president." a preview. >> mr. president, it's a pleasure to meet you. lloyd blankfein, ceo of goldman sachs. i assume you want to discuss which members of my company will be a part of your cabinet? >> no. >> then why did you ask me here? >> so that i could do this. that's for the american people. >> gravel's philosophy on washington? you've got to laugh because it's so depressing. thanks for watching "state of the union." i'm candy crowley in washington. we will see you next sunday. tonight, a prime time exclusive, ben gentleman minute netanyahu on the palestinians. >> i think it requires courage on the palestinians side to say, hey it is over no more bloodshed, we are going to make a genuine peace with israel.

peace talks. >> the president abbas, the palestinian president, meet me and let's talk peace. >> and his real's bond with the united states. >> we have both common values and unfortunately, common enemies. >> was his meeting with president obama a turning point, finally marking a thaw in an icy relationship? benjamin netanyahu for the hour is next on "larry king live." we only go back almost 30 years. bebe, that is his nickname, i have to refer to him as prime minister netanyahu that's formality here. benjamin netanyahu, prime minister in new york, a city he knows well, used to be a former ambassador to the u.n. >> good to see you, larry, you didn't have to reveal how far back we go together.

>> yeah, you've got a point a few months ago, you went to the white house, it didn't go too well, what changed yesterday? >> i think there's an underlying relationship there that people don't appreciate. we have our ups and downs. people focus on the downs and the downs are exaggerated and sometimes distorted, but there's ups and there's a basic bedrock of identification, common values between israel and united states. the president gives an expression, i given a expression. yesterday's meeting gave an expression. i think there's a solidity of ties between israel and the united states that the president of the united states and the prime minister of israel reflect in their meeting. no matter who holds the posts? >> i think every prime minister, every president has his own -- his own points, his own viewpoints but there's a common

position of friendship and basic alliance that is there. really continued by all leaders, wherever they are. that will be the case yesterday. >> mr. prime minister, have there been times though since president obama took office where you felt that friendship or that tie weaken? >> no, a lot of things that the public is not aware of, that throughout the year and some that i've been in office, we've had continuous cooperation in the fields of security, in the fields of intelligence, in the fields of vital strategic importance to israel and the united states. and that seems to go unnoticed or unremarked. people always focus on differences of views that we may have. they're minor compared to the things that unite us. we have -- israel is the only democracy in the middle east.

america is the world's greatest democracy. we have both common values, and, unfortunately, common enemies. the people who attack the united states and the middle east attack israel. and the people that we are fighting are the people you are fighting. there's a great commonalty, a great cooperation that goes underneath the surface. and sometimes, i'm happy to say, it does come to the surface. it does yesterday. it really should be an indication of something that guides our relationship throughout. >> larry: so there's no time that you question president obama's commitment to your country? >> no. and i think there's no time that he questioned israel's unwavering commitment as a firm american ally. i would say there is no greater ally, no greater friend of the united states, than israel. and there is no greater friend and no greater ally of israel than the united states. >> larry: there were those who were saying, though, in the past few months, until that meeting yesterday, the relationships

were at the lowest ebb in 35 years. do you buy that? >> look, no, i don't. i think the support for israel and the american people and the intertwining of interests and cooperation between our governments is increasing all the time. it's obscured by the bumps on the road. there's no question the road is going towards and going upwards. i have no doubt about that. >> larry: all right, let's get into some things. mr. prime minister, you say that you want to have direct talks with the palestinians. so when are you and president abbas of the palestinian authority going to sit down? when's it going to happen? it's so frustrating to the world. >> that's a very -- that's an excellent question that i've been asking for a year and a quarter, ever since i got into office. on day one that i got in, i said president abbas, the palestinian president, meet me and let's

talk peace. and i use this forum today, on the "larry king" show, to say, president abbas, meet me, and let's talk peace. we all have our grievances. we all have our, you know, our questions and things that we want answered. but the most important thing is to get together, sit down in a room and begin to negotiate peace. you cannot resolve a conflict, you cannot successfully complete a peace negotiation if you don't start it. and i say let's start it right now. today. tomorrow. in jerusalem. in ramallah. or anywhere else. i'm prepared to go to a warm city like new york or a cool city anywhere. let's get on with the business of talking peace and concluding the peace agreement. >> larry: so, forgive me, what's holding it up? he could watch this show. you know, we did a show some years ago with arafat, with yitzhak rabin and king hussein of jordan, historic show. i was in washington.

the three of them were in their homelands. it was terrific. why can't -- would you do that, if we had you and abbas and we had the king of jordan on? could we do that now? >> you're on, larry. from my point of view, immediately, no problem. >> larry: all right. so if we worked on that, we could set it up? because it's -- it's frustrating -- go ahead. >> well, i'm just saying that you're hitting the nail right on the head. i mean, what is there to prevent a meeting between the prime minister of israel, in jerusalem, and the president of the palestinian authority, mahmoud abbas, who's ten minutes away in ramallah, that's when you have traffic, without traffic, it's seven minutes. i really like and respect senator george mitchell, president obama's envoy to the middle east. but i find it perplexing and unnecessary that president -- that senator mitchell has to

travel halfway across the world to relay messages between president abbas and myself. there's no need for that. we should sit down. we have very serious issues to discuss, our security, the question of where the borders will end up, the question of settlements, the question of palestinian refugees, the question of water. all these things are crucially important. the only way they're going to be resolved is if we actually sit down and negotiate a peace. i think leaders have to do exactly that. i think we have to break molds, break stereotypes, and cut right through to a solution. i'm prepared to do it. i'm prepared to lead. and i hope that president abbas hears my call,pok weha'l importd steady help from president obama. but there is no substitute for the two leaders, the leader of israel and the leader of the palestinian authority, to get down together, talk peace and make peace.

>> maybe we can kick it off on this show. we'll be right back with benjamin netanyahu, the israeli prime minister. don't go away. let's go. come on. hurry up. [ laughter ] [ slamming ] [ engines revving ] [ tires screech ] [ engine revving ] [ male announcer ] before you take it on your road trip... we take it on ours. [ children laughing ]

now during the summer event, get an exceptionally engineered mercedes-benz like the 2010 c-class, an iihs top safety pick, for 1.9 percent apr or lease one for $349 a month. but look below the surface. your mouth is no different. just brushing leaves germs behind. adding listerine® antiseptic cleans deeper. [ boom! ] to penetrate and kill more germs. [ exhale ] [ male announcer ] listerine®. clean deeper. get healthier™. brings your child's fever down faster and keeps it down longer than children's tylenol®. not even children's motrin® is proven better. for relief you can trust, look for children's advil® in the cough/cold aisle now. ...into a free year's supply?

be one of thousands to win free honey nut cheerios for an entire year... its great taste helps make lowering cholesterol a non-challenge. just see specially marked boxes for details. helps make lowering cholesterol a non-challenge. basic.? preferred. okay. at meineke i have options, and 50% off brake pads and shoes. my money. my choice. my meineke. >> larry: we're back with prime minister netanyahu. he is in new york. we're in los angeles. what about the settlements issue? president obama said yesterday he expected talks to begin before the moratorium on settlement construction expires, which is late september. will you extend the moratorium, by the way, if things aren't

settled by late september? >> larry, the whole settlement issue was supposed to be discussed in the final peace -- what are called final status peace negotiations, which means how -- to achieve a final peace, this is one of the issues we have to resolve. seven months ago, i did something quite extraordinary, that is, no other prime minister in israel's history did this. i put on a temporary freeze of ten months on new construction in the settlements in order to encourage the palestinians to get into the peace talks. seven months have passed by. they don't come in. they say, oh, we need, now, another extension. and the answer is, right now, listen, we don't need any pretext and preconditions. let's just get into the talks. and one of the things we'll discuss, right away, is the issue of settlements. that's what i propose doing. in any case, what is important is to get down and talk. that's the important thing. >> larry: president clinton once

said to me that the difficulties in the middle east are harder to solve than ireland/england. that it's so deep rooted and so frustrating. can you explain to a waiting world why you can't get together? >> i can't, and i'm offering to do exactly that. i think there's been a persistent refusal in many arab quarters to recognize the state of israel and any borders. i think the issue of borders is important. it's related to our security. but the issue of recognition, the basic recognition of the jewish state that exists in the middle east, that is the homeland of the jewish people, that lives in peace and security with its neighbors, is something that is recognized by some. we made peace with egypt. we made peace with jordan. i think it's important to make peace with the palestinians. and i'm prepared to negotiate that peace right away.

i think it requires courage on the palestinian side for all those who don't really want a peace with israel to stand up and do what president -- the late president of egypt, anwar sadat did, and to say, hey, it's over, no more war, no more bloodshed. we're going to make a genuine peace with israel. i'm prepared to have a demilitarized state live next to the jewish state of israel. i think the palestinians should not be either subject of israel or citizens of israel. they should have their own independent country. we should be assured that this country is not used as a staging ground for iranian-sponsored terrorist attacks on us. and i think this combination of state for the palestinians and security for israel is something that can be brought about in direct negotiations that i propose to start without any preconditions, without any pretext. >> larry: right. >> leaders don't need excuses. they just have to get on with it and i'm prepared to get on with it.

>> larry: do you -- you absolutely favor a palestinian state though, right? >> i do. and i want to make sure that it -- that we don't have a repeat of what happened in the other two times that we vacated territory. you know, we left lebanon, every last square inch of it. and iran came in and used it as a staging ground to launch 6,000 rockets on israel's cities. 6,000. we left gaza, last square inch, and iran used it to arm its proxies and fired another 6,000 rockets. so, we can't afford that happening a third time. now, when i say that, larry, you can now reach one of two conclusions. either don't make any peace attempt or ensure that the peace that you do make has the necessary security arrangements on the ground to prevent this from happening a third time. that's what i propose to do. i think it's possible to fashion a secure peace for israel and a

dignified peace and a dignified life for the palestinians. i discussed this at some length yesterday with president obama, and i'm very happy with the progress of those talks. >> larry: all right. but abbas isn't the only leader we have to concern ourselves with. would you sit down with hamas? >> i'll sit down with anyone who will recognizes my existence. somebody who calls for our destruction, my destruction, is unfortunately, not a partner for peace. >> larry: so you would not sit down -- >> -- hamas that calls -- well, you know, would you sit down with somebody who said we want to destroy the united states. now come and talk to us? >> larry: do you think they can -- that can change at all? do you think there's some way -- secretary mitchell -- senator mitchell maybe somewhere in between can get a little tempering of the language? i mean, we're trying for the

same result here, nobody gets killed hopefully. >> i think in the case of hamas, it's basically a proxy, a terror proxy of iran. iran openly calls for our destruction. it denies the holocaust. it sponsors terrorism everywhere. it brutalizes its own people. hamas, by the way, does the same thing to the palestinians in gaza. they don't really have a choice. they can't really vote the hamas out. they can't decide their own fate. but look at what is happening in the west bank with our cooperation. you know, we removed -- i removed hundreds of checkpoints, hundreds of road blocks, and the palestinian economy on the west bank is just booming. i mean, there's coffee shops, there's shopping malls, there's e-businesses, you name it. it's growing at about 8% or 9% a year, which isn't bad these days. and i'm very happy for that. and i want to add on to that a formal peace, peace with security and prosperity. hamas is totally the other way around. they are -- you know, they're subjecting their own people to

terrible things. and they're using the territory to just stockpile weapons. i wish they -- i wish they'd change, and i wish they'd accept the state of israel, but as long as they call for our destruction, there's not much we can do. >> larry: we'll be right back with the prime minister of israel after this. host: could switching to geico really save you fifteen percent or more on car insurance? host: was abe lincoln honest? mary todd: does this dress make my backside look big?

abe: perhaps a... vo: geico. fifteen minutes could save you fifteen percent or more on car insurance. we get double miles on every purchase. so we earned an l.a. getaway twice as fast. we get double miles every time we use our card. no matter what we're buying. and since double miles add up quick... romans! get em! [ garth ] ...we can bring the whole gang. [ sheep bleats ] it's hard to beat double miles. whoa -- he's on the list. but we're with him. [ male announcer ] introducing the venture card from capital one with double miles on every purchase every day. go to capitalone.com. [ indistinct shouting ] what's in your wallet?

>> larry: we're back with prime minister benjamin netanyahu of the state of israel. your coalition, we know this, has some right-wingers who don't agree with the notion of a palestinian state. you have some difficulties. there are always inner politics going on. is there any way, a pragmatic way, to bring you and the kadima together?

>> well, i've called for a national unity government. i've formed one. i've formed likud labor alliance. i'm always happy to broaden it to people who want to serve the nation. but, you know, getting into the intricacies of israeli politics would take a lot more of -- even a long program of "larry king." it's a subject of encyclopedic vantage. >> larry: back to the difficulties. in may, israeli forces stormed a ship on a humanitarian mission to gaza. several turkish activists were killed. i don't know if you've -- have you ever publicly said that you were wrong to do this? >> well, we were definitely sorry about the loss of life, but i'll tell you what happened. first of all, why do we check ships that go to gaza? because we are concerned with the flow of -- the possible flow

of weaponry into gaza. we've had, as i said, thousands of rockets fired on us. i think that what people fail to recognize is that there were six ships. five of them were totally peaceful and nothing of substance happened. our navy checked these ships. and we didn't have any incident. the sixth ship was very different. it had about 500 people on it, of which about 450 were peaceful people. but several dozen were activists of a very radical group that had apparently amassed steel rods, knives, communication equipment. they boarded differently than the other passengers. the other 450 passengers boarded in one port in turkey. they went through security checks. these people boarded in another port in istanbul. they didn't go through any

security checks. they had their own communication equipment. they had their own -- their own steel pipes and things that they brought on board. and when our coast guard effectively wanted to check this ship and make sure that it behaved the way the other five did, they were brutally attacked. and you can see that in the films that were released. our soldiers, our navy people, were fighting for their lives. what would you do if the coast guard boarded a ship and the coast guard was brutally attacked by people who were, you know, clubbing them, knifing them, taking weapons from them, shooting at them? what do you think would happen? how do you think the american people would respond? >> larry: okay. but how do you repair the damage with a state you need to be friendly, turkey? >> well, you're quite right that turkey and israel had an important relationship. turkey's a very important country in the middle east. i think that the relationship

began to deteriorate with the turkish policy, a new policy, that basically veers away from the west and i think israel -- what has happened with israel as a result of that policy and not its cause. but nevertheless, i look for every opportunity to see if we can stop this deterioration and somehow get things back to normal or relatively normal. last week, i authorized a meeting with one of my senior ministers and the turkish foreign minister. they met in zurich, in the airport. i can't tell you that something positive came out of it. but i want to feel, as prime minister of israel, that i leave no stone unturned in the quest for -- the quest for a broader peace and the quest of good relations with our neighbors. and even though it may not succeed right now, we'll keep trying. >> larry: will you meet with

turkish leaders? >> sure. >> larry: we'll take a break. we will be right back with more of the israeli prime minister. don't go away. see, expedia lets me mix and match airlines. so i can take one airline out... and another home. so with more flight options, i can find the combination that gets me there and back quickest. with a little help from expedia, my friends will think i can be everywhere at once. where you book matters. expedia. ♪

[ male announcer ] we all need people who will be there for us in life. people who say, "we're with you, no matter what." at wachovia and wells fargo, we're with you, when a house turns into a home... ...when a passion becomes a career... ♪ ...when a relationship turns into a lifetime... and when all the hard work finally pays off. we're with you when you need someone to stand by you. wachovia, wells fargo, and you. together we'll go far. [ male announcer ] invest with fidelity and get more for less.

don't you wish all investing decisions were this simple? ♪ ♪ ♪ now when you open and fund an account, you'll get 200 commission-free trades. fidelity investments. turn here. ♪ fidelity investments. turn here. my joints ache so bad, i wake up in pain every day. i want to know why. i want to know why my hair is falling out. how did this happen? how did this happen? a little pain in my knee. that's how it started. that's how it started, this rash on my face. now it's like my body is attacking me. i want answers. announcer: when you don't have the right answers,

it may be time to ask your doctor the right question. could i have lupus? >> larry: we're very interested in your comment, mr. prime minister, on the statements made by former american president jimmy carter. he called the incident with the ship, the attack on the ship, unprovoked and an illegal israeli assault. he also says there's no way to realize a two-state solution, while, quote, the people of gaza remain isolated and deprived of basic human rights. how do you respond to president carter?

>> well, first of all, i think he's wrong on the incident. i described to you what happened. >> larry: all right. >> we regret the loss of life, but we don't apologize for our soldiers defending themselves. and i think that's obvious. secondly, i think the people of gaza are, indeed, incarcerated by hamas. third, i removed all the civilian -- civilian closure that we had. that is, the prevention of free flow of civilian goods, food, medicine, anything, toys. i actually changed a policy that i inherited from the previous government. it had put both a civilian closure on gaza and a security closure. i said we really have to be clear about our policy. our policy is that weapons and war-supporting material don't go in and everything else should go in. food and everything else should go in.

so, i changed that policy and i'm glad i did it, because i think there's clarity. and there's common sense in it. i'm sorry that not everyone can see that. i think fair-minded people can see it and, in fact, do. >> does it pain you personally to have a former president of the united states be so critical of your country? >> well, i'm sorry he thinks that. i think the majority, the overwhelming majority of americans, see things differently. i think -- i think successful presidents, including this one, see things differently. and the important thing is to -- is to be true to the facts. the facts are that israel was attacked from gaza. the fact is that we had -- that iran sends weapons into gaza so they'd be fired on us. the fact is that this regime, hamas, is holding an israeli soldier that they kidnapped for

four years. for four years, this soldier, gilad shalit, has not been allowed to see anyone. this is a complete violation of international norms. i think if anything bears condemnation, it is this -- this inhumane terrorist regime. and i would hope that international condemnation is directed there. that's where it belongs and not against israel. a struggling democracy striving to live and to make peace with its neighbors, it should not be condemned. it should be encouraged to -- >> larry: saying -- >> -- defend itself and also make peace. >> larry: continue, mr. prime minister that israel's image around the world is poor. you're not in high regard at the u.n. you seem to be, from a public relations standpoint, pr standpoint, in trouble. >> well, that's one of the reasons i'm appearing on the

"larry king show." there's a difference between perception and reality. the reality is that the people of israel yearn for peace, pray for peace. we've not had a day's peace, a day of complete peace, since the founding of the state in 1948. we know the cost of wars. there's -- many israelis have suffered it. i've suffered it personally. i've lost a brother in the war between the wars known as terror. many of my friends have lost direct relatives. we know the cost of war. we know the sorrows of war. we know the blessings of peace. yet at the same time, we forged a peace agreement with egypt. we forged a peace agreement with jordan. and throughout these years, we built a robust economy. israel is a beehive of creativity and innovation. the economy is growing. it's one of the best-performing economies in the developed world. there's a story there that

doesn't get told, both of our desire for peace, our sacrifices for peace, and our building of a better reality. and i can envision, if we had the kind of peace i envisioned with the palestinians, we could see what we're seeing now in the west bank, this great prosperity, envelop the entire region. i think israel could make a tremendous contribution to the well-being of its arab neighbors. and i think that peace could bring for our children, my children and their children, something beyond their imagination. it could be a different life, a different reality. and i'm prepared to do it. i'm prepared to move and lead my people to that peace, and i need a partner on the other side. >> larry: when we come back, we'll talk about iran with the president, with the prime minister of israel, right after this.

>> larry: mr. prime minister,

iran. how much -- the word fear apply -- how much do you fear their intentions? do you -- do you -- what's the worst-case scenario to you? >> well, we've learned in history and in jewish history to take seriously those who call for our extermination. a lot of people in the past century, in the 21st century didn't take such calls seriously and we know the awful price that was paid by the jewish people and later by rest of humanity for not taking seriously these kinds of statements. the fact that after the holocaust, sovereign government at once denies the holocaust and calls for the destruction of the jewish state is just outrageous. do we take it seriously? absolutely. we take it seriously. we also know israel was founded

to defend the jewish people and we absolutely will defend ourselves. >> larry: if you determined they had nuclear capability, would you attack iran? >> you know, i've taken note of president obama's statement, that he's determined to prevent iran from acquiring nuclear weapons. i see that sanctions have been adopted, modest sanctions at the u.n., but more robust sanctions recently by the congress was signed by the president the other day. i hope other nations follow america's lead in this. will it be enough to stop the iranian nuclear program? i can't tell you, larry. i do tell you that the president has said that all options are on the table. and i do tell you that israel always reserves the right to defend itself. that's the purpose for which it was founded, to defend jewish lives.

>> larry: assuming -- israel has never said it has nuclear weapons, but the world thinks it does. why is it okay for israel to have nuclear weapons and iran not to have nuclear weapons? hypothetically, if israel has them, why is it okay for them to have them and the other not? >> well, we said we wouldn't be the first to introduce these weapons into the middle east, but equally, we're not threatening to destroy any country. we don't seek the destruction of any country or any people. we don't say that an entire people has to be wiped off the map of the earth. we don't have such intentions and i think all nuclear proliferation is bad, but some of it is a lot worse. it does make a difference, whether holland has nuclear weapons, or the ayatollah

regime that sponsored terrorism and calls for its destruction, where there is nuclear weapons. and i think there's a common understanding right now. something that i spoke about 16 years ago, 14 years, to be precise, 1996, when i was elected, 14 years ago, spoke before the joint session of the u.s. congress. i was just elected prime minister. and i said that the greatest threat facing humanity is that iran would acquire nuclear weapons. some eyebrows were raised at the time. and i can tell you 14 years later that most of the world's leaders today agree with this. there is a question of the distance between understanding an effective action, and that is the ultimate test of leadership and history. >> larry: would you ban all nuclear weapons throughout the -- not the world. would you ban nuclear weaponry entirely? >> well, that's beyond my scope. i mean, this is -- this is a worthy cause, but it's -- it's a very complicated issue. and i'm sure you realize that the most important thing is

preventing the most dangerous weapons in the world from falling into the hands of the most dangerous regimes. and this is what we really are facing today. we're facing the prospect that people who talk about destruction, who deny the holocaust, who sponsor terrorism everywhere, who shoot their own citizens on the sidewalk, you know, they lie there. you remember that young woman lying there, choking on her own blood. these people who have absolutely no inhibitions about the use of violence and brutality would acquire the weapons of mass terror, the ultimate mass terror weapons, which is atomic bombs. that's a very, very dangerous development for all of us. >> larry: would there be any point -- may sound ridiculous, but speaking is better than killing. would there be any point for you to sit down with ahmadinejad?

>> well, if he wanted to change the policies of iran. we used to have friendly relations with iran. it actually recognized israel. we had exchanges all the time. tell me when ahmadinejad decides to recognize the state of israel and seek peace with it, believe me, i'll be there eagerly waiting, but i'm afraid i don't see that. i see the very opposite. >> larry: some more moments. we have a couple segments left with the prime minister of israel, benjamin netanyahu. don't go away. it makes it hard to do a lot of things. and i'm a guy who likes to go exploring ... get my hands dirty... and try new things. so i asked my doctor if spiriva could help me breathe better. spiriva is the only once-daily inhaled maintenance treatment for both forms of copd... which includes chronic bronchitis and emphysema. spiriva keeps my airways open... to help me breathe better for a full 24 hours. and it's not a steroid. spiriva does not replace

fast acting inhalers for sudden symptoms. stop taking spiriva and call your doctor right away if your breathing suddenly worsens, your throat or tongue swells, you get hives, have vision changes or eye pain... or have problems passing urine. tell your doctor if you have glaucoma, problems passing urine or an enlarged prostate... as these may worsen with spiriva. also discuss the medicines you take... even eye drops. side effects include dry mouth, constipation and trouble passing urine. i'm glad i'm taking spiriva everyday because breathing better is just better. ask your doctor if once-daily spiriva is right for you. ngin r achinery humng [ male an] weave it er of a rc th we thprecisn aexus. and in rn, wr aefn 's pe we thprfor an automobile. engi revs ] gss shatts ] s ishe purit thimssible this pursu ofpetion.

>> larry: we're back with benjamin netanyahu, prime minister of israel. so thankful to give us this hour tonight on "larry king live." as we say, we go back a long way. what do you make of iraq -- no, no, well, i'm leaving "larry king live" in november, but i'm going to be around.

we're going to do specials. we're going to come to the middle east. >> oh, good. good, i'll -- then i'll entertain you again in israel. it will be a good refresher. >> larry: it will be my pleasure. and don't forget, you committed, if we can get all three leaders on together, we're going to do that show. >> you can do it anytime. you have one. >> larry: okay. are you -- well, i think we can get jordan. now, if we get -- we're fine if we get abbas. what do you make of what's going to happen in iraq? will that hold together? >> well, i hope so. i mean, we are -- we are rooting for the success of the american effort and of the iraqi effort to stabilize iraq. it went through a very difficult period. we want to see a peaceful middle

east. we want to see a moderate middle east. i think there's a larger battle taking place between the forces of modernity and the forces of medievalism. i cannot describe this militancy that tries not merely to eradicate israel but to bring down any moderate government in the arab world and in the middle east. in a way, there's a -- this is the first time in my lifetime that the -- many of the arab governments and israel understand that there's a great -- a great foe that threatens all of us. and that is the basis of a broader understanding. i don't think peace should be merely forged by common dangers. it should be forged also by the benefits, the blessings of peace, economic blessings, the human blessings of every sort. but today, the context of a peace is made perhaps more likely and more possible because of this common enemy that threatens israel and arab

countries alike. >> larry: what's -- what about hezbollah, lebanon, that -- four years since the war with hezbollah and lebanon. are you still concerned about them? >> unfortunately, yes, because it is basically an iranian terror proxy. look, lebanon was the switzerland of the middle east. it's a very beautiful country. it had robust economy. and iran has moved its surrogates, hezbollah, into lebanon. it has piled weapons there. they fire those weapons on israel. and they undermine any attempt at moderation and any movement towards peace. we always hoped that lebanon -- we always said we don't know who the first country to make peace with israel, which country that

would be, but certainly lebanon would be the second country. and, you know, it hasn't happened, not because many lebanese don't want it, but because radical forces, pro-iranian forces, like hezbollah, are preventing it. and so you have these two enclaves next to israel, one in the south, gaza, controlled by one proxy of hezbollah, preventing the people there from making peace with israel. and then another enclave in the north, in lebanon, controlled by another iranian proxy, hezbollah, preventing the lebanese from making peace with israel. and threatening to throw the entire region into a maelstrom of violence and terror. that's happened before. i hope it doesn't happen again. but hezbollah and hamas are basically iranian surrogates. as long as iran doesn't want peace, they don't want peace. >> larry: touch some other bases before we leave as we have one segment to go.

you've invited obama to visit israel. what has he said? >> well, you know, he'll decide the appropriate time, but i have to tell you that we had very, very, very productive conversation. and i think that when we have a chance to sit, as we do, one on one, i think it's very, very productive for israel, for the united states and for the quest for peace. >> larry: and we'll be back with our remaining moments with the prime minister right after this. for an entire year... its great taste helps make lowering cholesterol a non-challenge. just see specially marked boxes for details.

we make meeting times, lunch times and conference times. but what we'd rather be making are tee times. tee times are the official start of what we love to do. the time for shots we'd rather forget, and the ones we'll talk about forever. in michigan long days, relaxing weather and more than 800 pristine courses make for the perfect tee time. because being able to play all day is pure michigan. your trip begins at michigan.org.

>> larry: couple of other things, mr. prime minister. how would you describe the relationship of your country with secretary of state clinton, and how do you measure her work in the peace process?

>> i greatly respect secretary clinton. you know, i worked with her husband, bill. i got to know hillary on her visits to israel. she's always a welcomed guest. i think she's knowledgeable. i think secretary clinton was a very wise choice on the part of president obama, and we'll be happy to work with her if the president so designates, and he often does. >> larry: there's some video getting a lot of attention on the web, supposedly of israeli soldiers dancing while on patrol in hebron. what do you know of that? >> i don't know. i hear it for the first time. >> larry: so do i. they gave me a note here and said it's on the web. >> i don't know. if you talk to me -- if you want to invite me again, i will be able to respond to it. >> larry: we'll invite you any time. are you ever able -- you're

prime minister of israel. you have had a previous prime minister assassinated. you live in the center of a hostile world. are you ever able to really relax? >> yeah. you know -- yes. and i'll tell you when. every saturday, the sabbath, we have a day off. it's a very good idea that this institution was brought into the world. so, i have a day off. and every saturday i take an hour and a half and i read from the bible with my younger boy. he's just won the national bible championship in israel and became in third in the international. it's like a big spelling bee. huge. and i relax then. i draw a lot of spiritual strength.

you know, i used to teach him. he is now 15. but in the last couple of years, he teaches me. so, yes, i draw enormous reservoirs of strength and relaxation. i think that is needed for all leaders, but especially for the leaders of israel. >> larry: four years ago, the former prime minister ariel sharon suffered a stroke. is he still alive? do you ever go to see him? what is that story? >> it's a tragedy. ariel sharon was a great leader of israel. in my mind, the greatest general israel has had in modern times, has contributed a lot to the country and, unfortunately, has suffered, as you say, the stroke. we can all pray that somehow he miraculously recover, but that has not happened yet. but i think the people of israel value his contributions.

i certainly do. >> larry: earlier in the program, you mentioned that hamas is still holding gilead shalit, the israeli soldier they captured four years ago. >> yes. >> larry: any late word on any efforts? >> well, we've had a german mediator, a very able man, trying to broker the release. i'm prepared to release 1,000 palestinian prisoners for gilead but so far there's not been an official response of hamas to this offer the mediator has made. i have accepted it. they have not. i can only hope that they change their mind. >> larry: in our remaining moments, mr. prime minister, do you think -- how old are you now? >> i'm 60 years old, larry. and showing it. >> larry: do you think that in

your lifetime, you will really see peace in your region? >> i think it's possible to achieve it, yes. will we achieve it with the entire middle east? that, i cannot say. can we achieve it with the palestinians? i say absolutely. i say that with conviction because i think it's a question of a rightness for our people's perspective. there is a ready time. it's now. i think for many palestinians, the time is now. and i'm prepared to make that effort. it requires a lot of courage. maybe that's the quality that supersedes all others. if you don't have courage, everything else fails, but if you have it, then everything else is possible. we have the courage to make peace.