Opposition leader Binyamin Netanyahu was treated respectfully by the 100 members of the foreign press who attended his Israel Project briefing Wednesday. The same day, the Hebrew press was not as kind. "The Twin Towers disaster worked in our favor," Netanyahu was quoted as saying on the front page of Ma'ariv, which printed his picture alongside a photo of the WTC on fire, with the caption "Netanyahu lapses again." The people who had heard him speak at Bar-Ilan University Tuesday were shocked by the headline, which Netanyahu did not say, and which was taken out of context from an answer to a question about the US-Israel relationship. In an interview with The Jerusalem Post at the capital's King David Hotel, Netanyahu implicated the press in attempts to prevent his return to power and said the media was part of the reason for the Likud's recent fall in the polls. "Will some of the press try to prevent the Likud from coming back to power specifically by attacking me personally with all sorts of personal attacks? The answer is yes. Of course they will, but we'll have to overcome it." He said that "for a short time, [the press] can artificially focus an attack and get some shift in the voters." But he expressed confidence that over time, serious issues like Iran and the government's mishandling of the rocket fire from Gaza would bring him back to power "considerably before the next election's scheduled date." How much time is there to deal with Iran, will we ultimately end up alone on this issue, and is the current government capable of making the right decisions? On Iran, you won't hear a partisan position from me, because there's none. There's no coalition or opposition on the nature of the Iranian nuclear threat and the need to roll it back. There is complete unanimity and cooperation. This wasn't always true. There was a time when some of us warned, but [its urgency] wasn't widely accepted. But there's also a growing understanding of this menace in Israel and among leading world figures. That doesn't mean that their understanding will be translated into the necessary international action in time, but we have to do everything possible to make sure it does. How much time do you think there is? Last year, the Mossad chief said we have three years. They haven't changed their estimate, which means we have two. The American National Intelligence Estimate was seen as removing the military option from the Bush administration. What are the implications? It certainly was a setback. There was a head of steam building in the Security Council for additional pressure and the Iranian regime was concerned. There was a relaxation of pressure in the report's aftermath. In the last two months, there's been a reassessment of this reassessment, due to the flow of information and common sense. If it looks like a nuclear program, smells like a nuclear program and walks like a nuclear program, it's not a duck. It's a nuclear program. And people understand that. Are you saying that the sense that the NIE removed President Bush's military option is misguided and it may indeed still be on the table? I listened to the statements of Bush, who says that all options should still be on the table, but I haven't heard anything beyond that. I can't tell you I heard a definitive statement that if all other options do not work by such a date, we will act. If all else fails, can Israel live with a nuclear Iran? Our policy should be that Iran will not acquire nuclear weapons, period. Is there more that Israel should be doing publicly or is this a case of the less we do publicly, the better? No, I don't think we need to hide the fact that we are under threat. It would seem odd - and it would be wrong - for Israel not to sound the alarm when [Iranian President] Ahmadinejad every few weeks touts his nuclear saber and promises to eliminate Israel from the face of the earth. I spoke about Iran to 100 journalists and 300 were listening in. The governments understand but they're constrained by the fact that public opinion is not fully aware. The public in those countries understands Iranian-backed terror's threat. They less understand that such terror will be heightened tenfold if it's backed by a nuclear umbrella. Should we be engaging with Syria to help with Iran? No. We have a short timeframe. Whether Syria can be plied is questionable. They've shown no signs of detaching themselves from the Iranian axis. [Egypt's President] Sadat detached himself from the Soviets and it still took another war, but he finally shifted wholeheartedly for a peace agreement with Israel after shifting to the West. The opposite happened here. Syria's supplying Hizbullah with Iranian arms, hosting Khaled Mashaal and terrorist groups, and is in cahoots with Iran. There has to be a change of critical weight. The Mossad chief said Iran will be ready in two years. The next general election is set for November 2010. Does the election have to be moved up for you to try to take over sooner, so you could handle this threat? We will do everything in our power to move up the next general election. Iran's not a subject I will raise in a political context. As long as [Olmert and I] see eye to eye on this subject, I see no reason to argue about it. We have enough areas left to argue about... On Iranian backed terror, [Olmert and his predecessors] followed the wrong policies. The unilateral retreat from Lebanon immeasurably strengthened Hizbullah and produced an Iranian base north of the country, from which they launched 4,000 rockets. That base is arming itself feverishly now with 40,000 mostly Iranian missiles of greater range and payloads. The same policy of unilateral retreat from Gaza that Olmert advocated immeasurably strengthened Hamas, leading them to overtake Gaza, giving them a second Iranian base, from which they fired 4,000 rockets since disengagement. That base too is arming feverishly. These failures should have made people stop in their tracks before they offered to make a third base here [in the West Bank], which is essentially what the government is doing. They pretend [Palestinian Authority head] Abu Mazen has a supermarket where they could buy a product called Peace. In that supermarket, Israel pays in advance and gets nothing in return, but an Iranian base, more rockets and terror... To give everything away, even in a shelf agreement, would create a third Iranian base here. I suggest we do what's required on the ground with the Palestinians who want peace and differentiate our policies from Gaza, where ultimately, we will have to bring down the Hamas regime. We'll develop an economic peace with bottom-up change, not top-down. This can be done by encouraging economic growth and the development of Palestinian institutions. Those are Tony Blair's mandates. Yes, and it's right. Oslo's misconception was that peace would produce prosperity. The opposite. Prosperity will lay the foundations for peace and security. What the government is doing is putting the cart before horse to reach an agreement and then have it trickle down. By ensuring security and focusing on the economy, prosperity can trickle up. If an agreement is reached, would you honor it? I don't think it will reach the legal status of a formal contract ratified by the Knesset. The elections will come quicker and will be a referendum on this agreement. Most people understand that there's a gap between the composition of the Knesset and the public and a reverse since the last election where Likud got 12 seats and Kadima 29. But polls have shown that to be true since the end of the Second Lebanon War a year and a half ago, and Olmert's still in power. Why would that change now? I don't control 61 MKs who are putting their own self-interest before the public sentiment and will. We have no mechanism in Israeli parliamentary democracy to express the public will between elections. The only thing we have is no-confidence votes, so if you can pacify 61 MKs, you can hold on to your coalition. The government can maneuver, but it can't stop the clock. When it will be apparent that we are heading toward elections, this government will unravel - considerably before the next election's scheduled date. Does the government not know what to do about Gaza? The issue is not what to do in Gaza. People know what to do. The army has excellent plans and I speak with authority. The problem is leadership. Can you be specific: What should Israel be doing in Gaza? Bringing down Hamas? Yes. We have to increase the cost enormously and we can. It is not that difficult. The first thing is to deprive them of sanctuary and the second is to increase the cost to the point of bringing down the regime. Change the rules of the game. It shouldn't be an incremental tit-for-tat - that they kill a few of our people and we kill a few of theirs. We have to change this pattern of attrition, which is good for them, not us. That means increasing the cost, because most Hamas people are not suicidal. They want to kill and live another day, but they want to live. One way I would be careful of, even though it is very popular, is to deprive basic necessities to the population. I would not do that. To be blunt, we should kill more Hamas people? I say we have to go from attrition to deterrence and if necessary bring down the regime, and ultimately, I believe it will be necessary. And give Gaza to whom? There will be others who will rise to fill the vacuum. But you're not saying retake Gaza now? There are good programs from the defense establishment. The tactic is not relevant. The result has to be that we are not rocketed. So it has to be done in a way that will not leave Israel back in Gaza? I think ultimately that's possible, but it's not wise to discuss it. There are many ways to act by ground, air and sea. The reason why it hasn't been done is a failure of the political leadership, not of the army. This government says no one else can do it better. That's not true. We did do it better, it can be done better and it will be done better. If they don't know how to stop it and they are satisfied with what's going on now, let them clear the way for people who can do it a lot better. It's unacceptable what is happening in Gaza. They might think this is the best possible government. Tell it to the residents of Ashkelon, Sderot, soon Ashdod. Most Israelis understand this is unacceptable, and most governments I talk to can't fathom why Israel is not using its vast power to stop it. What can you do to avoid what your people see as an attempt by the press to bring you down? Is the press part of the reason you are not back in power? Some of it, but no, I don't think it's the press that is holding us back right now. It's the politicians who are putting their self-interests before the public's. Will some of the press try to prevent the Likud from coming back to power specifically by attacking me personally with all sorts of personal attacks? The answer is yes. Of course they will, but we'll have to overcome it. Does the press have anything to do with your recent fall in the polls? Some of it. It's not such a great fall, but some of it does have negative consequences. But over time, the issues will be stronger, because reality is stronger. But for a short time, they can artificially focus an attack and get some shift in the voters. You deal with the deck of cards you have been dealt with and I have been dealt this deck of cards. Is running together with Israel Beiteinu still an option? Such things are dealt with on the eve of elections like I did in 1996. Presumably, it will come up again. We'll have to judge in real time if there's an advantage in doing it. Where are all the generals you said would come to Likud besides Yossi Peled? I appreciate that Peled came. Others are openly saying they'll plunge into political waters only when elections come closer. I understand that. It's not a simple decision. No one's putting a gun to their heads. But isn't someone like former IDF Chief of General Staff Moshe Ya'alon hurting you by not coming now when he could help you bring down the government? You can make that case or a different case. Without referring to a specific person, I'd be happy if people joined earlier but I have to be realistic. What has happened to the economy since you left the Finance Ministry? We propelled the economy forward by streamlining government, lowering taxes and pushing competition-enabling reforms. This pushed the economy from -1% contraction to 5% growth in four years. Now with the government doing no reforms, it's running out of steam. Rather than renew reforms, the government is saying we will go down to 2% growth rate rather than try to change things. When I was finance minister, we had quarterly growth targets and if the economy showed signs of failing to reach targets, we took action and achieved our goals. This is completely different from how it's being done today, paying coalition partners whatever they ask. For the economy to succeed, you need the right policy and total coordination between the prime minister and finance minister. This government has neither. Are all the candidates in the US election capable of handling the Iranian threat? I have enough to worry about in Israeli politics. I'm not going to plunge into the throbbing waters of American politics. Anyone elected president will see the dangers to American interests and allies of a nuclear-armed Iran. I don't think it's right for Israelis to interfere in American elections any more than it's right for Americans to interfere in Israeli elections.