On one of the most critical days for the relationship between Israel and Palestine  Israeli Prime Minister Benjamin Netanyahu sat down for an interview with “ABC World News” weekend anchor  David Muir shortly after addressing the U.N. General Assembly.  Portions of this interview aired on “World News with Diane Sawyer” on Friday, September 23, 2011 and a full transcript of the interview this afternoon is below.  News organizations using material from this interview should credit “ABC’s David Muir” (i.e. in an interview with ABC’s David Muir…).

DAVID MUIR:  Mr. Prime Minister, thank you for doing this.

PRIME MINISTER NETANYAHU:  Thank you, my pleasure.

MUIR:  I know it’s been a long day. We heard your invitation to President Abbas at the end of your speech.  Let’s meet here today in the United Nations.  Who’s there to stop us? Did you meet?

NETANYAHU:  No, I’m still here.  He’s in town.  There’s no reason why we shouldn’t meet.  I mean, we’ve been spending — actually, wasting 21/2 years on negotiating about the negotiations.

You know the thing we have to do?  Sit down and negotiate.  You can only end a negotiation for peace if you begin it.  And I say it’s time to begin.  It’s long overdue.

MUIR:  Did it take today, though, to hear that invitation?

NETANYAHU:  No, I issued it on the day one, when I was elected prime minister in this term.  And I then proceeded to make all sorts of other offers, and took a lot of steps, like removing hundreds of checkpoints and other things to facilitate the Palestinian economy’s growth.

I called on two states for two people.  I even froze the settlement for nearly a year.  And so far, they haven’t responded, the Palestinians.  I hope that, after my speech in the U.N. today, that they — President Abbas changes his mind.

In any case, if he wants to come right now, to this hotel, or to the U.N. or to his hotel or to your studios, we should be able to proceed on negotiations.  From my point of view, we’re ready.

MUIR:  Well, we’re ready at the studio, too.

NETANYAHU:  OK, invite him.  Maybe you’ll succeed.

MUIR:  We’ll try.

Let me ask you about something we also saw.  As President Abbas was speaking today, we saw jubilation from the Palestinians, who believe that now is the time for two states.  Do you agree with that?

NETANYAHU:  I think that peace will require two states, a Palestinian state that recognizes the Jewish state.  They’re willing to accept their Palestinian state, but they don’t want to recognize the Jewish state.  They want a state without peace.

We want a state with peace.  And I think they have to cross the Rubicon.  They have to decide that Israel is here to stay, and agree to live alongside it.  I think they have a problem inside their own politics, of making that decision.

MUIR:  President Obama and former President Clinton, for that matter, did not support this move by the Palestinians before the U.N. today.

But President Clinton was quoted in the last 24 hours, bluntly saying, reportedly, that your government is to blame for the continued failure of the Middle East peace process, saying that you’d essentially moved the goalposts when you came to power.  How do you react to that?

NETANYAHU:  Oh, I respectfully disagree.  You know, President Clinton knows very well in 2000 at Camp David that — who really made the generous offer, and the Palestinians refused to come.  I’m sure that President Bush can tell you what happened at Camp David a few years later, when another Israeli prime minister made a generous offer, and the Palestinians refused to come.

I’ve made a series of offers on day one and since then, on coming to office this trip, and the Palestinians refused to come.  The reason they refuse to come is they get away with it.  They get a free ride.  They basically refuse to sit down and negotiate.  And they’re — and we’re branded as the opponents of peace.  As long as that continues, they’ll continue to avoid negotiations.

MUIR:  But have the goalposts been moved since President Clinton, Camp David, and since President Bush as well?

NETANYAHU:  Not at all.  I think that the Palestinians so far have not responded to these suggestions.  I’d be interested in hearing their response to it.  But the most important thing is rather than try to end the negotiations before they begin, I suggest just begin the negotiations.  It’s so simple.  What could be simpler than a suggestion to just sit down?

Now, there are a lot of things we have to negotiate about.  Settlements is one of them.  I’ll tell you what the other one is, security.  Israel is so tiny.  It’s, you know, a little less than the length of Manhattan, without the West Bank, without Judea and Samaria.

So how do we protect it?  We’re going to have to have security arrangements, solid security arrangements on the ground, a long-term Israeli military presence in strategic areas in the West Bank.  And that requires a negotiation.

And the Palestinians are basically trying to shortcut this.  They’re trying to get a state without giving us peace, and without giving us security.  That’s wrong.  I called on them today to have — to come and negotiate the recognition and security that I think will make peace a real thing, something that could endure for generations.

MUIR:  You’re aware of the political climate in this country, President Obama running for re-election. Governor Rick Perry, a Republican from Texas, one of the many who would like President Obama’s job, and he said that we would not be here today at the very precipice of such a dangerous move if the Obama policy in the Middle East wasn’t naive, arrogant, misguided and dangerous.

What do you make of those words?

NETANYAHU:  I’m just not going to walk into the minefield of American politics.  I’ve got enough politics back at home.

I will say that I think Israel enjoys strong bipartisan support in the United States.  It’s really above and beyond American politics.  And I think President Obama and I cooperate on Israel’s security, we cooperate on many other areas, and I’m not just going to walk into this field.

This has characterized all American presidents to date, and it continues to do that — to do so with this administration.

MUIR:  I’m not sure if you saw this magazine cover while in New York, but they make the argument that President Obama is the first Jewish president, actually saying Barack Obama is the best friend Israel has right now.

What –

NETANYAHU:  Well, you know, I’m not going to get into these rankings.  I’m sure –

MUIR:  Is he a best friend?

NETANYAHU:  I’m sure there are a lot of — he’s definitely a friend of Israel and definitely represents what the people of the United States feel for Israel, which is a deep and abiding friendship.

And by the way, it’s strongly reciprocated in Israel.  You know, there’s no partisan difference in the — in the feelings towards the United States.  A very — I don’t want to wax poetic, it’s very deep in Israel.  But I, as the prime minister of Israel represent all the people of Israel who support America and I think — I think our friendship with America, our allies.

And in the case of President Obama, he, I believe, represents the broad base of America and of the American people that support Israel.  So that’s — that’s something that has been true and will continue to be true, I think.

MUIR:  You spoke a moment ago powerfully about the security concerns that you have.  Are you concerned at all about the Arab Spring that we’re witnessing?  We were in Tahrir Square during the revolution; We’ve all witnessed what happened at the embassy in Cairo in recent days, Israeli diplomats essentially chased out of Egypt.  Does it feel like a more dangerous time right now for Israel in the region?

NETANYAHU:  Definitely.  It’s dangerous for everyone, not only for Israel, because while there are great hopes that the Arab societies will undergo a democratic and peaceful transformation, there are also other forces waiting in the wings — not waiting actually, meddling in the affairs — chief among them Iran, that are trying to subvert this revolution and take it back to a — Medieval times to impose a militant Islamic rule on all these societies.

That’s happened in Lebanon.  It’s great hopes were subverted.  It’s happened in Tehran itself and Iran itself.  All the hopes for freedom of these people were subverted.  It happened in Gaza where you have a third Iranian enclave.

So the last thing we — we’re concerned that this could spread elsewhere in the Arab world to the detriment not only of Israel and the Arabs themselves, but also to the detriment of peace.

MUIR:  Mr. Prime Minister, when you looked out at the U.N. in speaking and know that most of that room overwhelmingly agrees with the Palestinian perspective in this two-state wish, do you feel pressure in that room?

NETANYAHU:  Well, I’m an old hand there.  You know, I served as Israel’s U.N. ambassador for — for several years.  It was a different U.N. then, it was at the height of the Cold War, and I didn’t get a better reception then either.

In a way, it’s somewhat better now, but it has a way to go.  The U.N. could improve considerably.

Anyway, I had a better reception in the U.S. Congress, I can tell you that.

MUIR:  We saw that.

MUIR:  So –

NETANYAHU:  But, you know, the test of a leader is not to go only to friendly forums, it’s to go to — and face unfriendly fire and to state your case, to tell the truth.

I try to speak the truth about Israel’s desire for peace, my desire for peace, but also the necessities for peace.  That the Palestinians, for god’s sake, recognize finally the Jewish state.  And Jewish people have been dispersed for centuries.  They have one tiny little state in our ancestral homeland.  And we need, also, the security to protect it.

These two things, recognition and security, are really what will make the difference.  They’ll determine if there’s peace.  And I said that very clearly and in a less than friendly forum, yes.

MUIR:  I will take you up on your offer to invite both leaders to our studios.  And in the meantime, if the two meet a year from now when you come back for the U.N. Assembly, do you think anything will be different?

NETANYAHU:  I hope that we sit down by then and not merely begin to negotiate, but end the negotiations for peace that my children and Mahmoud Abbas’ children are fervently waiting for, and that our grandchildren could celebrate not because we begin it with them, but because by then there’ll be two generation who’ve enjoyed the peace that has eluded us for so long.

MUIR:  Mr. Prime Minister, we thank you.

NETANYAHU:  Thank you.

MUIR:  Thank you.

NETANYAHU:  Thank you.

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