The international credibility of the United States, and its vital interests around the world, require that it honors its commitment to thwart Iran’s nuclear drive, outgoing Defense Minister Ehud Barak said Thursday.

Speaking at the World Economic Forum annual meeting in Davos, Switzerland, Barak said America’s own interests mean it must be able to say, “We stood behind our policy and blocked Iran.”

He said he didn’t envision Iran being halted via diplomacy, and that sanctions need to be “much more drastic.”

Ultimately, though, if worse comes to worst, there should be a US-led “readiness to launch a surgical operation that will delay” the Iranian program. It does not need to be “a binary choice” between Iran going nuclear or a full-fledged war, he said. Rather, he repeated, there could be a surgical operation, by which he said he meant “a scalpel,” not a “10-ton hammer.”

Under orders from the Obama administration, Barak said, “the Pentagon prepared quite sophisticated, fine, extremely fine, scalpels. So it is not an issue of a major war or a failure to block Iran. You could under a certain situation, if worse comes to worst, end up with a surgical operation.”

Barak said moderate states in the Middle East had seen Egypt’s Hosni Mubarak, a US ally for decades, ousted in days. “They took note of that.” Other international players, notably including China, were watching the US. A lesson from the Middle East that the US “stands firm,” he said, would be significant.

Barak began his remarks, delivered in an interview format, by noting the vote for change in Tuesday’s elections, and praised the successful political newcomer, the “charming” Yesh Atid leader Yair Lapid, for putting together a Knesset list of fresh faces.

He stressed that he would not be serving in the next government, and was taking a break from politics for at least five years.

He said he hoped progress would be possible with the Palestinians, noting his own commitment to a two-state solution and saying that Prime Minister Benjamin Netanyahu has “said he strongly believes in the two-state solution.”

Still, “we should not delude ourselves that if we were only more devoted” to seeking progress “a crack would open in heaven” and enable an accord. “Most of the responsibility is on the Palestinians” for the failure to reach an accord to date, he said, and the Palestinians under leader Mahmoud Abbas may still not be “ripe” for the necessary compromises.

Therefore, some kind of conflict management, perhaps even “some kind of unilateral steps,” might be necessary. If Israel cannot separate from the Palestinians, it would be “inevitable,” because of the demographics, that Israel becomes non-Jewish or non-democratic. “That’s not the Zionist dream.”

He noted that he ordered the withdrawal from the security zone in south Lebanon in 2000, and Ariel Sharon pulled out of Gaza in 2005, and in both cases Israel had endured thousands of subsequent rocket attacks. “Who can guarantee that if we allow the Palestinians to establish a state we won’t find rockets there as well, half a mile from the airport or 10 miles from Tel Aviv?” he asked. And yet, he said, Israel must find a way to “put a wedge” on the slippery slope to a one-state solution.

Barak also said the atrocities in Syria had underlined to Israel, when it weighs the risks of territorial compromise and other challenges, that it cannot rely on international assurances that the world will step in at times of crisis. “The air force of a state attacks the civilians of its own population, tanks are shooting… and the world doesn’t move.” Even facing “unspeakable atrocities,” there is no guarantee that there’ll be “enough unity of [international] purpose to translate it into action.

“For us, that’s a lesson,” he said. “Many of our best friends around the world are telling us, ‘Don’t worry, if worse comes to worst…”

“Many of our best friends,” he said, also tell Israel that “the root cause” of Middle East instability “starts with your inability to solve your conflict with the Palestinians… It’s not true… Would the Iranians not be trying to go nuclear?” he asked. Would the Muslim Brotherhood not have taken over in Egypt?

It would help Israel dramatically if it could move forward with the Palestinians, he noted, but it’s not “the panacea.”

Israel was open to peace, he said, but with a finger “close to the trigger” — otherwise “we won’t be there, and we’re determined to be there.”

Looking at the region, he quipped that “we must be modest about our predictions, especially about the future.” More seriously, he said, Mubarak’s regime “had half a million people taking care of internal security” and yet “they were taken by surprise” by the revolution.

Speaking at the same Davos meeting, President Shimon Peres asserted that global companies are replacing the role of governments. “Forty global companies have more fortune than all the governments in the world,” he pointed out, going on to say that global corporations are answering the expectation of individuality which defines the younger generations. “Young people are not satisfied by the attempt to be equal,” he said. “They are satisfied by the attempt to be different.”

He also credited global companies with reducing racism. “You cannot be global and racist,” he said.

Peres described the three themes he believes will define the next generation. First, national governments, because they cannot run economies or companies, will be relegated to simple husbandry of the state. Second, there will be continuing empowerment of global corporations that will handle global investment and innovation. Third, deeper understanding of the human mind will help people to make better decisions.

Peres concluded by describing his hope for the future. “I never lost anything by believing or by hoping. Better to create hope than to suggest hopelessness,” he said. “Live as an optimist. I tried it for 90 years and it’s not bad.”