Exclusive: Full text of Reuters interview with Obama

WASHINGTON (Reuters) - Reuters White House Correspondent Jeff Mason interviewed President Barack Obama on Monday on topics including U.S.-Israel relations, Iran, China and Russia. Here is a full transcript of the interview.

REUTERS - Mr. President, thanks very much for joining us.

OBAMA - Good to see you.

REUTERS - Let’s start right on Israel. Your administration has described Prime Minister Netanyahu’s plans to address Congress tomorrow on Iran as destructive. What damage has really been done?

OBAMA - Well, first of all, I think it’s important to realize the depth of the U.S.-Israeli relationship. Under my administration, billions of dollars have gone to support Israel’s security, including the Iron Dome program that has protected them from missiles fired along their borders. The military intelligence cooperation is unprecedented and that’s not our estimation. That’s the estimation of the Netanyahu government. And that bond is unbreakable. So we need to make clear from the outset how strong our alliance with Israel is.

The second point is that we actually share a goal, which is making sure Iran does not have a nuclear weapon. That’s something that I committed to when I was still a senator. It is a solemn pledge I made before I was elected president and everything that I’ve done over the course of the last several years in relation to Iran has been in pursuit of that policy. There is a substantial disagreement in terms of how to achieve that. And what it boils down to is what’s the best way to ensure that Iran is not developing a nuclear weapon.

Prime Minister Netanyahu thinks that the best way to do that is either through doubling down on more sanctions or through military action, ensuring that Iran has absolutely no enrichment capabilities whatsoever. And there’s no expert on Iran or nuclear proliferation around the world that seriously thinks that Iran is going to respond to additional sanctions by eliminating its nuclear program.

What we’ve said from the start is by organizing a strong sanctions regime, what we can do is bring Iran to the table. And by bringing Iran to the table, force them to have a serious negotiation in which a) we are able to see exactly what’s going on inside of Iran b) we’re able to create what we call a breakout period, a timeline where we know if they were to try to get a nuclear weapon it would take them a certain amount of time.

And the deal that we’re trying to negotiate is to make sure that there’s at least a year between us seeing them try to get a nuclear weapon and them actually being able to obtain one.

And as long as we’ve got that one-year breakout capacity, that ensures us that we can take military action to stop them if they were stop it.

Now, we’re still in the midst of negotiations. What I’ve said consistently is, we should let these negotiations play out. If, in fact, Iran is agree, willing to agree to double-digit years of keeping their program where it is right now and, in fact, rolling back elements of it that currently exist …

REUTERS - Double digit years?

OBAMA - Double digit years. If we’ve got that and we’ve got a way of verifying that, there’s no other steps we can take that would give us such assurance that they don’t have a nuclear weapon.

Now, Iran may not agree to the rigorous inspection demands that we’re insisting on. They may not agree to the low levels of enrichment capabilities they would have to maintain to ensure that their breakout is at least a year. But if they do agree to it, it would be far more effective in controlling their nuclear program than any military action we could take, any military action Israel could take and far more effective than sanctions will be.

And we know that because during the period in which we applied sanctions for over a decade, Iran went from about 300 or a couple of hundred centrifuges to tens of thousands of centrifuges in response to sanctions.

REUTERS - Let’s talk a little bit specifically about the prime minister. Susan Rice said that what he has done by accepting the invitation to speak was destructive to the fabric of the relationship. Would you agree that it’s destructive? And if so, will there be any consequences for him or for Israel?

OBAMA - You know, I think that Prime Minister Netanyahu is sincere about his concerns with respect to Iran. And given Iran’s record and given the extraordinarily disruptive and dangerous activities of this regime in the region, it’s understandable why Israel is very concerned about Iran. We are too. But what we’ve consistently said is we have to stay focused on our ultimate goal, which is preventing Iran from having a nuclear weapon.

Now, as a matter of policy, we think it’s a mistake for the prime minister of any country to come to speak before Congress a few weeks before they are about to have an election. It makes it look like we are taking sides.

REUTERS - But aside from that, what about that is destructive?

OBAMA - I’m answering your question, Jeff. And the concern is, not only does it look like it politicizes the relationship but what’s also a problem is when the topic of the prime minister’s speech is an area where the executive branch – the U.S. president and his team – have a disagreement with the other side.

I think those who offered the invitation and some of the commentators who have said this is the right thing to do, it’s worth asking them whether, when George W. Bush had initiated the war in Iraq and Democrats were controlling Congress, if they had invited let’s say the president of France to appear before Congress to criticize or to air those disagreements, I think most people would say, well, that wouldn’t be the right thing to do. I guarantee you that some of the same commentators who are cheerleading now would have suggested that it was the wrong thing to do.

I don’t think it’s permanently destructive. I think that it is a distraction from what should be our focus. And our focus should be,‘How do we stop Iran from getting a nuclear weapon?’ Now keep in mind the prime minister, when we signed up for this interim deal that would essentially freeze Iran’s program, roll back its highly enriched uranium - its 20 percent highly enriched uranium - and so reduce the possibility that Iran might breakout while we were engaged in these negotiations, when we first announced this interim a deal, Prime Minister Netanyahu made all sorts of claims. This was going to be a terrible deal. This was going to result in Iran getting 50 billion dollars worth of relief. Iran would not abide by the agreement. None of that has come true.

It has turned out that, in fact, during this period we’ve seen Iran not advance its program. In many ways, it’s rolled back elements of its program. And we’ve got more insight into what they’re doing with more vigorous inspections than even the supporters of an interim deal suggested.

So the question is this: If in fact we are trying to finalize a deal, why not wait to see a) is there actually going to be a deal? Can Iran accept the terms that we’re laying out? If in fact Iran can accept terms that would ensure a one year breakout period for ten years or longer and during that period we know Iran is not developing a nuclear weapon - we have inspectors on the ground that give us assurances that they’re not creating a covert program - why would we not take that deal when we know the alternatives, whether through sanctions or military actions, will not result in as much assurance that Iran is developing a nuclear weapon?

There’s no good reason for us not to let the negotiations play themselves out. Then we’ll show, here - here’s the deal that’s been negotiated, does it make sense? And I am confident that if, in fact, a deal is arrived at, then it’s going to be a deal that is most likely to prevent Iran from getting a nuclear weapon.

REUTERS - You obviously disagree about that. If the prime minister wins reelection, would you be able to work with him?

OBAMA - Absolutely. We’re working with him now on a whole range of issues.

REUTERS - Would you meet with him?

OBAMA - Of course. As I’ve said before, the only reason that we didn’t meet with him this time is a general policy we don’t meet with somebody two weeks before an election. I’ve met with Prime Minister Netanyahu more than any other world leader. And given the strong relationship between the United States and Israel, I would expect that to continue.

REUTERS - Is it fair to say you’re angry with him?

OBAMA - This is not a personal issue. I think that it is important for every country in its relationship with the United States to recognize that the U.S. has a process of making policy. And although we have separation of powers, ultimately, the interaction with foreign governments runs through the executive branch. That’s true whether it’s a Democratic president or a Republican president. And that’s true regardless of how close the ally is.

REUTERS - Have Israel’s actions been disruptive to the ability to get this deal?

OBAMA - I think that it’s been a distraction. I think that in the meantime negotiators are going full speed ahead. Ultimately, what’s been remarkable is the international unity we’ve been able to maintain in saying to Iran, you have to show the world that you are not pursuing a nuclear weapon. You can have very modest enrichment capabilities for peaceful use, so long as there’s a vigorous enough inspection process that we have assurances that you are not obtaining breakout capacity. And the biggest challenge right now to getting a deal is for Iran to recognize this is its path in order to ultimately re-enter into the community of nations.

REUTERS - Have your communications with the Supreme Leader helped in this?

OBAMA - You know, I would say that most of the work has been done directly between the negotiators and Secretary Kerry, Foreign Minister Zarif of Iran, the expert teams that have worked together along with our P5+1 partners. They’ve done the lion’s share of the work.

REUTERS – But has that been useful?

OBAMA – I think it’s been important for us to send a clear signal to all parties inside of Iran that we are not the aggressors here. We are looking to resolve this diplomatically if we can. But given the history of Iran engaging in covert programs, given the history of Iranian sponsorship of terrorism in the region and around the world, given the rhetoric that’s come out from the Iranian regime including anti-Israel and anti-Semitic statements, it is important for them to understand that they have a high threshold that they have to meet in terms of proof and convincing the world that they’re prepared to not pursue a nuclear program.

If they do that, and we have ways of measuring that, very concrete ways, if they do that, that’s the best path for us to take. What we should not do is to try to jettison the talks, undermine the talks.

I’m less concerned, frankly, with Prime Minister Netanyahu’s commentary than I am with Congress taking actions that might undermine the talks before they’re complete. And what I’ve said to members of Congress, both Democrats and Republicans, is there will be plenty of time for us to reapply sanctions, strengthen sanctions, to take a whole range of other measures, if in fact we do not have a deal. But what we should not do is pre-judge the deal and initiate sanctions that might allow Iran to walk away and claim that the United States is the one that has eliminated the path to diplomacy.

REUTERS – How would you judge, what’s your assessment of the percentage likelihood now of this happening.

OBAMA - The likelihood of?

REUTERS - Of a deal coming through? You’ve said before less than 50 percent.

OBAMA - You know, I would say that it’s probably still more likely than not that Iran doesn’t get to yes. But I think in fairness to them, they have been serious negotiators. And they’ve got their own politics inside of Iran. It is more likely that we could get a deal now than perhaps three or five months ago. But there are still some big gaps that have to be filled.

REUTERS - We’re running short of time. So I’m going to ask you about Russia. A top opponent of President Putin was gunned down last week. What does this say about Vladimir Putin’s Russia and do you believe that the Kremlin was not involved?

OBAMA - What I’ve called for is a full investigation and, hopefully, an independent investigation of what happened. Whether that can occur inside today’s Russia is not clear. The individual involved is somebody that I actually met with back in 2009.

This is an indication of a climate at least inside of Russia in which civil society, independent journalists, people trying to communicate on the Internet, have felt increasingly threatened, constrained, and increasingly the only information that the Russian public is able to get is through state-controlled media outlets. That is a problem. It’s part of what has allowed, I think, Russia to engage in the sort of aggression that it is has against Ukraine.

REUTERS - You don’t want to say whether or not the Kremlin was involved?

OBAMA - I have no idea at this point exactly what happened. What I do know is more broadly the fact that free - freedom of the press, freedom of assembly, freedom of information, basic civil rights and civil liberties inside of Russia are in much worse shape now than they were four or five, ten years ago.

REUTERS - Let me ask you about another area of the world, China. Are you concerned about how hard China is making it for U.S. tech companies to do business there?

OBAMA - I am concerned. This is something that I’ve raised directly with President Xi, and my entire foreign policy team as well as people like Secretary of the Treasury Jack Lew and Secretary of Commerce Penny Pritzker have raised with them. They’ve got a couple of laws that are working their way through the system that would essentially force all foreign companies, including U.S. companies, to turn over to the Chinese government mechanisms where they could snoop and keep track of all the users of those services. And as you might imagine, tech companies are not going to be willing to do that.

Those kinds of restrictive practices I think would, ironically, hurt the Chinese economy over the long term because I don’t think there’s any U.S. or European firm, any international firm, that could credibly get away with that wholesale turning over of data, personal data, over to a government. And so we’ve made very clear to them that this is something they’re going to have to change if they expect to do business with the United States.

REUTERS - Let me close with a lightning round of yes or no questions. Keystone veto just happened. How soon do you think we’ll have a decision from the State Department and ultimately the White House - weeks, months or not before the end of your administration?

OBAMA – I think it will happen before the end of my administration.

REUTERS - Weeks or months?

OBAMA - Weeks or months.

REUTERS – O.K. and on Cuba, do you expect to have relations, diplomatic relations restored between Cuba and the United States before the Panama summit?

OBAMA - My hope is that we will be able to open an embassy, and that some of the initial groundwork will have been laid. Keep in mind that our expectation has never been that we would achieve full normalization immediately. There is a lot of work that still has to be done. But we are going down a path in which we can open up our relations to Cuba in a way that ultimately will prompt more change in Cuba. And we’re already seeing it.

The very fact that since our announcement, the Cuban government has begun to discuss ways in which they are going to reorganize their economy to accommodate for possible foreign investment, that’s already forcing a series of changes that promises to open up more opportunities for entrepreneurs, more transparency in terms of what’s happening in their economy, and that’s always been the premise of this policy. That after 50 years of a policy that didn’t work, we need to try something new that encourages and ultimately I think forces the Cuban government to engage in a modern economy. And that will create more space for freedom for the Cuban people.

REUTERS - Very last question on domestic policy. The Supreme Court is seeing arguments on the Burwell v. King this week. Your administration has said it does not have a Plan B. Isn’t that a little risky?

OBAMA - This should be a pretty straightforward case of statutory interpretation. If you look at the law, if you look at the testimony of those who were involved in the law, including some of the opponents of the law, the understanding was that people who joined the federal exchange were going to be able to access tax credits. Just like if they went to a state exchange. And you know what? The thing’s working, exactly as intended. Which is why we signed up 11 million people to go through these exchanges.

And we’re seeing more competition, lower prices, more choice, more shopping among people than even I expected, even proponents of it expected. And it’s costing less than anybody expected. So the thing’s working. And there’s in our view not a plausible legal basis for striking it down. But, you know, we’ll have to wait and see what the Supreme Court decides.

REUTERS - They could rule against you. Then what?

OBAMA - Well if they rule against us, we’ll have to take a look at what our options are. But I’m not going to anticipate that. I’m not going to anticipate bad law. All right?

REUTERS - Mr. President thanks very much for your time.

OBAMA - Thank you so much.

Reporting By Jeff Mason, Roberta Rampton, Julia Edwards and Caren Bohan; Editing by Toni Reinhold