WASHINGTON — Although the interim deal with Iran does not give it the right to enrich uranium, the regime could be allowed to have a peaceful nuclear program with “modest enrichment” capability under a permanent deal, US President Barack Obama said Saturday.

The all-or-nothing demands by Prime Minister Benjamin Netanyahu, he indicated, were unrealistic. “You’ll hear arguments, including potentially from the prime minister, that we can’t accept any enrichment on Iranian soil. Period. Full stop. End of conversation,” said Obama. “In an ideal world,” he said, “Iran would destroy every element and facility, you name it.” But, he went on, “We have to be more realistic.”

With that in mind, the president said, “We can envision a end state that gives us an assurance that even if they have some modest enrichment capability, it is so constrained and the inspections are so intrusive that they, as a practical matter, do not have breakout capacity. Theoretically they might still have some [breakout capacity]]. But frankly, theoretically, they will always have some because, as I said, the technology here is available to any good physics student.”

Obama made the comments in a question and answer session at the end of a lengthy interview with the Haim Saban, the Israeli-American producer and businessman who founded the Saban Center for Middle East Policy, at Washington’s Brookings Institution. The session was part of the annual Saban Forum.

Asked about the differences between him and Netanyahu over the tactics for thwarting Iran in general, and over the interim deal in particular, Obama acknowledged it was “probably a good bet” that he and the prime minister would analyze the deal differently — a “more than 50-50″ likelihood, he said with a broad smile. He spoke of “occasionally significant tactical disagreements” between the two as they work “to reach the same goal.”

Earlier, during the interview itself, he underlined his administration’s concerns about the Iranian nuclear program, and defended the interim deal, which was reached in Geneva two weeks ago.

“[Iran] doesn’t need to have an underground fortified facility like Fordo in order to have a peaceful nuclear program. They certainly don’t need to have a heavy water reactor at Arak. They don’t need some of the advanced centrifuges that they currently possess in order to have a limited, peaceful nuclear program. And so the question ultimately is going to be are they prepared to roll back some of the advancements that they’ve made,” said the president.

These advances “cannot justify simply wanting some peaceful nuclear power, but frankly hint at a desire to have breakout capacity and go right to the edge of breakout capacity. And if we can move that significantly back… that is, I think, a net win,” he added.

Speaking amid grave Israeli misgivings over the deal, reached by the P5+1 powers and Iran, which limits but does not halt Iran’s enrichment capacity and curbs aspects of its nuclear program in return for some sanctions relief, Obama stated: “There’s nothing in this [interim] agreement or document that grants Iran the right to enrich. We’ve been very clear that, given its past behavior and given the UN resolutions and previous violations by Iran of its international obligations — that we don’t recognize such a right.”

Obama stressed that “it is in the US national security interest, not just Israel’s national security interest, to prevent Iran from getting a nuclear weapon” but “the best way [to do that]… is a diplomatic solution.”

“What I try to describe is not a choice between this deal and the ideal, but [between] this deal and other alternatives,” he said.

Under the arrangements envisaged to thwart Iran’s rogue nuclear program, “it’s not as if there’s going to be a lot of capacity to hide the ball,” Obama stressed. “If we can’t get there, then no deal is better than a bad deal,” he said. But it would be wrong to presume that no diplomatic deal could be done.

Addressing recent tensions between his administration and the Netanyahu government over the interim deal reached in Geneva last month, which has been harshly criticized by the prime minister and other Israeli officials, Obama dismissed as wistful dreamers those who “imagine a world” in which Iran’s nuclear program was “all gone,” quipping to audience laughter that he could also envision a world “in which Congress passed every one of my bills.”

He also dismissed critiques of Iranian President Hassan Rouhani’s UN performance as a “charm offensive,” arguing that “those who say Hassan Rouhani is just Ahmadinejad but more charming understate the shift in Iran politics.”

Setting out a broader philosophy, Obama said: “Wherever we see the impulses of a people to move away from conflict and violence and toward a diplomatic resolution of conflicts, we should be ready and prepared to engage them, understanding though that it’s not what you say, it’s what you do.”

It was vital not to be naive about the dangers posed by the Iranian regime, and “to fight them whenever they engage in terror or actions that are hostile to us or our allies. But we have to not constantly assume that it’s not possible for Iran, like any country, to change over time.”

Despite their differences, he emphasized that he and Netanyahu have been in “constant consultations” over the Iranian threat throughout his presidency. Obama described their conversations as “candid,” a term frequently implying significant disagreements between sides.

“There are times where I, as president of the United States, am going to have a different tactical perspective, and that is understandable,” he added. “Israel cannot contract out its security. We respect that. But ultimately, it is my view from a tactical perspective, to test out this deal.”

“When I hear people criticize the Geneva deal, and say it’s got to be all or nothing, I would just remind them that if it’s nothing, if we did not even try for the next six months to do this, all the breakout capacity we’re concerned about will accelerate in the next six months. They would be that much closer to breakout capacity six months from now. And that’s why it’s important for us to test this proposition,” Obama said, in response to a question from Amos Yadlin, the former IDF military intelligence chief.

“I think if you want to summarize the differences between myself and prime minister [Netanyahu] on the Geneva issue, I think what this comes down to is the perception, potentially, that if we just kept on putting up the pressure — new sanctions, more sanctions, more military threats, etc — then eventually, Iran would cave,” said the president.

“You have to compare the approach we’re taking now with the alternatives, the idea that Iran — given everything we know about their history — would just continue to just get more nervous about more sanctions and military threats and ultimately just say ‘OK, we give in’… does not reflect an honest understanding of the Iranian people or the Iranian regime. And I’m not just talking about the hardliners,” he warned.

If talks break down, added the president, “then the pressure we’ve been applying on them and the options that I’ve made clear…including the military option, is one that we would consider and prepare for.”

“When the president of the United States says that he won’t take the military option off the table, that should be taken seriously,” Obama stressed, pointing out that, however, “military action was not an end unto itself.”

On Mideast peace hopes, Obama echoed an optimistic assessment provided by US Secretary of State John Kerry during a trip to Israel and the Palestinian territories this past week.

The president said his administration had spent much time working with Netanyahu to understand Israel’s security needs as part of any two-state solution.

“I think it is possible over the next several months to arrive at a framework that does not address every single detail but gets us to the point where everybody recognizes it’s better to move forward than move backward,” Obama said.

Still, he said tough decisions await both sides, including the Palestinians’ understanding that a transition period will be necessary so no situation arises similar to Hamas’s takeover of the Gaza Strip after Israel’s 2005 military pullout.

“The Israeli people can’t expect a replica of Gaza in the West Bank,” Obama said. “That is unacceptable.”

Kerry was set to speak later Saturday at the high-end forum focused on Israel’s relationship with the United States, with Netanyahu expected to make his address on Sunday afternoon via webcast.

The prime minister will be interviewed by PBS News host Charlie Rose.

The annual forum, now in its 10th year, is organized by The Saban Center for Middle East Policy and aims to foster dialogue between American and Israeli political figures on the most pressing issues in the Middle East.

This year’s forum comes as ties between the US and Israel have become increasingly strained following the interim nuclear deal signed in Geneva last month between Iran and six world powers including the US, which Netanyahu staunchly and outspokenly opposed.

US officials responded that they were “very frustrated” by the backlash.

On Friday night at the Saban Forum, Foreign Minister Avigdor Liberman said there was zero trust between Israel and the Palestinians, voicing scant hope for a peace agreement by the end of the nine-month period allotted for the American-brokered peace talks.

Numerous other Israeli politicians are participating in the event — including Justice Minister Tzipi Livni, Energy and Water Resources Minister Silvan Shalom, and Strategic Affairs Minister Yuval Steinitz.

Ilan Ben-Zion contributed to this report.