One of the main aims of Sharon is to prevent a Palestinian state - a real, viable, sovereign, free Palestinian state. It has been the major task of his life for the last forty years. What Sharon wants to do is "shorten the lines," in military slang. He wants to give up some positions which are untenable, or which cost too much to keep, and to withdraw to where he wants Israel to be.

I believe that Israel must concede to the Palestinian right of return in principle. Israel must, first of all, assume its responsibility for what happened in 1948, as far as we are to blame - and we are to blame for a great part of it, if not for all - and we must recognize in principle the right of refugees to return.

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.

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.

Palestinians want a state of their own. They want to live in freedom. They want to get rid of the terrible misery in which they are living. They are ready after fifty years to accept a state of their own in 22 percent of what used to be the country of Palestine. I think it is the height of stupidity on our part if we don't grasp this opportunity.

In 1949, the country of Palestine was partitioned after the war in such a way that the State of Israel-proper consisted of 78 percent of this country of Palestine. What was left to the Arabs was 22 percent, the West Bank and the Gaza Strip.

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.