The foreign minister rejected claims that Prime Minister Benjamin Netanyahu prefers using Barak for foreign policy matters, like in his meetings with special US envoy to the Middle East George Mitchell.
"People are asking why the defense minister is holding negotiations with the Palestinians. Why is he meeting with Mitchell? And why isn't the Foreign Ministry dealing with the Palestinian issue?
"I can give you a diplomatic answer: Naturally, the Palestinian issue is being handled by the Defense Ministry. The person who eventually signs is the defense minister, and the entire issue of the roadblocks and humanitarian aid passes through the Defense Ministry, and therefore this is natural."
He went on, however, to offer an "undiplomatic" explanation, related to the fact that he is a settler.
"There is clearly a conflict of interests here. For me to deal with this issue – it's clear there is an absolute conflict of interests here. I wouldn't want to be accused of intentionally thwarting negotiations.
"With all the affairs of honor of one minister or another, I believe our relations with the United States are much more important than the honor of the State of Israel's foreign minister."
The Yisrael Beiteinu chairman reiterated that his cooperation with Minister Barak and the other government members was good.
"The teamwork in the government is extraordinary, including with the defense minister. I can only praise him. This government is working in a very, very coordinated manner and there are agreements here."
Lieberman expressed his confidence in Israel's relations with the United States, but clarified that boundaries should be set here as well.
"It's clear that we understand and want to help the United States, and there is no alternative to our special relations with the United States. But by no means will we waive those red lines, as agreed with the prime minister. We have set very clear red lines," he said.
'Unmoved' by Sarkozy remarks
During the meeting, Lieberman was asked about the controversial remarks made against him by French President Nicolas Sarkozy, who had urged Netanyahu to fire him.
"People sometimes say unnecessary things, including myself. So I wouldn't get excited about it," he said, adding that many leaders sometimes have a slip of the tongue.
"I am glad to say that I am in good company, with (US President Barack) Obama and (German Chancellor Angela) Merkel. I have no problem with this incident, and I view it as an unfortunate slip of the tongue."
Asked about US Vice President Joe Biden's statement that Israel had the right to strike in Iran, the foreign minister replied, "Biden said something that really makes sense. Israel is a sovereign country. At the end of the day, responsibility lies on the Israeli government's shoulders, not on anyone else's. There are differences, but our decisions will be according to the State of Israel's interests."
Lieberman also rejected media reports that former Minister Aryeh Deri of Shas was slated to replace him at the Foreign Ministry should he be indicted.
"I don’t see any indictment," the minister clarified. "This question is in disregard of people's intelligence. A series person cannot think that Aryeh Deri could join Yisrael Beiteinu based on Yisrael Beiteinu's platform. He is a very close friend of mine, and we talk on a daily basis, but this doesn't make sense."
The minister also stated that his ministry was in the midst of "a very deep internal process aimed at examining the Foreign Ministry's role in the new era. Such an examination has never been conducted. A reform is almost a bad word.
Attila Somfalvi contributed to this report