We present the first results of the LWS and SWS ISO observations of 18 molecular clouds in the Galactic center (GC) region. H2 emission from several rotational lines in the ground vibrational state has been detected toward all molecular clouds. The rotational temperatures derived from these lines are between 150 and 500 K. Remarkably, the derived column densities of the hot H2, ~ 2 1022 cm-2, are similar to those obtained for the cold gas. the From the non-detection of the S(3) line at 9.7 micron , we find that the hot gas must be located behind more than 30 mag of visual extinction of cold gas and dust. The LWS continuum spectra indicate that the cold dust has temperatures of 25-35 K and column densities similar to those required to explain the extinction of the H2 emission. Observations of the J=2-1 and J=1-0 lines of C18O (J=2-1/J=1-0 line ratios of 0.7-1.4) seem to sample only the cold gas located in front of the hot gas. This indicates that the low J transitions of C18O does not trace the total molecular gas in the GC. The LWS continuum spectra impose stringent limits (<= 1 per cent) to the hot dust associated to the hot H2. Toward most of the clouds we also detected emission from the fine structure lines of ionized species such as SIII and NeII, and in some cases lines from NeIII and OIII. In contrast with the previous idea that the heating of the GC clouds is dominated by shocks, our data suggest that photoelectric heating by UV radiation can be the dominat mechanism. The effective temperature of the ionization radiation derived from the NeIII/NeII ratio is 35.000 K (typical of an O7 star). Our ISO data when combined with the upper limits to the intensities of the recombination lines measured at millimeter wavelengths indicate that the UV radiation is very diluted. Cavities with sizes larger than 2 pc surrounding the ionizing star(s) are required to explain the dilution. The origin of the ionized cavities and the implications of these findings on the heating of the molecular clouds in the GC are briefly discussed.