It is an unusual experience for Israel not to be at the centre of a storm in the Middle East. Mr Netanyahu’s line about this month of revolt is: “This is not about us.” As if fearing that this might appear complacent, he qualifies: “That’s not to say we won’t be put back in the centre of the picture.” “Bellicosity” against Israel could easily become, once again, the sole uniting force in a fractured Arab world.

Something about the mood of Mr Netanyahu, now in his seventh decade, and two years into his second term in office (the first was from 1996-1999) is ruminative, almost professorial. There is little of the youthful point-scoring arrogance for which he used to be attacked. His talk is full of historical parallels and dates. I pursue his train of thought. If it is not about you, what is it about?

Mr Netanyahu separates the Arab regimes and the people they rule. The regimes, he says, “are preoccupied with Iran, and with the threat from their own people. The people are preoccupied with their own regimes.” The political advances of the 20th century “passed over the Arab world and a great chunk of the wider Muslim world”. Modern communications are constantly “reminding them what they missed out on”. There is a sense of “deprivation”. “There’s a battle going on between the early 20th century and the 21st century. Will they get to the 21st, or will they be blown back to the ninth century?”

By the ninth century, he means chiefly the plans of Iran and its “proxies”, Hamas and Hizbollah. Iran is “seeking to exploit” current events. Its decision to send two naval vessels through the Suez Canal is “the first time we’ve seen elements of a Persian fleet in the Mediterranean since Alexandrine times”. This proves Iran has “aggressive intentions”. It is a “very grave development”. Iran was working as hard as it could to destabilise societies – Iraq, Afghanistan, Lebanon – before all this, and now it is trying to take advantage of the new situation. “When I say this, I am not guessing,” he says, with a meaning look.

It is well known that Mr Netanyahu’s relations with President Barack Obama have not been as easy as is usually the case with US and Israeli leaders, but he will not be drawn on this subject. What he will admit to, though, is a disappointment with the West’s attitude to Iran. It is not only in Tahrir Square, he says, that crowds have protested. It happened in squares in Tehran in 2009, and hundreds of thousands have protested there this month. “There, [unlike in Egypt] the regime is applying brutal force.” “The people want to free themselves of this tyranny.” They need more help, he says – It is very dangerous if there is no regime change.

The fatal combination – the same would apply if the Taliban were to achieve dominance in Pakistan – is that of militant Islam and nuclear weapons. The Soviet Union was dreadful, but at least it was rational enough to back down when its own survival was at stake, but “with militant Islamic regimes, you cannot be so sure”. Under such regimes, “self-immolation is held as a great value”. Islamists often say that their enemies prefer life and they prefer death – “There’s truth to that.”

Besides, Iran with nuclear weapons would create new threats. “Look at Bahrain. A nuclear Iran would make it a Persian Gulf on both sides.” It would control the oil supplies of the world and “spawn a nuclear arms race in the Middle East”. Iranian conventional ballistic missiles already have a range which includes western Europe: “It is extraordinarily dangerous for my country, but also for your country.” He sees Israel as “merely a forward position of Western values”.

The Western powers agree about the Iranian nuclear threat, he says, citing Britain’s Defence Secretary, Dr Liam Fox, as a strong exponent of this view. But he adds: “I think we should do more. I think we can do more.” The present sanctions “don’t have sufficient bite”, and we “need a credible military option if sanctions fail”.

The only time Iran suspended its programme was in 2003, because, he says, it believed that it would suffer US military action if it did not. Without that threat, it will press ahead. So the challenge now for the US is huge. It must keep Iran down, and help “preserve the circle of peace” made with Israel by Egypt and Jordan, so that, for example, the new Egypt does not “open the floodgates” in Gaza. But isn’t there a feeling of American withdrawal and waning power in the air? “That remains to be seen. There’s no question that there’s a great test of will here.” Which is all very fascinating, but aren’t these reflections on current events ignoring Israel’s own duties? People accuse Israel of taking advantage of the situation by stalling the peace process and avoiding a clear line. Mr Netanyahu sharply reminds me of his own position. Israel, he says, recognises the need for a nation state for Palestinians, but unless they recognise Israel’s right to be the Jewish state, there is no basis for a discussion of borders. The Palestinians provide no “education for peace”. Their school textbooks preach hatred and the public squares under the Palestinian Authority are named after the murderers of Israelis.

Stung by the European criticisms I convey, Mr Netanyahu rises from his seat and takes me to a display cabinet by the window. He shows me a seal found in recent excavations in Jerusalem. It comes from the time not long after King David. He points out the Hebrew characters on the stone. “Do you know what name that is on the stone? It is my name: Netanyahu. So we do have some connection with the place!” He wants to remind Europeans that Israelis are staying: “We are not neo-Crusaders. We are not neo-colonials.”

But take the settlements, I respond. You yourself say that they are a relatively minor incursion (less than two per cent) upon the whole, disputed territory. Why do you persist in the face of world condemnation? Is the game worth the candle? He comes straight back with a historical parallel – the Sudetenland in the late 1930s. “People, especially the leading British media,” considered that Czechoslovakia’s possession of these German-speaking areas was “the barrier to peace with Hitler”. “It didn’t work out quite like that,” he drily points out. (I slip in a historical footnote that it was The Timeswhich supported the Munich Agreement. The Daily Telegraph did not.) In Mr Netanyahu’s view, the “international ganging-up on Israel” over the settlements is a classic example of changing the terms of the argument – what he calls “the reversal of causality”. There were no Jewish settlements in the West Bank before Israel was attacked in the Six Day War of 1967, “So what was all that about?” Israel proper remains disputed by her enemies. “Even moderates don’t say that, if the settlements end, we’ll make peace with Israel.” He does hasten to add, however, that a deal can be done. “It is not impossible to resolve it, to make the necessary compromises. The settlement issue has to be resolved.”

I explain that I raised the settlement issue not only on its own merits, but because it is a classic example of the “delegitimation of Israel”. Once upon a time, the West saw his country as a beacon. Now it often rejects the Netanyahu claim that Israel embodies its values. It is not uncommon to hear talk of an “apartheid” state. Mr Netanyahu became famous for his skill as an Israeli spokesman during the first Gulf war, yet now he is more reticent on the public stage in the West. He has been prime minister for two years, and this is his first full British media interview in that time. Has he despaired of persuading us? Mr Netanyahu replies: “Do you know our Israeli expression ‘to look for the keys under the lamp-post?’ People look under the lamp-post where there is light, but that doesn’t necessarily mean that the keys are there.” In other words, it is easier to scrutinise Israel than to explore the darker places where the keys lie.

He is, he admits, “worried” about Britain. In his view, there are “two streams” in British attitudes to Israel and the Jews. One, exemplified by Lloyd-George’s “understanding of history” in the Versailles era, is admirable. He cites Col Richard Meinertzhagen, intelligence chief to General Allenby in the Mandate era in Palestine, who, despite having had little previous contact with Jews, quickly discovered that, contrary to his fellow-countrymen’s prejudices, they were “very good fighters” and would “provide a bulwark against the aggression of Islamic militancy”. He also refers to Arthur Stanley, late 19th-century Dean of Westminster, as one of many British luminaries who found the Holy Land neglected and argued that “the Jews would come back and build up this country”. Mr Netanyahu has a portrait of his greatest British hero, Winston Churchill, on his shelves. He poses beside it for our photographer.

On the other hand, there are bad attitudes. “Britain was a colonial power, and colonialism has been spurned.” Britain therefore tends to look at the Israeli question through its “colonial prism”, which makes the British “see us as neo-colonialists”. But this is wrong. “We are not Belgians in the Congo! We are not Brits in India!”

In the United States, the situation is different because the Americans were not colonisers, but in revolt against colonial power. Their vision was “one of a society based on the New Jerusalem, the promised land”, so they naturally saw Israel as “partners in freedom”.

He agrees that Western loss of support for Israel is “a huge issue” and “tragic because, in many ways, we are you and you are us”. This has been a talk with Mr Netanyahu in statesmanlike mode. He shows me his books, including the huge, definitive history of the Spanish Inquisition written by his father, who is still alive aged 101.

It seems a pity to drag the talk to mere politics, but I have a parting shot. We now have a coalition in Britain. In Israel, they never have anything else. Has he any advice for David Cameron? He permits himself an amused look: “Lower taxes.” Then he adds: “I believe you are thinking of reforming your voting system. Be careful of proportional representation. I give you that as a free tip.”