In the second half of my interview with Sen. Joe Lieberman (I-Conn.), we discussed his impending retirement, what work he has left to do and his thoughts on the presidential race.

As we talk, the Palestinian Authority’s chieftain, Mahmoud Abbas, is threatening an end around decades of international agreements and U.N. resolutions to obtain a unilateral declaration of independence from, well, naturally, from the United Nations, whose resolutions he no longer finds convenient. Lieberman says, “He has gotten so far out on a limb” he may not be able to reverse course. “Nevertheless, it has consequences.” He predicts a cutoff in funding for the Palestinian Authority by Congress if Abbas goes down this track. After all, Lieberman observes, Abbas “has publicly rejected an appeal by the president of the United States.”

He also notes with regard to financial support for the Palestinian Authority, “The U.S. gives $550 million per year. The EU collectively gives a billion. The Arab states give $100 million.” So much for Arab empathy for their Palestinian brethren.

Lieberman is also very troubled by the state of defense spending. We have an aging military, increasing international threats and a Congress and president willing to slash billions from national security. “I’m very concerned about it,” he says. In his remaining 16 months in the Senate, he intends to make every effort to protect the decimation of our armed services. There are real risks in the world, he explains. “We need a greater naval presence,” he says. “The thought we’d have to cut the size of the navy” is deeply worrisome to him. He’s not pleased with the “trigger” in the debt-reduction legislation. “If the committee doesn’t agree or the Congress doesn’t pass it, all of the savings comes out of the 30 percent of [the budget comprised of] discretionary spending, and half of that is defense cuts.”

He believes that as we get closer to the election whoever “emerges” on the Republican side will have to “get detailed” on real entitlement reform and reduction of the debt. He gives Rep. Paul Ryan (R-Wis.) credit for offering concrete ideas. “He’s smart as hell,” Lieberman says. While the senator didn’t entirely agree with Ryan’s Medicare plan, Lieberman spoke out when Ryan was being hammered, saying, “Give this guy credit.”

I ask him about New Jersey Gov. Chris Christie. He says, “He’s impressive as a public personality. He encourages confidence and seems trustworthy.” He adds, “He seems like a regular guy.”

Lieberman has publicly said he might endorse the GOP nominee in 2012. Under what circumstances would he do that? Citing the late Supreme Court justice Stewart Potter’s admonition on defining pornography, Lieberman says, “I’ll know it when I see it. I’m approaching it as an independent.”

I ask whether he’s seen a change in Republican political support for Israel during his time in the Senate. “There has been a change, “ he remarks. “That’s not to say there weren’t some pro-Israel Republicans.” But he sees that support has broadened and intensified. It’s not merely a response to a particular constituency, he argues. This is a response to a “genuinely felt” Republican sentiment. Beyond the general bipartisan support for Israel that has a lot to do with the historical connection between the American experience and Israel, a great deal of it is “rooted in the Bible.”

This has only intensified under the Obama administration. Lieberman observes, “There is unease in the Jewish community about President Obama that has moved from Republican, Orthodox Jews to the mainstream [of Jews].” He also cites the Republican Jewish Coalition as “a rising force.” That shift in Jewish opinion may have real consequences. He says that in the 2012 election, “this could make a difference.” You don’t have to “flip” an entire group to shift an election, he notes. “If you can just move it some, that can spell the difference.”

Lieberman doesn’t seem melancholy about his upcoming retirement, although pro-Israel and pro-defense wonks and voters certainly are. Is there another Democrat who will place principle on human rights, national security and Israel above partisan loyalty? Unfortunately, none comes to mind.

But perhaps after the Senate there are more opportunities for public service. U.S. ambassador to Israel in a Mitt Romney administration? Defense secretary in a Christie administration? Perhaps his most influential years are still to come.