World

Olmert: Palestinian State Vital To Israel

November 29, 2007 / 6:53 AM EST / CBS/AP

Prime Minister Ehud Olmert said in an interview published Thursday that creation of a Palestinian state is a vital Israeli interest, and that failure to reach a peace agreement could plunge Israel into a South African-style apartheid struggle.

Such a scenario, he said, would mean "the state of Israel is finished."

While Olmert has long said that the region's demography is working against Israel, the comments published in Haaretz were among his strongest as he prepares a skeptical public for the renewed peace talks launched at this week's conference in Annapolis, Md.

It will be a hard sell, reports CBS News correspondent Robert Berger: two polls show that 42 to 50 percent of Israelis believe Annapolis was a failure.

Olmert's reference to apartheid was particularly explosive because Israeli officials have long rejected any comparison to the racist system once in place in South Africa.

Olmert was en route back to Israel at midday Thursday, and his office could not immediately confirm the accuracy of the published comments in Haaretz.

In other developments:

Israeli police on Thursday recommended that prosecutors drop their investigation into whether Olmert illegally intervened in the government's sale of a bank, citing a lack of evidence, police said. The decision gave Olmert an important boost as he prepares to relaunch peace talks with the Palestinians. The threat of indictment has cast a cloud over Olmert for months.

In a closed-door session during the Mideast summit, Israeli Foreign Minister Tzipi Livni complained that she was being treated like a pariah by the Arab representatives to the conference. "Why doesn't anyone want to shake my hand?" a Dutch official told The Washington Post. "Why doesn't anyone want to be seen speaking to me?" "They shun her like she is Count Dracula's younger sister," said Frans Timmermans, the Dutch Minister for European Affairs.

At the same meeting, U.S. Secretary of State Condoleezza Rice drew parallels between the Palestinians' situation and her childhood in a segregated Deep South. "I know what it is like to hear to that you cannot go on a road or through a checkpoint because you are Palestinian," she said, according to the Post. "I understand the feeling of humiliation and powerlessness." Timmermans and a U.S. official say she also said she understood the Israelis' fear of Palestinian violence.

"We are looking for a two-state solution, not a three-state solution," National Security Adviser Stephen Hadley said, adding that the parties are Israel and Abbas' Palestinian Authority, not Israel, West Bank and Hamas in Gaza. If a Palestinian state is achieved, "the Palestinians in Gaza are going to have to make a choice," he said in a speech Wednesday evening at Johns Hopkins University's Paul H. Nitze School of Advanced International Studies in Washington.

Before leaving Washington, Olmert briefed Israeli reporters and gave a different interpretation to the Annapolis summit, reports CBS News correspondent Howard Arenstein. Olmert said that even if the two sides reach an agreement by the end of 2008, that doesn't mean Israel will have to implement it until it gets what it wants from the Palestinians. That includes peaceful relations with Gaza and other Palestinian obligations from the "road map" peace plan.

That's unlikely to happen. Hamas warns it won't allow Abbas to implement Phase 1 of the road map plan, dismantling militant groups. Hamas official Halil Abu Lelleh said the Annapolis conference gave the U.S. the authority to wipe out the armed struggle, reports Berger. He described the U.S. as the enemy of the Palestinian cause.

The Palestinians want to form an independent state in the Gaza Strip, West Bank and east Jerusalem - areas that Israel captured in the 1967 Mideast war.

Many Israeli demographers believe that with their higher birthrate, the Arab population of these areas, combined with Israel's own Arab population, could soon exceed the Jewish population in Israel.

Jews are a solid majority inside Israel proper, comprising roughly 80 percent of the population of 7 million. However, if the West Bank and Gaza are included, Arabs already comprise nearly half the population of the region.

To ensure that Israel can maintain its character as a democracy with a solid Jewish majority, Olmert supports a large withdrawal from the West Bank and parts of east Jerusalem, following Israel's pullout in 2005 from Gaza.

"The day will come when the two-state solution collapses, and we face a South African-style struggle for equal voting rights," Olmert told Haaretz. "As soon as that happens, the state of Israel is finished."

Israel's 1.5 million Arab citizens have the right to vote. But the estimated 3.9 million Palestinians in the West Bank and Gaza do not have Israeli citizenship.

In the interview, Olmert warned that Israel risks losing the support of influential American Jewish groups if it retains control of the Palestinians.

"The Jewish organizations, which were our power base in America, will be the first to come out against us," he said, "because they will say they cannot support a state that does not support democracy and equal voting rights for all its residents."

Olmert, a hard-liner early in his career, in recent years has repeatedly warned that Israel cannot remain both Jewish and democratic if it holds on to the West Bank and Gaza. But he has never used the South African analogy in public, though officials say he recently made the same argument in a closed meeting with lawmakers.

At the U.S. peace conference in Annapolis, Olmert and Palestinian President Mahmoud Abbas formally relaunched peace talks, which broke down in violence seven years ago, and pledged to reach an agreement next year.