Netanyahu Israel news photo: Flash 90

Prime Minister Binyamin Netanyahu on Monday said he does not believe that Palestinian Authority Chairman Mahmoud Abbas is serious about reaching a peace agreement with Israel.

"In the reality of the Middle East, any areas we will pull out of will be taken over by Iran," Netanyahu told Channel 2 News in a special interview. "The stronger we are, we will be able to secure our future and make peace with our neighbors. I'll make peace if I am talking with someone who does not embrace Hamas and does not give credit to people who showered rockets on the State of Israel," he added, in criticism of Abbas's reconciliation meeting last week with Hamas chief Khaled Mashaal, after the latter said that Israel should be wiped off the map.

He added, "If Abbas comes to the negotiating table without preconditions, he will find me on the other side of the table."

Since 2009 Abbas has refused to come to the negotiating table with Israel and has continuously tried to impose preconditions on talks.

One of his longstanding demands is that Israel accept the pre-1967 lines as final borders. He has also demanded that Israel release all Arab terrorists from its jails, and halt construction in Judea, Samaria and east Jerusalem for a second time before talks begin. At the same time, he has refused to recognize Israel’s right to exist.

During Monday night's interview, Netanyahu also once again dismissed accusations by former Prime Minister Ehud Olmert that Netanyahu had wasted 11 billion shekels on preparations for a strike on Iran that never materialized.

"Not one shekel was spent in vain. We invested in the security of Israel," Netanyahu said.

He added, "In addition to this, we created offensive capabilities for the IDF that were also reflected in Operation Pillar of Defense, as well as in other arenas, and in the ability of Israel to defend itself against those who come to destroy us. I think these abilities are essential."

Asked whether he intends to raise taxes after the elections, in the wake of reports Sunday that Israel's budget deficit was double than what had been expected, Netanyahu replied, "I do not see the need to do this because we took these things into account. Perhaps the markets will recover and exports will grow. The deficit was much larger in 2009 so we took out a lot of expenses. That did not stop us from providing free education from age three, free dental care and raising the minimum wage."

At the same, Netanyahu refused to explicitly say that he would not raise taxes.

"We will increase the budget, contrary to what people think," he said. "You need to think about what you raise more and what less. In order to build the economy, we added jobs so that the rate of unemployment in Israel today is among the lowest in the West. I do not want to raise taxes, it's not my natural inclination, and I will do everything I can to avoid it. We'll make both cuts and increases."