By the time I arrive at our 7 a.m. meeting in the lobby of Jerusalem's Crowne Plaza Hotel, Uzi Arad is already deeply ensconced in a pile of documents - after driving a good hour to get here. He does not seem the least bit sleep-deprived, however. On the contrary, he appears acutely alert, as one accelerated by the adrenaline of activity. This may be par for the course for the 59-year-old founding director of the Institute for Policy and Strategy of the Interdisciplinary Center Herzliya and former head of Mossad military intelligence. Still, during the week preceding the Herzliya Conference on Israel's Balance of National Security, Arad is bound to be busier than ever. It is his baby, after all. And a handful at that. Indeed, the Herzliya Conference, which Arad established in 2000, has become such a major event in this country that not attending it is almost tantamount to being a nobody - or worse, a has-been - in academic, intellectual, political, business, media and social circles. Even members of these circles in the US and Europe have come to covet - if not actively lobby for - invitations either to speak at the podium or be counted among the audience, as illustrious a list of VIPs as you can get. It perhaps should not be surprising, then, that the conference became a place - the place, in fact - for prime ministers and wannabes to present their platforms to the public. (It was at the Herzliya Conference that prime minister Ariel Sharon first referred to "painful concessions." It was at the following Herzliya Conference that he outlined his disengagement plan. And it was at last year's Herzliya Conference that his subsequent successor, Ehud Olmert, revealed "realignment.") Having the undivided attention of the electorate will do that. Having the ears and eyes of the cream of the celebrity crop - gathering to see and be seen, exchanging calling cards as passionately as ideas - gives it that much more weight. Arad - who served as former prime minister Binyamin Netanyahu's foreign policy adviser, and who currently sits on the plenary and specialized subcommittees of the Knesset Foreign Affairs and Defense Committee - stresses the significance of the conference's "policy of encouraging the free market of ideas." In an hour-long interview, Arad previews the "marketplace" of the seventh Herzliya Conference, which begins this Sunday morning, and emphasizes the critical nature of the challenges facing the nation in 2007, chief among them the threat of radical Islam in general, and Iranian nuclearization in particular. "Personally, I'm optimistic," he says. So much has happened in the past year politically, diplomatically and militarily that it's hard to keep track of it all. Is this year's Herzliya Conference going to reflect that? Is it going to be different from its predecessors as a result? Unlike its predecessors, this year's conference will span four full days, rather than the traditional three. As has always been the case, however, participants and attendees will be from among the cream of the Israeli establishment, and the agenda will cover all issues of paramount significance to the country - military, diplomatic, social, economic and Jewish. As in the past, as well, we will have extensive international participation. To underscore what is different this year: Last year's conference - which took place at exactly the same time, the third week of January - was held on the eve of elections. Prime minister Ariel Sharon had just fallen into a coma. The three major contenders for the office of premier - Mr. Ehud Olmert, Mr. Amir Peretz and Mr. Binyamin Netanyahu - each presented his policy position. Mr. Olmert presented himself as Sharon's successor, and introduced "realignment" as his top priority. Mr. Peretz presented himself as a leader who would address the domestic-social issues, saying that this would be the source of the country's main problems. And Mr. Netanyahu presented himself as the man looking seriously at the security situation - the threats from Gaza, the north and Iran - and stressing the necessity for fighting for security. Because of the upcoming election, about two-thirds of the conference was devoted to the domestic issues of governance, the economy, welfare, corruption and the like, with international issues slightly less pronounced. The mood at the time was as follows: Kadima, the newly formed party, was way ahead in the polls. It appeared as if the "big bang" was about to result in Olmert's carrying 35-40 seats in the Knesset, and the feeling was that it would reflect the policies he presented at the conference dominating the year. OK. Now we are a year after that event. What a change! Prime Minister Olmert is in office, but his popularity and authority are not running as high as last year. Mr. Peretz, lo and behold, ended up as minister of defense, and his authority, too, has been tarnished by events. Netanyahu, whose agenda turned out to have been closest to what actually transpired, nevertheless is still the head of the opposition. This year's agenda, then, will be dominated by defense, strategy and foreign affairs - as is warranted by what happened this summer in Lebanon - by the erosion of Israel's deterrence capability; by the difficulties the military has been encountering; by a complete change of foreign policy agendas; the emergence of Syrian options; the festering problem of Hizbullah in Lebanon, and the accumulation of Hamas power and armament in Gaza; and a possible American withdrawal from Iraq - all this will amount to a completely different landscape. You refer to "the emergence of Syrian options." Is it true that at the conference, ideas for territorial swaps with Syria will be raised, supposedly so that Israel can remain on the Golan Heights? Yes. A report on this will be presented. The idea is a territorial compromise which would allow Israel to retain both its early warning stations on top of Mount Hermon and a security strip extending a few miles east of the water line, so that most of the settlements - including the town of Katzrin and all the elevated areas - would remain under Israeli control forever. This would be facilitated by offering the Syrians alternative land, through exchanges with a third party, such as Jordan, Lebanon or both. In a letter to Israel during his presidency, Gerald Ford committed to Israel's need to stay on the Golan being seriously taken into account by future American administrations. That American commitment, which was reiterated to subsequent Israeli prime ministers - such as Yitzhak Shamir and Binyamin Netanyahu - was to allow for a joint and coordinated Israeli-American position regarding how a territorial compromise over the Golan should be reached. But isn't the dispute in the region more ideological than territorial? Haven't we seen that Arab hostility toward Israel cannot be removed through land deals? You are absolutely right. Israel is and has been facing a much more complex and multi-faceted challenge. The ideological component - specifically, the visceral hostility toward Israel that varies only in degree among Arabs and Muslims - remains a problem. Particularly when it takes on a violent form - such as suicidal terrorism - and extends as far as possible negation of Israel through a variety of means. Therefore, to reduce the issue to its territorial aspects alone would be superficial. Still, there is a territorial dimension that has to be addressed, especially when efforts are made to negotiate a settlement or other types of accords. And when addressing the territorial aspects, I believe that Israel should not be defeatist and accept all territorial demands, but rather should insist on compromises that satisfy its security needs; its own ideological and historical positions or values; and other national interests. It is in response to the defeatist Israeli proposals - in the Palestinian context or the Syrian - that a more responsible Israeli program is warranted. The Herzliya Conference will allow for rigorous deliberation on the more responsible Israeli positions on the above, in addition to a serious discussion of the various strategies and options for how to blunt the most menacing security threat on the horizon, that of a nuclearizing Iran. What is the point, when this year has seen almost everything stated at least year's conference proven false, or turned on its head in some way? Some got it wrong; some got it right. The conference has a policy of encouraging the free market of ideas - the exchange of different outlooks and positions. It is as far from a monolithic gathering as it can be. All one has to do is look at the executive summary of the proceedings to see who got it right and who got it wrong - whose policies have been vindicated, and whose have failed miserably. I don't think I have to be more specific than that. There seems to be much confusion and controversy surrounding the Iranian issue, both in terms of the time frame and on the question of what to do about it - invade or foment popular insurgence. What is your take on it? There are more options than the two you raise. Essentially, the great debate among those who believe that Iran should be prevented from having nuclear weapons centers on the instrumentalities that can bring that about - sanctions, military operations, coalitions... about the efficacy of those measures, and the political will that is required for them. There is also some debate about whether Israel should go about it unilaterally, in the event that the international community fails to do the job. The alternate view is one that says that either prevention will fail, or that Iran inevitably, or in high likelihood, will become nuclear. I personally believe that Iran's nuclear capability is preventable. But, taking into account the possibility that it is not prevented from acquiring nuclear weapons, the secondary debate that arises is about whether a nuclear Iran is deterrable. It's one thing to possess the weapons; it's another to threaten their use or actually use them. Some believe that because of the fanatical ideology and irresponsibility of the current regime, it cannot be deterred. Others pin their hopes on changing that regime. They say, "OK, if there are to be such weapons, at least let them be in hands less hostile to Israel and the West." The debate there is about how likely a possibility that is. In other words, can regime change be effected before Iran has weapons, so that the nuclear option could be rescinded? Or can regime change take place after the acquisition of those weapons, thereby reducing the probability of their ever being used? I, personally, am optimistic, in the sense that if we - meaning the United States and we its allies - do all we are capable of doing, Iran can certainly be prevented from becoming nuclear. One should not consider it an inevitability. But the big "if" is if there's the leadership, the political will, the savvy, the statecraft, the perseverance, the military creativity and the will to use all legitimate instruments of persuasion. Much of the discussion at Herzliya will revolve around those "ifs," with the participation of senior American, European and Israeli experts and officials. I'm also optimistic in the sense that if - thinking the "unthinkable" - Iran does become nuclear, this will not be the end of the world, because it can be effectively deterred from committing any aggression against Israel. What is your assessment of Olmert's statement indicating that Israel has nuclear weapons? I'm quite convinced this was a slip of the tongue. One shouldn't make too much of it; it doesn't reflect any change of policy. Was it as dangerous a faux pas as some made it out to be? No, it was a harmless one. But I would like our leaders to be more exacting, more prudent and more scrupulous in their pronouncements. The question of Israel's nuclear capability is something our leaders have always been extremely cautious about talking about. Here, there was a slight departure - a slip. Well, it's regrettable; but no damage was done, as long as things like that don't recur. Speaking of the "ifs" you listed, do you think that Israel's performance in Lebanon this summer can be seen as a microcosm of the larger arena - or augur of things to come vis-a-vis Iran? After all, there was national will and even, initially, international acceptance. Nevertheless, it went very badly. Is there any way to develop confidence in the ability to confront a much greater challenge, if we couldn't even handle that one? In the first place, some of the commissions of inquiry have not yet presented their findings, and we shouldn't prejudge what they'll say. But there is already some sense of what went wrong and what worked well. For example, the performance of the air force and surgical strikes which hit the Hizbullah's long-range missiles. So, although other aspects of the war were mismanaged, this one was successful. And don't forget that it is the air force that would be needed for certain military operations in Iran. What went wrong in Lebanon was the ground war and the way the whole campaign was led. In other words, it was a leadership problem. At least now we know what has to be rectified. Thus, the war in Lebanon need not necessarily be a prelude or example of things to come. It could also be corrective and a jolt to the public about what it needs to expect from its leadership. Speaking of which, every year we do a survey of Israeli patriotism. This year's findings are fascinating. What they show is that the Israeli public has great confidence in itself, yet a strong sense of disillusionment with its leaders and institutions, even the military. The full part of the glass is that we are pleasantly surprised by the way we are coping individually. This is manifest in the performance of the economy, which depends so much on private and individual initiative. Speaking of disillusionment with leaders and institutions, what is your view of the Tax Authority scandal? Will it be addressed at the conference? Of course it will be addressed, but the question is how. I hope it will not be used as an excuse to cry "gevalt," but rather examined with an analytical view to its root causes. During the debate over disengagement, Sharon and his sons were under investigation. That's when the advocates of the withdrawal revealed the "etrog" phenomenon. A famous Israeli publisher said that if he had a choice between peace and the law, the law could wait. But the law is not elastic. If I had been a proponent of disengagement - which I wasn't - I would have said, "I will advocate disengagement as if no corruption charges were there, but I will also fight for the strict application of the law as if no disengagement were on the agenda." A society which allows for the selective application of the law to suit political expediency is inviting systematic corruption on the one hand and the manipulative use of policy to cover up corruption on the other. Let me highlight another aspect of this problem - that of appointments in the civil service, be it the Tax Authority, the foreign service or any other branch of government. I believe that all such appointments should be made on merit and merit only. In fact, there should be conditions of entry for every position. Is it too much to ask that to become a minister, a person needs to have the minimal requirements, say, of an intern working in his or her ministry? By not insisting on such standards, we have reached absurdities of incompetence. In America, the system of making certain appointees undergo congressional hearings to review their positions and examine their record and qualifications has utility. In Israel, it has never been applied. Maybe it's time such a screening process be adopted here. I'm the only one who went on record before the war saying that the fact that our defense minister not only had no background in defense and military affairs, but didn't even complete his matriculation diploma, could go by without its exacting a price. I said, "Don't we think this will be noticeable?" That statement was made on Israel Radio the day before the war in Lebanon. Isn't it true that this country was always run more by political maneuvers than merit? Up until the Likud takeover in 1977, one couldn't even get a job here unless he were a card-carrying member of the Histadrut, for example. Well, yes, you're right, and I resent the fact that some people, in a self-serving way, reduce the issue to its being a derivative of the Likud central committee. Not only have many of these tainted Likud members joined Kadima - and the Likud central committee has been cleansed and its powers removed by Netanyahu - but the overall problem still remains with the political class in other parties. Let us not forget how quick Labor leaders have recently been to blame each other (and rightly so) for using corrupt practices - such as rigging elections and buying votes - on such a large scale that it led to the cancellation of elections. So the reason corruption seems so widespread now is that it is more transparent? It's not only that. Expectations have changed; times have changed. When Mapai acted like this, it was the ruling power. These were years when there was no tradition of civil service. We were a country of immigrants, and many of the professional and political norms were nonexistent. To give an example, someone responding to criticism of Peretz as defense minister, posed the question, "Was David Ben-Gurion bad as defense minister?" Well, no, he wasn't. But when he was defense minister, on the one hand, he invested much more in familiarizing himself with defense issues, and on the other hand, no one in the military had had more than a few years of real military experience. We were a new nation. Some of our generals had fought a couple of battles in World War II; none of them reached ranks higher than captain; and they were turned into generals. It's one thing to talk about civil service as it existed in the '50s; it's quite another to talk about it as it is in the 21st century. Now, with the advent of education and great improvements in professionalism, standards have been elevated all over the world. Here in Israel, excellence in some fields is being pursued - mainly in those that demand it - such as in the military, where either you're an elite unit or you fail. In certain domains of private enterprise, as well. If you can't compete globally, you're just not there. But we lagged behind in imposing such standards on civil service. And the Knesset? Well, yes, but some would argue that you can't dictate whom the electorate chooses. But if you look at the educational background of the standard US congressman or senator - without there being any formal requirement for college education - most of them are well-educated, some exceptionally so. So, although American politics doesn't make education a precondition, the free dynamic of American selectivity does. In Israel, not only do we not have something similar when it comes to our politicians, but even in the professions related to the ministries, standards are relaxed or bent according to political patronage. Everything is a matter of degree. We had such things in the past, but it was not as prevalent. It's the standards and the atmosphere that have to be corrected. Is changing the electoral system necessary to this end? Absolutely not. Sometimes, an overly ambitious plan, such as electoral reform, defeats the limited purposes it may have. Meritocracy and excellence can be pursued under a presidential system or a parliamentary one. Look at England; look at America. We need to concentrate on the problem, rather than go into irrelevancies that may have the effect of slowing down what actually has to be rectified. Isn't it a good sign, then, that all of this is now being exposed? I'm not sure it's been exposed to the extent it could be, nor analyzed with detachment. Furthermore, I don't see enough self-criticism. For example, I'll ask you and then myself the following questions: Are you, in the media, looking into your own practices? Are all journalists above bending their standards of professionalism to suit expediencies? Are they beyond reproach? You and I both know the answer. Is Israeli academia serving as it should professionally - with objectivity at the highest levels? Are we stating our voice as we should? Are we doing so on sufficiently professional grounds? Are we training our cadres with the best practices that we should? I'm not so sure. So, a lot of self-scrutiny and honest self-examination would help, plus the establishment of some absolute standards and criteria that should not be bent under any circumstances. Once you start bending things, it's all over. How much of all this is due to the fact that this country is still in diapers? Diapers are used by the very young and the very old. In some areas, we seem to be an old and fatigued nation. Unless we are rejuvenated and imbued with a new sense of purpose, we may end up validating what some of our enemies believe: that we are in a process of decline. Here again, I'm optimistic. Not because I'm certain things will turn out well, but because I know there are so many reservoirs here of talent, ingenuity, strength and excellence which, if tapped to the fullest, could enable us to spring forward, while streamlining our structures and overcoming inefficiency. It all boils down to leadership and standards. It's not a matter of political outlooks. All political positions are legitimate in a democracy. There should be only one standard, however: the rule of law and the requirements of high competence. Looking ahead, how do you envision the way the coming year will unfold? In the spirit of self-criticism - I should practice what I preach, after all - I must admit that I am less qualified to assess the domestic political scene. What about internationally, then? 2007 will be a fateful year for Israel - a year that will determine whether the world community, Israel included, will be getting closer to blunting the Iranian threat and redressing the growth of Hamas, Hizbullah and all other radical Islamic forces. It will also be the year that will determine whether we allow the process of Islamic gain of strength to continue unchecked. Hamas came to power only a year ago. It is establishing itself in Gaza. Hizbullah has shown its staying power under Israeli attack. It is now gathering its strength and reestablishing and retrenching in Lebanon. Syria is also flexing its muscles. Capping it all is Iran. The image is one of Western weakness - of a lack of European resolve to do what it takes; of American uncertainty about whether to retreat or to fight it out in Iraq. An American retreat from Iraq could have adverse consequences for Israel. It is therefore in Israel's interest for the Islamic advance to fail - an advance fueled by the anticipation of future success. The Islamicists believe that time is on their side. They are gathering confidence. That momentum has to be broken. This makes the unexpected events in Somalia - where the Islamicists and al-Qaida had a setback - especially interesting and significant, because they show that local blocking of the radicals can be achieved. The question is whether Israel will do this in Gaza. Gaza will be a test case, because it has all the ingredients of an accumulating, festering problem. Are we standing by, paralyzed? Or are we about to take decisive action? Are we about to score there - achieve victory? What we seem to have forgotten under the current psychological climate is that the role of the military is to "decide" the battle. That's what it's there for. You know, in the last few years, all kinds of slogans - like "limits to military force" - have become popular. Well, if there are limits, gone is the concept of victory, or deciding the battle. Another common saying is: "Every conflict has to be resolved at the negotiating table." If that were true, what would be the point of fighting altogether? In any case, the saying is factually wrong. I don't think World War I, World War II or the Cold War were resolved at the negotiating table. They were decided on the battlefield. Nevertheless, such phrases have become the bon ton in Israeli intellectual circles and the media. They have even permeated the military. Today, you can hear some generals talk as if they were social scientists! That's disturbing. But reality has a habit of forcing itself on you - as Gaza indicates. Which is why we will need to take effective action there. What we are doing now is giving Fatah weapons and money. Well, if we pursue the defeatist, escapist policies practiced by some in power and recent contenders, we may see the problems getting worse. And usually it's the people, not the leaders, who pay the price.