The process has begun. The next meeting will be between the heads of the negotiating teams, following the meeting between Prime Minister Olmert and Abu Mazen. We are not interested in playing for time.

Every government and every country, in advancing a process, must know its ultimate goal. The ultimate goal of Israeli society also affects the result that we want to achieve in the political process with our neighbors. This ultimate goal in my eyes, which represents Israel’s self-conception – and this is not a political statement – is the desire to preserve the State of Israel as a Jewish and democratic state. To achieve this goal, to combine these values without them being in conflict is not an easy task. It is our responsibility to prevent such a conflict and to reconcile these two elements, and of course, to achieve a state living in security in the Land of Israel.

This goal can be translated into the daily work of each of the Israeli government ministries. But if we want to translate this into the negotiations with the Palestinians, we have to know that every decision we make must serve this objective, this shared, ultimate goal.

The historical conception of the Israeli-Palestinian, or the Jewish-Arab conflict, is today taking on a different aspect. Some of the disputes become less national and more religious. The bad news is that, while the national conflict is one that can be solved – it can ultimately become a dispute over borders which can be solved by the creation of two nation states – the religious conflict has no solution. The religious extremism currently existing in the region – whether in a state like Iran, in organizations like Hizbullah, which is the long arm of Iran, in an organization like Hamas in the Palestinian Authority – represents an ideology that is not interested in compromise, but wants to impose its will, its religious ideology, on all those around it.

Thus, it is in our interest to try and find a solution with the more pragmatic nationalist-oriented entities in the Palestinian Authority. There is today an understanding, on our part and the part of others in the region, that they face the extremist religious threat as much as we do. Iran poses a threat to the countries around it no less than to the State of Israel. It is also clear that the solution to the Israeli-Palestinian conflict will not diminish the extremist religious ideology of Iran, and that it will continue to work with radical groups in this region, to undermine the region’s stability and become the dominant factor in the region. This is clear not only to Israel, but also to the pragmatists in the Palestinian Authority.

Nobody wants to create a new terrorist state in the region. Hence the road to the establishment of a Palestinian state must involve a war on terror. In this context, the Palestinians undertook a list of obligations in the Roadmap, which was endorsed by the world. Only afterwards, according to the Roadmap, was the dialogue on permanent arrangements to begin.

Israel, too, made commitments in the Roadmap. The Roadmap is not a bilateral document between us and the Palestinians. The reference to the need to evacuate outposts, freeze settlements, etc. were intended as confidence-building measures and/or steps that would not create facts on the ground affecting the negotiations of the final arrangement. The idea in freezing settlements was to avoid a situation whereby, while the Palestinians are hopefully fighting terror – at least, this is how the international community sees it – Israel is establishing facts on the ground that will make it impossible to create a peace process at the end of the road.

But what happened? After the elections in the Palestinian Authority and the rise to power of Hamas, and its takeover of Gaza, a gap developed between the moderate forces and the extremists in the Palestinian Authority, which was reflected in geographic terms. Gaza is now completely controlled by Hamas, where Fatah has almost no presence.

In this very complex situation, we want to try and reach an agreement with the pragmatists in the Palestinian Authority.

The situation being as it is requires that while we engage in dialogue on all the core issues and the arrangements required to reach a peace agreement with the Palestinians, we continue to face terror. The reality  that we live in is such that we have to cope with terrrorism, not only theoretically, and this situation must change. At the end of the road, the reality will be examined.

The first understanding reached at Annapolis, which is the most important for Israel, states that we are entering the negotiating room with the Palestinians, with the understanding that implementation of any arrangement we may reach is subject to the implementation the Roadmap.

We are therefore moving in parallel, carrying on a political dialogue while implementing in the field – in the areas of both security and economy. These two elements are intertwined. One affects the other.

The negotiating room is not a sealed room, and some of the first discussions there revolved around decisions taken in the various government ministries. They revolved around decisions that the Palestinians viewed as a violation of the Roadmap, such as the publication of a tender, or things of that kind. Other talks dealt with our demands following security incidents or terrorist incidents, where we demanded and insisted that the Palestinians meet their obligations.

Part of the insight that we have to develop when we sit with them is the ability to separate. Our objective is not to allow the peace process to stagnate because today may have been a bad day in the field, for us or for them, but rather to advance the process, while continuing to make the same demands. There is a lack of trust on both sides. I am not speaking about the leaders, I am speaking about the public. There is much cynicism in Israel about the process and much lack of trust on the Palestinian side toward the process.

My next meeting will be with Abu Ala. I know that after each such meeting people want to see recommendations and statements, and if it doesn’t happen, then there is a feeling that maybe it is not taking place, maybe it is not serious, maybe it is imaginary – but in practice this is not the case. Ladies and gentlemen, this is happening. And I prefer that it happen quietly, because past experience has taught us that that when negotiations take place if front of the cameras, when everyone is expecting declarations, when things are said, whether accurate or not, when one side reacts angrily, and then the other side, leading to a flare-up, when expectations are raised and not fulfilled – the result is terrorism. In conducting this process, I prefer that it be quiet, without headlines, even if the cost at first is people saying, "Wait, maybe it isn’t happening." In choosing between results and headlines, I choose results.

But in order to really create trust – and I believe in the need to create trust in the process – it is important, for the Palestinians as well, to create a new economic reality. This brings us to the economic aspect. I know that meetings have begun between the director-general of the Finance Ministry and Salam Fayyad regarding the economic committee. So we are working first of all on two parallel tracks – security and economy – with each affecting the other.

We are also working in a concentric circles: the inner circle of the dialogue between us and the Palestinians, the circle of the Arab world, and the international circle, which also calls for economic support and the building of institutions in the Palestinian Authority. In this way, we will be able to create an option in which, at the end of the internal process we will have a partner, that is, a government that accepts the conditions set by the Quartet: one that recognizes Israel, a government that is effective, that knows how to combat terrorism and exert control throughout its territory. This is the task that must be accomplished parallel to the political dialogue.

In conclusion, I would like to comment on how I view the working processes in the negotiations, between myself, as head of the negotiating team, and the various government ministries. As was stated in the meeting between Prime Minister Olmert and Abu Mazen, the process will advance on three levels. One is, of course, the level of Prime Minister Olment and Abu Mazen level. The second is Abu Ala and myself, as heads of the negotiating teams, and the third relates to specific issues. On the specific issues, I do not profess to be an expert, and I don’t think that there is anyone on the negotiating team who thinks he can conduct a dialogue on the issue of water, which is also a core issue. When we speak of the core issues we are usually referring to borders, settlements, Jerusalem, and refugees. But from the Palestinians’ perspective, water, too, is a core issue. We live in a region in which water is a casus belli. So, in this context, on the economic issues, on the question of borders, and on every issue, the input of every government ministry will be important.

The process has begun. The next meeting will be between the heads of the negotiating teams, following the meeting between Prime Minister Olmert and Abu Mazen. We are not interested in playing for time. We must move forward step by step with the Palestinians, bearing in mind the historical context, but moving towards our goals. This is the basis of every negotiation, and certainly of the peace process.