Excerpts from interview with Netanyahu adviser Dore Gold

(Reuters) - Following are excerpts from an interview with Dore Gold, a senior adviser to Israeli Prime Minister-designate Benjamin Netanyahu.

Q - Do you think the priorities in (Israel's) foreign policy will be affected by the structure of the coalition Netanyahu is trying to build?

A - It's the prime minister of Israel who really has the most decisive voice in determining the line of policy that the state of Israel follows in its international contacts.

Q - Where do you think the priorities lie for the government in taking action and in discussing with its American and other partners what the international approach to Iran should be?

A - There's no question that Iran is the number one Middle Eastern issue for the state of Israel but also for many of our neighbors who are actually closer to Iran. And therefore the prime minister will give the issue of Iran the highest priority. Now, that does not mean that he will not deal with the Palestinian issue -- quite to the contrary ... He believes however that by working on the economic issues and then in parallel starting to work on the difficult political diplomatic issues, even those can proceed forward once we create a new environment on the ground in the West Bank.

Q - We've heard the figure, a growth target of 10 percent (for the Palestinian economy) -- so ambitious in these global times. Is that something that figures in the strategic thinking or not?

A - I think the key point for Mr. Netanyahu is that once he takes over as prime minister he will seek to move aggressively on the economic front trying to improve the condition on the ground for the Palestinians.

Q - How important is it for Mr. Netanyahu to say clearly ... that this approach has the ultimate goal of creating a Palestinian state, that the two-state solution is his policy?

A - Netanyahu is not interested in semantics -- Palestinian state versus some other label. He's looking at the powers of the Palestinian state, and what is critical for him, is that Palestinians have all the powers necessary to enjoy self-government, but none of the powers to undermine the security of the state of Israel. And that gets into a lot of critical issues like who controls the air space over the West Bank, what about the electromagnetic (communications) zone in the area of the West Bank, and a number of other related issues that have to be left for negotiations. Some people say a Palestinian state up front, (and) afterwards try and subtract powers implicit in their use of the word 'state'. Mr. Netanyahu's approach in a certain sense is more honest. He's saying, 'I don't want to get into the semantics. I want to get into what we need for the protection of Israel and what the Palestinians need for maximum freedom'.

Q - What do you think the priorities are in ... dealing with the security issue that arises out of Gaza and then the political issue of having a substantial part of the Palestinian electorate ... supporting a party that is not prepared to talk peace?

A - Gaza poses a very real problem. It's a Mediterranean beachhead now for the Islamic Republic of Iran, which is supplying arms to Hamas, which is giving money to Hamas, and which is training Hamas operatives in military camps outside of Tehran run by the Revolutionary Guards. With that said, Israel still believes that everything must be done to recognize the humanitarian needs of the Palestinian population and address them. But ultimately it is completely unacceptable to any Israeli government for Hamas to launch rockets at Israeli towns and cities with impunity.

Q - When do you think decisions would have to be taken about Iran's nuclear program?

A - There may be tactical differences of how we get there, but whether the U.S. and its allies pursue a policy of engagement and dialogue with Iran or they decide on another course of action, those decisions will have to be taken rather quickly, not allowing the Iranians to exploit the negotiating period to simply progress further and enrich more uranium ... Netanyahu has met ... Barack Obama twice already and the subject of Iran was at the center of their meeting. And I'm sure that Mr. Netanyahu feels confident in the assurances that President Obama has stated publicly that the acquisition of nuclear weapons by Iran would be a game changer and completely upset the balance of forces in the region.

Q - Do you feel that the incoming administration believes that Israel on its own can play a role in preventing Iran going nuclear?

A - Well, that's obviously a question dependent on the most sensitive intelligence, which the prime minister would have to obtain when he enters office.

(Editing by Dominic Evans)