Iran, Olmert stated, is "the world's largest exporter of terrorism, a fundamentalist dictatorship, motivated by utter contempt for the values represented by the free world and an uninhibited ambition to achieve military superiority and regional hegemony. It openly calls for the elimination of Israel and actively seeks nuclear capabilities to enable it to translate its sinister plans into action.
"International economic and political sanctions on Iran, as crucial as they may be, are only an initial step, and must be dramatically increased. Iran's defiance of international resolutions and its continued tactics of deception and denial leave no doubt as to the urgent need for more drastic and robust measures.
"The sanctions must be clearly defined and religiously enforced. Any willingness to overlook Iranian violations or justify Iran's questionable tactics will immediately be interpreted as a sign of weakness and will only encourage them to proceed with more vigor.
"Each and every country must understand that the long-term cost of a nuclear Iran greatly outweighs the short-term benefits of doing business with Iran. While Iran may be a large oil exporter, it imports almost half of its refined oil products.
"Sanctions can be imposed on the export of gasoline to Iran and they can be imposed on countries which refine gasoline for Iran," Olmert said, urging governments to announce "that Iranian businessmen are no longer welcome in their countries, and that funds arriving from or channeled to Iran should not be transferred through their banks."
'We'll never choose appeasement in face of evil'
Addressing the threats the Jewish state faces, Olmert said "Israel will never capitulate to terrorism or choose appeasement in the face of evil.
"Our stand in this regard is unequivocal and is completely on a par with the policies of President Bush and his administration. We will continue to exercise our inalienable right to defend ourselves against all acts of aggression and we will prevail.
"At the same time," he said, "we will never abandon our efforts to achieve peace and reconciliation with our neighbors, as we truly believe that only real peace can ultimately provide the security we all deserve."
Moving on to the mediated peace talks between Israel and Syria launched recently, the prime minister said that "Syria is currently a threat to regional stability, but if it ultimately makes the choice to have peace relations with Israel, for which it will have to disengage from its allies in the axis of evil, this will constitute a drastic, strategic shift in the entire Middle East. Iran's negative response to this process can serve as an indication of the benefits embodied in it.
"I can only assure you that any future agreement, if and when it is reached, will be backed by all the necessary security guarantees, and that I will never compromise on anything which could undermine Israel's security or vital interests.
While the negotiations with Syria are only at a very initial stage, the prime minister said, the negotiations between Israel and the Palestinians are continuous and intensive.
"The current leadership in the Palestinian Authority, headed by President Mahmoud Abbas, presents a rare opportunity to achieve an agreement. President Abbas and his government recognize Israel's right to live in security and are as committed as we are to achieving peace. They know full well that the path of terrorism only condemns the Palestinian people to misery and hopelessness, and have a genuine desire to see a Palestinian state living side by side with Israel, in peace.
"I am wholeheartedly convinced that we are at a critical crossroads, and that this opportunity must not be missed. My obligation, as prime minister, is to explore every avenue to reach an understanding, and I truly believe that now, perhaps for the first time ever, it is attainable.
"Israel entered this bilateral process with the Palestinians in good faith and with a genuine willingness to make the necessary compromises. The time for both parties to make difficult decisions is soon approaching. I believe that the leadership of Israel and the people of Israel are ready for it, and hope that when the moment of truth finally arrives, the Palestinian leadership will respond to the challenge."
Olmert stressed that Israel "has never, nor will it ever, negotiate with Hamas, as long as it refuses to accept the three principles set forth by the international community. The reality on Israel's southern border is intolerable…While we have no desire to see the uninvolved Palestinian population in Gaza suffer, we cannot be expected to accept a situation that no other nation in the world would tolerate."
The prime minister went on to say that Israel would not be deterred by a large military operation in Gaza "if and when we come to the conclusion that this is the best way to restore calm on our southern border, but the fact that no such operation has yet taken place does not imply that we are not taking action."
Turning to AIPAC representatives, the prime minister stated that "the alliance between Israel and the United States is never taken for granted… The traditional bonds of friendship between Israel and America will continue to be nurtured and strengthened," he said.