'Money talked in Afghanistan, Hank said, and they had millions in covert action money," Bob Woodward wrote in his book, Bush at War, chronicling the days after 9/11 and President George W. Bush's decision to go to war in Afghanistan. "Warlords or sub-commanders with dozens or hundreds of fighters could be bought off for as little as $50,000 in cash, Hank said. If we do this right, we can buy off a lot more of the Taliban than we have to kill." On Friday morning, "Hank" stood near the window in the Executive Lounge of the David Intercontinental Hotel in Tel Aviv looking out at a blue sky merge with an equally blue sea. In Israel last week to take part in a biannual dialogue on counterterrorism with Israeli officials, he discussed a host of hot-button issues: Hamas, Iran, suicide bombings, financing terror. Hank's identity today is known to all: He is Henry A. Crumpton - since the summer, the State Department's counterterrorism coordinator, working in the office of, and reporting directly to, Secretary of State Condoleezza Rice, coordinating the activities of the various US civilian intergovernmental agencies involved in counterterrorism. Ushered into the room, I looked around for Crumpton, who also starred anonymously in the US report on 9/11 as "Henry," the CIA operative who twice proposed actions to kill Osama bin Laden before 9/11, and who was twice turned down. But my gaze went straight past him. On the short side, with a slightish build and a rural southern accent, he simply didn't fit the part of a former spymaster. But then, life rarely imitates the movies. We are faced with a situation in which a terrorist organization, Hamas, has taken control of the PA. What needs to be done? It depends on what Hamas decides to do. We have given it some room; we have given it some clear perspective on where we sit. Until it recognizes Israel, abides by the agreements the Palestinian Authority has with Israel, and until it renounces violence, we are not going to treat it as a legitimate government. The "we" here is the US? Correct. There is apparently some daylight between the US position and that of the rest of the Quartet, with other Quartet members saying that there is some flexibility, and that the three pre-conditions you mentioned for Hamas to gain legitimacy are not set in stone. It seems that while the US and Israel are on the same page, the rest of the world is not. Well, our view is pretty clear, and we are going to stick with it. If a Hamas-led PA government wants to join the community of nations, it is going to have to accept these three principles. If it doesn't do that, I don't see how we are going to get very far, frankly. Russia and Turkey are talking to Hamas, while China said it is willing to give it aid. How detrimental is this to your efforts? Obviously, the more people are with us, the more pressure will be brought to bear on Hamas. It is a problem that other governments relate to Hamas as a legitimate actor, when it clearly is not. We have communicated this. We have told the Russians and others that this is not helpful. Do you see Hamas changing? If it accepts the three conditions, it will cease being Hamas. I think that it will have to make some bold decisions, and fundamentally change the way it looks at Israel and the world. It won't be easy; I'm not kidding myself about this. To a large degree, violence is part of its identity: It defines who the organization is. But change is not impossible. If it wants to help its people, if it wants to lead and govern responsibly, we will see if it has the courage to make this kind of change. And if it doesn't? If it doesn't, I don't see us moving forward with it. Nor, sadly, do I see the Palestinian people moving forward. Do you accept the premise that the Palestinians didn't vote for Hamas because of its ideology, but rather because they were fed up with corruption? I think it was a mix. I think primarily it was a rejection of the corrupt, ineffective government that Abu Mazen was leading, but also I think there is an element among the Palestinian people that backs Hamas's platform - I hope a minority element. One I hope diminishes over time. But it doesn't look good with this election, and it is a problem. Hamas's victory has raised questions about President Bush's whole democratization program, and about what happens when the "bad guys" win. Secretary Rice said it best last year in her Cairo speech about how we looked at the Middle East and basically supported status quo regimes in the hope of stability and in the hope of preventing terrorism. But what happened was that we didn't get that, and we didn't advance democracy. If you look at the long term, which we are doing, you've got to pull this all together. You can't talk about counterterrorism separately and democracy separately and economic development separately. All of those have to come together, because they reinforce one another. Counterterrorism isn't just about capturing and killing the enemy, it is about denying the enemy a safe haven, and most of all - this is the hard part - addressing the political, social and economic conditions that the enemy exploits. You've got to do those together. You can't do just one, otherwise the enemy will continue to recruit and its cause will continue. It seems that Bush has backed himself into a corner. On the one hand, he promoted democracy. On the other hand, this is what happens when the people speak. Again, if you look at the longer term, it is a process that [involves] democracy and liberal institutions. You can't divide the two. You can't just have electoral democracy and not have liberal institutions. You've got to have both. That is part of the problem in the PA. You have to have the rule of law, media, an education system and all those things that are the foundations for electoral democracy. And that is where the PA is weak. When those things develop - and they will - the Palestinians will be able to make some changes. So, if Hamas doesn't come through, people will have the option to kick it out. To what degree has the Hamas victory emboldened other terrorists in the region? It may have contributed to [emboldening others], but what concerns me more is the growing [Islamic] radicalization. This reaction to the cartoon in Denmark is really disturbing. Look at the new leadership in Iran and at some of the comments it has made. In the year 2006, we cannot tolerate this. You look at the divisions within Islam, the horrible act against the Shi'ite mosque in Iraq and the Hamas victory - if you look across the continuum of these issues, it doesn't look good. You talk about being emboldened, we are in for the long haul here. We are not going to resolve this in the next year or in five years. This is going to be a long, hard war. What does the cartoon issue reflect? I think it reflects the frustration and anger of those in the Muslim world who do not have the kind of opportunity - who do not have the kind of political institutions and civic society - to move forward and progress. I think it is more about their political frustrations than religious outrage. It is against globalization; against the modern world. They are under enormous pressure in traditional societies, and from their perspective, they are under assault. So they are striking out. But they don't have a constructive way to do this. So they take to the streets and attack Danish embassies. Then you have some leaders, like the Iranians and the Syrians, taking advantage of this in the most cynical way possible, for their own selfish political ends. Do you envision this Shi'ite-Sunni tension spilling over here? Hamas is Sunni, while Iran is Shi'ite. Are the Iranians less likely to help Hamas now that these religious tensions have boiled over? The Iranians, with this leadership, could continue to support Hamas. I wouldn't put it past the Iranian government to continue supporting Hamas despite the Sunni-Shi'ite tensions, if it serves their political ends, and if it puts pressure on Israel. For them, this is perhaps more important than the Sunni-Shi'ite issue. What do you think about the effectiveness of Israel's targeted killings? You have to do three things in this long, strange war: There is an immediate objective - to stop the tactical operations that are coming to kill us tomorrow; to engage them; and to protect your people. In the longer-term view, as far as strategy is concerned, you have to nullify enemy leadership, deny enemy safety, and address the conditions the enemy exploits. You have to do all three. You can't just kill and capture the enemy. Certainly, [targeted killings] are effective if [terrorists] are coming to kill you right away. But if you can capture them and apply the rule of the law, that is the best course. Often there is not time. Often the battlefield conditions don't allow for it and you have to engage in lethal force. But that alone won't do the job. You have to address the other two issues. Can Israel continue to go after Hamas leaders? In terms of how you nullify, box in, or restrain leaders, there are other ways to do it other than targeted killings. You were instrumental in drawing up the plan to get rid of the Taliban. Are there any parallels to what could be done here? For me, the most important part of it is understanding those conditions that I talked about - the, social, political and cultural terrain, and using that in our favor. And it is about partnerships with the Palestinian people - those who are responsible. The war in Afghanistan was a victory for the Afghans. They threw out these foreign invaders - the Chechens, Arabs, and Pakistanis - who basically hijacked their government. It wasn't us. It was their victory also. I think it will ultimately be the victory of the Palestinian people when they have a responsible, democratically elected government that recognizes Israel and joins the community of nations. You forged alliances in Afghanistan with people who wanted to see the Taliban out. Can the same thing be done here? In the long term, I think so. It has to be a Palestinian victory. It has to be seen in their eyes, and in reality, to be their victory. This is not about us versus them, it is about the Palestinian people working with foreign partners - the US, Europe and Israel - to persuade this new Hamas government to be responsible, or if not, then eventually to get a new government in there. One glaring difference between the situations is that the Taliban were foisted on the Afghanis, while here the Palestinians elected Hamas. I know, but when the Taliban came in, they were originally embraced by the Pushtan, but the Taliban were corrupted and recruited by al Qaida over the next couple of years. There are clear differences, but the similarity is that Israel and the US cannot impose our will on the Palestinian people. They have to be a part of this. Yes, they elected Hamas. Now, will Hamas respond to their needs? How does this dovetail with the report a couple weeks ago that the US and Israel were working to economically destabilize the PA? This is not about destabilizing the PA; it is about providing humanitarian assistance to the Palestinian people while not supporting Hamas, and giving Hamas the political opportunity to step forward and be responsible leaders. That is the objective here. You have spoken in the past about terrorists getting hold of WMDs. How big a threat is that? Every day that threat grows. Look at the Iranians and their pursuit of nuclear weapons. Make no mistake. This is a clandestine military program; this is not about nuclear energy. Chemical-bio weapons are in some ways more difficult to detect from an intelligence collection perspective, and certainly more difficult to constrain. Some pundits talk about delivery systems and missiles, and that is a concern, but there is also another delivery system, and that is called Hizbullah, which is an extension of the Iranian government. You combine the Iranian nuclear weapons program with Hizbullah, and that is a pretty nasty mixture. Do you see Iran trying to turn Hamas into the same type of instrument? I think Iran would love to have the kind of control over Hamas that it does over Hizbullah. It doesn't now, but it is clearly an objective. The Iranians would love to have another proxy like that. What is to stop that from happening? I hope the Palestinian people; and I hope the leadership of Hamas, if they are going to be responsible or courageous enough. What do you think about the Russian proposal to enrich Iranian uranium on their soil? It could help, but there has to be some other things, including transparency as to what the Iranians are doing. I could see the Iranians agreeing to this [proposal], but keeping to another part of the program and continuing. So there has to be transparency, which today we don't have, since the Iranians walked away from their international obligations. The feeling here is that there is a significant time-lag between the world's diplomatic efforts and the Iranians' technological development. The clock is ticking, and diplomatic efforts are lagging way behind. How do you close the gap? We need to have a dialogue with our partners on this issue and need to continue to pressure Iran. Secretary Rice just asked Congress for $75 million to engage with the Iranian people, and there are other options. For us, all options are on the table. Including the military option? Everything is on the table, given how grave this threat is. You mean that the US cannot abide a situation in which there is a nuclear Iran. Given those concerns I've outlined, I don't think the community of nations can. That you have a government that rejects its international obligations and pursues this path - I don't see how it can be accepted in the long-run. But the community of nations in the recent past hasn't shown great determination in this, so it seems it would be up to America. I think that is a leadership responsibility we have. Is there a cut-off date? I don't have a set date or benchmark, and if I did I wouldn't reveal it. Can the US handle two major confrontations at one time? I think the US, with the kind of partnerships we have, can deal with multiple problems. When you look at state-sponsored terrorism, it is not necessarily about open, blunt warfare - big armies on big armies. There are a whole lot of other options - a whole lot of combinations of options - that we have to pursue. It goes back to what I said earlier about all the instruments of statecraft and how we partner. Looking at counterterrorism successes, every success we have had depended on the success of our partnerships, whether in Afghanistan with the Afghan people, or whether with a particular tactical operation - the capture of a terrorist. It is always about partnership. That is why I am here [in Israel] and why I am going on to Cairo and Jordan. That [partnership] is the key. Before the war in Iraq, the US wanted Israel to keep a low profile. Does that apply with regard to Iran as well? We are very pleased with the restraint Israel has shown in response to outrageous comments by the Iranian leadership. I think it shows the maturity and responsibility of the Israeli government, and we think that is appropriate. I think that in the longer term Israel will continue to be a key partner, and I am not really at liberty to go into details regarding a potential response to Iran. Is there a connection between how Israel reacts to events in Gaza and the situation in Iran? Some are asking whether Israel might not be responding to rocket fire from Gaza more forcefully because there are other things going on regarding Iran. That is a great point. This is what makes it harder. If you act over here it does have an impact, even if it is three or four actors removed. It is related, because perceptions are linked. In today's world, tactical decisions are going to have strategic consequences.