Jerusalem -- "The hope for peace, and the desire for peace is so strong, that while suicide bombers create great damage, they cannot kill the peace process," Secretary of State Madeleine Albright said here September 12.

"The problem of the terrorism overhangs everything here, and I have, throughout my visit here, made very clear that we can brook no terrorism, that dealing with the terrorist threat is a sine qua non of the whole process, and we have made very clear that Chairman Arafat must give it a hundred percent of his effort," the Secretary said in an interview with Fox TV.

"The terrorists are the enemies of peace. The terrorists are the enemies of those who want to have a normal life, and Chairman Arafat, as the leader of his people, wants to be able to deliver something to them, and I think he knows that the terrorists are not his friends, and that the terrorists are those that have to be dismantled...," Albright said.

Following is the transcript of the interview:

(Begin transcript)

QUESTION: Secretary Albright, have you come away with anything tangible from your meetings with the Palestinians and the Israelis?

SECRETARY ALBRIGHT: Well, I came here hoping that we could take some big steps, but I am a realist and we are coming away with some small steps. Big steps are necessary, and small steps are what we have, and what I can announce is that Prime Minister Netanyahu and Chairman Arafat have agreed to send their senior negotiators to Washington, the beginning of the week-after-next to talk about how to get the peace process back on track. And then I will host Foreign Minister David Levy and the Palestinian Deputy Abu Mazen in New York the week after that, so that we can see if we can keep the process going.

What we have here is a very serious crisis of confidence. And we have to try to rebuild that confidence. It would be wonderful if it could be rebuilt with larger -- with some more dynamism, but I'll take the small steps for now.

QUESTION: Well, this sounds like talking about talking, and in the absence of any tangible progress, another suicide bombing or two could tip the scales again, so where are we really?

SECRETARY ALBRIGHT: Well, I think that, obviously, the problem of the terrorism overhangs everything here, and I have, throughout my visit here, made very clear that we can brook no terrorism, that dealing with the terrorist threat is a sine qua non of the whole process, and we have made very clear that Chairman Arafat must give it a hundred percent of his effort. But I think the stunning thing about being here is that the hope for peace, and the desire for peace is so strong, that while suicide bombers create great damage, they cannot kill the peace process. And I found that it's evident everywhere one looks, and it was certainly clear in terms of the young people that I met with. I deliberately wanted to meet with some young people because they are the future, obviously, and there is hope in their eyes and that is why the leaders here have to make the tough decisions so that the peace process can move forward.

QUESTION: When you're talking about tough decisions in that unusual conversation with President Weizman, he talked about butting heads together, the Carter approach, of getting maybe Netanyahu and Arafat together, locking them up until they come up with something. The United States is the only superpower in the world these days. Why not some more muscle flexing to help get something done?

SECRETARY ALBRIGHT: Well, I think that what we know is that unless the leaders themselves make tough decisions, it's very hard even for all-powerful United States to make a difference. But we can make a difference when those decisions are made, and I have decided that I will come back to this region whenever the tough decisions have been made. I'm more than happy to come back and do what I can, but I'm not going to come back here just to tread water.

QUESTION: Why are you opposed to the shuttle diplomacy concept of Mr. Christopher?

SECRETARY ALBRIGHT: Well, I'm not saying that shuttle diplomacy is treading water. I'm just saying that if there is nothing to do, and it's a matter of just hand holding, that is not what I believe an American Secretary of State should do. I believe that I will come here when big and tough decisions have been made and the United States can help in the final push.

QUESTION: Do you think Netanyahu and Arafat are capable of making those tough decisions?

SECRETARY ALBRIGHT: One hopes always that the elected leaders of peoples and countries are prepared to do what is best for their country, and I think that as I look at the people, as I said, I think the thirst for peace here is evident everywhere.

QUESTION: I'm trying to put myself into the hands of Chairman Arafat, into the seat of Chairman Arafat, and if I have to fight Islamic terrorists, who have a lot of support within his populace, and I am not really offered much -- I mean Netanyahu said he's not going to change his policies on the issues that you mentioned -- what's in it for him to go ahead?

SECRETARY ALBRIGHT: I think he needs -- he understands -- that the Palestinian people themselves are as much victims of terrorism as the Israelis are. The terrorists are the enemies of peace. The terrorists are the enemies of those who want to have a normal life, and Chairman Arafat, as the leader of his people, wants to be able to deliver something to them, and I think he knows that the terrorists are not his friends, and that the terrorists are those that have to be dismantled, and that's what I talked to him about, is how to dismantle the terrorist infrastructure.

QUESTION: Thank you.