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CNN Transcript:

ZAKARIA: Charles Krauthammer, a conservative critic, has said the world is going to hell and President Obama is playing golf. Is he playing too much golf while all these crises are popping up?

CLINTON: No. I think that's an unfair comment to make. I know from my own experience with the president where we work so closely together, and as I write in the book, you know, went from being adversaries to partners, to friends, that he is constantly working and thinking. But he also wants to do what will make a difference, not just perform. He wants to be sure that we know what the consequences, both intended and unintended are.

When it comes to the Middle East, this is always a very difficult issue for any American president. I have said publicly -- and I believe it -- that Hamas provoked Israel in order to actually cause what we are now seeing and there are many reasons for that. I negotiated the last ceasefire in November of 2012 and I know very well how difficult it is even when at that time we had a punitive ally of Hamas with the Muslim brotherhood and Morsi in charge in Cairo.

If was still difficult and we had to work hard to end the violence of that time. And I think the president is doing what he can do to try to get a ceasefire and then see whether we can sort out some, you know, longer-term resolution.

ZAKARIA: Bibi Netanyahu. You said you had a complicated and it sounded like a difficult relationship with him.

CLINTON: Well, I have to say, I've known be a long time and I have a very good relationship with him, in part because we can yell at each other, and we do. And I was often the designated yeller. Something would happen, a new settlement announcement would come and I would call him up, what are you doing? You've got to stop this. And we understood each other because I know how hard it is to be the leader of a relatively small country that is under constant pressure and does face a lot of legitimate threats to its existence from those around it.

And I also care deeply about how Israel is able, not just to survive, but thrive, and just fundamentally disagreed with Bibi in the '90s that I was in favor of a two-state solution. I was the first person associated with any administration to say that out loud. And he did not. But then when he came back in, in 2009, he did. And I've sat with him, as you and I are sitting, and I really believe that if he thought he could get adequate security guarantees for a long enough period of time, he would be able to resolve everything with the exception of Jerusalem which is the hardest issue.

You can get borders, and if you can figure out how to do security within those borders, some of which may require having IDF and international forces in the Jordan valley, for example. Then if you could move toward a state and leave Jerusalem to be worked on, because that's the hardest issue for all sides.

ZAKARIA: But you know, he gave an interview recently to I think it was "The Times of Israel" where he said there are no circumstances under which we will ever relinquish security control of the area west of the Jordan, meaning the West Bank. That sounds like it is going back on his acceptance of the two-state solution.

CLINTON: Well, Fareed, I see that as an opening negotiating position because I had the private one-on-one conversations and the private conversations with him sitting there and Mahmoud Abbas sitting there and George Mitchell sitting there, and I know that Abbas in my conversations was willing to entertain a number of years where there could be some continuing security.

Remember, the IDF, the Israeli Defense Forces, have a working relationship with the Palestinian Authority security forces which have been incredibly professional. We've helped to provide training, as has Jordan and others, and the positions that Netanyahu has taken. Now once they take a position -- and I know the years that Abbas has said are permitted and I know the years that Bibi has demanded -- you're in a negotiation. But if there is no process going on, which is why we can't ever leave the vacuum of no process, despite how incredibly frustrating it is -- then of course Abbas is going to say never, not under any circumstances and Bibi is going to say absolutely forever.

ZAKARIA: In 2009 you said that you wanted Israeli settlement activity to stop. In fact you were pretty blunt. You said no exceptions. You write in the book that that was a tactical mistake because it made Bibi Netanyahu get even more hard-line.

CLINTON: Right.

ZAKARIA: But Martin Indyk has just resigned as the -- you know, the kind of -- the Sherpa of the peace process and he says that the immediate trigger, in his view there were many -- but was the fact that the Palestinians looked at the Israeli continued settlement activity and said these guys are not serious, we're never going to be able to get a state, look at what they're doing.

CLINTON: This is my biggest complaint with the Israeli government. I am a strong supporter of Israel, strong supporter of their right to defend themselves. But the continuing settlements which have been denounced by successive American administrations on both sides of the aisle are clearly a terrible signal to send if at the same time you claim you're looking for a two-state solution. Now when I was negotiating and I had been able to put together three

face-to-face meetings between Netanyahu and Abbas, it was clear that if we were working off the 67 borders which was our stated position that President Obama had outlined, some of the settlements would be within any reasonable drawing of borders for Israel. But a number of them would not. And those that would not would have to be either dismantled or live under Palestinian rule.

There are deep wells of mistrust and misunderstanding on both sides. And what I've urged the Israelis to do is, do more to help the Palestinians in the West Bank right now. Don't monopolize the water. Don't make it difficult to build. So even while we're struggling over the end issues that would resolve the conflict, like borders, don't make life so miserable. You know? Because that's not any way to begin to try to deal with the mistrust.

You know, the longer I do this, Fareed, the more convinced I am that mistrust and misunderstanding are often the real fundamental obstacles to bringing people together, and that means that people from both sides of whatever divide it is, whether it is Israeli/Palestinian, you know, Russian speaking, Ukrainian speaking, whatever it might be. People have to start listening and working together to build habits of cooperation that might possibly lead to greater trust.