Netanyahu, who served as Israel's Prime Minister from 1996-99, spoke at the beginning of the second day of the conference organized by the Institute of Policy and Strategy of the Interdisciplinary Center in Herzliya. The three-day event is designed to bring together the country's military, political, academic, and economic brass, and has become the most influential forum of its nature on contemporary Israeli policy.
Netanyahu said that a demographic problem exists - but not with the "Arabs of Palestine, but rather the Arabs of Israel." He said that there is essentially no demographic problem with the Arabs of the PA, in that they are already under PA control, "even if the army sometimes goes into the cities." However, Netanyahu said, "regarding the Israeli-Arabs, who will remain Israeli citizens, here we have a problem... In our Declaration of Independence, we say that our raison d'etre is that we are a Jewish state, and this means that we must guarantee a Jewish majority. But we are also a democracy..." He said that if the Arabs become a minority of 40%, the State will cease to be Jewish - but if we remain with 20%, or even less, but with tough and violent relations, then this harms the State's democratic nature. "We therefore need a policy that will first of all guarantee a Jewish majority - I say this with no hesitation, as a liberal, a democrat, and a Jewish patriot - ... and one that will balance between these two needs."
Regarding the future borders, Netanyahu said that Israel must protect its vital security interests: "What connection is there between their right to self-definition and their ability to station themselves on hills near Ben Gurion International Airport and shoot down a landing plane? There is no connection. I therefore say that any peace agreement has to be built on two elements: The entire Palestinian population, or almost all of it, must be under self-rule of the Palestinians, and not Israeli; and Israel must maintain its control over the entry of arms and fighters into those areas."
Netanyahu said that there is no reason for despair, and that the situation has improved both economically and security-wise since last year.
The Finance Minister spoke of the importance of the counter-terrorism partition fence from many standpoints, including "economics, defense, demography, and as something that advances peace... Last night I signed an order releasing 700 million more shekels for the construction of the partition."
He said that under the present circumstances, we can't proceed diplomatically with the PA because "we have no partners on the other side." He said that a true peace partner must drop all its intentions to destroy Israel, "what they call the right of return or the liberation of occupied Palestine... What's important is not what they [the PA Arabs] say in Geneva, but what they say in Jenin, and in Kalkilye, and in Ramallah. We see that they [are far from that point] - from their education, their textbooks, their marketplace talk, their public dialogue - they have not dropped their plans [to destroy Israel]; on the contrary, they are encouraging it... The second test of a partner must be that they neutralize their tools of destruction - terrorism." Netanyahu said that he does not believe that a moderate PA leadership can arise under the current conditions of hatred and daily incitement, and that therefore Israel "must first take steps to destroy terrorism and bring about a societal interest in stability, and only then will a moderate leadership be able to arise."
Netanyahu had strong criticism of all the new plans being spouted by Likud ministers with no coordination with the Prime Minister. "The multiplicity of plans causes damage to Israel," he said.
Both Gen. Amos Gilad and Gen. (res.) Oren Shachor expressed opposition today to unilateral gestures by Israel. "Even if the war lasts until 2020," Shachor said, "we must not withdraw unilaterally." Gen. Shachor headed the Civil Administration in Judea and Samaria and was a senior member of the Israeli negotiating team with the PA under the Rabin and Peres governments, while Gen. Gilad is head of the Defense Ministry's Diplomatic Desk.