Netanyahu commented that Shimon Peres had admitted to
him that the Oslo process had been based on a mistaken
economic premise, and as a result European and U.S.
assistance to the Palestinians had gone to create a bloated
bureaucracy, with PA employees looking to the international
community to meet their payroll. Netanyahu predicted that
Palestinians would vote for Abbas if they believe that he can
deliver the money. He suggested putting in place an
"economic squeeze with an address," so that Hamas would
receive the popular blame. Asked if Fatah knew how to
conduct an election campaign, Netanyahu said the Palestinian
patronage system should be forced to collapse, which would
have an immediate impact since the entire Palestinian economy
was based on graft and patronage. Instead, he asserted, the
opposite was happening. Hamas was also handling the prisoner
release issue well since they had created the impression that
Hamas was in control of the process and "sticking it to the
Turning to the Second Lebanon War, Netanyahu said the
problem was not the war's goals but rather the disconnect
between goals and methods. If the IDF had used a flanking
move by a superior ground force, it could have won easily.
Instead, Israel "dripped troops into their gunsights," an
approach he termed "stupid." The top leadership had lacked a
sense of military maneuver. In addition, they had been
afraid to take military casualties, but instead got many
civilian casualties. If Olmert had mobilized the reserves in
ten days, seized ground, destroyed Hizballah in southern
Lebanon, and then withdrawn, he would be a hero today.
Netanyahu asserted there was a growing sense in the
public that he had been right in the last election.
Unilateral "retreats" (i.e. such as the withdrawals from Gaza
and southern Lebanon) were the wrong way to go. Israel had
allowed an Iranian enclave to establish itself in Gaza.
Syria was arming itself for the first time in 20 years,
Hizballah had rearmed since the war, and Gaza was being
turned into a bunker. Egypt was not doing on a twelve mile
front along the Gaza border what Jordan was doing on a
150-mile front. The way out was to stop Iran, thereby
dealing with the octopus, not just its tentacles.
Netanyahu stated that a return to the 1967 borders
and dividing Jerusalem was not a solution since further
withdrawals would only whet the appetite of radical Islam.
Ackerman asked if the Palestinians would accept peace based
on the 1967 lines. Netanyahu said he would not agree to such
a withdrawal since the 1967 lines were indefensible, but he
added that the "right of return" was the real acid test of
Arab intentions. Instead of Israel making more step-by-step
concessions, Israel should insist that further concessions be
linked to reciprocal steps toward peace. The Palestinians
must drop the right of return and accept Israel's right to
exist. The Arab initiative did not meet this standard since
it keeps the right of return open. Israel will only have a
peace partner when the Palestinians drop the right of return.
Asked whether Israel could accept case by case exceptions,
Netanyahu insisted not one refugee could ever return. Israel,
after all, was not asking for the right of Jews to return to
Baghdad or Cairo.
Netanyahu said UNSCR 242 was not a bad formula since
it did not specify precisely from which territories Israel
would withdraw. After the withdrawals from Gaza and Lebanon,
there was deep disillusionment among Israelis about the
principle of land for peace. Even the noted Israeli leftist
writer AB Yehoshua had said in a recent interview that he
despaired about peace because the Arabs wanted all of Israel.
From 1948 to 1967, the conflict had not been about occupied
territories, but that point had been obscured by "effective
propaganda." The root of the conflict was an Arab desire to
destroy Israel, which had now become part of the larger
ambitions of radical Islam.
The 1967 borders were not the solution since Israel
was the only force blocking radical Islam's agenda of
overrunning Jordan and Saudi Arabia. Netanyahu proposed that
Israel offer to work with the Saudis against Iran. If Iran
was not stopped, there would be no agreement with the
Palestinians, and the peace treaties with Jordan and Egypt
would come under tremendous pressure. There could be no
deterrence against "crazies" such as Ahmadinejad.
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