At a Cabinet meeting held in the wake of the impending end of a moratorium imposed on West Bank settlement construction, Lieberman inveighed against recent comments by Arab League Secretary-General Amr Moussa, who said his organization would never recognize Israel as a Jewish state.
"This forces us to deal with the issue of the Israeli Arabs during the negotiations. People like Hanin Zoabi and Raed Salah fight against Zionism, and I believe they should be Palestinian citizens," he said, referring to a controversial MK who participated in the Gaza flotilla and the leader of the Islamic Movement's northern branch, respectively.
"The principle that should guide us in negotiations is not territories for peace but the exchange of both territories and populations. They can be parliament members in Gaza, for Hamas, Fatah, wherever they like – but they can't enjoy benefits on both sides."
MK Hanin Zoabi (Balad) responded to Lieberman's comments by saying that the rights of Israeli Arabs to their homeland did not depend on either the foreign minister or the definitions of the State of Israel.
"While Lieberman bases his claims on the doctrine of racism, I base mine on the principle of total equality between citizens. We are the ones representing the only democratic option, while Lieberman represents apartheid and ethnic cleansing," she said.
Netanyahu prefers to discuss F-35
Other ministers at the meeting demanded the government end the construction freeze in settlements as planned, despite US pleas, and Netanyahu told Likud ministers later that his stance on the issue had not been changed by the peace talks.
"I cannot go into the content of the talks because of the sensitivity. On the issue of the freeze there has been no change in our position. I stand firmly behind security needs, so that the fire on our citizens does not return, as it did after the withdrawal from Lebanon and Gaza."
Interior Minister Eli Yishai said, "The freeze cannot continue, it's all an excuse. They don't want negotiations and are incapable of making decisions. This is a vow we cannot break under any circumstances."
He added that the Palestinians were building without any permits while settlers desired only to build within existing blocs. "I am opposed to any type of freeze, and most of the people are for the continuation of construction," Yishai said.
Science and Technology Minister Daniel Hershkowitz expressed the same opinion. "We have already made clear through various channels that the issue of extending the settlement freeze is non-negotiable. For 10 months Israel made gestures above and beyond what was required, and now it's the Palestinians' turn," he said.
Regarding Palestinian threats that continued building would derail peace talks he said, "The construction in settlements is not an obstruction to peace. Will the Palestinians take it as an excuse to withdraw? They were never short of excuses in the past. If not this, they'll find something else."
Prime Minister Benjamin Netanyahu seemed to ignore the issue during the meeting, and chose to discuss a new deal for the purchase of 20 F-35 fighter jets from the US for the sum of $20 billion.
"This is the most advanced jet in the world," he said. "Its arrival in the Air Force will be a significant step for the improvement of Israel's military capabilities."
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