Israeli Defense Minister Ehud Barak said Wednesday that a "daring" peace initiative by Prime Minister Benjamin Netanyahu is vital to his country's security and international standing, and that without one, Israel could face increased isolation and mass popular protests.

His comments came as Netanyahu embarks on a diplomatic mission Thursday to the United States, though American and Israeli officials alike have sought to lower expectations that the visit would lead to a breakthrough restarting of U.S.-brokered peace talks.

In an interview with The Times in his office at the Knesset, or parliament, Barak said Netanyahu has made "clear movement" in spelling out his peace vision by stressing Israel's insistence on maintaining settlement blocks as well as a military presence along the Jordan Valley. But Barak said Israel still lacks "a sense of direction."

He added that he hoped the warm reception Netanyahu is expected to receive in Washington would not distract from the hard work yet to be done to block a Palestinian Authority initiative to seek statehood recognition from the United Nations this September. President Obama is expected to indicate in a speech Thursday that the administration will oppose the proposal.

Despite the current stalemate, Barak said he believes a peace deal is closer today than it was when he was prime minister during the Camp David talks in 2000. But he also warned that Israel's desire for increased U.S. military aid could be at risk if no deal is reached.

Below is an edited transcript

Q: By most accounts, Netanyahu will not unveil a new peace initiative during his U.S. trip, as you and others have urged. Is that a mistake?

A: I don't know whether that's a fact. I still hope he will say something clear about our intentions.

Q: So he might surprise everyone?

A: If you listen to his speech in the Knesset [on Monday], there were certain elements that were quite clear movement toward the positions that many of us here think are essential for any sincere Israeli proposal: namely, that we'll make clear those elements that have to do with borders and the need to make major, painful concessions regarding what he called part of our fatherland.

Q: You called for something "daring." Was that daring enough?

A: I don't know how to judge it. It's clear to me that Israel at this junction should act and not be paralyzed by the uncertainties, low visibility, volcanic eruptions and historical earthquake around us. It makes sense that many people say, "Let's not be too enthusiastic about doing something at any price." On the other hand, I personally feel that we should be ready to move. We need to put [something] on the table, whether behind closed doors to the president or in public. We need to be ready to move toward a daring proposal that will include the readiness to deliver an answer to all the core issues.

Q: Should the U.S. try to jump-start the process by putting forward an American proposal that frames some of the core issues?

A: I don't know. It depends on the details. America, with all the question marks that have been raised about its effectiveness or strength in recent months, is still the most effective superpower and the most important player in the region. But neither Netanyahu or Obama or "the quartet" [the U.S., Russia, the U.N. and the European Union] can do it alone. It depends on the sides and on many details. There should always be an American readiness to provide whatever services are needed in order to help the two sides move forward.

Q: Some argue that making concessions now will make Israel look weak and "reward" the Palestinian Authority for leaving the negotiating table and, most recently, reconciling with Hamas, which the U.S. and Israel view as a terrorist group.

A: I don't think so. Israel is the strongest country for 1,000 miles around Jerusalem, and we should be self-confident enough not to lose sight of what has to be done. What we need is a sense of direction and a readiness to take decisions. We have to do it.

I can't tell you for sure it will work. It probably won't. But we have a responsibility and a commitment to move. We should make it genuine, that if an agreement cannot be achieved at this juncture, the responsibility is on the other side's shoulders. Probably along the way we will find that while we are trying to find a breakthrough for a fully-fledged agreement, only an interim one can be achieved. So let's find it. We should prepare for all three possibilities: a breakthrough agreement, stalemate or an interim agreement. All three are better than the alternative, which might lead to growing isolation of Israel.

Q: In your assessment, are Palestinians ready to reach an agreement?

A: It's more complicated for them than in the past. But I think [Palestinian Authority President Mahmoud Abbas] seems to me to be at least sincere. I can't read his gut. [Prime Minister Salam] Fayyad is sincere. They are doing a good job in this bottom-up building of embryonic state institutions. There is more freedom, more normalcy, more security and a much lower level of terror than in any previous years.

Q: Can Israel work with a PA that includes Hamas?

A: People here say, "Oh, that's a catastrophe." I say that doesn't make sense. We cannot say on the one hand that [Abbas] is not a real partner because any negotiations would be, at most, an agreement that you put on the shelf because he doesn't control half his people, and then on the other side, when he tries to resume control [of the Hamas-run Gaza Strip], to say, "Now they are lost." It's not lost. But we should say loud and clear, if and when they form a technocratic government, we expect the government, Fatah and mainly Hamas, to be ready to explicitly accept … recognition of Israel, acceptance of all previous agreements and denouncing terror

Q: For two years, people close to Netanyahu have predicted that he would surprise the world by making a dramatic peace overture. Now some doubt it will ever happen.

A: I don't buy this description that he should surprise us, or that he just has to surprise us by making this inevitable step. It's much more complicated. He should reach a painful point where, under the circumstances, he feels it is his responsibility to do it.

Q: Will he reach that point?

A: I hope. I'm in the government to make sure that if there's an opportunity to make peace, it won't be missed. I believe that if Netanyahu is met with a responsive Palestinian leadership and supportive American administration and quartet, he might be able to make the decisions. He fully understands the reality.

I hope we will not be blinded by the warm atmosphere of the meeting in the U.S., both in the administration and the Congress. Probably there will be a very warm atmosphere. But we still have to be aware that beyond the warmth and the basic common values, there is a job to be done, which is pushing forward the prospect and probability of the peace process.

Q: Critics call you a fig leaf for Netanyahu. Has your participation in the government made a difference to the peace process?

A: I'm confident that without me, you would have never seen the Bar-Ilan [University] speech [of June 2009, in which Netanyahu became the first Likud Party prime minister to endorse a two-state solution). You never would have seen a freeze on building settlements for 10 months. You would probably have found Israel less restrained and disciplined in some sensitive moments regarding the use of force. A right-wing government could accelerate the process of isolating Israel. That's my role. People on the left tend to say, Barak is just a fig leaf. People on the right say Barak drags Netanyahu by the nose. The reality is different. There is a certain point where I probably push him beyond what he was planning to do otherwise. There are certain points where I make gestures and I can suppress a criticism in public. The difference between us and many of our critics is they look up and see other layers of authority over them. When we look up, we see the sky. We feel the responsibility to make the decision.

Q: Are we closer or farther away from resolving the conflict today than when you negotiated at Camp David in 2000?

A: We're closer. We found that [now-deceased Palestinian leader Yasser] Arafat was not focusing on solving 1967 and the occupation, but on 1947 and the very establishment of Israel. Some people on the right wing believe that's the case right now. I don't buy it. The other side has changed. Abu Mazen [Abbas] and Fayyad say loud and clear, if there is an agreement that meets their minimum demands, they are ready to sign an end of conflict and claims. That's exactly what Arafat rejected. They are willing to consider more moderate ideas than Arafat. I think this leadership is more ripe. We won't know until we try. You cannot just produce self-fulfilling prophecies, or say we are not acting because we don't think it will work.

Q: What are the chances of another Palestinian uprising?

A: History never repeats itself in the same way. The second intifada [Palestinian uprising] was totally different from the first. The first was stones and violence, the second was suicide bombing. It's quite possible that we'll see other ways of protest. What characterized the Palestinian approach for the last few years is they identified that soft power works more effectively or at least as effectively as terror. Once they removed terror, the only element that remains is that Israel is reigning over another people for 43 years. Even what is happening in the other Arab countries in the past few months can resonate here as we saw a few days ago [when hundreds of Palestinian refugees tried to break through borders with Lebanon and Syria].

Q: Is that just as threatening to Israel? How do you handle, say, 100,000 Palestinians marching to Jerusalem?

A: We have been looking for several months about how to deal with such events. We are thinking about it a lot: how to face it on the technical level, how to block, how to stop, how to deal with such possibilities. It's a changed picture.

Q: You've argued in the past that if Israel signs a peace deal, it should receive a substantial increase in U.S. military aid to offset the new security risks you might face. If Israel doesn't reach a peace deal, should it expect less additional aid?

A: It's clear to everyone, including America, that in this turbulent region, the only stable place is Israel. You can easily justify to anyone about the need to keep supporting Israel. We get very generous support. We need it. But of course, if we don't move forward, our justification to demand more support will be somewhat weakened.