Israel will begin setting its final borders over the next two years according to a plan based on including the major West Bank settlement blocs and the Jordan Valley, Defense Minister Shaul Mofaz told The Jerusalem Post on Tuesday. Spelling out his vision of the future borders, Mofaz said in an exclusive interview that Israel would retain control over the settlements of Ofarim and Beit Aryeh, currently on the Palestinian side of the security fence. He also indicated that the withdrawal from the West Bank would include civilians and the military. But, he said, Israel would retain a "free hand" to operate within the evacuated areas at its discretion. In a detailed listing of the settlement blocs to be retained under a second withdrawal following the Gaza and northern Samaria disengagement, Mofaz included Ma'aleh Adumim, the Jordan Valley, Ariel, Kedumim-Karnei Shomron, Gush Etzion, Reihan-Shaked and Ofarim-Beit Aryeh. "These are the main places," he explained. "And if the need arises, we will move the security fence to enclose all of these places." During the interview, which will appear in its entirety in Friday's Post, Mofaz said that Israel would prefer to set its borders in agreement with the Palestinian Authority and based on the US-backed road map. "But if we see that we do not have a partner, then I think we will need to take our fate into our own hands and make a decision where it is right to be and where it is not right to be," he said. As to a military pullout, Mofaz said it was still undecided whether bases would remain in the evacuated areas. Whatever the decision, he said, the IDF would continue to operate in the area. "The plan is based on holding on to the settlement blocs and maintaining the right to operate militarily anywhere we want," he said. "How we will do that and whether it will include one or two bases or no bases at all, we don't yet know." This year, he said, would be used to formulate the plan, to set its principles and to garner international support. The implementation, he predicted, would begin the following year. "I don't see any movement during 2006 but certainly over the next two years," he said. Once Hamas formed the PA government, Mofaz said, Israel would consider the PA a terror entity Hamas continued supporting terrorism and refused to recognize Israel's right to exist and previous agreements. Israel, he said, would not be willing to talk to PA Chairman Mahmoud Abbas following the formation of the Hamas-led government. "We do not want the PA to develop in a two-headed entity - one Hamas head led by Ismail Haniyeh and the other head led by Abu Mazen [Abbas]," he said. "We will not accept this. We see the PA as one entity." Israel, he said, would not restrain itself militarily following the formation of the Hamas government, and if the need arose the IDF would launch widespread operations in the West Bank similar to Operation Defensive Shield in 2002. "There is no reason not to take action against anyone who engages in anti-Israel terror activity," he said."Hamas are terrorists... and if there will be terror under their government then, for me, they will be held responsible."