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MK Otniel Schneller of Kadima, a former secretary general of the Yesha Council of settlements and a resident of Ma'aleh Mikhmash, east of Ramallah, says he did not tremble as he voted Shimon Peres for president. "On the contrary. I also campaigned for his election," he says. Peres holds many advantages, both internationally and domestically. "We elected an excellent president," Schneller says.

How will Peres be welcomed in Ma'aleh Mikhmash?

"As a president in every respect."

There were Knesset members who said they could not vote for him because he is responsible for the death of thousands.

"I don't even accept the question. The statement that one of Israel's leaders is responsible for the death of another person is not legitimate. A leader must take risks. Going to battle means taking risks, and the same is true of peace processes. Our sensitivity toward the bereaved families is fitting, but it cannot become a political tool. I think it neutralizes leaders' decision-making abilities. It endangers the security of the state and our existence. What do they expect, that the State of Israel will not make peace and will not make war? After all, that's what is happening today, because of the public assault on every leader. The question is whether we will frighten the next leaders out of making decisions. That's suicide."

Shouldn't a leader have resigned after a report like the Winograd Committee's?

"No. The Winograd draft report did not demand the prime minister's resignation. It is incredible hypocrisy to say that what the Winograd report says must be carried out and what it doesn't say also must be carried out."

Schneller has a very good opinion of the Second Lebanon War and a much worse opinion of the Winograd Committee. The war, he says, was a "birkat hagomel" - a benediction of deliverance, recited after escaping danger. "We discovered our weak point during the war; otherwise, in a real war, the results would be ten times worse. The fact that the northern border was not as quiet in the last decade as it has been in the last year is not a result of the Winograd Committee report. It is despite Winograd." The war, he says, very much strengthened the coalition against Iran, and led Europe to support Israel's positions. "These are strategic achievements and therefore we have to salute the government," he says.

"The Winograd Committee report dealt with the easy part, the less important, more populist part. More with what can be referred to as salon talk. I'm not denigrating it; the fact is that the army and government are drawing far-reaching conclusions. But that's not the essence. The essence is the failure in building the force. Since the 1993 Oslo Accords, the entire leadership was captivated by the longing for peace, and paid a steep price that included a cut in the defense budget. It was a major strategic error, because the depth of peace is the depth of the army's strength and professional readiness. And the Winograd Committee barely touched this. If we want peace, we must rehabilitate the army quickly, expand it and invest in it."

Where would you find the billions for security?

"We could pass up on transferring the billions, but then we also will be giving up on peace. I don't want to give up on peace. Shouldn't we give up on part of the 5-percent economic growth in favor of peace? More money for peace is also an economic statement. The defense system spurs technological knowledge, and every agora invested returns with high interest."

Kadima will yet surprise

Schneller, 56, and a father of four, is one of Kadima's religious MKs, and is Prime Minister Ehud Olmert's contact with the settlers. When on reserve duty, he is chief of staff of the Judea and Samaria division. From 1986-1996 he headed the Transportation Ministry's Road Safety Authority. He headed the Israeli team discussing transportation issues with the Palestinians during Oslo, and the team that formulated the transportation agreements with Jordan. In 2000, he was an adviser to the Israeli delegation to Camp David, headed by Ehud Barak.

In a document Schneller recently submitted to the security cabinet members, he proposes entering the Gaza Strip and turning all open spaces into demilitarized buffer zones. "No one will enter these areas. Anyone who enters them will remain there forever. This will enable defense against tunnels and some distance from Qassams. It will also enable the desired objective of having a multi-national force come to separate between Israel and the strip."

"The Oslo Accords went bust. The whole concept went bust. A second Palestinian state has been established. There will be two Palestinian states, and there is no other option. The State of Israel must prepare for Gaza functioning as an independent state of terror and Hamas, which is identified with Hezbollah and Iran."

He describes a scene he saw on television that left a strong impression on him: A woman, standing in a Gaza hospital, points to a bed and says: "The Shi'ites came in here and killed my husband." Schneller says, "The woman has to be reminded that those who came here were from Hamas, which is Sunni and not Shi'ite, but its behavior is Shi'ite, like that of Hezbollah. And perhaps her error expresses the whole story."

Before the disengagement, Schneller declined to head the Sela Administration. "The disengagement failed in many respects," he says, but he is currently helping plan the convergence. "If and when we get to it, the public will see the essential difference. This will not be a withdrawal from Judea and Samaria. It will be a deployment whose significance is not bulldozers, but cement mixers," he says. The new communities, he promises, will be built within settlement blocs.

Can those who headed the disengagement remain in office following the failure?

"After the disengagement, there were elections and the people chose Kadima to a very impressive extent."

Kadima currently seems like a temporary party.

"Yes, Kadima today is in a relatively bad position. But I think the election of Peres as president, the appointment of a professional defense minister and the expansion of the government will restore Kadima's true strength. We've passed the low point. We're on the way up. Kadima will be very surprising in the coming months."

Parting from Wadi Ara

Since the elections, Schneller has been formulating a demographic plan for an exchange of territories between Israel and the Palestinian Authority, under which the Arab communities in Wadi Ara would be transferred to the Palestinian state. This would be part of a 30-year process, during which economic development would be encouraged in the area. "We want to create motivation for both sides. We must do this through dialogue," says Schneller.

The Arabs see this proposal as transfer.

"Transfer to where? From where to where? They stay in their homes, they won't go anywhere. If a Palestinian state is established, they will be in a state with which they identify more. They are angry they don't live in a state of all its citizens. So we will live in a Jewish state, and they will live in a state of all its citizens.

"Not everyone likes it, but it's impossible to talk constantly about a demographic danger without doing anything. What I'm proposing is a demographic separation on a humanitarian and fair basis. And as sensitive as the issue is, it must be dealt with in a way that is not overly pious and fawning. One that is to the point, but fair."

Avraham Burg, the former Jewish Agency chairman and former Knesset speaker, also said in an interview with Haaretz that he wants to live in a state of all its citizens.

"You mean the French citizen? Let him go and vote in Paris and find a grave in Paris. I think he crossed the line. He separated himself from the general public. He has presumptions of being [Yeshayahu] Leibowitz in a 4x4, but he doesn't have Leibowitz' intellectual capacity."

Don't you think his arguments should be addressed in a frank manner?

"I didn't see any genuine argument. A person says to the citizens of his state: 'Get a passport from another country.' There's nothing to address. This is crossing a line. It's beyond the national ethos. Just like any other Sabbatai Zevi. He should be seen as a false messiah."

Defender of the president

When the Katsav affair surfaced, Schneller came to the former president's aid. He was interviewed in the media and repeatedly said he had no doubt that the acts Katsav was accused of never happened, and described Katsav as too refined a person.

Do you still think an injustice was done to Katsav?

"Moshe Katsav is a friend. I worked with him closely for many years. Unlike all those who say these things were known, I didn't see a thing and I didn't feel a thing and I was very surprised by the investigation and the accusations. If these things are true, Katsav must bear the full punishment. But if these things are not correct, then a great injustice has been done to him."

What is your position on the Gay Pride parade planned for this week?

"Each person should act according to his understanding and according to his worldview. I may not like, but I respect. If those with pride want to protest, let them do so, but must it be done purposely in a place as sensitive as the capital of the Jewish people? I think this is a mistake. But I try not to deal with this issue."