TED KOPPEL: It’s not that there isn’t a lot going on in the Middle East these days or that there aren’t going to be some difficult times ahead, but there is sort of a lull. Sad to say, but when all the talk is of goodwill, momentum toward peace, stability in the region, as it was today, reporters begin stifling yawns.

And when President Clinton says, as he did today following his meeting with the prime minister of Israel, that he feels encouraged by the discussions they’ve had, that there are things worth working on but that he has nothing specific to say at this time, I begin to realize that my conversation with Prime Minister Netanyahu tonight may need to move into the kind of territory that my friend Larry King normally covers.

If you have something of enormous interest that you would like to tell us, I certainly don’t want to prevent you from making news tonight. Anything new at all that you can talk about? I know there are things going on. But there really wasn’t much that came out today from you, from the president, from the secretary of state, from the secretary of defense. You talked to all of them. But it’s been a very, very quiet day. What does that mean?

PRIME MINISTER NETANYAHU: We had very good discussions. We spoke for a long time, laying out various possibilities for resolving our conflict with the Palestinians and a final settlement of peace. We spoke about the problems of Syria. I have a peculiar notion that you cannot separate peace from security, that peace without security is an oxymoron. So I talked a lot about our security concerns.

The president listened. I think he listens very well, and he also got into the depth of things. And we try to go from there and see how we can take the process forward on both fronts, the Syrian and the Palestinian, to achieve peace with security.

MR. KOPPEL: I think you will agree, as someone who has a keen appreciation of what makes news and what doesn’t, that you just didn’t. I know there’s something you want to talk about, and let’s get that out of the way, because it is not uninteresting. You’re very proud of the fact that Israel economically is busting at the seams.

PRIME MINISTER NETANYAHU: It’s changing so rapidly that people, most people haven’t figured it out yet. But the smart money has. There is a gush of investments in Israel. In the last two years, especially in the last year, we have more money coming in than the previous year; in the last two years, more than in the last 30 years.


PRIME MINISTER NETANYAHU: We have a thousand new startup companies in high technology in Israel, more than any other country in the world except this one.

MR. KOPPEL: Because?

PRIME MINISTER NETANYAHU: Because we’re moving to knowledge- based industries and we have a lot of people with knowledge. It’s one of the great benefits of communism. They gave us a lot of the only benefit of communism. They gave us a lot of very able scientists who emigrated to Israel.

MR. KOPPEL: You’re talking about all the Russian Jews who came over.

PRIME MINISTER NETANYAHU: Tremendous investment of human capital, working now in capitalism. We have a very large army to sustain the life of Israel. It’s a technological army. It releases thousands of people into the marketplace, unlike any other country. They have experience with the information highway if they worked in intelligence, in robotics if they worked in the air force. Then they start doing businesses, civilian businesses.

Now, what I’m trying to do in Israel is to marry this technological storehouse with free-market principles. And the combination is combustible in a powerful and positive way. So foreign money, seeing that, is coming into the country. And I will make a flat prediction that Israel will be I think it already is the Silicon Valley not of the Middle East that’s not saying much but of the eastern hemisphere.

MR. KOPPEL: The big disadvantage that money has always seen or investors have always seen of Israel is, of course, the security disadvantage. There’s always been a fear that, yes, there are a lot of smart people over there and we may be able to make money, but what happens if there’s war? So you’re saying, in a sense, that your fear of war is less than it has ever been?

PRIME MINISTER NETANYAHU: No, that’s not what I’m saying. I think the risk is still there. It’s not pie in the sky, and the Middle East is a very difficult neighborhood. You’ve got some people like Saddam Hussein and like the ayatollah regime in Iran and they’re feverishly arming themselves, and other regimes as well.

But I think, A, we’re moving towards peace where we can, and we are. And we’ve shown our bona fides on that. And secondly, high-tech happens to be fairly resistant to political uncertainty. You don’t build large plants. You don’t have, you know, tens of thousands of workers out there in machinery. You have a lot of people’s heads and very small product lines.


MR. KOPPEL: If there is an antithesis to the prime minister of Israel in terms of just the solidity of the job, it has to be Hafez el-Assad, the president of Syria, right? He’s been in there now, what, 28 years, 29 years? A long time. My question is whether someone like that as a negotiating partner ever needs to make concessions. Can’t he just wait until you’re in trouble?

PRIME MINISTER NETANYAHU: He can afford to sit back. I can’t force him to come to the table. I can’t force Hafez Assad to make peace. He’s the odd man out. The Palestinians have joined the peace. With the Jordanians, we’ve completed the peace. With the Egyptians, we made the first peace. We now have contacts with at least other 10 Arab countries with whom we’re moving to semi-formal relations, informal relations, moving towards peace.

Assad, a close neighbor of Israel with the largest army in the Middle East, is sitting back, effectively allow a proxy war to be conducted against us by Hizbullah terrorists under his control in Lebanon. And he has to ask himself, what does he want? If he wants peace, he will not get it through the battlefield. He will not get it through the fields of terror. He will have to negotiate. If peace is not important for him, then you’re quite right. There is nothing I can do to entice someone to make peace if he doesn’t want peace. It’s Assad’s decision, not mine.

MR. KOPPEL: Prime Minister, you slipped in a moment ago this notion of 10 Arab countries with which you have various kinds of dealings. Has the day come when you can actually name them, or would you embarrass them if you did?

PRIME MINISTER NETANYAHU: No, some of them have representatives. And I’ll tell you, in fact, I just had dinner in our embassy and the representatives of Tunisia and Morocco and, of course, Jordan is obvious and Egypt is obvious. And there are others as well.

MR. KOPPEL: What about some of the Gulf states?

PRIME MINISTER NETANYAHU: We have contact with them.

MR. KOPPEL: Does that contact now include the possibility of diplomatic recognition by them of you? Do you have any reason to think that the Saudis, for example, are on the brink of recognizing Israel?

PRIME MINISTER NETANYAHU: I don’t think it’s imminent. I think there’s a paradox here that Fouad Ajami wrote about in a piece that I read this morning. I read this haunting piece by, I think, a very compelling writer who himself is a Lebanese. And he said the Arab leadership has failed to move the Arab street that runs from Morocco to the Gulf towards peace. They’ve failed to make that movement to say, "All right, Israel has moved. Israel has made concessions. Israel has shown its willingness (to appease?). Where are you? Why aren’t you all making peaceful relations with Israel? Why aren’t you making peace with Israel?"

And he, I think, raises something very important. Unless you have a top-down process where the leadership in every one of these countries from the Gulf to Morocco educate their people that it’s over, that the battle to eradicate Israel is finished, that it’s here to stay, and that peace is desirable and has to happen, you cannot complete this revolution towards peace.