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interview benjamin netanyahu

In March '96 there are terrible terrorist attacks in Israel. Many Israelis are killed. What do you say? ... What is your position at the time?

... The terrorist attacks under Mr. Peres' prime ministership were another confirmation that something was deeply flawed with the Oslo accords. After all, Israel made these enormous concessions, placed Arafat there, gave him 40,000 guns to fight terrorism, gave him territory, gave him money, gave him a small army, gave him unprecedented international recognition, access to the White House, all for one thing: the promise that Arafat would fight terrorism from within his domain. And he appeared to renege on this.

So I thought this was another illustration of something terribly wrong with the Oslo accords. But I also knew that it was duly signed by the Knesset and at least for a while would bind any future government, including my own, if I were to be elected. ... I looked at [Oslo] before the elections and I said I would honor it under two conditions: one, that Arafat honor it; ... the second was that I would reduce the dangers in Oslo within the agreement -- ... reduce the withdrawals, reduce the price that Israel would have to pay.

You are elected; you have two priorities. What do you do with, first, the Syrians? ... Dore Gold [an Israeli negotiator] told us ... that you wanted to know what [Rabin had promised the Syrians].

Yes, I did. I wanted to find out what had been promised effectively, but I also wanted to make clear that since there was no written agreement [with the Syrians] -- contrary to the Oslo accords where there was a written agreement -- that this was not binding.

So one of the first things I did was to request and receive from the United States a formal statement that says that whatever had been said hypothetically by my predecessors -- namely Rabin -- was not binding internationally on Israel in the American view. And I received this commitment; therefore, I was now freed of any commitment that Israel may have made, at least in American eyes, and I was certainly free in my eyes. But I wanted to have no American pressure to make undue concessions to the Syrians, so I was very pleased that I received that.

Dore Gold told us that you had the impression you saved the Golan.

Well, without a doubt we changed the terms because this document now gave us much more international leeway to negotiate, if negotiations were possible, from an advantageous point. ... We were now free. We could do whatever we wanted. ...

You send [Israeli negotiators] Dore Gold and Danny Naveh, Yitzhak Molcho, your lawyer, to the house of [U.N. Middle East coordinator Terje] Larsen in Tel Aviv. And had talks with ... [Mohammed Dahlan, head of the Palestinian Preventive Security Service in Gaza], Saeb Erekat [a Palestinian negotiator]. Why were all these talks necessary before you met Arafat for the first time?

I thought it was important to lay down the ground rules so that Arafat would know exactly where I was coming from. And I think by the time we met, he knew. But by the time we met, there was also a very clear policy that I'd put forward that if the violence would continue and erupt, we would punish the regime and if necessary bring it down. So Arafat knew that there was a cost to terrorism. Quite apart from the give and take of politics, of political negotiations over territory and the like, there was an underlying understanding that if the Palestinians resorted to terrorism, ... we would bring down the regime.

In 1996, following an outbreak of Palestinian suicide bombings, the Likud Party's Benjamin Netanyahu defeated by a very slim margin the incumbent and longtime Labor Party leader, Shimon Peres. A vowed opponent of the Oslo peace process, Netanyahu promised to crack down on terrorism. His tenure as prime minister was a volatile one. He negotiated an agreement with Arafat at the Wye summit, agreeing to pull the Israel Defense Force (IDF) out of more of the West Bank, inflamed Palestinians by continuing to build Jewish settlements, and sparked a violent Palestinian protest after he opened a tunnel along the Western Wall of the Temple Mount. In 1999, Netanyahu was defeated in a landslide by Labor Party leader Ehud Barak, who favored restarting the peace process.

Since the outbreak of the Al Aqsa intifada in September 2000, Netanyahu has continually called for Yasser Arafat's removal from power and enjoys growing popular support from Israelis unhappy with Prime Minister Ariel Sharon's handling of the conflict.

In this interview, Netanyahu discusses his first meeting with Yasser Arafat, why he opened the tunnel along the Western Wall of the Temple Mount, the tense negotiations at Wye River, and why he thinks Oslo's logic is fundamentally flawed.

The Palestinians, many of them, told us on camera, "Before the elections, everybody told us, 'Be careful, Netanyahu will be elected. He's a big danger.'" After the election, the same people came back to them and told them, "You can talk to Netanyahu, he's pragmatic. You can make a deal with him." Did you hear about these talks?

No. Of course I was willing to make a very limited deal within the confines of Oslo -- which we eventually did in the Wye agreement -- but this was a very different deal from the one that had been made by Peres and Rabin. They had essentially promised Arafat that he would get all the territories except the settlements and something vague called specified military locations before we'd even get to the final status negotiations. Which means Arafat would get, as they told him privately, under the table, about 95 percent of the territories before there was even a final status peace settlement.

I thought this was absurd and very dangerous for Israel. I changed those terms. Arafat knew that I was changing those terms. But I think at that point he was happy to receive anything because he thought that he would get nothing. I said, "You [will] get something. Not a lot, but you will get something if you give something. What you have to give is to honor your commitments on security, on weapons collection, and other things." And for a while he did it because he had no other choice.

The first deal was made [at] that meeting at Erez on the 4th of September '96. You don't like Arafat. How did you feel shaking his hand?

It's not a question of likes or personal dislikes. It was a question of personal position that I had at the time. Two-thirds of the public supported Oslo at the time. The international community supported it; they really thought that Arafat meant peace. I didn't think that he meant peace, but I was absolutely insistent on putting forward the conditions I thought were necessary for the achievement of tranquility and security and maybe a partial peace settlement between us. And this was what I went in with. My personal feelings I'll leave to my biography.

... The famous opening of the so-called tunnel, the Western Wall tunnel. Why did you decide it?

Well, I was actually approached by Palestinian merchants in the Via Dolorosa who wanted me to open the tunnel wall. ... About half a million tourists a year were going through this tunnel, coming to the end, ... [and] touching the Via Dolorosa. But instead of getting out there, they had to go back, make a U-turn and go back 500 meters or maybe almost a kilometer from where they came. The merchants said, "Why don't you open the door and we could get the benefit of all this commerce, all this traffic?" I asked our security forces. They said, "You can open the door." I opened it. For 24 hours, nothing happened. ...

[Your defense minister, Yitzhak] Mordechai says that he told you he was against opening it. [Former Deputy Chief of General Security Services] Israel Hasson also said that the Shin Beit [Israel's internal security agency] was against opening it at this stage.

It's not true. We have all the conversations between the prime minister and the head of the Shin Beit on record, literally recorded, so there's no question that I asked this question and I received an answer. They could have forecasted incorrectly; that often happens. It happened in this case, but I don't hold them at fault. At any case, after the chief of ... the Shin Beit told me that from his point of view there shouldn't be a problem, I opened the door. For 24 hours, 48 hours, nothing happened. I went to France. ...

And you got these calls [that] all hell broke loose?

Not quite. ... Hell broke, yes, but in stages. So by the time that I got to Germany, I heard that there was general fighting going on everywhere -- in ... Nablus, throughout Judea, Samaria, the West Bank, in Gaza. I quickly apologized to [German then-Chancellor Helmut] Kohl, got on a plane, flew back to Israel immediately.

And they told you about the drama at Joseph's tomb?

I heard about it when I landed in Tel Aviv airport. They told me that there was a siege in Joseph's tomb, that more than a dozen of our soldiers had been killed by them, that we had killed over 80 of his soldiers. ... I gave an order to move our tank forces into striking positions all across the fronts, everywhere.

Then I called up Arafat and I said, "Mr. Chairman, we are in a time of crisis, so I want to be very brief and to the point." I said, "You have very little time ... of which to effect a complete ceasefire. And if you don't, I'll send the tanks." And he responded by saying, "Your Excellency, I understand." Within the time that I said he should stop, he stopped completely.

In parallel I also asked [Yitzhak] Molcho to call one of Arafat's deputies and to explain that what I would do is not merely go in with tanks. I would bring down his regime because I could not accept this kind of breach. It's totally unacceptable. These were weapons we had given Arafat to fight terrorists and he was shooting at our men, with thousands and thousands of people trying to kill our people. So I had given him a very, very stern warning and I was going to act on it. He believed it and therefore he stopped the violence. ...

Arafat said that in opening the tunnel wall, I was undermining the foundations of the Al Aqsa mosque. That's a little difficult because it's a quarter of a kilometer away. But nevertheless, he said it. [And] this so-called Al Aqsa intifada lasted all of two days.

Calm returned. You went to the United States for the summit with Arafat [in October 1996]. King Hussein was there, Bill Clinton. ... Do you remember these talks? ... What did you tell Arafat and what did you tell Clinton?

I was very keen on having a very clear procedure, not only for Hebron -- which had been signed by Peres -- but for the remainder of the peace process. So I wanted to do here two things. First, I wanted to get a document, an agreement, that would spell out in great detail Arafat's commitment to us. Up to then, all of Oslo was our commitment to him, what Israel gives, when Israel gives, how Israel gives.

Now I said, "If you want an agreement, even on Hebron, we have to explain exactly and to write down what Arafat has to give, what the Palestinians have to give." And this was one component of our discussions. The second was the beginning of a move that I had planned which was to decide who will specify the specified security locations. Because if it is Israel that specifies the security locations that remain in Israel's hands, then at that point, I will shift the control of the whole withdrawal process to Israel.

These were the two things that I wanted to achieve and I began seeding these two elements in those discussions. ... I came in with a very fixed idea of what I wanted to achieve: detailed list for reciprocity, that is, of Palestinian commitments; and second, that Israel would control the extent of withdrawal by deciding the size and location of what are called the security zones. ...

At this meeting in the Oval Office, do you remember telling King Hussein and Arafat that you are a man of peace, that you want to make peace. ...

I'm sure, because it's true. I am a man of peace. I'm not a man of false peace. I'm not a man of suicidal peace that would ... sign any peace agreement, any piece of paper, in order to say that we made peace, [while] ... Arafat will continue the terror and continue telling his people that the goal is to destroy Israel. In fact one of the things that I asked for in the reciprocity was to stop the incitement, the incitement in the officially controlled Palestinian press, controlled by Arafat, in addition to many other things. ...

I know that at the time they looked at me and they probably said, "Well, what does he want? He's putting all these obstacles." I was seen in general as the great obstacle to peace. After all, if Arafat allowed terrorist attacks to escalate, to come from his territory, this was excused. If he broke every commitment that he gave, this was excused. The mindset at the time, I would say, was that Israel had to give and give and give and give fast. And, of course, I wanted the opposite: I wanted to give very little, as little as possible, and force Arafat to give as much as possible.

December 16, your security people, negotiating with the Palestinian security [team], agree on a text. ... You get the text and you are dissatisfied with it. Why?

I don't remember this particular [agreement]. ... I was often dissatisfied with things that were not negotiated according to my precepts. I'm a very tough negotiator. ... And I come in with a specific purpose. My goal isn't to get an agreement at any price, because then you get nothing. Peace at any price, you pay all the price and you get no peace. My goal was to have a very measured agreement that all the time forces Arafat to pay for what he gets. And he would get a lot less than he would have gotten from Peres.

An agreement is almost done. But you need a last push. On Jan. 12, 1997, King Hussein came ... to the Ministry of Defense in Tel Aviv. ... And he believed in you, ... you had talks with him. ... Do you remember that evening with King Hussein? ... What can you tell us about it?

I was very impressed by his willingness to step in, because frankly the Egyptians were in many ways obstructing -- encouraging Arafat to toughen his terms. So I thought that it would be useful to discuss this with King Hussein and he stepped forward.

I must say that I admired him. I didn't always agree with him. Sometimes we had difficult arguments, even tough arguments. But on the whole I admired him, because I think he generally wanted us to achieve reconciliation with the Palestinians. He showed this here. He showed it again at Wye when he came when he was already dying.

You went afterwards to Gaza, and three days later ... you signed the Hebron agreement. How did you feel? You're a Likud man, yet you give now territory to the Palestinians, you give autonomy.

... Hebron was difficult to do. ... Giving up any territory is difficult, I admit it readily. It's part of my homeland; it's part of the place where my ancestors, the prophets and the kings of Israel and so many generations of Jews, had walked on and had dreamed of coming back to. But this was an agreement that had been ratified by Peres and I was going to carry out but with one major idea.

The idea was essentially to trade the Arab part of Hebron for the rest of Judea and Samaria, or almost the rest of it. And I insisted on receiving in exchange for the Hebron agreement, two documents. One, a document spelling out the ... 10 major commitments that Arafat had to achieve for the remainder of the negotiations about the territory beyond Hebron, which is most of the territory. And second, that we would receive from the Americans a letter that said that Israel and Israel alone would determine the extent of the security location, hence the extent of withdrawal. In effect, what I was doing was giving up the Arab part of this city and ensuring that we retain nearly all of Judea and Samaria. ...

We were supposed to ratify [the agreement] in the cabinet. ... I explained that we were to get this letter from the United States. We didn't get the letter; I stopped the cabinet meeting, folded my hands, and said, "We are now waiting. We will not conclude this agreement until the American letter reaches us." I think that I sent Danny Naveh to call the American ambassador and tell him that unless this letter came as agreed, we will not ratify the Hebron agreement.

I wasn't an obstacle to peace; I was an obstacle to terror, which is the true obstacle to peace.When the letter came. It was signed by then-Secretary of State [Warren] Christopher. It was a very good letter. It was a revolutionary letter. ... It says that Israel and Israel alone will determine the location and the extent of the specified security locations, which means effectively that Israel would determine how much it would withdraw.

This was the way of flipping Oslo around without breaking Oslo. Instead of Oslo being a one way street, where Israel gives and gives and gives without any limit, all of a sudden Israel had its hands on the wheel and on the accelerator and on the brakes. We could now drive. This letter was revolutionary.

When we got it, everybody was very pleased, but I said, "No, there is one other thing that has to happen. I want Arafat to receive exactly the same letter. It has to be an agreed-upon American position that is communicated and accepted not only by us but also by Arafat." And we waited until we had confirmation that Arafat received exactly the same letter. That is the point in the Hebron agreement. For the sake of the larger control, we had in fact given up Hebron, or the Arab part of Hebron, but now we're able to ensure that Israel would not be reduced to indefensible boundaries. ...

A Jordanian soldier killed Israeli school girls [in Naharaim in 1997]. And then King Hussein came for this unprecedented gesture. I saw you almost with tears in your eyes when he went kneeling in front of the bereaved families. Do you remember that?

It was an extraordinary moment. It was incredible. Here was an Arab king, an Arab leader, coming before the people of Israel showing tremendous grief and identification. It shows you why the people of Israel embraced King Hussein, because he spoke the same thing. He didn't say different things in Jordan in Arabic, and different things here in English or on CNN. He spoke peace to his people and to our people and to the rest of the world. And here was a man speaking to families who had lost these beautiful little girls and he spoke from his heart. It made a tremendous impression on me and the world. ...

A few days later, you gave the green light to a project that was prepared during Rabin's time, which was [to build a settlement near Jerusalem at] Har Homa. And then again the demonstrations started. Why was it necessary to do it at that time?

... It's always necessary to make clear that our commitment to unify Jerusalem under Israeli sovereignty is not just a cosmetic commitment, not just a verbal commitment. And I made it very clear that I would do it, that I was willing to face the music. And the music came soon enough, both from the Palestinians, the Americans, the international community. ... But Jerusalem was very clearly part of Israel under Oslo. ... There is no question about Israel's right to act within the municipal boundaries of Jerusalem and so I acted.

Palestinians demonstrated everywhere, There are casualties. ... You are the prime minister. You promised security. What do you say? What do you do?

I think at that time the Palestinians did not have alternative funding sources readily available. So immediately I cut off all the funding that went through Israel. We collect VAT taxes for Palestinians workers and I simply said, "Cut it off completely." ... There were one or two other bombings that came with this in Jerusalem. Within a very short time, I was told by the Americans that Arafat's regime is about to collapse. I said, "Well, that's his problem. That's not my problem." [They] said, "But you're supposed under Oslo to give him the VAT money." I said, "Well, he's supposed under Oslo not to allow terrorists to attack us." And they said, "What do you want?" with great impatience.

Here again, I was an obstacle to peace. I wasn't an obstacle to peace; I was an obstacle to terror, which is the true obstacle to peace. And I said, "He has to jail such-and-such people, he has to do A, B, C, and D." And indeed he started doing it.

Within about six weeks he had reined in Hamas and Islamic Jihad. And by that time we agreed to give him the rest of the money. From that point on, for nearly two years, we had practically no terror. ... My main response vis-a-vis terrorism was directed at the regime. It's not that we didn't take measures against Hamas and Islamic Jihad. We did. Not all of it is publicized. ... But that wasn't the main focus. To stop the terror Arafat would have to know that his regime would be in danger of collapse. And one time, he knew it militarily, and the other time he knew it financially. He got the message. So from that point on, we practically had no terrorism to speak of.

But you had also back channels. Abu Mazen [Arafat's deputy] came to your [house]. ... And you had, from what he says, a very good discussion. He came back to Arafat and ... he says, "This is a man we can talk to." Even you proposed to him to go and visit his house. ... Do you remember this meeting?

I don't know if I suggested it in jest or seriously. But you know, I was very direct with ... Arafat and Abu Mazen and Abu Ala, [a senior Palestinian negotiator] with whom I occasionally met. I spoke to them with respect. It's not that I agreed with them. I didn't give them the kind of concessions that were offered before me or after me. But I always was clear to them. I told them what I would do. I told them what I would not do. And in that sense, I think they felt that when I told them something, it was going to be true.

It wasn't a game that I was playing with them. I didn't reveal necessarily my full tactic -- although I'm sure they understood it -- vis-a-vis the reciprocity and the extent of withdrawals, the security locations. But they were intelligent people; they understood what I was doing. ... I think this clarity was useful because I think it stabilized things. It didn't solve the problem. It didn't solve this conflict, but it stabilized things.

You had also back channels with [Israeli negotiator] Uri Savir and Abu Ala. ... [Why]?

I talked to both Peres and to his people, seeing if we could use their contacts, their influence on this or that occasion, but always within the line of the policy that we had stated. We didn't veer from the policy. But I am a firm believer that there are ways to communicate your policy and to persuade the other side, sometimes with force if you have to, if you're forced to do it, and sometimes with persuasion. Why not? Use whatever is useful. ...

You had the big terror attacks in Mahane Yehuda, Ben Yehuda in July, September [of 1997]. Again, you put pressure on Arafat. You didn't do what is being done today, like direct military [action] against the [Palestinian] Authority. Why?

It wasn't necessary because it was clear to me that the message had been received. In fact, I could see that he was taking action. ... This is what I wanted to see, the ending of the terror. You must remember that for two years, there was practically -- well, there was a terrorist attack here, a stabbing there ... but hardly anything. ... So you have to ask why. Why did the Palestinians stop the terror? Certainly they weren't going to get from me a lot of territory; they knew it. At most if they behave, they would get 13 percent but that was subject to reciprocity. ...

Why they were doing it? They were doing it because they knew that terror would be a boomerang for them, that we would go after the survival of their government. ...

The Khaled Meshal affair [when Israeli intelligence agents bungled an attempt to assassinate Meshal, a Hamas leader, in Amman, Jordan]. Sometimes you succeed. Sometimes you don't. It was difficult to get out of this?

Yes, it was a failure, I must say that my memories of this are somewhat Kafkaesque. ... When I learned about the failure, I wanted first of all to inform King Hussein. ... I sent Danny Yatom, the head of the Mossad. As he was about to leave, I said, "Danny, I think you forgot something." He said, "What?" I said, "Well, the antidote to the poison." And there we spent a long night with the heads of Israel's security chiefs seeing if this antidote would work; nobody had ever tried it. It worked. So at least, in that sense, we were able to begin to diffuse it but it took a long time. It wasn't an easy thing to defuse.

You sent Ariel Sharon at the end because the king refused to talk to Danny Yatom?

Yes, we actually sent a delegation and I myself went there as well. Look, it wasn't an easy thing. But we also did not for once say that we have no right to strike at the people who planned the murder of our children. The fact is it didn't work. Many things did work but are unknown. And this was not one of them; it didn't work. But you take the responsibility for the good things and also for the unsuccessful things.

... To free Sheik Yassin [who is considered the spiritual leader of Hamas] was difficult?

It was difficult but the information that I received -- and again these are intelligence assessments -- [was] that there was a good chance that he would die in our prison. If he had died in our prison, I would say that this could have been much worse because people would have believed that we had killed him, that he would not have died innocently. And in fact, we were contemplating releasing him for a full year before that based on these medical and intelligence assessments. So that made the decision somewhat easier, because if he's going to be freed anyway, then free him and use him for ending this whole affair and getting our men back. Getting our men back was uppermost in my mind.

... [U.S. Secretary of State Madeleine] Albright comes, goes. [U.S. Ambassador] Dennis Ross. Nothing goes forward. ... First of all, you had not very good relations with the American administration of Bill Clinton. ...

I think the Clinton administration was under the impression at the time that Arafat was really a partner; that the problem was on the Israeli side, and specifically I was the Israeli side. And I think they were very easy on Arafat. They didn't hold him responsible for anything. They never forced him to do anything, to stop the propaganda which I always mentioned to them, to jail the terrorists, to collect the illegal weapons, to reduce the police to the agreed size, and so on and so on -- all these things that we had put in the Hebron agreement and then articulated in Wye. ...

What this policy did was to habituate Arafat [to the fact] that there are no rules, there are no limits. Because the only limits were what we would do to him but not what the Americans would do to him. ... No matter what he did, the Americans always ended up letting him go, if you will. And I think this policy had to change, and I'm glad to see that it has changed now and for the better. ...

There were negotiations between your security people with Dahlan [the head of the Palestinian Preventive Security Service in Gaza]. Dahlan even met you before going to Wye. Remember this meeting?

... I don't remember that specific meeting, but I remember meetings with--

They [the Israelis and the Palestinians] say that the security papers were ready before Wye. ...

No, there were drafts. But we wanted to make them very detailed; in other words, to come out with a work plan that would say exactly what the Palestinians would do. And the reason we needed it as detailed was because we knew that it not only would make sense vis-a-vis the Palestinians but also because it would make sense vis-a-vis the Americans. It was important to put it down on paper. Palestinians do not so much respect what is on paper, but the Americans do. And that was my consideration. ...

[Former General Security Services Deputy Chief Israel] Hasson remembers that in the plane, you suddenly call him and you told him, "What about the security papers?" And he told you, "But it's done, we did it." And you said, "No you must redo it."

It wasn't detailed in the way that I'd wanted, in the way that I envisioned it. And in fact a good part of the Wye River conference was devoted to working out this work plan. Quite a few of the conflicts or the crisis took place because there was no progress, even though the Americans had promised that we would work this out. And until we got this detailed work plan, I would not move forward on the other things.

This is when you decided to pack and leave?

Yes, I decided to pack and leave, because they were telling us for two or three days, "We'll start working on the work plan. We'll start working." They didn't. So here we were, asked to negotiate about the things that we give, [while] the most important thing -- a detailed security plan on the Palestinian side for fighting terrorism -- was done practically nothing.

I got fed up. It wasn't a tactic. I said, "OK, let's pack. Let's go because I'm not going to continue negotiating like this." And contrary to reports, what happened was ... they started negotiating. Instead the Americans came and said, "We'll start working immediately on the work plan." And that's what happened. ...

Why did you meet a delegation of settlers in the middle of Wye?

They were concerned.

... What was their concern?

... I think it was both the victims' families ... and the delegation. They were concerned. They thought perhaps I would be making concessions which I ended up not making. They didn't know. They heard all sorts of rumors. I told them, in general terms, I didn't specify to them what I was planning to have as the outcome of Wye. And that's why I met them.

Then you go forward. You have this last night [at Wye]. And the idea is to have the cancellation of the Palestinian covenant ... in Gaza, in the presence of Bill Clinton. Who got the idea?

I don't remember where it originated exactly. But we definitely wanted to have the Palestinian covenant cancelled. ... I thought that this was a good precedent to have in order to habituate the Palestinians that they would have to shed the main instruments calling for our destruction in their ideology and in their national documents. ...

There was a big discussion about the number of Palestinian prisoners, detainees, [that Israel would release].

Yes, all of this was put in a very detailed form. The reciprocity list of 10 major commitments ... that we had listed in Hebron now was flushed out in very great detail -- security, the work plan on security, the people to be jailed, in what order, in what sequence, how it would be monitored, the collection of weapons, the cessation of propaganda against Israel, and the creation of a monitoring committee ... and so on.

And then we said, "OK, now this is what you give." We give, as it turned out, about 10 percent of territory and 3 percent would be in nature reserves. ... Even this 10 percent would be given in stages. The first stage -- very easy stage -- 2 percent. Palestinians had to do A, B, C, and D. And then for the next 10 percent, there would be two installments of actions that they would have to do, harder things to do. And this is what came out of Wye.

This was an arrangement where instead Israel giving 95 percent of the territory with no reciprocity, Israel was giving a few percent of territory, subject to reciprocity. This was the long road we had taken from being elected through Hebron, through Wye -- not to explode the Oslo agreement but to bring it down to a size that we could live with it.

[Former U.S. Ambassador to Israel] Martin Indyk told me in front of the camera that [at Wye] he saw ... Arafat with a big smile, announcing that he would call Mubarak so that the Egyptians [would] free Azam Azam. Do you remember that?

[Ed. Note: In 1997, Egypt sentenced Azam Azam, an Israeli Arab, to 15 years of hard labor on charges of spying for Israel.]

I don't remember that he called. I remember that the president, President Clinton, called Mubarak. He called him more than once; I think he called him three times at my request.

Arafat said he's willing to help in freeing--

I don't know if Arafat called because I didn't see him calling him. But I was in the room with President Clinton. I said that he must make an all-out effort to free Azam Azam and he had also promised to free Jonathan Pollard [who the U.S. sentenced to life in prison for spying in 1987].

This was the clash you had in the middle of the night with Clinton, with finger pointing?

No it wasn't in the middle of the night and there was no finger pointing. Right at the beginning of Wye, I had said that I expect to have Pollard released and a genuine effort made to release Azam Azam. The genuine effort to release Azam Azam was made; I saw it in front of my eyes. The president had called Mubarak, implored him to release the prisoner but President Mubarak declined, rather brazenly I must say. We even offered exchanges of Egyptian personnel and so on that we had in our jails. [He] didn't care. But there was a promise, a longstanding promise to release Pollard.

... Tell us about this promise.

This promise was made and of course the other ministers were aware of it as well. ... This was the last day [of the Wye conference], in the morning actually. We met; everything was more or less finished, ready to be concluded and signed. And I had met the president and I said, "Well, what about Pollard? When he will be released?" And he explained that he could not carry out his promise because he had a threat of mass resignations in his defense establishment.

There was no finger-pointing or shouting. I just looked at him very quietly for a long time and said, "I want to think this over." No shouting, no finger-pointing, nothing. But you can be sure that I was deeply disappointed.

And then I sat down and thought about it and after talking to the ministers I had to make a decision. I was obviously upset. I thought that Pollard had paid his due; he was our agent and strictly on humanitarian grounds he had been [in prison] already, at that time, 14 years, I think. And I thought ... it's our responsibility to get him back. He didn't work for himself; he worked for us, however mistaken that mission was.

And then I had to ask myself, was this agreement a good agreement for Israel? And I thought it was, because it allowed Israel to get out from the slippery slope of going back to the ... '67 boundaries. It created clear stages of reciprocity and Palestinian accountability. And on balance, with all my disappointment, I decided to do it. And I informed the president. There was no shouting; there was great disappointment.

You come back and you have Ehud Barak accusing you of giving too much to the Palestinians. How did you feel?

Well, that was absurd. ... At the end of three years of my tenure, we had effectively given the Palestinians 2 percent of all the territories that had been fully under our control. ... They didn't live up to the rest; we didn't give them the rest. In Wye, I also demanded and later received a memorandum signed by Dennis Ross on behalf of President Clinton saying that the United States would support Israel's position that the third redeployment, the last withdrawal, would not exceed 1 percent.

So in all that time, instead of withdrawing 95 percent, bringing Israel to be 10 miles wide, ... we were able to reduce it to 2 percent. So I thought this was an absurd charge. And in a fact as soon as Barak replaced me as prime minister, he gave away all the remaining territory of Wye -- 11 percent -- without any thought of reciprocity. ...

[Before the election], your coalition falls apart. There are problems. You're under pressure. ... Almost you had a military putsch against you. You had leaks from the army, from the ministry of defense. ... What was your feeling?

There are many things I could say about the election, but it belongs to another place. I would say that in the election, the issue of security was put aside because there was no problem with security. We'd restored security to the country. The issue of the negotiations was in many ways put aside because we had negotiated very well. So I would say the election was more on atmospherics, on character, attacks on my character as presented to the public and so on. And a promise that essentially the same policies more or less would continue, more or less. And that maybe there'd be a better management of the economy. ...

I think, today, there has been a sea change in public opinion in Israel. There has been a sea change in public opinion in the United States and some other parts of the world. But these are the two critical opinions. And now they understand, one, that terror is never justified, no matter what Arafat says. You cannot blow up little children. You cannot send your killers to pizzerias and to discotheques. Nothing justifies terror.

This was said I think with great clarity and with timely clarity ... by President Bush in his historic speech before Congress. And the second thing that people understood was that the only way that you stop terrorism is by going after the regime. If you don't stop the regime, you don't stop terrorism. This is why the Americans, [in order] to stop Al Qaeda, they dismantled the regime of the Taliban. ... That remains true of our ability to stop Palestinian terror.

And the third thing, Israel has a right, indeed a duty, to demand the most elementary things of peace. Which means that the other side teach the idea of peace to its people and not the idea that peace is merely a stepping stone in war to push the Jews into the sea. ...

You've fought here several wars. You had personal losses. You fought also political wars. The name of our series is "Shattered Dreams of Peace." What is your shattered dream? ...

No, I never had the pipe dream that Oslo and Arafat were the salvation of Israel -- that we would place this man who's unalterably committed to our destruction, give him bases right next to our cities, arm him to the teeth, and close our eyes and hope that there will be a peace. I never believed that. I criticized Oslo. I inherited this agreement and tried to reduce its dangers and I think I did. But I never had that as a dream. ...

I'm actually very hopeful for the future because the falsehoods of Oslo, the contradictions of Oslo, have been swept aside to a much clearer way of thinking, both in Israel and in the United States. The basic flow of Oslo was that its architects failed to examine the foundation. The foundation of Oslo was that Arafat had given up the idea of destroying Israel and had given up the tool of terror. Experience should have shown them even before I got into power that he hadn't given up the tool of terror. And just listen to what his officially state-controlled media was pounding day in day out to the Palestinian public, to Palestinian children, telling them in Arabic that the goal was to destroy Israel. Not to have a state next to Israel, but to have a state instead of Israel. That should have been the other warning signal.

And in fact these are the reasons why Oslo collapsed -- because the premises that there had been a real change of heart in Arafat ... was false. There was no change of heart. And therefore, this process was doomed to collapse. And as long as this leadership is here, you're not going to move towards peace. But if this leadership is replaced, I'm quite hopeful for the future.

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