This is a rush transcript from "Hannity," May 24, 2011. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: Israeli Prime Minister Benjamin Netanyahu was on Capitol Hill today. He addressed a packed House chamber before a special joint meeting of Congress. And moments before his historic speech, right after that, I sat down with him in Washington. And you're going to see that interview just moments from now.

But first, let's take a look at some of the highlights from his speech from earlier today.


BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: In an unstable Middle East, Israel is the one anchor of stability. In a region of shifting alliances, Israel is America's unwavering ally. Israel has always been pro-American. Israel will always be pro-American.

More On This...


    You don't need to do nation building in Israel. We are already built.


    You don't need to export democracy to Israel. We've already got it.


    And you don't need to send American troops to Israel. We defend ourselves!



    HANNITY: And today in a cable exclusive interview, I asked the Israeli Prime Minister Benjamin Netanyahu about that speech and much, much more. Let's take a look.


    HANNITY: Mr. Prime Minister, welcome back sir, it's an honor to have you.

    NETANYAHU: Good to see you, Sean.

    HANNITY: I appreciate you being here.

    Just prior to your arrival, the president gave a speech and talked about the Israeli-Palestinian conflict. It made a lot of news and in the speech he said, the U.S. believes a negotiations should result in two states with permanent Palestinian borders with Israel, Jordan, Egypt and then he said the borders of Israel and Palestine should be based on the 1967 lines with mutually agreed swaps so that secure and recognized borders are established for bottle states. It caused a bit of an uproar.

    NETANYAHU: Well, I was very happy to hear the president add the other side of the coin. He said, there will be no return to the June 4th, 1967 lines. And I agree with that obviously because I think those lines are indefensible. Israel would only be nine miles wide, that is kind of hard to defend. You know, that's half the width of the Washington Beltway. I was in the Capitol today. It's the width from the Capitol building to Bethesda.

    HANNITY: Short.

    NETANYAHU: Yes, just imagine America compressed to half the Washington Beltway. We won't be able to defend ourselves. So, I said that we would have to maintain a permanent Israeli presence along the Jordan River. And I think there's agreement between Israel and United States, that Israel must have defensible borders. Because in our part of the world, there's a simple truth, a peace you can't defend is a peace that will not hold.

    HANNITY: Things changed pretty dramatically though in the course of the time that you've been here. The president went into great detail in his APEC speech to clarify those remarks. What did that mean to you, when he clarified it?

    NETANYAHU: Well, you know, we talked about that in our conversation too, and I was glad -- in the lunch that we had, too. I think it was important. Because it reassures Israel that we'll have a defensible peace, a realistic peace. And I think also that the fact that he said that peace will only be negotiated between the parties. It's not going to be imposed by the U.N., the U.N. can decide anything. The U.N. can decide that the sun revolves around the Earth and that both are flat discs. It could actually do that. They pass these outrageous resolutions.

    So, when the president said, that's not going to happen, and that's not going to succeed in the Security Council, because they will block it, and because peace has to be negotiated. So, a negotiated peace in which the Palestinians recognize, finally recognize the Jewish state. And in which Israel has defensible boundaries, that's a good thing. I agree with that, obviously.

    HANNITY: So, as this week has evolved, how would you describe your relationship with President Obama?

    NETANYAHU: I think it is a very, very important and positive development and a positive relationship. We have a lot of things that don't meet the eye. People don't see it. The press loves to take differences we have, blow it up, you know, it is very attractive.

    But I spent seven meetings with the president. That's a lot of hours. And we have so much more that we agree on than those areas that we disagree on. And there are things that people don't know. They don't know that Israeli-American security cooperation is at an all-time high.

    We just -- I don't know if you know this, we had a revolutionary development in military history. We've had the support of the United States for Israeli technology to develop an anti-missile system. And we just intercepted in combat seven incoming rockets aimed at Israeli cities and they never got there. We intercepted them in mid-air.

    Now, that's partly a result of the American support for Israel that has taken place now. I appreciate that. I think it is important with all the hoopla -- it is important to say these things. Because there's so much that binds Israel and the United States together. And I think it needs to be said.

    HANNITY: So, could we say that there is a healthy understanding -- I watched the speech today, and 29 standing ovations. You got 10 good jokes in, and over 50 moments of applause. By any estimation, a very, very warm welcome from the United States Congress, a joint session of Congress. Would it be fair to say there's a healthy understanding with the White House and Congress, understanding Israel's security needs?

    NETANYAHU: I think so. And I think also some basic principles. You know, Palestinian authority just embraced Hamas. Which I think is a tragedy. Hamas talks about destroying Israel. You know, just fired a missile deliberately, into -- a rocket, into a yellow school bus. They killed, you know, they killed a 16-year-old boy. In rockets, our cities and our civilians. It is keeping (INAUDIBLE) our captured soldier for five years without one visit from the Red Cross. It's a criminal organization committed to our destruction saying that they have a holy mandate to kill Jews everywhere. It's not a partner for peace.

    So, the other thing that we agree on is that you can't negotiate with Hamas. You don't negotiate with people who want to kill you.

    HANNITY: Let me get into this.

    NETANYAHU: And I think that's another area of agreement that I think is important.

    HANNITY: Let me ask you specifically, because Hamas' charter not only calls for the destruction of Israel but for the killing of Jews. You used the line in your speech today, when we say never again, we mean never again. How do you go into negotiations with a group whose charter calls for your destruction now that they are in a unity agreement with Fatah, with the Palestinians?

    NETANYAHU: I don't. I will not. Neither would you. You would never enter negotiations with a government backed by Al Qaeda. And we won't go into negotiations with a government backed by the Palestinian version of Al Qaeda. And Hamas by the way, just condemned the United States for killing bin Laden whom they call a holy warrior. So, this is ridiculous, of course we can't do that. And I think there's agreement between the United States and Israel on this one. I don't think, I know that. So, I think that's important.

    Now, if they break up the deal, you know, they don't consummate the union, the deal phrase, then we can go back and negotiate the peace. And you know what is required for the peace to be negotiated? Other than Israel having the deal to be completed, assuming they get rid of Hamas? It's not only mutual recognition and security, it is really a simple formulation that the Palestinian president has to say.

    You know, two years ago, I stood before my people and I said, six simple words, and it wasn't easy for me. I said, I will recognize a Palestinian state. It wasn't easy for me, because we are talking about parts of our homeland, the land of Israel. And we have enormous attachment to it for 4,000 years, the land of Abraham, Isaac, Jacob, David, Solomon, everything. But I said it.

    So, what President Abbas of the Palestinian authority has to do is to do before his people what I did before my people. He has to stand up there and say six words, I will recognize the Jewish state. You know what, I will give them a concession, he can do it in five. I recognize the Jewish state.

    He won't say it. Why not? If you want peace, say it. That's the only way that we'll know that the Palestinian people will know that it is over. And that's the only way that the people of Israel will know that we have a real peace partner, and that's what the world has to put forward. Tell Abbas to say the simple words, I will recognize the Jewish state.


    HANNITY: And coming up, more of my cable exclusive with Prime Minister Netanyahu. He pulls no punches when talking about the clear and present danger that Iran poses to America and to his people.


    HANNITY: Israeli Prime Minister Benjamin Netanyahu spoke before a joint meeting of Congress today. And a short time after that speech, I sat down with him for a cable exclusive interview. And here is more of my candid conversation with the prime minister.


    HANNITY: We go back a long ways.

    NETANYAHU: Yes we do.

    HANNITY: And very kiddingly, somebody said, is there any chance that the prime minister has a birth certificate in Hawaii? For those that would like you to run in our upcoming elections.

    NETANYAHU: No way. I have a country.

    HANNITY: I'm teasing.

    NETANYAHU: Well, I'm sure you're teasing. I have to tell you, I respect America. I grew up and I spent a few of my high school years in Philadelphia. I visited the Liberty Bell many times. I know this bond. There's a Liberty Bell, a replica of it right near my office in Jerusalem. And it has an inscription. And the inscription is from the book of Leviticus in the bible. It says, "Proclaim freedom throughout the land." That's what we're about. The greatest democracy in the world and the only democracy in the Middle East. I hope we have other democracies soon. There's a deep bond there.

    And in many ways, I think I lead a country that shares so many values with America. And that's why Americans share this affinity to Israel, you could see it today in the Congress. It was so powerful. So encouraging. And so, you know, so uplifting. What I saw there was representatives of the American people saying to Israel, we're with you. And that's tremendous.

    HANNITY: It was interesting. Because you talked about 300 million Arabs, one million are free and they live in Israel.

    NETANYAHU: They are citizens. People don't know that. They don't know that we have in Israel, in the sovereign state of Israel. I'm not talking about the West Bank and, you know, disputed territories. I'm talking citizens of Israel. We have seven million citizens. Over a million are Muslim-Arabs. And they are the only once in this vast expanse from, as I said, from the Cairo pass to the straits of Gibraltar. And this whole vast area of the Middle East and North Africa. The only ones who are free, who have free democratic rights, are the Arab citizens of Israel.

    So, I said, and I think this is right, Israel is not what is wrong in the Middle East, Israel is what is right in the Middle East. It's the only place where you have the kind of genuine democracy, so far. And, you know, I hope this changes. I hope we see other democracies emerge.

    HANNITY: You said to President Abbas, tear up your pact with Hamas. You went into detail, you talked about a changing and a growing economy for the Palestinian people, how things are changing. But yet, on the other hand, you described teaching children to hate Jews. You talked about the influence, Hezbollah is being funded weaponry comes from Iran. You have Hamas obviously firing rockets into Israel. You have battles with Lebanon. You have obviously Syria has been a mortal enemy of the Jewish state of Israel. Are you confident, do you think that maybe Abbas will listen? Do you have the confidence he will agree to break this unity pact?

    NETANYAHU: For the sake of peace and for the sake of my people and his, I hope he does. Because you can only make peace with an enemy who wants peace. An enemy that is committed to your destruction is not a partner for peace.

    I think that's a central lesson in the 20th century. You know, I think if the democracies made a mistake in the 20th century is they didn't identify an implacable enemy committed to fanaticism. And I think America understands that very well. Certainly understands it with bin Laden and Al Qaeda. You don't negotiate with Al Qaeda, what is there to negotiate about? Are you destroying more American cities? Obviously, not.

    So, what do we have to negotiate with Hamas, the method of our emulation? You know, this is a demand that has to be put forward not only by me, the prime minister of Israel. But by anyone who wants peace. Everybody should turn to President Abbas and say, what I said today in Congress, "Tear up your pact with Hamas." Sit down and negotiate peace. Make peace with the Jewish state.

    HANNITY: This is recent, though. And it is obviously problematic. Because you got -- you described a very small landmass. And, you know, you are dealing with Hamas, and Hezbollah and Iran and...

    NETANYAHU: Tough neighborhood.

    HANNITY: It's a tough neighborhood. I think you were very, very clear in all of that. If they do not recognize Israel, if that recognition does not come, peace cannot come.

    NETANYAHU: That's right. Well, that's what the Americans say too.

    HANNITY: Yes.

    NETANYAHU: The formal American position is, they've got to recognize the state of Israel about Hamas and they've got to give up terror. They say, since signing this initial pact with the Palestinian authority, we are never going to recognize Israel, we are committed to the obliteration of the Zionist entity and we continue the armed struggle. You know what that is, that's the polite term for terrorism.

    HANNITY: Sure.

    NETANYAHU: In the meantime, they are putting into Gaza about 10,000 rockets, which they fire on us. They've already fired 6,000 rockets on us. They are amassing more. So, they are not a partner for peace. I don't think anybody listening to us and anybody in Washington, any fair-minded viewer or observer of the Middle East would really expect Israel to do this. And they don't. I mean, fair-minded governments don't expect that. But I think it was important that this was said by President Obama. I think that's very, very important.


    HANNITY: And coming up, the prime minister delivers a very strong message to Mahmoud Ahmadinejad and the enemies of Israel.


    HANNITY: The Israeli Prime Minister Benjamin Netanyahu was interrupted early and often by applause today during his speech to a joint meeting of Congress. Now following his address, I sat down with him for a cable exclusive. And here is tonight's final installment of our conversation.


    HANNITY: Over the years that I've had a chance to interview you, you talked about moral clarity. How Iran, Ahmadinejad denies the Holocaust, repeatedly talks about Israel's destruction, wiping Israel off the map.

    NETANYAHU: That's right.

    HANNITY: You talked about a real, clear and present danger, you talked about this being an epic moment in history.

    NETANYAHU: Right.

    HANNITY: Explain that.

    NETANYAHU: Well, in the broad Middle East, there's a big contest between democracy and tyranny. We all know what we want to happen. We want to see democracy win out. It will be a tremendous thing if you actually have democracy in all the Arab countries.

    But, there are people who have another idea. And they want not democracy, but theocracies. They want a re-imposition of dictatorships. And those forces are led by Iran. If Iran gets nuclear weapons, they will dominate the entire region. I'll tell you something, if they get -- if Iran gets nuclear weapons, that's the end of the "Arab Spring." You will have an "Iranian Winter" descend on the entire Middle East.

    So, both for the sake of freedom and for the sake of our common interests and our own survival, we better make sure that Iran doesn't get nuclear weapons. And I appreciated the president's reiteration in his statements the other day that the United States will not enable Iran to develop nuclear weapons, is committed to preventing Iran from getting nuclear weapons.

    HANNITY: It was interesting. You described, you had a free moment.


    HANNITY: And you walked around Washington with your wife. One of the things that really stood out in my mind is, you have an almost deep reverence for this country. Its history, what it stands for, a deep knowledge of our founders, our framers, our Constitution and how that ties these two countries together, Israel and the United States.

    And I was reading that in particular, and it struck me that that is the natural yearning of mankind. That's what we talk about, you know, natural rights of human beings, endowed by their creator. It really has played out in your life personally. And you described that a little bit in the speech today when you talked about your brother who was killed in the raid on Entebbe, and how you fought for freedom. The cost has been high. How do you tie those two together, this ideal and the cost?

    NETANYAHU: Well, I was strolling the other day, my American security guards are much more generous than the Israeli security guards.

    HANNITY: Those guys have been very tough on me.

    NETANYAHU: See, the Americans let me out. They let me out. I could actually stroll. And I said to my wife, you know, let's go to the Potomac. We walk along the Potomac. And see these extraordinary monuments there. There's an unbelievable monument for the fallen American soldiers in the Korean War. And there's a wall there. And there's an inscription. It says, "Freedom is not free." You know, it requires, not merely vigilance but the willingness to fight for it, to defend it, which is very true.

    And then from there, we walk up -- so obviously we identify with that, because God knows we've had to fight for our freedom, fight for our very survival in ancient times and modern times, the Jewish people have struggled like no other people. And then we walk up, we walk up the -- we see the Jefferson monument, you know, and those timeless words, "We hold that all men are created equal."

    HANNITY: These truths, yes.

    NETANYAHU: "These truths to be self-evident that all men are created equal." Yes, and that they are entitled to certain inalienable rights.

    And then you go up to the Lincoln Memorial and you've got this immortal address, you know, government for the people, by the people.

    I'll tell you why these words resonate so deeply with me and with all Israelis. Because they're basically Jewish concepts that were originated at the time of the Bible, thousands of years ago. You know, that all men are created in God's image. That no ruler is above the law. That there should be universal justice. These were revolutionary Jewish ideas that were introduced thousands of years ago when the Earth was ruled by -- slave empires. That's what changed history.

    So, we feel a natural infinity to the United States. Some of the founding fathers of the United States said that the language of the United States should be Hebrew. Because this was such a profound, common wellspring of ideas.

    America and Israel are alike. Sometimes, I think that we, you know, the fanatic Muslims don't hate you because of us, you know, they hate us because of you. Because they feel that we represent a forward position of this common free civilization.

    And you know something, they are absolutely right. This is the bond, this is this fantastic alliance between Israel and America. It is these two countries that are bonded in this idea of liberty. And that Liberty Bell, that freedom, the liberty, proclaim liberty throughout the land. I hope that we proclaim and succeed in establishing genuine liberty, genuine democracy in these vast lands of the Middle East. Believe me, if we do, we'll have peace.


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