KATIE COURIC: President Clinton and Secretary of State Madeleine Albright met with Israeli Prime Minister Benjamin Netanyahu yesterday, looking for ways to keep the Middle East peace process moving. This morning the Israeli leader is still in Washington.

Mr. Prime Minister, good morning and thanks so much for joining us.

PRIME MINISTER NETANYAHU: Good morning. It’s very good to be with you.

MS. COURIC: Your first meeting in Washington was with Secretary of State Madeleine Albright. And as you know, it’s recently emerged that her grandparents were Jewish and that three of them were killed in the Holocaust. Can you confirm that Israel knew about her Jewish ancestry since 1994 but for some reason Prime Minister Rabin decided not to disclose that information to her?

PRIME MINISTER NETANYAHU: Well, I can’t confirm that. And if Prime Minister Rabin, the late prime minister, knew about it, he certainly didn’t confide it to me, not that it makes any difference. We don’t hold anything against anyone for being Jewish, as you know.

MS. COURIC: Yes, I know that quite well. But do you feel that this revelation might hurt U.S.-Israeli relations? Because I know there was some concern that if it became public, she might be pressured to prove her even-handedness at Israel’s expense.

PRIME MINISTER NETANYAHU: No. The answer is gosh, no. I think it’s an outlandish proposal. I think that Secretary Albright is a patriotic America citizen. She doesn’t have to even prove it. It doesn’t have to be discussed. And she doesn’t have to prove her bona fides. Her life and her work has done that, have done that amply. I think she’ll be a very good friend of Israel and a very good friend of peace, and I personally look forward to continue working with her.

MS. COURIC: At the press conference yesterday, both you and President Clinton talked about making peace with Syria. Are you willing to meet with Syrian President Assad? And if so, when?

PRIME MINISTER NETANYAHU: Yesterday. We’re willing to meet. He’s not willing to meet. And I can’t force him to meet. Whether or not he’ll rescind the various obstacles that he’s putting in the way of resuming the negotiations is up to him. No one can force someone else to make peace if they don’t want to. And I hope he’ll prove that he does want to.

MS. COURIC: Mr. Prime Minister, your spokesman said you had brought a "creative formula" for restarting the Syrian-Israeli talks that were suspended nearly a year ago. Can you elaborate on this so-called creative formula?

PRIME MINISTER NETANYAHU: Well, I like the adjective. It’s self-appointed; it’s self-designated, obviously. But I think that we’re trying to find a way to resume the negotiations between Syria and Israel. We have we think that Syria ought to have a vested interest in peace, as we do. It is the largest the country with the largest army in the Middle East poised against our borders. We have continual friction and bloodshed in Lebanon, where Syria controls. And it controls the Hizbullah terrorists that are attacking us.

Lebanon can always get out of hand, and that would be to the detriment of both Israel and Syria, something that I certainly don’t want. And the question is, what does President Assad want? I cannot speak for him. It ought to be that he should be interested in the peace of Syria’s children and the future of in the future generations’ destiny, as I am for Israel’s children and our future. But I cannot speak for him. You’ll have to interview him and ask him, "Why don’t you just come to the peace table?"

MS. COURIC: Well, let me ask you, what do you want? What is it you would need to get Syria to give back most or all of the Golan Heights?

PRIME MINISTER NETANYAHU: Well, I think that Syria will put up its demands for the Golan Heights and we’ll put up our demands. But I’d rather not engage in the polemics of preconditions. I could, for example, come and say, "Look, we will not engage in negotiations with Syria unless Syria stops all Hizbullah terrorism in Lebanon," which I think should be one of the consequences of the negotiations. But I didn’t put it as a precondition.

In point of practice, I don’t think we could get very far if terrorism continues after we start the negotiations. But I’m not in the business of putting up preconditions. I think we should remove preconditions and get on with the job of negotiating peace between Israel and Syria.

MS. COURIC: Do you think that Israel will return the Golan Heights in your lifetime?

PRIME MINISTER NETANYAHU: Well, I intend to live a long time and I don’t think that, if it’s up to me, that is not what I’d like to see at the end of the negotiations. And I think I’ve made that clear many times.

MS. COURIC: Let’s talk about southern Lebanon a little bit more. Israel, as you know, has been occupying a strip of land in southern Lebanon for over 10 years. But it continues to pay a high price. As you well know, just the other day more than 70 Israelis died in a helicopter crash carrying troops to Lebanon. Is it worth it? I mean, don’t the costs outweigh the benefits at this point? And aren’t more Israelis feeling that way?

PRIME MINISTER NETANYAHU: I think the great majority of Israelis feel, as I do and as most of the ministers in my government do, that a unilateral withdrawal from Lebanon would simply bring the Hizbullah terrorists right up to the Israeli-Lebanese fence, right up to the border, from which they’ll simply attack deeper into Israel. And that is where we were actually not 10 years ago but closer to 20 years ago.

So we’ve been stuck in Lebanon since; that is true. We’ve not been able to resolve the basic problem of Lebanon. And the basic problem of Lebanon, there is no responsible government there to police the terrorists. The one government that can do so is a foreign government, Syria, which has 35,000 troops in Lebanon. But it is not using its influence and its power to curb the terrorists. It is, in fact, using them to launch the terrorists against us.

So I think that a political solution, a negotiated solution, would obviously have to be explored with Syria and with Lebanon, but essentially would require the dismantling of Hizbullah and the fanning out of Lebanese troops up to the border to prevent the approach of terrorists to Israel’s border. If we could have that, yes, I would withdraw from Lebanon instantly.

MS. COURIC: Very quickly, are you surprised that you have such a working relationship with Yasser Arafat, since nine months ago you said you’d never shake his hand?

PRIME MINISTER NETANYAHU: I said before the elections that I would meet with the chairman of the Palestinian Authority. I said that we would honor previous agreements. We did. We’ve shown that. We’ve done Hebron. We’ve fulfilled our other commitments. The working relationship that I have with Arafat now has to be translated into fulfillment of commitments by the Palestinian side, because the ledger has to be filled on the Israeli side and on the Palestinian side with mutual undertakings that are mutually fulfilled. That is the way I see peace working with Arafat. And I will be very happy if we progress to peace on an even keel, on a two-way street.

MS. COURIC: All right, Israeli Prime Minister Benjamin Netanyahu. Mr. Prime Minister, thank you so much for talking with us.

PRIME MINISTER NETANYAHU: Thank you. Good morning.