Binyamin Netanyahu, the leader of Likud,
 talks to Sir David Frost
Sir David Frost: On Monday Condoleezza Rice, the US secretary of state, will be holding talks with Palestinian President Abbas and Israeli Prime Minister Olmert.

The summit comes hot on the heels of a deal between the Palestinian factions Fatah and Hamas to form a unity government and of continuing tensions at Jerusalems al-Aqsa mosque.

To discuss that delicate situation in Israel I am delighted to be joined by the man who has been described as the most controversial politician in Israel. I don't know whether the correct form of address should be former prime minister or would you prefer future prime minister?

Binyamin Netanyahu: Well how about both?

DF: The Palestinian representative in London told me last week that there is now no excuse for Israel and the US not to deal with a Palestinian unity government following what went on at Mecca. I presume you do not agree.

BN: Unfortunately I did not hear from Mecca that Hamas is willing to recognise Israel, is willing to abandon its goal of destroying Israel. I did not even hear of one word, not even one syllable, in the Mecca agreement about fighting terror and dismantling the terror organisations. These basic commitments of recognising Israel and fighting terror is what the international community, including the Quartet, set as the first part of the road map and there is not a whisper about that in Mecca.

It is an agreement between the two Palestinian factions but it does not move them any closer to peace with Israel and that is unfortunate because the Palestinian people deserve peace and the only way to get there is to make the steps toward peace.

DF: They do say of course that it is implicit in that agreement that by recognising the agreements that the PLO have undertaken with Israel that is an implicit recognition of Israel.

BN: It is one of those techniques that diplomats use not to say things. In other words they recognise the fact that agreements exist. That does not make them recognise the agreements themselves. And for god's sake if they agree to abandon the goal of destroying Israel just say so. It is so simple.

There is, I would say, an inherent conflict that is being for the moment adjudicated here in the Palestinian society but I believe throughout the Middle East and the Muslim and Arab world. It is a battle between the militants and the moderates and so far the militants are winning, and unfortunately the results of the second Lebanon war did not help the moderates.

It is important to have the moderates stand firm and say we are going for peace we want to move from backward regimes as in Iran to forward looking regimes. We want for the Palestinians not to have this backward militant Islamic regime but an open regime that will embrace the future and peace with Israel. The same thing in Lebanon. They do not want Hezbollah is Lebanon. Many Lebanese want a forward, prosperous, peaceful Lebanon.

That is really what is taking place here. And now there is a hiatus in this battle between the Palestinians, and for the moment they are creating this ceasefire between them, but ultimately for peace to win the moderates have to win. The extremists have to lose.

DF: What about the situation in terms of future policy? In terms of reading what your press spokesman said, you actually would not want a Palestinian state or, he said, a Palestinian entity or a Palestinian anything. You actually do not want a Palestinian state under any circumstances, is that right?

BN: No that is not true. I think I would want an arrangement where the Palestinians govern themselves but in such a way that they do not threaten us. Remember I am the one who negotiated measured agreements with the Palestinians. And during the three years I was prime minister we had the greatest growth of the Palestinian economy since the Oslo days. Because I insisted on security but I opened up the markets - this is what I believe in and it benefited us and it benefited our Palestinian neighbours.

I want them to govern themselves. No sane Israeli leader - I consider myself perfectly sane - will want to reincorporate the Palestinian cities, make them part of Israel. They have to govern themselves, they have to live side by side with us.

But the problem we have now, there and elsewhere in the Arab world and Iran, is that you have a stream of militant ideologues - primarily militant Islamic ideologues - who are basically saying skip co-existence with Israel, skip co-existence with other Muslims, skip co-existence with the world. And they are bringing tragedy to their own peoples and pushing peace further away. That is what Hamas is doing here and that is what Hezbollah is doing in Lebanon and I believe that is what Iran is doing throughout the Middle East.

I think at the end of the day it is not merely what we in Israel do [regarding] the Palestinians. I hope we find moderate partners and I certainly would like to make peace with them. It will be a tough negotiation but it will come out eventually.

If you have partners on the other side who want to make peace with us, the experience of Anwar Sadat in Egypt and the experience of the late King Hussein in Jordan have shown that regardless of who is in power in Israel - a Likud government under Menachem Begin or a Labor government under Yitzhak Rabin - when you have a partner for peace Israel makes peace. What we lack now is a partner for peace amidst the Palestinians.

DF: In terms of the immediate future, what can be done at the meeting bewteen Rice, Olmert and Abbas that would represent progress? What can these three people do when they meet?

BN: Abbas should say unequivocally that he will not sanction a government that does not explicitly recognise the state of Israel. What have we been talking about all these years - we've talked about peace - how can they expect us to make peace with somebody who does not recognise our right to exist. I certainly recognise the right of the Palestinian people to exist, to govern themselves, to have a future for their children, to have a better life, an economy that is free of corruption and these terrible policies that we see around us. I would like them to partake in the progress that we have in Israel but for that to happen they also have to take a decision. Abbas has to make that decision to stand up for the right things, not to be carried away with the wrong things.

I really want to use this opportunity - I am talking to you David but through you I am talking to our Palestinian neighbours, I am talking to perhaps the people of Iran, some of whom are listening to us, and I would like to tell them you can have a choice. There can be peace between us but you have to make sure that the moderate forces that want progress, that want an end to these backward militant ideological regimes, that you prevail the forces of progress and peace. It is a decision that has to be made in Iran, it has to be made in Lebanon, it has to be made by the Palestinians. It has already been made by us. We want peace with those who want peace with us.

DF: One thing that interrupts that process a bit, for instance, is the Lebanon war and the destruction of the Lebanese infrastructure and the fact that in any clash between the Palestinians and the Israelis it is always at least four-to-one in terms of fatalities against the Palestinians. When you are pleading for moderation from the extreme Arabs should there not be a concomitant need for the same thing from the military side of Israel?

BN: Well yes, but remember that in the case of the second Lebanon war Hezbollah, totally unprovoked, launched 4000 rockets on Israel. That is equivalent - actually identical - to the number of rockets fired by the Germans on London and British cities during World War II. If I compare Israel's response to the response of the British government it is disproportionately low. That is an understatement. Churchill - and I don't blame him, right now I am not getting into that discussion - but Churchill wiped out Dresden and entire German cities and caused hundreds of thousands of casualties.

That wasn't the case here. Israel did not use a modicum of its power. Now, having said that, I have to tell you I - and I think just about every Israeli - is sorry, genuinely sorry, for any civilian death but I think that one of the things we have to recognise is that we were fired upon from populated areas, from built-up areas and we simply tried to knock out those stations.

I think the real solution is to make sure that rockets are not fired from one country into another and then we would not have to respond. But then again that relates to that basic power struggle that is taking place right now in Lebanon. Iran is trying to use Hezbollah to turn Lebanon into an Islamic republic.

The people who are hearing us right now - just the fact that they are hearing us and listening to this channel - they do not want that. Arabs and Muslims who are listening to us now, the overwhelming majority do not want that to happen. And if it does not happen, if Hezbollah is stopped, Iran is stopped, then rockets will not be fired, we won't retaliate and what is more important is that we could have the kind of future of prosperous exchanges between us that we all dream about - that I dream about. For god's sake, I would like to visit Beirut, just driving along the coast in a very nice car and meeting Lebanese people and I think they would like to come to Haifa and Tel Aviv. You know that the people of Lebanon want that - you know that the majority want it.

There is a moderate responsible government there trying to establish itself and you know who doesn't want it. Hezbollah and Iran do not want it. That is the same battle that is going on in the Palestinian society. It is the same battle that is going on in Iran itself where a minority, the ayatollah minority, is trying to govern an entire people, a great nation with great capacities and turn it into a pre-medieval backward regime.

I really think it goes beyond the Arab-Israeli question. It goes into the larger question of what is happening in Islam itself, what is happening in the Arab world itself and I, for one, am rooting for the moderates even if they won't admit that they are rooting for us.

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