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Will the Hamas victory threaten Israel?

Former Israeli Prime Minister Benjamin Netanyahu plays Hardball
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The Palestinian Parliament faced dramatic results in its election where the Hamas won over 50 percent of the seats.

Former Israeli Prime Minister Benjamin Netanyahu joined Chris Matthews on ‘Hardball’ to comment on what this now means for Israel.

To read an excerpt from their conversation, continue to the text below. To watch the video, click on the "Launch" button to the right.

CHRIS MATTHEWS, HOST, ‘HARDBALL’:   Mr. Netanyahu, what do you make of President Bush's argument today that we should not in any way talk to, negotiate, support, deal with any Palestinian group that supports the destruction of your country? 

BENJAMIN NETANYAHU, FMR. ISRAELI PRIME MINISTER:  It's perfectly sensible.  I mean, you want to encourage the peacemakers, not those who seek genocide and terror.  Unfortunately, the Palestinian people have elected a regime, a Hamas regime that seeks Israel's destruction, is allied with Iran for that same purpose and has been dispatching terrorists and suicide bombers left and right. 

MATTHEWS:  What kind of a world is it in Israel today, when you face a militant group which has taken over the Palestinian government, Hamas, that wants to destroy your country, and you have an Iranian president who's called day after day for the destruction of Israel and is building a nuclear weapon? 

NETANYAHU:  It's a major setback for peace, obviously, because Iran, I don't think I have to belabor any words because it's obvious that it's a clear and present danger, not only to Israel but to the peace of the world.  If the Ayatollah regime acquires nuclear weapons, the consequence is not only for Israel, but for everyone would be, I think, catastrophic. 

But now one of its subordinate organizations alongside Hezbollah and alongside the Hamas enclave that's already been established in Gaza, now they have a third enclave, which is in the West Bank and that's bad news.  Now what should we do about it?  I think we have to adopt a very clear policy that says, A) you apply international pressure and sanctions, economic sanctions, if necessary, to send a message to this regime that this kind of policy and this kind of behavior will not be tolerated. 

And second, we in Israel I think have to desist, to stop the policies of unilateral retreats under terrorist fire, which catapulted Hamas to its present position.  Hamas benefited from the corruption, the endemic corruption in the Palestinian authority, but it also got over the top and got enormous support for appearing to be the party that drove Israel out.  If you retreat unilaterally, you embolden the terrorists.  I said that, I think, on your program many times, and unfortunately it's come to pass. 

I think we have to change our policy and say we don't reward terrorism anymore.  We seek a peace partner, but we don't retreat in the face of terrorists.  That's not a good policy, because that's not the way to restore hope.

MATTHEWS:  Mr. Netanyahu, should Israelis feel secure because the wall is up between yourself and the Palestinian territories?

NETANYAHU:  It's a fence actually, about 5 percent of it is a wall.  Most of it is a fence.  Yes, I think it adds some measure of security, but it's not sufficient in itself.  A), the Hamas is firing rockets over the fence and especially from areas that we vacated in the northern strip of Gaza.  They're firing into the city of Ashkalon and into our suburbs. 

If we make additional unilateral retreats, they'll simply fire rockets into our airports and Khassam projectiles into our cities and so on.  So I think we have to establish a security belt around the Palestinian areas.  This doesn't annex any population, it doesn't do anything except provide for stability and security, which is the first foundation of peace. 

In any case, that's the opposite of the policy of unilateral retreats, which I and others warned would lead to the present impasse.  I think we have to communicate very firmly:  We want peace, we seek peace for our children and the Palestinian children, but peace must have a peace partner.  And the Palestinians must change the direction of their policies and their government. 

MATTHEWS: Mr. Netanyahu, the Israeli government today called on Mahmoud Abbas, the man who lost the elections in the Palestinian territories to disarm the winners.  Is that a credible demand? 

NETANYAHU:  It's kind of late, don't you think? 

MATTHEWS:  Well, I'm asking you.  I mean, it is their position that they want Mahmoud Abbas, who lost his Fatah group, after decades of rule, have lost control of the Palestinian people.  And now the Israeli government is saying, you, sir, Mr. Mahmoud Abbas—Abu Mazen—should go out there and collect the rifles and other guns from the winning team, the Hamas group. 

NETANYAHU:  I think that demand should be placed on the Hamas itself and it should be clearly told that if it persists in its policies and its armed gangs and its war of terror against Israel and its policies of genocide, then it will suffer the consequences, including economic consequences.  The Palestinians receive a lot of money from the Europeans and some money from the Americans, and that money should be held back and the Palestinian people and the Palestinian regime should be told very clearly, You won't get it if you continue in the policies of terror and war.  I think that's the first thing that should be done. 

In fact that demand to dismantle the terrorist organizations, coupled with very firm sanctions has a chance of making some headway.  The last thing we should do is offer more concessions, more unilateral withdrawals.  I've been saying this, you know, ad nauseum, and explaining that this policy would lead to the present predicament.  And it has come to pass.  Because if you retreat in the face of terror, you get reality punching you in the face.  And it just did. 

I think we have to do the combination of these two things. 

MATTHEWS:  We only have a minute, sir, and of course, Ariel Sharon, who's in terrible shape right now, took a different view from you.  He turned away from the view you've just voiced very well.  That was his view for many, many years—decades, in fact, as a strong Likud member.  And then he said the demographic situation, whereby there's so many more Arab people living within the territory under Israeli control that Israel had to avoid becoming a colonizer by stepping back and only claiming land that it is where the Jewish people were in the majority.  How's your view different?

NETANYAHU:  Well no, we didn't disagree on that and I don't want to go back into the Palestinian towns, I don't want to go back to Gaza and I certainly don't want to go back into the Palestinian cities in the West Bank.

I have no intention whatsoever—we won't do that.  But the territories that are in dispute are largely empty of Palestinians, or anybody, for that matter.  Yet they could be used as launching ground for more Hamas terrorist attacks against us.

So I say first of all, provide a security cordon of these largely empty territories.  Don't annex and don't re-enter the Palestinian-populated areas.  Leave that to the Palestinians.

But build, if you will, a real defensive perimeter around the Palestinians.  Tell them that they will be rewarded for peace-making and they will be punished for terror-making.  I think that's a pretty sound policy.  I practice it as prime minister and I brought terror to its lowest level in the last decade.  It wasn't because the Hamas and Arafat became Zionists, believe me, Chris.  It was because this policy of strength and deterrence works to restore hope and peace.

Watch each night at 5 and 7 p.m. ET on MSNBC.