Ahmadinejad's Ambitions

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When the issue becomes clear, and understood that the Holocaust does not have any relationship with the Palestinian people, then we will have two proposals for the Western and European countries. The first solution is that in the same way that you mounted this regime in the past, you can remove it yourself. You know well that the Holocaust has nothing to do with the Palestinian people. That was just a pretext to create this regime. And it was not a good excuse. Just cease to support it. Don't use your people's money to assist this violent regime. This is the best solution. If they do not accept the first solution, then they should allow the nation of Palestine to make their decision about its own fate. Anyone who is a Palestinian citizen, whether they are Christian, Jewish or Muslim, should decide together in a very free referendum. There is no need for war. There is no need for threats or an the atomic bomb either.

Israel isn't going to accept any of this.

If the American and British government do not support and help them, and they stop using their power and influence they will accept.

Without a war?

Yes. Why not? Everyone knows that the Zionist regime is a tool in the hands of the United States and British governments.

Prime Minister Olmert seemed to acknowledge this week that Israel has nuclear weapons. Does that change Iran's need or determination to have nuclear weapons?

The era for bombs and atoms and weapons has come to an end. People should be talked to with reason. Where are the ones who used nuclear bombs in Hiroshima? Their era is over. This literature belonged to 60 years ago. Now it's the time for dialogue, logic as well as law and justice. Our people and our nation have a very clear logic and sense.

If sanctions are imposed on Iran for continuing with its nuclear program, how will you retaliate?

Friendship with the Iranian people is better than confronting us. Experience has shown that we have the capability to defend ourselves and take advantage of any circumstance. The Iranian people are an extremely intelligent people. They know how make the best opportunities from the harshest of threats. And make ill wishers regret themselves.

So what will Iran do?

Don't be in a hurry. We believe that the American government cannot do anything against us.

To read a full transcript of Scott MacLeod's interview with Mahmoud Ahmadinejad, check TIME.com on Monday December 18