He has served as a member of Parliament for the past 49 years and as a minister in most cabinets since the 1960s. Yet the breakup of Sharon’s “national unity” government could send Peres packing up his government office for good. He has already turned down an offer to continue serving as Sharon’s foreign minister without the Labor Party onboard. By the time new elections are held next year, Peres will be 80, and though no one rules out another go-round–least of all, him–a new generation of Labor Party leaders is storming the gate. He spoke last week at the Foreign Ministry with NEWSWEEK’s Dan Ephron. Excerpts:

EPHRON: This government was broader and more stable than most in Israel. How do you explain its collapse?

PERES: A national-unity government is not something natural. It contains two different streams. And I would say that while it better serves the country, it is very difficult for the parties because each of them has to live in an uneasy environment… On top of that, we’re nearing the national elections and the primaries in the parties, so each of the leaders wants to convince his party that he is determined and tough and clear.

What happened in the prime minister’s office in those last hours of negotiation between Sharon and Ben-Eliezer?

We were very close to reaching an agreement. As a matter of fact, I thought we reached an agreement. But, without criticizing either of the men, both were ultimately short of generosity. Had we had a few more hours, I think we would have ended the negotiation successfully.

Why were you fighting to keep the government together?

Because I think there are times when the interests of the state should override the legitimate interests of the parties. I thought the government should be given more time to try and escape the political impasse.

What about the national-unity government was worth preserving?

We halted settlements, and when illegal settlements were built, our Army went to dismantle them. This would never have happened without Labor. I think we had an impact on trying to ease the situation in the territories, by opening the markets for Palestinian workers, by beginning to unfreeze the Palestinian money. I believe we paved the way to accepting the [American-led ceasefire initiatives], the Mitchell plan and the Tenet report.

Where did this government fail?

There were many mistakes. The most important for me is the Muqataa [Arafat’s Ramallah compound]. [During the siege in September] it was wrong to destroy the building and to leave Arafat under candlelight. Nothing shines brighter than candlelight in a political environment. We should have reacted [to the suicide attack that prompted Israel’s siege] in a different way.

What about other mistakes?

I think we made an error by giving up our traditional position that says you have to negotiate while fighting terror and fight terror while negotiating… When you decide not to negotiate until the terrorism ends, the result is that the terrorism never ends and the negotiations never begin.

How will things look in the coming months?

I tend to believe that we shall have an early election. But I don’t believe a narrow government can run the show.

What’s your nightmare scenario?

I’m afraid the Middle East will grow nuclear and terroristic, and that it will be beyond repair.

What can save the Labor Party?

Labor needs to come up with new messages on things like the relationship between religion and state, on social issues… One of our mistakes is that we put too much stock in political and military analysis and not enough on economic issues. We have too many strategists in our country and not enough economists.

Where do you fit in all that?

I think after so many years I reached the point that I can say what I want. Many people oppose me but many people also trust me. I don’t need a position, I’m not after a position… I shall devote more time to Labor. I think I shall lecture, write, I’ll be a free man again.

But public life is not over?

Why should it be? I never understood people who go on vacation. What do they do? It’s a waste of time… I don’t feel I have to apologize for my age or for my attempt to serve the country right.