Overnight, the news came through that as well as continuing conflict in the Lebanon, Britain's Armed Forces suffered losses in Iraq and Afghanistan. It brings home yet again the extraordinary courage and commitment of our armed forces who risk their lives and in some cases tragically lose them, defending our country's security and that of the wider world. These are people of whom we should be very proud.

I know the US has suffered heavy losses too in Iraq and in Afghanistan. We should never forget how much we owe these people, how great their bravery, and their sacrifice.

I planned the basis of this speech several weeks ago. The crisis in the Lebanon has not changed its thesis. It has brought it into sharp relief.

The purpose of the provocation that began the conflict was clear. It was to create chaos, division and bloodshed, to provoke retaliation by Israel that would lead to Arab and Muslim opinion being inflamed, not against those who started the aggression but against those who responded to it.

It is still possible even now to come out of this crisis with a better long-term prospect for the cause of moderation in the Middle East succeeding. But it would be absurd not to face up to the immediate damage to that cause which has been done.

We will continue to do all we can to halt the hostilities. But once that has happened, we must commit ourselves to a complete renaissance of our strategy to defeat those that threaten us. There is an arc of extremism now stretching across the Middle East and touching, with increasing definition, countries far outside that region. To defeat it will need an alliance of moderation, that paints a different future in which Muslim, Jew and Christian; Arab and Western; wealthy and developing nations can make progress in peace and harmony with each other. My argument to you today is this: we will not win the battle against this global extremism unless we win it at the level of values as much as force, unless we show we are even-handed, fair and just in our application of those values to the world.

The point is this. This is war, but of a completely unconventional kind.

9/11 in the US, 7/7 in the UK, 11/3 in Madrid, the countless terrorist attacks in countries as disparate as Indonesia or Algeria, what is now happening in Afghanistan and in Indonesia, the continuing conflict in Lebanon and Palestine, it is all part of the same thing. What are the values that govern the future of the world? Are they those of tolerance, freedom, respect for difference and diversity or those of reaction, division and hatred? My point is that this war can't be won in a conventional way. It can only be won by showing that our values are stronger, better and more just, more fair than the alternative. Doing this, however, requires us to change dramatically the focus of our policy.

Unless we re-appraise our strategy, unless we revitalise the broader global agenda on poverty, climate change, trade, and in respect of the Middle East, bend every sinew of our will to making peace between Israel and Palestine, we will not win. And this is a battle we must win.

What is happening today out in the Middle East, in Afghanistan and beyond is an elemental struggle about the values that will shape our future.

It is in part a struggle between what I will call Reactionary Islam and Moderate, Mainstream Islam. But its implications go far wider. We are fighting a war, but not just against terrorism but about how the world should govern itself in the early 21st century, about global values.

The root causes of the current crisis are supremely indicative of this. Ever since September 11th, the US has embarked on a policy of intervention in order to protect its and our future security. Hence Afghanistan. Hence Iraq. Hence the broader Middle East initiative in support of moves towards democracy in the Arab world.

The point about these interventions, however, military and otherwise, is that they were not just about changing regimes but changing the values systems governing the nations concerned. The banner was not actually "regime change" it was "values change".

What we have done therefore in intervening in this way, is far more momentous than possibly we appreciated at the time.

Of course the fanatics, attached to a completely wrong and reactionary view of Islam, had been engaging in terrorism for years before September 11th. In Chechnya, in India and Pakistan, in Algeria, in many other Muslim countries, atrocities were occurring. But we did not feel the impact directly. So we were not bending our eye or our will to it as we should have. We had barely heard of the Taleban. We rather inclined to the view that where there was terrorism, perhaps it was partly the fault of the governments of the countries concerned.

We were in error. In fact, these acts of terrorism were not isolated incidents. They were part of a growing movement. A movement that believed Muslims had departed from their proper faith, were being taken over by Western culture, were being governed treacherously by Muslims complicit in this take-over, whereas the true way to recover not just the true faith, but Muslim confidence and self esteem, was to take on the West and all its works.

Sometimes political strategy comes deliberatively, sometimes by instinct. For this movement, it was probably by instinct. It has an ideology, a world-view, it has deep convictions and the determination of the fanatic. It resembles in many ways early revolutionary Communism. It doesn't always need structures and command centres or even explicit communication. It knows what it thinks.

Its strategy in the late 1990s became clear. If they were merely fighting with Islam, they ran the risk that fellow Muslims - being as decent and fair-minded as anyone else - would choose to reject their fanaticism. A battle about Islam was just Muslim versus Muslim. They realised they had to create a completely different battle in Muslim minds: Muslim versus Western.

This is what September 11th did. Still now, I am amazed at how many people will say, in effect, there is increased terrorism today because we invaded Afghanistan and Iraq. They seem to forget entirely that September 11th predated either. The West didn't attack this movement. We were attacked. Until then we had largely ignored it.

The reason I say our response was even more momentous than it seemed at the time, is this. We could have chosen security as the battleground. But we didn't. We chose values. We said we didn't want another Taleban or a different Saddam. Rightly, in my view, we realised that you can't defeat a fanatical ideology just by imprisoning or killing its leaders; you have to defeat its ideas.

There is a host of analysis written about mistakes made in Iraq or Afghanistan, much of it with hindsight but some of it with justification. But it all misses one vital point. The moment we decided not to change regime but to change the value system, we made both Iraq and Afghanistan into existential battles for Reactionary Islam. We posed a threat not to their activities simply: but to their values, to the roots of their existence.

We committed ourselves to supporting Moderate, Mainstream Islam. In almost pristine form, the battles in Iraq or Afghanistan became battles between the majority of Muslims in either country who wanted democracy and the minority who realise that this rings the death-knell of their ideology.

What is more, in doing this, we widened the definition of Reactionary Islam. It is not just Al-Qaeda who felt threatened by the prospect of two brutal dictatorships - one secular, one religious - becoming tolerant democracies. Any other country who could see that change in those countries might result in change in theirs, immediately also felt under threat. Syria and Iran, for example. No matter that previously, in what was effectively another political age, many of those under threat hated each other.

Suddenly new alliances became formed under the impulsion of the common threat.

So in Iraq, Syria allowed Al-Qaeda operatives to cross the border. Iran has supported extremist Shia there. The purpose of the terrorism in Iraq is absolutely simple: carnage, causing sectarian hatred, leading to civil war.

However, there was one cause which, the world over, unites Islam, one issue that even the most westernised Muslims find unjust and, perhaps worse, humiliating: Palestine. Here a moderate leadership was squeezed between its own inability to control the radical elements and the political stagnation of the peace process. When Prime Minister Sharon took the brave step of disengagement from Gaza, it could have been and should have been the opportunity to re-start the process. But the squeeze was too great and as ever because these processes never stay still, instead of moving forward, it fell back. Hamas won the election. Even then, had moderate elements in Hamas been able to show progress, the situation might have been saved. But they couldn't.

So the opportunity passed to Reactionary Islam and they seized it: first in Gaza, then in Lebanon. They knew what would happen. Their terrorism would provoke massive retaliation by Israel. Within days, the world would forget the original provocation and be shocked by the retaliation. They want to trap the Moderates between support for America and an Arab street furious at what they see nightly on their television. This is what has happened.

For them, what is vital is that the struggle is defined in their terms: Islam versus the West; that instead of Muslims seeing this as about democracy versus dictatorship, they see only the bombs and the brutality of war, and sent from Israel.

In this way, they hope that the arc of extremism that now stretches across the region, will sweep away the fledgling but faltering steps Modern Islam wants to take into the future.

To turn all of this around requires us first to perceive the nature of the struggle we are fighting and secondly to have a realistic strategy to win it. At present we are challenged on both fronts.

As to the first, it is almost incredible to me that so much of Western opinion appears to buy the idea that the emergence of this global terrorism is somehow our fault. For a start, it is indeed global. No-one who ever half bothers to look at the spread and range of activity related to this terrorism can fail to see its presence in virtually every major nation in the world. It is directed at the United States and its allies, of course. But it is also directed at nations who could not conceivably be said to be allies of the West. It is also rubbish to suggest that it is the product of poverty. It is true it will use the cause of poverty. But its fanatics are hardly the champions of economic development. It is based on religious extremism. That is the fact. And not any religious extremism; but a specifically Muslim version.

What it is doing in Iraq and Afghanistan is not about those countries' liberation from US occupation. It is actually the only reason for the continuing presence of our troops. And it is they not us who are doing the slaughter of the innocent and doing it deliberately.

Its purpose is explicitly to prevent those countries becoming democracies and not "Western style" democracies, any sort of democracy. It is to prevent Palestine living side by side with Israel; not to fight for the coming into being of a Palestinian State, but for the going out of being, of an Israeli State. It is not wanting Muslim countries to modernise but to retreat into governance by a semi-feudal religious oligarchy.

Yet despite all of this, which I consider virtually obvious, we look at the bloodshed in Iraq and say that's a reason for leaving; we listen to the propaganda that tells us its all because of our suppression of Muslims and have parts of our opinion seriously believing that if we only got out of Iraq and Afghanistan, it would all stop. And most contemporaneously, and in some ways most perniciously, a very large and, I fear, growing part of our opinion looks at Israel, and thinks we pay too great a price for supporting it and sympathises with Muslim opinion that condemns it. Absent from so much of the coverage, is any understanding of the Israeli predicament.

I, and any halfway sentient human being, regards the loss of civilian life in Lebanon as unacceptable, grieves for that nation, is sickened by its plight and wants the war to stop now. But just for a moment, put yourself in Israel's place. It has a crisis in Gaza, sparked by the kidnap of a solider by Hamas. Suddenly, without warning, Hizbollah who have been continuing to operate in Southern Lebanon for two years in defiance of UN Resolution 1559, cross the UN blue line, kill eight Israeli soldiers and kidnap two more. They then fire rockets indiscriminately at the civilian population in Northern Israel.

Hizbollah gets their weapons from Iran. Iran are now also financing militant elements in Hamas. Iran's President has called for Israel to be "wiped off the map". And he's trying to acquire a nuclear weapon. Just to complete the picture, Israel's main neighbour along its eastern flank is Syria who support Hizbollah and house the hardline leaders of Hamas.

It's not exactly a situation conducive to a feeling of security is it?

But the central point is this. In the end, even the issue of Israel is just part of the same, wider struggle for the soul of the region.

If we recognised this struggle for what it truly is, we would be at least along the first steps of the path to winning it. But a vast part of the Western opinion is not remotely near this yet.

Whatever the outward manifestation at any one time - in Lebanon, in Gaza, in Iraq and add to that in Afghanistan, in Kashmir, in a host of other nations including now some in Africa - it is a global fight about global values; it is about modernisation, within Islam and outside of it; it is about whether our value system can be shown to be sufficiently robust, true, principled and appealing that it beats theirs. Islamist extremism's whole strategy is based on a presumed sense of grievance that can motivate people to divide against each other. Our answer has to be a set of values strong enough to unite people with each other.

This is not just about security or military tactics. It is about hearts and minds about inspiring people, persuading them, showing them what our values at their best stand for.

Just to state it in these terms, is to underline how much we have to do. Convincing our own opinion of the nature of the battle is hard enough. But we then have to empower Moderate, Mainstream Islam to defeat Reactionary Islam. And because so much focus is now, world-wide on this issue, it is becoming itself a kind of surrogate for all the other issues the rest of the world has with the West. In other words, fail on this and across the range, everything gets harder.

Why are we not yet succeeding? Because we are not being bold enough, consistent enough, thorough enough, in fighting for the values we believe in.

We start this battle with some self-evident challenges. Iraq's political process has worked in an extraordinary way. But the continued sectarian bloodshed is appalling: and threatens its progress deeply. In Afghanistan, the Taleban are making a determined effort to return and using the drugs trade a front. Years of anti-Israeli and therefore anti-American teaching and propaganda has left the Arab street often wildly divorced from the practical politics of their governments. Iran and, to a lesser extent, Syria are a constant source of de-stabilisation and reaction. The purpose of terrorism - whether in Iran, Afghanistan, Lebanon or Palestine is never just the terrorist act itself. It is to use the act to trigger a chain reaction, to expunge any willingness to negotiate or compromise. Unfortunately it frequently works, as we know from our own experience in Northern Ireland, though thankfully the huge progress made in the last decade there, shows that it can also be overcome.

So, short-term, we can't say we are winning. But, there are many reasons for long-term optimism. Across the Middle East, there is a process of modernisation as well as reaction. It is unnoticed but it is there: in the UAE; in Bahrain; in Kuwait; in Qatar. In Egypt, there is debate about the speed of change but not about its direction. In Libya and Algeria, there is both greater stability and a gradual but significant opening up.

Most of all, there is one incontrovertible truth that should give us hope. In Iraq, in Afghanistan, and of course in the Lebanon, any time that people are permitted a chance to embrace democracy, they do so. The lie - that democracy, the rule of law, human rights are Western concepts, alien to Islam - has been exposed. In countries as disparate as Turkey and Indonesia, there is an emerging strength in Moderate Islam that should greatly encourage us.

So the struggle is finely poised. The question is: how do we empower the moderates to defeat the extremists?

First, naturally, we should support, nurture, build strong alliances with all those in the Middle East who are on the modernising path.

Secondly, we need, as President Bush said on Friday, to re-energise the MEPP between Israel and Palestine; and we need to do it in a dramatic and profound manner.

I want to explain why I think this issue is so utterly fundamental to all we are trying to do. I know it can be very irritating for Israel to be told that this issue is of cardinal importance, as if it is on their shoulders that the weight of the troubles of the region should always fall. I know also their fear that in our anxiety for wider reasons to secure a settlement, we sacrifice the vital interests of Israel.

Let me make it clear. I would never put Israel's security at risk.

Instead I want, what we all now acknowledge we need: a two state solution. The Palestinian State must be independent, viable but also democratic and not threaten Israel's safety.

This is what the majority of Israelis and Palestinians want.

Its significance for the broader issue of the Middle East and for the battle within Islam, is this. The real impact of a settlement is more than correcting the plight of the Palestinians. It is that such a settlement would be the living, tangible, visible proof that the region and therefore the world can accommodate different faiths and cultures, even those who have been in vehement opposition to each other. It is, in other words, the total and complete rejection of the case of Reactionary Islam. It destroys not just their most effective rallying call, it fatally undermines their basic ideology.

And, for sure, it empowers Moderate, Mainstream Islam enormously. They are able to point to progress as demonstration that their allies, ie us, are even-handed not selective, do care about justice for Muslims as much as Christians or Jews.

But, and it is a big 'but', this progress will not happen unless we change radically our degree of focus, effort and engagement, especially with the Palestinian side. In this the active leadership of the US is essential but so also is the participation of Europe, of Russia and of the UN. We need relentlessly, vigorously, to put a viable Palestinian Government on its feet, to offer a vision of how the Roadmap to final status negotiation can happen and then pursue it, week in, week out, 'til its done. Nothing else will do. Nothing else is more important to the success of our foreign policy.

Third, we need to see Iraq through its crisis and out to the place its people want: a non-sectarian, democratic state. The Iraqi and Afghan fight for democracy is our fight. Same values. Same enemy. Victory for them is victory for us all.

Fourth, we need to make clear to Syria and Iran that there is a choice: come in to the international community and play by the same rules as the rest of us; or be confronted. Their support of terrorism, their deliberate export of instability, their desire to see wrecked the democratic prospect in Iraq, is utterly unjustifiable, dangerous and wrong. If they keep raising the stakes, they will find they have miscalculated.

From the above it is clear that from now on, we need a whole strategy for the Middle East. If we are faced with an arc of extremism, we need a corresponding arc of moderation and reconciliation. Each part is linked. Progress between Israel and Palestine affects Iraq. Progress in Iraq affects democracy in the region. Progress for Moderate, Mainstream Islam anywhere puts Reactionary Islam on the defensive everywhere. But none of it happens unless in each individual part the necessary energy and commitment is displayed not fitfully, but continuously.

I said at the outset that the result of this struggle had effects wider than the region itself. Plainly that applies to our own security. This Global Islamist terrorism began in the Middle East. Sort the Middle East and it will inexorably decline. The read-across, for example, from the region to the Muslim communities in Europe is almost instant.

But there is a less obvious sense in which the outcome determines the success of our wider world-view. For me, a victory for the moderates means an Islam that is open: open to globalisation, open to working with others of different faiths, open to alliances with other nations.

In this way, this struggle is in fact part of a far wider debate.

Though Left and Right still matter in politics, the increasing divide today is between open and closed. Is the answer to globalisation, protectionism or free trade?

Is the answer to the pressure of mass migration, managed immigration or closed borders?

Is the answer to global security threats, isolationism or engagement?

Those are very big questions for US and for Europe.

Without hesitation, I am on the open side of the argument. The way for us to handle the challenge of globalisation, is to compete better, more intelligently, more flexibly. We have to give our people confidence we can compete. See competition as a threat and we are already on the way to losing.

Immigration is the toughest issue in Europe right now and you know something of it here in California. People get scared of it for understandable reasons. It needs to be controlled. There have to be rules. Many of the Conventions dealing with it post WWII are out of date. All that is true. But, properly managed, immigrants give a country dynamism, drive, new ideas as well as new blood.

And as for isolationism, that is a perennial risk in the US and EU policy. My point here is very simple: global terrorism means we can't opt-out even if we wanted to. The world is inter-dependent. To be engaged is only modern realpolitik.

But we only win people to these positions if our policy is not just about interests but about values, not just about what is necessary but about what is right.

Which brings me to my final reflection about US policy. My advice is: always be in the lead, always at the forefront, always engaged in building alliances, in reaching out, in showing that whereas unilateral action can never be ruled out, it is not the preference.

How we get a sensible, balanced but effective framework to tackle climate change after the Kyoto Protocol expires in 2012 should be an American priority.

America wants a low-carbon economy; it is investing heavily in clean technology; it needs China and India to grow substantially. The world is ready for a new start here. Lead it.

The same is true for the WTO talks, now precariously in the balance; or for Africa, whose poverty is shameful.

If we are championing the cause of development in Africa, it is right in itself but it is also sending the message of moral purpose, that reinforces our value system as credible in all other aspects of policy.

It serves one other objective. There is a risk that the world, after the Cold War, goes back to a global policy based on spheres of influence. Think ahead. Think China, within 20 or 30 years, surely the world's other super-power. Think Russia and its precious energy reserves. Think India. I believe all of these great emerging powers want a benign relationship with the West. But I also believe that the stronger and more appealing our world-view is, the more it is seen as based not just on power but on justice, the easier it will be for us to shape the future in which Europe and the US will no longer, economically or politically, be transcendant. Long before then, we want Moderate, Mainstream Islam to triumph over Reactionary Islam.

That is why I say this struggle is one about values. Our values are worth struggling for. They represent humanity's progress throughout the ages and at each point we have had to fight for them and defend them. As a new age beckons, it is time to fight for them again.

Question:

Mr Prime Minister, can Britain take the lead in speaking to Iran and Syria directly?

Prime Minister:

You know the thing that always surprises me about this is that people talk about this issue of engagement with Iran and Syria as if there was some doubt about what we were saying, or where we stood, or maybe the message hadn't been clear enough.

Actually the message is absolutely clear, the message is if you stop supporting terrorism, if you stop trying to acquire nuclear weapons and breach your international obligations then we are willing to have a partnership with you, but if you export terrorism around the region and destabilise democracy in Iraq, we will confront you. Now I know there are all sorts of people who engage, and of course we do, we send messages the whole time to both governments, but I am afraid I have come to the conclusion that this is not an issue of communication, it is not that people can't read our handwriting, it is actually that they lack the will to do what they need to do and we need to make sure they have that will.

Question:

What is the United Nations capable of, and what is it not? Can all it do is pass meaningless resolutions?

Prime Minister:

Actually I would say to you that I think the United Nations can, in certain circumstances, be absolutely essential to solving the world's problems, and there are situations that have arisen in which the United Nations has come together and made a real difference, and indeed some of the things that we were talking about earlier in relation to some of the disputes in Africa and so on indicate that very, very clearly too. But there are two things that need to happen. The first is that we need to reform the institutions of the United Nations thoroughly because they are not as they should be; and the second thing is you can make any amount of institutional change, but the key thing is whether there is the right political alliance at the heart of the Security Council of the United Nations.

Now I think there is a case incidentally for broadening the Security Council and I favour that, but in a way whatever institutional framework you have, the basic point is we have to have political agreement between the leading powers. And that is why I say in particular I think the transatlantic alliance is really, really important. Europe and America, whatever their differences from time to time, they have the values system in common and they should be proud of their alliance and we should make sure that we use that as a basis for trying to engineer the right type of political alliance within the UN Security Council.

So look, if the UN didn't exist we would be inventing it, that is for sure, at least some people would, but I think it could be so much more effective but it needs reform, it needs leadership and it needs the right political alliance to motivate it.

Question:

In what ways does our passion for western democracy get in the way of resolving global or regional conflicts?

Prime Minister:

Well that is a very interesting question and a very good question. You see I have come to the conclusion, and I really confess to you I have changed my view of this, that actually there are no stable relationships in the long term unless there is progress towards democracy and freedom, that in other words the idea that countries that are governed by either secular or religious dictatorships provide a solid basis for progress, I think is just wrong. And the interesting thing about Iraq and Afghanistan, and this was the fascinating thing, is that so many people told us that you just don't understand it, people in Iraq aren't interested in democracy. The turnout in Iraq, despite people being threatened and in some cases killed on the way to the polls, was higher than the last Presidential election or the last general election in Britain. So people do care about this and democracies by and large don't fight each other. So I actually think in the end, yes, short term sometimes the passion for democracy can be difficult because there are so many vested interests that don't want it. Long term I have come to the conclusion that actually it is only through the spread of liberty, and democracy, and the rule of law and basic respect for human rights that we will get peace and security.

Question:

Should NATO be used in Lebanon, as it is in Afghanistan and Bosnia?

Prime Minister:

I think it depends on what is most helpful for the situation there, because we will need both the support of the government of Israel and the government of Lebanon for the force to operate. And I think at this point in time it is not possible to be clear about it, although I would say to you that the majority of people probably would say that NATO shouldn't be involved. But whatever force is involved it has to have the capacity of making sure that the original reason for the conflict, which were the activities in breach of the United Nations resolutions down in the south of Lebanon by Hezbollah are curtailed, because unless the government of Lebanon is given proper authority over the whole of Lebanon this will erupt again. And in my view the purpose of any multi-national force has got to be able to provide a bridge between the position for the government of Lebanon now, and the position we need to get to, which is not a permanent multinational force on the ground, but is a Lebanese democracy that is capable of having its writ run in every single part of the country without armed militias taking over parts of the country and running them in the way that they want.

And that is why in Lebanon what is important is to support Lebanese democracy. They have done amazing things in that country, it is why it is so tragic what has been brought about, but the only way, whether it is NATO or anybody else, we are going to get an effective multinational force there is if it has at its heart one principle, which is that our purpose is to make sure that when the Lebanese people vote in their government in a democracy, they do so without outside interference from Syria or anyone else, and without inside interference by well armed militia.

Question:

To many Americans there seems to be a latent and growing anti-Semitism in Europe. How can this be stopped?

Prime Minister:

I think that there are really two parts to this. I think there are people who are anti-Semitic in Europe and there has been a growing rise of anti-Semitic attacks which are appalling and terrible in different parts of Europe. But I think there is another strain of opinion, and this is the reason I devoted some of my speech to doing this, that just doesn't see it from Israel's point of view at all, I mean just doesn't understand what it is like to be a country surrounded by a lot of people who basically want to deny your right to exist, and in a way I think that is part of the problem. And I also think it then gets run in with the issue to do with anti-Americanism because of America's support for Israel. And again I said this in a speech I made a couple of months ago, the only way you ever confront this is confronting the basic ideas.

What I said in that speech, let me try and explain this, a lot of what happens in the western debate, in the European debate very specifically, but also in other countries too, less so in America but still in parts I guess in the American system, is that everybody abhors the terrorist method, people don't get up and support terrorism but they kind of buy half way into some of the ideas that they are putting forward in the sense that they say yes well you do have a real sense of grievance against America and its allies, but you shouldn't blow people up in pursuit of it. And my point the whole way through is we are never going to defeat this until we say actually that is wrong, you have no sense of grievance.

In Afghanistan and Iraq we have billions of dollars waiting there to help reconstruct the country, the country is a democracy, where is the suppression? You know the Taliban down in the south where British troops have gone in to try and clear out the Taliban, they have literally taken teachers out in front of their class and executed them in front of class for teaching girls. Now where should the sense of grievance be - against us who have actually helped those countries and those people get democracy for the first time, or these absolutely brutal murderous terrorists who want to send them back into some sort of feudal time?

In other words unless we are prepared to stand up and say, 'No actually what you think about America is nonsense', I mean I said this to some people the other day and it was difficult, but you have got to say it. I said look, as far as I am aware people in America are free to practise their religion as Muslims, and they certainly are in Britain, what is the sense of grievance?

Now we may disagree about this or that aspect of foreign policy, but that is not the same as saying that our purpose in going to Iraq and Afghanistan was something to do with the fact that those countries were Muslim, it was to do with the fact that they were threatening our security. That is where this is difficult.

So the answer to your question is yes, there are real worries about anti-Semitism, but I think that the problem is slightly different from that, if I am frank about it, it is that there is a world view there that is very, very, well I would call it somewhat soggy and unable just to see the realities of what is happening. And that is what you have to confront, not just the activities of the terrorists, but their ideas, because far too many of their ideas have some purchase on opinion in the western world.

Question:

Will you continue your government's leadership on global climate change now that you are no longer President of the G8?

Prime Minister:

I think, as I was saying yesterday with Governor Schwarzenegger - it is great to be with him. I phoned my wife up and she said to me: "How do you feel being with Arnie Schwarzenegger?" I said: "Actually I felt acute body envy really." But anyway we were discussing climate change. The important thing is this. I actually think that there is a real chance for America to take leadership in this area because President Bush made his State of the Union address, talking about the need for America to move to a low carbon economy, we established at the G8 last year a G8+5 dialogue, that is the G8 countries plus Brazil, Mexico, South Africa and of course India and China, and the purpose of it was to try to get the main countries together. When we look at what is going to succeed Kyoto, instead of trying to get 150 countries, or however many it is, round the table and negotiate something, get the main people together, let's work out a framework but the framework has to include not just America, but China and India on the other side. And we should work out how we manage to get the right binding framework in place with the right targets that allow our economies to grow, and this was the importance of yesterday's meeting, we had a wide range of business leaders there.

What business wants to know is the direction of policy, it wants some regulatory certainty, it wants to know that if we are going to make the investment in the research and the development which is necessary for the science and technology to work, you know they are not suddenly going to find policies move in a different direction.

And I think this is the time for us to work now on the successor to the Kyoto Protocol when it expires in 2012, make sure it has all the main players in it, and I think it is a fantastic thing if there are places in the United States that are showing leadership now on this issue because it hugely empowers and emboldens the rest of us. And I want to see this issue back on the agenda for the German G8 next year, I think that will happen, and I do honestly believe that the evidence of climate change is clear and this is a major, major subject for us.

Question:

This gentleman says he is a Los Angeles County fire fighter who responded to the 9/11 disaster in New York, and he would like to know how the events of 9/11 changed you personally?

Prime Minister:

Well first of all I would like to pay tribute to the fire-fighters from Los Angeles, from New York, from elsewhere who did such a fantastic job, and the public servants everywhere. It did change me personally because some of the things that I have said tonight I can trace back to the speech I made actually in Chicago in 1999 at the time of the Kosovo crisis. But I think what September 11 did for me, quite apart from everything else obviously, the emotional impact such a terrible thing makes, it showed me that the world is genuinely interdependent. I always believed that it was not just an attack on America but it was an attack on America because America was the most powerful country espousing our values and therefore it was an attack on all of us. And I from that moment became determined that we should do everything we could, not just to defeat those that had committed such murder and slaughter of innocent people, but to make sure that in every single part of the world, given its interdependence, we should give people the chance of hope and prosperity and that we should never believe that people languishing in poverty or under extremist governments were not our responsibility.

And one of the things that I find most difficult about politics is that everything really works through the media today, which is the way it is, but sometimes I get frustrated when you can call any numbers of people on to the street to protest against say military action in Iraq or Afghanistan or wherever it might be, or against what Israel is doing in Lebanon. There are no demonstrations about North Korea, there is not a placard there, not as far as I know, maybe there is here but not that I have ever seen, and these people live in complete and total enslavement, and I think our job has got to be, if the world is interdependent, that is something we can't help. We can't help globalisation, globalisation is a fact, but the values that govern globalisation are a choice and our choice should be, and this is what came home to me as well as everything else after September 11, our choice has got to be the values of liberty, and tolerance and justice, it has got to be a world that is free but also a world that is fair, and that is what I decided after that time to dedicate our foreign policy to trying to do