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Yaakov Neeman and Amir Peretz represent two polar opposite worlds. Attorney Yaakov Neeman represents big money, Amir Peretz represents the workers. Millionaire Jerusalemite Neeman is an avowed Thatcherite; Peretz, the politician from Sderot, is a socialist. Neeman is a Greater Land of Israel man, a darling of the Hebron settlers, while Peretz is an outright dove who believes wholeheartedly in peace.

And yet when Yaakov Neeman finished his tenure as finance minister in the late 1990s and was asked which person he dealt with impressed him most in the course of his job, he replied without hesitation: Amir Peretz. With Peretz, his word is his word, is what he said about his adversary. A handshake is a handshake. His homework is always meticulously prepared. His mastery of the material is total. Behind the mustache and behind the inevitable demagoguery of a workers' leader hides one of the most serious people in Israeli politics.

Indeed, Peretz is as serious as they come. He's friendly, he makes jokes, he tells stories, but he works at a murderous pace. Scolding aides, dismissing journalists, personally examining the schedules of the candidates-to-be-ministers.

He goes into every detail of every activity related to the election campaign that he himself has defined to a great extent. Peretz believes in himself and his mission as only Netanyahu believes in himself and his mission. But unlike Netanyahu, he lives in harmony with himself. His nerves are made of steel, his leadership is bloodchilling and pitiless. Since the death of his father, he bows to no one. Anyone who stands in his way is removed with a wave of the hand. He is possessed of a unique combination of ideology and aggressiveness, says one close associate. In a world of spin and false appearances, Peretz is surprising in his honesty and directness. His faith in his personal gospel is so strong that it doesn't even occur to him to fudge or obscure it. During many hours of intense conversation, Peretz says nearly everything that's on his mind. He lays his truth right on the table. In great detail. Without any obfuscation.

The Labor Party headquarters in Or Yehuda is a hive of activity. The time has come, proclaim the signs. The time has come for education, the time has come to raise the minimum wage, the time has come for someone to think about you. Is there still any hope here? In one room, the following analogy is proffered: Arik Sharon and Ehud Olmert are like the Baba Sali and Baba Baruch. When the Baba Sali died, his robe was passed to the Baba Baruch, in the hope that it would have its effect. For several months, it did. The believers continued to believe, the ones who got rich continued to get rich. But after a while, people suddenly understood that the robe was the same robe, but the Baba wasn't the same Baba.

This is exactly what's starting to happen now with Olmert, Peretz's advisers hope. Suddenly, Israelis are waking up to the realization that the acting prime minister is not Sharon. The robe of Kadima is the same robe, but Olmert is not Sharon. And since Olmert is not Sharon, there is nothing to sustain Kadima. Therefore, if the press doesn't rig the game, the playing field will be even. If big money and the government and the press don?t serve Olmert as they've been serving him, the glass ceiling will be breached. And who knows? Amir Peretz might surprise everyone.

Amir Peretz himself has no doubt about it: He will surprise. Others in Labor theorize that when the party chose him as its leader, it missed a historic opportunity.

Were it not for Peretz's opposition-stirring candidacy, the balance of power between Labor and Kadima would be exactly the opposite of what it is now. But Peretz rejects out of hand such words of heresy from those of little faith. Sitting alone in the office as giant planes descend outside his window, in preparation for landing at Ben-Gurion Airport, he returns again and again to 1977. Then, too, the government didn?t see what was coming, Peretz says. Then, too, the elite didn?t hear. Then, too, as will happen now, the revolution stunned the country.

The new IsraeliAmir Peretz, what do you represent? In the name of who and what are you running for prime minister?"Amir Peretz is the new Israeli. The Israeli who has crossed over all the hurdles in a country that brought together different populations and created a social mix that can turn into a strong society. Every stage I went through was a serious obstacle. And when you face obstacles like that, you have two options: either to sink into the mire of bitterness or to transform the difficulty into an empowering and tempering instrument that adds to your strength. I always chose the second option."

How hard was it?"It's still hard. It's not over. In my life I never got anything on a silver platter. But I'm happy about that. When you get things easily, you make light of them. I don't make light of them. I view the position of prime minister with reverence, too. In contrast to others, who enter the Prime Minister's Office frivolously and cynically, and behave like a bull in a china shop, I will enter on tiptoe. I will always remember the responsibility that devolves on me."

We will return to the Prime Minister's Office later. But your journey to it is being made in the name of the war on poverty. Do you personally remember poverty?"My father arrived from Morocco with assets. He lost his assets very quickly. But comparatively speaking, we were a family that had a little more. I remember that sour cream was not taken for granted and I remember that we could eat Krembo [an Israeli sweet] only once a week, but I don't remember hunger. We weren't hungry for bread.

"You have to understand that poverty is not only bread. It's a broad term. People who grasp the problem of poverty as a problem of bread are being narrow-minded. Poverty lies in culture, education, employment. Poverty is related to solidarity and internal strength. A child who does not go to the theater is poverty. A couple that does not have an apartment is poverty. But above all, poverty is dependence on another and sometimes also kowtowing to the other. Poverty is the shattering of dignity, the shattering of human dignity."

Did you see poverty in this sense around you in the town of Sderot, where you grew up?"I saw my uncles going to look for work and not getting work. I saw families almost sitting shiva [going into mourning] because they were forced to ask for welfare. I saw the young people with the greatest skills ending up in prison. I saw my friends, furious and battered by insult, burn the government Employment Bureau.

"One of the most dramatic days in my life was at age nine, when I came and found all my relatives sitting silently around my father, who was in the center. I remember to this day the feeling of calamity. As though someone had died. When I asked quietly what happened, I was told, 'Your father will be a laborer.' The assets from Morocco had run out, the status of community leader was not reconstituted, and tomorrow morning dad was going to the factory of Kibbutz Ruhama to be a laborer."

Did the immigration to Israel break your father?"'Break' is a far-reaching word. He was a strong person. He had extraordinary strengths. But immigration was a blow to him and a blow to his status. In Morocco he was an omnipotent patriarchal father and here he was dealt a blow. For 30 years he worked as a laborer. He was an excellent worker, by the way. He never missed a day at the factory."

You are said to have exorbitant drive. Does it come from there?"There is no doubt that it comes from there. I was the third child in the family but even as the third child my seniority was acknowledged by the other children in the house."

Was there a feeling in the family that you would repair what had been broken in the immigration to Israel?"Yes, and that feeling imbued me with the strength not to be absorbed into the collective experience of poverty that we lived in."

So you said from an early age that you would not be broken, that you would not let the reality of Israel or the establishment break you?"It was clear that I would not let them break me. There was no way they were going to break me. I had no fear of governmental power; I was not about to kowtow or abase myself before it. And I did not accept situations that I thought were wrong - to this day I am unwilling to accept situations I think are wrong. I always believe that there's another way, that there's a different solution.

"But my biggest temptation in Sderot was to become embittered. There is nothing more tempting than to sink into bitterness. Into feeling that you are a victim.

That's the easy solution, it gives you an answer for everything. But then you are part of a process of rot; you become part of rotting. And I refused to do that, to become addicted to rotting. I would not be a victim and I would not become bitter."

What you actually said to the Mapainiks [Mapai was the forerunner of the Labor Party] and to the kibbutzniks and to the Ashkenazi establishment is that you would not let them leave you outside.

"Yes. I decided that I'd learn the rules of the game and play it to the full. I would not remain outside but would enter. So my anger at the kibbutz movement was the reverse of Shas? anger. It was not anger because they changed me but anger because they prevented me from crossing the fence and becoming part of the green yard of the kibbutz."

Did you encounter racism?"One of the happiest days of my life was the day on which my brother was appointed the principal of Ma'aleh Habesor School, to which the elitist kibbutzim send their children. I said at the time that if the people I want most to be connected to - the kibbutzniks - are ready to place their children's education in the hands of someone who grew up in Sderot, then it's over. At long last, it's over."

The ethnic demonYou didn't answer my question. Or maybe you didn't answer because it is not over. Hundreds of thousands of Ashkenazim who are veteran Labor Party members are unwilling to place their country in the hands of Peretz, the Moroccan."During my whole life I have been trying to avoid being enthralled by the ethnic demon. The ethnic demon is the No. 1 enemy of the social struggle. It is a barrier between the new-immigrant worker from Russia and the veteran immigrant worker from Tunisia or Algeria. But I am not ignoring this. What's the point of ignoring it? I always knew I would have to do more to achieve the same [as others]. To prove that I am worthy. In this, by the way, I am no different from women. They, too, have their glass ceiling.

"I am not whining. I am not launching a counter-attack. I am fighting the phenomenon you're talking about by proving that I am capable of doing things. But I am also not being a sycophant. I'm an offspring of Moroccan Jewry. I am Moroccan. And I'm proud of my origins. I think that Morocco is a peace-seeking Muslim state and that everyone who came from there should take pride in that. What hurts me now is that part of the peace camp, which since 1977 has said that it wants to open its gates to the people of the periphery, is now leaving the Labor Party when the peripheral towns are coming to it. Because there is already a turnabout in those towns. We will win in the periphery. You have no idea what is going to happen there.

We will win eight seats for Labor from populations which for 30 years have not voted Labor. But just at this moment, for which we all longed, eight other seats are saying goodbye, see you later: you are coming but we are going. That hurts me. It truly hurts."

Is there any chance of restoring the lost Ashkenazi votes?"I believe that when the moment of truth arrives in the voting booth, they will return. They will not vote for Tzachi Hanegbi and Roni Bar-On. So I'm optimistic. I tell you that there is going to be a great drama here."

Is Amir Peretz as prime minister a revolution of identity?"It is a revolution, obviously. It is the shattering of all the conventions and all the rules. That's why there are people who are frightened of that possibility. On the other hand, some people are absolutely thrilled by that possibility. They believe that if that happens, then the State of Israel truly gives everyone an opportunity.

"If you're ready to conduct an in-depth discussion and not one that is populist or aimed at the popularity ratings, I'll tell you what happened here. The great debate of Zionism regarding the 'development towns' was over the question of what Zionism is. About whether Zionism by coercion is Zionism. Whether a Zionist can only be a person who planned to be a Zionist and to get to a certain place and settle it, or whether a Zionist can also be someone who was dumped from the back of a truck in the middle of night and went on to build Dimona. The problem was that an hour after the people were dumped in the desert, no one came to talk to them. No one told them that they were going to do the most important thing in the country; that even though they were promised Jerusalem, for Jerusalem you have to have Dimona and that they would build Dimona.

"That's the problem. If the 1950s establishment had done that, it would have placed the poverty and the injustice and the difficulty in a completely different context. But the establishment of that era failed to do that. Until Menachem Begin arrived and fomented a revolution of belonging. He told the people that they were inside. And that was fantastic - people don't understand just how fantastic it was. Because when you are part of things, you get your dignity back. If I belong, I?m no longer an offender. If I belong, I study, I do things, I progress. Tremendous energies are released and everything looks different.

"It was Begin who fomented the belonging revolution. That can never be taken from him. He, of all people, was the social democrat. He also made peace with Egypt and launched Project Renewal in the disadvantaged neighborhoods. The next social democrat was Yitzhak Rabin. He did the Oslo process and he invested in education. But Rabin did more than that. He fomented a second revolution of commitment. He told the residents of the disadvantaged neighborhoods and in the periphery that the state is committed to them."

That is all well and good: it was difficult, but in the right direction."Exactly. But then came the bad years of Bibi [Benjamin Netanyahu], [Ariel] Sharon and [Ehud] Olmert. In those years the pie was resliced. They made the social gap in Israel into one of the biggest in the world. They created a situation in which, out of 2.48 million salaried workers, one million make less than NIS 3,300 a month. And there are a million workers without a pension and nearly a quarter of a million contract workers with no rights. That's why we are now confronting a dramatic social crisis. Because what Bibi and Olmert said in those years is that the only value in life is to get rich quick. To become one of the successful. They started to treat those who were weakened as parasites and cheats who are leeching off the state. That was a terrible thing to do. They brought back the humiliation of the 1950s. They pushed out the peripheral towns and renewed the feeling of the 'Second Israel.'"

Restoring the dreamAnd Amir Peretz is the one who will resolve the problem?"Amir Peretz will return to what Begin and Rabin started. If I am elected, there will be a third social-democratic revolution here. Everyone who was shunted out will again feel that he is inside. That he is being counted. That he is part of this country. And when that happens, people will believe in themselves again and start to hope again. You'll see what energies will be released here - activity, growth, you name it."

What you are describing is totally divorced from reality: it?s very beautiful, but a dream."Part of my role is to restore the dream. People who stop dreaming are as good as dead. But I am telling you: live and learn. I am telling you that there is a tremendous distance between the reality I encounter on the ground and the reality that is reported in the media."

Do you maintain that the media is serving Kadima?"What the media is broadcasting is, People, forget it, Kadima is the government. And anyone who wants to be close to the trough should know that Kadima is the trough. But I am telling you that the public is in a different place. The public feels what is happening and is saying, Hey, you exaggerated. Therefore, what will happen on March 28, 2006, is the same thing that happened in May, 1977. Those in power were sure they would win then, too; euphoria was flagrant and alienation was total. But when they counted the votes, there was a great drama. There was an upheaval."

Kadima has twice as many seats as Labor in the polls, and you still believe in an upheaval?"The upheaval of 1977 was social, not political. And, with all the differences in the world, the Hamas upheaval was also social in character. The pollsters aren't able to report upheavals like that; some of them don't want to report them. They have wishes of their own. At least in some cases, the polls are as much an attempt to shape reality as to reflect it.

"But there is a deeper issue here: an issue of master and servant. As long as the brutal governing authority looks strong, the servant says Yes, sir, whatever you say, sir. But the moment a crack appears, the moment there is a chance of some kind, there"s suddenly a great eruption of release. I believe that eruption will come: On Election Day there will be a great eruption."

From your point of view, what sort of phenomenon is Kadima?"Kadima is a party with no values. It does not bring any new value with it - not political, not social, not democratic. And it is a party that is managed undemocratically, without institutions, without a review of the leadership, without internal democracy. But the most serious thing about Kadima is that it is broadcasting some sort of absolute pragmatism. Its message is that we are the powers that be and so it is worth your while to join us. Join the winners, the party says, join the success stories. I believe that there is something that is not moral in this message, something almost totalitarian."

Is Kadima tainted with corruption?"In Kadima you find opportunistic aisle-crossing and public debasement. And there are too many elements there of a connection between money and power. Kadima is the party with the greatest commitment to Israel?s 18 moneyed families. I think it is illogical for 18 families to hold most of Israel?s capital. It is untenable for there to be wealth on such a mammoth scale alongside such stark social distress. It is wealth on a scale that kings and emperors never knew. It is perfectly clear that the families with this unimaginable wealth are connected to those in Kadima. I'm not saying that this connection is illegal or illegitimate. But it is clear that when a Kadima government would makes decisions, it would take into account the interests of the 18 families and this would be at the expense of the general public interest."

Is Ehud Olmert the political representative of the 18 families?"I'm not going to comment on Olmert's private life. He has the right to live as he wishes. But it?s clear that those who control capital are his reference group. During his whole life, he has acquired friends from that reference group. He is very plugged into groups of capital-holders in Israel and abroad. Clearly that influences his decisions, of which the public is not always aware. A person is close to himself, close to his friends and close to his reference group."

What are the implications of this liable to be?"In recent years the concept has developed here that the basic condition for improving the country is the enrichment of a particular group. If this group does not get rich, the poor will not have bread; without this group becoming rich, the country is lost. That's why decisions were made here that eroded the middle class. A social ladder has been created here in which there are two top rungs and two bottom rungs and nothing in between. You cannot climb to the roof on a ladder like this, and a ladder like this also ensures that you will not come down from the roof.

"This specific concept holds that the state's assets are a burden and that whoever takes these assets from the state is doing the state and its citizens a favor. As a result, this concept leads to the sale of everything that can be sold to the owners of capital for a mess of pottage. It generates this terrible social disparity and builds this legendary wealth. This is the Kadima concept, this is the concept that Ehud Olmert represents."

The compassion factorBut Olmert is not Bibi; Olmert talks about compassion."I am against compassion. Compassion is a term that sets us back 40 years. It turns the welfare state into a relief state, a country in which a child who can't pay for the school's yearly outing has to bring pay slips to show how poor his parents are. And then the child passes up the outing. The outing is not worth the poor person's mark of shame that is branded on his forehead. And it is the same with the elderly, the unemployed, the recipients of state allowances. When there is no universal welfare policy, there is patronizing relief and a well-publicized culture of patrons. The kind of thing we saw when Olmert went to a soup kitchen wearing a suit and poured salt on open wounds.

"I want to tell you something about Olmert and Bibi. It is true that Bibi was the high priest of the policy of cruelty. But Olmert backed him every step of the way. Olmert was a partner to everything Bibi did. So I don't buy his expressions of compassion. It shows lack of courage not to take responsibility for what you did. There is a rolling of eyes here that infuriates me."

Let's leave Olmert aside and let's say you are prime minister and the stock market falls and capital flees the country. What do you do?"I don't think that situation will occur. But unlike others, I'm preparing for every possibility. I'm bringing in the world's best economists to back my worldview. I assume that I will succeed in calming the stock market. Both because I, as a man of peace, will ensure stability in the region and the dynamics of a constant political process, and because I will bring in sources of investment that have not been fully tapped until now. The world pension funds are just waiting for the moment when I am elected.

"I do not think investors will flee. When I met with a group of Israeli billionaires, one of them told me that I shouldn't be impressed by what the others are saying. Not one of them will leave. They will not leave because there is no country in the world that gives them gifts the way this country does, he said, gifts that we do not deserve."

There will be a wave of terrorist attacks. People will test you, they will test what you are made of."I do not think that the most extreme person of peace and the person of peace for whom peace is the most sacred goal can allow himself to put up with terrorism. We have to ensure that there are no showcase operations here, or collective punishment, but I will have greater legitimatization for fighting terrorism than any other candidate."

You have a limitation in the security sphere."If I have to decide the size of the cannon that fires at the exposed areas in Gaza, I have a limitation. But if I have to balance between the human damage entailed in that firing and the military consideration, I have an advantage over everyone else."

Still, people are asking themselves whether Amir Peretz is capable of managing a security crisis and of piloting the defense establishment."I think it does Israel harm to have a chief of staff above whom is a defense minister who is a super-chief of staff and above him a prime minister who is the super-super-chief of staff. It is also not the case that the prime minister sits in the Pit [the war room] when some army unit embarks on an operation. I think it's correct for nonmilitary observers also to sit at the table where the decisions are made. Did [Israel's third prime minister Levi] Eshkol have more military experience than I do? Even Churchill did not have greater military experience than I do."

How are you in tense situations?"I don't think there is any question about that. You can ask anyone who was with me in the greatest situations of pressure. I come into my own in those situations - it's only in pressure situations that I extract the best from myself.

One of the most important issues in the next term will be whether to bomb Iran. Are you built to make a decision like that?"I think I'm more capable than any of the other candidates of making a decision. My advantage over the others is that the moment the bombing of Iran appears as a possible mode of action, from that moment I must not sleep day or night in order to try and prevent that. The wisdom is not to reach a point where you say there is no choice, all options have been exhausted. The question is what to do before that happens. And I think this is my advantage over the others. I'm trying to forge a policy that will shape reality and I'm not willing to have reality dictate policy to me."

You are inexperienced. You have not even been a cabinet minister. That is disquieting."What does inexperienced mean?"

You did not manage any state system, not even a junior ministry."I'm more familiar with the state systems than anyone. The system I managed, the Histadrut labor federation, is more complex and more complicated than any government ministry. It also gave me the opportunity to get to know all the government ministries. But in my eyes a prime minister is tested by his ability to put forward a vision. And I am capable of putting forward a vision, of setting goals and determining red lines. It is toward that vision and those goals that the system has to be aimed. A prime minister should not deal with day-to-day dynamics. On the contrary, he has to be divorced from that so that he can think a few steps ahead."

You have no diplomatic experience."What is diplomatic experience? I certainly know very well how to conduct negotiations."

When Olmert and Netanyahu visit Washington they know who is against whom, they know who to talk to and what to talk about."The question is not who you know. I read a map very fast. And I believe that my election will put many international bodies to the test. The Americans, too, will ask themselves tough questions. I believe that my ability to create an international umbrella that takes into account the Arab world, the European Union and the United States far exceeds the ability of those who are locked into conceptions."

The Rambo poseListen, you show no fear, your self-confidence is huge.

"The tragedy of the State of Israel is that we have stopped thinking in simple terms. We like to complicate everything. But if you look at simple human considerations and simple interests, you can foresee the rise of Hamas. It's not so complicated. And you can understand that if a humanitarian catastrophe occurs in the territories now, that will strengthen Hamas even more and will undercut Israel's legitimacy and will topple us in the Security Council precisely over the Iranian reactor issue. But all these simple considerations get swallowed up by the populist consideration of how to create a Rambo impression. I'm not impressed by this Rambo pose. I find it ludicrous. And it hurts Israel, too."

You did not answer the question about your vast self-confidence. Is it an advantage or a drawback?"Self-confidence that is under self-review is an advantage. My confidence stems from the fact that I know what I want Israel to look like. I see the dream. Here I have absolute self-confidence."

I assume the dream includes peace. Will there be peace in the coming decade?"The optimal scenario is massive aid from humanitarian organizations to the moderate Palestinian forces so that within two years Abu Mazen [Mahmoud Abbas] can dissolve the parliament after Fatah cleans up its corruption. If that happens, the results of those elections will be totally different. On the other hand, if we starve the Palestinians, we?ll get the opposite result."

What is the permanent border we are heading for? The Geneva Initiative border?"I don't think we have to accept the Geneva border. Geneva went too far, from my point of view. In general the Geneva Initiative was harmful rather than beneficial to the process. But the line of demarcation for the border will be 1967. It will be impossible to evacuate the settlement blocs of Gush Etzion and Ma'aleh Adumim, but we will have to give compensation for them - either a great deal of money or territories."

And Jerusalem?"The unity of Jerusalem has to be examined in terms of its intrinsic merits and not in terms of the demarcation of the municipal boundaries, which was done randomly years ago. But if you?re asking me about the Temple Mount, there should be Israeli sovereignty there. There should be a joint religious council and a place for international bodies, because the site is holy to other religions. But the Muslims have Mecca and the Christians have Bethlehem and we have only Jerusalem. Jerusalem is the national, religious and traditional Jewish symbol that unites us. Therefore we need sovereignty on the Temple Mount."

The right of return?"We can be flexible, more or less, over the issue of family unification, but as a sweeping term, the Palestinians have to forsake the right of return. The moment they do that, they forsake the extreme approach of Israel's destruction."

Will you evacuate settlements even without a peace treaty?"I opposed the unilateral move as it was carried out because it brought about the collapse of Abu Mazen and helped the rise of Hamas. But now there will be no choice other than to carry out unilateral actions. Until a Palestinian partner appears, and without any connection to the political process, we have to evacuate illegal settler outposts and isolated settlements accompanied by the immediate implementation of an evacuation-compensation law."

How many settlements will you evacuate? Dozens?"We are talking about a very broad population of 50,000 to 60,000 people - 10,000 to 15,000 families."

As prime minister, will you succeed in evacuating nearly 60,000 settlers in four years without a peace treaty?"It's possible. It's not simple, but it's possible. I see in my mind's eye exactly how to do it. I will plan it systematically. First it will be necessary to prepare the deployment for their absorption. To enhance the peripheral towns for this and maybe to establish a new city in Galilee or the Negev. And then to hold a dialogue with the settlers. To make it clear to them that the law is stronger than anything else. My ability to talk with them exceeds anyone else's. The settlers themselves tell me so.

"They are telling me that if I evacuate them, it will be the best and most humane evacuation. In that they are right. It's true. I will bring human dignity to the evacuation of settlements, too."

Very briefly, what are the main points of your economic plan?"Three immediate actions: raising the minimum wage to [the shekel equivalent of] $1,000 within a year and a half; reducing the activity of the manpower companies so that they are 3 percent of the labor market and not 12 percent; and enacting a universal pension law."

The claim is that raising wages will lead to increased unemployment."Two Nobel Prize laureates, [Joseph] Stiglitz and [Amartya] Sen, give my plan economic backing. Sen wrote me that he views me as a world prophet of a new economic conception. I have no doubt that I'm also right about the question of the minimum wage. But for the sake of caution, we'll set up at team of economists that will examine the implications of the move every half-year."

Education, welfare, health."A law mandating free education from the age of one year until an undergraduate degree; subsidization of day-care centers, which will becom