Lally Weymouth of Newsweek and The Post interviewed Israeli Prime Minister Benjamin Netanyahu in Jerusalem.

Q: What did you think of the Goldstone report?

A: I thought there were limits to hypocrisy but I was obviously wrong. The so-called human rights commission accuses Israel that legitimately defended itself against Hamas of war crimes. Mind you, Hamas didn't commit just one type of war crime. It committed four. First, they called for the destruction of Israel, which under the U.N. Charter is considered a war crime -- incitement to genocide; secondly, they fired deliberately on civilians; third, they hid behind civilians; and fourth, they've been holding our captured soldier, Gilad Shalit, without access to the Red Cross, for three years.

And who gets accused of criminal behavior at the end of the day? Israel that sent thousands of text messages and made tens of thousands of cellular phone calls to Palestinian civilians [to warn them to evacuate]. This inversion of justice is patently absurd.

People here appear to feel the Goldstone report is very unfair, but some have called for an internal inquiry. What is your position?

We've had 26 allegations investigated. Not because of the U.N. decision but because this is our procedure. We've investigated people for wrong behavior. We've put people on trial in the past because we're a functioning democracy. We'll do it in this case too. But what the Goldstone report actually accuses Israel of is deliberately targeting civilians, which is patently false.

So you're not in favor of an independent inquiry?

We're looking into that not because of the Goldstone report but because of our own internal needs.

The best way to defuse this issue is to speak the truth because Israel was defending itself with just means against an unjust attack. Serious countries have to think about adapting the laws of war in the age of terrorism and guerrilla warfare. If the terrorists believe they have a license to kill by choosing to kill from behind civilian lines, that's what they'll do again and again. What exactly is Israel supposed to do?

That's why you think the report is so dangerous?

This gives terrorist regimes a new weapon against democracies and even against non-democracies -- it allows them to attack entire cities with weapons of mass terror and get away with it simply because they fire the rockets from populated areas. In the case of Hamas, they deliberately targeted civilians while hiding behind civilians. So our attempted surgical strikes would be attacked as [acts of] war criminals. There's a world of difference between the incidental civilian casualties that are tragic in any war and the deliberate targeting of civilians.

Now [comes] the new tactic, which is the deliberate targeting of civilians while using civilians as a human shield. A double war crime. [But] the U.N. commission in Geneva added insult to injury by condemning Israel. It's a complete inversion of the facts, which is more[or] less what this report does. It just stands truth and justice on its head. So the simplest way to deal with this [report] is to tell the truth. The United States did that with great clarity.

Were you surprised that some of the other countries like Great Britain and France did not support Israel?

I think all countries should stand up that are themselves engaged in the war against this brutal terror. Moral clarity is the most important weapon against terror.

What did you think of the Geneva deal that the Obama administration and other Western countries appear to have struck with Iran?

It's too early to say because the crucial thing is that the international community pressure Iran to stop the enrichment of uranium, which has only one purpose. Iran is swimming in oil. The purpose of enrichment is the development of nuclear-weapons capability so any solution has to be accompanied by the cessation of enrichment.

Some U.S. experts argue that this deal is a reversal of past policy, which was based on freezing enrichment.

I think the cessation of enrichment should be the policy.

Someone told me this week that you believe it is your duty as prime minister to prevent a second holocaust of the Jewish people.

This has been the sentiment of all the prime ministers of Israel.

But do you feel it particularly in light of the Iranian nuclear threat?

I think right now the issue is not merely the security of Israel but of the world. Free and open societies are menaced by a dark radicalism that is seeking to arm itself and its proxies with nuclear weapons.

You're speaking of Iran?

Yes. We're definitely the first country threatened but definitely not the last.

Your Arab neighbors say that they are very concerned, too.

There is not, perhaps with one exception [and] I'm not even sure about that one, a single Arab country that is not concerned by the possibility of a nuclear Iran. And of course, many of the great powers in Europe understand the danger. This would be a pivot of history if it happened.

Is there a lot of time for you to deal with this issue?

It's not we [Israel], it's we the international community. I've spoken about it to President Obama, and he assured me that the goal of the United States is to prevent Iran from acquiring nuclear weapons.

Reportedly, Israel might be preparing for a strike against Iran.

I'm not responsible for rumors. Our belief is that this is a global problem. Since it's the problem of the international community, the international effort led by the United States is the way to stop this danger.

What do you think should happen with the Palestinians?

We just wasted six months because of the Palestinian effort to place preconditions on the negotiations -- preconditions that weren't there for the last 16 years.

Is that freezing the settlements?

It's freezing the settlements, it's committing in advance to the results of the negotiations.

It's committing to the outcome basically?

Yes, it's the old technique. Let's agree on what the results of the negotiations will be before the negotiations begin.

Didn't the U.S. get the Palestinians' hopes up by saying there should be a settlement freeze?

I think the Palestinians have to recognize [that] Washington says there should be negotiations without preconditions. That's what they mean. And that's certainly what we mean. We're prepared to begin yesterday. Why waste more time?

Shimon Peres told me that you are mistakenly viewed as a right-winger. Peres said you've done much more than any previous prime minister [by freezing settlements].

I think we do represent a consensus of the Israeli public. I think what we've done in the last six months is to consolidate a great part of the Israeli body politic around certain clear principles that will enable us to achieve peace. If I had to sum it up I'd say that the beginning of the peace negotiations should be without preconditions and the outcome of the negotiations should be a demilitarized Palestinian state that recognizes the Jewish state.

That brief sentence encompasses the gist of the problem and the gist of the solution. The gist of the problem is that for 62 years the Palestinians have refused to recognize Israel as the nation state of the Jewish people.

Because while it is the nation state of the Jews, all the non-Jews that live here have full civil rights, participating in the Knesset and the government. I think recognizing Israel as the nation state of the Jewish people is a minimal requirement for achieving a truly successful conclusion. Because just as we're asked to recognize a nation state for the Palestinians, the Palestinians must recognize Israel as the nation state of the Jewish people.

The Palestinians say they've recognized Israel, but now they have to recognize it as a Jewish state.

That's right. Israel is not a bi-national state. It has non-Jews who live here with full, equal rights, but it has two things that assure its special character. It's the homeland of any Jew. And there is a very broad consensus in Israel that the Palestinian refugee problem should be resolved outside Israel's borders. Jews come here and Palestinians will go there. So choose. That's the basis of a solution.

I gave a speech at Bar-Ilan University in which I said what I've said to you here. It wasn't easy but I did it. There has yet to be a Palestinian leader who actually turns to his people and says -- it's over. We're not going to have a state that will continue to make demands on Israel. It's over. We recognize that Israel is the Jewish state just as we ask the Israelis to recognize the Palestinian state.

And that's why it's important?

That's why it's essential. Because why is this conflict going on for 62 years?

It raged for almost 30 years before the establishment of the state of Israel. The popular explanation is that this conflict is about the territories captured in the 1967 war. So why did the conflict rage [when] there were no settlements? The Arabs fought wars and terror campaigns in the 1920s, '30s and '40s against any Jewish state, and then they rejected the partition. Our presence in the territories is not the cause of the conflict but one of its results. What Arab propaganda has done is to turn around cause and effect. The cause is the persistent Palestinian refusal to recognize the Jewish state at any point.

We left Gaza, we left Lebanon -- every square inch of it. And they fire rockets into the Galilee and say this is occupied Palestine. And of course the world community is not sensitive to that and says you mean, the West Bank. They say, No, we don't mean the West Bank. Of course we want the West Bank but we want Tel Aviv, Jaffa and all of Jerusalem. It's the persistent refusal to recognize Israel in any boundaries, and I'm not talking about Hamas. I'm talking about the moderates who have to turn around to their people and say "it's over" when they make peace. . . . We will end the conflict by establishing a state. That simple truth requires a lot of courage from the Palestinian leadership. They have to stand up and say we will make a final peace with the Jewish state of Israel. Courage is required on both sides.

What do you think of President Obama?

There is much greater cooperation and transparency between the Obama administration and my government than people know. We speak openly and I greatly appreciate steps taken by the Obama administration against the distorted Goldstone report and their pressure on Iran to stop its military nuclear program as well as the ongoing efforts we are making to re-launch the peace negotiations between us and the Palestinians.