Amir Peretz, did you return to the Labor Party with your tail between your legs?

MK Amir Peretz, former Labor Party chairman and defense minister, returned to the party this week along with MK Eitan Cabel, after a year-long "revolt" after the party joined Benjamin Netanyahu's coalition.

MK Peretz, it seems you have returned to the faction with your tail between your legs, weakened after MK Ophir Pines-Paz left, and lacking achievements.

"I don't think so. We returned to the faction because that is our only potential political framework. We went back unhappily, and I emphasize that. In the past, we [Peretz, Cabel, Pines-Paz and Yuli Tamir] reached an agreement with [Ehud] Barak that would enable us to split off from the faction, regardless of how many people we were. After Pines-Paz broke away, Barak changed his mind, and we had to consider our actions.

"I announced at the faction meeting that it would be best for us to part ways in a friendly manner but since this didn't happen, I don't suggest that anyone hang a sign saying 'Welcome to Peretz and Barak's happy home.' Not only have our disagreements not disappeared, they have grown worse."

What are you, Cabel and Tamir going to do now? You were a minority before and you are still a minority.

"Over the past year, we were waiting for the opportunity to build a new party. There are hundreds of thousands of homeless voters between Kadima and Meretz because the moment Barak put Labor to the right of Kadima, he left an entire public without a political home. This public still has reservations about voting for Kadima, so we hoped to set up a party to fill that need.

"Right now, that option is not on the agenda because of Pines-Paz. Therefore we decided that the best thing we could do for our voters would be to return to the faction and prove first and foremost that we are still committed to the positions of the party, and after that try to pull the party from the coalition and replace Barak as chairman." Will you be running to lead Labor again?

"That is not currently on my agenda. First we want to create a new, alternative camp with clear positions, with different principles and without double standards. If in three months, Barak tells me he's willing to sign our agreement for a break-away, then I'll sign. But in another six months it could be too late, because we are launching an internal movement to change the entire leadership, including him. If this leads to a leadership contest, I do not intend to act on personal considerations but to work toward creating a big camp, and it doesn't matter who heads it."

That is to say, if another candidate has a better shot at leading Labor, you'll support him?

"For sure. I am interested in building a new Labor Party or returning the current Labor party to an appropriate path. The question of who heads it is secondary."

Do you think Barak is happy you returned to the faction, or would he have preferred that you remain outside?

"I haven't heard him shouting for joy, and I haven't noticed a new shine in his eyes. If he is happy, he certainly knows how to conceal it."

Could you start speaking with him regularly, or is the bitterness irreversible?

"I won't rule out dialogue. I don't believe in personal disqualifications. I have no problem with meetings, I consider them welcome. I told my faction colleagues explicitly that I am not here because I wanted to be; I did not come to make a fake reconciliation. And I can calm the fears of all the animal advocacy groups - no sheep will be slaughtered in the near future over our return."

Why do you say the party has double standards? After all, you also sat with the right in the government.

"When the chairman of the Labor Party said eight months ago that evacuating outposts is not related to the Americans or the European Union, but is an internal matter of a country that observes its own laws, this involved a great deal of pathos.

"After that came the [construction] freeze, which is a cover-up for strengthening the settlements. And the only freeze that took place was for Barak's decision to evacuate outposts.

"A few months ago, Barak made an important statement - that if we don't reach an agreement, we will find ourselves in a binational state, or an apartheid state. It is true that people have said this before him, myself included, but it is tremendously significant when it is said by the defense minister, the only person who legally may set policy in the territories.

"And despite the fact that he said that, he is still in the government, when he knows that his very presence gives validity to the process of turning Israel into a binational state. Labor's presence in the government is one of the biggest factors pushing us toward the looming demographic bombshell."

If Labor leaves the government, will things be resolved? Will the demographic bombshell disappear?

"If we leave the government, we will at least be an alternative to Netanyahu and the right. Currently, we are not an alternative. That is why we have returned to the faction - so we can clarify and sharpen our positions, so we can tear off masks where needed. A party has to be in a place where it can advance its beliefs. People say to me, You agreed that [Avigdor] Lieberman should be in the [Ehud] Olmert government.

"True, because when we were in the Olmert government, its agenda was to end the conflict. It had a social agenda, raising the minimum wage, which I led. ...

"The day I left the government, the minimum wage stopped increasing, as if it were my personal business. When I joined the Olmert government, the minimum wage was NIS 3,230. When I left, it was NIS 3,850. In the three years since I left the government, it hasn't budged.

"What is the difference between Lieberman today and Lieberman four years ago? When he joined the Olmert government, he was a representative of the right in a government [seeking] peace; he was the poodle of the peace camp. Barak has turned the peace camp into the poodle of the right wing."

If the Labor Party doesn't leave the government, is it likely to disappear in the next elections?

"The more time passes, the more people will understand that Labor cannot be their political home. Even if Kadima splits, it will not lose seats, according to the surveys. The voters will stay there because they believe in the party.

"With us, it's exactly the opposite. When Barak moved Labor to the right, he left the voters where they were, between Kadima and Meretz. It is not very evident in the surveys yet, but during the next election campaign, when the big confrontation begins, Labor will not be in the game anymore."

Perhaps the solution is a merger between Labor and Kadima?

"I'm not ruling that out. In principle, it is better that there be two blocs in the peace camp that could bring more seats, and so that everyone will have someone to vote for - Kadima, Labor or Meretz.

"But the components of the center-left bloc certainly could link up, and that would breathe new hope into the entire bloc, and the 30 seats' worth of center-left citizens who don't go to the polls will be energized. If on the eve of the elections the atmosphere is 'Come, let's set up a big bloc,' we could consider that, in order to let the peace camp feel an alternative exists. Currently, the feeling is that the right-wing bloc will win, and the only question is by how much."