I have always been conscious of the importance and the strength of nationalism, and this has led me straight to the acknowledgment of the nationalism of the Palestinian people. I believe there is no way around this: We have to have a solution based on two national states, which will hopefully live and grow together and establish a relationship between them in something like a European Union.

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.

It is our responsibility as the stronger party [Israel], as the occupying power, to convince the Palestinians that they can achieve their basic national aims, their just national aspirations, without violence. Unfortunately, the behavior of the Sharon administration, and before this of the Barak administration, has shown the Palestinians the opposite: namely, that they will achieve nothing without violence.

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.

In order to put an end to the occupation, you must make peace between the Israeli and Palestinian people. This is the real aim, this is the real task.

There are lots of grounds for hope in Israeli society. We are seeing Israelis getting fed up with war, looking for solutions. The youngest soldiers are refusing to serve in the Occupied Territories. Some are volunteering for army combat units but are refusing to serve in the Occupied Territories. We have the elite of the Israeli army, the air force pilots, some of them refusing orders which they consider illegal.

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