"They're our next-door neighbors, and you can actually see Russia from land here in Alaska, from an island in Alaska," Palin told Gibson.
Her response to that question came back to haunt her in interviews and with Tina Fey's iconic portrayal of her on "Saturday Night Live."
But Palin told Walters that she never said "I can see Russia from my house" and explained why she still feels Alaska's proximity to Russia is important.
"It's very significant. And we are a gatekeeper for the continent. So for national security reasons, and for energy independence and resource development reasons, Alaska should be recognized for its strategic location on the globe," she told Walters.
The former governor wouldn't directly address the burning question of whether she wants to be president or if she would make a run in 2012, but she did not completely close that door, either.
"That certainly isn't on my radar screen right now," said Palin. "[But] when you consider some of the ordinary turning into extraordinary events that have happened in my life, I am not one to predict what will happen in a few years."
Palin said that on a scale of one to 10, she would give the president a mere four for his job performance.
"There are a lot of decisions being made that I -- and probably the majority of Americans -- are not impressed with right now," Palin said. "I think our economy is not being put on the right track, because we're strayed too far from, fundamentally, from free enterprise principles that built our country. And I question, too, some of the dithering, and hesitation with some of our national security questions that have got to be answered for our country. ... So, a four."
ABC News' Jake Tapper contributed to this report.