PM Olmert focused on contacts with the Palestinian Authority, Iran and the Israeli economy, and replied at length to journalists’ questions.

The trilateral meeting which took place Monday here was a very serous meeting, and I think it was very candid. I said what I had in my heart, the President of the Palestinian Authority shared with me what he has in his heart and we heard also, of course, the opinion of the Secretary of State, Condoleezza Rice. We appreciate very much the American efforts to keep the momentum of contacts between us and the Palestinians. I think this is very important for all, and Secretary of State Condi Rice is playing a very positive role in creating the necessary environment, which is very helpful to both sides.

I think it’s well known and everyone understands that we were very unhappy with the reconciliation agreement that did not explicitly recognize the Quartet principles. And I shared my view with President Abu Mazen, and I also shared it with President Mubarak, but in a different telephone call, and it was clear that Israel will not be able to maintain any kind of formal or practical contact with a government that will not accept explicitly the principles of the Quartet. That was said by us, it was said by the Americans, it was side by the Quartet members on the 2nd of February, and immediately following the announcement of the agreement it was said again by all the Quartet members and I believe that it will be repeated today at the conclusion of the meeting of the Quartet members in Europe.

However, at the same time, I made it clear that I will not cut my contacts with Abu Mazen. I will continue to maintain the bilateral track, I will meet with Abu Mazen, my staff will meet with his staff on a regular basis, hoping to create the necessary environment that will be helpful for the relations between us and them. We want to contribute to the quality of life of the Palestinian people living in Gaza and in the West Bank. We believe that however mistaken their leadership come sometimes be, people don’t have to suffer from the mistakes of their leaders, and inasmuch as we can contribute to the upgrading of the quality of life, under the present circumstances, we’ll make these efforts, and if necessary, in cooperation with Abu Mazen.

Also we expect Abu Mazen to make exceptional efforts to stop the terrorist attempts and the suicide attacks against Israelis. What may have happened yesterday is just a reminder to all of us of how dangerous and serious terror can be and how easily it can break up every pattern of cooperation that we are trying to build.

So I believe that this bilateral track will continue. I believe that the Secretary of State will continue to play this positive role in inspiring these contacts between us and the Palestinians, and I want to believe, and I hope, that if indeed a new government of the Palestinians will be established, this government will be explicitly, publicly and officially committed to the principles that were adopted by the international community, to the Roadmap, and to the Quartet principles.

Today is the last day that was designated by the international community and by the UN Security Council Resolution 1737 for the adoption of the parameters of cooperation by Iran with IAEA, with regard to their attempts to acquire nuclear capacity. It appears that up until now the Iranians did not respond in a manner that all of us wanted and therefore the international community will have to think of additional measures in order to influence the Iranians to change their basic position.

My personal view is that the sanctions that were already applied and other measures taken by the international community, including financial measures, are effective. They influence and they make an important contribution to what may eventually appear as a new perception of opportunities and realities for the Iranians. It’s not enough. A lot more has to be done. But I think that the Iranians are not as close to the technological threshold as they claim to be and unfortunately, they are not as far as we would love them to be. So there is a lot that still can be done and ought to be done, and the sooner it will be done, the better it will be.

If there will be a concerted effort by the international community, both diplomatic, economic and political effort by the international community, I think that there are serious chances that it will have an impact that may change the Iranian attitude. And so I think that this is the main area of focus that should engage us. I personally believe that this can be a productive way and I urge all the international community, particularly in light of the refusal of the Iranians officially to extend their cooperation with the IAEA to stop the efforts for enrichment, that additional resolutions – effective resolutions – will be adopted and applied in this area of economy, financial measures, diplomacy.

And finally, I want to take this opportunity to also report to you of what I think was the record, historic record year for the Israeli economy. I don’t know how many of you are aware of the fact that this last year we had, in spite of the fighting through July and August, we had a very remarkable growth of our economy of over 5 percent, inflation rate in Israel last year was -0.7, which is quite unusual for the economy to grow so rapidly and at the same time to have such low inflation. We had last year a record export, first time that our balance of payment was positive and we sold overseas more than we bought, and the surplus was more than 6 billion dollars. We also had – and we still have – a record in our stock exchange, which I think is an expression of the confidence of investors, both in Israel and outside of Israel, in the Israeli economy.

Another indicator of confidence in the economy was the highest ever foreign investments in the history of the State of Israel. Last year we had $23.2 billion of foreign investment, of which more than $12.5 billion were in tangible assets, in Israeli properties and industries. The other part was financial investments. And of course, the interest rate of Israel is one full point below the American prime rate, which is certainly something quite unusual, which I think, again, reflects the strengths of the Israeli economy and the confidence of the international community in the economy of the State of Israel.

So we were not surprised that people like Warren Buffet thought that Israel is a target for their investments. The first time that Warren Buffet ever invested outside of the United States of America, he chose to invest $4 billion in one of the leading Israeli industries, the Iscar Industries, and he never even visited the State of Israel. When he finally came to see what he bought, and he was so gracious to come and see me, he told me: "I have never seen any such place in the world. I am going now to go everywhere to speak so highly of the enormous and unbelievable achievements of your economy and your industries" – and I think that this is a very positive indication. Coming in the same year that Intel decided to invest $5 billion in new facilities, manufacturing facilities and research facilities in the State of Israel, I think it is a very strong signal of the successes of our economy last year, and our anticipation is that this year, the year 2007, will also be a year of growth in our economy and continued foreign investments in Israel.

So we are looking forward with great hope for the coming year and of course we will make every possible effort that every other front of our lives will be as successful as this.

Thank you very much.

Questions & Answers

Q: Prime Minister, what would Israel be willing to give up in territorial terms in exchange for a lasting peace with Syria?

PM Olmert: I think we first have to start negotiations and then we will find out precisely how much and what kind of territories we want to give up. I think it’s a little bit too early. It is true that President Assad talked about starting a peace process with Israel, and I think I said several times – and this is our position – that we would be very happy to make a serious, genuine, credible and trustworthy peace agreement with the Syrians. But for the Syrians to want to make peace is not only just to say that they want to talk with Israel in order to make peace. They have to stop their daily involvement in encouraging terror, in smuggling arms to Lebanon, in assisting the terror in Iraq and in assisting the brutal actions sponsored by the Iranians in our part of the world. Just to say that you want peace and at the same time to sabotage the legitimate government of Lebanon and to continue the assistance to Hizballah to smuggle arms and to provoke all kinds of terrorist actions, is not a genuine signal that can convince Israel that they are really ready for a peace agreement. If there will be a positive change, they will find Israel ready, and when we will sit to the table of negotiations, I am sure that they will find out exactly what are the kind of compromises that we are ready to make.

Q: Two questions. First of all, President Ahmadinijad in Iran has reportedly repeatedly called for the destruction of Israel. What red line do the Iranians have to cross before you would carry out a military strike against Iran? And secondly, when the Israeli public voted you into office a year and a half ago, it was on your promise to withdraw from large parts of the Occupied Territories. Why are you still building in the West Bank?

PM Olmert: I think I’ve outlined what I think should be the strategy to deal with the Iranian thereat. There is a genuine threat by Iran. The fact that a leader of a nation of almost 80 million people, which is a member state of the United Nations, can stand up publicly and openly and threaten the very existence of another nation, which is a member state of the United Nations, this in itself is totally intolerable. The fact that this leader is doing it and at the same time is trying to build up nuclear capacity for his country and delivery systems that could use this capacity in order to destroy another nation, is totally unacceptable.

I think it is incumbent upon the international community not only to take practical measures to stop this threat, but also to take practical measures that will indicate the extent of the disapproval of this language, of these attitudes and of these approaches, as spelled out by President Ahmadinijad of Iran. No country in the world, which is a member of the United Nations, can hesitate or contemplate its position about it. Every nation has to take a very strong stand against anyone who threatens the annihilation of another nation. And that’s what we expect the international community to do. I believe that the coordinated effort, the diplomatic and the economic and financial measures, can cause the result that we are looking for. And therefore I’m not defining any other thresholds or timetables. I believe that the goal that we have set for ourselves can be achieved in this way, and naturally this is my priority.

It is true that I said that I want to reach a new agreement, preferably that will allow the Palestinians to have their state alongside the State of Israel. This is my vision. This is the vision of the United States. This is the vision of the international community, and I share this vision entirely. I am in favor of the creation of a Palestinian state that will live in peace and security alongside the State of Israel, which has the same right to live in peace and security.

As you know, unfortunately, some of the circumstances that developed over the last year did not make it any easier. Just in the Palestinian front – we pulled out entirely from Gaza, we disengaged, no one can claim that we hold one inch of territory which is claimed by the Palestinians in the south part of the country. And yet there was not one single day since the disengagement from Gaza in which the Palestinians did not shoot rockets on innocent Israelis living in the south part of the country. Now we have agreed on a cease-fire with the Palestinians in Gaza in November. Since then, again, there was not one single day they didn’t violate this agreement. And we didn’t respond up until now.

So I think that there is no basis whatsoever to come to the Israeli side and to argue: why haven’t you yet not accomplished everything that you wanted to do after less than one year, with all these violations that were committed by the Palestinian side – and I haven’t yet even started to talk about the brutal abduction of the Israeli soldier Corporal Shalit and the numerous attempts of suicide attacks, the last one was yesterday, by the Palestinians against the State of Israel. And on top of it, of course, the divisions amongst the Palestinians, the fact that the Palestinians keep fighting against each other. They have appointed a government which is boycotted by all the international community because they are not prepared to make pace with Israel and are not prepared to recognize the State of Israel. And as I already said at the beginning of this talk, unfortunately, the agreement signed between the Fatah and the Hamas does not promise any change in the basic position of the Palestinian government with regard to the basic principles of the Quartet, which are the guidelines for any future agreement.

So these are the main obstacles for the fulfillment of the vision of a two-state solution, and unfortunately it takes more time as a result of this. But the strategy has remained the same and I haven’t changed my vision and I haven’t changed my commitments, and I’m going to do everything in my power to continue to build up bridges between me and Abu Mazen that will allow both of us to move forward on this direction that I have set forth for my country when I ran for the election.

There is not any violation of the basic Israeli commitment that there will not be any building outside of the existing settlement limits as they were. So there is natural growth and everything that was done was done within the framework of the existing settlements as a result of natural growth. There is not any government building, there is no policy of building, there are no government investments in the territories, certainly not in the last year.

Q: How long will you restrain your responses to the terrorist attempts and the shooting of Kassam rockets against Israelis? The last two Kassam rockets just landed now in the south part of Israel.

PM Olmert: We are not going to restrain ourselves forever, and I made it clear to Abu Mazen when I met with him and I think that the Palestinians know very well. However, I’m not going to give you now any specific timetable or dates of when we are going to respond, but it is clear that the patience of Israel is being tested only too often and I think that it is a terrible mistake by the factions in Gaza that are stretching and challenging the Israeli patience for such a long time. At the end, we will respond and we will reach out for those who are responsible for the threats and for the shooting against innocent Israelis. 

Q: You’ve said that you conveyed your concerns about the Mecca agreement to Abu Mazen. What’s the point of keeping up the appearance, the process, if you don’t expect any substance to come out of a joint government with Hamas? And how many more trips will Condoleezza Rice have to make here? Aren’t you just spinning your wheels?

PM Olmert: I’ll never lose my desire to talk with every Palestinian that I will find a genuine potential partner for peace with the State of Israel. How many do I have to want not to meet with Abu Mazen? Unfortunately, there are not too many, and I personally think that we have to realize that the Palestinians are divided. I will not speak with Hamas, I will not speak with Mashal, I will not speak with Haniyeh, I will not speak with a government which does not accept the very right of Israel to exist as a Jewish state as it is. But if the Palestinian President, who was directly elected by the people, shares these basic commitments and repeats it publicly and formally, do I have to also say to him: I will not talk with you? I will not try in every way to find ways that together we can work towards peace? I think it would be a mistake.

So I don’t ignore the complexities, and of course the reluctance of the majority of the Palestinian members of the national council now, who are members of Hamas, to recognize Israel and to negotiate with Israel, and therefore we will not coordinate any efforts with a government which is not obliged to these basic principles. But Abu Mazen is different and he is not afraid of spelling out his difference, in spite of the agreement, and I think that I have to maintain that link between us and the Palestinians in order to be able to continue this dialogue, and hope that one day, perhaps, the promise of this dialogue will be stronger than the fears and the threats and the hatred and the viciousness of Hamas and its supporters.

Q: Obviously everybody knows here or maybe some know, that you were actually the mayor of Jerusalem for many years. The question, sir, Israeli Antiquities Authority said a couple of days ago that there is actually a room under the Mugrabi Gate there and that they have hid this evidence from the public. Now the Turkish team is going to come to the region soon. Why, sir, you are hiding the evidence in this delicate, sensitive issue? Second question, sir. Israeli people actually voted you to do the Realignment Plan, and this was the campaign of Kadima. Are you still committed to this in a sense that there is no final status negotiations with the Palestinians? Are you still committed to realignment?

PM Olmert: First of all, I want it to be clear. Israel is not working at all on the Temple Mount. There are not any kind of works by the Antiquities Authority of Israel on the Temple Mount, and the fact that so many are using the Temple Mount to describe what we do is false, is untrue, is part of an attempt made by the most radical anti-Israeli Islamic group in Israel to stir the emotions and to provoke violence between us and Arabs. I repeat again: the walkway is entirely outside of the Temple Mount. That’s number one.

Now, everything involved – everything involved – all the information was shared in advance by the Antiquities Authority with all the interested parties, including the Waqf and others inside and outside the State of Israel. There was nothing new that was not revealed in advance by the Antiquities Authority. Now I can only say one thing, that I’m very proud that we are such a democracy that even the most extreme, fundamentalist, radical groups of the Islamic movement within the State of Israel can express their positions and their provocations in our democracy. I just suggest that we will not be carried away too much by their false statements and their provocations.

Finally, when I met with the Prime Minister of Turkey, Mr. Erdogan, and he certainly showed some concern because what he knew was based on what he heard on some of the reports, which were not accurate, to put it mildly. I suggested to him that his ambassador will come to visit the site, as did so many other ambassadors that were invited by us, and he suggested that maybe with his ambassador he will send a special representative, one or two of his own. So I said: why not? Everything is in the open, everything is exposed, actually there are television cameras that broadcast live everything that happens there and if you want to send more than one person you can send, but of course, there is no inspection committee, there will not be any inspection committee, there is no need for any inspection committee, but we always welcome everyone that wants to come and look around and see everything, and I believe that after such a visit will take place by the Turks or by others, they will report to the Prime Minister of Turkey, and he will do precisely what he said he wants to do, which is to say that everything is alright.

You also asked me about the realignment plan. What I said before the elections, and I kept saying all along the way, is that we have the same vision, as America and many others, which is a two-state solution. The realignment is a process. The vision is a two-state solution. Now, the most important part, of course, is the substance, or what is the vision. What is the final permanent situation that we envision for the Palestinians and ourselves? And I am absolutely loyal to the same position that I expressed before the election, that there should be a two-state solution and that the Palestinians will have a contiguous territory in the West Bank and that they will be able to live their own secured, independent lives in their own state. And this has not changed. How to come about it, how to accomplish it, how to carry out this plan depends on circumstances. I hope that the circumstances will allow us to reach an agreement with a Palestinian government that will recognize the Quartet principles and will accept the right of Israel to exist as an independent State. And in that case, this will be the best possible way in which I will be able to carry out my commitments.

Q: (inaudible)

PM Olmert: We knew exactly in July that there is no government that we can talk with. Now, we want to talk with our enemies, but the pre-requisite for such talks ought to be that they will agree to talk to us. And I’m sure that you heard what the real leader of Hamas said, Khaled Mashal, that he will never talk to Israel, will never make peace with Israel, and will never recognize a two-state solution, so I think that this question of when will you talk to your enemies, should not be put to us. We are ready to talk with our enemies, but there must be a basis for such talks, and the basis which was accepted by all the international community is the Quartet principles. We accept the Quartet principles. Everyone that will share with us this acceptance will be a partner of negotiations.

Q: There’s been a lot of talk about international agreements and whether to accept them and who accepts them and who does not accept them. As far as I remember, the international agreement with the Palestinians was done between the Israeli government and the PLO. Could you explain to us why do you insist now on the recognition by a government that we apparently all understand will not recognize Israel for the time being. Why do you not, as the Palestinians suggest, go into further negotiations with the head of the PLO, Mr. Abu Mazen, who you’re meeting already and you say to us that you want to meet? Are you going to engage with him in negotiations? And I just want to add an extra question because I think both the Palestinian side, and if I’m not wrong also the Israeli side, the public is dead tired of politicians who seemingly don’t do what the people want, make peace. I know it seems and maybe sounds a bit simple, but that’s the basics. If you go into the Palestinian areas, they are sick and tired of Fatah and they are sick and tired of the Hamas, and I won’t tell you who they are sick and tired of in Israel.

PM Olmert: I am sure that you know what the basis that you have to speak for the Palestinians and for the Israelis at the same time is, for the public. I’m not certain that there is one voice in our country. We are a democracy, there are many voices, and I am afraid that also there are quite a few voices amongst the Palestinians.

Now, what you ask me to do is to speak with the body which does not represent the majority only because the majority is against talking with me. But a body which does not represent the majority today amongst the Palestinians will not be able to actually carry out any commitment that will make any such talks valuable and meaningful. Let’s not bypass the issue. The fact is that indeed the majority amongst the Palestinians voted for people who don’t want to make peace with Israel, and without a change amongst the Palestinians it will be very difficult to accomplish this. What you suggest is that we will be talking as if the 13 years or 14 years that passed since the Oslo Agreement did not exist and that we will go back into 1993. But we live in 2007 and there is a certain reality in 2007 and the only way to deal with this reality is to look into its eyes openly and seriously and to deal with it. What you suggest or some may suggest is that we will ignore all of this. So it’s good when you want to fool yourself, but we don’t have this privilege. We have to take care of the problems every day and when a party says not only that we don’t want to make peace with you, but we will continue our efforts to commit suicide attacks and to shoot rockets on your cities, I am not certain that ignoring this can be of any help to the creation of a real and sustainable peace process between us and the Palestinians.

Q: Mr. Prime Minister, you mentioned Abu Mazen more than six times, that you are ready to negotiate with him and you want to meet more with him, but in the last meeting that you held with Abu Mazen here in this hall, you accused him that he deceived you in this Mecca agreement. This on the one hand. On the other hand, Abu Mazen existed before the Palestinian elections, before the winning of Hamas, and in that time, he was the President, and Israel refused to negotiate with Abu Mazen around the disengagement from Gaza and now you’re going to choose your counterpart with whom you want to negotiate with the Palestinian side. How do you want the Palestinians to respect the result of the negotiations if you want to negotiate only with 50%, if you neglect 50% of the Palestinians, which mean the Hamas people? Why didn’t you negotiate with the Palestinian leadership from the Hamas and from the Fatah together?

PM Olmert: I never accused Abu Mazen of deceiving me. And I don’t remember that you were in this very intimate meeting that I had with Secretary Rice and with Abu Mazen. There was no one else there. There was only an interpreter and I’m certain that this interpreter didn’t tell you this because it never took place. I never accused Abu Mazen of deceiving me. I accused him of making an agreement which, unfortunately, is not productive and is not constructive and is not helpful in creating the necessary environment for an agreement and the dialogue between Israel and the Palestinian government. That I said, and I regret very much that Abu Mazen was not more consistent on this issue. But at the same time, as I said before, I know of no other person that has any kind of authority amongst the Palestinians who is a better candidate for a dialogue with me and therefore I want to continue to meet with Abu Mazen. I never said that this will be easy, nor did I say that it will be simple. It will be difficult and it will be complex. It will require the utmost patience by me and by him from his respective point of view, which I can understand even if I disagree with, and we will have to work together and meet and meet again and again and again.

Why don’t you accept the fact that Khaled Mashal says openly, publicly and formally in every platform in the world, that he doesn’t want to negotiate with Israel and he doesn’t want to make peace with Israel? That’s what he says. It’s regrettable. It’s sad. The fact that the leader of more than 50% of the Palestinian electorate openly says that he will do everything to destroy the State of Israel is very sad. But why don’t you accept that this is the reality and why do you come to the Israeli side and blame the Israelis for not wanting to sit with someone who is aiming a gun at your head and says: if you come close, I’ll kill you?

Q: I’m very interested in your opinion about Israeli Arabs. First of all, would you tell me what kind of significance do you see of the appointment of Mr. Majadleh as a first Muslim Arab minister? And second, what kind of role would you expect Israeli Arabs to play in the context of a peace process between Israel and the Palestinians? Thank you.

PM Olmert: The fact is that Raleb Majadleh is the first Israeli Arab who was appointed to be a member of the cabinet. So this in itself is an historic turning point which no one can ignore or disregard. I think it’s very symbolic, it’s very important. It’s one more step in a long and painful process that will have to take place between the Israeli citizens who are Arabs, both Muslims and Christians but mostly Muslims, who are 90% of the Israeli Arabs, and the other citizens of the State of Israel, mostly Jews.

The Israeli Arabs, I am sure, many of them, the majority of them, are torn between their natural emotional identification with other Arabs and Muslims in the neighboring countries and between their commitments to the State of Israel, of which they are a part as equal citizens in our country. And this is a source for a very painful emotional conflict which characterizes their lives. Now, I think that what we need to do is to find the pattern that will allow them to resolve this conflict without violating their commitment to the State of which they are citizens and at the same time not to entirely dissociate themselves of their emotional connections to the people that they identify with, and this is something that we have to invest a lot of energy in and a lot of effort in, and we are doing it. It’s not simple.

The fact that we have reached a point that in spite of the complexity of this conflict which characterizes the Israeli Arabs, there is an Israeli Arab member of the cabinet, is a very significant step forward. It’s not a solution, it’s not the only thing which has to be done in the build up of a better understanding and tolerance between us and the Arabs living in Israel, but I think that this is a step forward. The fact that we have 10 members, Arab members in the Knesset who can, almost on a continuous basis, on a daily basis, speak out their heart and mind, which happens to be completely, wholeheartedly against the consensus of the vast majority of Israelis, I think is a testament to the strength of the Israeli democracy, of which we are so proud.

I hope that the relations that will be built and will be improved all the time between the Israeli Arabs and the Israeli Jews will help create the appropriate environment that will encourage the upgrading of our dialogue with the Palestinians.

Q: I would like to ask you about the hint you gave last week concerning the release of Gilad Shalit, which could maybe change your attitude towards the Palestinian unity government. Would you please clarify on that, and I would like also to ask more in general, which place on the Israeli priority list does the release of kidnapped soldiers still posses today?

PM Olmert: I don’t remember any particular hint that I gave last week about Gilad Shalit. Now, certainly, Abu Mazen said all the time that the first requirement, the pre-condition for the creation of a national unity government, will be the release of Gilad Shalit. So if indeed such a government is about to be formed and if Abu Mazen is a part of this effort, then I hope that the first condition that he set for such a government would be fulfilled, which is the release of Gilad Shalit. But I never said that the release of Gilad Shalit can come in exchange or instead of the acceptance of the Quartet principles. There is no way that we can make a trade-off here between the principles of the Quartet and the release of Gilad Shalit. Gilad Shalit has to be released, unconditionally, immediately. As, by the way, the two abducted soldiers in Lebanon ought to be released immediately, because this was the first demand of the 1701 Resolution of the United Nations Security Council. Now, the release of Gilad Shalit does not mean that we then are going to ignore all the other basic principles, which are the necessary foundation for any future negotiations between us and the Palestinians.

Q: The other day in parliament before a committee, army intelligence officer, Mr. Baidatz, testified that he thought Hizbullah was stronger today than it was before the war, and your Defense Minister, Mr. Peretz, said: no, no, no, that’s not really true. Their potential is to be stronger, and that was an unusual debate. I’m curious to ask you, as the head of the government, whether Hizbullah is stronger now than it was before the war, and if that is true, is that a failure of Israel’s campaign this summer?

PM Olmert: Since the answer is no, I don’t think I have to go into the second part. I think that Hizbullah is weaker, much weaker, than they were. It is true that they are trying to smuggle arms into Lebanon. It is true that they are making efforts in order to rearm themselves to the level that they had before the war, but it is also true that the south of Lebanon now is filled with 30,000 or 25,000 soldiers of the army of Lebanon and of the international force, which make the life of Hizbullah almost intolerable in that part of the country, and the fact is that since August 14th, there was not one case that a Hizbullah soldier surfaced in uniform and with guns in the south of Lebanon, and when it happened, by the way, then they were killed by the Israeli army when they were present there. And when they try to surface now, they are disarmed and arrested by the international force and the Lebanese force.

So I think the fact that all along the Israeli border there are not any more bunkers of the Hizbullah, that they don’t have the same freedom of movement that they had, that there is an international force in the south of Lebanon together with the Lebanese force, has changed dramatically the basic situation in the south of Lebanon and has definitely weakened the options of Hizbullah in comparison to what it was. Now, I can only say to you that the newly appointed Chief of Staff, General Ashkenazi, today said the same thing, that according to his assessment, the assessment that was made by one of the officers of the intelligence, or what was attributed to him because I never heard him so I have to be very careful, what was attributed to him, I think was incorrect.

The Hizbullah is still a major obstacle to an important change in Lebanon. They are the allies and partners of Iran and of Syria. They are making every possible effort in order to destabilize Lebanon and to continue to service the Iranians’ ambitions in this part of the world. And therefore, we have to have a very close look at what they are doing and to make sure that they will not be able to rebuild the same kind of fortresses which were in the south of Lebanon under their command prior to the 12th of July. I don’t think that the situation today is what it was. I think it is much better. I’m not certain that they have any appetite to fight with Israel again and I think that there is still a lot to do so that the threat of Hizbullah will be removed entirely. It has not been removed entirely, but it has changed in a very significant way, and I think that therefore the result of the war in Lebanon, or the fighting in Lebanon, in this respect, was very important, but we still have a way to go.

Q: A question about Syria again. You’ve argued, and you argued again today, that the problem with talking with Syria now despite their rhetoric is that they actively support terrorist groups, Hizbullah radical groups in Damascus. The question is: isn’t that the point of the negotiations? In other words, wouldn’t it be wise to check their intentions and through that, to get them to stop their activities? Isn’t that the logical way to proceed in order to get them to stop the activities you say are blocking negotiations? Aren’t negotiations the key to stopping this activity?

PM Olmert: This is a very dangerous distinction that you have drawn, which must be clarified. The purpose of negotiations is to make peace, if they take place, not to find out that the other side that you are negotiating with is not interested in the main thing which is the driving force for you, which is peace. So as I said, we are interested in peace, not in the "industry of peace". We are interested in peace, not in the process of peace. We are interested in peace with Syria, not in helping Syria pretend that it is now a peace-loving country and therefore it has to be released of all the efforts made by the international community to establish an international tribunal to inquire the assassination of the former Prime Minister of Lebanon and of the violent Syrian involvement with Hizbullah in Lebanon.

In other words, if the Syrians are really interested in genuine peace with the State of Israel, they can’t at the same time be actively involved in making the opposite against the State of Israel, and in order to find out what they are doing on a daily basis, I don’t have to negotiate with them. I can see and you can see and everyone can see, they are assisting terror in Iraq, they are assisting the Hamas in their terrorist attempts against the State of Israel, they are assisting the Islamic Jihad. The attempt yesterday, which, almost by an extraordinary chain of circumstances, was prevented, was coordinated by the Islamic Jihad whose headquarters is in Damascus. So what the Syrians are doing we know. If they want to make peace, at some point they have to stop it. Then we will still have a long way to go in order to accept the terms of peace. But how can you try to make, sit and negotiate with someone who at the same time is preparing your assassination?

Thank you very much.