EHUD Olmert is a giant of contemporary Middle East politics. As Israel's prime minister he made war - twice - in Lebanon in 2006, and in the Gaza Strip earlier this year. He's also tried to make peace, offering the Palestinian leader, Mahmoud Abbas, the most extensive concessions any Israeli leader has ever brought to the table in the search for a settlement. Now Olmert's out of office, not because he lost an election but because he is fighting corruption charges in the courts. Previous such charges against him came to nothing and Olmert has always asserted his innocence.
In Sydney this week, I conducted, perhaps, the longest interview and discussion Olmert has undertaken with any media since leaving office in March after more than three years as prime minister. Dressed in jeans and black T-shirt with a Red Bull logo, Olmert looked pretty chipper for a balding lawyer with a modest paunch in his early 60s who'd just flown 24 hours from Israel. For 90 minutes in the boardroom of Sydney's Park Hyatt, and then over a relaxed lunch with his wife, Aliza, at Circular Quay, Olmert talked with remarkable frankness about the military campaigns in Gaza and Lebanon, the historic peace deal he offered the Palestinians, President Barack Obama's Middle East policy and the options for action against Iran.
Olmert's role in history is a big one. If he clears his name of the corruption charges he could come back to the centre of Israeli life, as previous prime ministers - like Likud's Benjamin Netanyahu, now PM for the second time - and Labour's Ehud Barak, who both staged comebacks. Olmert is straightforward and direct, and sometimes surprising, in his assessments of the global leaders he dealt with. He believes, for example, that the President of the Palestinian Authority, Mahmoud Abbas, is a genuine partner in the peace process.
Olmert says of Abbas: "I think he's genuine in his desire to achieve a Palestinian state, and he recognises the right of Israel to exist. And, while I can't speak for him, even if he can't say it publicly and formally, he recognises that Israel is the homeland of the Jewish people." This judgment by Olmert is critical because it means he still believes the peace process has a chance, while Abbas remains the Palestinians' leader. And it's not as if Olmert, who spent most of his life in the centre-right Likud party and was once the hardest of hardliners, is unwilling to pass a harsh judgment on a Palestinian leader.
I ask Olmert to compare the failure of Abbas to conclude a peace agreement with him, with the opportunity Yasser Arafat passed up at Camp David in 2000. It is one of the few times Olmert cuts off a question with a declarative response: "The two are not alike. Yasser Arafat never wanted to make peace with Israel. Yasser Arafat was a murderer and a terrorist and remained so until the last day of his life. Abu Mazen (the name by which Israelis and others in the region commonly refer to Abbas) wants peace."
So, too, Olmert says, does Netanyahu. Olmert followed Ariel Sharon out of Likud to form the Kadima party, based on the idea that Israel would unilaterally withdraw from the Gaza Strip and later the West Bank. It withdrew from Gaza but withdrawal from the West Bank became untenable in light of the missile attacks on Israel from Gaza.
Sharon was felled by a stroke and Olmert took over as acting PM in January 2006, later won an election in his own right and remained PM until the end of March this year. Netanyahu became leader of Likud and consistently attacked Sharon and Olmert from the Right, for offering too many concessions to the Palestinians.
But Olmert says Netanyahu is not an obstacle to peace: "The Prime Minister (Netanyahu) is dedicated to peace, he is concerned with peace. Naturally - he is also worried about security."
Olmert is similarly positive about Obama, implicitly rebuking those Israelis who see Obama as hostile to Israel's security interests: "I'm entirely free of any suspicions or complaints about the Obama administration. I think the Obama administration is very friendly to Israel. I know a lot of the people in the administration and they are committed to Israel. Many people in this administration are intimately acquainted with all the facts of the Middle East - Hillary Clinton, Dennis Ross, Rahm Emmanuel, Jim Jones."
Olmert, like many Israelis, was critical of Obama's speech to the Muslim world in Cairo: "I was not happy with this speech. There should not even be a tacit comparison of the Holocaust with the Palestinian situation. This mistake was not corrected by Obama later visiting Buchenwald (the site of a Nazi extermination camp during World War II). However, this does not mean that Obama is an enemy of the Israeli people, just that he made a mistake. I hope he realises he made a mistake."
But he has some advice for Obama on the search for an Arab-Israeli peace: "I don't quite understand the American approach. Every new president believes they have to start from square one. If they're lucky they last for eight years, and by the end there is almost peace. But the new administration then starts anew, because they always know best."
Olmert believes Obama made a mistake by focusing initially on a demand for an Israeli building freeze in West Bank Jewish settlements: "I think the tactic of starting to argue about a building here or there is a tactical mistake and I expect the Americans to change their approach."
So what should the Americans do? "Instead of starting at the beginning, they should start at the end."
Here, Olmert approaches the most significant aspect of his prime ministership. He waged a war against Hezbollah in southern Lebanon in 2006, and since then Hezbollah has not fired rockets against Israel. He waged a brutal operation against Hamas in the Gaza Strip at the start of this year, and since then the Hamas rockets have mostly fallen silent. And the Israeli economy, despite everything, did well in the last few years.
But Olmert's term in office is best remembered for the extensive negotiations, and final peace offer that he undertook with Abbas.
Olmert explains this position to me in unprecedented detail. His offer to Abbas represents a historic watershed and poses a serious question. Can the Palestinian leadership ever accept any offer that an Israeli prime minister could ever reasonably make?
It is important to get Olmert's full account of this offer on the record: "From the end of 2006 until the end of 2008 I think I met with Abu Mazen more often than any Israeli leader has ever met any Arab leader. I met him more than 35 times. They were intense, serious negotiations."
These negotiations took place on two tracks, Olmert says. One was the meetings with the two leaders and their senior colleagues and aides (among them Kadima leader Tzipi Livni on Olmert's side). But Olmert would also have private, one-on-one meetings with Abbas.
"On the 16th of September, 2008, I presented him (Abbas) with a comprehensive plan. It was based on the following principles.
One, there would be a territorial solution to the conflict on the basis of the 1967 borders with minor modifications on both sides. Israel will claim part of the West Bank where there have been demographic changes over the last 40 years."
This approach by Olmert would have allowed Israel to keep the biggest Jewish settlement blocks which are mainly now suburbs of Jerusalem, but would certainly have entailed other settlers having to leave Palestinian territory and relocate to Israel.
In total, Olmert says, this would have involved Israel claiming about 6.4 per cent of Palestinian territory in the West Bank: "It might be a fraction more, it might be a fraction less, but in total it would be about 6.4 per cent. Israel would claim all the Jewish areas of Jerusalem. All the lands that before 1967 were buffer zones between the two populations would have been split in half. In return there would be a swap of land (to the Palestinians) from Israel as it existed before 1967.
"I showed Abu Mazen how this would work to maintain the contiguity of the Palestinian state. I also proposed a safe passage between the West Bank and Gaza. It would have been a tunnel fully controlled by the Palestinians but not under Palestinian sovereignty, otherwise it would have cut the state of Israel in two.
"No 2 was the issue of Jerusalem. This was a very sensitive, very painful, soul-searching process. While I firmly believed that historically, and emotionally, Jerusalem was always the capital of the Jewish people, I was ready that the city should be shared. Jewish neighbourhoods would be under Jewish sovereignty, Arab neighbourhoods would be under Palestinian sovereignty, so it could be the capital of a Palestinian state.
"Then there was the question of the holy basin within Jerusalem, the sites that are holy to Jews and Muslims, but not only to them, to Christians as well. I would never agree to an exclusive Muslim sovereignty over areas that are religiously important to Jews and Christians. So there would be an area of no sovereignty, which would be jointly administered by five nations, Saudi Arabia, Jordan, the Palestinian state, Israel and the United States.
"Third was the issue of Palestinian refugees." This issue has often been a seeming deal-breaker. The Palestinians insist that all Palestinians who left Israel - at or near the time of its founding - and all their spouses and descendants, should be able to return to live in Israel proper. This could be more than a million people. Olmert, like other Israeli prime ministers, could never agree to this: "I think Abu Mazen understood there was no chance Israel would become the homeland of the Palestinian people. The Palestinian state was to be the homeland of the Palestinian people. So the question was how the claimed attachment of the Palestinian refugees to their original places could be recognised without bringing them in. I told him I would never agree to a right of return. Instead, we would agree on a humanitarian basis to accept a certain number every year for five years, on the basis that this would be the end of conflict and the end of claims. I said to him 1000 per year. I think the Americans were entirely with me.
"In addition, we talked about creating an international fund that would compensate Palestinians for their suffering. I was the first Israeli prime minister to speak of Palestinian suffering and to say that we are not indifferent to that suffering.
"And four, there were security issues." Olmert says he showed Abbas a map, which embodied all these plans. Abbas wanted to take the map away. Olmert agreed, so long as they both signed the map. It was, from Olmert's point of view, a final offer, not a basis for future negotiation. But Abbas could not commit. Instead, he said he would come with experts the next day.
"He (Abbas) promised me the next day his adviser would come. But the next day Saeb Erekat rang my adviser and said we forgot we are going to Amman today, let's make it next week. I never saw him again."
Olmert believes that, like Camp David a decade earlier, this was an enormous opportunity lost: "I said `this is the offer. Sign it and we can immediately get support from America, from Europe, from all over the world'. I told him (Abbas) he'd never get anything like this again from an Israeli leader for 50 years. I said to him, `do you want to keep floating forever - like an astronaut in space - or do you want a state?'
"To this day we should ask Abu Mazen to respond to this plan. If they (the Palestinians) say no, there's no point negotiating."
Olmert is right to paint this offer as embodying the most extensive concessions, and the best deal, ever offered to the Palestinians by an Israeli leader. But his very experience with this offer raises several questions. Could he have delivered its terms if the Palestinians had accepted it? Perhaps international momentum would have enabled him to do so, and, in fact, Olmert's Kadima party did remarkably well in the election which followed his prime ministership. Could any Israeli government today realistically make such an offer? The answer would seem to be no.
And most important, if the Palestinian leadership cannot accept that offer, can they accept any realistic offer? Do they have the machinery to run a state? Is their society too dysfunctional and filled with anti-Semitic propaganda to live in peace next to the Jewish state? Could they ever deliver on any security guarantees?
I put these questions to Olmert and his response to them is perhaps the most lukewarm part of our interview: "It's certainly a legitimate concern, since I never received a positive response from them. I think it's up to them (the Palestinians) to prove the point. I hope they will rise to this."
Olmert still believes the Palestinians should respond to the deal he offered them. If they did so, this would open the way to peace, but only if Palestinian society is reconciled to living in peace next to Israel as it really exists.
Olmert is robust in defence of other parts of his legacy. The war he led in 2006 against Hezbollah in southern Lebanon was widely criticised within Israel itself as being poorly executed. Not surprisingly, this is a view Olmert rejects: "The war in Lebanon ended with a unanimous UN resolution which allowed Israel to stay in the south of Lebanon until an international force took over from us. Since then, there has been not one military attack on Israel from Hezbollah. For more than three years now the northern border has been totally quiet and the northern part of Israel is flourishing as never before.
"The military operation in Lebanon was the most successful military operation in recent Israeli history. Many in Israel don't recognise that."
He claims a similar success in the military operation in the Gaza Strip, which has also resulted in a vast decline of rocket attacks on Israel. He sees a grotesque double standard in the world's criticism of what he portrays as Israel's efforts at self-defence: "When they were firing rockets at us from the north or the south, their purpose was only one thing, to kill Israeli civilians. Nobody (at the UN) was so devastated by this that they set up a special commission to investigate it. Everyone comes to us and says non-involved people (innocent civilians) were killed in Gaza. I regret it very much. But I had to protect a million people who were under attack. Every prime minister . . . has the responsibility to provide security for his people."
Not surprisingly, Olmert rejects the Goldstone report accusing Israel of war crimes in Gaza root and branch: "To write a report that focuses only on Israel's response to terror against innocent civilians was a moral indignity by Goldstone."
Olmert went quite a long way towards achieving a peace deal with Syria, but could not conclude it before he left office: "If Bashir Assad (Syria's President) wants the Golan Heights, I made it clear what the requirements would be for Israel."
Part of those requirements, Olmert says, would be "breaking off military co-operation with Iran that is harmful to Israel's security. Breaking off that military co-operation is important, but I don't expect Syria to break diplomatic relations with any country."
Olmert believes that the Syria track is perhaps the only peace process open to Israel in the immediate future, and that the time has come for direct Israel-Syria negotiations.
But if Syria is willing to make peace, I ask Olmert, how come it was building, with North Korean help, a nuclear reactor which Israel, under Olmert, bombed to obliteration? "I am saying nothing about that."
One matter where Olmert is a little critical of Obama is the ever present issue for all Israelis, Iran: "There is no doubt that Iran is planning to have a non-conventional capacity. Why would any country fight with the whole world over a civilian nuclear program if they have no plan of developing a nuclear bomb?
"They (the Iranians) are enriching uranium and hope to have enough fissile material for a few bombs. At the same time they are developing delivery systems with a range of 3000km. Once they have enough fissile material it will be impossible to stop them.
"When the President of Iran talks about removing Israel from the face of the Earth and is building nuclear bombs with a range of 3000km, you have to be worried.
"Israel is very active about this, but we feel the leadership on this issue should be taken by the Americans, and also by the Russians, Chinese, Germans and French.
"I was not happy with Obama's decision to have a dialogue with Iran. This dialogue will be used for only one purpose, to buy time for Iran.
" My advice would be to set a rigid timetable for this dialogue. This will not be easy as the Iranians are not dumb. Secondly, prepare your fallback position now. Don't start to prepare it when the talks fail.
"My view is that the Chinese and Russians are not in favour of a nuclear Iran. The problem is how to co-ordinate action. This is the responsibility of President Obama. The Americans want to lead the world, they must lead the world. Europe certainly now wants tough action.
"It is not a simple choice between acquiescence in the face of Iranian nuclear weapons or a comprehensive military attack on Iran. There are a lot of other effective options."
And what are some of these options? "I'm not prepared to discuss them publicly."
Olmert's life and political persona have seen radical transformations, from ultra-hawk to offering historical compromise. He was mayor of Jerusalem for 10 years, was finance minister, has been at the heart of intense political and military struggles.
He is visiting Australia in connection with the Australia-Israel Leadership Forum, which has its second session next week. Olmert has been a frequent visitor to Australia, and compares Sydney to Tel Aviv.
"Growing up in Israel, how can I not be an optimist? When you remember what Israel was 50 years ago and you see Israel now, one of the most successful countries in the world, stable, democratic, with an enormously stable economy despite everything that has happened in the global economy in the last few years, how can I not be an optimist?"
His final injunction seems simple enough in theory, but is immeasurably difficult in practice: "We need to be powerful enough to defeat all our enemies, and generous enough so that they will understand that peace is more attractive than any alternative their extremists can offer."
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