Tony Blair: Gaza Cease-fire 'Hangs in the Balance'

As Israeli ground forces continue to move further into Gaza City on the 18th day of their offensive, Former British Prime Minister Tony Blair said that the possibility of a cease-fire between Israel and Hamas "hangs in the balance."

"I think the next 48 to 72 hours are pretty crucial," Blair told ABC News' Cynthia McFadden.

Blair arrived in Washington late Monday night from Egypt, where he was negotiating a cease-fire, and sat down with McFadden at the British Embassy to discuss the situation. Blair was appointed 18 months ago as a special envoy to the Middle East representing the United States, Russia, the European Union and the United Nations.

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Blair says the agreement being negotiated in Cairo centers on Israel being confident that there will no longer be "smuggling of weapons and rockets coming into Gaza which Hamas then uses to fire onto Israel citizens" and for Hamas to be assured that "there is the reopening of the Gaza crossing so that Gaza can be rejoined with the rest of the world."

"In essence, that is the deal," Blair said, "and as we speak, people are negotiating."

When asked if it was appropriate to negotiate with Hamas, Blair said, "well, that's a big debate and one that at some point is worth having. Truthfully, in this situation, the reason there's a problem is not a failure of communication. ... Because people have been sitting down and saying to them, 'This is what is necessary.' They know what's being offered them, the question is whether or not they'll accept it."

In response to the debate about whether Hamas should be part of the ongoing, lasting search for peace in the Middle East, Blair said that he doesn't believe a two-state solution is possible unless Hamas is "prepared to commit to peace" and that there is a role for Hamas in a peaceful Middle East once they decide if "they are going to be part of the solution or continue as they are now to be part of the problem.

"If you want a two state solution -- state of Israel, state of Palestine -- there is only one state of Palestine, and at the moment, the West Bank, where the most Palestinians live and the biggest amount of territory, is separated from Gaza. Hamas runs Gaza; the West Bank is run by the legitimate Palestinian authority. So if we want to get a viable peace process, we have to reunite Gaza and West Bank. Now, Hamas can be part of that and they can be part of the process. But it's difficult to make them part of the process toward two states -- Israel and Palestine -- unless they accept the existence of Israel and accept their pursuit of the state of Palestine has to be done peacefully and not through terrorism."

Blair: No Conflict Without Civilian Casualties

Blair stressed that differences over issues such as how to handle Jerusalem refugees and precise territorial boundaries are "major issues, very complicated issues" but "not impossible issues, if you want to resolve this."

When questioned about whether the Israeli reaction had been proportional to the actions taken by Hamas and if Israel had taken adequate steps to prevent civilian casualties, Blair said, "I don't recognize the concept of proportion when you've got hundreds of young children dying.

"You can debate about proportion or not; the fact is that it's very hard to fight a conflict that is in a small space, possibly the most densely populated space in the world and where Hamas deliberately, of course, put their military infrastructure in civilian areas. So you're never going to have a conflict where you're not going to have civilian casualties. Now should Israel do everything that they possibly can to avoid that? Yes. Can we do more on the humanitarian side? Of course. And we must. But in the end the most important thing is to stop the conflict."

When asked if he believes that Israel has gone over the line, Blair said, "I think what I'm really saying is that there is no line. The only answer is to stop the conflict."

As for the humanitarian situation, Blair said that based on his conversations with United Nations officials, "the suffering is terrible" in Gaza.

Secretary of State Condoleezza Rice gathered with leaders of 49 nations in Annapolis, Md., last year to address the peace process and predicted a two-state solution would be reached before the end of the Bush administration.

Blair said that despite the current bloodshed, the two sides had moved forward in terms of addressing some of the issues "in real detail" in the past year and that other countries in the region have become more involved in the process.

Peace is achievable, Blair said, "because the world outside of Israel and Palestine, particularly the Arab world, has a huge interest in resolving this dispute. ... Because their real fear is that what they see is an attempt by Iran and by extreme elements in the Arab and Muslim world to, as it were, create this movement of extremism which in many ways is based on a perversion of Islam throughout the whole region and the broader world and they see resolving the Israeli Palestine question as an important part of pushing that movement back."

'You Can't Disengage From This Problem'

When asked, given the economic conditions at home, why Americans should care about the situation in the Middle East, Blair said that "we are involved.

"That's what they say in Britain too, and they say it in France and they say it in Germany and Spain and all over the world. And the answer, I'm afraid, is very simple," he said. "We are involved and when Sept. 11 happened here in America, it didn't start here in America, it started with people thousands of miles away in places we barely had heard of who were being trained in camps as part of this broader extremist movement so whether we like it or not, they aren't going to leave us alone so we're going to have to find the right combination of hard power and also soft power to deal with it."

Blair said that U.S. engagement in the peace process is crucial to success.

"You can't disengage from this problem because it's there and it matters," he said. "Now, to be fair, in the first Bush term right after the failure of the peace attempts at the end of the Clinton administration and then the uprising on the Palestinian side, it all became extremely difficult. But actually what the engagement over the last 18 months has shown is that engagement is the only way that this works."

The former prime minister praised Secretary of State-designate Hillary Clinton's experience and "complete knowledge and handle on this problem."

"I'm sure she is of exactly of the same view that I've been expressing to you," he said.

Blair was in Washington to receive the Presidential Medal of Freedom award from President Bush, whom he staunchly supported in the Iraq war, receiving wide criticism in Great Britain.

Blair: 'I Don't Regret' Supporting U.S. in Iraq

He said that he doesn't regret his decision to stand "shoulder to shoulder" with the United States after Sept. 11.

"I took that decision then and I don't regret it now," he said. "And I think even though it is incredibly difficult in Iraq and Afghanistan and actually it's the same issue that we've just been talking about in Israel and Palestine. I think we have to be prepared for a long struggle and a difficult one and it will be a struggle that involves not just military power but also strategic diplomacy. But I am sure that in that struggle our two countries should be alongside each other and partners of each other."

As for the next president, Blair said he has met with President-elect Barack Obama many times and spoken to him recently about the situation in Israel and Palestine, adding that he supportsObama's taking an active role in the conflict.

"I think he's got a moment of huge possibility and hope and opportunity," Blair said. "I think what is important is that the rest of the world understands that he needs partners and friends and people who are prepared to stand up with him, not just cheer from the sidelines. So it is a moment of great possibility, but it's also a moment of huge challenge, you know I'm optimistic, but then I always am."