Following is an edited transcript:

SNOW: Israeli Prime Minister Benjamin Netanyahu and Palestinian leader Yasir Arafat last week signed an agreement to hand 80 percent of the city of Hebron to Palestinian authorities. With us in his first American interview since signing the pact is Prime Minister Netanyahu, who joins us from his office in Jerusalem. Good morning, Mr. Prime minister.

Prime Minister BENJAMIN NETANYAHU: Good morning to you.

SNOW: Also joining me are Brit Hume, bureau chief of Fox News in Washington, Josette Shiner of the Washington Times, Howard Fineman, Washington bureau chief of Newsweek.

Mr. Prime Minister, I’d like to start the questioning. Israeli newspapers this morning are carrying the stories reports of a September 18th letter signed by Secretary of State Warren Christopher saying that, essentially, you can tear up the previous talks with Syria that had to do with turning over the Golan Heights, security arrangements and so on. Can you tell us about that letter?

Prime Min. NETANYAHU: Well, I’m not going to comment on press reports about confidential diplomatic exchanges, real or unreal, so I’ll pass to the next question.

SNOW: OK. Well, the next question I will follow up, then, is, Secretary of State Christopher has said on the record for everyone that the next step is to deal with Syria. Have you already tried to contact Hafez Assad and try to arrange even the sort of diplomatic negotiations we had here in Washington under the previous Israeli government?

Prime Min. NETANYAHU: Well, that was a public offer that I made several months ago. It wasn’t accepted by Syria then. We’ve since had, obviously, communications with Syria through the good offices of the United States, and I hope that we will be able to resume our peace talks. I think peace is important for Syria, as it’s important for us. And it’s important for our children and their children. I think that if this is the guiding principle, we should be able to resume the talks.

SNOW: Are you willing, at any point, to surrender the Golan Heights?

Prime Min. NETANYAHU: The Golan Heights is a very important piece of real estate for us. It gives us the protection against any future attack. And you know that in our area, peace is not just a piece of paper that you sign and you forget about it the next day; peace is kept by the ability to enforce the peace, and the Golan Heights is a very important part of that. So obviously, we’ll present our views in the negotiations and the Syrians will present their views. Our view is that the Golan Heights is very important for Israel’s defense.

Mr. BRIT HUME (Fox News): Mr. Prime Minister, it’s Brit Hume. We note that Chairman Arafat has once again promised to strike that language about the destruction of Israel from the Palestinian covenant. How many times, sir, is he going to be able to use that as a bargaining chip in his dealings with you?

Prime Min. NETANYAHU: Well, he’s only dealing with me now for the past few months. And we have signed, in the aftermath of the Hebron redeployment agreement, an agreement, a post-Hebron agreement of what comes next. I think the main difference between my government and the previous government there are two main differences. One is on the goal, what we want to see at the end of the negotiations. We want to see a unified Jerusalem. We want to see Israel with proper defenses. And we offer self-government to the Palestinians, but not with those sovereign powers that could threaten the state of Israel. That’s a difference in goals. The second thing is in the method of negotiations. We insist on a simple word called ‘reciprocity,’ but I think it says all. When you make an agreement, then it’s not only Israel that has to keep its side of the agreement, like the Hebron redeployment, as we’ve done, but the Palestinian side has to keep their side of the agreement, like annulling the PLO charter that calls for Israel’s destruction.

Mr. HUME: Well, he’s agreed to do that.

NETANYAHU: We drew up a list of outstanding commitments.

Mr. HUME: But he’s agreed to do that before, hasn’t he, sir, and not done it.

Prime Min. NETANYAHU: Yes. I’ve put forward all the outstanding commitments that the PLO has promised and Arafat has promised since the start of the Oslo accords. I’ve put them on a piece of paper; that’s column A. They’ve put forward our commitments; that’s column B. And also a column C, those issues that are left for negotiations. And I think that now we have a blueprint on how to proceed. And you’re quite right, if we are going to proceed, then we’ve got to end the situation of one-way giving by Israel and one-way receiving by the Palestinians. We fulfill our commitments, they fulfill theirs.

Mr. HUME: Are you confident, sir, that Mr. Arafat has the power and the authority in his territory there to deliver on the promises of non-violence and the promotion of peace? Do you think he has the authority to do that?

Prime Min. NETANYAHU: I think he has the power and I think he has the authority to do it. The big question is: Will he have the will? At least I hope, in the aftermath of our talks, that he will exercise the power and authority that he has with goodwill. And with goodwill and, I would say, with resolve, then he definitely can fulfill his commitments.

Mr. HOWARD FINEMAN (Newsweek): Mr. Prime Minister, I think you shared a victory cigar of some kind with Yasir Arafat a Cuban- made cigar. Is there anything about him that’s surprised you? Have you learned anything about him personally that makes you think he’s going to keep commitments now that he didn’t before?

Prime Min. NETANYAHU: Well, I didn’t share a victory cigar. I do smoke cigars of indeterminate nationality on occasion. This is an an American show and I don’t want to embarrass anyone. But I have found, in the course of our talks, that the one thing that has come forth and has become very clear, I think, to Arafat is that this is a different government. It’s negotiating towards a different end I think a fair end that puts a balanced, fair solution that puts a balance between the Palestinians’ need for governing themselves self-government and our needs to protect ourselves and our primary interests, especially security. But he also, I think, understands that we’re not going to look askance, we’re not going to shut our eyes to the various violations of PLO commitments. And I think the important change one of the important changes is that this has now been codified, it’s been formalized in the post-Hebron agreement by a reciprocity deal. And I think he understands that that is the way we’re going to proceed, or not proceed at all if it’s not kept.

SNOW: Mr. Prime Minister, you just were talking about this is a different government. When you came to power, you said you would never surrender Hebron. Now it’s 80 percent under Palestinian rule. What is to prevent Arafat from saying by the way, today he said, once again, reiterated not only his vow that there would be a Palestinian state in two years but also that Jerusalem there would be some official Palestinian presence there. What is to prevent his seeking 80 percent, at least, of East Jerusalem?

Prime Min. NETANYAHU: Well, I think that he can seek all he wants, but we’re not going to redivide Jerusalem; we’re not going to erect a Berlin wall in the center of that city again. And secondly, I have to correct you. I said from the start that I would carry out the outstanding commitments of the previous governments the redeployment in Hebron. It’s very important to stress "in" and not "out of" Hebron, because we’re staying in that eternal city and the tomb of our patriarchs, Abraham, Isaac and Jacob. But I said that I would fulfill those commitments, and I have. And I’ve also said that I would follow the remainder of the Oslo path to a negotiated solution of a final settlement, providing we have reciprocity. And I’ve done that as well. I’ve established those guidelines. Now, Arafat undoubtedly may want a different outcome, but so do I. So you’re going to have a final settlement negotiated and certainly not imposed by one side on the other. And I expect it to be a far different outcome than the one that many of the Palestinians are talking about today. It will be an outcome that’s good for us and good for them.

Ms. JOSETTE SHINER (The Washington Times): Mr. Prime Minister, Jean Kirkpatrick charged this weekend that the Palestinians have been an obsessive concern of the Clinton administration. They’ve neglected other issues of security in the Middle East, like Libya, Iran, Iraq and the Sudan. Do you feel that the Clinton administration has not paid attention to these other threats to peace in the Middle East?

Prime Min. NETANYAHU: First of all, I think the Clinton administration was exemplary in the assistance it gave us in the negotiations. Sometimes in the course of Arab-Israeli peace negotiations, from Camp David till the present, we’ve had difficult points that could be points of impasse that were helped along the way by the United States and I value that assistance. As far as other threats, I’m sure the United States is cognizant of the threat posed not only to the peace of the Middle East, but to the peace of the world by the fact that you have radical regimes arming themselves with ballistic missiles, possibly with nuclear warheads one day, but certainly with chemical and biological warheads today. And that is something that I think has to be addressed and I’m sure is being considered in Washington.

SNOW: So what you’re talking about is extending anti-ballistic missile technology to Israel on a follow-on to the Arrow program?

Prime Min. NETANYAHU: Well, the Arrow is one of the important developments in the coming age that we face. We face the proliferation not only of missile technology, but of nonconventional weapons technology. And that is perhaps the greatest threat that we face in the world today. It is not true that we have ended history and that we have come to the end of days in the Biblical sense and everything is going to be wonderful. We have, in fact, a very unstable world, a very dangerous world in the wake of the collapse of the Soviet Union. And we have now these irresponsible regimes, some of them highly irresponsible regimes, developing both missiles and non-conventional warheads.

And the question is what do we do about it? Once they have these weapons they can decide to use them against Europe, against us, against American allies and interests, against the oil lanes and so on. What I think the Arrow does is give hope that there is protection against these missiles. It’s an anti-missile missile that has proved very successful in the trial runs. It’s an American-Israeli joint effort. I think it will be like its predecessor, SDI. The mere knowledge that that is coming has a deterrent effect. Its achievement would have a great protection and a great advantage for those who want peace in the world.

SNOW: Prime Minister Benjamin Netanyahu, thank you for sharing your time with us this morning.