Israeli Economy Minister Naftali Bennett on Tuesday turned the tables in an interview on BBC’s Hard Talk when he asked host Stephen Sackur, “Would you hand over half of Britain to someone who keeps on killing you?”

In the combative interview, Bennett countered Sackur at every turn.

Asked about his resistance to the internationally acclaimed “two-state solution,” Bennett said the history of Arab violence and two decades of diplomatic failures mean “fresh thinking” is required.

“In our land, there are nearly 2 million Palestinians…. They’re not going anywhere, but we’re not going anywhere,” Bennett said. “We gotta figure out how to live together, how to work it out.”

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Sackur insisted, asking Bennett why he was against offering “sovereignty.” Bennett responded that “every time” Israel withdraws from land, “they kill us.”

“Would you hand over half of Britain to someone who keeps on killing you?” Bennett asked the host.

“For 20 years we tried this direction, in [the international peace agreements of] 1993, in ’95, 2000… and you know what they did? They killed 1,000 Israelis,” Bennett said. “It’s not working. It’s time to try a different approach.”

“That something else is peace between the people. Businesses in Judea and Samaria of Israelis and Palestinians together. That’s the real bridge to peace, build it bottom-up, because clearly the diplomats are failing.”

Sackur said that Saeb Erekat, the lead Palestinian Authority negotiator in the ongoing peace talks with Israel, recently appeared on his talk show and said the PA recognized Israel in the 1993 Oslo peace accord.

Bennett disagreed and described what he said was the PA’s plan to divide Israel repeatedly until there is nothing left to recognize:

“Here’s what Erekat is essentially saying: divide the land, give us half of it, first of all. Now we have our Palestinian state, and now let’s start debating your half, and let’s turn it into a bi-national state.”

“No,” Bennett said. “It’s got to be the homeland of the Jews. We only have one homeland, the Arabs have 22 — 300 times the size of our tiny state. I don’t know how many of your viewers realize that from the ocean to the Green Line it’s a 10 minute ride. That’s how narrow our state is, but he wants a piece of that.”

“What he doesn’t get is he needs to recognize Israel as a Jewish state and, yes, we only have one. The Jewish nation only has one state in the world, and that’s Israel. But if he wants it to be a multi-national state that means he wants his state, and then the day we sign that deal, he’ll begin fighting for the small Jewish state.”

Sackur then addressed the notion that refusing a two-state deal is succumbing to “real naivety” in the belief that Palestinian-Arabs will eventually lose their will to fight.

“I’ve unfortunately fought in every battle in Israel since 1990. I’ve lost my best friends in battle, in the First Intifada, the Second [Intifada], the Second Lebanon War… A thousand people blew up in Tel Aviv and Haifa and Jerusalem when we did hand over land,” Bennett said.

Asked by Sackur if he has “empathy” for the plight of Palestinian Arabs, Bennett replied: “I have immense empathy… [but] we’ve got a tiny home, one home for the Jews. We don’t have anywhere else to go. The Arabs have 22 states, much bigger, and that’s it. That’s what we’ve got, that’s what we’ve had forever.”

When Sackur mentioned the opinions of Ahmed Tibi, the Arab-Israeli Member of Knesset who heckled Canadian Prime Minister Stephen Harper during a historic speech at the Knesset last month, Bennett used that example to show the strength of Israeli democracy.

“We’re a democracy,” Bennett said. “One democracy in the Middle East. We have a Supreme Court, freedom of speech.”

“Ahmed Tibi, he is an Arab-Israeli out of 1.5 million, he is a member of our parliament. Show me in Saudi Arabia a Jewish member of parliament; show me in Jordan; show me in Syria; show me in Lebanon,” Bennett said. “We’re the only democracy in the entire Middle East who really gives free rights and equal rights to women. Everyone can speak up in Israel and everyone does.”

When asked by Sackur why his position on a Palestinian homeland seemed “out of step” with international consensus, and if he were “ready to contemplate” diplomatic and economic sanctions against Israel, Bennett responded that “common wisdom” has been proven to be right only about half the time.

“The fact that a lot of people think something doesn’t make them right,” Bennett said. “Everyone thinks the right thing is to hand over land to my enemy.”

However, “the Israeli public, the younger generation, is flocking to my party because they see reality not from Washington, D.C., not from London, [but] from ground up.”

Asked about recent comments from Israeli businessmen who said Israel’s economy can’t afford a failure of the peace talks, Bennett said, “I would ask those business people, ‘how will Israel’s economy look the first time a plane is shot down from the West Bank, which is 4 km from Ben Gurion Airport?’ ”

“We’ve got apartheid going on in Lebanon; we’ve got apartheid going on in Syria. In Syria, they butchered 100,000 people,” Bennett said, asking why “sanctions” haven’t been threatened on those states. He later added, “We’re not blowing up mosques like others are blowing up churches.”

When Sackur pressed him on the economic implications of a boycott of Israel, Bennett, who was an internet entrepreneur before entering politics, responded with figures.

“The fourth quarter of 2013 was the best high tech quarter in Israel’s recorded history; last week, we sold a company for $900 million,” he said. “The stent in your heart is Israeli; the irrigation system is Israeli; the navigation system is Israeli.”

Meanwhile, he said economy ministers in Europe asked him, “how do we build another start-up nation?”

Israel is “helping out in India, in Africa, all around the world,” Bennett added. “Google set up shop in Israel, Microsoft, Facebook has now set up shop. Israel has seen more R&D centers of multi-nationals than any other country in the world.”

Asked if Israel’s relations with the U.S. are currently at their “lowest,” Bennett said, “America is our biggest ally” with “deep intelligence and economic” co-operation at many levels.

He told Sackur, “The only problem with your approach is that it has nothing to do with reality, beyond that it’s perfect.”

“I see the fact [that] more American investment is coming into Israel, more American intelligence collaboration,” not less, Bennett said. “We do have disagreements on the Palestinian issue, on the Iranian issue, [but] it’s okay. Friends can disagree.”

Watch Economy Minister Naftali Bennett in the BBC Hard Talk interview below: