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By Lisa Beyer

The day after his return from Washington, Israeli Prime Minister Benjamin Netanyahu met in his office with TIME Jerusalem bureau chief Lisa Beyer. As the weekend approached, Netanyahu appeared relaxed and untroubled, laughing at times in the interview. Excerpts:

TIME: Are you prepared to acknowledge that opening the tunnel exit was not wise?

Netanyahu: Well, I think it was very hard to anticipate that the issue would serve as an opportunity to foment violence. But I think we have to understand there are innumerable issues that could serve that purpose. My main concern is that we restore the standard that no issue leads to violence, that violence is not a negotiating tactic. What will we do the next time we have an impasse? The next time there's a grievance?

TIME: If you were a Palestinian, how do you think you would regard Netanyahu?

Netanyahu: If I read the controlled Palestinian media, I would think that, as they call me, I'm worse than Hitler.

TIME: And if a Palestinian could see you for what you really are?

Netanyahu: I think they would regard me as a person who believes deeply in the necessity of peace and that we don't have another partner other than the Palestinian Authority. I think that any Palestinian mother reading this should understand that I am as deeply conscious of her pain of losing her child as I am of a Jewish mother's.

TIME: Has your understanding of the Palestinian view improved?

Netanyahu: It seems to me that the Palestinians are suffering from two main burdens. One is the economic burden that is a function of the security situation, especially the closure [of Israel to Palestinian workers]. I explained to Arafat that the degree of closure is directly related to the degree that he fulfills his security obligations.

Secondly, it has been said in an unending chorus, not only in Palestinian circles but throughout the Arab world, that Netanyahu doesn't want peace. And if it's repeated often enough, it assumes the aura of self-evident truth. It is false.

TIME: At the time of the violence, you said Arafat "cynically" manipulated the tunnel issue? Has your perception changed?

Netanyahu: No. The kind of rhetoric, articles and broadcasts that we found in the Palestinian media well before the incidents and especially during the incidents were inflammatory to the point of violence. Since the Palestinian media are directed by the Palestinian Authority, it is responsible for ensuring that this incitement ceases. [Arafat] said he would take care of the breaches.

TIME: Has your appreciation of him changed?

Netanyahu: Well, you get to know somebody better, and you can judge intentions and personality better. The important thing is it improved the communication between us. [Nevertheless] inherently we represent different perspectives and different interests.

TIME: Arafat can be charming.

Netanyahu: Sure. But I wouldn't make too much of the personal thing between us.

TIME: I was trying to get you to say that Arafat is a nice guy.

Netanyahu: You get him to say it about me, and I'll say it about him.