Face reality: Two different agendas

Israeli President Shimon Peres is the last remaining founding father of the Israeli state.

Is there a realistic chance of peace with the Palestinians?

I think we have to follow a two-track approach: one political, the other economic. I think the economic locomotive has achieved much more than the military since the Second World War. And I think that we have unbelievable economic proposals as to how to make accommodations between us and our neighbours. In the political negotiations, the gaps are not very great, but they are highly emotional. It will be extremely difficult to put them on paper because each party looks to its own audience and will be very careful not to appear as losers. We cannot compare, for example, the issue of occupied Jerusalem with the issue of borders. If we can agree on borders, let's agree. If we can agree on refugees, let's agree. It will take time.

Do you think that you should be focusing on improving the day-to-day lives of the Palestinian people rather than trying to achieve a political agreement?

Both.

You seem to be focusing on the economic cooperation between states.

The Middle East (has) two problems. One is the struggle with the Iranians who want to control the Middle East religiously and the Arab states who are not happy with that. It's not only us.

The second is between a generation that doesn't want to enter the modern age (and) the generation that understands we have to. The generation that refuses to enter the modern age is also employing terror. They think they can stop the march of history, which is nonsense.

Now you are known for your dedication to the search for peace. But when I first interviewed you in 1981, you were still hawkish.

Half of Israel was under the impression that the Arabs would not make peace with us. As long as they thought they could overpower us, they wouldn't make peace. So practically all of us were hawks. The minute that Israel showed its muscles and proved that you cannot overcome her (was) the first time we saw some chances for peace. ... It's not that I changed my character.

And also there was luck. Personalities play an important role. Anwar Sadat was luck. If (the late) Jamal Abdul Nasser had remained in Egypt, I don't think he would have made peace.

For years you have been trying to make contact with important Arabs in order to enhance the prospects of peace.

Yes, all the time. In 60 years, we have had to face seven wars, outgunned, outmanned, outnumbered. And we won them all. But we never gave up the search for peace.

Is your country going to have to send its military forces into Gaza in order to protect its citizens from the rockets that keep falling?

No, I think the ones who will change the situation in Gaza will be the people of Gaza.

They are getting tired of Hamas. They say, 'What the hell are you doing to us?' They are looking for a cease-fire.

Some argue that Hamas is looking for a cease-fire so that it can rearm.

They are rearming themselves without the cease-fire.

So you think the people in Gaza are getting sick of Hamas.

Eventually, yes. Because Hamas is no solution.

Do you worry for your country on the eve of the 60th anniversary when there is such a scandal around your prime minister?

The prime minister is innocent until shown otherwise. But, what shall I say? Better a democracy with scandals than an authoritarian system without scandals.

What do you believe should be done about Iran's nuclear program?

We never said we were going to wipe anybody off the map, but they have.

It's not a problem of nuclear capability but of political intention.

... I think today (Iranian President Mahmoud) Ahmadinejad is becoming more and more a problem for the world, not only for Israel. ... Sooner or later the international community will take the necessary measures, which don't have to be military.

The title of your conference that President Bush is attending here ... is "Facing Tomorrow." And that's really what you're about?

Yes. I think the world has changed, the Jewish world has changed, Israel has changed. I think that relations with the Jewish people shouldn't be based so much on finance but rather on intelligence and intellect, arts and spirit. ... We want to become a contributing nation. ... We want to be citizens of the world and not just followers of our faith.

Lally Weymouth also spoke with Palestinian Prime Minister Salam Fayyad in Ramallah.

When did you become prime minister?

In June 2007 I was sworn in.

Do you blame the Americans for pushing the election in which Hamas won?

No. From what I remember, everyone, myself included, pushed for elections to be inclusive.

So how do you explain Fatah's loss?

The PA (Palestinian Authority) had been around for a long time. ... There was dissatisfaction with the way the PA had governed. You had a newcomer running against the system. They claim to be clean, they claim Fatah is corrupt.

Is it true that Fatah was corrupt?

The PA clearly didn't manage properly throughout. It does not really have to be a clear case of impropriety for there to be strong public opinion against a sitting authority. The context in which we live, occupation and checkpoints, people don't like that. Another is the failings of the peace process. In the early '90s, expectations were high, but then there was setback after setback.

But when you were sworn in, you spoke out against violence and incitement. ... What did you say?

Essentially, that the party is over. Places of worship are places of worship. Religion is about tolerance, religion is not about incitement. (Incitement) is not going to be allowed. It was something I did out of deep conviction. It was evident we were not on the right path.

What was the reaction?

They complied. For the Authority to govern, there have to be rules. People have to know what they are.

I heard that you and Israeli Defense Minister Ehud Barak are working on building up Palestinian institutions. Is that correct?

Correct. ... I want to build toward statehood.

Are you creating a currency and a central bank?

We are doing all of this. ... But when we started doing this, it looked even more distant because the country was on fire and in a state of disintegration.

Because of Gaza?

The Gaza situation could have spilled over into the West Bank.

Is Hamas still strong in the West Bank?

I wouldn't say that they are very strong, but I wouldn't say that they have no strength either.

How is Palestinian security performing on the West Bank?

Our security performance has improved markedly.

Is the Israeli security working with your security? Is there ... cooperation?

It's been dead for a long time, to tell you the truth. New realities emerged after spring of 2002, in which the Israelis pretty much assumed authority (for) security in all areas of the West Bank, including areas which were designated PA areas. Israel was not about to give this up. What do you do? ... A state of lawlessness has emerged.

Does chaos exist today?

It's much better. Looking at this situation, I knew we had to assert our physical presence. But the Israelis would not agree to that.

President Abu Mazen (Mahmoud Abbas) and Prime Minister Ehud Olmert are conducting peace talks. Is anything going to happen?

They have not proceeded at a pace that's consistent to obtain the objectives set forth at Annapolis. ... Annapolis set in motion two tracks. The second ... talks about the need to immediately implement phase one of road map obligations. People forget about that. It's important to me because it preserves the possibility of a two-state solution.

How do you unite Gaza and the West Bank again? How do you get rid of Hamas?

My starting point is not to get rid of anyone. We have to be accepting of political pluralism.

Is it a democracy when people are shelling Israel?

As soon as there is acceptance by everyone, including Hamas, that there is one authority here and it is the sole address for weapons, there can be a resolution to our conflict. Ultimately our people have to see things for what they are and move away from empty slogans that have brought us nothing but complete calamities. The reason we slid into this complete chaos in Gaza is not so much because there was political disagreement but because there was a channel through which political disagreement or discord translated into disaster and that is militias, outside the purview of the Palestinian Authority.

If they keep shelling Israel, won't the Israelis go into Gaza?

The cycle of violence definitely has to stop. We cannot go on like this.

It's not really a cycle of violence. It's people in Gaza shelling Israel.

I do not want to be less than 100 percent clear on this. We are against violence from Gaza.