Apparently, there was a second question that didn't make its way into the HuffPo clip that I posted earlier this morning and it adds important context. Here's a transcript, including a portion of the first answer:
MCCAIN: They're the government and sooner or later we're going to have to deal with them. ... It's a new reality in the Middle East and I think the lesson is people want security and a decent life and decent future, then they want democracy. Fatah was not giving them that.
RUBIN: So should we, the United States, be dealing with that new reality through normal diplomatic contacts to get the job done for the United States?
MCCAIN: I think the United States should take a step back, see what they do when they form their government, see what their policies are, and see other ways we can engage with them, and if there aren't any, there may be a hiatus, but I think part of the relationship is going to be dictated by how Hamas acts, not how the United States acts.
Perhaps I'm being too kind, but I think this walks back the allegation against McCain rather significantly. His message to Sky News was still far more nuanced than his message to CNN, but neither was it a clear embrace of relations without conditions.
YouTube can cut both ways, it would seem, and this time it may have helped McCain.
That being said, there is still no justification for John McCain's unpresidential attacks on Obama.
Update: I just watched the clip again and wonder if I'm being too easy on McCain. The thing that really strikes me is that his answer to the first question is just so different than his answer to the follow-up, which is different to his CNN interview on the same day. It's almost like he couldn't keep his story straight in the space of a two minute interview. Certainly, if a Democratic candidate ever said something like this, he or she would not be treated nearly as charitably as I did in my initial writeup.