Now, even though America's attitude toward Syria has recently softened, the U.S. still sees Syria as a roadblock to peace in the Middle East. Correspondent Mike Wallace reports.
Syria is still officially at war with Israel. It insists that Israel give back the Golan Heights - 400 square miles of land within 25 miles of Damascus - that Israel captured and has occupied since the 1967 war.
For years, Syria has provided weapons to Hezbollah and Palestinian militants who send suicide bombers and missiles into Israel. Hamas and Islamic Jihad have offices in Damascus. But Syria's foreign minister, Farouk al-Sharaa, told 60 Minutes that Syria is simply providing a home for Palestinians who were displaced by Israel back in 1948.
"If Syria has accepted refugees we are a terrorist country," asks al Sharaa. "You call the Syrians as harboring terrorists. This is absolutely - what shall I say - insane."
Syria is now one of only six countries that the U.S. says supports terrorism. But al Sharaa denies this allegation, saying, "This is absolutely false."
He also insists that Palestinians who attack Israel are not terrorists but freedom fighters trying to liberate their land from Israeli occupation. The real terrorists, he told us, attacked on Sept. 11, and he said Syria has joined with America to crush al Qaeda.
There is some truth in that.
The U.S. has acknowledged that Syria has been very helpful to the U.S. in battling al Qaeda. 60 Minutes learned that Syria warned the U.S. about a plot to attack an American installation in the Middle East. The warning enabled the U.S. to prevent the attack and save American lives.
And the main reason President Bush toned down his criticism of Syria this week is that the CIA did not want to risk losing Syria's cooperation against al Qaeda. Syria is a dictatorship, a one-party, one-family state.
President Bashar Assad took over three years ago when his father died. Hafez al-Assad had ruled with an iron hand for 32 years. Bashar was not supposed to become president - his older brother Basil was, but he died in a car crash nine years ago. As a result, Bashar left a comfortable life in London, where he'd been an ophthalmologist in training, and returned to Syria to become a dictator in training. When his father died, Bashar took over the family business - the presidency. He was just 34 years old.
When Wallace asked Syrians what they think of their government, their response was always, "I don't talk politics."
The fact is, dissent in Syria can get you arrested. Speech is not free. The government runs the press -and television.
Syrian TV did not show Saddam's statue coming down. When American troops took Baghdad, Syrian TV switched from that coverage to a five-hour program on Islamic art and architecture. But Syrians could see it anyway, because they get Al Jazeera and other Arab TV stations.
In Damascus, no roof is complete without a satellite dish so that Syrians can keep up on the news - not as reported by their government or CNN, but by Arab partisans. As a result, Syrians have come to believe that America's foreign policy has been hijacked by Israel's prime minister Ariel Sharon.
The foreign minister says the U.S. has rattled its saber at Syria, to distract the world's attention from America's current difficulties in post-war Iraq. And when Wallace asked him why he thought America had gone to war in Iraq in the first place, his answer had nothing to do with weapons of
mass destruction. Instead he suggested it was about contracts to rebuild Iraq.
"The administration, [they] signed with some companies some contracts in anticipation even before the war," says al-Sharaa.
So did the U.S launch the war so that it could tear Iraq apart and then make money rebuilding it?
"I don't rule it out," says al-Sharaa.
In Damascus earlier this week, Wallace met for a moment with President Assad. He declined to be interviewed on camera and Rep. Darrell Issa (R-Calif.) who was also there, thinks he knows why.
"I think he's more timid than most people that find themselves in his position," says Issa. "He is camera shy. He's soft-spoken, but in fact he's well read, Western educated."
Issa, a California Republican, and Rep. Nick Rayhall, a West Virginia Democrat, are Lebanese-Americans. They spoke with President Assad for two hours and they disagree with some hawks in Washington who have tried to portray Assad as Saddam Light.
"Some will try to lump them together, put them in the same package, but Saddam Hussein, he is not," says Rayhall. "He is not an enemy of America."
"But he's not yet a friend," adds Issa. "And one of the things that we came here to do is to try to encourage this regime to become a friend of America."
Syria's young people want to be friends with America, and 60 percent of Syrians are under 20 years old. For an Arab state, a 90 percent Muslim state, Syria's lifestyle is remarkably permissive. Women don't have to cover their heads, and Syrians can drink alcohol in public. But they are frustrated by the stagnant state-run economy. Per capita income is just a $1,000 dollars a year. Having lost its old benefactor, the Soviet Union, Syria desperately needs American economic aid.
Western diplomats told Wallace that Syrians had hoped President Assad would move faster to improve the economy, cut down on corruption, even permit some dissent. But so far, he has mainly let them down.
Ed Jerejian has been U.S. ambassador to both Israel and Syria, and he knows President Assad quite well.
"Instinctively he would like to reform. But for a host of political reasons, I think he's holding back for the moment," says Jerejian.
"There's a lot of hope placed in him, especially by the young, that he'll reform the country. And I think he'll be judged by that."
The foreign minister says Syria is being unfairly judged by Washington. He said that Syria wants to be friends with America, but that Israel has so distorted America's view of Syria, that in Washington, Syria is totally misunderstood.
"It's a horrible act of misunderstanding," says al-Sharaa.
And who is responsible?
"Israel," says al-Sharaa. "To put it bluntly, without any ambiguity."
Syria told the United Nations that the United States is not being reasonable about weapons of mass destruction. Syria is said to have chemical weapons, while Israel is believed to have chemical, biological, and nuclear. The U.S. is insisting that Syria destroy its chemical weapons, but saying nothing about Israel's more powerful arsenal.
Meanwhile, the U.S. has more immediate concerns about the human traffic between Syria and Iraq.
American officials have named several top Iraqis who they say have fled to Syria, but not one has actually been found. But then there's the problem of fighters moving the other way - from Syria to Iraq.
Now, America's biggest fear is that armed Syrians will continue to cross into Iraq to attack Americans. But the border is 350 miles long. So, America will have to expect some of that, according to Syria's foreign minister.
Al-Sharaa says that Syria has passed some strict orders to prevent Syrians from crossing the border. But he reiterated that strict orders can't stop them.
"We are unable to seal in our borders just like any other country, because people who are smuggling or crossing illegally from one country to another cannot be stopped totally," says al-Sharaa. "This happens in the United States. It happens in Syria."
Admittedly, the U.S. is flexing its muscles here. With more than 100,000 troops in neighboring Iraq, the U.S. is demanding that Syria stop its fanatics from attacking Americans and stop Palestinians from attacking Israelis.
Secretary of State Colin Powell plans to fly to Syria, probably next month, to spell out what the U.S. now expects from Syria, and what Syria can expect from the United States.
Meantime, since 60 Minutes returned from Damascus, credible sources in U.S. intelligence have said that no Iraqis from the deck of cards are now in Syria. No Iraqi scientists have fled there. And there was no transfer of weapons of mass destruction from Iraq to Syria.