This is a rush transcript from "On the Record," September 23, 2011. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: It doesn't get any more important than this. Even a remote chance of peace for Israel seems to be slipping away. That's after Palestinian Authority President Mahmoud Abbas petitioned the U.N. for statehood for his people.
And 60 minutes later, Israeli Prime Minister Benjamin Netanyahu blasted the U.N. as the "theater of the absurd." The Palestinians' official bid for statehood comes in defiance of both Israel and the United States.
Now, we spoke with Prime Minister Netanyahu right after his speech at the U.N.
VAN SUSTEREN: Mr. Prime Minister, nice to see you, sir.
BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: Well, good to be here. Thank you, Greta.
VAN SUSTEREN: And welcome to the United States. I know you spent a lot of time here in the United States growing up, but it's nice to see you back, sir.
NETANYAHU: Thank you.
VAN SUSTEREN: Today you called the U.N. General Assembly -- you used the term "theater of the absurd." You came out pretty hard hitting on the General Assembly. Why?
NETANYAHU: Well, because, you know, it can decide these odd things. It can pretty decide the earth is flat. It can decide that the Western Wall, which is Judaism's most holiest site, is occupied Palestinian territory.
It singles out Israel every year for attack. You know, 21 out of 27 resolutions adopted by the U.N. on human rights are directed against Israel, the Middle East's only true democracy. All the other countries there -- and you can imagine some of them -- nothing! They don't mention anything.
So you know, it's an upside-down place. I mean, I've been used to it. But in a place like that, the only thing you can do is just tell the truth, which is what I tried to do.
VAN SUSTEREN: I'm sort of curious whether there's some sort of temptation not to even comment. I mean, if the -- Israel is portrayed by many in there as the villain...
VAN SUSTEREN: ... and you referred to it as the "theater of the absurd." And we all sort of watched -- we watched President Abbas speak, then we watched you speak. And it's -- it is a theater and with -- with undetermined consequences.
NETANYAHU: Yes, but you know, it's a strange place, the U.N., because they make, you know, Saddam's Iraq responsible for disarmament, and you know, Qaddafi's Syria chair the Human -- Qaddafi's Libya chair the U.N. Human rights Commission. And now you have Lebanon, which is effectively controlled by Hezbollah, a terrorist organization, preside over the Security Council, which is responsible for global security.
You know, that's very odd. And one of the victims of this absurdity, of this travesty, is Israel, that gets hammered day in, day out, as some -- as a country opposed to peace, as a country -- as an aggressive country, when it's a tiny country, the one and only Jewish state of the Jewish people that is fighting for its life against terrorists supported by Iran, and is accused of -- when it's tying to defend itself, as any democracy would.
So you know, I think the only defense against lies is to tell the truth, even in an unpopular forum, and that's what I thought the responsibility of an Israeli prime minister is. And I'm the prime minister, I went there and told it like it is.
VAN SUSTEREN: I was reminded and I'd forgotten -- of course, I've been to Israel -- but about how tiny Israel is, when you compared it to Manhattan, talked about flying -- you could fly across Israel in what, three minutes, then cross the United States, six hours. It really is...
NETANYAHU: A big difference.
VAN SUSTEREN: ... a big difference. And it really puts the sort of issue of security up front and center for people who are listening.
NETANYAHU: It's a tiny country that is faced with enemies and challenges to its security like no other. I mean, we've had in this tiny country -- it's a little bigger than Rhode Island. We've had 12,000 rockets lobbed at our cities in recent years. Can you imagine Rhode Island sustaining 12,000 rockets and missiles on Providence and on the towns next to it? I mean, it's unbelievable!
And so Israel has to defend itself. And part of peace must be proper security safeguards where Israel can defend itself by itself in order to also defend the peace. I think these are the things that we need to negotiate with the Palestinians. So far, they refuse to negotiate, basically relying on the received wisdom in certain international quarters that, well, they don't have to negotiate because Israel will always be blamed as not wanting peace.
We want peace. We're prepared to have peace with the Palestinian state. The Palestinians want, basically, a Palestinian state without peace. And so I think fair-minded people should tell them, Sit down and negotiate. Work out these issues of security and the recognition of Israel as the Jewish state. Negotiate peace. That's the only way that we can have it. You can't resolve it by U.N. declarations. That's not going to do it.
VAN SUSTEREN: Did you watch President Abbas's speech or listen to it in another room?
NETANYAHU: I read it. I was busy writing my own speech at the time, so...
VAN SUSTEREN: You were still writing yours?
NETANYAHU: I write my speeches right up to the podium, more or less. And I change them on the podium. I sort of look at -- I actually look at the audience, and if I see them dozing off, I say, Well, I better say something to wake them up.
VAN SUSTEREN: So what did you think of President Abbas's words?
NETANYAHU: I thought that -- I was disappointed because I'd hoped that he would -- you know, aside from I think not telling it like it is, because he said -- he said -- in fact, he said something very telling. He said -- the other day, he said that Israel has been occupying Palestine for 63 years.
Wait a minute. If they're talking about the West Bank, that's -- that goes back only to 1967. Sixty-three years goes back to the founding of Israel. Is what President Abbas telling us that Tel Aviv is occupied Palestinian territory, that Haifa is occupied Palestinian territory? In other words, that all of Israel is basically a land that has to be freed in quotes, Israel shouldn't exist in any boundary?
I think there's something telling there because that really gets to the core of the conflict. It's the persistent refusal of the Palestinians to accept a Jewish state in any border. That's the core of the conflict. And I hope -- you know, I hope they muster the courage, President Abbas and his colleagues, to tell the Palestinian people that that kind of thinking has to be discarded. They have to recognize a Jewish state. And they have to sit down and negotiate with us a workable peace, a defensible peace.
VAN SUSTEREN: Was that a slip, or do you think that's sort of the Hamas thinking? I mean, Hamas don't recognize the right of Israel to exist. Is that -- was that sort of a slip and he made a mistake speaking, or do you think underlying all this is that he doesn't think that Israel has a right to exist?
NETANYAHU: I think you should be interviewing him and asking him that question because I think they walk around this issue all the time. They never just come out and say it. You know, it was very hard for me as a Likud leader to speak to my own people and my own constituents. And I said, Look, as difficult as it is, as deeply attached as I am to every inch of the land of Israel, our historic homeland in Judea and Samaria, we'll have to make some compromises here. And it's going to be very painful, but I'm prepared to do it.
I'm willing to set up a Palestinian state that lives in peace with Israel, providing we have proper security. But I'm not prepared to have another Iran there -- in other words, to establish another Gaza there, where they'll fire rockets at our territory and not make peace with us.
What I hear the Palestinians so far saying is, We want a state not to end the conflict, we want a state to continue the conflict. And that's wrong. So I think part of it is telling Abbas or letting Abbas tell his people, It's got to be over. You know, we're going to get a state and we're not going to try to go for Tel Aviv or the other parts of Israel. We're going to live at peace. Israel is here to stay. That's why he should recognize the Jewish state. That's so simple.
But again, I don't place preconditions on beginning negotiations. I would start them right away, right now.
VAN SUSTEREN: Well, you offered that to him. But you know, listening to your speech (INAUDIBLE) you talk about being a theater and then looking at sort of the reaction, I saw that, you know, of course the Palestinians were cheering on their president. The Israelis are cheering on their prime minister. And it seems like, you know, if we're all sort of creating this theater, we can't really get you guys to sort of sit down and work things out because now your base has dug its heels in to...
NETANYAHU: No, my base says to me and I say to my base, Let's talk peace. Let's negotiate. Nobody prevents me from going to talk. I mean, that's the whole point. There is no symmetry.
VAN SUSTEREN: Well, you've still got to -- I assume that you still have to have the support of your people. I mean, if everyone is -- if everyone thinks that you're getting such a raw deal from the Palestinians because they've come in here and now they're asking for statehood, I mean, you know, that is something I would think would be somewhat of a hurdle for to you deal with.
NETANYAHU: Well, if they want statehood without peace, you know, that's not going to happen. I'm not going to do it, not because people oppose it at home, because I oppose it. If they want peace and then a state, that's fine. And that's what we should be working on.
But I think there's a basic asymmetry because Israelis want peace desperately. They yearn for peace. They pray for peace. And it's very hard living in this tiny country that is being attacked day in and day out and seeing your friends die, relatives die. It's not -- people want peace. Peace is very precious, especially if you've been in wars and you know how bad they are.
The Palestinians can't seem to develop this kind of consensus. In Israel, I developed that consensus. I can bring I think the majority of Israelis to the table. And I think the Palestinians are -- to use Abba Eban's immortal words, never lose an opportunity to lose an opportunity. They really have to take that courageous step and confront their people and say, We're not going to get everything we want. We're not going to flood Israel with millions of Palestinians. We're going to have to accept Israel as the Jewish state, and we'll have to make some compromises. Not only Israel will make compromises, both of us will make compromises.
I'm prepared to do that. I'm prepared to sit down right now in this room, right now.
VAN SUSTEREN: You said that at the end of your...
NETANYAHU: On this interview, if you want.
VAN SUSTEREN: I'd love to have...
NETANYAHU: I say that to every interviewer. I give them the -- you know, the sweepstakes. Go ahead. If you can get Abbas into the studio, I'm there. Let's do it! We're not -- it's not a symmetrical thing. Israel wants peace, wants to negotiate peace. So far, the Palestinians have avoided negotiating peace. That's the simple truth.
VAN SUSTEREN: How much does it hurt when -- I mean, there are presidential -- people running for president in this country -- you have Governor Perry and Governor Romney. They both issued statements. President Clinton -- I don't know if you heard what he said today. He said that you were standing in the way of any sort of peace. I mean, how does sort of the -- the people who are not the people in office, but have -- very influential in this country -- how does that complicate things for you?
NETANYAHU: Well, first of all, I respectfully disagree with President Clinton. I've offered to make peace with the Palestinians, sit down with them time and time again and they've avoided it. He said actually that I moved the goalposts. You know what? He's right. I moved them closer to peace. I said things and I did things that no previous prime minister has done. I froze the settlements for 10 months, the construction there. Nobody did that before. Didn't help.
And it doesn't help the perception either because no matter what we do or what we say, you know, the play is cast, the cast of characters is determined. And so it doesn't change people's minds. And I think that's part of the problem.
I think the Palestinians avoid going to the negotiations, and they can try to end run this process by going to the U.N., because they're getting a free ride. They're getting a free ride because people actually believe that they want to negotiate peace when they're doing everything in their power to avoid it. So I disagree with that.
As far as American politics, I -- you know, I just have enough politics of my own in Israel.
VAN SUSTEREN: But -- but...
NETANYAHU: I don't want to get into that.
VAN SUSTEREN: I'm not -- I wasn't suggesting you get into it, but I'm just curious -- I mean, like, you know -- you know, you're one -- you're one of our best friends. And I'm curious to what extent, you know, the United States really can help this process. And I imagine if there's sort of some external noise going on, whether it's for you or against you, you know, I imagine that it makes it a little more difficult, even those who are in power this country, to attempt to help you.
NETANYAHU: Well, I think the U.S. is doing its best and there's a very powerful alliance between us, which, by the way, transcends prime ministers and presidents. It's just very, very strong. It's really a sense of affinity of the American people to Israel, and this may shock you, but a very strong sense of affinity of the people of Israel to America. Israel is the one country in the world you just can't be anti-American. Everybody's pro-American. And that's a bipartisan or multi-partisan sentiment in Israel, which I, as the prime minister, represent.
And the same is true here. Whoever is the American president, there is this very, very strong friendship that the presidents represent. And at end of the day, that's -- it's that cooperation that I think gives strength to the American position in the Middle East because Israel is your most stable ally and it's the one Western democracy. It's one thing that's right about the Middle East. It's the one thing that doesn't shake. It's the unshifting sands. It's the rock.
And so I think the American people understand that instinctively, and the people of Israel understand instinctively that the United States is their best friend.
VAN SUSTEREN: You mentioned the settlements and that you put a freeze on them for a while, and then you lifted the freeze. And I think I'm correct President Obama wasn't happy that you lifted the freeze. Why -- you know, why did you lift the freeze? Do you have sort of a conflict with President Obama on that? Is the freeze still in play? Does it have any value at all in trying to move peace forward?
NETANYAHU: Well, you know, the Palestinians put up this precondition, which they never put in for 18 years. They negotiated without demanding a settlement freeze. And all of a sudden, then I came in, they immediately demanded it. So I nearly froze it for a year, 10 months. And nine months and one week into this froze, they still didn't come.
Finally, they came and they just said, Well, we want another freeze. I said, Why don't we just talk about all the issues, settlements being one of them, but let's talk about peace, let's talk about the borders, let's talk about security, let's talk about early warning. Let's talk about all the things that we have to do to fashion a workable, stable and secure peace between us. They wouldn't do it.
So I think it's a pretext. I think it's just a way to avoid negotiations. Anyway, I agreed to extend the freeze with President Obama. People didn't know that. I agreed another three months extension. And he said, and I think wisely -- he said, No, it's not worth it. It'll just be the focus again and again of these disputes, instead of getting on to the - - all the core issues that are at the heart of this conflict. That's what needs to be negotiated about.
VAN SUSTEREN: What can we do to help you? What can the United States do to help you? What -- you know, to move this peace forward? Is there anything that you think that we're not doing that we could do?
VAN SUSTEREN: What? Tell me.
NETANYAHU: Well, I think (INAUDIBLE) doing it, but I think the most important thing is to tell the Palestinians to quit negotiating about the negotiations and just get on with it. You know, it's like the Nike commercial, Just do it.
VAN SUSTEREN: But then you've got the problem with the Arab spring, and you've got President Obama being hit with the fact that while he -- you know, he's backing the rebels in Libya and in Tunisia and suddenly doesn't want to help the Palestinians. And he said a year ago there'd be a Palestinian state. I mean, he's -- that's the problem. We've got
NETANYAHU: I think he's actually helping them a lot. I think -- I think getting the Palestinians weaned off the idea that they can be the spoiled child of international relations and they can have -- they can just avoid negotiations on and on and on and not be taken into account for that.
I don't think that helps the peace process. I think telling them, respectfully and firmly, to get to the negotiation table is the right thing. It's the right thing because it's true. And sometimes, the simplest policies is the right policy and the truest policy.
VAN SUSTEREN: When we come back, more with Prime Minister Netanyahu. Iran's president wants to wipe Israel off the map, so what would Prime Minister Netanyahu do to stop it?
VAN SUSTEREN: Iran's President Ahmadinejad doesn't just want to wipe Israel off the map. According to Israeli prime minister Benjamin Netanyahu, Iran is after us, too, and of course, after others. Here's the prime minister on the dangers of nuclear arms in the hands of Iran.
VAN SUSTEREN: You mentioned today when you were speaking about Iran, and if Iran goes nuclear in terms of weapons -- and that the world shouldn't allow this to happen -- how do we stop that?
NETANYAHU: I think the sanctions are important, but I think the sanctions will only work, economic sanctions, if they're coupled with a clear understanding that there'll be a nuclear -- military option against a nuclear program if the sanctions fail.
And I think the combination of the two, economic sanctions and the clarity of a military option added to them, will actually stop the Iranian program. It's the only thing that has worked in the last two decades. Iran stopped its program only once, in 2003, when it believed for about a year that the United States would take military action against them the way it took against Iraq and Afghanistan.
VAN SUSTEREN: It's sort of -- the way that I -- that I see it is that your country has the greatest interest in the (INAUDIBLE) because President Ahmadinejad wants to destroy Israel. There's no secret. Do you have the sense that the rest of world has -- although the rest of us should care about nuclear weapons in Iran, do you have the sense that the rest of the world has a sense of urgency about it that we should, and that, obviously, your country has?
NETANYAHU: Well, I think there's an understanding or an agreement now that didn't exist before on how close the Iranians are getting to this. I think there's an agreement that that's a very, very bad thing for the world.
I think there's a greater understanding among security services, but I'm not sure the general public always understands how dangerous it would be if for the first time since the advent of nuclear weapons, you'd have atomic bombs in the hands of, you know, an apocalyptic sect fervently hating the West because they might use it. They might threaten to use it. They might give it as an umbrella to terrorists. They might give it to terrorists directly.
And they're not just after us, they're after you. You know, we're the small Satan, you're the big Satan. We're just you closer by. But ultimately, they want -- they have this pathological hatred of the United States and everything that it represents. So a nuclear armed Iran I think would present a real threat of nuclear terrorism for the first time in history. Nobody should let that happen.
VAN SUSTEREN: Mr. Prime Minister, thank you. And thank you, by the way, for visiting the Twin Towers last night.
NETANYAHU: Well, it was very moving. What also touched my heart was the fact that an Israeli architect actually won the competition and built a tremendous, tremendous memorial there.
As I was looking at it, I was very touched but also incensed because the president of Iran said yesterday at the U.N. -- he said yesterday that -- he implied yesterday that 9/11 was an American plot. You want to have this guy with nuclear weapons?