A Conversation with Tzipi Livni

JACOB WEISBERG: (In progress) -- introduce Tzipi Livni.

She went into politics in the 1990s and was elected to the Knesset in Israel in 1999 as a member of the Likud Party. She joined Kadima, which was the breakaway party that left Likud in 2005 with Ariel Sharon. In 2006 she became the foreign minister of Israel, and as I think most of you know, she took a lead role in the peace negotiations with the Palestinian delegation at Annapolis.

In fall of last year she replaced Ehud Olmert as the head of the Kadima party, and in February of this year in the Israeli election she actually -- Kadima got more votes than Likud, so perhaps she'll be able to tell us how Al Gore feels -- (laughter) -- since it was Netanyahu who formed the government. She declined to join Benjamin Netanyahu's government, so she is now a member of the Knesset and leader of the opposition party.

Tzipi Livni. (Applause.)

TZIPI LIVNI: Thank you. Thank you very much. I can tell you nothing about global warming, by the way -- (laughter) -- but I'll stick about things that I have my own vision and I think that I understand the situation.

For me, it's my first visit to the United States as the leader of the Israeli opposition in days that there is a huge question mark what's going to be the Israeli government's policy, what's going to be with the relationship between Israel and the United States. I just came from Washington. I addressed also APEC there, and of course everybody asks the question, what's going to be; what's going to be the new government policy? And just rest assured that I'm not going to represent here the new Israeli government policy. (Laughter.)

But I would like to say that as the new leader of the opposition, I tried to see how can I represent things that I believe in, and the last thing that I want is to criticize the Israeli government outside Israel since anywhere Israel face a huge gap between what we are, between our values, between our goals, and between the way Israel is being perceived outside of Israel. And so I needed to find a balance, on one hand to represent the state of Israel since I am the representative of the state of Israel, which is very important for me. On the other hand, I would like to share with you my views and my visions as the leader of opposition and the leader of Kadima. And I've tried to find this balance also in addressing you today. And there are certain things that there are no differences in Israel and there is no coalition or opposition, and I'll start with this, and then I will relate to other things that we have some differences.

Clearly when we are looking at a region of the Middle East, it is now being understood more than ever that the region is being divided between extremists and moderates or so-called moderates or pragmatic leaders in the region or pragmatic states in the region.

The extremists represent an extreme Islamic ideology, which is not connected to the Israeli-Palestinian conflict, and this is something that needs to be said in advance. The Israeli-Palestinian conflict is not the cause of Iran's ideology; it's not the cause for Hamas ideology. This is something that you need to solve because this is part of our interest, but this is not the reason for extremism in the Middle East. One thing that there is no differences between me and the government in Israel, and I think that there is no differences from this between Israel and the United States of America.

Iran leads this camp of extremists. Iran supports Hamas. They have their own differences in terms of different religious views, but at the end of the day, Iran supports Hamas. Both of them represent this kind of agenda of hatred, extreme ideology. Iran supports Hezbollah in Lebanon and Syria, which doesn't show with these groups the same religious ideology, but it's part of the same camp for now.

On the other hand, we of Israel -- by definition, we are part of the moderate, according to our values, according to what we are. And in the last few years we can see that it's not anymore on one side Israel, the other side the entire Arab world, but we can see with us -- Israel -- other parts of the Arab world in understanding that Israel is not the enemy anymore, but Iran is the enemy. Iran is not only the enemy of Israel. Iran speaks about their hope or desire to wipe Israel off the map, but speaking with other Gulf states, Arab states, they say clearly that they cannot afford a nuclear Iran in the region.

Unfortunately, like on other issues that I will relate to later, some things that are being said by some leaders in the region in closed rooms are not being said publicly or in loud voice outside of the closed room, so the perception is sometimes that this is a problem of Israel, but it is not the Israeli problem anymore. This is the problem of the world. The world -- the free world cannot afford Iran with a nuclear weapon. Israel is part of the free world. We are working with the international community and on this there is not coalition or opposition in Israel.

The world needs to stop Iran and prevent Iran from achieving the nuclear weapon. This is something that nobody can afford. This is one thing that we all share. This is part of the understanding of the nature of the threat in the Middle East.

Now, for me, the understanding of the nature the threat is not enough because I feel that when there are some threats, we should find as leaders whether there are also new opportunities. And the fact that we can find with us today, in the same camp of moderates, other states that in the past were Israel's enemy or couldn't accept the right of Israel to exist, and now they are with us in the understanding of the new threat. This is also a new opportunity to enables us to work together, not only in facing together Iran, but in thinking together how to change the situation in the region -- also as it keeps connected to the Israeli-Palestinian conflict.

Now, I will concentrate on the Israeli-Palestinian conflict because this is part of -- this is the basic, maybe, differences between opposition and coalition in Israel, and I know that this is something that you can find different views in Israel and outside of Israel. And I would like to speak about each in more details.

And you said that I entered politics in the '90s; I would like to say that, what, I was a lawyer by profession. I loved being a lawyer; I hate politics. And I decided to enter Israel politics because of also agreement. I mean, I understood that the only idea that can keep Israel as a Jewish and democratic state is to divide the land of Israel -- what we call the land of Israel; what the Palestinians call Palestine -- into two, and I could accept this idea and I still believe that this is the right idea, and I'll refer to it later. But on the other hand, I thought that to do something like a memorandum of understanding but delaying all the core issues to the future was a tactical mistake, and in fact it led us to some years in which we had an agreement but we -- all these differences about the core issues were left between the two peoples.

So I entered politics. So my drive is to try and find a way to end the Israeli-Palestinian conflict in a way that can give us the possibility to keep Israel as a Jewish and democratic state.

And things that are obvious -- I said talking about dividing the land into two -- this is not -- and it was not easy for me to say since I grew up in a family of -- (inaudible) -- fighters; I was taught that the Jewish people have the right, not only in the part of Israel between Jordan River and Mediterranean Sea, but the entirety -- both sides of Jordan even -- and I do believe that the Jewish people has the historical, biblical, judicial rights on the land.

But I think that the last thing that we should do is to put the discussion and to put the focus or to try to solve the conflict -- who has more rights on the land, Israel or the Palestinians -- because this is dead end -- literally. And this is what I said to (Abu Ali ?) in our first meeting. I told him, "Listen, we can start talking about who is right; we can speak about history; who was here before; who has more rights -- this is going to lead to a dead end. We need to speak not about the rights but about how can we solve the situation in order to live in this region for the future of our children, grandchildren, for the future -- not to solve history or to choose between different narratives, because this is unsolvable."

And my ultimate goal or the way I see the vision of Israel is not to keep more and more land but to keep Israel -- its two values -- as homeland for the Jewish people and a democratic state living together and not in contradiction. And in order to do so we need a Jewish majority. This is not just a technical matter. This is needed because I'm not willing to give up the values of Israel as a democracy in order to keep Israel as homeland for the Jewish people. And in order to have this goal, I need to give up some of the land. And maybe these are the differences also amongst -- some of the differences in Israel because there are those in Israel that feel that the ultimate goal is to have more Jews living on the entire land, keeping the land. So this group, every day this passes is another victory. We are holding the land, nothing's happened, and this can be the situation forever. I believe that time works against us. I believe that when time passes, the conflict can turn from a national conflict, which is solvable, into a religious conflict which is unsolvable.

I mean, Iran, Hamas -- they are not fighting -- Hamas doesn't fight for the rise of the Palestinians for a state. They are trying to deprive us from our rights. I just read today in The New York Times, an interview -- Khaled Meshal saying that he is willing to accept a Palestinian state on '67 borders; Jerusalem, its capital; plus right of return of refugees to Israel, and what we got in return? Not recognition that we have the right to live -- 10 years of truce. And then what?

So this is not a national conflict with Hamas. This is a religious conflict, and this is not solvable. And when I see the situation in the region relating to what I said at the beginning that we can see more and more extremists, we can see more and more radical elements in different places in the region, I believe that we need to try -- to try and solve the conflict with the pragmatic leadership amongst the Palestinians to find whether we can find a way to divide the land and to have two states for two peoples living side by side in peace and security, and this is not a slogan. It means more than just few words.

And I would like to share you the way I feel -- or the way I believe we need to translate it in all that will represent the interest of both our people, even though in my role as an Israeli leader, I believe that it represents entirely the interests of Israel. Two states for two people -- (inaudible).

We are talking about two nation-states. Israel is a Jewish state, homeland for the Jewish people. It was created as a Jewish state in 1947 by the United Nations' recognition. United States supported it, of course. And it was obvious then that the state of Israel was established as a homeland for the Jewish people. It gave refuge to Jews who needed to leave Europe after the Holocaust. It gave refuge to Jews who needed to leave Arab states after the creation of the state of Israel. And this is the raison d'etre of the state of Israel. This is the reason for its existence. And the way I see it is that Israel is fighting for its existence -- not only the physical existence of the state of Israel but its existence as homeland for the Jewish people.

And this reflects part of the negotiations with the Palestinians because the only way to keep Israel as such and to end the conflict is to understand that there words "two states for two peoples" means that the creation of the Palestinian state means that this gives an answer to the nation and aspiration of the Palestinians, wherever they are. Those who live in the territories -- West Bank and Gaza Strip -- and those who live in refugee camps, in different places, that left Israel in 1948. For those of you who believe that the conflict began in 1947, it began before the state of Israel was established. And the idea of the United Nations resolution to create two states was to solve the conflict because there are those that think that when the state of Israel was established, this is the moment in which the conflict began and this something that they cannot accept.

So the creation of the Palestinian state is the answer to the Palestinians, and it means that the moment in which the Palestinian state is being created there are no demands for what the Palestinians call return of refugees to Israel -- demand. It's a matter of concept. It's not a matter of numbers. And it's a matter of concept because without it we open something that can end the conflict. And in opening this, giving some numbers, it means that the conflict is going to be open forever.

The creation of a Palestinian state is not going to be the solution but just a step. While Israel (was ?) safe, demands of individuals, refugees, asking to come to Israel, demanding what they call their rights -- the creation of the states will not be any more the answer to them, and the process which exists, unfortunately -- not in the United States of America but in different places in the world -- the process of delegitimization of the state of Israel as homeland of the Jewish people will continue and the -- Israel is being questioned for its moral values, something that we need to refer to and we need to give an answer because I believe in the moral standards of Israel. But this is the reason that saying two states for two peoples means something also in terms of the conflation into the negotiation. And this is the only way that can solve the conflict, and this is the reason why when I was minister of Immigrant Absorption, Ariel Sharon, the prime minister, sent me to the United States, and then I said that this is not pro-Israeli or anti-Palestinian. It's the conflation of the vision of the United States, and we got the letter of President Bush saying that the creation of a Palestinian state is the answer to the refugees.

The other reasons, of course, is living side by side in peace and security. What does it mean? It (needs ?) to be translated into different part of an agreement saying what's going to happen on the other side of the border. We are not going -- and I'm not going to throw the keys to the other side of the border hoping for good. We need on the other side a state, yes, demilitarized, and effective government that can control. We cannot afford another terror state or a failed state in the region, and these are also parts of or different articles of the future agreement between Israel and the Palestinians in order to translate the vision of two states, two peoples into an agreement.

Now, since I believe that time works against us, there are different views about how to proceed. There are those saying that since we have partners but they are too weak and they cannot deliver, we should wait until the situation on the ground changes -- until they can fight terror, until the situation in Gaza Strip changed. And then -- only then we will answer to the negotiations -- (inaudible) -- trying to have a concrete agreement in order to give the answers to all the core issues that we decided to discuss back in Oslo.

I think that even though we need the situation on the ground to change, we cannot afford stagnation as a policy. I believe that we need to find today -- with the partners that we have today, whether we can reach an agreement on all the core issues which are open today between us and the Palestinians, and then, as I said before, I'm not going to give them the keys without the changes on the ground.

So in a way I would say that we need to find out whether there is a partner -- and I believe that there is a partner -- to reach an agreement with. And then we need to see whether the government is effective enough to be a partner to the implementation of the agreement. And this is the difference maybe between the road map and the Annapolis process. The road map suggested to start with the situation on the ground and then to reach a point in which -- only then, later -- in which we start negotiating final status issue. In Annapolis we decided to start negotiating with the pragmatic leaders in the Palestinians, and then the implementation is according to the road map, subject to the road map. So the need to fight terrorism is there anyway, and we need to do it simultaneously. While we are talking we need of course to change realities on the ground in terms of security, economy, as far as we can. And now the -- (inaudible) -- thing that we can do is only in the West Bank since Hamas controls Gaza Strip.

Last word about Hamas and Gaza Strip -- because since we've (sensed ?) these divisions between extremists and moderates in the region, we need to have also a strategy that addresses the different parts of the Palestinian society and leadership and different parts of the region. So this is the dual strategy. It's not only about speaking with the good guys or the pragmatic leaders in the Palestinians or the moderate Arab states, but acting without giving legitimacy directly or indirectly to the extremists. So the need to fight terror exists anyway. The need not to -- to delegitimize Hamas in Gaza Strip is needed anyway and simultaneously, because you need to understand that (this is ?) a zero sum game between extremists and moderates. When we give Hamas legitimacy, they are getting stronger. Abu Mazen, Salim Fayed -- they are getting weaker and their ability to reach an agreement with Israel, if they want to, is being undermined.

When Hamas is getting stronger in the future, we'll have more and more supporters of this kind of an ideology that is not willing to accept the right of Israel to exist. I mean, what were the demands of the international community for Hamas? To accept the right of Israel to exist, to renounce violence and terrorism, and to accept or to agree to the former agreements between Israel and the Palestinians. And that's all. It's not too much to ask. And I think that when the international community expects the peace process to continue, it's not less important to keep the demands from Hamas and not to undermine these demands or not to be flexible or not to compromise on these demands.

Now, these are the basics, because I know that I need to answer also your questions. But I want to say something about -- say a few words about the Iranian issue, about the Palestinians. And people are talking now about differences or maybe about conflict between Israel and -- I don't know, the international community. I know that we are talking, that we have shown interest on both these things. The Iranian issue is not only -- the need to stop Iran from being nuclear is not only the interest of Israel. This is the interest of the entire land, the entire world, the world led by the United States of America. So we need to work together. We can work together. And this is something that -- (inaudible) -- the interest of the entire world.

And I do believe that making or reaching an agreement with the Palestinians is not a favor that Israel is doing to the Palestinians, nor to the Arab world; not even, excuse me, to the United States of America. This is our own interest. We live there. We need to find a way to live in peace there. It's not easy. We have problems. We have problems on the other side; the Palestinians have problems. We have Hamas there. I'm not going to undermine any of the problems in the region because they are there. And I'm not going to undermine any of the threats in the region. But I would like to say that in the understanding of the nature of the threats, it doesn't mean -- I don't want to make these threats as an excuse not to continue the negotiations with the Palestinians because I believe that these represent the interests of Israel to keep Israel as a secure state in the land of Israel -- not on the entire land, but as homeland for the Jewish people and democratic state. And in doing so, this represents the interest of Israel; this represents the interest of the pragmatic part of the Palestinian society; this represents the interest of the Arab world; this represents, of course, the interest of the international community, the United States of America. But excuse me, I'm an Israeli and I feel that I need to represent the Israeli interest, and this is the Israeli interest.

A few words before I'm being asked about the Arab Peace Initiative because talking about the Arab world, there is a kind of -- I hear more and more about the need to adopt the Arab Peace Initiative and why Israel is not doing so. A few words about this and then I'll open the floor for questions.

Listen, I think that the idea of the Arabs saying that the way to solve the conflict is not by violence but through negotiations is positive. The idea that they want to normalize their relations with Israel is very positive. But the Arab Peace Initiative puts the outcome of any agreement as part of the initiative. It relates to Border '67, border (of ?) Jerusalem, right of return, 194 -- something about an agreed solution on this. But the Arab Peace Initiative puts the Arab narrative on the table, and the outcomes are the Arabs' fault.

Now, I -- (inaudible) -- I said what is important in this initiative, but I hope and I know -- since I asked -- that they are not trying to dictate the outcome of an agreement which should be bilateral between Israel and the Palestinians. This is why we negotiate. And they don't want to replace the -- Palestinians (to ?) negotiate on behalf of the Palestinians with Israel.

So as an idea, speaking about peace, talking about normalization, saying that they are willing to accept Israel -- this is really -- I'm not undermining this -- it was a -- (inaudible) -- very dramatic change in the atmosphere and the way the Arabs act toward Israel, but this is the only way that we can refer to it because in -- (inaudible) -- the whole articles mean that we -- that there is no room for negotiations. And since the Arab League has some delegation and I met them, of course -- only, unfortunately, the Jordanian and the Egyptians -- those states that we have relations with -- were able to represent the Arab League. I asked them the same questions, and I think that this is the only understanding how to deal with this.

But there is another thing that the Arab world can do. There is no Palestinian leader who can really make the historical decisions which are needed, and historical decisions are needed by Israel and by the Palestinians as well, (without ?) the support of the Arab world. And as a part of the Arab world, it's not only speaking about peace, calling for it to Israel to speak with the Palestinians, to reach peace with the Palestinians. There is something that can support the peace process, and this is what I call normalization in stages. Since in the Arab Peace Initiative they say -- it's written that the end of the road, when Israel reaches peace with the Palestinians and Syria, then -- only then the Arab world is willing to normalize its relations with Israel. And I said to my colleagues, "Listen, I need peace with the Palestinians not in order to have normalizations with you; I need peace with the Palestinians because I need peace with the Palestinians. I'm not doing it for the sake of the normalizations with you. But you can send the message right now to your own radical elements, to the Palestinians and to the Israelis." I mean, there are justly skeptic Israelis saying, "There is no palestinian partner; they cannot deliver anyway. What we got in return after we left Gaza Strip is only terror. What can we gain out of this? There are only risks in this process."

So let's imagine that the Arab world starts in doing some acts of normalization -- some public meetings, God forbid; inviting some delegations from Israel; Israelis coming to these places -- places that we don't have diplomatic relations with; saying something that represents what you are doing, by the way, anyway, but privately.

This can give -- send a message to Israel and to the Israelis -- to those who don't believe in the process that the entire -- that there is something, that the tradeoff is not only Israel and the Palestinians but something which is bigger. This can send a message to the Palestinians that the Arab world supports them. And this can send a message to the radical elements in the region because up to now the only pictures that they see in Al Jazeera is unfortunately pictures from military operations that we need to do in order to act against terror; or, in good times, pictures of Abu Mazen, (normal ?), -- (inaudible) -- Livni.

So, from their perspective, the only one -- those who are willing to speak with the enemy, with Israel, and I'm talking about radical elements, is few. If they could have seen their own leaders meeting with the Israelis, this can send a message that reflects reality -- that Israel is not the enemy anymore, that Israel is willing to do some steps toward the Palestinians.

And I can understand the linkage -- that the Arab world is doing, that they are willing to do so only when they see something that Israel is doing towards the Palestinians -- I can understand this linkage. But, they need not to wait until we reached or finalized -- reach a final-status agreement, and only then normalize the relations. But, there are certain things that they can do right now that can help us -- all of us, to reach an agreement at the end of the day.

So, I think that this is -- these are my beliefs, my vision about what needs to be done, you know, which is related to the Israeli-Palestinian conflict, what needs to be done about the real threat in the region, the Iranian one? And now I think this is time for questions. Thank you.

(Applause.)

WEISBERG: Ms. Livni, let me begin by asking you, in two weeks the new American president will meet for the first time with the new Israeli prime minister. Most people seem to think that President Obama will press for further negotiations leading to a two-state solution. Most people seem to think that Prime Minister Netanyahu is not in favor of pushing forward with negotiations now, that he thinks either that the issue of Iran should be more urgently dealt with, or that they should -- negotiations should be put on the back burner.

What do you forecast for that meeting? And, speaking for yourself again, what would you hope might come out of that meeting?

LIVNI: You can ask everybody here --

QUESTIONER: (Laughs.)

MS. LIVNI: -- I mean, you can choose somebody, and that's the same question. I really don't know. I don't know -- listen, I believe that the relationship between Israel and the United States of America are of strategic nature.

I think that it is so deep, that it is more than a question of a new government in Israel or a new administration in the United States. It's bipartisan in the United States -- the relationship, and the understanding and the friendship, and I believe that this is the situation in Israel. At the end of the day, show that both the Israeli prime minister and the American president will discuss everything. And we're all waiting for the outcome of this meeting.

But, it's more than that, it's just -- I mean, everybody's waiting for May 18th like something is going to happen on the same day. This is just the beginning of -- I think, the beginning of a dialogue between the United States and Israel on all the issues.

As I said before, I believe that the question is not "give me something here, and I'll give you something there," because I believe that this is a shared interest: they need to stop Iran, and the continue of the peace talks with the Palestinians (anyway ?).

But, as I said before, the last thing that I want to do right now is to represent the government. I chose not to do so since I didn't -- I'm not part of this coalition.

WEISBERG: There has been an issue, of course, over whether Israel has a partner for peace. Your successor as minister of foreign affairs, Avigdor Lieberman, is an extreme nationalist, I think you could say, who lives in a West Bank settlement himself, who has suggested that Israeli Arabs need to take a loyalty oath, and would be deprived of some citizenship rights if they don't agree to the -- about the Jewish character of the Israeli state.

Is he a plausible partner for peace? Can he be someone that the Arabs can negotiate with in good faith?

LIVNI: Listen, Israel is a partner for peace. And because Israel wants to live in peace with its neighbors, the vast majority of Israelis -- I do believe the vast majority of Israelis believe that there's a need to adopt the vision of two states for two peoples.

We have some differences. There are those, as I said before, that believe that -- like the settler movement, trying to grab more and more land, in the understanding that this is the ultimate goal of Israel. There are those who have their own concerns, in terms of security. And I respect this. I mean, these were also some of my concerns (even in ?) negotiations.

We had tough discussions: What's going to be the nature of the Palestinian state -- (inaudible) --? And, talking about the Israeli Arabs, I would like to say -- to express my position on this. And I'm sure that you can ask Lieberman, when he comes -- when he comes to New York, what is his views. As I said before, the creation of a Palestinian state is the answer to the (national situation ?) of the Palestinians wherever they are.

Since I believe that Israel's -- (inaudible) -- demography are crucial, are very important for us -- and this is the reason why I need to give up part of the land, each and every Israeli citizen is an equal rights citizen. Because Israel is a democracy, this is part of our -- (inaudible) -- a democracy and Jewish state goes together.

But, also the Arabs in Israel -- the Palestinians in Israel, the Israeli citizens need to understand that the creation of a Palestinian state gives an answer to their own (national situation ?). They are equal rights citizens. They can live in Israel as an equal rights citizen.

This is part of my responsibility. It's not a favor that we give them equal rights. This is what -- this is part of being a democracy. But, I cannot accept any national demands, within Israel, afterwards. This is the way I see the relationship between Israel, the Palestinians, the creation of a Palestinian state, and the relations between the different minorities and majority in Israel.

WEISBERG: Before we open it up to the audience, I wanted to ask you one more question that I think draws on your background as a lawyer, and also, as I understand it, someone who worked in the security services in Israel. We are in the middle of a major debate about torture in this country, which was a policy of the previous administration, now thrown out by the current administration, and we're in the midst of a conversation about what to do about having done it.

Israel drew a very firm line against this, I think, a little more than 10 years ago when the supreme court ruled against it. In your view, is -- does torture ever work, and can torture ever be justified?

LIVNI: Whew! (Laughter.)

As I said before, I believe that democracy is not just a system, it's a combination, and a system which -- (inaudible) -- and is being found on values. And this is part of it. According to which we are acting. And this is the reason why, in the past, the Israeli supreme court decided -- as it decided there are some things that are permitted and some things that are forbidden.

And it's not like yes or no. When you say torture it means, it gives -- there is yes or no answer, and the answer is "No, but." There are certain things that the supreme court permitted the Israeli security services to do in order to save lives, because, at the end of the day, we are fighting terror. And this is part of the Israeli -- excuse me for opening something which is not, directly was raised from your question, but it's something that, it is the Israeli basic frustration.

We feel that we are fighting -- well, we are fighting terror. The Israeli soldiers -- I mean, it's our children -- my son is in the army. You don't suspect me wanting my son to do something against the values that I (raised him ?), but he needs to be defend (his turf ?). And then he fights terror, or he's hiding among civilians, and we are trying to catch them. And in doing so, unfortunately, there are civilian casualties and there are civilian casualties

And when we need to know there is a ticking bomb in order to save life of citizens, civilians in Israel. Sometimes we need to investigate, or to find and to see whether there is information that can stop this suicide bomber who is going to enter our nurseries, and cities, and towns and kindergartens. So, what should we do?

So, it's not just a philosophical question about torture. It's our day-to-day life. And, as a decisionmaker, (I will ?) tell you it's not about torture, but a kind of a dilemma that I had as an Israeli minister. At the beginning of the war -- it's not (torture ?),but maybe it's -- at the beginning of the war in Lebanon we had all the information about the missiles that Hezbollah had in Lebanon.

Some of them we knew in advance (to know ?). The system was that there were places in which they (hire ?) in order to put missiles -- apartments. -- (inaudible) -- not for somebody -- (inaudible) -- but for missiles. And we had information, and we needed to decide whether we are going to bomb these places the night of July 12th, in an understanding that we can cause civilian casualties. But, these people knew in advance what they are doing.

So, these are -- and we decided to do it, so these are the kind of the dilemmas that, as the decisionmakers, we have when it comes to these kind of decisions of our security services on a daily basis.

And in the last -- listen, we are just, we have some, not quiet, but I still remember the horrific days of the Second Intifada in Israel, when we couldn't send our children to the malls, or to the discotheque or to go together to a restaurant. So, this is part of fighting against terror, and we need to find the balance, to express our values on one hand and to find a way to get the information that can prevent the next terror attack.

It's not easy, but it's not only a philosophical question of yes or no. And I'm familiar with the debate here in the United States. I can't relate to it -- I don't know to relate to it, but I just wanted to share with you some of the problems that we are facing.

And, on the other side, they are exploiting our values. And it's not easy to express these values, and to work accordingly, while the other side is exploiting them.

WEISBERG: All right, at this point I'd like to invite our members to join the conversation. Please, when I call on you, wait for a microphone to come to you. And tell us your name and your affiliation, and please limit yourself to one question. Time is short and we'd like to get in as many as possible.

And why don't we start right there?

QUESTIONER: I'm Bill Droesdiac (sp).

You haven't said much about the settlements. And I know that very much something that the Obama administration will bring up in the discussions with the Israeli government leadership. How do you respond to the arguments of those who say it's hard to cultivate a negotiation, or a reconciliation with those on the Palestinian side as long as settlements continue to grow and expand in the West Bank?

LIVNI: Okay. So, you asked two -- you ask for short questions, and I'm giving long answers.

On settlements, there is also one thing that I want to -- that I want to say, because I know that this is something that we have differences with the United States since '67, I mean, basically.

And you mentioned that Lieberman is a settler himself. And this is true, but I just want to say since at the beginning, in 1967, the idea was -- from our perspective, I was a child then, and I remember the feeling that we came back to places which are part of our own history -- and the idea was to live happily ever after between Jordan, (Egypt ?) and the Mediterranean Sea, Jews and Arabs. Nobody wanted to control the Arab, and the idea was to live in one state.

I believe now that this is against the interest of Israel -- the idea of one state, or a binational state, or something like this. So, we need to divide the land. And, while negotiating with the Palestinians, I tried to find what is the border that can give an answer to realities on the ground, that are there anyway for the last 40 years. And, basically, (this refers ?) to what we call "blocks of settlements," or civil population centers that takes only few percentage of the West Bank, but vast majority of Israelis are living -- are living there, and these places are very close to what is called the "red line" of -- "green line" of '67.

Now, there is also the Israeli government (policy ?) -- (inaudible) -- the former Israeli government policy was not to expand or to build -- (inaudible) -- settlement, not to expand settlements. But the complexity -- it is not complex, just (shall we ?) be part of the complexity, since, from the Israeli perspective, lots of settlements are going to be part of Israel in the future.

The Palestinians, even though some of them understand that -- (inaudible) -- (or/are ?) part of the -- (inaudible) -- that something is going to be part of Israel, from their perspective they are suspicious, and they feel that Israel has its own conspiracy of building more and more settlements in order to get more and more land from them, while trying not to finalize or to reach a final-status agreement, and in wasting time by building more settlements, grabbing more land, and make the division, or the creation of a Palestinian state impossible.

This was not the Israeli government's policy. At the end of the day, you couldn't see a real expansion of settlements. But, I also think that there is a kind of an equation between time and the settlements. I'll try to explain. I think that when the Palestinians felt that we have (distrust ?), that we are not -- that we are not looking for a settlement or -- (inaudible) -- in order to grab more land, and we are -- (inaudible) -- to reach a peace treaty with them, they understood that maybe the settlements or some building is less important because it's not going to take much more time until we reach a peace treaty.

And when the feeling is that it's going to take a long time, it makes them more sensitive when it comes to settlements. The way I see it, the final word is -- the way I see it is that my responsibility is to give an answer, in a final-status agreement, to more and more -- or to more Israelis who live in especially in the blocks of settlements that exist anyway. Well, there are, of course, different -- there are parts of the secular movements who believe differently. And I think that since today I heard that the vice president said publicly that this is part of the United States' demand, I'm sure that this is going to be raised on May 18th.

WEISBERG: All the way in the back, ma'am -- that's you.

QUESTIONER: Yes, Bernadette Kilroy, from Clarium Capital Management.

I wonder if you believe, or if you think that members of the Israeli government believe that the Obama administration has already come to terms with a nuclear Iran? And, given the --

LIVNI: I hope not.

QUESTIONER: -- and given that the Obama administration seems to be linking support on Iran to progress on the Palestinian issue, what do you think the prospects are for some kind of a deal with Iran that will be acceptable to Israel?

LIVNI: Okay, I believe that the United States of America is not -- or, we are not in a point in which there is somebody -- especially -- (inaudible) -- the United States of America is going to accept Iran with a nuclear weapon. I don't think that this is the position, so I don't think that there are differences on this.

More than that, I think -- I know that the world's leaders, basically, almost all of them, in talking about the free world, are talking in terms that the world cannot afford Iran with a nuclear weapon. There is, unfortunately, a gap sometimes between some of the statements and the way they vote in the Security Council when it comes to different sanctions. But, the understanding that the world cannot afford Iran with nuclear weapon is there, and of course the United States leads this understanding and the efforts to stop Iran by sanctions and diplomatic means.

Now, from the Israeli perspective, I think that the most important things for us, when it comes to the dialogue, is -- and I think that everybody needs a kind of a definition: what is the meaning of success; what is the definition of success or failure; and a timeline? Because we know that Iran is trying to spend more time, and while we are talking here, eating lunch, they are continuing in their enrichment.

And the day which is the most -- (inaudible) -- or day of no return is not a day -- it's not the day of the bomb. Each day that passes is another day that Iran becomes more and more problematic. And, in reference to the other states in the region, I said before that they -- the Gulf States and other Arab states understand that Iran is a threat to them as well, but there is something else to understand.

We live in a neighborhood in which whether you beat the bully or join him. And the entire region is looking at the free world, led by United States of America, waiting the see whether the world is going to stop Iran or not.

And if the impression today -- not in the future, but today, if the perception, the image is going to be that the world can live with an nuclear Iran, this is going to be the day in which, what I said here about -- (inaudible) --, understanding that Iran is a threat, this can be changed in a day, because they've tried to -- (inaudible) -- to get nuclear weapons themselves. And just think about proliferation of weapons, just as the situation in Pakistan.

What are we risking at, in a situation in which Iran gets the weapon, or even the perception that Iran is going to get it? And this is the way that, as I said before, about the engagement, and any dialogue should be under an understanding that there is -- (inaudible) -- I mean, if they are not going to work or to accept the demands of the international community, what happens then? And Iran needs to know that all the options are on the table.

WEISBERG: Let's see -- right here.

LIVNI: Last question?

WEISBERG: I think we may have time for one more after this.

QUESTIONER: Jeff Laurenti, with the Century Foundation.

First, Mrs. Livni, I have to say that if you really hate politics you must be a superstar in the courtroom --

LIVNI: (Laughs.)

QUESTIONER: -- because your -- (inaudible) -- been dazzling.

There's been this concern that the peace process and the talks may be "spinning of wheels." And one wonders, when you look at the Taba parameters that were agreed to in early 2001, what are the issues that are really no longer on the table? What are the problematic elements of what had seemed to be agreed at Taba? And what, in the year of negotiations you had under Annapolis, have been kind of resolved, maybe differently from that initial package?

LIVNI: Okay, thank you.

You know, after I said to -- (inaudible) -- that you shouldn't decide who is the right and who is wrong, in terms of narrative, we decided not to decide what happened in Taba. Because there are different ideas about what was agreed and what was not, in Taba, so we decided to put it aside and to start of what need to be done in order to end the conflict.

But, we decided we had different understanding at the beginning of the process. One, is -- and this is unlike, I don't know, probably was Clinton's principles, we don't want a principles agreement. We want a concrete agreement, and we need to give an answer to all -- not only the core issues, but we need something that can be implemented.

For example, I was asked about the settlements. As I said before, as long as -- let's assume that we reach an understanding, something about the border -- '67, plus, minus 8 percent. Never mind, okay? Now, from the Israeli perspective, we are certain that this includes Jerusalem and blocks of settlements, okay. This is the basic understanding in Israel.

-- (inaudible) -- So, let's assume that we reach this kind of agreement, and the next day Israel decides to build in -- (inaudible) -- because we believe that this is going to be part of Israel, and -- (inaudible) --. The first block that we (build now ?), the Palestinians are going to come and to say, listen, you're in violation of the agreement because this is part of the future Palestinian, this is not part of Israel.

So, something which is vague, or which is not concrete, -- (inaudible) -- that line on the map, knowing what's going to be Israel and what's going to be Palestine is going to lead to more frustration in the future. And this was part of -- my understanding, from Oslo, that led me to the idea of entering politics, but also the idea that we need to have a full package.

Another understanding was the understanding of Camp David 2000 -- not exactly Taba, but the idea that now we should enter to the room and try to finish everything in a day. Put the pressure, and leave the room with an agreement. This is also a situation that led to lack of ability to (do solve ?) differences that maybe, from the outside, are small differences. The gap looked -- was perceived as a narrow gap. But, when I tried to (learn ?) on different issue it was not that narrow and, in fact, we couldn't bridge it.

So, the decision was to give a concrete idea, to work simultaneously on all the issues, since at the end of the day there are connections between different issues. For example, we have settlements, border, Jerusalem -- border, settlements, Jerusalem, security, water and refugees. The way I see it is the following: The refugees and the statehood are both sides of the same -- different sides of the same equation. The creation of a state is the answer to refugees. But, it's not enough.

This is the basic idea, but of course, we need to do -- to deal with international the mechanism of compensation. It's not only the right of return, yes or no. Because there are certain issues that we can do as part of a full package, which is not giving up -- or which is not opening Israel to refugees but giving them compensation as part of an international mechanism.

As an example -- (inaudible) -- settlements and borders. When we define the borders, it is clear -- (inaudible) -- what is Palestine. And the idea is that, of course, we need to dismantle settlements which are on the other side of the border when we decide the border. So, it's not just vague idea.

And, Jerusalem, of course, is something which is unique and a very sensitive issue. Now, we decided to work simultaneously -- (inaudible) -- myself on some of the issues, and different officials on economy -- water. But, we decided that, at the end of the day, when we reached -- even we are very close to finalize one core issue, we stopped because, at the end of the day, the final -- (inaudible) -- is trade-off between different -- if one is important for me, the other is important for him. I didn't want to reach an agreement on borders without knowing what about our security, and so on.

And about water, just an example of the way that sometimes when you build with everything you can solve problem and it's not -- it doesn't become more problematic. Just small -- a short story: We discussed one of the places which is one of the settlements, which was built on an aquifer of water -- and, in the Middle East water is a -- (inaudible) --. And we had this argument. It was very strong, and very sensitive and -- (inaudible) -- (determine of this ?).

And then I said, listen, it's not this much of the land, why you are so --? He said, "Listen, but it sits on the water." And I said, listen, so we can make an agreement saying that because, for me, I need this place because I don't want to evacuate these places, because there are thousands and thousands of people who live there, but I'm not doing it -- they were so suspicious they suspected that I am talking about it because I want the water.

So, just in putting everything sometimes we can solve the problem -- (inaudible) -- Okay, I need the place because of the settlers living there. You can get the water.

We decided -- and this was part of the trust that was built between us, that we are not going to share with the public what was achieved and not what. But, as I said before, it's not like we had one understanding on one issue and the others are not. It is we had the progress and I feel this is -- you know, I was asked whether, how is it to be in the opposition, and for me the most, the thing that I, that I feel that this is the most -- I don't know how to say, "painful," but something which is basically, it's the end of the negotiations, hoping that this is just a pause and not something that will stop, because we need more time, we need more time, we need to do it the right way. But, I believe that we can do it. It's not easy, but I believe that we can do it.

WEISBERG: I'm afraid you're right. That was the last question.

(Laughter.)

LIVNI: Okay.

WEISBERG: Thank you for joining us today. (Applause.)

LIVNI: Thank you.

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THIS IS A RUSH TRANSCRIPT.

JACOB WEISBERG: (In progress) -- introduce Tzipi Livni.

She went into politics in the 1990s and was elected to the Knesset in Israel in 1999 as a member of the Likud Party. She joined Kadima, which was the breakaway party that left Likud in 2005 with Ariel Sharon. In 2006 she became the foreign minister of Israel, and as I think most of you know, she took a lead role in the peace negotiations with the Palestinian delegation at Annapolis.

In fall of last year she replaced Ehud Olmert as the head of the Kadima party, and in February of this year in the Israeli election she actually -- Kadima got more votes than Likud, so perhaps she'll be able to tell us how Al Gore feels -- (laughter) -- since it was Netanyahu who formed the government. She declined to join Benjamin Netanyahu's government, so she is now a member of the Knesset and leader of the opposition party.

Tzipi Livni. (Applause.)

TZIPI LIVNI: Thank you. Thank you very much. I can tell you nothing about global warming, by the way -- (laughter) -- but I'll stick about things that I have my own vision and I think that I understand the situation.

For me, it's my first visit to the United States as the leader of the Israeli opposition in days that there is a huge question mark what's going to be the Israeli government's policy, what's going to be with the relationship between Israel and the United States. I just came from Washington. I addressed also APEC there, and of course everybody asks the question, what's going to be; what's going to be the new government policy? And just rest assured that I'm not going to represent here the new Israeli government policy. (Laughter.)

But I would like to say that as the new leader of the opposition, I tried to see how can I represent things that I believe in, and the last thing that I want is to criticize the Israeli government outside Israel since anywhere Israel face a huge gap between what we are, between our values, between our goals, and between the way Israel is being perceived outside of Israel. And so I needed to find a balance, on one hand to represent the state of Israel since I am the representative of the state of Israel, which is very important for me. On the other hand, I would like to share with you my views and my visions as the leader of opposition and the leader of Kadima. And I've tried to find this balance also in addressing you today. And there are certain things that there are no differences in Israel and there is no coalition or opposition, and I'll start with this, and then I will relate to other things that we have some differences.

Clearly when we are looking at a region of the Middle East, it is now being understood more than ever that the region is being divided between extremists and moderates or so-called moderates or pragmatic leaders in the region or pragmatic states in the region.

The extremists represent an extreme Islamic ideology, which is not connected to the Israeli-Palestinian conflict, and this is something that needs to be said in advance. The Israeli-Palestinian conflict is not the cause of Iran's ideology; it's not the cause for Hamas ideology. This is something that you need to solve because this is part of our interest, but this is not the reason for extremism in the Middle East. One thing that there is no differences between me and the government in Israel, and I think that there is no differences from this between Israel and the United States of America.

Iran leads this camp of extremists. Iran supports Hamas. They have their own differences in terms of different religious views, but at the end of the day, Iran supports Hamas. Both of them represent this kind of agenda of hatred, extreme ideology. Iran supports Hezbollah in Lebanon and Syria, which doesn't show with these groups the same religious ideology, but it's part of the same camp for now.

On the other hand, we of Israel -- by definition, we are part of the moderate, according to our values, according to what we are. And in the last few years we can see that it's not anymore on one side Israel, the other side the entire Arab world, but we can see with us -- Israel -- other parts of the Arab world in understanding that Israel is not the enemy anymore, but Iran is the enemy. Iran is not only the enemy of Israel. Iran speaks about their hope or desire to wipe Israel off the map, but speaking with other Gulf states, Arab states, they say clearly that they cannot afford a nuclear Iran in the region.

Unfortunately, like on other issues that I will relate to later, some things that are being said by some leaders in the region in closed rooms are not being said publicly or in loud voice outside of the closed room, so the perception is sometimes that this is a problem of Israel, but it is not the Israeli problem anymore. This is the problem of the world. The world -- the free world cannot afford Iran with a nuclear weapon. Israel is part of the free world. We are working with the international community and on this there is not coalition or opposition in Israel.

The world needs to stop Iran and prevent Iran from achieving the nuclear weapon. This is something that nobody can afford. This is one thing that we all share. This is part of the understanding of the nature of the threat in the Middle East.

Now, for me, the understanding of the nature the threat is not enough because I feel that when there are some threats, we should find as leaders whether there are also new opportunities. And the fact that we can find with us today, in the same camp of moderates, other states that in the past were Israel's enemy or couldn't accept the right of Israel to exist, and now they are with us in the understanding of the new threat. This is also a new opportunity to enables us to work together, not only in facing together Iran, but in thinking together how to change the situation in the region -- also as it keeps connected to the Israeli-Palestinian conflict.

Now, I will concentrate on the Israeli-Palestinian conflict because this is part of -- this is the basic, maybe, differences between opposition and coalition in Israel, and I know that this is something that you can find different views in Israel and outside of Israel. And I would like to speak about each in more details.

And you said that I entered politics in the '90s; I would like to say that, what, I was a lawyer by profession. I loved being a lawyer; I hate politics. And I decided to enter Israel politics because of also agreement. I mean, I understood that the only idea that can keep Israel as a Jewish and democratic state is to divide the land of Israel -- what we call the land of Israel; what the Palestinians call Palestine -- into two, and I could accept this idea and I still believe that this is the right idea, and I'll refer to it later. But on the other hand, I thought that to do something like a memorandum of understanding but delaying all the core issues to the future was a tactical mistake, and in fact it led us to some years in which we had an agreement but we -- all these differences about the core issues were left between the two peoples.

So I entered politics. So my drive is to try and find a way to end the Israeli-Palestinian conflict in a way that can give us the possibility to keep Israel as a Jewish and democratic state.

And things that are obvious -- I said talking about dividing the land into two -- this is not -- and it was not easy for me to say since I grew up in a family of -- (inaudible) -- fighters; I was taught that the Jewish people have the right, not only in the part of Israel between Jordan River and Mediterranean Sea, but the entirety -- both sides of Jordan even -- and I do believe that the Jewish people has the historical, biblical, judicial rights on the land.

But I think that the last thing that we should do is to put the discussion and to put the focus or to try to solve the conflict -- who has more rights on the land, Israel or the Palestinians -- because this is dead end -- literally. And this is what I said to (Abu Ali ?) in our first meeting. I told him, "Listen, we can start talking about who is right; we can speak about history; who was here before; who has more rights -- this is going to lead to a dead end. We need to speak not about the rights but about how can we solve the situation in order to live in this region for the future of our children, grandchildren, for the future -- not to solve history or to choose between different narratives, because this is unsolvable."

And my ultimate goal or the way I see the vision of Israel is not to keep more and more land but to keep Israel -- its two values -- as homeland for the Jewish people and a democratic state living together and not in contradiction. And in order to do so we need a Jewish majority. This is not just a technical matter. This is needed because I'm not willing to give up the values of Israel as a democracy in order to keep Israel as homeland for the Jewish people. And in order to have this goal, I need to give up some of the land. And maybe these are the differences also amongst -- some of the differences in Israel because there are those in Israel that feel that the ultimate goal is to have more Jews living on the entire land, keeping the land. So this group, every day this passes is another victory. We are holding the land, nothing's happened, and this can be the situation forever. I believe that time works against us. I believe that when time passes, the conflict can turn from a national conflict, which is solvable, into a religious conflict which is unsolvable.

I mean, Iran, Hamas -- they are not fighting -- Hamas doesn't fight for the rise of the Palestinians for a state. They are trying to deprive us from our rights. I just read today in The New York Times, an interview -- Khaled Meshal saying that he is willing to accept a Palestinian state on '67 borders; Jerusalem, its capital; plus right of return of refugees to Israel, and what we got in return? Not recognition that we have the right to live -- 10 years of truce. And then what?

So this is not a national conflict with Hamas. This is a religious conflict, and this is not solvable. And when I see the situation in the region relating to what I said at the beginning that we can see more and more extremists, we can see more and more radical elements in different places in the region, I believe that we need to try -- to try and solve the conflict with the pragmatic leadership amongst the Palestinians to find whether we can find a way to divide the land and to have two states for two peoples living side by side in peace and security, and this is not a slogan. It means more than just few words.

And I would like to share you the way I feel -- or the way I believe we need to translate it in all that will represent the interest of both our people, even though in my role as an Israeli leader, I believe that it represents entirely the interests of Israel. Two states for two people -- (inaudible).

We are talking about two nation-states. Israel is a Jewish state, homeland for the Jewish people. It was created as a Jewish state in 1947 by the United Nations' recognition. United States supported it, of course. And it was obvious then that the state of Israel was established as a homeland for the Jewish people. It gave refuge to Jews who needed to leave Europe after the Holocaust. It gave refuge to Jews who needed to leave Arab states after the creation of the state of Israel. And this is the raison d'etre of the state of Israel. This is the reason for its existence. And the way I see it is that Israel is fighting for its existence -- not only the physical existence of the state of Israel but its existence as homeland for the Jewish people.

And this reflects part of the negotiations with the Palestinians because the only way to keep Israel as such and to end the conflict is to understand that there words "two states for two peoples" means that the creation of the Palestinian state means that this gives an answer to the nation and aspiration of the Palestinians, wherever they are. Those who live in the territories -- West Bank and Gaza Strip -- and those who live in refugee camps, in different places, that left Israel in 1948. For those of you who believe that the conflict began in 1947, it began before the state of Israel was established. And the idea of the United Nations resolution to create two states was to solve the conflict because there are those that think that when the state of Israel was established, this is the moment in which the conflict began and this something that they cannot accept.

So the creation of the Palestinian state is the answer to the Palestinians, and it means that the moment in which the Palestinian state is being created there are no demands for what the Palestinians call return of refugees to Israel -- demand. It's a matter of concept. It's not a matter of numbers. And it's a matter of concept because without it we open something that can end the conflict. And in opening this, giving some numbers, it means that the conflict is going to be open forever.

The creation of a Palestinian state is not going to be the solution but just a step. While Israel (was ?) safe, demands of individuals, refugees, asking to come to Israel, demanding what they call their rights -- the creation of the states will not be any more the answer to them, and the process which exists, unfortunately -- not in the United States of America but in different places in the world -- the process of delegitimization of the state of Israel as homeland of the Jewish people will continue and the -- Israel is being questioned for its moral values, something that we need to refer to and we need to give an answer because I believe in the moral standards of Israel. But this is the reason that saying two states for two peoples means something also in terms of the conflation into the negotiation. And this is the only way that can solve the conflict, and this is the reason why when I was minister of Immigrant Absorption, Ariel Sharon, the prime minister, sent me to the United States, and then I said that this is not pro-Israeli or anti-Palestinian. It's the conflation of the vision of the United States, and we got the letter of President Bush saying that the creation of a Palestinian state is the answer to the refugees.

The other reasons, of course, is living side by side in peace and security. What does it mean? It (needs ?) to be translated into different part of an agreement saying what's going to happen on the other side of the border. We are not going -- and I'm not going to throw the keys to the other side of the border hoping for good. We need on the other side a state, yes, demilitarized, and effective government that can control. We cannot afford another terror state or a failed state in the region, and these are also parts of or different articles of the future agreement between Israel and the Palestinians in order to translate the vision of two states, two peoples into an agreement.

Now, since I believe that time works against us, there are different views about how to proceed. There are those saying that since we have partners but they are too weak and they cannot deliver, we should wait until the situation on the ground changes -- until they can fight terror, until the situation in Gaza Strip changed. And then -- only then we will answer to the negotiations -- (inaudible) -- trying to have a concrete agreement in order to give the answers to all the core issues that we decided to discuss back in Oslo.

I think that even though we need the situation on the ground to change, we cannot afford stagnation as a policy. I believe that we need to find today -- with the partners that we have today, whether we can reach an agreement on all the core issues which are open today between us and the Palestinians, and then, as I said before, I'm not going to give them the keys without the changes on the ground.

So in a way I would say that we need to find out whether there is a partner -- and I believe that there is a partner -- to reach an agreement with. And then we need to see whether the government is effective enough to be a partner to the implementation of the agreement. And this is the difference maybe between the road map and the Annapolis process. The road map suggested to start with the situation on the ground and then to reach a point in which -- only then, later -- in which we start negotiating final status issue. In Annapolis we decided to start negotiating with the pragmatic leaders in the Palestinians, and then the implementation is according to the road map, subject to the road map. So the need to fight terrorism is there anyway, and we need to do it simultaneously. While we are talking we need of course to change realities on the ground in terms of security, economy, as far as we can. And now the -- (inaudible) -- thing that we can do is only in the West Bank since Hamas controls Gaza Strip.

Last word about Hamas and Gaza Strip -- because since we've (sensed ?) these divisions between extremists and moderates in the region, we need to have also a strategy that addresses the different parts of the Palestinian society and leadership and different parts of the region. So this is the dual strategy. It's not only about speaking with the good guys or the pragmatic leaders in the Palestinians or the moderate Arab states, but acting without giving legitimacy directly or indirectly to the extremists. So the need to fight terror exists anyway. The need not to -- to delegitimize Hamas in Gaza Strip is needed anyway and simultaneously, because you need to understand that (this is ?) a zero sum game between extremists and moderates. When we give Hamas legitimacy, they are getting stronger. Abu Mazen, Salim Fayed -- they are getting weaker and their ability to reach an agreement with Israel, if they want to, is being undermined.

When Hamas is getting stronger in the future, we'll have more and more supporters of this kind of an ideology that is not willing to accept the right of Israel to exist. I mean, what were the demands of the international community for Hamas? To accept the right of Israel to exist, to renounce violence and terrorism, and to accept or to agree to the former agreements between Israel and the Palestinians. And that's all. It's not too much to ask. And I think that when the international community expects the peace process to continue, it's not less important to keep the demands from Hamas and not to undermine these demands or not to be flexible or not to compromise on these demands.

Now, these are the basics, because I know that I need to answer also your questions. But I want to say something about -- say a few words about the Iranian issue, about the Palestinians. And people are talking now about differences or maybe about conflict between Israel and -- I don't know, the international community. I know that we are talking, that we have shown interest on both these things. The Iranian issue is not only -- the need to stop Iran from being nuclear is not only the interest of Israel. This is the interest of the entire land, the entire world, the world led by the United States of America. So we need to work together. We can work together. And this is something that -- (inaudible) -- the interest of the entire world.

And I do believe that making or reaching an agreement with the Palestinians is not a favor that Israel is doing to the Palestinians, nor to the Arab world; not even, excuse me, to the United States of America. This is our own interest. We live there. We need to find a way to live in peace there. It's not easy. We have problems. We have problems on the other side; the Palestinians have problems. We have Hamas there. I'm not going to undermine any of the problems in the region because they are there. And I'm not going to undermine any of the threats in the region. But I would like to say that in the understanding of the nature of the threats, it doesn't mean -- I don't want to make these threats as an excuse not to continue the negotiations with the Palestinians because I believe that these represent the interests of Israel to keep Israel as a secure state in the land of Israel -- not on the entire land, but as homeland for the Jewish people and democratic state. And in doing so, this represents the interest of Israel; this represents the interest of the pragmatic part of the Palestinian society; this represents the interest of the Arab world; this represents, of course, the interest of the international community, the United States of America. But excuse me, I'm an Israeli and I feel that I need to represent the Israeli interest, and this is the Israeli interest.

A few words before I'm being asked about the Arab Peace Initiative because talking about the Arab world, there is a kind of -- I hear more and more about the need to adopt the Arab Peace Initiative and why Israel is not doing so. A few words about this and then I'll open the floor for questions.

Listen, I think that the idea of the Arabs saying that the way to solve the conflict is not by violence but through negotiations is positive. The idea that they want to normalize their relations with Israel is very positive. But the Arab Peace Initiative puts the outcome of any agreement as part of the initiative. It relates to Border '67, border (of ?) Jerusalem, right of return, 194 -- something about an agreed solution on this. But the Arab Peace Initiative puts the Arab narrative on the table, and the outcomes are the Arabs' fault.

Now, I -- (inaudible) -- I said what is important in this initiative, but I hope and I know -- since I asked -- that they are not trying to dictate the outcome of an agreement which should be bilateral between Israel and the Palestinians. This is why we negotiate. And they don't want to replace the -- Palestinians (to ?) negotiate on behalf of the Palestinians with Israel.

So as an idea, speaking about peace, talking about normalization, saying that they are willing to accept Israel -- this is really -- I'm not undermining this -- it was a -- (inaudible) -- very dramatic change in the atmosphere and the way the Arabs act toward Israel, but this is the only way that we can refer to it because in -- (inaudible) -- the whole articles mean that we -- that there is no room for negotiations. And since the Arab League has some delegation and I met them, of course -- only, unfortunately, the Jordanian and the Egyptians -- those states that we have relations with -- were able to represent the Arab League. I asked them the same questions, and I think that this is the only understanding how to deal with this.

But there is another thing that the Arab world can do. There is no Palestinian leader who can really make the historical decisions which are needed, and historical decisions are needed by Israel and by the Palestinians as well, (without ?) the support of the Arab world. And as a part of the Arab world, it's not only speaking about peace, calling for it to Israel to speak with the Palestinians, to reach peace with the Palestinians. There is something that can support the peace process, and this is what I call normalization in stages. Since in the Arab Peace Initiative they say -- it's written that the end of the road, when Israel reaches peace with the Palestinians and Syria, then -- only then the Arab world is willing to normalize its relations with Israel. And I said to my colleagues, "Listen, I need peace with the Palestinians not in order to have normalizations with you; I need peace with the Palestinians because I need peace with the Palestinians. I'm not doing it for the sake of the normalizations with you. But you can send the message right now to your own radical elements, to the Palestinians and to the Israelis." I mean, there are justly skeptic Israelis saying, "There is no palestinian partner; they cannot deliver anyway. What we got in return after we left Gaza Strip is only terror. What can we gain out of this? There are only risks in this process."

So let's imagine that the Arab world starts in doing some acts of normalization -- some public meetings, God forbid; inviting some delegations from Israel; Israelis coming to these places -- places that we don't have diplomatic relations with; saying something that represents what you are doing, by the way, anyway, but privately.

This can give -- send a message to Israel and to the Israelis -- to those who don't believe in the process that the entire -- that there is something, that the tradeoff is not only Israel and the Palestinians but something which is bigger. This can send a message to the Palestinians that the Arab world supports them. And this can send a message to the radical elements in the region because up to now the only pictures that they see in Al Jazeera is unfortunately pictures from military operations that we need to do in order to act against terror; or, in good times, pictures of Abu Mazen, (normal ?), -- (inaudible) -- Livni.

So, from their perspective, the only one -- those who are willing to speak with the enemy, with Israel, and I'm talking about radical elements, is few. If they could have seen their own leaders meeting with the Israelis, this can send a message that reflects reality -- that Israel is not the enemy anymore, that Israel is willing to do some steps toward the Palestinians.

And I can understand the linkage -- that the Arab world is doing, that they are willing to do so only when they see something that Israel is doing towards the Palestinians -- I can understand this linkage. But, they need not to wait until we reached or finalized -- reach a final-status agreement, and only then normalize the relations. But, there are certain things that they can do right now that can help us -- all of us, to reach an agreement at the end of the day.

So, I think that this is -- these are my beliefs, my vision about what needs to be done, you know, which is related to the Israeli-Palestinian conflict, what needs to be done about the real threat in the region, the Iranian one? And now I think this is time for questions. Thank you.

(Applause.)

WEISBERG: Ms. Livni, let me begin by asking you, in two weeks the new American president will meet for the first time with the new Israeli prime minister. Most people seem to think that President Obama will press for further negotiations leading to a two-state solution. Most people seem to think that Prime Minister Netanyahu is not in favor of pushing forward with negotiations now, that he thinks either that the issue of Iran should be more urgently dealt with, or that they should -- negotiations should be put on the back burner.

What do you forecast for that meeting? And, speaking for yourself again, what would you hope might come out of that meeting?

LIVNI: You can ask everybody here --

QUESTIONER: (Laughs.)

MS. LIVNI: -- I mean, you can choose somebody, and that's the same question. I really don't know. I don't know -- listen, I believe that the relationship between Israel and the United States of America are of strategic nature.

I think that it is so deep, that it is more than a question of a new government in Israel or a new administration in the United States. It's bipartisan in the United States -- the relationship, and the understanding and the friendship, and I believe that this is the situation in Israel. At the end of the day, show that both the Israeli prime minister and the American president will discuss everything. And we're all waiting for the outcome of this meeting.

But, it's more than that, it's just -- I mean, everybody's waiting for May 18th like something is going to happen on the same day. This is just the beginning of -- I think, the beginning of a dialogue between the United States and Israel on all the issues.

As I said before, I believe that the question is not "give me something here, and I'll give you something there," because I believe that this is a shared interest: they need to stop Iran, and the continue of the peace talks with the Palestinians (anyway ?).

But, as I said before, the last thing that I want to do right now is to represent the government. I chose not to do so since I didn't -- I'm not part of this coalition.

WEISBERG: There has been an issue, of course, over whether Israel has a partner for peace. Your successor as minister of foreign affairs, Avigdor Lieberman, is an extreme nationalist, I think you could say, who lives in a West Bank settlement himself, who has suggested that Israeli Arabs need to take a loyalty oath, and would be deprived of some citizenship rights if they don't agree to the -- about the Jewish character of the Israeli state.

Is he a plausible partner for peace? Can he be someone that the Arabs can negotiate with in good faith?

LIVNI: Listen, Israel is a partner for peace. And because Israel wants to live in peace with its neighbors, the vast majority of Israelis -- I do believe the vast majority of Israelis believe that there's a need to adopt the vision of two states for two peoples.

We have some differences. There are those, as I said before, that believe that -- like the settler movement, trying to grab more and more land, in the understanding that this is the ultimate goal of Israel. There are those who have their own concerns, in terms of security. And I respect this. I mean, these were also some of my concerns (even in ?) negotiations.

We had tough discussions: What's going to be the nature of the Palestinian state -- (inaudible) --? And, talking about the Israeli Arabs, I would like to say -- to express my position on this. And I'm sure that you can ask Lieberman, when he comes -- when he comes to New York, what is his views. As I said before, the creation of a Palestinian state is the answer to the (national situation ?) of the Palestinians wherever they are.

Since I believe that Israel's -- (inaudible) -- demography are crucial, are very important for us -- and this is the reason why I need to give up part of the land, each and every Israeli citizen is an equal rights citizen. Because Israel is a democracy, this is part of our -- (inaudible) -- a democracy and Jewish state goes together.

But, also the Arabs in Israel -- the Palestinians in Israel, the Israeli citizens need to understand that the creation of a Palestinian state gives an answer to their own (national situation ?). They are equal rights citizens. They can live in Israel as an equal rights citizen.

This is part of my responsibility. It's not a favor that we give them equal rights. This is what -- this is part of being a democracy. But, I cannot accept any national demands, within Israel, afterwards. This is the way I see the relationship between Israel, the Palestinians, the creation of a Palestinian state, and the relations between the different minorities and majority in Israel.

WEISBERG: Before we open it up to the audience, I wanted to ask you one more question that I think draws on your background as a lawyer, and also, as I understand it, someone who worked in the security services in Israel. We are in the middle of a major debate about torture in this country, which was a policy of the previous administration, now thrown out by the current administration, and we're in the midst of a conversation about what to do about having done it.

Israel drew a very firm line against this, I think, a little more than 10 years ago when the supreme court ruled against it. In your view, is -- does torture ever work, and can torture ever be justified?

LIVNI: Whew! (Laughter.)

As I said before, I believe that democracy is not just a system, it's a combination, and a system which -- (inaudible) -- and is being found on values. And this is part of it. According to which we are acting. And this is the reason why, in the past, the Israeli supreme court decided -- as it decided there are some things that are permitted and some things that are forbidden.

And it's not like yes or no. When you say torture it means, it gives -- there is yes or no answer, and the answer is "No, but." There are certain things that the supreme court permitted the Israeli security services to do in order to save lives, because, at the end of the day, we are fighting terror. And this is part of the Israeli -- excuse me for opening something which is not, directly was raised from your question, but it's something that, it is the Israeli basic frustration.

We feel that we are fighting -- well, we are fighting terror. The Israeli soldiers -- I mean, it's our children -- my son is in the army. You don't suspect me wanting my son to do something against the values that I (raised him ?), but he needs to be defend (his turf ?). And then he fights terror, or he's hiding among civilians, and we are trying to catch them. And in doing so, unfortunately, there are civilian casualties and there are civilian casualties

And when we need to know there is a ticking bomb in order to save life of citizens, civilians in Israel. Sometimes we need to investigate, or to find and to see whether there is information that can stop this suicide bomber who is going to enter our nurseries, and cities, and towns and kindergartens. So, what should we do?

So, it's not just a philosophical question about torture. It's our day-to-day life. And, as a decisionmaker, (I will ?) tell you it's not about torture, but a kind of a dilemma that I had as an Israeli minister. At the beginning of the war -- it's not (torture ?),but maybe it's -- at the beginning of the war in Lebanon we had all the information about the missiles that Hezbollah had in Lebanon.

Some of them we knew in advance (to know ?). The system was that there were places in which they (hire ?) in order to put missiles -- apartments. -- (inaudible) -- not for somebody -- (inaudible) -- but for missiles. And we had information, and we needed to decide whether we are going to bomb these places the night of July 12th, in an understanding that we can cause civilian casualties. But, these people knew in advance what they are doing.

So, these are -- and we decided to do it, so these are the kind of the dilemmas that, as the decisionmakers, we have when it comes to these kind of decisions of our security services on a daily basis.

And in the last -- listen, we are just, we have some, not quiet, but I still remember the horrific days of the Second Intifada in Israel, when we couldn't send our children to the malls, or to the discotheque or to go together to a restaurant. So, this is part of fighting against terror, and we need to find the balance, to express our values on one hand and to find a way to get the information that can prevent the next terror attack.

It's not easy, but it's not only a philosophical question of yes or no. And I'm familiar with the debate here in the United States. I can't relate to it -- I don't know to relate to it, but I just wanted to share with you some of the problems that we are facing.

And, on the other side, they are exploiting our values. And it's not easy to express these values, and to work accordingly, while the other side is exploiting them.

WEISBERG: All right, at this point I'd like to invite our members to join the conversation. Please, when I call on you, wait for a microphone to come to you. And tell us your name and your affiliation, and please limit yourself to one question. Time is short and we'd like to get in as many as possible.

And why don't we start right there?

QUESTIONER: I'm Bill Droesdiac (sp).

You haven't said much about the settlements. And I know that very much something that the Obama administration will bring up in the discussions with the Israeli government leadership. How do you respond to the arguments of those who say it's hard to cultivate a negotiation, or a reconciliation with those on the Palestinian side as long as settlements continue to grow and expand in the West Bank?

LIVNI: Okay. So, you asked two -- you ask for short questions, and I'm giving long answers.

On settlements, there is also one thing that I want to -- that I want to say, because I know that this is something that we have differences with the United States since '67, I mean, basically.

And you mentioned that Lieberman is a settler himself. And this is true, but I just want to say since at the beginning, in 1967, the idea was -- from our perspective, I was a child then, and I remember the feeling that we came back to places which are part of our own history -- and the idea was to live happily ever after between Jordan, (Egypt ?) and the Mediterranean Sea, Jews and Arabs. Nobody wanted to control the Arab, and the idea was to live in one state.

I believe now that this is against the interest of Israel -- the idea of one state, or a binational state, or something like this. So, we need to divide the land. And, while negotiating with the Palestinians, I tried to find what is the border that can give an answer to realities on the ground, that are there anyway for the last 40 years. And, basically, (this refers ?) to what we call "blocks of settlements," or civil population centers that takes only few percentage of the West Bank, but vast majority of Israelis are living -- are living there, and these places are very close to what is called the "red line" of -- "green line" of '67.

Now, there is also the Israeli government (policy ?) -- (inaudible) -- the former Israeli government policy was not to expand or to build -- (inaudible) -- settlement, not to expand settlements. But the complexity -- it is not complex, just (shall we ?) be part of the complexity, since, from the Israeli perspective, lots of settlements are going to be part of Israel in the future.

The Palestinians, even though some of them understand that -- (inaudible) -- (or/are ?) part of the -- (inaudible) -- that something is going to be part of Israel, from their perspective they are suspicious, and they feel that Israel has its own conspiracy of building more and more settlements in order to get more and more land from them, while trying not to finalize or to reach a final-status agreement, and in wasting time by building more settlements, grabbing more land, and make the division, or the creation of a Palestinian state impossible.

This was not the Israeli government's policy. At the end of the day, you couldn't see a real expansion of settlements. But, I also think that there is a kind of an equation between time and the settlements. I'll try to explain. I think that when the Palestinians felt that we have (distrust ?), that we are not -- that we are not looking for a settlement or -- (inaudible) -- in order to grab more land, and we are -- (inaudible) -- to reach a peace treaty with them, they understood that maybe the settlements or some building is less important because it's not going to take much more time until we reach a peace treaty.

And when the feeling is that it's going to take a long time, it makes them more sensitive when it comes to settlements. The way I see it, the final word is -- the way I see it is that my responsibility is to give an answer, in a final-status agreement, to more and more -- or to more Israelis who live in especially in the blocks of settlements that exist anyway. Well, there are, of course, different -- there are parts of the secular movements who believe differently. And I think that since today I heard that the vice president said publicly that this is part of the United States' demand, I'm sure that this is going to be raised on May 18th.

WEISBERG: All the way in the back, ma'am -- that's you.

QUESTIONER: Yes, Bernadette Kilroy, from Clarium Capital Management.

I wonder if you believe, or if you think that members of the Israeli government believe that the Obama administration has already come to terms with a nuclear Iran? And, given the --

LIVNI: I hope not.

QUESTIONER: -- and given that the Obama administration seems to be linking support on Iran to progress on the Palestinian issue, what do you think the prospects are for some kind of a deal with Iran that will be acceptable to Israel?

LIVNI: Okay, I believe that the United States of America is not -- or, we are not in a point in which there is somebody -- especially -- (inaudible) -- the United States of America is going to accept Iran with a nuclear weapon. I don't think that this is the position, so I don't think that there are differences on this.

More than that, I think -- I know that the world's leaders, basically, almost all of them, in talking about the free world, are talking in terms that the world cannot afford Iran with a nuclear weapon. There is, unfortunately, a gap sometimes between some of the statements and the way they vote in the Security Council when it comes to different sanctions. But, the understanding that the world cannot afford Iran with nuclear weapon is there, and of course the United States leads this understanding and the efforts to stop Iran by sanctions and diplomatic means.

Now, from the Israeli perspective, I think that the most important things for us, when it comes to the dialogue, is -- and I think that everybody needs a kind of a definition: what is the meaning of success; what is the definition of success or failure; and a timeline? Because we know that Iran is trying to spend more time, and while we are talking here, eating lunch, they are continuing in their enrichment.

And the day which is the most -- (inaudible) -- or day of no return is not a day -- it's not the day of the bomb. Each day that passes is another day that Iran becomes more and more problematic. And, in reference to the other states in the region, I said before that they -- the Gulf States and other Arab states understand that Iran is a threat to them as well, but there is something else to understand.

We live in a neighborhood in which whether you beat the bully or join him. And the entire region is looking at the free world, led by United States of America, waiting the see whether the world is going to stop Iran or not.

And if the impression today -- not in the future, but today, if the perception, the image is going to be that the world can live with an nuclear Iran, this is going to be the day in which, what I said here about -- (inaudible) --, understanding that Iran is a threat, this can be changed in a day, because they've tried to -- (inaudible) -- to get nuclear weapons themselves. And just think about proliferation of weapons, just as the situation in Pakistan.

What are we risking at, in a situation in which Iran gets the weapon, or even the perception that Iran is going to get it? And this is the way that, as I said before, about the engagement, and any dialogue should be under an understanding that there is -- (inaudible) -- I mean, if they are not going to work or to accept the demands of the international community, what happens then? And Iran needs to know that all the options are on the table.

WEISBERG: Let's see -- right here.

LIVNI: Last question?

WEISBERG: I think we may have time for one more after this.

QUESTIONER: Jeff Laurenti, with the Century Foundation.

First, Mrs. Livni, I have to say that if you really hate politics you must be a superstar in the courtroom --

LIVNI: (Laughs.)

QUESTIONER: -- because your -- (inaudible) -- been dazzling.

There's been this concern that the peace process and the talks may be "spinning of wheels." And one wonders, when you look at the Taba parameters that were agreed to in early 2001, what are the issues that are really no longer on the table? What are the problematic elements of what had seemed to be agreed at Taba? And what, in the year of negotiations you had under Annapolis, have been kind of resolved, maybe differently from that initial package?

LIVNI: Okay, thank you.

You know, after I said to -- (inaudible) -- that you shouldn't decide who is the right and who is wrong, in terms of narrative, we decided not to decide what happened in Taba. Because there are different ideas about what was agreed and what was not, in Taba, so we decided to put it aside and to start of what need to be done in order to end the conflict.

But, we decided we had different understanding at the beginning of the process. One, is -- and this is unlike, I don't know, probably was Clinton's principles, we don't want a principles agreement. We want a concrete agreement, and we need to give an answer to all -- not only the core issues, but we need something that can be implemented.

For example, I was asked about the settlements. As I said before, as long as -- let's assume that we reach an understanding, something about the border -- '67, plus, minus 8 percent. Never mind, okay? Now, from the Israeli perspective, we are certain that this includes Jerusalem and blocks of settlements, okay. This is the basic understanding in Israel.

-- (inaudible) -- So, let's assume that we reach this kind of agreement, and the next day Israel decides to build in -- (inaudible) -- because we believe that this is going to be part of Israel, and -- (inaudible) --. The first block that we (build now ?), the Palestinians are going to come and to say, listen, you're in violation of the agreement because this is part of the future Palestinian, this is not part of Israel.

So, something which is vague, or which is not concrete, -- (inaudible) -- that line on the map, knowing what's going to be Israel and what's going to be Palestine is going to lead to more frustration in the future. And this was part of -- my understanding, from Oslo, that led me to the idea of entering politics, but also the idea that we need to have a full package.

Another understanding was the understanding of Camp David 2000 -- not exactly Taba, but the idea that now we should enter to the room and try to finish everything in a day. Put the pressure, and leave the room with an agreement. This is also a situation that led to lack of ability to (do solve ?) differences that maybe, from the outside, are small differences. The gap looked -- was perceived as a narrow gap. But, when I tried to (learn ?) on different issue it was not that narrow and, in fact, we couldn't bridge it.

So, the decision was to give a concrete idea, to work simultaneously on all the issues, since at the end of the day there are connections between different issues. For example, we have settlements, border, Jerusalem -- border, settlements, Jerusalem, security, water and refugees. The way I see it is the following: The refugees and the statehood are both sides of the same -- different sides of the same equation. The creation of a state is the answer to refugees. But, it's not enough.

This is the basic idea, but of course, we need to do -- to deal with international the mechanism of compensation. It's not only the right of return, yes or no. Because there are certain issues that we can do as part of a full package, which is not giving up -- or which is not opening Israel to refugees but giving them compensation as part of an international mechanism.

As an example -- (inaudible) -- settlements and borders. When we define the borders, it is clear -- (inaudible) -- what is Palestine. And the idea is that, of course, we need to dismantle settlements which are on the other side of the border when we decide the border. So, it's not just vague idea.

And, Jerusalem, of course, is something which is unique and a very sensitive issue. Now, we decided to work simultaneously -- (inaudible) -- myself on some of the issues, and different officials on economy -- water. But, we decided that, at the end of the day, when we reached -- even we are very close to finalize one core issue, we stopped because, at the end of the day, the final -- (inaudible) -- is trade-off between different -- if one is important for me, the other is important for him. I didn't want to reach an agreement on borders without knowing what about our security, and so on.

And about water, just an example of the way that sometimes when you build with everything you can solve problem and it's not -- it doesn't become more problematic. Just small -- a short story: We discussed one of the places which is one of the settlements, which was built on an aquifer of water -- and, in the Middle East water is a -- (inaudible) --. And we had this argument. It was very strong, and very sensitive and -- (inaudible) -- (determine of this ?).

And then I said, listen, it's not this much of the land, why you are so --? He said, "Listen, but it sits on the water." And I said, listen, so we can make an agreement saying that because, for me, I need this place because I don't want to evacuate these places, because there are thousands and thousands of people who live there, but I'm not doing it -- they were so suspicious they suspected that I am talking about it because I want the water.

So, just in putting everything sometimes we can solve the problem -- (inaudible) -- Okay, I need the place because of the settlers living there. You can get the water.

We decided -- and this was part of the trust that was built between us, that we are not going to share with the public what was achieved and not what. But, as I said before, it's not like we had one understanding on one issue and the others are not. It is we had the progress and I feel this is -- you know, I was asked whether, how is it to be in the opposition, and for me the most, the thing that I, that I feel that this is the most -- I don't know how to say, "painful," but something which is basically, it's the end of the negotiations, hoping that this is just a pause and not something that will stop, because we need more time, we need more time, we need to do it the right way. But, I believe that we can do it. It's not easy, but I believe that we can do it.

WEISBERG: I'm afraid you're right. That was the last question.

(Laughter.)

LIVNI: Okay.

WEISBERG: Thank you for joining us today. (Applause.)

LIVNI: Thank you.

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