Netanyahu has smaller majority to create new coalition

>>> israeli elections have left prime minister benjamin netanyahu with a stronger majority. the big surprise, though, with a second-place finish led by a israeli celebrity who emphasizes pocketbook issues, not so much the foreign threats or the peace process itself. joining me now, israel 's ambassador michael oren . this is not a system familiar to many americans, ambassador, but thanks so much for taking us through it. what's going to happen now as the prime minister tries to create a coalition, and will his policies change towards either the palestinians or the united states as a result of this election?

>> good afternoon, andrea. always good to be with you. we just concluded the inauguration of president obama 's second term and israelis have now celebrated our democracy by going to the polls and turning out some interesting results, including a decisive victory for prime minister benjamin netanyahu , and, yes, an interesting victory for the head of a party, a new party, a centrist party, headed by journalist and writer lapeed. it's not going to be major changes in terms of the peace process , prime minister netanyahu 's position calls for direct talks with the palestinians without preconditions, to establish a two-state solution for two peoples, based on security and mutual recognition. that's the position of the obama administration, and i think that's the position of lapeed's party, as well. in terms of the relationship with the united states , we're committed to the closest possible alliance with the united states . that has been the situation for the last four years, and that will continue. you are right that there's a greater emphasis on some of the social issues in our country, which are not so different than the issues in the united states . that includes a livable middle class wage, a housing for young people , economic opportunities, these have been the issues that have really come to the forefront in the last elections in israel .

>> might it be necessary for the prime minister to back off of the new settlements, for instance, which are such a bone of contention with the administration here, and, of course, with the palestinians ?

>> i think there's a strong centrist feeling the settlements are not the major issues in the search for peace. settlements can be negotiated in the dreblth tairect talks. he is largely directive of direct negotiations without preconditions and the settlement issue will be resolved with that. netanyahu is speaking in a joint session of congress and said express he he understands that there settlements that lie beyond israel 's borders.

>> what about iran and the possibility of military action against iran ?

>> not much change here. israelis understand that iran poses the paramount threat to israel in the region. the iranian nuclear program and support for terror. we have the greatest stake in the game and the greatest skin in the game. no country has a greater threat than resolving the threat through diplomatic means. we hope that crippling sanctions and military threat will dissuade them from nuclear weapons . the position of netanyahu and i believe of the vast majority of israelis and the obama as min station. all options should remain on the table and containment is not an option.

>> what about chuck hagel and talk about concern of supporters that he is not strongly enough a supporter of israel . he tried to a swage that and met with jewish groups. what is your sense as to chuck hagel as defense secretary ?

>> israel will also respect the senior administration officials nominated by president obama and confirmed by congress. i have not personally met senator hagel , but the deputy foreign minster met frequently with senator hagel who understands the partnership between the united states and israel and the support is in america's interest. i have worked with two sec tears of defense and i agree with what our minster of defense said. the defense relationships between the u.s. and israel are better than ever and i have confidence that relationship will continue to strengthen and grow.

>> thank you very much. israel 's ambassador to the united states .