Israel should not have to remove any settlements in a peace agreement with the Palestinians, Strategic Affairs Minister Moshe Ya’alon has told The Jerusalem Post, adding that just as Arabs live in Israel, so, too, should Jews be able to live in a future Palestinian entity.

“If we are talking about coexistence and peace, why the [Palestinian] insistence that the territory they receive be ethnically cleansed of Jews?” Ya’alon asked during a wide-ranging interview that will appear in the Post’s Yom Ha’atzmaut supplement on Monday.

“Why do those areas have to be Judenrein?” he asked. “Don’t Arabs live here, in the Negev and the Galilee? Why isn’t that part of our public discussion? Why doesn’t that scream to the heavens?”

Ya’alon said that if Israel and the Palestinians were truly headed down the path of peace and coexistence, “Jews living in Judea and Samaria under Israeli sovereignty and citizenship” should be possible.

He stressed that “no settlement” should be removed, and that the country’s previous withdrawals – from Lebanon and from Gaza – strengthened Hizbullah and Hamas, respectively.

“That is opposed to our strategic interest and to the strategic interests of the West,” he said.

Ya’alon, who sits on Prime Minister Binyamin Netanyahu’s top decision-making body, known as the septet, and is among those deliberating on how to reply to US President Barack Obama’s reported demands for a construction freeze in east Jerusalem, said Israel must not give in on the issue.

“We cannot fold on Jerusalem. What is Jerusalem? It is Zion,” he said.

“We disengaged politically in Judea and Samaria, and physically from Gaza,” Ya’alon pointed out. “The policy of the Netanyahu government is that we don’t want to rule over them [the Palestinians]. But not ruling over them does not mean we have to withdraw to the 1967 borders, which are indefensible borders; or that we have to divide Jerusalem in order to bring Hamas snipers into Jerusalem.”

Ya’alon, like the other members of the septet, is very discreet about the discussions regarding the answers to be given to the Americans, and would not even discuss what it was exactly that Obama was demanding.

And while stressing that the US and Israel had a deep, strategic alliance, Ya’alon acknowledged significant conceptual gaps regarding how each side saw the region.

“In order for there to be a proper prognosis, you need a proper diagnosis,” he said, adding that the US administration had misdiagnosed the root of the conflict here as territorial, when in reality it was about the failure of the Palestinians to recognize the right of the Jews to be here in any permutation.

“Those who want to continue the Oslo process, who want us to continue to give and give and give, without a Palestinian willingness to recognize our right to a national home, are cooperating with the phased plan for Israel’s destruction,” Ya’alon said.

Amid reports that Obama may, in a few months, try to impose a peace plan on Israel and the Palestinians, Ya’alon – who has accompanied the diplomatic process from up close since he was the head of Military Intelligence in 1995 – said that anyone who thought it was possible to “impose peace just like that” is “detached from reality.”

The government must work closely with the Obama administration to prevent the imposition of any such plan, he said.

Turning to Iran, Ya’alon said that country’s rulers must be faced with a determined West that placed the following dilemma before them: the bomb or regime survival.

Asked who in the West was showing the most determination against Iran these days, Ya’alon replied with France and Britain.

“Something has happened here that we haven’t seen in the past,” he said.

“Previously, the US led the aggressive line. Today, as I said, the president of France and prime minister of Britain are leading a more aggressive line than the president of the US.”

Asked if there were people in Jerusalem charged with coming up with plans on how to contain Iran if it eventually got the bomb, Ya’alon replied, “By one way or another, the Iranian military nuclear project should be stopped. And we should not discuss any other possibility.”