Transcript: Israeli Prime Minister Binyamin Netanyahu’s address to Congress

We’ve helped, on our side, we’ve helped the Palestinian economic growth by removing hundreds of barriers and roadblocks to the free flow of goods and people, and the results have been nothing short of remarkable. The Palestinian economy is booming. It’s growing by more than 10 percent a year. And Palestinian cities -- they look very different today than what they looked just few -- a few years ago. They have shopping malls, movie theaters, restaurants, banks. They even have e-businesses, but you can’t see that when you visit them.

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That’s what they have.

It’s a great change.

And all of this is happening without peace. So imagine what could happen with peace.

Peace would herald a new day for both our peoples, and it could also make the dream of a broader Arab-Israeli peace a realistic possibility.

So now here’s the question -- you’ve got to ask it -- If the benefits of peace with the Palestinians are so clear, why has peace eluded us?

Because all six Israeli prime ministers since the signing of the Oslo accords agreed to establish a Palestinian state, myself included. So why has peace not been achieved?

Because so far the Palestinians have been unwilling to accept a Palestinian state if it meant accepting a Jewish state alongside it.

You see, our conflict has never been about the establishment of a Palestinian state. It’s always been about the existence of the Jewish state. This is what this conflict is about.

In 1947 the U.N. voted to partition the land into a Jewish state and an Arab state. The Jews said “Yes.” The Palestinians said “No.”

In recent years, the Palestinians twice refused generous offers by Israeli prime ministers to establish a Palestinian state on virtually all the territory won by Israel in the Six-Day War.

They were simply unwilling to end the conflict.

And I regret to say this: They continue to educate their children to hate. They continue to name public squares after terrorists. And, worst of all, they continue to perpetuate the fantasy the Israel will one day be flooded by the descendants of Palestinian refugees.

My friends, this must come to an end.

President Abbas must do what I have done. I stood before my people -- and I told you it wasn’t easy for me. I stood before my people, and I said, “I will accept a Palestinian state.”

It’s time for President Abbas to stand before his people and say, “I will accept a Jewish state.”

Those six words will change history. They’ll make it clear to the Palestinians that this conflict must come to an end, that they’re not building a Palestinian state to continue the conflict with Israel, but to end it.

And those six words will convince the people of Israel that they have a true partner for peace.

With such a partner, the Palestinians -- or, rather, the Israeli people will be prepared to make a far-reaching compromise; I will be prepared to make a far-reaching compromise.

This compromise must reflect the dramatic demographic changes that have occurred since 1967.

The vast majority of the 650,000 Israelis who live beyond the 1967 lines reside in neighborhoods and suburbs of Jerusalem and greater Tel Aviv.

Now, these areas are densely populated, but they’re geographically quite small. And under any realistic peace agreement these areas, as well as other places of critical strategic and national importance, will be (ph) incorporated into the final borders of Israel.

The status of the settlements will be decided only in negotiations. But we must also be honest. So I’m saying today something that should be said publicly by all those who are serious about peace: In any real peace agreement, in any peace agreement that ends the conflict, some settlements will end up beyond Israel’s borders.

Now, the precise delineation of those borders must be negotiated. We’ll be generous about the size of the future Palestinian state. But as President Obama said, the border will be different than the one that existed on June 4th, 1967. Israel will not return to the indefensible boundaries of 1967.

So I want to be very clear on this point: Israel will be generous on the size of a Palestinian state, but we’ll be very firm on where we put the border with it.

This is an important principle; shouldn’t be lost.

We recognize that a Palestinian state must be big enough to be viable, to be independent, to be prosperous.

All of you, and the president, too, have referred to Israel as the homeland of the Jewish people, just as you’ve been talking about a future Palestinian state as the homeland of the Palestinian people.

Well, Jews from around the world have a right to immigrate to the one and only Jewish state.

And Palestinians from around the world should have a right to immigrate, if they so choose, to a Palestinian state.

And here’s what this means: It means that the Palestinian refugee problem will be resolved outside the borders of Israel.

You know, everybody knows this. It’s time to say it. It’s important. And as for Jerusalem, only a democratic Israel has protected the freedom of worship for all faiths in the city.

Throughout the millennial history of the Jewish capital, the only time that Jews, Christians and Muslims could worship freely, could have unfettered access to their holy sites, has been during Israel’s sovereignty over Jerusalem.

Jerusalem must never again be divided. Jerusalem must remain the united capital of Israel.

I know this is a difficult issue for Palestinians, but I believe that with creativity and with goodwill, a solution can be found. So this is the peace I plan to forge with a Palestinian partner committed to peace. But you know very well that in the Middle East the only peace that will hold is a peace you can defend. So peace must be anchored in security.

In recent years, Israel withdrew from South Lebanon and from Gaza. We thought we’d get peace. That’s not what we got.

We got 12,000 rockets fired from those areas on our cities, on our children, by Hezbollah and Hamas.

The U.N. peacekeepers in Lebanon, they failed to prevent the smuggling of this weaponry. The European observers in Gaza, they evaporated overnight.

So if Israel simply walked out of the territories, the flow of weapons into a future Palestinian state would be unchecked. And missiles fired from it could reach virtually every home in Israel in less than a minute.

I want you to think about that, too. Imagine there’s a siren going on now, and we have less than 60 seconds to find shelter from an incoming rocket.

Would you live that way? Do you think anybody can live that way?

Well, we’re not going to live that way, either.

The truth is that Israel needs unique security arrangements, because of its unique size. It’s one of the smallest countries in the world.

Mr. Vice President, I’ll grant you this: It’s bigger than Delaware.

It’s even bigger than Rhode Island. But that’s about it.

Israel on the 1967 lines would be half the width of the Washington Beltway.

Now, here’s a bit of nostalgia. I came to Washington 30 years ago, as a young diplomat. It took me a while, but I finally figured it out: There is an America beyond the Beltway.

But Israel on the 1967 lines would be only nine miles wide. So much for strategic depth.

So it’s therefore vital, absolutely vital, that a Palestinian state be fully demilitarized.

And it’s vital, absolutely vital, that Israel maintain a long-term military presence along the Jordan River.

Solid security arrangements on the ground are necessary not only to protect the peace, they’re necessary to protect Israel in case the peace unravels. Because in our unstable region, no one can guarantee that our peace partners today will be there tomorrow.

And, my friends, when I say “Tomorrow,” I don’t mean some distant time in the future. I mean tomorrow.

Peace can only be achieved around the negotiating table. The Palestinian attempt to impose a settlement through the United Nations will not bring peace.

It should be forcefully opposed by all those who want to see this conflict end.

I appreciate the president’s clear position on this issue. Peace cannot be imposed. It must be negotiated.

But peace can only be negotiated with partners committed to peace, and Hamas is not a partner for peace.

Hamas -- Hamas remains committed to Israel’s destruction and to terrorism.

They have a charter. That charter not only calls for the obliteration of Israel, it says kill the Jews everywhere you find them.

Hamas’ leader condemned the killing of Osama bin Laden and praised him as a holy warrior.

Now, again, I want to make this clear: Israel is prepared to sit down today and negotiate peace with the Palestinian Authority.

I believe we can fashion a brilliant future for our children.

But Israel will not negotiate with a Palestinian government backed by the Palestinian version of Al Qaida. That we will not do.

So I say to President Abbas, “Tear up your pact with Hamas, sit down and negotiate, make peace with the Jewish state. And if you do, I promise you this: Israel will not be the last country to welcome a Palestinian state as the new member of the United Nations. It will be the first to do so.”

My friends, the momentous trials of the last century and the unfolding events of this century attest to the decisive role of the United States in defending peace and advancing freedom. Providence entrusted the United States to be the guardian of liberty. All people who cherish freedom owe a profound debt of gratitude to your great nation.

Among the most grateful nations is my nation, the people of Israel, who have fought for their liberty and survival against impossible odds in ancient and modern times alike.

I speak on behalf of the Jewish people and the Jewish state when I say to you, representatives of America, thank you.

Thank you. Thank you for your unwavering support for Israel. Thank you for ensuring that the flame of freedom burns bright throughout the world.

May God bless all of you, and may God forever bless the United States of America.

Thank you. Thank you very much. Thank you. Thank you.