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Kelly File

Israeli PM Netanyahu: Peace agreement must be negotiated, not imposed

This is a rush transcript from "The Kelly File," March 19, 2015. This copy may not be in its final form and may be updated.

MEGYN KELLY, HOST, 'THE KELLY FILE': Breaking tonight, tensions rising between the United States and the one country in the Middle East that has been our strongest and most important ally. Tonight 'The Kelly File' is at the heart of this story.

Welcome, everyone. I'm Megyn Kelly. For the last 24 hours we've seen a mounting series of attacks by Obama administration officials on the newly re-elected leader of Israel, Benjamin Netanyahu. The fight between the President and the Prime Minister pushing out almost all other news today. And in the middle of this, Mr. Netanyahu today sat down with us. Now it is no secret that these two leaders have not always seen eye-to-eye. Still, the American-Israeli relationship is critical for both sides which makes it all the more perplexing that after the news broke this morning from the interview you're about to see as well as from other public remarks Mr. Netanyahu made today, the White House rejected an apparent olive branch. Benjamin Netanyahu, the prime minister of Israel now in one of his first interviews since his re-election.

Congratulations, sir, on a very big win. Let's get right to it. In 2009, you said you supported a peace deal that would recognize the Palestinian State but the day before, Tuesday's election, you completely reversed that. Why?

BENJAMIN NETANYAHU, PRIME MINISTER OF ISRAEL: I didn't. I didn't retract any of the things that I said in my speech six years ago calling for a solution in which a demilitarized Palestinian State recognizes a Jewish state. I said that the conditions for that today are not achievable for simple reason, Mahmoud Abbas, the leader of the Palestinians, rejects consistently the acceptance of a Jewish State. He's made a pact with the Palestinian terrorist organization Hamas that calls for our destruction. And the conditions in the Middle East have changed to the point where any territory you withdraw from is immediately taken out by Iranian backed terrorists or by ISIS. It's only a dozen miles away from us. Thousands of miles away from you.

So, the conditions are that we would vacate territory instead of getting the two state solution, we could end up with a no state solution. That is a solution that would threaten the very survival in the state of Israel. I said we have to change the terms. Because right now we have to get the Palestinians to go back to the negotiating table, break their pact with Hamas and accept the idea of a Jewish state. And I think that's what the international community should be focused on.

KELLY: In the wake of your statement earlier this week however. President Obama, he apparently sees the difference. Because he's now reportedly saying that he sees no path to a peace agreement and is threatening to abandon Israel at the United Nations which would reverse decades of history. What would that mean for Israel?

NETANYAHU: Well, I hope that's not true. And I think President Obama has set time and time again. As I've said that the only path to a peace agreement is an agreement, a negotiated agreement. You can't impose it. In any case, you have to get the international community to press on the Palestinians to go back, to go back on their unity pack with the terrorist Hamas and come back to the table. I think that you can't force the people of Israel to just elect me by a wide margin to bring them peace and security. To secure the state of Israel, to accept terms that would endanger the very survival of the State of Israel. I don't think that's the direction of American policy. I hope it's not.

And I look forward to working with President Obama to see how he could advance our interest, our common interest in the most difficult circumstances in the world, in the most dangerous region in the world. And what I said before six years ago about the conditions necessary for achieving peace is ten times more relevant today when the entire Middle East is being swept by these radical Islamic terrorist forces backed by Iran. We need to talk together and see how we can work together to advance security and peace.

KELLY: The AP is reporting today that the draft nuclear deal would force Iran now to cut its centrifuges that could be used to make a nuclear bomb by 40 percent from 10,000 to 6,000. Washington originally wanted a limit of 500. Are we conceding too much?

NETANYAHU: Well, you know, I spoke in Congress a couple of weeks ago and I said that we need a better deal, a different deal. Because this deal would leave Iran with sufficient capability. Six thousand centrifuges enables them to break out to a bomb very quickly. If I had my drudgers, if Israel had to seat in the table, I would say zero centrifuges. But I don't have to seat in the table. And if I can impress on the negotiating partners, I would say what our Arab neighbors say, get a symbolic number and 6,000 is certainly not symbolic. That is an agreement we would like but we could live with I said literally.

The second thing is, you impose restrictions on Iran's nuclear program. Don't lift them in a specified time but after you see that Iran actually changes behavior, that it stops its aggression in the region, stops being the world's foremost practitioner of terror and stop threatening to annihilate the state of Israel. These are the two changes that we would make. Increase restrictions on Iran's nuclear capabilities so you increase the breakout time and don't lift those restrictions until Iran stops terrorism and aggression and stops calling for Israel's destruction. That's the right deal.

KELLY: You suggested in a U.S. Congress that the better deal that we should strike would be Iran totally eliminating its entire nuclear program. And Secretary Kerry came out and said that's basically demanding complete capitulation by Iran and that will lead to no deal whatsoever. Is that even arguably a realistic demand?

NETANYAHU: Well, I just said that we think a much better deal could be done and that further much bigger constriction on Iran's nuclear program is possible. Because Iran was very aggressive abroad economically weakened at home because of the sanctions regime that could be maintained or even increase and because of the drop in oil prices. So, you know, you got them to the table only after you applied a couple of years ago abiding sanctions. That's what got them to the negotiations in the first place. And as long as you're not toothless sanctions, they'll just disregard everything. But the minute they saw there, the economy would collapse and that's happened in the last few years. Because of the tough sanctions that were imposed by the United States and by President Obama with our encouragement and support, that got them to the table.

Now, don't take the foot off the brake. Just pass -- keep on pressing. I think that's possible. And especially because of the drop in oil. So I think there's a lot of leverage that the United States can use on Iran. And I hope it uses it. Because right now succumbing to this deal would get Iran an easy path to the bomb and that would happen. Not by violating the deal, but by keeping the deal in a few years. That would endanger the entire Middle East. You'd have a nuclear arms race that would be sparked here by other countries. And I think you'd have a great danger for the United States and the world when the world's foremost practitioner of terrorism has atomic weapons. It's not a good deal.

KELLY: You know, in running for re-election, you urged your supporters to get out and vote. Warning that you were in danger, your party was in danger because, quote, ‘the Arabs are voting in droves.’ And some called that racist. The White House came out and said that you were divisive and that you tried to marginalize Arab-Israelis. Do you regret those comments?

NETANYAHU: That's just not true because what I've said was should be taken in the larger context. I warned of foreign money coming in to selectively put out just try to bring out supporters of a list that includes Islamists and other factions that oppose the state of Israel. Supported actually, this list was support by Hamas. I'm very proud of the fact that Israel's policy and my policy is to be the prime minister of all Israelis, Arabs and Jews alike. I've been funding billions into the Arab communities to upgrade their infrastructure and to better integrate them into the Israeli economy, technology, every walk of life. And the right of every citizen in Israel, Jew and non-Jew alike to vote is sacrosanct. I wasn't trying to suppress a vote. I was trying to get out my vote against those who were targeting foreign money that was coming in to target a specific group to bring down --

KELLY: American money?

NETANYAHU: I was calling my voters -- international money all over the place.

KELLY: But do you think America -- there is a question about whether America worked against you and President Obama and the White House in the election. Do you think that happened?

NETANYAHU: Well, individual donors from Europe and United States and Latin America, the answer is yes. I wasn't talking about that. And I'm looking forward. I'm not looking to the past. But I want to make it clear, my policy, I've been raised as -- I would call it someone who believes in equal opportunity. I deeply believe that. And I've acted that way. I called on ten days ago; I called on Arab supporters of Likud. And I've met them in the north of the country. And I said, look, there is going to be this effort, foreign funded effort to get the votes for that party. And I want you to be ready for that and get out the vote whether that happens.

That's what I was referring to. And you'd be surprised. We've got a lot of Arab votes, not -- I'd like to have more. But I consider myself the prime minister of all Israelis, those who voted for me and those who didn't vote for me, Arabs, Jews.

KELLY: I understand.

NETANYAHU: Those Arabs who voted for me and those Arabs who didn't vote for me. The same with the Jews who voted for me and those that didn't vote for me. That's my policy. It always was my policy. And Israel remains the one country in the Middle East where Arabs can vote freely and fair elections. That's sacred. That will stay. And my policy will stay as well.

KELLY: And my last question sir, what does it mean to you personally to wake up each day knowing that Israel's enemies stated goal is to destroy the people and the country that you love?

NETANYAHU: Well, first of all, let me tell that you I woke up this day and it's a lot better -- a day after the election is a lot better than the day before the election, especially if you win. That's the first point on this particular day, obviously. But I wasn't just elected because of any personal desires. I was elected because the vast majority of -- a very strong majority of the people of Israel want me to lead the country in realistic and what they consider the responsible way that we lead in. In a Middle East that is so dangerous and becoming increasingly so. So they want to make sure that Israel is safe and secure. And that's my obligation.

But I can tell you what I was once asked, what's the difference between the President of the United States and the prime minister of Israel? And I said Megyn that the president of the United States I believe is always concerned about the security of the United States. But the Prime Minister of Israel, and I can speak personally in the nine years that I've been in office, there's not been a day, a day that I haven't thought about the things that I have to do to protect the survival of Israel. And that's a difference. We're the country that is most threatened with destruction around the world and it's my responsibility to ensure that this state, the one and only Jewish State lives forever. And that's a big burden. But that's why I'm here. That's why I was elected.

KELLY: Mr. Prime minister, thank you so much for your time. All the best, sir. Congratulations.

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