Updated

This is a rush transcript of "Special Report With Bret Baier" from September 22, 2009. This copy may not be in its final form and may be updated.

BRET BAIER, "SPECIAL REPORT" HOST: Earlier today, President Obama met with Palestinian Authority President Mahmoud Abbas and Israeli Prime Minister Benjamin Netanyahu in the latest effort to start a dialogue between the two long- time adversaries. Following that meeting, I talked with Prime Minister Netanyahu about Iran and whether the U.S. has given Iran another deadline to come clean about its nuclear program.

(BEGIN VIDEOTAPE)

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: What I hear from President Obama is he doesn't want to have Iran just dawdle away the time. He understands. He said that there has to be a clear and finite result within a given amount of time to see if the Iranians are serious about stopping their nuclear program.

BAIER: So you don't have a new date?

NETANYAHU: Well, put it this way, I think that I heard clarity. Now, the question, of course, is whether Iran understands this clarity, and what's most important is that if it doesn't that the international community, with or without the Security Council slap very forceful sanctions on Iran, because this regime is very vulnerable. It is not as strong as people think. It doesn't have the support of the Iranian people. There's a lot of pressure that could be applied to it to make it stop the enrichment of nuclear material.

BAIER: How long can Israel wait for the world to act before Israel has to act unilaterally against the Iranian nuclear program?

NETANYAHU: Bret, I'm not going to deal in hypotheticals, although you want me to. I suppose any country has and reserves the right for self-defense, and Israel is no exception. But I think the specter of Iran arming itself with nuclear weapons and possibly giving it to terrorists or giving them nuclear —

BAIER: And you're convinced they want nuclear weapons —

NETANYAHU: Is sufficiently — sufficiently troublesome for the international community to get its act together and act to stop this from happening.

BAIER: You're convinced they want a nuclear weapon?

NETANYAHU: Yes.

BAIER: How long do you think from Israel's perspective would it take Iran to get one?

NETANYAHU: Well, it's getting shorter because they're amassing more enriched material.

BAIER: Some of the bullet points lately of stories coming out seem like in months. Is that possible?

NETANYAHU: What I think is possible is for the international community to make Iran reconsider its blatant flaunting of international commitments and international obligations. It's possible to apply pressure on them.

This regime has been a mess. I mean — you know, a few months ago I would have told you that 75 percent, maybe 80 percent of the Iranian people detest this regime, this theocratic dictatorship, and you would have said, well, maybe yes, maybe no. But the Iranian people showed unbelievable courage going out there in the streets again and again and saying we want our freedom. We don't want this medieval doctrinaire despotism controlling our lives, and now you see it. And when you see that, you ask, do you want — do you want these people to have nuclear weapons? And the answer is no, none of us do. The Iranian people don't, and as soon as pressure is applied, the sooner that catastrophic development would be averted.

BAIER: How concerned are you about Russia selling S-300 anti-aircraft missiles to Iran?

NETANYAHU: Well, I can tell you what I've said in open forums and to leaders all over the world, I think that arming Iran with advanced weapons would give the regime, that regime the feeling that, in fact, they're immune to pressures, they're immune to the statement that President Obama has made repeatedly that all options are on the table. If they think that all options are not on the table, it will be that much harder to make the sanctions work. So I think that for the sake of peace, and for the sake of security, these weapons should not be given or sold to Iran.

BAIER: Former National Security Adviser Zbigniew Brzezinski is quoted this week about a possible Israel strike on Iran, that the U.S. is not impotent here, and possibly preventing Israel from bombing Iran. This is what he said. "They have to fly over air space in Iraq. If they fly over, you go and confront them. They have a choice of turning back or not." Your reaction to that?

NETANYAHU: Well, I'm not going to respond to a hypothetical on a hypothetical.

BAIER: OK, but how about this question? Are you 100 percent confident that if you have to act unilaterally, that you will have the backing of the U.S. government?

NETANYAHU: Well, I have nothing to add about that, adding and responding to a hypothetical of a hypothetical of a further (ph) hypothetical —

(CROSSTALK)

BAIER: OK. How much cooperation or consent —

NETANYAHU: I think it's a worldwide interest and an American — a joint American/Israeli interest to make sure that Iran does not get nuclear weapons.

BAIER: How much consent or cooperation would Israel need from the United States?

NETANYAHU: I think the question is how much cooperation the international community is going to muster among its leading members to make sure that these options are not really necessary, because they are sufficiently strong economic, political, diplomatic pressures that could be applied to Iran, and the stronger they are, the less severe the measures needed to stop the Iranian nuclear program.

BAIER: Well, on that line, is it clear to you that Russia and/or China will never sign on to meaningful economic sanctions against Iran? A lot of critics of those two countries believe that's the case.

NETANYAHU: I don't know. I don't know. I hope that's not the case. I hope that they understand that their own security, their own interests would be impaired if they just take not a long-term view, just a middle-term view, even a short-term view of their most basic interests. To have their total regime arming itself with the weapons of mass death is something that would jeopardize their interests and everyone's interests.

So, A, I hope they view this along these lines. B, I think that it's possible to act in a multi-national way without necessarily the Security Council. I hope they mobilize the Security Council for this necessary action. But even if they don't, we've seen time and again that if the major powers in the world, not all of them, but most of them act in unison, that it's possible to apply very strong pressure, first and foremost, economic pressure on a country like Iran.

(END VIDEOTAPE)

BAIER: We'll hear what Prime Minister Netanyahu says about Israeli settlements in the West Bank a little later. Up next, a former New York governor tells the president to mind his own political business.

(COMMERCIAL BREAK)

Now, for more of my interview with Israeli Prime Minister Benjamin Netanyahu, the subject — Israeli settlements in territory the Palestinians want for a future homeland.

(BEGIN VIDEOTAPE)

BAIER: Do you think that the Obama administration focusing on the settlement issue so much at the beginning set back the talks?

NETANYAHU: Well, I think it's the Palestinian interpretation of the American position that may have been the problem here. And I'm glad the United States and the president made their position clear that we should have talks, resume talks without preconditions. That's been my position all along, and I hope we get on with it.

BAIER: President Abbas said after the meeting today that Israel must agree to the roadmap borders and agreements in 2008. Is Israel prepared to do that?

NETANYAHU: There you go again. We will start discussing who failed this or that commitment, and we're just not going to find our way. In order to get it on, to move forward, we have to move forward. We can't all the time look back.

And I said today in the meeting with President Obama and then Mr. Abbas, I said, look, you have your claims against us. We have our claims against you, you know. We'll never get this done. So let's focus on the future and move to try to fashion a final settlement of peace between the Israelis and the Palestinians. And I think we should focus on the main issues and not on nit-picking legalisms.

BAIER: Would Israel agree to some sort of temporary freeze on the settlements if that referred only to West Bank settlements outside of Jerusalem?

NETANYAHU: I think that we're ready to make gestures to help move the process forward, but at the same time, we have to allow for the possibility of a normal life by the people who are living in those communities, those settlements. There are a quarter of a million people there. They need kindergartens. They need schools. They need health clinics. And I think that what we're trying to do is balance the necessities of normal life with the — our intention and desire to re-launch the peace process.

I think the issue of the settlements will come at the end of the negotiations. We will have to decide what to do with them. But we certainly can't decide that before we negotiate.

BAIER: So will you and President Abbas now have regular meetings

NETANYAHU: I hope so. We're seasoned hands, and we know that we are in charged with a great responsibility of our people, and that responsibility is to produce peace for our peoples and for our children.

And I think that this is the great choice that the Palestinian leadership has to make. Does Mr. Abbas want to be Arafat, or does he want to be a Sadat? Because if he is a Sadat, he will see that we respond. When Israel saw Sadat, then Menachim Begin responded. When we saw the late King Hussein, Rabin responded.

If I saw a genuine willingness to make peace from the Palestinian leadership, I'll make peace.

(END VIDEOTAPE)

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