Lally Weymouth: What do you plan to do now that the Israelis have withdrawn their settlers from Gaza?

Mahmoud Abbas: We have three stages. The first was the evacuation of the settlers, and it went smoothly. Now we have the second stage -- the Israeli army is willing to leave in one week, more or less. . . . The third is to run and maintain [the public facilities left by the Israelis] and invest the money for the benefit of the Palestinian people. We still haven't solved some problems like the Rafah crossing [between Egypt and Gaza], the safe passages [entries in and out of the Gaza Strip] and the airport.

When the Israeli army departs, will the Palestinian Authority take control and prevent Hamas from entering what previously were settlements?

We are ready to control the whole security situation. We will not allow anybody to rush into the settlements. We have to preserve the establishments. Only the private houses were destroyed [during Israel's evacuation of the settlers]. We want them to remove all the synagogues. They [the Israelis] do everything unilaterally, they don't talk to us . . .

You've talked about cooperating with Hamas and letting them become a political party rather than confronting them. Why don't you tackle them?

We prefer the safe way -- to cooperate with them in order that they will be diverted into a political party. In the beginning, they accepted the truce. After that they participated in local elections. Now they're aiming to participate in the legislative elections. I hope after that, they will become a political party. This is the safest way.

But they have an army of 5,000 here in Gaza. How can you have an election with an army of that size?

They have an army. When we say there should be one law, one authority, we mean it.

If there should be one law, how can Hamas have its own militia?

There will be one law. But let us come to this period. We are preparing ourselves and rebuilding our apparatuses. When we are strong enough, we will say one law for everybody. We aren't going to confront Hamas because . . . we aren't ready for a civil war.

Aren't they a danger to you [and] the Palestinian Authority?

Nobody can deny that . . .

What should the next step be in the peace process?

To return to the roadmap and implement the Sharm el-Sheikh understandings. There was an agreement that the Israelis would evacuate [some West Bank] cities . . . This was not implemented. . . . Of course, we want them to freeze [West Bank] settlement activities and [stop building] the wall.

The roadmap says the Palestinian Authority should dismantle the infrastructure of terror and Israel should freeze settlements and illegal outposts. Prime Minister Sharon says that Israel's not in the roadmap yet. And you argue for going to phase three of the roadmap.

I'm talking about the first and the second phase, [which says] that the Israelis should evacuate [land] and release prisoners . . .

If they do that, what are you going to do about the infrastructure of terror?

As I explained to you, we use dialogue -- talks with the Hamas and others. Until now, we succeeded. Let us use our way. We are doing everything we can.

What's your vision for the Palestinian Authority?

Now we have Gaza, we will control Gaza and solve all the problems. After that we will go to the West Bank in order to evacuate the cities -- city by city. In this period we have to implement law and order. After that, we will go to the final status issues.

What do you plan to do for your people?

We have to improve their lives . . . Otherwise, the disengagement means nothing. The day after the disengagement, there should be at least a hundred projects on the ground to let the people see that something is changing.

Do you have such plans?

We are cooperating with [James D.] Wolfensohn, [special U.S. envoy for disengagement], and are working on our own. Saudi Arabia has two huge projects in Gaza, and the Emirates has one. The Americans gave us $50 million for projects here and $30 million for water. The Germans gave us $60 million for sewage. If things improve here, the whole atmosphere will improve. People will not accept the shooting or shelling or attacks. This will help us to convince everybody that peace is the way.

Reportedly, you warned Chairman Arafat once that violence was a mistake.

Many times. This was my conviction from the very beginning. The day after the beginning of the intifada, I told Chairman Arafat, "Please, stop, enough is enough. We are going to hell." During my election campaign, I said it openly. I believe that the people are with me . . .

It's widely believed that Hamas and other terrorist organizations are going to move their campaigns of terror to the West Bank. Your comment?

If they try to move to the West Bank, they won't succeed. Of course they will try.

Hamas says the pullout is a victory for them.

They try to say it is a victory. I say it is a correction of the situation, not a victory for anybody -- neither Hamas nor the Israelis.

What do you think of Prime Minister Sharon carrying out the disengagement?

After the disengagement, I called Prime Minister Sharon, congratulating him for his courageous action. I told him I want to meet, either in New York or in Jerusalem. He said, "Okay."

What about your legislative elections coming up Jan. 25? People say Hamas could get up to 30 or 40 percent. How can you possibly run this place if Hamas controls so much of the legislature?

If they get 30 or 40 percent, either they will participate in the coalition government or they will be in opposition. But the majority will be on our side, [so] we can continue -- with their cooperation or without it.

So, they can be both a political party and an armed militia?

They should be a political party. As they participate in the PLC [Palestinian Legislative Council] elections, it means they are a political party. A political party plus a militia is unacceptable.

If you say it's unacceptable, what are you going to do about it? Have you got enough forces to take on their forces? When you postponed the legislative elections, didn't Hamas fire rockets into Israel in protest?

They fired rockets, but not for this reason. I will be honest with you: The Israelis provoked the situation many times. The Israelis initiated killings here and there. Afterwards, there was a reaction -- rockets here and there.

What do you think about the prospect of building up democratic institutions here?

We are working on [building] democratic institutions, and we have democracy.

But elections aren't enough to constitute a democracy.

We need courts, we need everything. But we are rebuilding.

What do you think of President Bush? Has he been helpful?

From our point of view, he's helpful and I consider my visit to the U.S. a big success.

Do you think he's been too friendly to Israel?

He's trying to be fair, but we know what the relationship is between the United States and Israel, how close it is.

You don't like that obviously.

It's up to the Americans. . . . If they are biased toward Israel, it can't work.

Are you safe from extremists?

We are trying to change the atmosphere, to replace terrorism with the culture of peace. If you go on the streets, you see something different. People really are abandoning terrorism.

What do you think about suicide bombing? Do you think it's wrong?

I'm against it, totally. We condemned it.