Updated

This is a partial transcript from On the Record with Greta Van Susteren, May 8, 2002. Click here to order the entire transcript of the show.

Watch On the Record every weeknight at 10 p.m. ET!

GRETA VAN SUSTEREN, HOST: Prime Minister Ariel Sharon traveled back to Israel to deal with the latest attack. What will the Israeli response be? Former Israeli Prime Minister Ehud Barak who joins me from New York. Welcome, sir.

EHUD BARAK, FMR ISRAELI PRIME MINISTER: Hello, Greta.

VAN SUSTEREN: Sir, when can we expect that the Israelis will react because it certainly seems like the writing is on the wall. The prime minister said that Israel will react.

BARAK: There's basically to exercise our right of self-defense, I believe that it will happen, or begin even before your next night show. But I cannot, you know, but respond to what Mr. Shanab told you. At the same time it's a telling interview and then insults to common sense. We all know by now there was no massacre in Jenin, and we all know by now that it is not about occupation.

Occupation could be ended 20 months ago at Camp David and Mr. Arafat on behalf of the Palestinian people deliberately turned to terror. What is really here at stake is an attempt by the Palestinian Hamas and Arafat to dictate to all of us, not just to Israel, a new diplomatic legitimate tool called suicide bombing. We will never ever accept it. I believe that you should never, ever accept it and the rest of the world to follow.

VAN SUSTEREN: Sir, Hamas has now taken responsibility, or claimed responsibility for yesterday's bombing and as well as the Passover suicide bombing that started this last round of combat. But Arafat today and yesterday condemned this bombing. Do you think that this was a genuine condemnation or not?

BARAK: I cannot penetrate his soul, but basically from my experience it's a smoke screen that he usually spreads around himself when he feels the pressure coming closer, or the burner coming closer to his skin. Let me tell you, maybe Hamas did not take responsibility, but it ends up to be not the operation of some… quite probably either Hamas or Islamic jihad or Arafat's organization itself.

VAN SUSTEREN: Well what do you make of the fact that the president of United States, at least in terms of Arafat and his condemnation says it was incredible positive sign. Do you think that the president has been fooled by Arafat?

BARAK: I believe that it's better that he condemn than he applaud it or call for more charades, but basically I believe that it's slightly exaggerated. The man has not changed his behavior, his stains of terror on his record basically leopard's spots.

VAN SUSTEREN: Here's what I don't understand is Hamas has taken responsibility for yesterday's bombing in Tel Aviv, which was no doubt in my mind a poke in the eye to say it politely because Sharon was at the White House visiting the president, and the Passover massacre, I mean, on a very important night to Jews in this world. How come it is that the Israelis have gone after Arafat and not gone to the Gaza Strip and gone after Hamas, the group that has claimed responsibility for these terrible bombings?

BARAK: No, I believe that we will go after Hamas.

VAN SUSTEREN: But why haven't you so far?

BARAK: I don't see think that we ever prevented or refrained from dealing with the Hamas. Usually they're hiding some things better, but we'll find all of them. From basic level, there is no difference between their pattern of terrorism. Arafat managed to mislead the world for quite a long time by his readiness to have this kind of double speak that he talks in English in a much more positive terms and we gave him a chance, together with the whole world, but at a certain point ...

VAN SUSTEREN: Is Arafat calling the shots for Hamas? I mean are you saying that Arafat tells Hamas what to do? I mean because Hamas says they are the ones doing this.

BARAK: No, no. He's not telling them. But they do not have to sit every evening to technically coordinate. They understand where it serves them and where it threatens them. And they kind of move their two arms of the same national movement that are operating in coordination. Arafat is sometimes the good cop, the good player and Hamas is the bad player and sometimes both are bad. This is not basically new, and we have to face it. Somehow, I believe that the real lesson for Israel is to start immediately with setting the security fence between us and the Palestinians to include Israel and the settlement block in order to reduce dramatically suicide attacks into Israel. And at the same time, you know the other challenge is to make clear that the whole world understands, that Arafat cannot gain even a single inch out of these deliberate tools into terror.

VAN SUSTEREN: In talking about Arafat, what should happen to him? Foreign Minister Shimon Peres says that there's no point in exiling Arafat. What do you think should be done?

BARAK: Mr. Arafat should not enjoy neither immunity nor impunity, but I don't believe that it is our job. I believe that the whole world should identify what is the real nature of this leadership. The same way that you negotiated with Milosevic, and now he's in The Hague. The same way that Senator Dole and Reverend Jackson all talked with Saddam Hussein in his own palace at a certain point when he turned to, trying to eliminate Kuwait.

It became clear what his real nature is. And that's what should happen with Arafat. It's not about Israel. We should be saying loud and clear, we are ready to negotiate at any moment with no precondition beyond fool absence of violence.

VAN SUSTEREN: Sir, here's another point that I don't quite understand is that the Palestinians are very disturbed by the increasing number of settlements that have been built. They say it's encroaching on their land. The Palestinians, many of them have suffered incredibly as a result of what's going on over there. Even during the time that the Prime Minister Sharon has — since he's taken off, there have been 35 more settlements built. What is Israel going to do about those settlements?

BARAK: Look, I already said long ago when I was prime minister, I said eye to eye with Arafat, I told him, we can achieve an agreement that will put an end to the conflict and delineate a border within 18 months — 18 months is too short time even to end a single building, so whatever already happened, happened. But now, once we delineate the border, whatever houses or buildings will end up to be within the newly created Palestinian state, take them as a gift and put refugees in them. Whatever happened to be ...

VAN SUSTEREN: Will you go back to the 1967 borders? The Palestinians don't look at it as a gift. They look at it as something that actually belongs to them.

BARAK: Yes, but I can tell you, I told President Clinton and Mr. Arafat at Camp David, look, I can remember the night where Israel was established by a count of votes at the U.N. in '48 or the end of '47. You know, the other morning there was a war. The founding father of Israel accepted a Jewish state that was set out of three different contents, how they connected without Jerusalem, without even a corridor to Jerusalem. The Palestinians did not agree. They called upon the whole Arab world to try to destroy Israel before we can stand on our feet. I told President Clinton and Arafat, we will never, ever be apologetic about the fact that we survived.

It happened once and again, and we are committed to protect the security and the future of the state called Israel, the only democracy in the Middle East.

VAN SUSTEREN: Indeed it is the only democracy. Mr. Barak, it's always nice to see you. Thank you very much for joining us this evening.

BARAK: Thank you, Greta.

Click here to order the entire transcript.

Content and Programming Copyright 2002 Fox News Network, Inc. ALL RIGHTS RESERVED. Transcription Copyright 2002 eMediaMillWorks, Inc. (f/k/a Federal Document Clearing House, Inc.), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon Fox News Network, Inc.'s and eMediaMillWorks, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.