Message from Prime Minister Ariel Sharon to the American-Israel Friendship League
New York, June 25, 2001

Friends, distinguished guests.

As I look around the room I see many personal friends, dedicated supporters of Israel which is what the American-Israel Friendship League is all about: Promoting and strengthening the mutually beneficial relationship between the people of the United States and Israel.

It is my pleasure to bring you greetings from Jerusalem, the eternal capital of the Jewish people for the last 3000 years, and of the State of Israel for the last 53 years and united and undivided forever.

Let me add that this is not just an Israeli interest, but also a universal interest. For only under the rule of Israel has Jerusalem been a city of tolerance, with complete religious freedom for all faiths. This will never change.

At the beginning of March 2001 the State of Israel embarked on a new road the road of unity. The National Unity Government which I lead and which is founded on a broad national consensus, opens new and exceptional opportunities for the State and the people of Israel. It ensures our ability to cope with challenges from within and without, as a united nation.

Today we are facing a campaign of terrorism launched against us. It is a complicated and difficult struggle. We have been waging this fight over the right to settle the Land of Israel for the past 120 years. It requires unity and patience in order to persevere. For us, Peace is the natural choice, and I will spare no effort in order to achieve it. But peace must be based on security, first. That is why I accepted the Mitchell Report and the Tenet Proposal.

Israel accepted the Mitchell Report, and the sequence it calls for:

1. Total and unconditional cessation of terrorism, violence and all forms of incitement. The calls on Palestinian television for children to become suicide bombers must end.
2. Meaningful cooling off period.
3. Confidence Building Measures for both sides including the collection of all the illegal firearms in the area under the control of the Palestinian Authority.
4. Resumption of negotiations

Each new stage can only be started after the completion of the previous one.

We accepted the Tenet proposal for implementation of a complete and unconditional cease-fire. We insisted that the cease-fire includes ALL forms of violence and hostilities including assaulting Israelis with rocks and Molotov cocktails. The cease-fire must also encompass a cessation of all hostilities against Israelis everywhere. Finally, the cease-fire requires the re-arrest of terrorists who are now free but still seek to attack innocent Israeli civilians. This is a fundamental obligation of the Palestinians from all their past agreements with Israel. It is not enough that Arafat lower the flames of violence temporarily. He must put out the flames of violence permanently.

It is essential that Arafat finally fulfill agreements he has signed. Israel, like the United States, is a country of law, and we will create a dangerous precedent for all countries if we will allow the Palestinian Authority continuous violation and total disregard for the implementation of their agreements with Israel.

My government will work towards preserving and strengthening economic stability to attract foreign investment, which is essential to the Israeli economy.

Economic stability is not a target in itself. Economic stability is the only means by which we can withstand the challenge facing the Israeli economy the achievement of long-term growth.

We are committed to carrying out a responsible budgetary policy, combining low deficit, easing the burden of taxation, and increased government expenditure on infrastructure and education.

In this context, it is important to stress that the Israeli economy is in the midst of a positive process of reduction of government debt. In 1985, it was over 150% of GDP, and in 2000 debt was reduced to below 100% of GDP. Our goal is to reach 60% of GDP, in accordance with acceptable norms.

My Government will retain low inflation recognizing that economic and financial stability have to be based on price stability.

In order to achieve these goals, the Government will make efforts to invest resources in implementing the necessary reforms in tax, Capital Markets, Pension Funds and the liberalization of foreign currency which needs to be completed. We will push ahead with privatization in order to reduce the level of government control of the economy. These reforms will have to be advanced while attaining broad public support that is so important to achieve success.

Finally, I wish to emphasize my belief that this economic policy, which leads to long-term growth and the creation of employment by the business sector over the long-term is, in itself, the basis for a just and right social policy.

A healthy economy and a just society are not two opposites, but rather two sides of one coin.

We can, and even have to establish a society that is equal and just with a high standard of living, but only by means of a stable economy and long-term growth. That, I believe, is what we all strive for.

I admit that sometimes the situation is not easy. The Jewish people have never had it easy. We are used to surviving in the face of adversity.

Look what we have done in the Land of Israel in the last 120 years. We have done so much in the past 53 years and we have so much further to go. We brought millions of Jews who speak 82 languages, all of them speak Hebrew today and we intend to bring an additional one million new immigrants in the coming decade. We have saved Jews by creating a country of refuge, and created an environment where Jews all over the world are proud and not afraid to express their national and religious identity.

I know the period we are facing, at present, is difficult. But we have faced difficult times before. Because we were united, in the past, we surmounted together each of Israels challenges. I am convinced that Israel will emerge from the present crisis, as well, with new inner strength and confidence, so that a real peace can, at long last be reached for our people.