SPIEGEL: The Gaza Strip is on the verge of a humanitarian crisis. Last week, tens of thousands broke through the border to Egypt in order to provide themselves with food. What responsibility does Israel carry for the crisis?
Ayalon: I doubt that there is a humanitarian crisis in the Gaza Strip. The Hamas leadership there is manipulating information in order to make us believe there is a crisis. They are acting cynically towards their own population.
SPIEGEL: Israel has cut, among other things, the import of diesel fuel, which is also used to provide power to hospitals.
Ayalon: I do not believe in the effectiveness of such collective punishment. First and foremost, we must fight the terrorists with intelligence and military means. I was head of the Shin Bet secret service, and I believe in targeted operations. Israel has the right to defend itself. Morally this even includes the liquidation of terrorists. We cannot allow our citizens to be forced to live under the constant firing of rockets.
SPIEGEL: Innocent civilians died last week following Israeli attempts to kill militant Palestinians.
Ayalon: Such mistakes have to be prevented. They only stir up hatred. That is why I also oppose a broad military operation, which would only bring the people to declare their solidarity with Hamas. Many Israelis dont understand this. It is popular to explain the motivation of suicide bombers by citing Islam and the promise that 72 virgins will await the martyrs in paradise. But the real motives are humiliation, desparation and loss of hope. Therefore we have to initiate, parallel to our military operations, a political process which gives the people hope.
SPIEGEL: The people in the Gaza Strip do not appear to be revolting against Hamas though.
Ayalon: I also do not believe that an inner Palestinian Intifada against Hamas is likely. Nevertheless, our strategy has been succesfull: Hamas is already begging for a cease-fire ...
SPIEGEL: ... one which Prime Minister Olmert does not want to negotiate.
Ayalon: Many people are warning that a cease-fire would strengthen Hamas. But I would say that Hamas also got strong without a cease-fire.
SPIEGEL: Should Israel negotiate with Hamas?
Ayalon: Our official negotiating partner is Palestinian President Mahmoud Abbas, who was elected by two-thirds of his people. With Hamas we should not have direct talks but rather through a third party like Egypt, for example. If we are negotiating the release of abducted solder Gilad Shalit with Hamas, then I see no reason why we should not talk to them about a cease-fire in order to save the lives of the children in Sderot.
SPIEGEL: Do you think compromises with Hamas are possible?
Ayalon: Hamas is not a monolithic organization. Within Hamas, there are a variety of opinions and ideologies. I think it is likely that the pragmatists within Hamas are interested in returning to last years Mecca agreement with Fatah ...
SPIEGEL: ... which gives President Mahmoud Abbas the right to negotiate with Israel.
Ayalon: I believe Hamas leaders like Ismail Haniya in Gaza or Mousa Abu Marzook in Damascus are capable of such a step.
SPIEGEL: You are saying that Israel has to give the Palestinians hope for their own state during the negotiations. And yet even the settlement outposts in the West Bank, which are even illegal under Israeli law, still haven't been dismantled.
Ayalon: Regarding this point, the international road map is unequivocal: Israel has to evacuate all outposts. If Abbas is expected to fulfill his commitments, then Israel must fulfill its obligations too. All outposts must disappear -- if possible with the consent of the settlers, and if not then by force. If we do not fulfill our road map commitments, there will not be negotiations. And if there will be no negotiations, then the Labour Party has no business staying in this government. We have to freeze all settlement activities east of the security fence.
SPIEGEL: That would mean that settlement building could continue in East Jerusalem. Didnt you demand in 2002 -- in your initiative with Palestinian intellectual Sari Nusseibeh -- a partition of Jerusalem?
Ayalon: I only said what should be done immediately, which is a freeze of settlement building. The status of Jerusalem will be decided upon only at the end of the negotiations. Here, the Ayalon-Nusseibeh Formula is the only way to reach real peace between Israelis and Palestinians.
SPIEGEL: Eight months ago you demanded Prime Minister Olmerts resignation due to the failures of the 2006 Lebanon War. At that time you were not a minister, but now you are sitting with Olmert at the cabinet table. Do you have a different view of the war today?
Ayalon: No, I continue to say the same thing today that I said back then: One must not decide to go to war within a few hours. The prime minister and his defense minister should have called a press conference and set an ultimatum for Hezbollah to return the kidnapped soldiers within 48 hours. This would have given them time to play through all the scenarios.
SPIEGEL: Did you talk to Olmert at that time?
Ayalon: After one week of war I told him: Now it is time to end the war. The world is standing behind us, even the Arab states, and the Lebanese Prime Minister Fouad Siniora wants to meet you in order to negotiate a cease-fire.
SPIEGEL: But Olmert decided to continue the war. In the end, he even ordered a ground offensive, despite the fact that the United Nations cease-fire resolution was already foreseeable.
Ayalon: The last 60 hours of the war were the result of a miscalculation like the whole war itself -- it was a grave political mistake that cost the lives of 33 soldiers.
SPIEGEL: This week the final report about the failures of the Lebanon War will be published. Why dont you repeat your demand for Olmert to resign?
Ayalon: First of all I want to read the report. Whether or not Olmert must step down, also depends on the publics reaction. If he merely survives the report, then I will not be able to support him anymore. But if he proves himself to be strong enough to take the peace process with the Palestinians forward, then we must not throw him into early elections. The future of the peace process is much more important to me than the past war.
Interview conducted by Christoph Schult.