“A leader needs to have a grasp of history, and whoever doesn’t will have a hard time in the present, and will certainly struggle in negotiating the future. If you don’t know how you got to a certain point, and where you are now, it will obviously be tough for you to find your way from here and to conduct yourself according to a timetable. History doesn’t have to repeat itself. The big difference today is that the Jewish people are in a much better position, since they have a state which is capable of defending itself.”

On Passover Eve, the prime minister is speaking from his bureau in Jerusalem. He is on the cusp of the fourth year of his second term in the highest office in the land. “We are on the eve of Passover, a holiday in which we recite, ‘In every generation, they rise up to destroy us.’ Unfortunately, this is correct.”

“The major difference from the past is that in our generation we have a state that can push back these attacks. This is our job, while on my watch. This is the job of every prime minister who is in office.”

“I think that one needs to be able to properly identify the threats. You cannot ignore what's happening and say that Iran, which has declared its desire to destroy us and is trying to develop weapons of mass destruction, is not a threat. The difference between now and the way things were during the Holocaust is that we have the Israel Defense Forces and the state of Israel which are capable of acting on both the local and international arenas to push back the threat. Whoever doesn’t understand this is missing the point,” the prime minister says.

“Today, whoever wishes to lead the state of Israel, given the situation it is in and the threats it faces, must be capable of acting in an effective, determined manner in the international arena.”

Referring obliquely to vows made this past week by both Kadima chairman Shaul Mofaz and Labor party leader Shelly Yachimovich to replace Netanyahu at the helm, the prime minister said, “It is impossible to lead the state of Israel with flippancy. It’s not local politics, it’s not limited to fiery speeches of one kind or another in the Knesset. It is, first and foremost, the ability to act on the international stage, to set processes in motion, to enlist partnerships for issues that are crucial to Israel’s security. The manner in which we led the campaign to enlist global support for sanctions, the considerable support we succeeded in generating within the U.S. administration, Congress, and American public opinion, the contacts we have with many other countries both on the governmental level as well as with other organizations – these are things that require a very wide reach throughout the world.”

We conducted the interview with the prime minister in his office in Jerusalem. After three years on the job this time round, there is a clear message he is trying to send: He is older, wiser, and more responsible, more of an elder statesman. He is someone who has seen it all from every angle. His perspective is more comprehensive, more understanding. His views don't always come across effectively, and are not always acceptable to everyone. But the message about what he sees for Israel is this: sober optimism.

The prime minister is focused on the Iranian issue, though he is quick to add that the entire package of threats and opportunities is no less important. The rise of the Muslim Brotherhood in Egypt and the candidacy of one of their representatives for the presidency are a reflection of what Netanyahu views as the changes taking place in the region, and the dynamic reassessment necessary as a result.

“The world has changed,” he says. “And this means that we cannot assume that what was once, is what will be. I hope that the regime that rises after the Egyptian elections will respect the peace treaties. This is certainly our expectation and this is what we demand of Egypt. This is also the expectation and the demand of the United States, as I was told by its representatives.”

“But time will tell and we need to prepare for a new reality. The Middle East is undergoing an Islamist revolution whose foundation is enmity toward the state of Israel. It has footholds in two of Iran’s satellites lying on our borders: Hamas and Hezbollah, and we need to take these developments into account.”

Netanyahu, the son of a respected historian, continues to cite historic events, noting two specific dates – 1917, the start of the Ottoman Empire’s collapse in the Land of Israel, and 1929, the year of the Great Depression. Since then, there has never been this level of turbulence, or a “perfect storm,” as he puts it. Netanyahu knows that he will not be receiving any praise, but it is important for him that people know the facts.

“I’ve already become accustomed to the fact that it matters little what I do,” he said. “There’s no end to it ... If I operate according to what I think will be written about me and base my decisions on that, I wouldn’t be able to do anything. As prime minister, I need to decide the best course of action, and not what will be written about me in the press.”

Some in the media wrote that Netanyahu would use this term to implement the central tenet of his platform, one which he has been speaking about for 15 years and which states that the Iranian regime cannot be permitted to obtain a nuclear bomb. “I discussed this during my first term in office,” he said. “I warned of the danger 15 years ago and I have been called upon to deal with it again.”

“I’ve returned to lead the country, so I can finish various things,” he said. “I plan to complete the strengthening of our defense and to take up responsibility for the economy. I came back in order to devote my energies to socioeconomic issues like education, ensuring greater availability of housing, upgrading infrastructure paving highways and interchanges in the north and south, constructing the fence [along the Egyptian border]. Things that have not been done, which I started to do during the first term and then later on as finance minister, were shelved or frozen. I am advancing these things now in order to create the tools so Israel can ensure its future, its security, and its prosperity. These things are not to be taken for granted.”

“The sanctions are a burden for the Iranian economy but so far they have not succeeded in stopping the nuclear program. The Iranians tried to exploit negotiations to buy time, stall, and mislead [the Western powers]. They tried to do this in the past. I hope that the leading world powers, headed by the United States, have learned their lesson.”

“The way to deal with this Iranian strategy is to explicitly order a halt to all uranium enrichment, a removal of all enriched uranium from the country, replacing it with material that cannot be used to develop a nuclear weapon, and, of course, converting the underground facility in Qom. These are real things that can show that something has been accomplished. This is what will be discussed in the coming weeks. There needs to be a firm stance and clear demands in order for the sanctions to really have an effect.”

“I can only hope that this isn’t true. During my last visit to Washington, President Barack Obama repeated the principle that Israel must be capable of defending itself by itself against all threats. This certainly does not square with any attempt to prevent us from exercising our ability to defend ourselves.”

“It is my hope that there is no such attempt, and that the U.S. will remain faithful to this important statement made by Obama.”

“Nuclear weapons in Iranian hands are a danger to Israel and to the entire world. First of all, it is a danger to us, because Iran has stated that it is interested in wiping Israel off the face of the earth. It is aiding terrorist groups and arming them with thousands of missiles that are being launched at us.”

“The conventional threat will grow significantly if Iran has the benefit of a nuclear umbrella. And we haven’t even mentioned the fact that Israel would, for the first time ever, be faced with the threat of nuclear weapons. No clear-headed person would wander into this situation faced with such a double-threat: the growing menace of missiles and a nuclear threat. We need to do everything in our power to prevent Iran from arming itself with nuclear weapons.”

“If there is a global effort, it is possible to delay the threat for many years, no doubt about it. There is a certain readiness on the part of a number of countries. I can’t say that it is sufficient at this stage.”

"There are very specific forums for discussing this topic. Never have discussions been this organized and this intensive as they have been during this government’s tenure, with me at its helm. These guys are serious, the discussions are serious, the decisions are complex. There’s no doubt that the discussions are no less in-depth than they were in the past and it is clear that they are more in-depth than they were during previous governments’ terms in office.”

“I believe that all of Israel’s citizens understand that Iran’s arming itself with nuclear weapons is a significant threat to the state of Israel and that this needs to be prevented.”

“The state of Israel withstood the economic crisis better than almost every other country in the world. I use the word ‘almost’ in order to maintain a sense of proportion. If I was less cautious, I’d erase the word. Look, we are the only country in the world that was given a higher credit rating in the last year.”

“Growth is nearly at 5 percent. Unemployment is dropping to its lowest levels in decades, this at a time when the jobless rate in other countries is soaring. There are countries whose unemployment rates for young people reach 5%. Poverty in Israel has been decreasing for years, according to the indices of the Central Bureau of Statistics.

“There are far-reaching changes taking place here. We managed to halt the rise in housing prices and to reverse this trend altogether. We managed to enact a policy which grants free education to all children from the age of three, we slashed customs in order to ease the cost of living. These are significant achievements, all at a time of global economic instability.

“We were steadfast in dealing with two tumultuous developments: there was the global economic crisis, during which we maintained a responsible policy. Are global gas prices within our control? No. Are we trying to lower them? Yes. But we are not going to spend beyond the budgetary framework. We want to ease gas prices and to lower taxes, but this needs to be balanced. This week, I will present the Treasury’s proposal on how to deal with this change to the government. We are handling this in a responsible manner and the citizens of the state, I believe, appreciate our level-headed approach.”

“The net salary can certainly increase, but we are helping by providing subsidized education, assisting working parents, and enacting changes that will save money. It will save money on people’s individual cellular phone bills, cable television bills, and at the gas pump. We have subsidized at a cost of hundreds of millions of shekels. The same thing with regard to the cost of products. Eventually, net salaries will also grow.”

“I think people should compare the state of the middle class here to that of the middle class in Greece, Spain, Italy, and Portugal. There incomes were higher and unemployment was higher as well. We have surpassed many European countries on all of these parameters.”

“Unemployment is the most urgent problem. It’s not important how you make ends meet after receiving a salary at the end of the month, but what policy is enacted at the start of the month. Without an appropriate economic policy, we could have had tens of thousands of unemployed.

“By any fair standard given the difficult economic circumstances in which many countries find themselves, the state of Israel, headed by the government under my leadership, is functioning very well. Anyone with eyes in their heads can see this. Are there difficulties? Of course. But the performance of this government should be judged on how it has navigated the stormy economic waters. And we have enacted a policy very effectively.”

In a news conference which Netanyahu convened the day after the interview, he declared explicitly: “I’m not afraid of the protest.”

“We have cut down the concentration of wealth in the economy,” he said. “Why are prices high? Because there are monopolies and cartels, and we are breaking them up and dismantling them. This is what will ultimately lead to lower prices. The high prices do not stem from a particularly high tax rate in the state of Israel. With all due respect, the tax burn in Israel is not higher than it is in other Western countries. On the contrary. The right way to do this is to take apart the cartels and the monopolies. Nobody has done this.”

“The tax on gasoline has been slashed in half, less than what is common in Europe. It is a fact that we have lowered taxes cumulatively in the last year. Were it not for these measures, the price would have soared to NIS 9 per liter. As long as we are able to ease the burden on Israeli citizens, we will do it. We don’t control gas prices. The prices are impacted by the sanctions on Iran and many other factors. We don’t control the global price of oil, despite Israel’s importance … Whoever ignores this is resorting to populism.”

“If we discount any ulterior motive that may have been a factor, what really disturbs the people? I found three things. First, the cost of housing, which has climbed nonstop. Secondly, the cost of caring for young children. Third, the price of various consumer goods. I appointed the Trajtenberg committee to formulate a number of recommendations and the government adopted all of these conclusions. The housing costs started to drop, and we introduced free education for children three years of age and older, making it easier for working families and working parents. There will also be price limitations on other products. We have provided genuine solutions to real problems.”

“Is there any justification now for blaming the Israeli government due to the rise in global oil prices? No. Is the price too high? Compared to countries in Europe, which are our usual index, the price is actually lower. Could we do more to ease the burden? Absolutely. Our work is not done.”

Netanyahu’s experience as a capable handler of the economy raises questions as to the amount of influence wielded by Finance Minister Yuval Steinitz. The announcement that the increase in gas prices was halted came ten minutes before the main television newscasts on Saturday night, despite the fact that just an hour earlier Steinitz was a guest on Channel 2’s “Meet the Press.”

The prime minister insists that he fully trusts Steinitz, maintaining that the idea to halt the rise in gas prices was actually suggested by the finance minister.

“For two weeks, we held meetings,” he said. “The price of gasoline is set on the first day of the month according to the average price of gas on the last five days of the previous month. In other words, the decision is made based on what happens at the last minute as well as the dollar exchange rate. So there are factors that are subject to change.”

“I was in touch with the finance minister throughout the process. The finance minister himself proposed these necessary steps and we said that we would make a decision nearer the date. I’m satisfied with the finance minister’s job performance. He is acting responsibly and doing a good job, and I know what is required of a finance minister.”

“If only there would be. They [the Palestinians] need to prove that they are a partner. I’m ready to meet him [PA President Mahmoud Abbas] anywhere and to move forward. We are demanding elementary things, but, unfortunately, the Palestinians so far have preferred not to come to the negotiating table. They have always reached the cusp of an agreement, after receiving far-reaching offers before preferring to bolt the negotiations.”

“They are ultimately required to agree to difficult concessions. A diplomatic arrangement with the Palestinians will not only be a difficult thing for us. They will also have to give up the fantasy of diluting, cutting down, and liquidating the state of Israel to the point where it would cease to exist.”

“A government headed by me will not compromise on the state of Israel’s fundamental needs for its future. So the Palestinians will also need to compromise.”

Netanyahu said that many international officials have come to the realization that concessions will not have to come solely from the Jews. “Since Oslo, five prime ministers have compromised, and I am the sixth,” he said. “We are ready for a historic reconciliation and we are ready for compromises. Peres, Rabin, Barak, Olmert, and Sharon, they all made offers. Why is this never settled? To me, it’s clear that the reason for this is that they are not ready to make the most basic concessions which they are required to do.”

“This is a step that the legal establishment determined was mandatory. At the same time, I requested that the house be protected until the legal proceedings are concluded. It is clear to everyone that I support the settlement enterprise in Judea and Samaria in general, and in the city of our forefathers, Hebron, specifically. We have proved this in the past, and we have proved it in the three years that have passed since I returned to the prime minister’s chair.”

“First of all, there are a lot of people who say that they are doing well. According to an international poll, the Israelis are one of the most content nations. Perhaps there is a Scandinavian country that has bested us … but the Israelis are very fond of the state. Overall, they understand that by every possible measurement, the state is doing well.

“When I became finance minister 10 years ago, the monthly income was just two-thirds of that of European countries. Now we have closed the gaps. In a few years, if we continue with the right policy, we will catch England and France. There was a time when this sounded farfetched. There is a lot of good news in the state of Israel. We must not bury our heads in the sand. The forces of creativity, innovation, and industriousness here in Israel make me very optimistic and realistic.”

“In most cases, yes. There are problems that need to be solved, but the public knows full well that it has whom to trust!

I understand the difficulties facing the average Israeli family and working parents who have young children.

I understand the problems at the gas pump, and so I am fighting to lower the price.

I understand the problem of prices of products in the supermarkets. So I am working to break up the cartels.

I understand that paying dental costs for children is a tall order, so this government decreed that dental care for children will be fully subsidized.

“We are doing all we can to make life easier for the public, but we are doing so in a responsible way. If, after all, we were only to reap the fruit without planting seeds, tilling the soil, and watering, the tree would shrivel up quickly. The smart thing to do is to plan correctly and to distribute the fruits effectively and fairly.

Happy holiday.”