BOB SCHIEFFER: I want to start with your meeting with the president, after you left the White House, he issued what some call a very sharp rebuke, he said that if you go forward with new settlements in East Jerusalem you risk the condemnation of even your closest ally.
BENJAMIN NETANYAHU: Well, first of all I had a very good meeting with the president and I was baffled by this statement. Because it doesn't reflect American values; what we're being criticized for is that some Jewish residents of Jerusalem bought apartments -- legally -- from Arabs, in a predominantly Arab neighborhood, and this is seen as a terrible thing. You know, Arabs from in East Jerusalem, Palestinians, buy apartments, thousands of them, in Jewish neighborhoods in West Jerusalem, and nobody says you can't do it.
If I said to you some place in the United States Jews can not buy apartments, there would be an uproar, I don't accept this thing, Jews can buy private homes in Arab neighborhoods, Arabs can buy private homes in Jewish neighborhoods, its their right, we don't want to start something else, and I was absolutely baffled by this, it is against American values and it doesn't bode well for peace. The idea that we would have this ethnic purification as a condition for peace, I think it is anti-peace, it works against peace, I don't think it is a principle we should condone, it should be condemned.