EHUD BARAK: ...When the Palestinians tell you the Israelis are building in the settlement, it`s propaganda.Hmmm, who could he be referring to?
CHARLIE ROSE: Wait, wait, wait. Propaganda -- they`re not building in the settlement?
EHUD BARAK: No, we build but we built a building -- we have the --
CHARLIE ROSE: Are you building in East Jerusalem?
EHUD BARAK: Of course. That`s our capital, we build. We do not build in the -- within the Palestinians suburbs. We build in empty areas or Jewish neighborhoods.
But let me tell you honestly, when I was sitting with Clinton and Arafat in relative (ph) negotiations --
CHARLIE ROSE: Camp David.
EHUD BARAK: -- that failed because of (INAUDIBLE), we were building in four times the pace at which we are building now. And when Olmert came so close with some cigarettes and some maps on the table with Abu Mazen, the same Abu Mazen, not Arafat -- to reach an agreement, we were building about twice [the pace]--
CHARLIE ROSE: Ok. But wait a minute. This is a very important point. Stop, this is a very important point. You`re saying that on the issue of settlement they were prepared to negotiate an agreement and essentially had an agreement that seemed to settle most of the issues and there were settlements being built at that moment and they were not an impediment to an agreement.
EHUD BARAK: Yeah, yeah. I'm saying it. And the reality is that you know after 44 years, the whole Jewish settlement in the whole West Bank together doesn`t cover even 2 percent of the area. If we take 10 percent we have a good settlement bloc. It`s not a problem.
CHARLIE ROSE: But it is a problem and the Palestinians --
EHUD BARAK: No. It became a problem because some without thinking far- sightedly enough, some leaders donated the formula that not a single brick should be put. That`s a little bit too far and the Palestinians immediately adopted this as the standard. They say we are not ready to be less Palestinian than some world leaders.