SHIMON PERES, OPPOSITION LEADER: I think most people support the act against Sheikh Yassin and they wonder about the consequences. Will this lead to an escalation of the situation? Nobody wants to see higher flames of terror all around us.

MARK DAVIS: We've just spoken with Hamas leader Mahmoud al Zahar who has unequivocally pledged a bombing rain against Israeli citizens. Has that message sunk into Israel, do you think?

SHIMON PERES: Well they were not innocent or inactive until now. They bombed, they killed the innocent people, children, women, so this message is not something surprising to us. We are used to them. It's a terrible organisation. They don't have any responsible program for the future and they are running irresponsible campaign of violence and death.

MARK DAVIS: Well, it's not easy to criticise your own government under these circumstances, why have you chosen to speak out about the assassination of Sheikh Yassin.

SHIMON PERES: We are in opposition and we have to show the other side of the story and the argument is not whether Sheikh Yassin should have remained alive or not. He was a terrible leader who called for death and terror day in and day out. The problem is does it serve the purpose of reducing the hatred, of reducing the need of terror. Leaving the terroristic issue, more of a local nature than a wider one.

MARK DAVIS: Well the prospect that this will worsen the situation is presumably something that the Israeli cabinet thought through before they made this decision. What is their end game in your opinion?

SHIMON PERES: Well, now depends very much whether the government will continue with the peace process. If we shall embark upon a movement throughout peace, then it may reduce the tension. I believe personally that you cannot stop terror just by killing the terrorist, you have to fight them clearly. But you also have to tackle the reasons for terror. You have to ask yourself what are the motivations of people who commit suicide and for that reason, we in the position feel that you have to do two things, which are contradictory in a parallel way. One is to fight the terrorist in a determined way. On the other hand is to negotiate with the Palestinians that they themselves will begin to fight terror because terror is their enemy, not only ourselves. The terroristic works are frustrating any agenda that the Palestinians are trying to introduce.

MARK DAVIS: Well, you've signed an assassination order yourself against Hamas leader in 1996. Now that killing was followed by a wave of bombings across Israel. Are you drawing on that experience in making your assessment today?

SHIMON PERES: I don't think so. First of all I didn't sign anything so I don't take your question for granted. But I want to say that the so-called engineer was a ticking bomb. He was not just a leader of terror. He himself was responsible for 54 acts of terror and he was on his way to commit a 55 one. So something has had to be done in order to prevent him from doing it.

MARK DAVIS: Well, there was, of course, a series of reprisal bombings against Israeli citizens after that attack. Now, Mr Sharon would be aware of that history. What is your thinking in - what is his thinking in your opinion? Does he believe he's now able to defend Israel better than - and is more prepared than the government was in '96?

SHIMON PERES: Well, let's clarify the situation. There is a consensus in Israel that when you are facing a ticking bomb, namely a person that carries a bomb on his way to Israel to kill innocent people, we must prevent him from doing so. About that, there is neither a legal or political argument. The problem begins concerning the higher level or the case where leaders are not necessarily having at that moment a ticking bomb.

MARK DAVIS: Will Hamas change, in your opinion, under its new leadership of Dr Rantissi?

SHIMON PERES: I am not sure. It's very hard to believe that fanatic people can be changed overnight.

MARK DAVIS: Well this government shows no sign of backing down. The Prime Minister and senior ministers have all suggested that more Hamas leaders may be killed, or some have suggest will be killed. Is that a mistake in your opinion?

SHIMON PERES: Well, I would do it differently. I don't think does anything to spread threats. We have to act when there is no other alternative but to act in order to stop an additional murderer or murder, but otherwise as I have said, we've simultaneously developed a policy, which will convince more and more Palestinians that there is a political alternative. I mean, as the Chinese are saying, you know, talk talk, bomb bomb. There are times that you cannot avoid a bombing, but it shouldn't be the time to stop talking.

MARK DAVIS: It certainly does seem all bomb, bomb at the moment. There's also suggestion that Yasser Arafat will be targeted. Again, are you taking those suggestions seriously and what's your advice upon that?

SHIMON PERES: To be fair to the government, I must say that they're also advocating talk, talk. About Arafat, I think the present policy will be continued by the present government, namely, neither to expel him, nor to harm him in any other way.

MARK DAVIS: A number of commentators have suggested that this may be a final fling to weaken Hamas before Israel withdraws from Gaza. Is that a credible theory in your opinion and is Israel likely to do so?

SHIMON PERES: I don't know where the commentators took this idea, but my own opinion is that you can withdraw from Gaza without the added acts.

MARK DAVIS: And do you believe that Mr Sharon is inclined to do so?

SHIMON PERES: I'm not a spokesman for Sharon but that's what he says.

MARK DAVIS: Well threats have now been made by Hamas and al-Qa'ida for reprisals for this killing against America and its allies, how seriously are you taking those claims?

SHIMON PERES: Al-Qa'ida was not sitting idle anyway, even before the killing of Sheikh Yassin. They just performed in Spain and they will try to perform again and again. Their motives doesn't stem from reason and they don't have a message for the future.

MARK DAVIS: But this would be a turn of events if Hamas were to widen its focus to America and its allies?

SHIMON PERES: I think Hamas and al-Qa'ida are trying to do whatever they can anyway and they don't need any additional urge.

MARK DAVIS: Shimon Peres, thanks very much for your time.

SHIMON PERES: Thank you.