Olmert: Israel Must Abandon Most of West Bank

JERUSALEM - Israel's interim Prime Minister Ehud Olmert said Israel must give up virtually all the occupied West Bank including east Jerusalem, insisting in an interview published on Monday this was key to achieving peace with the Palestinians.

"We have to reach an agreement with the Palestinians, the meaning of which is that in practice we will withdraw from almost all the territories, if not all the territories," said Olmert, who heads an interim government following his September 21 resignation.

"We will leave a percentage of these territories in our hands, but will have to give the Palestinians a similar percentage, because without that there will be no peace," he told the mass-circulation Yediot Aharonot newspaper.

"Including in Jerusalem," he said in reference to the predominantly Arab eastern part of the Holy City which Israel occupied and annexed after the 1967 war and which Palestinians want as the capital of their future state.

His comments are expected to stir deep controversy. Israel officially considers Jerusalem its "eternal, undivided" capital, a view Olmert -- a former mayor of the city -- said he shared for many years.

"I am not trying to justify retroactively what I did for 35 years. For a large portion of these years, I was unwilling to look at reality in all its depth," said Olmert, who turns 63 on Tuesday.

But he stressed that giving up parts of the city is key to Israel's security, pointing to deadly July attacks by Palestinians from east Jerusalem who ploughed through crowded streets with bulldozers.

"Whoever wants to hold on to all of the city's territory will have to bring 270,000 Arabs inside the fences of sovereign Israel. It won't work," Olmert said.

"A decision has to be made. This decision is difficult, terrible, a decision that contradicts our natural instincts, our innermost desires, our collective memories, the prayers of the Jewish people for 2,000 years.

"I think that we are very close to reaching agreements," he said, even though the peace process with the Palestinians has made little visible progress since it was relaunched at a US-hosted conference in November.

He said that also applied to indirect negotiations with longtime foe Syria which were relaunched in May after a eight-year hiatus, with Turkey acting as a go-between.

He made it clear peace would come at a price for both sides, with Israel having to give up the annexed Golan Heights and demanding Syria end its current ties with Iran and stop backing "the Hamas terrorism, the Al-Qaeda terrorism and the jihad in Iraq."

"In both cases, the decision we have to make is a decision that we have been refusing for 40 years to consider with our eyes open," he said, warning, however that there were no risk-free solutions.

He did not rule out military confrontation in Syria in the coming years or renewed bloodshed in the West Bank.

"We don't know, for example, what will happen in the Palestinian Authority after January 9, 2009," he said.

On the one hand, Palestinian president Mahmud Abbas, whose term ends that day, could remain in power "with some manipulation," he said.

"But we believe that there is a very great danger that there will be a bloody clash, which will thwart any possibility of continuing negotiations and perhaps will force us to be involved in the confrontation, with bloodshed, with everything that could happen as a result."

Olmert formally presented his resignation on September 21 amid deep political turmoil over a series graft allegations that caused police to recommend criminal indictments.

He will remain interim prime minister until a new government is formed. The governing Kadima party's newly elected leader, Foreign Minister Tzipi Livni is scrambling to put together a government coalition in order to avert snap elections that could put the right-wing Likud party in power.