From the MSNBC "Meet the Press" transcript for September 25, 2011 (an interview with PM Netanyahu - follow the link to see a video of the full interview):
MR. DAVID GREGORY (MSNBC): ... is the Middle East about to take another violent turn? After a combative speech to the U.N. General Assembly demanding recognition of Palestinian statehood, Palestinian President Mahmoud Abbas returns Saturday to the West Bank and is rejecting a blueprint for peace put forward by international mediators. Moments ago, I sat down with the Prime Minister of Israel, Benjamin Netanyahu.
Prime Minister, welcome back to MEET THE PRESS. ...A lot of drama this week in this city. Here is the scene in Ramallah in the West Bank on Friday when President Abbas made his push for Palestinian statehood in the United Nations. As those scenes played out, euphoria, pride for Abbas. This was described as a milestone moment for the Palestinians. It almost certainly will fail. And my question to you is, will there be violent consequences for that?
PRIME MINISTER NETANYAHU: I hope that. It doesn't necessarily have to fail. It can succeed, but there's one--there's two pieces to--two sides to the equation. The Palestinians want a state, but they have to give peace in return. What they're trying to do in the United Nations is to get a state without giving Israel peace or giving Israel peace and security. And I think that's, that's wrong. That should not succeed. That should, that should fail. But what should succeed is for them to actually sit down and negotiate with us to get two states for two peoples, a demilitarized Palestinian state that recognizes a Jewish state.
PRIME MINISTER NETANYAHU: It's because of them. You know, I said in the U.N., I said to President Abbas, "Look, we're in the same city, we're in the same building, for God's sake, the U.N. Let's just sit down and begin to talk peace."
...MR. GREGORY: ...but that's not going to happen.
PRIME MINISTER NETANYAHU: Yeah, but, but you have to ask yourself why is it not going to happen?
... I think the Palestinians are trying to get away without negotiating. They're trying to get a state to continue the conflict with Israel rather than to end it. They're trying to basically detour around peace negotiations by going to the U.N. and have the automatic majority in the U.N. General Assembly give them, give them a state. That's unfortunate. Because the only way we're going to get peace is to negotiate it between the parties. ... All he has to do, Abbas, is to realize what I've just said and sit down and just do it.
....PRIME MINISTER NETANYAHU: ...We--I, I want them to simply sit down and negotiate a peace with us. I, I want them--I don't want them as--the Palestinians to be incorporated into Israel either as citizens or as subjects, I mean, it doesn't work. I say that to my colleagues, by the way, in the internal Cabinet meetings, I say, "Look, I want to be very clear about what I want." I just--I don't want a peace process, I want a peace result.
MR. GREGORY: But I know what you want. But what if this happens, what if the P.A. gets dissolved?
PRIME MINISTER NETANYAHU: Well, it's not our choice. I think, I think the choice is that they have their own independent state which recognizes our ancestral connections to this land, but also recognize the fact that we have unique security requirements because we're a country that could conceivably be the width of Manhattan, which is kind of hard to defend in a tough neighborhood. If we have their recognition of Israel as a Jewish state and the security requirements, there's no reason that we won't have peace.
...President Abbas has to turn to his people and do what I did--and it's tough facing your constituency, it's tough addressing your base--and say, "You know, it's over. I recognize a Jewish state, Israel is here to stay. It's not just a fact that it's here today, gone tomorrow. It's going to be here forever."
....MR. GREGORY: Isn't it quite clear that the Palestinians will never accept Israel as a Jewish homeland? Isn't--do you fear that the two-state solution is no longer viable?
PRIME MINISTER NETANYAHU: You know, I was so disappointed to hear him say that because he was, he was going back, I was trying to move forward. I said, "Listen, let's, let's talk." You know, I have deep, deep connections to this land, the land of Israel, the land of Abraham, Isaac and Jacob. Jacob was the father of Benjamin. That's my namesake. Four thousand years we've been connected to this land. But I recognize there's another people living there. You know, let's sit down and work out a solution. Then comes President...
...MR. GREGORY: ...is the two-state solution alive?
PRIME MINISTER NETANYAHU: Well, you tell me. Now, then President Abbas comes in, he says, "This land has been, you know, sacred for, for Muslims and Christians for 2,000 years." Hello! You know, "We've been around there. Two thousand years. I mean, Jesus came from a certain place, you know, from--there's this Bible thing which precedes it. What is this? Why can't you recognize our history? Why can't you recognize the Jewish connection to the Jewish land? And why can't we work out--recognize the past, seize the future?" And I'm willing to do that. And I gave a speech--and you heard my speech, it was--look, I wouldn't say it was a softy speech, it was a tough speech, but it was conciliatory. It said to him, "Listen, here's my hand." Right hand. "Here's my hand. Reach out to it, grasp it. Let's make peace." And that remains....