http://www.haaretz.com/hasen/spages/915888.html

Sarkozy tells Olmert: Palestinian refugees will not return to Israel

By Aluf Benn
Ha'aretz
October 23, 2007

PARIS - Palestinian refugees should be resettled in a Palestinian state, not in Israel, French President Nicolas Sarkozy told Prime Minister Ehud Olmert yesterday.

"Each side should have its own nation-state," he said, according to Israeli officials who were present at the two leaders' meeting. "It is Not reasonable for the Palestinians to demand both an independent state and also the refugees' return to the state of Israel, which even today has a minority of one Million Arabs."

Sarkozy, who hosted Olmert at the Elysee Palace, expressed strong support for Israel, describing its establishment as "a miracle" and "the most significant event of the 20th century."

[......]
He said that he and Sarkozy did not discuss a military attack against Iran.

"There's a broad spectrum of measures between the extremes of capitulation and military action," he said, adding that he believes there is a possibility of intensified sanctions against Iran via both the UN Security Council and the European Union. Sarkozy supports expanded sanctions, and the two leaders discussed how to persuade Germany, Italy and Spain to go along.

Olmert believes that existing sanctions, which target Iran's economy and banking system, have already had an effect. "We need to prevent Iranian businessmen from doing business, until the class that controls the Iranian economy does something against the regime," he said in a conversation with French journalists after his meeting with Sarkozy.