The holiday interview with Ehud Olmert took place on Wednesday at the Prime Minister's Residence, exactly a year to the day after his election victory. Olmert knows that the public expects him to engage in spiritual soul-searching after the hardest year of his life, but he is not eager to deliver the goods. He is out to show that he is, in the language of the legendary comedy troupe, Hagashash Hahiver, "unaffrontable" and "unsaddenable." The loss of trust in him, the war, the affairs that have turned into investigations and the looming Winograd Committee report - none of these is affecting his performance in office or breaking his spirit.

But this is not the same Olmert we saw a year ago. He is less self-confident, more skeptical. He is living in a kind of bubble at his residence, surrounded by security guards who like him, and by his aides. Here and there he emerges into the outside world, and what does he see? An economically prosperous country with less poverty and less unemployment, a higher minimum wage and a plan under which every citizen will have a pension. A country in which it's already more fun to live than it was a year ago, when he formally assumed power.

As long as the interview focuses on issues of state policy, Olmert leans back comfortably in the chair in his study. As soon as the stage of personal, family questions arrives, he tenses up. He literally sits on the edge of his seat. He reverts to his old pastime of clashing with the media. Questions that are too long, too trenchant, rile him. There is no holiday atmosphere in the prime minister's home these days, and the tenant, who is not in a festive mood either, will probably be living elsewhere come next Pesach.

Olmert maintains that he had no illusions on election day last year. "Even before March 28, I had become a target for attacks, investigations, accusations and vilification. I knew that political life in Israel is very cruel, and that there were a great many people for whom the idea that I - and not they - would be prime minister, would give them no rest. They have created an atmosphere here that forces me to address issues that are without precedent in our political history."

It's not hard to guess whom he means - Benjamin (Bibi) Netanyahu and people who are close to the leader of the opposition. Olmert's remarks intimate that Netanyahu and his confidants are responsible for the reports and investigations being conducted against him, and for the newspaper ads against him signed by "The Reservists."

"No one before me," he says, "faced this type of hunt, but life has taught me that if you cling to your inner truth, the truth will out. I don't know when the change will come, but I have no doubt that it will come. In the end, more people are now living with a little more fun, and in time I will get the credit for that."

Are there mornings or nights when you ask yourself why you need all this?

Olmert: "I am focused on what needs to be done for the people of Israel. Period. I do not pity myself and I do not pat myself on the shoulder. I get up in the morning full of energy to fulfill my mission."

Are you made of Teflon? Does nothing hurt you?

"Did I say it doesn't hurt? Of course it hurts."

Do you feel alone?

"No. I have my family, I have friends - and there are people who disappointed me, which also happens in life."

Why aren't you popular?

"Some of the prime ministers whom you admire were in the past at the height of popularity, and afterward plummeted to a terrible low. One of them delivered the 'They are afraid' speech and did the gimmick with the protective vest, but I am not here to whine."

What is your response to the comment by Attorney General Menachem Mazuz, on Channel 1, to the effect that you have to decide whether you are capable of continuing to serve in the shadow of the investigations?

"I am here and I will continue to be here."

Shula Zaken, Haim Ramon, Avraham Hirchson - your friends, your employees, your partners - are being taken from you one after the other.

"I don't know what they want from Shula [Olmert's longtime, close aide, now under investigation and suspended]. As for Haim, he really is a good friend of mine. He made a mistake, but I think he was flogged a little excessively. I hope he will know how to cope. Regarding Hirchson, I do not intend to ask him to go on leave as long as the High Court of Justice has not said that he has to, and as long as the attorney general has not said that he has to."

The question about his appointment of Labor Party leader Amir Peretz as defense minister delights Olmert. He has a ready response: "There is a great deal of hypocrisy and self-righteousness over this question. I know one newspaper that wrote an editorial calling on people to vote for him and stating that he should be appointed defense minister, and afterward the same paper wrote that the test of my leadership would be whether I would fire him. I am referring to the paper that the two of you work for." Olmert pauses and leans back. "I hope that will remain in the interview," he adds.

Peretz has stated that if he is reelected as Labor leader, he will demand the finance portfolio. Will you give it to him?

"I am not dealing with the question of what will happen if Amir is reelected."

Why don't you get along with Tzipi Livni?

"Who said I don't? I have close working relations with her. Just an hour ago we spoke on the phone."

Is she a good foreign minister?

"Absolutely."

Why is she incapable of saying a good word about you?

"Ask her."

What is Avigdor Lieberman doing in the government?

"He is deputy prime minister for strategic affairs and he will coordinate on my behalf the team that will deal with the Iranian question. We are actively and extensively involved in the efforts being made by the international community, and he will coordinate that work."

Aren't you apprehensive that if you launch a bold political initiative, Lieberman will resign?

"Lieberman is a bold person."

Are you confident that Shas will not abandon you?

"Shas is an excellent partner, and the Pensioners are excellent partners."

So you have a stable coalition.

"You don't ask how it is that the budget was passed on time and that the government is functioning and making the decisions it has to make, and that the Knesset is functioning. All this is happening because there is someone who is managing things, and not badly at all."

The prime minister vigorously defends the appointment of Prof. Daniel Friedmann as justice minister. "I reject the allegation that the justice minister wants to harm the Supreme Court. I will not allow the Supreme Court to be harmed. I hold the Supreme Court dear, but I do not have to oppose the court to think that the publication of the transcripts of the Winograd Committee is wrong. It is untenable that everyone who addresses these issues should be branded an enemy of the court. The justice minister wants to carry out reforms. That is why he was chosen."

What about Bibi Netanyahu?

Olmert guffaws. "Even today, when support for Kadima is low, it is higher than what Netanyahu received in the last elections. All right, he is now experiencing a good period. There is also some personal arrogance there. But I have no personal quarrel with him. That he wants me to resign is not surprising. He was not in favor of me before the elections, either."

Will he succeed in forging a coalition to replace you in this Knesset?

"I don't think so."

Do you fear a political earthquake when the Winograd Committee report is published at the end of April?

"I hope there will be no earthquakes of any kind in Israel. They are destabilizing."

Are you healthy?

"My doctors say I am very healthy. Otherwise, how could I sit with you for two hours without losing my patience?"

Do you watch [the satirical TV program] "A Wonderful Country"?

"Unfortunately, no. Those are the hours I spend with my grandchild, and if I have the opportunity to watch either a soccer game or a tape of 'A Wonderful Country,' I prefer soccer, or watching Shahar Peer win in tennis."

Did you want to go to the soccer game against the English national team?

"I almost called my good friend Tony Blair and said, [Olmert switches to English]: 'Tony, take a flight, come over and we will go together to the game.' But I dropped the idea."

Who, among all the leaders you have met so far, has impressed you the most?

"I will write about that in my book."

Do you keep a diary?

"No. I remember everything."

'No point in a bypass'

Olmert opened the policy section of the interview with an optimistic declaration: "Gentlemen, I believe that in the next five years, it is possible to arrive at a comprehensive peace agreement with the Arab states and the Palestinians. That is the goal. That is the effort, the vision."

How do we get there?

"With patience and with wisdom. The Palestinians are facing a historic junction at which they will have to decide whether they want to remain stuck in a corner of extreme fundamentalism, which will cut them off from the entire world, or whether they are ready to take the necessary steps. My role is to assist in building this process."

This week Olmert hosted the United Nations secretary general, Ban Ki-moon, and U.S. Secretary of State Condoleezza Rice. He rejected ideas of making rapid progress in negotiations with the Palestinians, of a shortcut to the final-status settlement, and committed himself only to biweekly meetings with the chairman of the Palestinian Authority, Mahmoud Abbas (Abu Mazen), at which confidence-building measures will be discussed. Rice had hoped to leave Jerusalem with a dramatic declaration on the revival of the peace process, but had to make do with a lukewarm statement.

"There was no real disagreement between us and the Americans," the prime minister explains. "There were very interesting and very productive discussions. All told, we said that there is no point in a bypass route, and that we have to confront the Palestinians and oblige them to fulfill commitments. That holds true also for Gilad Shalit. Abu Mazen promised he would not form a government if Shalit was not released. He told me that, he told Condi Rice that in my presence, he told [German Chancellor] Angela Merkel that. It's impossible to go on like this: Everything they commit to - to stop the terrorism, to fight terrorism, all these things ... How can you believe them when they don't fulfill anything?"

And you believe that one day they will undergo a transformation and start to fight terrorism?

"If they don't transform themselves, don't fight terrorism and don't fulfill any of their other commitments, they will continue to live in never-ending chaos."

But then demography will defeat us. Only a year ago you warned that it endangers the future of Zionism.

"At that time my role was to try to generate momentum in a different direction."

Olmert believes that various factors in the past year - the Second Lebanon War, the growing fear of Iran, and extremism - have pushed Arab states, led by Saudi Arabia, into a different perception of the regional reality. "A bloc of states is emerging that understands that they may have been wrong to think that Israel is the world's greatest problem, and that maybe it is worthwhile to reach an understanding that includes acceptance of Israel's existence," he says. "I very much hope that the conference of Arab states will contribute to this."

The prime minister praises Saudi King Abdullah for his involvement, speaks favorably about the "Saudi initiative" and expresses reservations about the "Arab initiative" that cites UN General Assembly Resolution 194, which calls for the return of the Palestinian refugees to their homes.

"I've referred positively to the Saudi initiative, which is something that prime ministers before me were not willing to say. I do not agree with every detail; it's not that I accept the initiative and tomorrow will be ready to sit down and sign an agreement. There are interesting ideas there, and we are ready to hold discussions and hear from the Saudis about their approach and to tell them about ours," Olmert says, adding that he'll be happy to participate in a regional conference that will support Israeli-Palestinian negotiations.

"In my [November 2006] speech at [Kibbutz] Sde Boker, I said far-reaching things, to which the whole world paid attention, and they are the conceptual underpinning around which the moves are also being conducted now."

Why is Shalit's release stuck?

"Because it turns out that Abu Mazen cannot fulfill his commitment, and the conditions that Hamas is presenting are creating a gap that cannot be closed at this stage."

Do you confirm reports from the Arab side about major progress in the contacts?

"The reports from the Arab side are intended to bring pressure to bear on us, and they are very inaccurate."

Should [jailed Fatah leader] Marwan Barghouti expect an early release?

"No."

He is not part of the exchange?

"No."

Why not?

"I think the reasons are perfectly clear."

Olmert is convinced that he has to continue the dialogue with Abbas. "I do not know anyone else among the Palestinians with status and authority who is preferable as an interlocutor," the prime minister says. "After all, he is a person whom it is pleasant to meet with and talk to, very intelligent, and in his basic positions he is showing understanding that is approaching the foundation on which a political process can be constructed. There are two problems with him. One is that the stream he represents is a minority in the Palestinian state [sic], and the second is that he is not in control of the governmental machinery in a way that enables him to put into practice his approach against the other elements."

Do you also talk about personal matters? Family? Soccer?

"We have never talked about soccer, but the last time he called me 'Abu Shaul, Abu Shaul.' How do you know that, I asked him. He says, 'You see, you call me Abu Mazen, because my son is named Mazen, and your son is Shaul, so I call you Abu Shaul.'

"Those who are calling for a boycott of Abu Mazen," Olmert continues, "who do not want to maintain connections with anyone, are those who in the end want the way of war, blood, fire, confrontation - and we have already tried this, in all its aspects. We want to maintain the possibility of dialogue. But it is completely clear that we will not be able to accept the continued firing of Qassam rockets [from the Gaza Strip] indefinitely."

You have been saying that for a year already, and they continue to be fired. Just this morning eight rockets were fired into the Negev.

"During that year, until November, we were quite active."

It didn't help.

"It didn't help when we acted, and therefore the fact that we are not acting now is not the reason that Qassams are being fired. We are not ignoring this question. This is not the situation that existed in southern Lebanon, where for six years there were people in Israel who said things gotten rusty. I am not saying that. Every day I look at what is happening there. We are making an effort to mobilize the international community to prevent the smuggling. We are making a great effort so that a Palestinian force will be created that will prevent the smuggling and the terrorist operations."

The Israel Defense Forces is calling for a large-scale operation in Gaza, before Hamas gets any stronger. What is your opinion?

"We have time before getting to a military operation. That is not the first thing I am looking to do. Qassams were fired even when we were in Gaza and carried out large-scale operations. We can't get a solution just by pressing a button."

What about the evacuation of the illegal settler outposts? Since the demolition of the houses in Amona more than a year ago, not even a shack has been evacuated.

"That is true, apart from what was evacuated today in Homesh. That was, I think, a clear signal. Israel, in the final analysis, will evacuate the illegal outposts. It has to be part of a process in which the Palestinians fulfill their commitments. [That] will facilitate things for us, too."

Here, Olmert is changing the policy of his predecessor in office, Ariel Sharon, who demanded that there be a distinction between the handling of the outpost question and the dialogue with the Palestinians, and portrayed the evacuation as fulfillment of a personal promise he made to U.S. President George Bush. Olmert prefers to make evacuation of the outposts conditional on the Palestinian battle against terrorism.

Syria - when conditions are right

Did you miss an opportunity to renew the talks with the Syrians?

"I want to make peace with Syria. Unequivocally. But we all know - and the Palestinian experience also shows us - that there is a disparity between declarations and a credible process, which can also bring about a correct outcome. It is not enough for someone to make a vague declaration through some court journalist. I want to arrive at the possibility of peace with the Syrians, and when I believe that the conditions are right, I will not miss the opportunity."

What are those conditions?

Olmert is mysterious: "Conditions that make negotiations possible, and everyone with any experience of negotiations with the Syrians knows about them."

The prime minister is pleased with the efforts to impose sanctions on Iran, which were reinforced last week in a UN resolution. He believes that it will be possible to stem the Iranian nuclear program before a violent confrontation erupts, "and that depends on the resolve the international community will show now in implementing the economic and diplomatic measures."

Are you worried by the forthcoming Winograd Committee report? Were you upset by the testimony of Shimon Peres, who said that he would not have gone to war?

"I have dealt with the Lebanese issue since January 8, 2006 - four days after Arik [Sharon] fell ill and I assumed office. We deployed for the possibility that what happened in the end, would happen. Throughout these discussions, there was total across-the-board agreement, by all the security elements and by the civilian echelon, that it would be impossible not to respond differently from the way we did in the past. Some said that the absence of a response would cause strategic damage to Israel.

"All these processes led to determination of a position well before July 12. When I was asked by the army why I wanted to see the plans, and why I wanted to consolidate a clear position far in advance, my answer was very simple. I didn't want to reach that day and then start from scratch. I wanted to know where I stood, the considerations for and against, what was on the agenda, what the damage would be in each scenario - and then to reach a conclusion.

"All these matters were presented to the cabinet in great detail, and the entire cabinet, 24 ministers, voted unanimously in favor. It is true that I am the prime minister and I bear supreme responsibility, but still, there were 24 ministers there, and they voted unanimously in favor. What they told the Winograd Committee later, what they said or didn't say, I don't know. I don't know whether what has been published represents everything that was said, whether there were any mistakes as a result of remarks being fragmented. So I don't think I have any reason to be worried. I believe in the seriousness of the Winograd Committee, and I will wait patiently for the report that it will publish."