"The right for a Jewish state and the right to self defense are two of the basic principles of our people. These two elements are interwoven: Without a state of our own we cannot defend ourselves and without the right to self defense, we cannot run our own country," Prime Minister Binyamin Netanyahu said at the opening of the Knesset's winter session on Monday.

The prime minister was referring to the recently published Goldstone Commission report on Israel's Operation Cast Lead in Gaza last winter.

"These basic rights are under continuous assault, gaining momentum since the Second Lebanon War and Operation Cast Lead. We must repel this onslaught," Netanyahu said.

The prime minister continued to address the report, saying that "we never claimed the rules of war do not apply to us," at which point Balad MK Jamal Zahalka began heckling him. Zahalka only calmed down after he was threatened with expulsion from the plenum by Knesset Chairman Reuven Rivlin.

Netanyahu defended his predecessor former prime minister Ehud Olmert, as well as opposition leader and former foreign minister Tzipi Livni over their decision to send IDF troops to the battlefield in Gaza.

"Israel will not allow its leaders to be prosecuted at The Hague. We reject this absurd state of affairs."

Netanyahu promised to work hard to achieve peace with the Palestinians, adding that he expected the same from them. He insisted that no peace could be attained while Israel was yet to be recognized as the Jewish state. The prime minister called on the Palestinian Authority to return to the negotiation table, insisting that he did not need preconditions to begin talks.

The prime minister placed the Iranian nuclear threat at the top of his security agenda, saying that "Iran's true face has been revealed over the last few months," one that supports terror, and builds hidden reactors to develop nuclear weapons.

Speaking after Netanyahu, Opposition leader Tzipi Livni lashed out at him in a biting speech.

"I would like to congratulate Israel's prime minister for achieving this government's main goal: survival. Your second achievement - and unfortunately that's the way you see it - you succeeded in not doing anything at all," she said.

Livni mockingly summed up Netanyahu's progress since being inaugurated: "We defeated America, we humiliated the Palestinians and we isolated ourselves."

"When the prime minister thinks he wins, all of Israel loses," she said. She said Netanyahu should not misread the behavior of the Israeli public: "This is not contentment, but apathy, indifference and desperation."

She warned Netanyahu that if he remained complacent, a Palestinian nation will arise and "it will not be the one you fear so much, but a Palestinian state between the Jordan River and the Mediterranean Sea, and it will rise by the simple power of the right to vote."

Livni suggested to Netanyahu to establish a special cabinet which will be entrusted with fighting crime. She also called on the prime minister to change the system of government and reminded him that he was behind initiatives to change it when he was in the opposition.

Likud MK Miri Regev was removed from the plenum after heckling Livni and being warned by Rivlin three times consecutively.

President Shimon Peres, who spoke prior to Netanyahu, stressed the importance of attaining peace with the Palestinians, warning against an option of Israel turning into a "de facto single state with two nations" that would "be alone, isolated, and solely responsible for all the territories." Instead, Peres urged the state to "try every option in order to put an end to more than 100 years of quarrel and bloodshed."

Reaching an agreement with the Palestinians, said Peres, would open the door to further agreements with Syria and Lebanon. In doing so, Israel would "remove the main pretext for the Iranian madness," he insisted, adding that he believed most of the population understood the necessity of a two-state solution.

Peres addressed the Goldstone Commission's investigation, saying that "a one-sided report" that "ignores the aggressors' crime of terror… will not determine our fate." The president said that the report failed to make a single suggestion that "deals with how to fight terrorism."

Peres praised the IDF for defending the state, calling it the only body that could protect "the historic right of our nation. Sweden cannot not prevent the terror. The IDF can," Peres said, alluding to a story in a Swedish tabloid published in August that alleged IDF soldiers were harvesting organs from Palestinians killed in combat. The story was refuted in Israel as a "modern blood libel."

Finally, Peres reiterated the importance of education, saying that "we have no capital except for human capital… Providing primary and secondary education, free, for all of Israel's youths, promises the best future for this country."