Australia/Israel & Jewish Affairs Council

The new Israeli government and the two-state solution

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Update from AIJAC

April 30, 2009
Number 04/09 #06


Today's Update offers some new material about the policy of the new Netanyahu Israeli government toward the Palestinian and other foreign policy questions.

First up, columnist and veteran journalist Ari Shavit of Haaretz discusses the Israeli government's demand that the Palestinian Authority recognise Israel as a Jewish state. (By the way it is not true that the government is making this a precondition for talks as is sometimes claimed - for Netanyahu's statement on the subject, see here.) Shavit looks back over the history of Arab-Israel conflict and points out that it just doesn't make sense to see "occupation" as the core of the conflict, and that it should be seen as a conflict of national movements. He concludes therefore that Netanyahu's formulation of requiring Palestinian recognition of Israel is both correct and fully in keeping with  Opposition Leader Tzipi Livni's (who Shavit supported in the election) statements about requiring two nation-states, not simply states, to end the conflict. For his full argument, CLICK HERE. Plus, an interesting meditation on the meaning of a Jewish state from David Breakstone.

Next up, Khaled Abu Toameh, Arab affairs reporter at the Jerusalem Post, weighs into the argument about whether the Netanyahu Government has or should explicitly endorse a "two-state solution" to the conflict. He argues that this debate is basically irrelevant because regardless of Israeli behaviour or positions, such a state is not currently possible given the state of the the Palestinian side. And he stresses that the problem is more than simply the division between Hamas and Fatah and their inability to unite, but is rooted in more fundamental shortcomings of the current Palestinian leadership. For this important reminder where things stand on the Palestinian side from a very knowledgeable observer, CLICK HERE. Making a similar argument in a video interview is top Israeli journalist Yossi Klein Halevi, while Israeli columnist Ophir Falk argues that, given the state of the Palestinian leadership and relations between the two peoples, Netanyahu's proposals to begin by building "economic peace" make sense.

Finally, since his opinions and statements have led to much controversy, we bring you a detailed new interview with new Israeli Foreign Minister Avigdor Lieberman. Lieberman talks at length about the Palestinians and how he sees the conflict,  the Iranian problem and how it relates to the Palestinian one, relations with America, Egypt, Europe and elsewhere. While Leiberman carefully does not either endorse or rule out Palestinian statehood, this interview does provide some valuable insights into his thinking, and also helps dispel some myths and exaggerations about Lieberman and his views. For all of it, CLICK HERE. More on what the new government is signalling in foreign policy from Jerusalem Post editor David Horovitz, who conducted the above interview. Also, Yossi Alpher, a former intelligence officer turned peace activist, while deploring some of Lieberman's rhetoric, says his key policy proposals are neither crazy nor racist.

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The two nation-state solution

By Ari Shavit

Haaretz, April 24, 2009

The Israeli-Palestinian conflict is not about the occupation. If it were about the occupation, it would have erupted in 1967 and not in 1920. If it were a conflict over the occupation, it would have ended in 2000 and not continued to this day. If it were about the occupation, it would be easy to terminate it by means of a full Israeli withdrawal and full Palestinian recognition of Israel after the withdrawal. However, withdrawal is not being implemented and recognition is not being given because the conflict is not about the occupation.

The Israeli-Palestinian conflict is three-tiered: It is a conflict about 1967, about 1947 and about 1917. However, what underlies this is the fact that the Jewish national movement did not recognize the Palestinian people or its rights to this land, and that the Palestinian national movement did not recognize the Jewish people and its rights to the same land.

It follows that peace will not be achieved without Israeli recognition of the Palestinian people and the Palestinian nation-state, and without Palestinian recognition of the Jewish people and the Jewish nation-state. The only way to peace is by means of true mutual recognition.    

In Oslo 1993, Camp David 2000 and Annapolis 2008, Israel went a long way toward this necessary mutual recognition. At first it recognized the Palestinian people, then agreed to the establishment of a Palestinian state and finally accepted almost full withdrawal and the partition of Jerusalem. Israel thus shattered taboo after taboo and shed refusal after refusal. However, in no case - neither at Oslo, Camp David or Annapolis - did the Palestinians go a parallel distance. They shattered no taboo and shed no fundamental refusal. To this day they do not recognize the Jewish people, its rights or its nation-state.

The best illustration of the Palestinian refusal was provided last year. In the summer of 2008, Israel's prime minister, Ehud Olmert, made Palestinian President Mahmoud Abbas (Abu Mazen) an unprecedented peace proposal: Israel would retain only 6.5 percent of the West Bank (the settlement blocs) and in return the Palestinians would receive full territorial compensation in the Mount Hebron area, in the Beit She'an Valley and in the Judean Hills. Jerusalem would be divided on a demographic basis, with the holy basin to be entrusted to a special international regime. However, Abu Mazen did not accept Olmert's end-of-occupation offer. He rejected out of hand the principle of dividing the country into two nation-states.

The import of this is clear: a double asymmetry exists between Israel and the Palestinians. On the one hand, Israel is the occupier and the Palestinians are the occupied. But on the other hand, Israel recognizes the right of existence of the Palestinian people's state, whereas the Palestinians do not recognize the right of existence of the Jewish people's state.

To try to acheive peace, it is essential to address the two asymmetries concurrently. To demand that Israel act for the establishment of a Palestinian state and to demand that the Palestinians recognize the Jewish state.

Tzipi Livni grasped the whole problem and also suggested a solution: replace the hollow formula of the two-state solution with the formula of two nation-states. No, the Palestinians need not recognize the Jewish state in advance. But as long as they do not recognize the Jewish state, there is no reason for Israel to recognize the Palestinian state.

One possibility is for the negotiations to be conducted with no prior conditions. The second possibility is for the negotiations to be conducted between two parties that are committed to the solution of two nation-states living side by side in peace and security. One way or the other, but the third possibility is completely unacceptable.

It is out of the question for Israel to recognize the Palestinian people's right of self-determination in advance, while the Palestinians refuse to recognize the Jewish people's right of self-determination. That asymmetry will not lead to peace; sooner or later, it will lead to a blood-drenched all-out war.

Benjamin Netanyahu is now trying to implement Livni's meta-principle. Expectedly, the left is ridiculing the attempt. The imagined peace community is trying to sabotage it.

However, in this specific case Netanyahu is right. On this issue of principle he is expressing the firm opinion of the Israeli majority. If there is a chance for an Israeli-Palestinian peace, it must be a peace of two nation-states.

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Analysis: Real 2-state problem is the Hamas-Fatah feud

Khaled Abu Toameh

 THE JERUSALEM POST,
Apr. 17, 2009

The Obama administration, through its special Middle East envoy George Mitchell, has launched what seems to be an aggressive campaign aimed at pressuring the new Israeli government into accepting the two-state solution.

But even if Prime Minister Binyamin Netanyahu and Foreign Minister Avigdor Lieberman do finally succumb to the American pressure, they, along with Mitchell, will find that the Palestinians themselves are still far from achieving their goal of building a viable and independent state.

In fact, the Palestinians already have two separate political entities, or mini-states - one in the West Bank and the other in the Gaza Strip. These rival entities, controlled by Fatah and Hamas respectively, are acting and dealing with each other like two different countries.

Fatah representatives who participated in the last round of "reconciliation" talks with Hamas in Cairo said upon their return to the West Bank that they felt as if they were conducting negotiations with representatives of another country and not with Palestinians from the Gaza Strip.

Repeated attempts by Egypt and Saudi Arabia over the past few months to persuade the two parties to end their differences and form a Palestinian unity government have failed, prompting Cairo and Riyadh to come up with the idea of establishing a confederation between the two "mini-states."

However, both Hamas and Fatah have categorically rejected the confederation idea out of fear that it would perpetuate and consolidate the split between the West Bank and Gaza.

Palestinian Authority officials said that PA President Mahmoud Abbas would ask Mitchell during their upcoming meeting in Ramallah to put pressure on the Netanyahu government to accept the two-state solution as the basis for a "just, comprehensive and everlasting peace" in the Middle East.

Abbas, the officials said, would also make it clear during his meeting with the US envoy that there was no point in resuming the peace talks with Israel as long as the Israeli government remained opposed to the establishment of an independent Palestinian state with east Jerusalem as its capital, continued settlement activity in the West Bank and demolished illegally built houses in Arab neighborhoods of Jerusalem.

Abbas, they added, would also brief Mitchell on the failed attempts to persuade Hamas to form a unity government with Fatah.

Spokesmen from both Palestinian parties have said over the past few days that only a miracle could lead to an agreement between the two sides. The gap between them remained as wide as ever, they noted, adding that the Egyptians were now considering canceling plans to host another round of reconciliation talks scheduled to take place in Cairo at the end of April.

For now, it appears that the Palestinians (and the rest of the world) will have to live with the fact that the split between the West Bank and Gaza Strip is not a temporary or passing phenomenon.

If the Obama administration is serious about promoting the two-state solution, it must focus its efforts first and foremost on helping the Palestinians solve the dispute between the Fatah-run state in the West Bank and the Hamas-controlled entity in the Gaza Strip.

The divisions among the Palestinians, as well as failure to establish proper and credible institutions, are the main obstacle to the realization of the two-state solution.

Less than half of the West Bank is controlled by the corruption-riddled Fatah faction, which seems to have lost much of its credibility among the Palestinians, largely because of its failure to reform itself in the aftermath of its defeat to Hamas in the January 2006 parliamentary election.

The Gaza Strip, on the other hand, is entirely controlled by the radical Islamic movement that has, through its extremist ideology, wreaked havoc on the majority of the Palestinians living there.

The Obama administration is mistaken if it thinks the power struggle between these two groups is a fight between good guys and bad guys. This is a confrontation between bad guys and bad guys, since they are not fighting over promoting democracy or boosting the economy, but over money and power.

Netanyahu and Lieberman need not worry about accepting the two-state solution, because Fatah and Hamas don't seem to be marching toward achieving the national aspirations of their people.

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The world according to Lieberman


DAVID HOROVITZ and AMIR MIZROCH

THE JERUSALEM POST, Apr. 28, 2009

He's only been in the job for a month, but already the foreign minister is fed up with the 'slogans' he keeps hearing from his international counterparts: occupation, settlements, land-for-peace, two-state solutions... His favored key words? Security (for Israel). A stronger economy (for the Palestinians). And stability (for all). Bringing peace to our region is more complex than sloganeering would allow, he tells The Jerusalem Post in this interview, his first with an Israeli newspaper. And it's time we all faced up to the inconvenient reality.

Last Thursday, just a few hours after The Jerusalem Post completed this interview with Foreign Minister Avigdor Lieberman, his American counterpart, Hillary Clinton, gave testimony on Capitol Hill that forcefully underlines the different emphases placed by the two allied governments on Middle East problem-solving.

If Israel wants the backing of moderate Arab nations in countering the profound threat posed by Iran, said the American secretary of state, then it needs to get deeply engaged in peace efforts with the Palestinians.

"For Israel to get the kind of strong support it is looking for vis-a-vis Iran, it can't stay on the sidelines with respect to the Palestinians and the peace efforts. They go hand in hand," she told the House of Representatives Appropriations Committee. Moderate Arab countries, she elaborated, "believe that Israel's willingness to re-enter into discussions with the Palestinian Authority strengthens them in being able to deal with Iran."

As Lieberman made crystal-clear in our interview, Israel has no desire to stall peace-making efforts with the Palestinians. Quite the contrary. The new government, he said, "intends to take the initiative."

But rather than progress with the Palestinians holding the key to combating Iran, Lieberman emphatically sees combating Iran as the key to progress with the Palestinians.

As he put it, "It's impossible to resolve any problem in our region without resolving the Iranian problem. This relates to Lebanon, to their influence in Syria, their deep involvement within Egypt, in the Gaza Strip, in Iraq. If the international community wants to resolve its Middle East problems, it's impossible because the biggest obstacle to this solution is the Iranians."

The new foreign minister, who insisted on conducting the conversation in his reasonable and improving English, was reluctant to go into the specifics of the new foreign policy strategy the coalition will be following. This is in part because it is still a work in progress, and in part because it is to be formally unveiled only on May 18, when Prime Minister Binyamin Netanyahu is to meet with President Barack Obama at the White House.

And despite several attempts to draw him out, he wouldn't rule in, or rule out, Palestinian statehood.

He did, however, sketch out some parameters. Among them: the contention that progress depends on improved security for Israel, a bolstered economy for the Palestinians, and stability for both; the refusal to so much as discuss a "right of return" to Israel for Palestinian refugees; the clarification that Palestinian recognition of the "Jewish state" is critical to "real peace" but is not a precondition for substantive talks, and the goal of "suffocating" Hamas.

He also all-but ridiculed the idea of further indirect negotiations with Syria for the time being, added some nuances to his position on the hugely controversial issue of a loyalty oath for Israeli citizenship, insisted he would not be forced out of his job by the corruption investigations surrounding him, but stressed that his own personal situation would not affect Israel Beiteinu's presence in the coalition anyway.

Characteristically soft-spoken, puffing somewhat half-heartedly at a cigar along the way, Lieberman was carefully setting out what amounts to a call for his international colleagues to remake their thinking on Israel and the region - to "drop the slogans," face up to a reality that is far more complex than it is convenient to acknowledge, and give this new Israeli government some credit and some time as it tries to formulate proposals that will succeed where past peace-making efforts have failed.

He said his impression, to date, was that his foreign counterparts were taking the new government seriously, and respected him for his straight-talking. Clinton's remarks on Capitol Hill, however, make plain that it will be an uphill battle for Lieberman and the Netanyahu government, once they overhaul Israel's approach to peace-making, to persuade the international community to do anything similar.

Can we start with the issue of two states for two peoples. Wasn't the international basis for the establishment of Israel that there be a Jewish entity alongside an Arab entity? Is your government now departing from this paradigm or is the principle of two states still the applicable one?

First of all, we must understand why the Palestinian issue is deadlocked, because since 1993 we really made every effort. We had very dovish governments. We can start with Ehud Barak at Camp David, who made a very generous offer to [Yasser] Arafat and he rejected it. As for the Ariel Sharon government, we undertook an insane process called disengagement. We transferred thousands of Jews from the Gaza Strip. We evacuated tens of flowering settlements and we received in return Hamas and Kassam rockets. The last government of Ehud Olmert is the same. From what I saw in the papers, he really made a very very generous offer to Abu Mazen. And the same thing happened: Abu Mazen rejected it.

Were there elements that Olmert offered that were surprising to you?

Of course. I was shocked, as was everybody.

But more than this offer, more important at the end of the day: what was the final result? This was a very dovish government - without Lieberman, without Netanyahu. It was Olmert, Barak and Tzipi Livni. And the result? The Second Lebanon War, the operation in Gaza, severed diplomatic relations with Mauritania and Qatar, our soldier Gilad Schalit still in captivity.

And we cannot move forward without understanding why.

I know that all of us know some very popular slogans - land for peace, two-state solutions. It would be very easy to win over public opinion or the mass media by talking in slogans. But this is not election time. We're not during the campaign. We want to bring real results.

Israel has proved its good intentions, our desire for peace. Since 1978, we gave up territories three times larger than Israel. We invested billions of shekels in the Palestinian Authority. We paid a very heavy price. Thousands of our citizens were killed in terrorist acts. What more can we do?

Without understanding the real reasons for this long-standing conflict, we cannot move forward. That's my view.

Over the last two weeks I've had many conversations with my colleagues around the world. Just today, I saw the political adviser to German Chancellor Angela Merkel, the Chinese foreign minister and the Czech prime minister. And everybody, you know, speaks with you like you're in a campaign: Occupation, settlements, settlers...

You mean they speak in slogans?

Yes, slogans. Settlements, outposts. And I ask only one thing: What was the situation before 1967, before we established a single settlement. What was before '48 and '67? Was it peace, was it a heaven here?

It was the same: friction, terrorism, bloodshed. The PLO and Fatah were established before '67 and the Arab countries controlled Judea and Samaria and the Gaza Strip for 19 years, from '48 to '67. Nobody spoke during this time about the Palestinian state. And even before the establishment of the state of Israel, it was the same: friction, tension, terror, riots, pogroms. People try to simplify the situation with these formulas - land for peace, two-state solution. It's a lot more complicated.

You don't need to persuade this newspaper not to speak to you in slogans, but nonetheless, is it not the case that for our sake, to keep a Jewish, democratic Israel, we have to find some way to separate from the Palestinians? And doesn't that mean, in principle at least, statehood? I understand the prime minister's concerns about what statehood brings with it - giving one the right to arm and to pose a threat. But what then is the ultimate goal here vis-a-vis the Palestinians?

Yes, you live here and you understand the situation. I'm not sure that in Europe, that the leadership of the European Union, understand. For them, it's occupation, settlements and settlers.

I view The Jerusalem Post not only as an Israeli newspaper, but as a means to speak to people around the world - supporters and enemies.

We must clarify our position. The real reason [for the deadlock with the Palestinians] is not occupation, not settlements and not settlers. This conflict is really a very deep conflict. It started like other national conflicts. Today it's a more religious conflict. Today you have the influence of some non-rational players, like Al-Qaida. What is Hamas and Islamic Jihad? It's Iran by proxy.

To resolve this conflict, it is not enough to repeat slogans. I don't see any short way for any comprehensive solutions.

From my point of view, we're interested in three things. First of all, as Israeli citizens, the most important thing is security. I don't want to see, every day, every morning, Palestinian missiles striking Sderot.

Second, what is most important for the Palestinians? I think it's also very clear - the economy. Now I say as a settler, we at Nokdim are the biggest employer in our area. I have met many times with Palestinians from the villages around us, who really strongly do not believe in any political process, in peace processes - not in summits, not in conferences, not in declarations...

They have unemployment of 30-40 percent, especially in the Gaza Strip, with families living on $200 a month. Like all normal peoples, they want, first of all, jobs, to feed their families, to provide education for their children, health services, personal security. So the key value for the Palestinians is the economy.

It's not independence? And they didn't vote for Hamas because they want to get rid of Israel? It's the economy?

Why they voted Hamas is an interesting question. It was not independence, and not because they believe in Hamas's radical ideology, but because Hamas established a social services framework - clinics, funds, schools. And the Palestinian Authority, Fatah, on the other hand, during the Arafat regime and after it, was seen as very corrupt in its institutions. That's why Hamas won the elections. The same applies today. The Palestinians want normal lives, a standard of living, jobs.

And the third element, of course, is stability. Economy, security, stability. It's impossible to artificially impose any political solution. It will fail, for sure. You cannot start any peace process from nothing. You must create the right situation, the right focus, the right conditions.

You say you don't foresee a comprehensive solution in the near future, but we're already hearing from the new American president that this has been going on for long enough.

Annapolis was the wrong approach. With the Road Map, you can see some logical path: First of all, [for the PA to] dismantle terrorist organizations, collect illegal weapons, establish a justice system and establish normal state institutions. You have three stages in the Road Map, with 48-49 paragraphs. Only the last stage, the last paragraphs, deal with negotiations for the permanent solution. So, [under Annapolis,] to jump straight to the last paragraph and to concede on all of the Palestinian commitments to fight terror - it's a very strange approach.

Now in our policy review, it's a new government and we need time. I'm not ready for someone to stand with a stopwatch and say, 'What's happening, what's happening?' I talked with [President Obama's special envoy George] Mitchell, and he well understood our problems.

The people of Israel made their decision [in the elections] and this is really the right time to examine new ideas, new approaches, new visions. We're trying to formulate this new approach now. And the first time that we're going to speak about it so that everyone can see the new policy will be on the 18th of May, during the first meeting between Prime Minister Netanyahu and President Obama.

We intend to take the initiative. Our interest is to keep the initiative in our hands and we will try to convince the Palestinians and the Europeans and the Quartet and the United States that this is the right way.

But I want to stress that the biggest problem, the biggest obstacle to any comprehensive solution, is not Israel. It is not the Palestinians. It's the Iranians.

Today we see how big the Iranian threat is in our area - not only regarding the Palestinian issue. In Lebanon too. And what we've seen in the last few weeks in Egypt is maybe the best illustration of the Iranian threat to this entire region.

It's a three-fold problem: Iran with a nuclear weapon; Iran with long-range missiles; and Iran by proxy - from the South, from the Gaza Strip, with Hamas and Islamic Jihad, and from the North, with Hizbullah. They can torpedo any solution, any agreement.

Does that mean Iran has to be stopped in order to liberate any substantive process?

Of course. What is the biggest problem for the Palestinians. It's not Israel. It's their internal Palestinian problem. We saw so many atrocities. There is such danger within - between Hamas and Fatah. Their biggest problem is first of all Hamas. Hamas in Judea and Samaria, Hamas in Gaza - supported by the Iranians.

The Iranians are the biggest sponsor of worldwide terrorist activity, whether it's Hizbullah or Hamas or Islamic Jihad or the Muslim Brotherhood in Egypt, or anywhere around the world.

Please clarify: We've seen headlines claiming Israel is saying, 'First, you have to stop Iran, and then we'll make progress with the Palestinians'...

It's impossible to resolve any problem in our region without resolving the Iranian problem. This relates to Lebanon, to their influence in Syria, their deep involvement within Egypt, in the Gaza Strip, in Iraq. If the international community wants to resolve its Middle East problems, it's impossible because the biggest obstacle to this solution is the Iranians.

Does that mean Israel is saying to the Americans, 'We're not going to move on the Palestinian issue until you stop Iran?'

Even if you want to put aside the Palestinian-related issues, and to look for a solution in Lebanon, say, the problems in Lebanon have nothing to do with Israelis and Palestinians. The same goes for Egypt and the problems of recent weeks. It's the same: Hizbullah and the Iranians.

I understand. But is our government going to say to the international community and the Americans in particular, 'We're not even going to start trying to make progress with the Palestinians until you stop Iran?

No, no, no, no, no.

That's the impression that's sometimes being created.

No, we must start with the Palestinian issues because it's our interest to resolve this problem. But there should be no illusions. To achieve an agreement, to achieve an end of conflict, with no more bloodshed, no more terror, no more claims - that's impossible until Iran [is addressed], one of the biggest players in our arena...

Where does Hamas and Gaza fit into the plan Israel will present to the Obama administration?

It must be clear that we cannot deal with Hamas in any way. Not directly. Not indirectly. We've tried to clarify our position to Europe. The [three] Quartet conditions must be kept on the table [- recognition of Israel; acceptance of previous agreements; renunciation of violence]. We've clarified that they [Europe] should not move from this, not to change these conditions. Hamas cannot be a partner to any discussions.

Is the goal to bring down Hamas?

Hamas cannot be a partner to any discussions, any talks or any process. I hope that we can suffocate Hamas. It's in our interests, in the interests of the Egyptians, and the Palestinian Authority. As we saw, Hamas is only a proxy of the Iranians here, and they repeat openly every day their intention to destroy us; they're not ready to recognize our right to exist. From my point of view there is only one way: to suffocate Hamas.

How do you achieve that?


We have enough possibilities. If the Egyptians, Palestinians and us build the right strategy, there are many effective ways to do this. Not only militarily. But if Hamas strikes Sderot and other towns in the south, then also militarily.

How do you square suffocating Hamas with a world that is lining up to pour huge amounts of aid and money to rehabilitate the Gaza Strip following the last war?

The role of the Palestinian government is interesting. They have Prime Minister Salaam Fayad, who can really be a partner for reconstruction in Gaza. He can lead this process.

Hamas has said it rejects Fayad.

We reject Hamas. That's my point of view. I think that the international community accepts Salaam Fayad as a legitimate representative of the Palestinian Authority."

Is the Israeli plan to bring the PA back into power in the Gaza Strip?

I don't think that we must interfere in the internal Palestinian problems. It's in their interests to bring back the Palestinian Authority into Gaza. It's not only our interest, but also in the Egyptians' interests to keep Gaza quiet - without weapons, money and terrorist ideology being smuggled into the Gaza Strip. The picture in Gaza is not optimistic.

Even though the generous Olmert government couldn't get a deal with the PA, Fayad and Mahmoud Abbas remain the address?


There are two clear models, one in Judea and Samaria and one in the Gaza Strip. The example of coexistence with Salaam Fayad in Judea and Samaria is really different from our experience with Gaza. It is the Judea and Samaria model that I adopt. We must build up something similar in the Gaza Strip, to strengthen normal, rational partners on the other side that recognize our right to exist. Even the Palestinian people see what the standard of living is in Judea and Samaria, and they can compare this situation to the Gaza Strip.

So you think the Abbas and the PA recognize our right to exist here?

In general, they recognize our right to exist. In my first meeting with Mitchell, I demanded that the Palestinians recognize Israel as a Jewish country. It's a very important point for us.

Is this recognition a precondition for negotiations?

No. You know, we don't want to torpedo the process. I don't see this as a precondition. But somebody who really wants a solution, somebody who really desires a real peace and a real agreement, must realize that this would be impossible to achieve without recognizing Israel as a Jewish state.

So what is your vision of a final deal?

We are in the middle of a deep process of policy review. We're making a very serious effort, and we're trying to prepare ourselves as best we can to show something real on May 18.

And any plan that addresses the 'right of return' of Palestinians is no basis for negotiations?


It is totally unacceptable. It cannot be used as a basis. Not even one refugee.

If President Obama says to Israel, 'I'm trying to tackle Iran, I'm trying to bring in the moderates in the region to help us where your interests are concerned. The Saudis have a peace plan, and I know you don't love it, and I know you're not going to agree to any right of return, but as a basis to get them on board, is this not something that we can work from,' then Israel will be saying...?

It's unacceptable. It cannot be on the table. I'm not ready to even discuss the 'right of return' of even one refugee. There cannot be at the same time a Jewish country and a 'right of return.'

So the final envisaged peaceful outcome?


Before peace we must create security, stability and prosperity. You cannot bring an artificial peace. Peace is a result of security, stability and prosperity. You cannot bring peace to a shaky area with daily friction and bloodshed and some 50 percent [Palestinian] unemployment. It's impossible. Peace must be created in the right way once these conditions are met and a new atmosphere is created.

The prime minister has said very clearly he doesn't want to rule over any Palestinians.

I agree absolutely.

Israel has asked the Americans to put a time limit on their dialogue with Iran. What is the timetable we've asked them to stick to?

We are not America. It's their decision. We're closely monitoring this engagement.

How can Iran be stopped?

First of all, there must be very tough sanctions from the international community. It's not too late for economic sanctions. If the Security Council adopts tough resolutions and tough sanctions, then it's possible to stop [Iran from developing nuclear weapons]. Today I had a meeting with the Chinese foreign minister. The Chinese understand that it would be very bad for the whole area - and they are also very close geographically to Iran - if Iran is a nuclear power. Nobody needs to be happy about this possibility.

You recently met with Egyptian intelligence chief Omar Suleiman. Were you invited to Egypt, and do you plan on visiting there?

We had very interesting talks. It was a very interesting meeting. It was not the first time that I met Mr. Omar Suleiman, and we will continue our dialogue.

But you've not had a formal invitation to Egypt?


I saw before our meeting many speculations, but I think that we will keep this atmosphere going.

There have been reports that Defense Minister Ehud Barak plans to propose a major increase in the number of PA police personnel in the West Bank. What is your reaction to this?


I don't want to discuss elements of the new policy. We will make our decisions in the next two weeks. The policy must be acceptable for me, and for all parts of this coalition. This is a very good chance for Israel to make really serious decisions. Our biggest problem is the instability of our political system. We have existed for 61 years, and this is the 32nd government. That's an average of just less than two years for every government. Only one government in the past has completed its term - the 15th government, of Golda Meir. This current government, I think, is the second government in our history that can complete all four years and nine months. It's a very interesting coalition - with a Left wing, with a Right wing, with the religious, the Orthodox. It's really a stable government.

If the Labor party stays together, and if you yourself are not indicted...

The legal issues [surrounding me] are a another question. Israel Beiteinu doesn't have any reason to be out of this coalition. It's not a personal decision, about personal benefits or my private policy. We as a party have today 15 seats in the Knesset and we have an interest to promote this government and support its policies. Everybody in this coalition has good reason to be a part of the coalition for four years and nine months.

We see Iran's effort to demonize Israel working very well. We see support for Israel receding in Europe. We are concerned with the way Israel is perceived in Europe and many places internationally. And then along comes Avigdor Lieberman, in the new government as the foreign minister, and fairly or unfairly, you are depicted by critics of Israel as one of the emblems that justify their criticisms. You are depicted as an extremist, a hardliner...

So it's easy for me to surprise them. (Laughs.) I think that they respect me, really respect me, and that they understand that I say what I mean, and I mean every word that I say. My impression from my last discussions with my colleagues from Europe, as well as from Australia and Canada, and with Madame [Hillary] Clinton - was really a very good impression. They understand that we are a really strong coalition. If this government fails to achieve some kind of solution, I don't see any other government in the future that can be more successful. I think that in Europe they are ready to accept us and I think that they understand that we have a better chance.

But don't they ask you, 'Mr. Lieberman, are you prepared to give the Palestinians a state at the end of this process or not?'

They understand that we are a new government and that we need time. It's impossible in two weeks to bring a new policy. It takes time. Everybody knows today that there is a meeting in Washington on May 18 between [Barack Obama] and Netanyahu. Everybody is ready to wait until the 18th of May.

The Europeans need to change their tune - to stop saying the words 'settlements, occupation,' and start using the words 'security, stability, prosperity'...

I said today in a meeting with the prime minister of the Czech Republic that we have three examples in Europe for the resolution of conflicts. The first example is of Czechoslovakia itself after the Second World War with Germany in the Sudetenland area in Czechoslovakia. This is a very bad example. The second example is in Northern Ireland. Today it's a good solution, but it took 800 years. We don't have 800 years.

The other example is Cyprus. What was the situation in Cyprus before 1974? The same situation as in Israel. The Greeks and Turks were living together. There was friction, bloodshed and terror and war. After '74, they concentrated all the Greek population in the southern part of the island and the Turkish part of the population in the northern part of the island. There is no peace agreement even today. But there is stability, prosperity and security.

The Greek part of Cyprus is a full member of the EU and nobody is thinking any more about the war and the terror. This is the result, even without a formal peace agreement. And Europe accepted this kind of solution. I think in this way it is clear what kind of solution we prefer.

Can you apply that model to the Syrian track?

It's a different concept and situation completely because what we see from the Syrian side today is that they continue to smuggle weapons to the south of Lebanon in spite of UN Resolution 1701. They continue to support Hizbullah and terrorist activity. They continue to host Hamas and Islamic Jihad headquarters in Damascus. We see that they are tightening their relations with Iran and they are really a very active part of the axis of evil. They are part of this axis, which stretches from North Korea to Iran, to Hugo Chavez.

America seems to be moving towards engagement with Syria and Iran.

We see the facts. There must be some signs of good will. We don't see any good will from the Syrian side. Only the threats like, 'If you're not ready to talk, we'll retake the Golan by military action.' We see very aggressive policies and very aggressive declarations. I don't see any real conditions for talks with Syria.

So you are not ready to continue indirectly mediated talks with the Syrians?

I don't see any reason today for talks with the Syrians. Also, it's very strange behavior. They say, 'First of all, you must give a commitment that you are ready to go back to the '67 borders and after that we will start to talk.' What would we have to talk about? What kinds of talks are those?

What about modalities of peace?

(Laughs.) In this case, I say that I agree that the Iranians need a nuclear capability for their peaceful policy and they need long-range missiles for their peaceful policy around the world.

Will you personally see out the four years and nine months in this government?

Yes. I am sure that I will be the foreign minister for four years and nine months.

Do you have faith in the judicial system?


I don't think that's a fair question to ask during the investigations, I have a long experience and I think it's part of my Israel experience.

Your policy about a loyalty oath…it seems unprecedented to ask people who are already citizens to take a loyalty oath to remain citizens.

The same things happen in America, where you have a pledge already from the first grade. Even pupils in first grade in schools, from the first day, they have a procedure in which they have to pledge.

What specifically would you want to require in your oath of allegiance?

The same things as in the United States. You don't have to sign a form, but that we as a state have the right to demand, from our citizens and our students, to fulfill their obligations to their country to do some kind of military service or civil service. The dividing line is not between Jews, Christians or Muslims, but to be a loyal citizen or not to be a loyal citizen, or to fulfill your duty or not to fulfill your duty to the country. We must encourage this process and example of civil service for the Orthodox and the minorities. We have to adopt what they have in the United States - the pledge in the schools in the first grade. They have a special bill for people in military service. They have some better conditions for studies and for universities, for housing and to receive employment in the service of the state.

What happens in a school in the Arab sector when the principal does what he is asked to do and calls an assembly every morning and some students don't say [the pledge]. What do you say to that?

Everybody can see our formal platform on Israel Beiteinu's website. People like to create speculation and rumors and make some dramatic statements and commentary. Everyone understands the situation when people in Israel, during war time, support our enemies, identify with terror. It's unacceptable.

How did it feel to hear [Iranian President] Ahmadinejad's comments on Holocaust Remembrance Day?

For me it's really terrible. I have a family that has first-hand knowledge of the Holocaust. My father was a soldier in the Red Army from the first day until 1946. My uncle was killed in Stalingrad.

For us, it's really crazy that after 60 years we have a new Hitler, a new crazy guy with the same ideology, the same purposes and the same aims. When Hitler published Mein Kampf, everybody said, 'He's not serious, he's just a crazy guy.' And when he took power, people said, He will change now that he's in power.' And the same was said with regard to [Ayatollah] Khomeini. And now we see it with Ahmadinejad.

I think we must stop him. I think it is possible. This is the world's problem. They don't want to see the reality.

We want to escape reality. We have this crazy guy. He's decisive, he's charismatic, with a lot of determination and with a lot of political will, who is steadily moving towards reaching the end of his program to be a nuclear power with unconventional weapons. Not only nuclear weapons, but biological.

Do you think he will use nuclear weapons if he has them?

I don't think it's just a question of will he use them, but also of what message it sends to the region, to the Gulf countries. The message is 'Who is the main power? Who is leading the Muslim world?'

It's a very bad message. Today he is stronger and more dangerous than he was yesterday, and tomorrow he will be stronger and more dangerous than he is today.

Is it him or is it the regime?

Him and the regime. Both are the same.

Can Israel survive in the shadow of a nuclear Iran?

I don't think it's a question of Israel. It's a question for the international community. The world today understands that it's not only about Israel and Iran. I don't think that in Japan they can sleep very well with the guy in North Korea who has missiles and nuclear weapons. The biggest problem that we will find ourselves in is a crazy nuclear arms race in this region. I don't even want to think about the consequences of that. The five biggest powers, the permanent members of the Security Council - it is first and foremost their responsibility.

Finally, what is your message to Israelis on Independence Day?

We're really a strong country. We have a big economy in spite of the problems of terror. We have a very strong society. We have very successful industry that garners international respect, even from China and Russia. The pope's coming to visit. We occupy a very serious place in the international community. Tourism is growing. And more people understand us better than ever before. We can hold out hope of a change for the better, of positive changes, in the next four or five years.