"Israeli Arabs will not lose anything by joining the Palestinian state. Instead of giving the Palestinians empty land in the Negev, we are offering them land full of residents, who will not have to leave their homes," said Deputy Foreign Minister Daniel Ayalon in an interview to London-based al-Sharq al-Awsat newspaper published on Saturday.

The deputy FM also stated that "demanding Israel stop building in settlements is like demanding the Palestinians give up the right of return for refugees."

Index Poll: 77% of 'Soviet' olim support Arab transfer Ynet Survey conducted by Israel Democracy Institute focuses on integration of immigrants from former Soviet Union into Israeli society after 20 years of aliyah. 2009 Democracy Index finds immigrants tend to be more hawkish, believe less in Israeli democracy, and are much more pessimistic. Poll: 77% of 'Soviet' olim support Arab transfer

"We say we expect national solidarity as Israelis, both from Jews and non-Jews… We respect the Arabs just as we wish they respect us. We have nothing against them. We are talking about a land exchange," Ayalon said, commenting on the platform of the Yisrael Beiteinu party of which he is a member.

"We say, 'Why give the Arabs (the Palestinians) empty land in the Negev, why not give them land full of residents?' These residents will not have to leave their homes."

When asked if he was referring to the concentration of Arab towns and villages known as the Triangle region, he said: "Yes. Why not? If the Arabs in Israel say they are proud of being Palestinian, why shouldn't they be proud of being part of the Palestinian state?

"They will lose nothing by joining it, and in addition, this will be in the interest of the Palestinian state, since they are economically and socially developed and will be able to use their experience to help build the state."

The interviewer, Ali a-Saleh went one step further and asked Ayalon why Israel doesn't include Nazareth in the land exchange if it already plans to trade off the Triangle and Umm al-Fahm.

"If you want to get rid of the Arabs in Israel, why not include all the Arabs?" he asked. In response Ayalon said, "I am talking about areas where there is geographical continuity (to the Palestinian state). Any area close to the border can be included in this plan."

The interviewer pointed out that Nazareth is located close to the Palestinian city of Jenin. In response Ayalon said, "We do not want to get into surgical procedures. The important thing is to accept the idea that the majority of Jews live in Israel and the majority of Arabs live in Palestine."

'Settlements not obstacle to peace'

On attempts to renew peace talks, Ayalon said he does not believes settlements will pose an obstacle to peace.

"I believe the notion that settlements are an obstacle to peace is an exaggeration. We have proven in the past that the settlements have no impact on the results. An example of this is the retreat from Sinai and the dismantlement of the settlement of Yamit, which was carried out by Ariel Sharon himself, as well as the decision of the Likud government headed by Sharon to withdraw from the Gaza Strip and dismantle the settlements in 2005.

"The settlements will not be a problem if there is a good agreement. A good agreement is an agreement in which the two countries enjoy security and stability and will live side by side in cooperation, coordination and security."

When asked why Israel does not freeze construction in settlements as proof of its good intentions, he said, "These are unfair words since demanding Israel stop construction is like demanding the Palestinians give up the right of return for refugees. This is not right and not realistic."

Turkish envoy incident a 'technical mishap'

Ayalon was also asked if he feels his behavior towards Turkish Ambassador to Israel Ahmet Oguz Celikkol in a reprimand meeting last month was arrogant or condescending.

The deputy foreign minister said: "It was not so. I did not mean to behave arrogantly and I did not mean to humiliate the ambassador. When I felt it caused pain and harm, I personally sent an apology. The apology was in writing."

The interviewer in response said the pictures were clear: "You sat on a chair higher than that of the Turkish ambassador, you did not serve any refreshments and you did not place the Turkish flag as is customary in the rules of diplomacy. Furthermore, you invited journalists to witness the humiliation themselves."

Ayalon responded saying, "What happened with the Turkish ambassador was a technical mishap, I did not mean to humiliate him. I can invite you to my office in the Knesset and you will see that it has two chairs, with one higher than the other which is meant for guest.

"We wanted to express our protest but we did not mean to humiliate him, and this was not supposed to be published."

The interviewer said that it was Ayalon who summoned the media, and Ayalon retorted saying "This is not true. We allowed cameras in just to take a few pictures. We presumed that the recorders were off, but this wasn't the case. I personally made a mistake and I take full responsibility for it and I apologize. I am not afraid to admit a mistake."