good evening, everyone, i'm erin burnett and "outfront" tonight live from jer ruse level the old city is behind me, as you can see the walls. just a few hours ago, the sirens went off in the city people stopping on the sides of the streets in honor of the beginning of memorial day. later on this week exit will be the 64th anniversary of the state of israel. it is an important week in this country and and it is an important decision whether to strike or not strike iran, a conversation topic at dinner tables around the world and crucial election issue in the united states as well. matters a whole lot to americans, barack obama, mitt romney. i had a rare conversation with benjamin netanyau at his home today. we talked about iran, mitt romney, barack obama and a whole lot more as he opened up at his home. mr. prime minister, thank you so much for inviting us and letting us come and see your home. >> well, welcome to jerusalem. take a look around. >> we came here to your courtyard. i know we had to move -- there was a table here earlier, when we got here, there were two coffee cups on it, yours and tony blair's, when you were talking this morning, but how important is this space for you? sort of your getaway space, right? >> no this is my prison courtyard, because prime minister of israel, like the president of the united states, and maybe the pope one or two other people. >> ever feel like you're sort of under house arrest? >> for good reason, but i suppose so. but it doesn't mean that there respect an endless number of people who want to get into this prison cell and live here. >> i'm sure. i'm sure there are. iran. there's been 16 years of diplomas circumstance as you have talked about you have said repeatedly, said it in march, i know you stayed to the army radio this morning. it is not a problem of days but also not a problem of years. now you said that first in march so i would imagine not years, plural. you think that means this will be resolved by next spring? >> well, i hope it is resolved and i hope it is resolved peacefully. the international community is putting a lot of pressure on iran and making clear that its nuclear program must stop. if it stops with sanctions, the combinations of sanctions, diplomas circumstance other pressures, i, as the prime minister of israel, will be the happiest person in the world. >> do you think that sanctions are working? i mean, i saw story today about -- i think it was 56% of iranian -- of iran's fleet, tankers, sitting off the coast with oil, full of oil, 'cause they can't sell it. it would appear that sanctions are working. >> well, they are certainly taking a bite out of the iranian economy but so far, they haven't rolled back the iranian program or even stopped it by one iota. i mean, i hope that changes, but so far, i can tell you the centrifuges are spinning. they were spinning before the talk s began recently with iran. spinning before the talks and spinning as we speak. so, if the sanctions are gonna work, they better work soon. >> how do you know what they're doing? >> oh, we know. >> you know? >> we know and others know and we share what we know. this is not the case of the questions people had about saddam hussein. >> they stay is for peaceful purposes. >> hmm. they stay is for peaceful purposes. >> they stay is for peaceful purposes. >> have a sense of humor. i mean, they said it is for medical isotopes, right? that's why they are developing icbm's to develop medical isotopes to europe or israel or the united states that's why they are building these underground bunkers 00 between -- underneath mountains for medical iso opens it. that's why they are telling the world that they are gonna erase israel, the medical isotopes. this is a farce. nobody can seriously -- nobody can take them seriously. no nations with nuclear weapons have ever gone to war with each other. i mean, take india and pakistan. they haven't used them could. it be that israel and iran could end up in a situation like that where the acquisition of the nuclear weapon ensure it is would never be used? >> well, i'm not going to comment on the reported capabilities. i will say that to date, since the advent of the nuclear age after hiro she marks all nuclear powers have been very careful with the use or more accurately, the nonuse of the nuclear weapon when it comes to militant islamic regime, i wouldn't be too sure. because unlike, say the soviets, they can put their ideology before their survival.because u, they can put their ideology before their survival.too sure. because unlike, say the soviets, they can put their ideology before their survival. i don't think you can bet on rationale, they are giving hezbollah and hamas they are giving them the most advanced lethal weapons, whatever weapons they have to give them and they fired now 10, 12,000 rockets on israel's cities. diplomats worldwide to kill american soldiers in afghanistan. think of what they do with nuclear weapons. i don't think they want to bet the peace of the middle east on this. i think it is a safer get do what president obama and i and others have said, prevent iran from acquiring atomic bombs. >> one thing interesting now, you talk about the negative parts of the regime there is a jewish member of the parliament in iran, and one of the most popular terms there zero turn, main character falls in wlof a jewish woman. he helps smuggle jews out of paris to save them from the holocaust. it was very popular in iran. what makes you so sure they are anti-semitic in a way that would cause them to use the weapon against israel? >> i draw a distinction between the people of iran and the regime that is that has taken over their lives. >> the regime let show the air though. >> the regime is the one that, you know, has to kill people in the streets and goes into their homes after they cull the internet and make people disappear. this is a regime that is very brutal to its own people. iran is not free. jews in iran have a lot to worry about. but the jewish state that iran openly called a cancer that has to be excised from the middle east that has to be eradicated, certainly must take seriously iran's claims to annihilate t. >> the way the talks seem to be going, u.n. negotiators, iranian negotiators, u.s. negotiators, saying that the sanctions are working and that they may, in fact, roll back some sanctions there has been the been a rebuttal from the other side, the sanction that will take place this summer. >> i think it would be a big mistake to rescind the sanctions or lighten the sanctions. i think there has to be a cascade of sanctions and so far, that's the acid test, the sanctions haven't worked. how do we know that? because nothing has been stopped. what is stopped in the iranian program? >> what if they halted full enrichment to 20%, started importing that, would that be enough? >> i think what they need to do are three things. one, they have to stop all enrichment, second to take the -- >> all enrichment, even the 3% for medical? >> yes. they say they need it for what medical isotopes? the second point is after you stop all enrichment is remove the enriched material and you will get these rods from another country that can allow you to use nuclear energy for peaceful purposes. and third, dismantle the underground bunker. if they have no military goals, they should respond to this readyly. what we want is factual results. we want to see the iranian program rolled back. that's, unfortunately, not achieved by talks in which iran has one goal, to stall, delay, run out the clock. that's basically what they are doing. >> do you worry that you are going to put yourself in a position though that you may have to strike, a strike which even former head of the mossad has said would only delay, not end the iranian nuclear program? that by staying is not days, years, you are going to end up with a date where if you don't do it, you look like you couldn't or you wouldn't so you have to? >> i'm not worried what we look like, i'm worried about stopping this. i think there were really three principles that should guide us. they have been echoed by the united states and i think any sensible person understands that. >> the first is that iran's nuclear weapons program must be stopped. the second is that containment is not an option. and the third is that israel, the state of the jewish people, must have the capacity to defend itself by itself against any threat. >> obviously, very significant that the prime minister is saying the only standard israel will accept is that iran not enrich at all, not even the 3% that they would need for medical use. well, there could be an issue that is even bigger for israel right now and we are going to talk about that next. >> i could deliver a peace agreement. i could get the israeli people to follow me if i believed that i have a serious partner on the other side. if you are one of the millions of men who have used androgel 1%, there's big news. presenting androgel 1.62%. both are used to treat men with low testosterone. androgel 1.62% is from the makers of the number one prescribed testosterone replacement therapy. it raises your testosterone levels, and... is concentrated, so you could use less gel. and with androgel 1.62%, you can save on your monthly prescription. 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this is big news. you just heard a little b bitof my exclusive interview with benjamin netanyau, the prime minister of israel. we are live from jerusalem, "outfront" tonight, you can see the old city behind me. israel right now honoring its dead in memorial day. we had a chance to talk about iran, as you just heard, zero enrichment is what he is willing to accept on that front. he says he know what is iran is doing but there is an issue that could be bigger around that issue has to do with palestine, you haven't heard a whole blot recently, maybe because iran has been dominating the headlines. but he had something to say about palestine he has never said before. i want to ask you about another issue that hasn't gotten much coverage recently because iran has been getting coverage. i was in dubai recently, interviewing sheik mohammed earthquake the uae, ruler of dubai. and here is what he said u. >> we have nothing against israel, nothing against israel. what happened we want is for the palestinian, a country for the palestinian and a country for israel. and i promise to you, israel will benefit more than us because israel have things to offer in the market. >> that's very wise. that's very wise and i agree with him. i think peace would benefit us, as i think would it would benefit the palestinians, as it would benefit the entire region. i think there's one other thing. i think that i could deliver a peace agreement. i could get the israeli people to follow me if i believe that i have a serious partner on the other side, willing to make the necessary compromises on the palestinian side. many compromises that people talk about on the israeli side, but there are necessary compromises on the palestinian side and you know, peace is always a two-way compromise. >> would you accept their belief though that they should have a country which is contiguous, not islands here and islands there, but one space? >> yeah, we talked about that. >> no check points. >> i don't think this -- no check points? i'm the prime minister who removed 400 checkpoints, barriers, roadblocks, so on to facilitate the growth of the palestinian economy. this is in line with what i believe is essential that is the economic growth that is a great supplement and a great bulwark of actual peace. it is not a substitute for a political peace, but it helps and i'm very much in favor of that. look, there are so many issues to discuss, but tough discuss them. you can't discuss them in the press, not even on cnn. you have to sit down opposite one another. that's what leaders do. >> yesterday, saw some of the best of israel we saw winery, we saw the more roquen oil, the hair plant i was telling you about. >> at sunset, went to a refugee camp outside jerusalem and going to talk to adults, you know what happened, children come flocking over, lots of boys came flocking over. they were playing soccer football, and i asked them what they wanted to be when they grew up? they spoke in arabic. interesting since many are not in school, dentist, engineer, fight israel. >> the first two i like hurricanes the last one i don't. >> you talk about changes in history, suspect this issue more important than iran or anything else? >> how do you change it? you change it by educating people for peace. i think one of the failings of the palestinian authority has been that the air, all this stuff about israel, doing away with israel, they have kindergartens for reveling in suicide bombers. not surprised kids grow up. the only way you change it is by having peace agreement and speaking peace to your people. i spoke three years ago to my people about a solution of a demilitarized palestinian state that lives alongside -- recognizes the jewish state. >> how can you have a -- demilitarized? >> they will become dentist and doctors they become a peaceful state. >> don't they have right for a real state, because you say demilitarized. >> demilitarized is a real state. mean these can't field the armies and can't fire rockities. we want to make sure if we have a peace arrangement, we walk away from certain areas they won't be used a third time by iran and its palestinian proxies to fire rockets on tel aviv and jerusalem, we don't want to run their lives. i don't want to goff center are israelis. i don't want them as subjects of israel or citizens of israel. i want them to have their own independent state but a demilitarized state. >> and to be clear, one that isn't separated by israel as in there's a palestine part here? >> swiss cheese now. >> no swiss cheese? >> swiss cheese, an analogy used by george w. bush years ago. at that time, benjamin netanyau did not support it. contiguous a crucial wordsome there going to be a contiguous state? not something the prime minister said before, talked to sources in the palestine -- plo today, not something he discussed with them that could be significant if peace talks do again start, to have a contiguous -- to use that word contiguous a lot of weight in that particular word. we will hear what the prime minister has to say about the u.s. elections it is an important issue for him and what he has to say about iran important there how well does he know mitt romney? we will get answers to that plus, his on swegs a map and a new case of mad cow disease in the united states a lot of people wondering what it means and we have some answers. 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[ male announcer ] it's a network of possibilities -- helping you do what you do... even better. ♪ that could adapt to changing road conditions. one that continually monitors and corrects for wheel slip. we imagined a vehicle that can increase emergency braking power when you need it most. and we imagined it looking like nothing else on the road today. then...we built it. the 2012 glk. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. welcome back, "outfront" tonightlive in the old city from jerusalem. i was spending time with prime minute stir netanyahu today. the interesting things about it in the courtyard, yes smokes his cigars, his wife won't let him do it in the house but we got to go inside and see his study. while we were there we saw a map of, well, the middle east. here is quick glimpse of a kind of interesting moment. in is your neighborhood? >> this is gigantic israel. you know, i can cover it with my thumb. i mean, this is the arab world, right? saudi arabia, iran. this is all of -- this is this gigantic israel that you hear about. that's it. from here to here. >> with all the focus on iran, what about egypt? your foreign minister said that could be a bigger threat to you than iran. >> well, you know, i'm not sure that's correct quote but certainly where he is concerned with iran and we are both concerned with the direction of egypt and i hope that any government that establishes in egypt understands that peace between egypt and his real is as much an egyptian interest as it is an israeli interest and i hope to continue the peace. that's our desire. >> just for the record, the quote was in the jerusalem post from the foreign minister on egypt. and obviously, it is an ongoing debate what is really going on between these two countries right now but that moment when he stayed this is the middle east answered gestured to north africa and put his thumb on israel, such an interesting moment, it makes an interesting point. and then, well, someone in our bureau here in jerusalem said, wait a minute, you have to look at this i said who is that? well, it was prime minister netanyahu, who, at the time deputy foreign minister, back in, was the date, january 18, 1991. take a look. >> this is the arab world. and i'm just gonna put my hands on it for the benefit of the viewers. i have a size ten shoe, american size ten shoe. i could walk on this map on the arab world. here's israel. i cover it with my thumb. >> ha ha ha. i mean, you got to say, some things never seem to change in this part of the world. there's always worth putting a little bit of humor when talking about very serious subjects. one thing we talked about very serious is well what does bebe think about mitt? do you like him? >> well, look, here's an answer that will -- should satisfy you. a more fuel-efficient turbocharged engine. and a completely redesigned interior. ♪ the 2012 c-class with over 2,000 refinements. it's amazing...inside and out. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. holding down the fort while you're out catching a movie. 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