[Translated from Hebrew]

Not too far from here, a solidarity rally for our kidnapped boys - Eyal, Gilad and Naftali - is taking place. I instructed the IDF Chief of Staff, the Head of the ISA and the Minister of Defense to spare no effort. We will spare no effort or resources to bring the boys home. I hope that we will succeed in our mission. We will not relent.

This event is part of a much broader trend which I am sure you are addressing in your deliberations. An historic change is taking place in our region, with major repercussions for Israel's security and the security of the entire world.

The Sykes-Picot agreement which, almost a century ago, defined the borders in our region, has come to an end. This arrangement was maintained during the first half of the 20th century by colonial powers and later by secular Arab dictatorships. When these regimes collapsed during the Arab revolution, all the demons in the Middle Eastern bottle were uncorked - Sunnis versus Shiites, tribe against tribe, sect against sect, movement against movement. The hope that moderate liberal movements will take the reins in Arab states quickly evaporated, and we are now looking at many years of conflict and instability.

I must tell you that at the beginning of the "Arab Spring", I was among those who were skeptical - to put it mildly - regarding the triumph of liberalism. I was dismissed as archaic, as someone who failed to see the new Middle East that was taking shape before our eyes.

You may be surprised then when I tell you that in the long-term, in decades, half a century, certainly a century, radical Islam will decline. It will decline because it does not allow for individual freedom and entrepreneurship, which has been the basis of economic development, certainly in the past several centuries. It will decline because it will be defeated by the information technology revolution which will make it very difficult for these regimes and movements to maintain long-term control over the minds of young people.

However, similar things could also have been said during the 1930s regarding the fate of Nazism in its battle against the Free World. Nazism was indeed defeated. However, 60 million people, including one third of our people, perished before the forces of freedom and progress defeated it. Therefore, as likely as I believe the ultimate decline of Islamic fanaticism to be, we must prepare now for the four great challenges it poses.

The first challenge is to protect our borders. The forces of radical Islam are already at our doorstep in the north and south. In Lebanon and Syria, Hezbollah and Iran's Shiite forces are arming themselves in preparation for a future confrontation with Israel, and they also test us from time to time. In Syria and in the Sinai, their Sunni and jihadist enemies are joining the attacks against us, and in Gaza, the Hamas and Islamic Jihad movements are operating against us.

We have established physical barriers to prevent infiltration into Israel on all these borders except one. The first thing we must do is build a security fence in the east, build it gradually from Eilat to join the fence we have already built over the past two years on the Golan Heights. Let me be clear. The fence does not completely prevent infiltration, it does not prevent shooting - as we tragically witnessed a week ago - it does not prevent the overhead firing of rockets or the underground digging of tunnels, but it dramatically minimizes ground infiltrations into Israel. Imagine what would have happened with the jihadist forces in the Sinai had we not established the security fence along the Israel-Egypt border.

Now you can understand why I keep insisting that Israel's eastern security border will remain along the Jordan River. Who knows what the future holds? The ISIS wave could very quickly be directed against Jordan. I will elaborate on that later. In any case, we must have the capacity to stop the waves of terror and fanaticism that can come from the east along the Jordan River rather than on the outskirts of Tel Aviv.

The second challenge we face is to stabilize the area west of the Jordan River security line. In this area of the West Bank no force can guarantee Israel's security other than the IDF and our security services. Time after time we have seen how the local forces trained by the West to stop the Islamists cannot be relied upon following the departure of those Western forces. This is what happened with the Lebanese army vis-à-vis Hezbollah following Israel's departure from Lebanon; this is what happened in Gaza when the Palestinian Authority forces were defeated by Hamas after Israel's withdrawal; and this is what is happening now in Iraq following the departure of American forces. My friends, this is a fact. It cannot be ignored because of outdated political concepts.

We must understand that in any future settlement with the Palestinians, Israel will have to maintain long-term security control of the territory along the Jordan River. This is the practical basis for the idea of two nation-states which I presented in my Bar Ilan speech and which I continue to stand by. I defined it then as "a demilitarized Palestinian state that will recognize the Jewish state".

What does "demilitarized Palestinian state" mean? Given what is happening around us, who will prevent infiltration into the Palestinian state and from the Palestinian state into Israel? Who will prevent the manufacturing of rockets and missiles inside Palestinian territory and their firing into Israel? This is what is happening right now in the Gaza Strip, which we completely evacuated. Who will prevent the dispatching of suicide terrorists from Palestinian cities to Israeli cities? Who will prevent the digging of tunnels into our territory? Again, this is what is happening in the Gaza Strip, and by the way, not only in Gaza. Who will prevent that if not the IDF and the ISA - with or without cooperation from Palestinian forces? Maintaining the demilitarization of the Palestinian state must be in Israel's hands. Otherwise, it will simply be unsustainable.

I believe that we must apply this updated concept to our arrangement with the Palestinians: Palestinian political and economic control in the territory governed by them, in parallel to Israeli security activity on the ground in accordance with the operational requirements to ensure that the territory is free of terrorist elements. The evacuation of Israel's forces would most likely lead to the collapse the PA and the rise of radical Islamic forces, just as it did in Gaza. It would also severely endanger the State of Israel.

I hear the arguments against this, that it undermines Palestinian sovereignty and that forces with which they were in conflict cannot remain there. Is that a fact? Is Germany's sovereignty compromised by the presence of American forces? Is South Korea's sovereignty compromised by the presence of American forces 60, 70, 80 years later? Less time in the Korean case. Is Japan's sovereignty compromised by the presence of American forces? What was it about? It was about America's security needs as it understood them. Sovereignty can and should coexist with that. It should adapt itself to the security needs.

The true security needs which are becoming clearer and clearer and which you are currently discussing necessitate the continued Israeli presence and security activity in the West Bank and along the Jordan River. Those who fail to understand that ignore reality. There are of course elements within the international community which consistently refuse to acknowledge this reality, although I do not totally dismiss the possibility of convincing them. Of course the last ones to be convinced are several Western European countries that continue to call for various boycotts and divestments of Israel because of our presence and activities in the West Bank and on the Golan. On the Golan! Nothing more, nothing less. This is the problem, and therein lies the solution - the Golan.

As for settlements, this is one of the issues that should and I believe can be resolved in a final status agreement. However, this is not the root of our conflict with the Palestinians. The root of the conflict is the refusal to recognize the Jewish state in any boundary. Until we resolve this issue, no settlement evacuation will make any difference, as we witnessed following our withdrawal from Gaza.

Therefore, Abu-Mazen, having said important things in Saudi Arabia against the kidnapping, must break his pact with Hamas, an organization which continues to champion kidnappings, terror and more importantly - the eradication of the State of Israel.

When we return to the negotiating table, as I hope we will, we will have to address not only the question of mutual recognition of two nation-states and the cessation of the constant incitement against us, but also arrangements that will guarantee Israel's continued security control along the Jordan River. There is simply no one else who can do it for us in the foreseeable future, neither Palestinian nor international forces. As we have seen time and again, the former are simply incapable of it, and the latter eventually evacuate.

The third challenge we face is building an axis of regional cooperation. I view it not only as a challenge, but also as an opportunity. We cannot resolve the conflicts between the Sunni and Shiite radicals, not in Syria, not in Iraq, not anywhere. These two camps are our bitter enemies, both the Shiite camp led by Iran and the Sunni camp led by al-Qaeda and ISIS. But they are also enemies of others, and there is an opportunity here for enhanced regional cooperation - cooperation which already exists and should be bolstered.

We can and should minimize the possible damage radical Islam poses to us and others, support the international efforts to strengthen Jordan and support the Kurds' aspirations for independence. Jordan is a stable, moderate country with a strong military that can defend itself, and the international efforts to support it are appropriate. So too is the support for the Kurds, who are a fighting people that has shown political commitment and moderation and deserves political independence. I believe we must also cooperate with Egypt and other countries to block the spread of radical Shiite or Sunni forces in their territories.

I believe that we spoke last year about these changes, and indeed there have been many contacts and a great deal of cooperation, as you know, with countries with which we have peace. Because of everything that we are witnessing here and even prior to the recent developments in Iraq, I believe that the understanding that there is a wider confluence of interests in the Middle East is not merely my own viewpoint or even a limited Israeli viewpoint.

The fourth and most important challenge - a shared challenge for many in the Middle East - is to prevent Iran from becoming a nuclear threshold state. We must not allow one of the sides in this bloody conflict in our region to arm itself with weapons of mass destruction. The arming of radical forces with nuclear weapons will endanger the entire world. In this sense, no deal is better than a bad deal.

To explain what a bad deal is, I will first explain what a good deal is. While the deal over Syria's chemical weapons did not end the conflict, it removed most of Syria's chemical agents and chemical weapons capabilities. The task is close to completion and should be completed of course. Notice I used the word "remove". The arrangement in Syria, led by and obtained through impressive cooperation between the United States and Russia, dismantled and removed Syria's chemicals and chemical weapons capabilities. Iran aspires to a different agreement, and unfortunately, there are signs Iran could obtain it.

Iran insists not on dismantling and removing, but on keeping and inspecting. Not dismantling of capabilities, but inspection of capabilities. Under such an agreement, both the nuclear material and the means for uranium enrichment, which are necessary for the production of an atomic bomb, will remain in Iran's possession under inspection.

However, the inspection regime cannot prevent the enrichment of uranium for a bomb. First of all, Iran can deceive the inspectors - it has done so for years - or it can do something else, it can sweep them aside and break out. This is the whole idea of breakout. You remove the inspectors and start racing towards enrichment, just as North Korea did. The North Korean model was keep and inspect - inspection of capabilities. The arrangement with Syria was the dismantling and removal of capabilities. Israel's position was and remains that Iran does not need enrichment at all because civilian nuclear energy for peaceful purposes does not require even one centrifuge. There are 17 countries which use nuclear energy for civilian purposes with no enrichment.

We have been following with concern the willingness of the P5+1 to reduce Iran's breakout time from "years" to "a year". If Iran maintains thousands of mothballed centrifuges, the breakout time will effectively be reduced to only several months or several weeks. If the world powers agree to such an arrangement, they will allow Iran to become a nuclear threshold state that will threaten Israel and the region and quickly spark a nuclear arms race in other countries in the Middle East.

Such an arrangement will endanger the entire world. We are doing everything we can to persuade the powers to refrain from such a deal or improve it. We are speaking with our American friends and with representatives of all the P5+1 countries to prevent what I have just described from happening. I cannot guarantee that it will happen. For years, we have led a steadfast battle against a nuclear Iran and mobilized the imposition of sanctions. Our efforts have indeed delayed Iran's nuclear program by many years. We must continue to do everything we can to prevent Iran from obtaining a deal of surrender from the P5+1. With will and determination and by focusing our efforts, I believe it is possible.

Distinguished guests,

I see here comrades in arms who have stayed young. We have experienced many things over the years, but we have not yet experienced turmoil such as that currently taking place. The convulsions in the Middle East will continue for many more years. I mentioned four challenges: protecting our borders; stabilizing the territory between the security border on the Jordan River and our population centers; strengthening regional cooperation to curb the spread of Islamic fanaticism; and preventing Iran from becoming a nuclear threshold state. I believe that these are all great challenges to Israel's security.

At the same time, I believe that these are important challenges facing the entire international community, especially the West. You look around and see the truth of what we have been saying for many years. There is no other anchor of stability and security in our region that is similar or even comes close to the State of Israel. We need to do everything we can to strengthen it. For the sake of Israel's security, for the sake of peace and stability in the region, for the sake of our future - and objectively speaking, not only ours - we must continue to strengthen our country and our military. There never was and there never will be any substitute.