As we sit with Dalia Itzik in her Knesset Speaker's office on Sunday morning, her Kadima party leader, Prime Minister Ehud Olmert, is opening the cabinet meeting a short walk away. A note summarizing what Olmert now says in response to the latest police investigation in which he is embroiled - his declaration that "wicked and malicious rumors" are sweeping the country, and that they will be laid to rest when the facts become clear - is quickly brought into Itzik's office. She reads it aloud, sorrowfully. Unsurprisingly, Itzik has little to say about the specifics of the new Olmert crisis, other than that she hopes it will indeed prove baseless. But she has plenty to say about Olmert the prime minister, all of it positive. He doesn't overreact, she says. He knows how to make up his mind. He's got strong nerves. He can take criticism. He supports his ministers effectively. Nonetheless, she says, the prime minister's job is nightmarish in the best of times - trying to protect the country from relentless external threats and enable it to flourish from within. Combine that with perennial coalition crises and, in Olmert's case, a seemingly endless succession of police probes, and you reach a situation in which, she says, it's almost impossible to function. A former teacher who rose to the national stage via the Jerusalem City Council before entering the Knesset in 1992, Itzik, 55, has achieved much that does her credit in her two years as Knesset Speaker. She's introduced reforms designed to make ministers more accountable to parliament, and promoted greater accountability among Knesset members. She's drastically reduced the amount of money allocated to special interest groups through the Arrangements Law, which had made such a mockery of the state budget in years past. She has refurbished the Knesset building and introduced a dress code that may help elevate its own sense of its status. And she's boosted her own popularity quite healthily in the process. A poll this spring found Itzik to be by far the country's most popular female politician, with a satisfaction rating among prominent public figures bettered only by President Shimon Peres, Chief of General Staff Gabi Ashkenazi and Bank of Israel Governor Stanley Fischer. In two key areas, however, Itzik has proven less successful, by her own admission. She says considerable headway has been made in the Knesset Constitution Committee headed by Menahem Ben-Sasson on an electoral process that would make Israel more governable. But there's been no substantive agreement among the parties, and there is no current prospect of a majority for the necessary radical change. And her bid to encourage the establishment of a national unity government has foundered, although she insists there was a brief moment not all that long ago when she thought it might succeed. Her conviction, she says, is that Israel's most senior rival political leaders need to put aside their differences for an agreed period, and together grapple with the key challenges facing Israel - notably the parameters for an accord with the Palestinians, and a strategy for ensuring that Iran does not go nuclear. Now any notion of a "prime minister's club" heading a cross-party coalition, she acknowledges, has likely been dealt a death-blow by the new Olmert probe, since rival politicians see ever-less reason to enter into a partnership with a man they soon hope to replace. In a relatively rare interview ahead of Independence Day, Itzik is healthily realistic about Israel. As the sixth of eight children of Iraqi immigrants, married with three children to the emphatically non-political Danny, she highlights the way her mother "fought like a lioness" to ensure a good education and says she sees her own and her siblings' absorption and success here as reflective of Israel's rise and the potential it offers. But she also expresses concerns over what she says are Israelis' intolerance of each other, and the worrying trend to violence in Israeli society. Understandably, given the timing of our interview, she is also particularly passionate in criticizing what she considers the over-ready resort to criminal investigation of public figures, arguing that their good name is too casually sacrificed in probes that frequently come to nothing. She insists that she doesn't want to see the police or the judiciary weakened, and that she acts to marginalize legislative attempts to achieve this. But she does not even endorse some cases in which convictions were achieved, reminding us that she opposed the lifting of Naomi Blumenthal's parliamentary immunity which led to the Likud MK's conviction for corruption. As for Kadima colleague Haim Ramon's conviction for the indecent assault of a young female soldier, Itzik asserts it should never have gone to court. He should, rather, have been subject merely to a disciplinary hearing for what she calls extremely inappropriate behavior. Itzik also robustly defends the politician's right to change his or her mind, and suggests the public is sometimes short-sighted in regarding reassessment and compromise, centerpieces of politics, as opportunism and horse-trading. "I don't want to relinquish the Golan," she says at one point. "But if the Syrians agreed to lease it back to Israel for 30 years, and to stay out of Lebanon, and so on -- you can't say I won't move from positions." Itzik is plainly reveling in the post of Speaker. She has given the Knesset greater centrality in the visits of leading overseas politicians, the vast majority of whom now make a call on the Speaker and the House part of their visit. And she has been prepared to drastically reduce her partisan political activity in order to invest the role with what she considers the necessary "above the fray" sensibility. The circumstances may have been dismal, but she also clearly flourished in the six-month period during which she served as acting president in the ignominious twilight of Moshe Katsav's tenure. Itzik did not mention that our interview happened to take place on the second anniversary of her taking office as Speaker. She did tell us, twice, unbidden, in the course of a near two-hour conversation that she has absolutely no desire ever to become prime minister. But whenever her time in the Speaker's office is over, she certainly isn't ruling herself out from other senior positions. Excerpts: What's your sense of the nation at 60? If the founders were asked whether they approved of how the state had turned out, they'd say there's no country like this in the world, trailblazing in every field - technology, medicine, agriculture. But they'd lament the intolerance of our society, particularly given the need for internal unity to meet external threats. We have very unsympathetic neighbors. We've made peace with two of them. Cold and frustrating peace, though I'd sign agreements like that with all of [our neighbors] if I could. But the Palestinians today are in a whole other place. There are two entities [Fatah and Hamas], and it is starting to become clear which of the two is prevailing. There is no reason for them to fire Kassams [from Gaza]. If they were wise, they'd not have fired and so encouraged us [to relinquish more territory]. But Israelis ask, "Why should we pull out [of further territory], if we'll be fired on?" Secretary of State Condoleezza Rice said this week that the Arabs have to promise security. Israelis say, "Ok, so they promise. Can we trust that promise?" I wouldn't switch places with the prime minister for a second. There's no country harder than this to run. We're fighting for our survival. It's not a clichÃ©. It's the reality. Given the latest investigation of the prime minister, is someone going to have to switch places with him soon? I don't know the details of the case. I don't want to know. But I greatly want to believe that, as in other cases, nothing will come of it. I want this first of all for Israel and the people of Israel. I want a prime minister who can function. You can't function like this. You've been urging the establishment of a national unity government, unsuccessfully, to better grapple with the external threats. The egos need to be set aside. I take [Iran's President] Ahmadinejad totally seriouslyâ€¦I'm not convinced anyone else will do the job [of thwarting Iran] for us. That requires serious thinking. The most experienced people need to put their heads together. I initiated meetings and it nearly happened a few months ago. I thought the prime minister needed to call for a national unity government. It is his responsibility, and the opposition's tooâ€¦The opposition did demonstrate considerable responsibility during the [Second Lebanon] War. We're great when there's an immediate threat. There's no one like us in an emergency. But we shouldn't only be united during wars. Isn't the call for a unity government an expression of no confidence in the prime minister? It's not a question of absent faith in this or any other prime minister. The instability of the political system is shocking. The system is impossible. But we can't change it because there's no majority to do so. So I wanted a government that would agree on a date down the road for elections and in the meantime take on the key two or three issues. Essentially the Palestinian issue and Iran? Yes, and maybe Syria. There may be a not bad chance for [progress with Syria]. But that also involves risks. They need to be carefully weighed. If the prime minister is spending all his time in interrogations and keeping his coalition safe from left and right, how can he run the business? Now the unity idea is hopeless, because there are people in the Knesset who think they'll be replacing the government at any moment. And there may be people in the coalition who say, "Why bring in the opposition?" You argue that there aren't major differences among the main parties. I saw [the Likud's Binyamin] Netanyahu return Hebron. He didn't have to meet with Arafat. [If he were prime minister], of course he'd have to talk [to the Palestinians]. The right wants peace too. The public doesn't want to hear about narrow political rivalries. People say they're sick of it all. They're not stupid. We all want peace. The question is how we do it. We've never sat down [as a nation] and decided what borders we want. Is that reasonable? In this job, you go to a lot of sad places. On Holocaust Remembrance Day and Memorial Day you go to the memorials and see the lined faces of the bereaved mothers. It heightens your sense of responsibility. The problems we face require more seriousness in leadership. You've defended the prime minister, but the public does not see the war as having been successful, and it sees all these investigations against him. A lot of mistakes were made in the war, but Hizbullah was very badly hurt. Modern warfare is fought in the media too, and there we failed terribly. If the public isn't appreciative that we kicked Hizbullah off the border, then that's our faultâ€¦ If our enemies feel they can beat us, we're in trouble. If we feel that inside, that's also terrible. This was a totally justified war. And when some of the Europeans lecture us about "proportionality," there's terrible hypocrisy. We weren't merely responding to a kidnapping of soldiers, but to a six-year build-up, under our noses, of astronomical quantities of weaponry intended to destroy us. When the Winograd Committee speaks of the [way the] decision-making process [ought to work], it describes a utopian state. "The State of Winograd." It's not realistic. But we do lack effective decision-making forums, and effective interface between the top military and political echelons. There is the security cabinet, and a smaller forum. But is there a body that weighs long-term options? The army has undergone a real process of reformâ€¦. The Knesset Foreign Affairs and Defense Committee has more tools, more advisersâ€¦. Look, these are some of the best people in Israel [at the top of Israeli politics]â€¦. Israel Prize winners, the ex-head of the Shin Bet, former chiefs of staff, ex-prime ministersâ€¦. The political echelon realizes it needs to supervise the military more effectively. We're dealing with increasingly sophisticated enemies, making increasingly sophisticated efforts to destroy us and to delegitimize us. The consequence in Europeâ€¦ Europe was always hostile to Israel, and even a little traitorous. It always responded too little, too late. But today there are some very positive trends - the rise of Angela Merkel, Sarkozy, Berlusconi. Europe is starting to understand that our dispute with our enemies is not territorial. What territorial dispute did we have with Iraq, or with Lebanon, where we relinquished every inch? After the Madrid bombings, and the twin towers, and London, and Ammanâ€¦ where's the territorial dispute? Not all Islam is terrorist. But all the terror is Islamic. The free world has to understand that this is not just Israel's problem. It's everyone's. Europe is starting to open its eyes. In this region, Jordan, Egypt, Saudi Arabia - behind the scenes, they acknowledge that they are in the same boat. I have no doubt that Israel's case is strong and just. The Israeli public has not moved to the right; it has become skeptical, because it tried and look what it got. It wants security guarantees. That's not an unjustified obsession. If you make peace with someone, you have to ensure that a day won't come when a crazy leader comes along and throws missiles at usâ€¦. So if the prime minister does reach a deal with the Palestinians, he'll have a hard time convincing the public that it's more than a piece of paper. Even so, the prime minister is managing the conflict by negotiating. Why do we need to be in dispute with moderate Palestinians? So he negotiates with them. I don't know what'll come out of it. But if we weren't negotiating, there'd be terrorism. You speak about Ahmadinejad as though he's the threat, rather than representing a regime. Individual leaders do make a difference. But no, he's not alone. There's a regime that supports him. And by the time the Iranian people stand up against him, it may be too late. To date, Israel has taken action to prevent certain states attaining a nuclear capabilityâ€¦But I don't think [international pressure on Iran] is a lost cause. The sanctions are having an impact. They need to be intensified. Israel was reluctant to lead the struggle. But it has realized it needs to speak out loudly and clearly because we may be the ones who will pay the price. How do you see Kadima's future? It's unique for a party to arise one day and immediately be in power. So people want to knock it down. But the party is alive, vibrant, and these are people who left their political homes. When I went to see [Ariel] Sharon to tell him I'd decided to leave the Labor party, my legs were shaking. I think Kadima has helped make the climate of political debate a little less fierce. It has defused some of the tribal aspect of Israeli politics. Some came to it from the left, some from the right, and that has shown that the political rifts aren't that wide. Yes, Kadima is going through another crisis now, but I firmly believe that Israel needs a strong center party. I am sure it has a future. So what of Labor? Several parties will have to ask where this leaves them. That's why some parties have an interest in Kadima breaking up. Yet during this crisis, and previous crises, Kadima leaders haven't turned on the prime minister. But the crises keep coming. Not every matter should merit the resort to legal action. It's gotten out of hand. Eighty percent of the local council heads who were investigated have been cleared. The sense is being created that Israel is corrupt and that's not true. Believe me, the system is not corrupt. I was the trade minister, a deputy mayor, I allocated millions. Nobody tried to bribe me. Look at the Ya'akov Edri case [involving allegations of breach of trust against the minister]. Huge headlines when it erupted. Then the case was closed with half a sentenceâ€¦. Everywhere [Edri] goes, people still say, "You're under investigation. He says "no, the case was closed." They say, "Oh, we didn't know that." The media gets carried away, too. Editors will tell you it sells more papers. No one can accuse me of being Avigdor Lieberman's biggest supporter. But 10 years under investigation. Is that reasonable? Haim Ramon? This is the only place in the world where a government minister has been prosecuted for a kissâ€¦ Give me another example and I'll resign my post. The public doesn't believe the media that much. But sadly, when it comes to politicians, it does believe. And [the sense of corruption] risks alienating people from politics, dissuading them from voting. But I don't want to end an Independence Day interview on this note. I also don't want to claim that everything is great. There's plenty to make better. But I am a great believer in Israel. I'm proud to belong to this people. We do have so much more history than geography, but in this little geography we have so much talent. When you look back 60 years, we've made it, against all odds. We are truly a remarkable nation.