It is manifestly idiotic to believe that Israel, with five million Jewish citizens and one million Arab citizens, will concede to the return of four million refugees. It will not happen. We can wish it, we can think it's just, that it's moral - it will not happen. No country commits suicide.

There is the Jewish Agency, which gets a lot of money from the United States, from American Jews, whose sole job it is to create settlements. It enlists people all over the world - especially in Russia, and in the United States, by the way - to come and settle in the Occupied Territories as a kind of religious statement, a kind of nationalist statement: "This is a country given to us by God." A lot of Israelis who do not believe in God believe that God has given us this country.

There are lots of signs that average Israelis want peace. But after such a long war - this conflict has been going on now for 120 years - you have a fifth generation being born into it on both sides. Such a conflict creates hatred, fears, stereotypes, and demonizations of the other. It would be an illusion to believe you can put an end to this overnight.

What is the alternative to peace? A catastrophe for both peoples [Palestine and Israel].

If you are a Jewish Israeli, you go to Gaza, you get the villa of your life, the villa which you did not dream of ever getting in Israel, a beautiful two-story villa with green meadows and so on, practically for nothing. Then you put up hothouses of tomatoes or flowers; you take the very Arabs from whom you grabbed this land and employ them as laborers in your hothouses. Israeli law does not apply in Gaza: There is no minimum wage, no annual vacation, no compensation for dismissal - so you get the work very, very cheap. It is a wonderful setup economically.

How do we solve the problem by allowing a number of refugees to return to Israel, allowing a number of refugees to return to the Palestinian state, and allowing a number of refugees to settle, with general compensation, where they want to settle? It is not an abstract problem. It involves four million human beings, and more than fifty years of various sorts of misery. But it is not an insolvable problem. It involves some good will, and a readiness to give up historic myths on both sides.

Sharon's so-called two-state solution will be, let's say, twelve Palestinian enclaves, which will be called a Palestinian state. It will be connected by, perhaps, a series of bridges, tunnels, and highways, which can be cut off at any moment at the whim of the Israeli government or Israeli army.