In an interview with London's Financial Times on Tuesday, Mohammed
Khatami, former president of Iran, said that if the Hamas-led
Palestinian government were to agree to a two-state solution with
Israel, Iran would also accept the Israeli state.

Khatami, widely known as a reformist during his term as president of Iran in the late 1990s, challenged the statements made by his successor Mahmoud Ahmadenijad that the Holocaust was a myth, saying that the Holocaust was a historical fact, and adding that he believed Ahmadenijad was misquoted on this issue. 

But Khatami added that, in regard to the Israel-Palestine conflict, the Iranian policy has always been one of non-interference, and said that has not changed since Ahmadenijad took power.  "Our policy has always been sustainable peace in the Middle East where Jews, Muslims and Christians are determining their faith and the refugees, who live in camps and die there, will have the right to come back…Naturally whatever the Palestinian people accept should be abided by the others as well. I believe sustainable peace would benefit all sides involved, including Iran. This insecurity and grounds for tension are dangerous for everyone. But there is one problem. There have been lots of peace plans, but they have been unsuccessful. The reason is because they were not just. If the rights of Palestinian people, including their right to return to their land, is recognised and if they feel those who advocate peace are neutral toward the two sides, and treat them equally and fairly, I think then the ground for establishment for sustainable peace will be provided. I don’t think there has been any basic change in Iran’s fundamental policies, including non-interference in the domestic affairs of that land. The problem should be resolved through observing the rights of both sides within that land."

He criticized the Bush administration's Mid-east policies, which he said rolled back gains made during the term of Bill Clinton and have increased hostility and tension in the region.

Khatami also challenged the claim made by the Bush administration that Iran is developing a nuclear weapons program.  He stated that the reactors being built are strictly to provide nuclear energy, not weaponry.  "I know the supreme leader [Ayatollah Ali Khamenei] who determines policies and strategies is definitely against it [nuclear weapon construction] and has called any efforts to produce and maintain atomic weapons haram [forbidden in Islam]. I strongly say that no official individuals and organisations, with determining roles and responsibilities, think of producing atomic weapons."  He said that during his term in office, Iran had voluntarily suspended uranium enrichment, but that this good-faith measure was not met with any reciprocal measures from Europe or the US.

When asked about a term used by Bush in a speech recently, 'Islamo-fascism', Khatami replied, "Islamic fascism is as wrong as if we talk about Christian or Buddhist fascism. The spirit of Islam, Christianity and other religions is in no way compatible with what represents fascism and Nazism. I am really sorry to say that fascism was created in Europe and the modern world as anti-semitism was created in the west and modern world. You see a coexistence of Jews and Muslims for centuries when hatred never dominated their relations. You see today Muslims and Arabs are extremely furious with Israeli suppressive policies. However this anger has never created hostility between Arabs and Jews and Muslims and Jews…the Holocaust was one of the Nazis’ crimes in the world. As I have said before, Europe is proud and the US is proud in its help to Europe to eliminate fascism from the national level, but unfortunately I have to admit that fascism was not uprooted and was transferred from the West’s national level to the international stage. Today at the international level we see a kind of fascism, apartheid, unilateralism and a kind of totalitarianism according to which nations are distributed, their interests are distributed and wars are created."