THE PRESIDENT: Welcome, welcome.

Q Thank you very much. Thank you, sir.

THE PRESIDENT: We are glad you're here.

Q Thank you very much.

THE PRESIDENT: Come on in to the Oval Office.

Q We are grateful for this. Thank you. This is great.

THE PRESIDENT: It's interesting history here, and I think one thing that your viewers might be interested in knowing is that the first decision I ever made as President -- but I was actually President-elect -- was, what color rug do you want? And one of the important things is to surround yourself with people who you can trust, and delegate. In this case, I delegated the rug design to Laura, my wife.

But I told her, I said, I want the rug to have a message, and that is "optimistic guy goes to work here." And so, as you can see, the rug really lights up the room. And I am optimistic about the future of the Middle East.

Q Well, that's a great note. You've been here eight years. A few weeks and you're going to be leaving.

THE PRESIDENT: I'm going home.

Q You sat on this desk for eight years, and you took many decisions regarding our region. You launched the Greater Middle East Initiative that you want to democratize, reform the Middle East. In retrospect, do you think that vision was realized? Would you do anything differently?

THE PRESIDENT: Well, I think it began -- the beginning of a very difficult vision to implement. But I felt it was necessary for a couple of important reasons. One, I believe we're in an ideological struggle against people who want to achieve their ideological vision through the use of violence and murder. And I believe it is essential that you have an alternative available for people -- the one I happen to believe in is based upon liberty. I don't think this is an American vision, see. And I tell people this, that I do believe there is a universal God, and a gift of that Almighty to all of us -- whether we be Methodists or Muslims or nothing -- is freedom. And so freedom is a great alternative.

But I also believe there's a moral calling. If you believe there's an Almighty God, and a gift of that Almighty to everybody is freedom, then I think you have to -- if you can do something about it, that you have to act on that -- so that moms can grow up in a society that is hopeful for their children, you know, that their children are -- can realize dreams.

And to me the best type of society to do that is freedom. But it's very hard, it's difficult. And so you have to plant a seed, and then you have to cultivate the seed, and eventually the crops will bloom. And we're beginning to see the crops beginning to bloom in parts of the Middle East.

Q Sir, some people say that the war on terror is a war on Islam.

THE PRESIDENT: Yes.

Q Yet you went to the first mosque after 9/11 and you spoke there. How do you convince people in the Middle East that George Bush is not fighting a war against Islam?

THE PRESIDENT: No, I know, and it troubles my soul, because I believe we're all God's children. And I hear people say, George Bush doesn't like Muslims; he wants to fight Muslims. And, first, I thank you for giving me the chance to hopefully set the record straight. But I am objecting to anybody who murders innocent people to achieve their objectives. I don't think people who murder in the name of religion are truly religious people. And secondly, I would hope that people would know that when we try to use some of our influence to help on education programs, for example, or we welcome students, Saudi students, to the United States to study here, that it's a sign of respect and a sign of my desire to reach out to all people regardless of their religion.

Q Absolutely. I wanted also to ask you about, in the last eight years, if you look back, would you do things differently? Would you have done things that you probably thought second -- for the second time, I would have done them different --

THE PRESIDENT: I'm sure there will be. I mean, there's been some disappointments.

Q Like what?

THE PRESIDENT: Well, like, Abu Ghraib was a terrible disappointment. And admittedly, I wasn't there on the site, but I was the Commander-in-Chief of a military where these disgraceful acts took place that sent the absolute wrong image about America and our military.

You know, parts of Iraq -- it's taken longer than I thought it would. On the other hand, I am pleased to see a multiethnic society begin to emerge. I talked to the leaders of Iraq yesterday and today and congratulated them on doing some hard work. And I love to hear their spirit in their voice.

And so I'm confident history will say, oh, Bush could have done it better here, or, Bush could have done it better there. But I think from the strategic point of view, I'm confident that the idea of moving liberty in the region, a two-state solution to help the Israeli-Palestinian issue, the liberation of Iraq, and the follow-up with -- to help the Iraqis realize their sovereignty -- a strong push-back against Iran -- I believe when people objectively analyze this administration, they'll say, well, I see now what he was trying to do.

Q I mean, the Arab peace initiative, it was a framework. Do you think that President-elect Obama should use it in terms of achieving peace in the Middle East?

THE PRESIDENT: I definitely think it was a major breakthrough for then-Crown Prince, now His Majesty King Abdallah, to take the initiative and lay out the conditions for peace. And it is, I think, a useful foundation to help solve a longstanding problem. I do believe there will be a Palestinian state. I feel comfortable in saying that the decision -- my decision to promote a Palestinian state, being the first President to do so, was the right thing for peace -- right thing for peace for the Palestinians, right thing for peace for the Israelis. And His Majesty was very useful and very bold in laying out the Arab peace initiative.

Q We're going to talk about all this in details so --

THE PRESIDENT: Yes, come on, I'll show you the Rose Garden.

Q -- let's walk and talk as we go down to the Map Room.

THE PRESIDENT: You've seen the Rose Garden before.

Q I have, many times.

THE PRESIDENT: Many times. (Laughter.)

Q Thank you, sir. It's beautiful.

THE PRESIDENT: Isn't it a beautiful day?

Q What are you going to miss most about this place?

THE PRESIDENT: Well, you know, I'll miss a lot. I am -- I've got such respect for our military and I admire people in our military so very much. I'll miss being the Commander-in-Chief. But, you know, the White House is full of incredibly gracious and kind people who work hard to make family life as normal as possible. And so I'll miss a lot of the people we work with here.

Q And what's your plans?

THE PRESIDENT: Well, I'm going to move back to Texas.

Q And what are you going to do there?

THE PRESIDENT: And I'm going to, you know, write a book, I think, about what it was like to be President and some of the hard decisions I had to make. I'm going to start a institute that will promote freedom. And this will be an interesting place, particularly in regards to the Middle East, because this will be a place where there will be a forum for people with different issues to come and discuss.

You know, I would love to have, you know, Palestinians -- such as the President or the Prime Minister -- to come and describe to the Americans what it was like to be in that part of the world or -- you know, there's just a lot of really interesting opportunities for people to come and lecture and think and talk.

Q And in your book, obviously we're talking about foreign policy. Most of it happened in the Middle East -- okay, we're off camera now.

Q Mr. President, thank you very much for this exclusive interview with us --

THE PRESIDENT: Thank you.

Q -- and thank you very much for granting us, to MBC, and to me, personally, on behalf of Arab media. I really do appreciate it, I'm very grateful.