I bolded the relevant part. Why does Netanyahu consider "Jews in Judea and Samaria" to be the Fakestinain problem? The Fakestinian problem is that there are Arab terrorists in Judea and Samaria and that they have a terrorist mini-state. The solution is to expel the Arabs.
Officials: Diskin 'Detached from Reality'
Israeli officials close to Prime Minister Netanyahu hit back at criticism by former Shin Bet chief, say he has a personal vendetta.
First Publish: 12/5/2013, 12:16 AM
Israeli officials close to Prime Minister Binyamin Netanyahu on Wednesday evening slammed former Shin Bet chief Yuval Diskin, who said earlier that there were “too many Jews” living in Judea and Samaria and said that "the solution to the Israel-Palestinian conflict is more existential than the solution to the Iranian nuclear program."
"Anyone who thinks that the Palestinian threat is bigger than the threat of a nuclear bomb in the hands of Iran, which calls for the destruction of the State of Israel, is detached from reality and lacks a strategic vision,” said the officials.
"Prime Minister Netanyahu will not be affected by recycled statements or by righteous preaching arising from the personal frustration of someone who wanted to be appointed head of the Mossad by Netanyahu and did not get the position,” they added.
“While others talk Netanyahu will continue working for the safety of Israeli citizens,” declared the officials.
In his remarks, which were made at a conference honoring the 10-year anniversary of the Geneva Initiative, Diskin called for Israel to adopt a two-state solution in upcoming negotiations with the Palestinian Authority.
Diskin called for Israel to become a nation "which prefers the sanctity of its people over the sanctity of its land" and which "does not feel it has to occupy others' land."
He also admitted that the number of Jews living in the area made it difficult in the future to evict Israelis from their homes in the event that a withdrawal demand becomes a condition of negotiations.
On the leadership of Prime Minister Netanyahu in promoting political negotiations, Diskin added that "the leaders on both sides, those who are supposed to lead, create hope and sweep the masses - are weak and busy blaming each other most of the time."
The plan, which was released in 2003, proposed a large-scale retreat from Judea and Samaria, and was backed by politicians from the extreme Left as well as PA representatives.
It called for over 100,000 Israeli citizens to be evicted from their homes, for Jerusalem to be divided, and for the Temple Mount - Judaism's holiest site - to be handed over to the Palestinian Authority.
Wednesday’s remarks are certainly not the first time that Diskin has slammed Prime Minister Netanyahu’s policies.
He previously portrayed Netanyahu as weak, out of touch, and a danger to Israel’s security, telling the Yedioth Ahronoth newspaper that he did not feel confident that Netanyahu and former Defense Minister Ehud Barak were able to take action on Iran.
“We didn’t trust these people’s motives, we were afraid they would make underhanded moves and complicate matters for us as a country… when we sat in very small meetings we had a feeling they were trying to sneak something under the radar,” he accused.
Diskin made similar statements several months earlier, portraying Netanyahu and Barak as “messianic” and “unfit to hold the reins of power.”