"We Are Facing A War"

Israeli Prime Minister Ariel Sharon spoke from his Negev desert ranch by phone Friday with TIME's Jerusalem bureau chief Matt Rees. Excerpts:

TIME: Your cabinet demands that Arafat rein in terrorists. Is this his last chance?

Sharon: He has an opportunity now. We have to understand that Arafat has made his strategic choices. Arafat has chosen the path of terrorism. The world hasn't always seen him for what he is. Now everyone is discovering the real Arafat. He is the greatest obstacle to peace in the Middle East, unfortunately. We are facing a war that has been forced upon us, a war of terror. The aim of terrorists and those who enable these terrible acts to be carried out without disturbance--their aim is to expel us altogether from here, to bring us to total despair and loss of hope. We are facing this hard war, and we regard Mr. Arafat as guilty of everything.

TIME: Will you topple Arafat?

Sharon: We are not making Arafat a target. I sent my son to him recently, with all those risks, just to assure him that we are not going to touch him, physically. We don't have any intention of getting rid of the Palestinian Authority, because I believe that though Arafat at the present time is the obstacle, maybe there are people there that may show a more pragmatic approach. We are not conducting a war against the Palestinian Authority. We are taking steps to force them to take steps. Arafat will not fool this government. He has done that in the past. This time he will not succeed in fooling us.

TIME: If Arafat doesn't crack down on terrorism to your satisfaction, what military action will you take?

Sharon: You understand if I don't elaborate here about what steps will be taken. I can tell you I'm very careful not to escalate the situation, because I think it's against our interest and the interest of the United States. The steps we will be taking will be such that we will force Mr. Arafat to take a strategic choice.

TIME: The U.S. typically urges restraint from Israel after terrorist attacks. This time, the U.S. didn't. Why?

Sharon: People understand the situation we have been facing, how in a few days, tens and tens of funerals took place. The President of the United States understands the danger of terror. It's the greatest danger for stability in this region and the world. We have been facing terror now for over 120 years. We are in a war. We. Are. In. A. War. We are going to exercise our right of self-defense. We'd like very much to reach peace. I really want to do that. Arafat is losing one of the last chances to reach peace. But my first duty is to defend the citizens of Israel.

TIME: Why is it the last chance to reach peace?

Sharon: I don't see now--there may be someone in the future, of course--but now, other than myself, I don't see somebody to take those hard decisions. I've seen all the horrors of wars, and I believe that maybe I'm one of the only ones that can get up here in this country and tell the people that for genuine, durable and true peace, we should be ready to make painful compromises. Of course, we will not make any compromise whatsoever when it comes to the security of the state of Israel and the security of the people of Israel. Peace is almost as painful as war because you have to make painful concessions. I can do that. I don't know if anybody else can do it. Not that everything depends on one man, but in the current situation I believe that I can do that.