years ago, there's no reason why we can't restore that. And that I think is going to be an important task.

But ultimately, people are going to judge me not by my words but by my actions and my administration's actions. And I think that what you will see over the next several years is that I'm not going to agree with everything that some Muslim leader may say, or what's on a television station in the Arab world -- but I think that what you'll see is somebody who is listening, who is respectful, and who is trying to promote the interests not just of the United States, but also ordinary people who right now are suffering from poverty and a lack of opportunity. I want to make sure that I'm speaking to them, as well.

Q: Tell me, time is running out, any decision on from where you will be visiting the Muslim world?

THE PRESIDENT: Well, I'm not going to break the news right here.

Q: Afghanistan?

THE PRESIDENT: But maybe next time. But it is something that is going to be important. I want people to recognize, though, that we are going to be making a series of initiatives. Sending George Mitchell to the Middle East is fulfilling my campaign promise that we're not going to wait until the end of my administration to deal with Palestinian and Israeli peace, we're going to start now. It may take a long time to do, but we're going to do it now.

We're going to follow through on our commitment for me to address the Muslim world from a Muslim capital. We are going to follow through on many of my commitments to do a more effective job of reaching out, listening, as well as speaking to the Muslim world.

And you're going to see me following through with dealing with a drawdown of troops in Iraq, so that Iraqis can start taking more responsibility. And finally, I think you've already seen a commitment, in terms of closing Guantanamo, and making clear that even as we are decisive in going after terrorist organizations that would kill innocent civilians, that we're going to do so on our terms, and we're going to do so respecting the rule of law that I think makes America great.

Q: President Bush framed the war on terror conceptually in a way that was very broad, "war on terror," and used sometimes certain terminology that the many people -- Islamic fascism. You've always framed it in a different way, specifically against one group called al Qaeda and their collaborators. And is this one way of --

THE PRESIDENT: I think that you're making a very important point. And that is that the language we use matters. And what we need to understand is, is that there are extremist organizations -- whether Muslim or any other faith in the past -- that will use faith as a justification for violence. We cannot paint with a broad brush a faith as a consequence of the violence that is done in that faith's name.

And so you will I think see our administration be very clear in distinguishing between organizations like al Qaeda -- that espouse violence, espouse terror and act on it -- and people who may disagree with my administration and certain actions, or may have a particular viewpoint in terms of how their countries should develop. We can have legitimate disagreements but still be respectful. I cannot respect terrorist organizations that would kill innocent civilians and we will hunt them down.

But to the broader Muslim world what we are going to be offering is a hand of friendship.

Q: Can I end with a question on Iran and Iraq then quickly?

THE PRESIDENT: It's up to the team --

MR. GIBBS: You have 30 seconds. (Laughter)

Q: Will the United States ever live with a nuclear Iran? And if not, how far are you going in the direction of preventing it?

THE PRESIDENT: You know, I said during the campaign that it is very important for us to make sure that we are using all the tools of U.S. power, including diplomacy, in our relationship with Iran.

Now, the Iranian people are a great people, and Persian civilization is a great civilization. Iran has acted in ways that's not conducive to peace and prosperity in the region: their threats against Israel; their pursuit of a nuclear weapon which could potentially set off an arms race in the region that would make everybody less safe; their support of terrorist organizations in the past -- none of these things have been helpful.

But I do think that it is important for us to be willing to talk to Iran, to express very clearly where our differences are, but where there are potential avenues for progress. And we will over the next several months be laying out our general framework and approach. And as I said during my inauguration speech, if countries like Iran are willing to unclench their fist, they will find an extended hand from us.

Q: Shall we leave Iraq next interview, or just --

MR. GIBBS: Yes, let's -- we're past, and I got to get him back to dinner with his wife.

Q: Sir, I really appreciate it.

THE PRESIDENT: Thank you so much.

Q: Thanks a lot.

THE PRESIDENT: I appreciate it.

Q: Thank you.

THE PRESIDENT: Thank you.

Meanwhile, in response to a question by Al Arabiya Channel on statements by President of United States of America Barack Obama aired by the channel, Prince Saud Alfaisal, the Foreign Minister, expressed the Kingdom of Saudi Arabia's welcome of the positive approach shown by the president in his statements, his serious desire to build strong and constructive relations with the Islamic world and his keenness to solve the crises of the region.

Prince Saud said, "We believe the problem of the Middle East continues to be the core of the crises in the region and one of the reasons of instability. Intensifying international efforts to solve this crisis will automatically contribute to solving the rest of the region's crises which have resulted from it."

On remarks by the president on some of the elements of the Arab Peace Initiative, Prince Saud said, "We have no doubt that the Arab countries - which decide on this matter - will have no reservations on conducting a purposeful and constructive dialogue and answering any inquiries by the US administration on the initiative."

On the other hand, U.S. President Obama spent part of his first full day in office on the phone with key Mideast leaders to pledge active involvement in peace efforts, the White House said Wednesday.

Obama called Egyptian President Hosni Mubarak, Israeli Prime Minister Ehud Olmert, Jordan's King Abdullah and Palestinian President Mahmoud Abbas.

"He used this opportunity on his first day in office to communicate his commitment to active engagement in pursuit of Arab-Israeli peace from the beginning of his term, and to express his hope for their continued co-operation and leadership," White House spokesman Robert Gibbs said in a statement.

The new president started his day early with a prayer service at the National Cathedral.

He was also to host an open house at his new home before shifting his attention to two key issues weighing heavily on his administration: the wars in Iraq and Afghanistan and the faltering economy.

Obama, whose inauguration drew more than one million people to Washington's National Mall Tuesday, was to hold afternoon meetings with his top military and national security advisers.

He's expected to hold an afternoon video teleconference with members of the National Security Council as well as the U.S. military commanders in Iraq and Afghanistan. Obama has said he wants combat troops out of Iraq within 16 months and to shift his country's military focus to Afghanistan. During his inauguration address, Obama pledged to "begin to responsibly leave Iraq to its people and forge a hard-earned peace in Afghanistan."

He's also expected to meet with his team of economic advisers to take the "bold and swift" action he pledged during the address.

Members of the U.S. Senate will consider a number of his cabinet nominees later Wednesday, including Hillary Clinton as secretary of state. Clinton's nomination was blocked Tuesday by Republican John Cornyn of Texas.

Timothy Geithner, the nominee to head the Treasury Department, faces the Senate finance committee, where he will have to explain his initial failure to pay payroll taxes he owed while working for the International Monetary Fund.

The judiciary committee is scheduled to consider the nomination of Eric Holder as Obama's attorney general.

And the commerce committee will hold a confirmation hearing for Ray LaHood as transportation secretary. The Senate approved six of Obama's cabinet nominees within hours of the swearing-in on Tuesday.

One of Obama's first major acts in office after being sworn in was a suspension of all trials at the Guantanamo Bay military prison. Obama verbally requested a 120-day continuance in the trials through U.S. Secretary of Defense Robert Gates, according to a spokesman for the military commissions at the U.S. naval base in Cuba.

Obama moves into his first full day as president after celebrating late into the night Tuesday, attending 10 inaugural balls around the city with his wife, Michelle. Their last stop came well after midnight.

Obama's envoy, who flew to Egypt and then on to Israel, also pledged that the new administration in Washington would pursue achieving peace and stability in the region vigorously.

"It is of critical importance that the ceasefire be extended and consolidated, and we support Egypt's continuing efforts in that regard," said George Mitchell after talks in Cairo with President Mubarak, whose officials have been mediating the ceasefire talks.

However, Mitchell's arrival in Egypt - which has been hosting ceasefire talks - coincided with a surge of violence that has threatened the fragile separate truces that Israel and the Gaza Strip's Hamas rulers put into effect on Jan 18 after a 22-day Israeli offensive.

Israeli aircraft bombed smuggling tunnels under the Gaza-Egypt border in a response to the killing on Tuesday of an Israeli soldier on patrol along Israel's frontier with the coastal enclave.

While Israeli leaders weighed more military action, Palestinian work crews used giant yellow bulldozers and backhoes to repair tunnels damaged by bombing during the Gaza war and in the latest attack.

Israel fears Hamas could rebuild the underground network to replenish an arsenal of rockets used in cross-border attacks on its southern communities before and during the Gaza campaign.

Mitchell, a former US senator and negotiator in Northern Ireland, plans to meet Israeli leaders and then hold talks with the moderate Palestinian leader Mahmoud Abbas in the West Bank on Thursday.

Western diplomats said that he would not meet Hamas officials. The Islamist group is shunned by the West over its refusal to recognize Israel and renounce violence.

U.S. Secretary of State Hillary Clinton said on Tuesday that the United State is giving priority to peace talks between Israel and the Palestinians despite its serious concern over other issues in the region.

"We are at this moment focused only on the Israel-Palestinian track," Clinton told her first press conference at the State Department when asked about any new plan for Syria under President Barack Obama's administration.

Clinton insisted that it is important to have a sustained cease-fire in Gaza after the 22-day Israeli offensive against Hamas ended on Jan. 18.

"We have some short-term objectives such as a durable cease-fire, which as you know has receded somewhat today because of the offensive action against the IDF (Israeli Defense Force) along the border," Clinton told reporters.

In her remarks, Clinton also voiced concerns over humanitarian crisis in Gaza. "Of course we're concerned about the humanitarian suffering. We're concerned any time innocent civilians, Palestinians or Israeli, are attacked."