Four years ago, Moshe "Bogie" Ya'alon handed over command of the IDF to his successor as chief of General Staff, Dan Halutz, and marched out of Tel Aviv's Kirya as hundreds of soldiers and officers lined the sidewalks applauding the end of an illustrious 37-year military career. But now Ya'alon is back in the Kirya, although this time not in uniform. He is also not sitting in the IDF tower but in the Prime Minister's Office, located in the compound, as the minister of strategic affairs. Being back in the Kirya is symbolic. When he left in 2005, he said the reason he wore boots around the base was because of the "snakes" that were there trying to undermine him. During an exclusive interview with The Jerusalem Post, his first since becoming a minister, Ya'alon appears comfortable and confident and needless to say is not wearing boots. Strolling alongside him on the grass surrounding his office, one can't help but notice the way passing IDF officers look at him, with admiration and respect. After 61 years of existence, Ya'alon believes that Israel has a lot to be thankful for and proud of. The country is a world leader in science, medicine, arts and culture. But at the same time, he says the United Nations conference last week, at which Iranian President Mahmoud Ahmadinejad called for the destruction of Zionism, creates a sense that the world is back in the same situation it was in the 1930s, when it preferred to ignore the threat emerging in Nazi Germany. As such, he does not believe that the dialogue the United States plans to hold with Iran will bear fruit unless it is limited by time and clear benchmarks. "The Iranians know very well how to exploit any dialogue to stall for time and race forward with their nuclear military program," he says. His office is currently working on formulating official Israeli policy on some of the most critical issues facing the country, including the Iranian threat and Palestinian conflict. He dismisses claims that his office lacks any real authority and says it fills a void he discovered in the decision-making process in 1992, when he was appointed commander of the Judea and Samaria Division and became exposed to military-government relations. "There was no effective staff work," he says. "I sat in on sessions with the prime minister and saw that the staff work began there and ended together with the session. Nothing was done before." It is interesting to hear Ya'alon say that the military cannot be the sole organization entrusted with advising the political echelon. The results of the Second Lebanon War, he says, speak for themselves. Ya'alon, 59, was born near Haifa but later moved to a kibbutz near Eilat. After being drafted in 1968, he served in the Nahal Brigade and, following the Yom Kippur War, joined the elite General Staff Reconnaissance Unit. In 1995 he was appointed OC Military Intelligence. It was then, he says, that as a declared supporter of the Oslo Accords and the "land-for-peace" idea that he discovered the truth about Yasser Arafat and the Palestinians' refusal to recognize Israel as a Jewish state. It is this, he says, that stands at the core of the conflict and not the territorial disputes. After leaving the IDF when prime minister Ariel Sharon refused to extend his term as chief of General Staff due to his opposition to the disengagement from Gaza, Ya'alon joined the Shalem Center, a right-leaning academic research center in Jerusalem. The State of Israel is celebrating 61 years of independence. What is the state of our country today? From a historical perspective I think that the State of Israel is a strong and prosperous country. After 61 years the country is a fact in a region where there are still people who oppose the idea of an independent Jewish state. It is a country with a strong military, economy and stands at the forefront of technology and science and is growing in the fields of culture and arts. It's simply a success story. This has all happened despite the strong opposition to the establishment of a Jewish state and our success demonstrates the country's resilience, since this is not a country that can lean on natural resources like gold or oil but only has the Jewish brain and spirit. When looking toward the future, we need to understand this "secret" of our success, which means that we need to continue being a Jewish state for eternity. We need to believe in this and not allow this idea to be undermined, as people have tried since the beginning of Zionism to undermine the justification of a Jewish homeland. We need to continue to reinforce this idea due to internal needs but also external threats. This country, we need to remember, is attacked not just physically but there are also people who try to take away its legitimacy to exist. This is being done by Islamic jihadists, Arab nationalists, anti-Semites and naÃ¯ve and radical liberals who think that the problem is "occupation" and "apartheid" and don't understand that there is simply basic opposition in the region to the country's right to exist as a Jewish state. There are also people within Israel who are post-Zionists, and I think that as a society we need to continue working to reinforce the foundations of this state so it will last forever. How did you feel about what happened in Geneva last week where Ahmadinejad spoke about destroying Zionism? It is not coincidental that people think about the 1930s and the period before World War II, since there are many common denominators between the rise of Nazism and Hitler and the rise of Islamic jihadists in Iran which is led not just by the president but also the Supreme Leader [Ayatollah Ali] Khameini. There are also al-Qaida, Hamas and the Muslim Brotherhood, which have all decided to confront the West and the Jews who they believe are heretics. Therefore, on the one hand there is a consensus that this phenomenon is dangerous and is wrong on every moral, Western and Jewish level. But on the other side, the West is trying to solve the problems by way of concessions, surrender and withdrawals. This is reminiscent of [former British prime minister] Neville Chamberlain. Someone who is familiar with Western culture should not be surprised, since the West has always striven for peace. This is natural and positive. Unfortunately though, the Western world has failed to understand that it needs to confront the threat in front of it and cannot pull away, since what is happening between the Western world and the Islamic jihadists of Iran is a process that is built on previous surrenders and concessions. What the West needs to do is stand up against this wave and confront it. The solution to this problem is to speak about the issue, to educate the Western world, since in this period there is a need for moral and strategic clarifications to understand the problem and to formulate a clear strategy to be able to deal with it. What about the fact that European countries, some which Israel has strong ties with, were at the Geneva conference and even sat in on Ahmadinejad's lecture? All the attempts by Western countries to minimize the size of the threat and to pretend it is an isolated issue are simply ways of running away from having to deal with it. It is convenient to push off the threat to tomorrow or to divert it to another direction. We have even heard paradoxical statements from Western leaders who have said that the core problem in the Middle East is the Israeli-Palestinian conflict. This is nonsense. I claim that even if the State of Israel did not exist, there would be Islamic jihadists. The revolution in Iran was because of us? The battle between the Islamic jihadists and the West is because of us? The fight between Sunnis and Shi'ites is because of us? You see the battle between nationalists and radicals in Lebanon, Algeria and Iraq. This is because of us? Therefore there is a very convenient naivety to hang everything on the Israeli-Palestinian conflict. This idea appeared in the Baker-Hamilton report and is supported by some leaders who try to divert the discussion to the Israeli-Palestinian conflict from the place where it needs to be - the conflict between Islamic jihadists and the West. This is a problem since there is a lack of moral and strategic clarity. How much time does the world have to stop Iran before it acquires a nuclear capability? Time is pressing because the reality doesn't wait. We need to share with our friends overseas our deep understanding that a nuclear Iran is not just a threat to Israel. The Arabs already understand this. They no longer say that the threat is the Israeli-Palestinian conflict but rather that the real threat is Iran. Overseas, there are people who understand this as well as that time is running out, but there are also people who are trying to avoid the inevitable confrontation with the Iranian problem. I hope we can bring our friends to understand the urgency, so that even if someone goes to talk to Iran they will set a time frame and benchmarks since the Iranians are masters at conducting dialogues. The Iranians know very well how to exploit any dialogue to stall for time and race forward with their nuclear military program. From our experience, when the Western world demonstrates determination and resolve, the Iranians stop. This happened in 2003 as a result of 9/11 and at a time when the US strategy was to be on the offensive and when American forces were attacking Afghanistan and Iraq and the question was who would be next. The Iranians thought they were next in line and suspended their enrichment of uranium. The Libyans also thought they were next and decided to completely give up their nuclear program. Therefore, when the West is determined and demonstrates force and its willingness to be confrontational, it is possible to stop them. I hope that the West - led by the US - will understand this in reference to the Iranians, since we are dealing with a nonconventional regime and we need to prevent it from obtaining a nonconventional capability. Even without a nuclear capability, the regime in Iran is dangerous. It undermines the West's interests in Afghanistan, Pakistan, Iraq, Lebanon, in the Palestinian Authority and other countries connected to the US, like Egypt. This is also true in Saudi Arabia and Gulf states like Bahrain, and this can happen to any other country aligned with the US in the region. The West needs to understand that the Iranian pursuit of hegemony is the real threat to the current world order. With that said, do you think that the dialogue the Americans plan to conduct with Iran can bear fruit? I have no doubt that the Iranians will use any dialogue to stall for time if there will not be a clear time frame and clear benchmarks, like telling them that they have two months to stop the enrichment or telling them that the dialogue is from now and until a specific month and that we demand that you stop enrichment and beef up international supervision in the interim. These are the type of benchmarks that can test the Iranians since anything else will be a waste of time. This time will be used by the Iranians to continue to move toward a nuclear military capability. If the dialogue fails there are still two tracks - the military option and additional sanctions. Do you believe that sanctions can still have an effect? The fact is that in 2003 Iran stopped its program without being attacked. This was basically due to a combination of diplomatic pressure and the threat of sanctions, but mainly due to the threat of military action. Diplomatic pressure and sanctions are important and need to be exhausted, and I think that a military option - no matter whose - needs to be the last option, but no economic or diplomatic pressure will work without holding the stick of military pressure alongside it. This can be learned from what happened in 2003. There are different opinions in Israel about whether the IDF can carry out such a mission on its own. What do you think? I don't want to talk about our capabilities and I think that we should not lead the pack on the Iranian issue, since it is not just a threat to us. We need to hope that the job will be done by someone else and at the same time, as the talmudic sage Hillel said: "If I am not for myself, who will be?" What about Pakistan? Is this a real threat for Israel? This is a major challenge for the West and foremost for the US. If, God forbid, Pakistan falls into the hands of Islamic jihadists then it will be a nightmare for the West and will also have an effect on us, since terror elements may be able to obtain a dirty bomb which they will be able to use against us. The challenge is first and foremost for the US, which needs to deal with the problem. If Iran goes nuclear, will we see a nuclear arms race in the Middle East? The possibility that Iran will go nuclear threatens the stability in the region. There will be Iranian hegemony and the possibility that the regime will use a nuclear umbrella against other moderate regimes like Qatar, which is now connecting itself to Iran out of fear. A nuclear Iran will also enable the country to take control of energy resources. This will also allow Iran to spread the revolution and to turn other countries into Islamic republics. There already is an Islamic republic in Iran since 1979, Hamastan in Gaza, and Hizbullah in Lebanon which is also trying to establish an Islamic republic there by taking over the government. This is one type of threat. Another potential threat is nuclear proliferation. There are countries that have already said that if Iran goes nuclear they will too. The king of Jordan said it, Egypt said it, the Saudis said it and Turkey said it. This will destroy the Non-Proliferation Treaty and this would be a threat to the entire world. There have been reports recently that the way the US deals with Iran depends on the way we deal with the Palestinians. Do you see such a connection? I believe the exact opposite. I mentioned before people like in the Baker-Hamilton report who believe that the way to deal with Iran is by solving the Israeli-Palestinian conflict. The widespread conception is that the way to solve the Israeli-Palestinian conflict is by Israeli withdrawals. I believe that this whole idea is wrong at its core. Firstly, if you solve the Israel-Palestinian conflict it will not stop or even soften the Islamic jihadists. The Islamic revolution did not erupt because of us. Al-Qaida was not created because of us and even Hizbullah did not rise up because of us. The Muslim Brotherhood was also established without connection to us. It was established in 1928 when there wasn't a State of Israel. It was not even a response to Zionism. Therefore, this whole connection is completely superficial. In addition, the attempt over the last 16 years to solve the conflict with territorial concessions has been proven wrong, since the conflict is not just territorial and over the definition of the borders and size of Israel but rather is about our right to exist. In every withdrawal of ours - which was done to address territorial grievances - like leaving Lebanon we didn't take away Hizbullah's right to exist and legitimacy. On the contrary, after our withdrawal Hizbullah grew stronger. The same happened following the Gaza withdrawal, when we were told that we would achieve quiet since we would neutralize the Palestinians' raison d'Ãªtre. Instead, what did we get? We got a stronger Hamas and a Hamastan in Gaza. I was not surprised by this and I warned of this at the time, and that is why I opposed the disengagement from Gaza. When you withdraw and surrender to the Islamic jihadists, you are essentially providing them with a victory. Therefore, anyone who thinks that Israeli concessions and withdrawals will solve the conflict and will soften the Iranians' position is wrong. It will have the opposite effect. In November 2007 you wrote: "The discussion of a final settlement permits the Palestinians to evade their responsibility for the failure of past agreements, and absolves them of the need to initiate the internal reforms imperative to altering the situation, thus placing the responsibility squarely on Israel's shoulders." If we are not talking with the Palestinians about a final settlement, what are we talking about? I think we need to learn from what happened over the past 16 years since the Oslo Accords. I am saying this as someone who supported Oslo and thought that if the territorial concessions would bring peace, it was worth doing. This was until I became head of Military Intelligence and discovered the gap between what we were being told through the media and what was really happening. As head of MI I discovered that already at the Oslo Accords, Yasser Arafat refused to recognize Israel's right to exist as an independent Jewish state. If he did not recognize this, then what were we even talking about? Beyond being our historical right, it is in the Balfour Declaration, recognized by the council of the League of Nations, in the United Nations partition plan and was the purpose of the British Mandate which was established on behalf of a Jewish homeland. Unfortunately, Oslo created an asymmetric reality that accompanies us until today, since we did not negotiate with the PA but with the PLO. The parallel to the PLO should have been the Zionist movement, but instead the parallel was the State of Israel. There was also no demand by the makers of Oslo that it become clear then that if we want to move forward with the two-state solution it needs to be "two states for two peoples." That is what we are saying now in the government: That the attempt by the last government in Annapolis to talk to the moderate element - not even to Hamas which wants to replace Israel with an Islamic state - was wrong. [PA President Mahmoud Abbas] Abu Mazen refused at Annapolis to have the mutual statement with Israel say "two states for two peoples." He only agreed to the wording of "two states." Not for two peoples. This is because he does not recognize the Jewish people's right to a state and he rejects the Jewish people's connection to the Land of Israel. Young Palestinians are being raised on this idea. Later, at an interfaith conference in New York last year which was hosted by Saudi Arabia and attended by President Shimon Peres, Prime Minister Salaam Fayad, who is considered a moderate Palestinian leader, spoke about Jerusalem as a city holy to Islam and Christianity but did not mention the Jews. And we speak here as if there is not a fundamental problem. What do they want? They want an Arab-Palestinian state in what they call the 1967 land Judenrein, free of Jews. They also want a State of Israel that is not a Jewish state and that has Arab citizens so according to the Fatah vision one day it will also become an Arab state. Where is the Jewish homeland? As a result, I claim that this was one of the great mistakes of Oslo. In addition, Oslo and Annapolis are paradigms that I call "top-down." Leaders meet, have a photo-op and hold a conference. But meanwhile at the bottom, they are teaching children in kindergarten to be suicide bombers and martyrs. How can you make peace with a young generation that is educated on jihad and rejects the Jewish right to Israel and believes that settlers are not just in Beit El and Ofra, but also in Tel Aviv and Haifa and in Grofit? We say occupation since 1967 and they say occupation since 1948. That is why I say that this whole top-down paradigm has failed. It reached a tipping point at Camp David in 2000 and as a result Arafat decided to launch a war and it continues with Abu Mazen, who refused to accept two states for two peoples at Annapolis. Let the Israeli politicians who criticized the Netanyahu government and said that we did not want peace and did not accept the two states for two peoples show me what they did over three years and which partner they had for two states for two peoples. So what is needed? We in the government claim that we need to change the paradigm from top-down to bottom-up. The prime minister has said several times that we don't want to govern the Palestinians and that we are ready to empower them so they can govern themselves but not to threaten us. They need to show us that they can govern themselves. After all, who is in charge of Jenin and Nablus? They have all the necessary mechanisms - municipal and political. They received this at Oslo when we transferred to them control over territories in Judea and Samaria. And what did we see happen? We saw Jenin and Nablus turn into terror camps and then we needed to return there with the IDF and retain operational freedom that allows us to stop terrorists before they leave these cities to attack us. This was a change that happened due to terrorism that grew under the PA. We are not responsible for civilian issues. They have their own government and political parties which they vote for. They have civil affairs that they are in charge of and have independent education and health systems, but they need to show that they can govern themselves in these places. Isn't this the "Jenin model" that started under the last government which allowed the deployment of US-trained forces in the city alongside efforts to improve the economy? In general, yes. But what is happening in Jenin is the implementation of only two out of five components that are needed. What are the other three? The two components in Jenin today are firstly the enforcement of law and order and secondly an attempt to improve the economy from the bottom up. These are important components, but there are another three - creating security by combating terror and arresting and jailing terrorists and not setting them free, political reforms, and lastly education reforms. Until they stop educating towards jihad and martyrdom and continue denying our right to our land and Israel's right to exist as an independent Jewish state, then what are we talking to them about? Without these five bottom-up reforms there is no reason to talk with them about anything. We need to talk about whether they are capable of doing this, since if they aren't, then what do we want? Hamastan in Judea and Samaria? Our experience with Oslo and the outbreak of the terror war in September 2000 and the rocket attacks from Gaza weren't enough? Have we not noticed that we gave up land for peace in Oslo and the disengagement, and instead of peace got terrorism? That is why the prime minister says that we want them to recognize Israel's right to be a Jewish state. This right does not depend on them, but if they don't recognize it, then there is nothing to talk about. Are you not afraid that this policy of the government will lead to a clash with the American administration? That is why we need to meet. I don't recall a single case in the past few decades of my adult life of the Americans ever forcing us to do something significant that was against our clear security interests. They did not push us to Oslo, to the disengagement from Gaza or to negotiations with [Syrian President Bashir] Assad. We need to share what we think with the president and the administration and the meeting with the president will be important so we can present our policies. This does not mean that we want a diplomatic freeze with the Palestinians. What we want is progress from the bottom up. President George W. Bush declared several years ago that within three years there would be a Palestinian state. Did this help? We thought that five years after Oslo there would be two states for two peoples. Did that help? We need to learn lessons and therefore I suggest that both sides study the reality and then we talk. What do you think about a regional solution that Defense Minister Ehud Barak talks about? If we talk about a regional solution under which Egypt and Jordan and other countries are involved and give something to the Palestinians, then that is one thing. If, however, you are talking about the Saudi Initiative which was accepted by the Arab League, then this is a very dangerous plan for Israel since it says we need to withdraw to pre-1967 borders, to give up the Golan Heights and to divide Jerusalem since east Jerusalem is the Palestinian capital. It also says that we need to agree to a right of return and only then talk about normalizing ties with Arab states. From our perspective, the pre-1967 borders are not defensible. To go onto this track is dangerous. I am in favor of doing things that are creative but not this way. Therefore I think we need to offer an initiative that ensures our security interests. What can we do practically to advance this peace? We can take steps to improve the economy and the quality of life in Nablus, Jenin and other towns and villages. This cannot, however, happen without educational and security reforms. Since without security reforms, for example, even if there is economic improvement the money will find its way to terrorist hands. With the right reforms, however, we can move things forward. You have said in the past that Israel should not pay any price for captive soldiers. What do you think needs to happen with abducted soldier Gilad Schalit? We are now reviewing the Schalit issue and setting our policy and I prefer not to talk about it. In principle, however, I am willing to repeat what I have said in the past: There is a tension between two conflicting values - releasing captives which is about saving lives and another value which is also saving lives since releasing terrorists endangers lives. If we see over time that Israel's willingness in the past to give in to terrorist demands and pay a heavy price like the release of hundreds of terrorists in exchange for a captive will encourage more kidnappings, then this is also about saving lives since releasing terrorists endangers lives. There is the famous case in Jewish history of the Maharam of Rothenberg in the 13th century who was taken captive and told the Jewish community not to pay for his release more than his value. From experience, we also know that terrorists who are released return to terrorism and cause more bloodshed. Do we want to cause bloodshed by releasing hundreds of terrorists? This is a not simple issue, but on a moral and strategic level what I'm saying is valid.

Taking stock

New Strategic Affairs Minister assesses how Israel may deal with Iranian, Syrian threats.