Tony Blair believes in “Islamist extremism.”

It’s U.N. week, and the former British prime minister is in town as the representative of the Quartet—the U.S., Russia, the EU and the U.N.—that aims to broker Mideast peace. We are in his suite at a posh Upper East Side hotel, talking about a passage in his just-published memoir in which he discusses the reach of the radical Islamist “narrative.” It’s a narrative, he argues, that needs to be “challenged head on.”

This prompts me to ask whether he thinks that the widespread reluctance to use the word “Islamist” alongside the word “extremist” is a kind of evasion from reality.

“I think it is, I’m afraid,” Mr. Blair answers, deploying the famously elegant diction that used to make for such invidious contrasts in the days when he shared a podium with George W. Bush. By way of explanation, he turns to the recent, aborted attempt by Florida Pastor Terry Jones to burn the Quran.

“I have no difficulty in saying this person is a Christian pastor but I completely and totally disagree with him,” he explains. “It’s fascinating, though, that when that happens the whole of the Western leadership have to come out and denounce it. . . . Let’s say some cleric in some remote part of Pakistan turns up and says, ‘I’m going to burn the Bible tomorrow.’ What would we all say?”

Mr. Blair has been out of office for more than three years, but he is still sounding the same themes that were the touchstones of his decade in office. He is still faithful to the Third Way school of politics, still believes that government should be for empowerment not entitlement, and is still fighting a rear-guard action against fellow “progressives” who think it ought to be the other way round. But above all, Mr. Blair remains seized by the scope of the challenge posed by radical Islam.

“I think there is a tendency to regard the activities of the extremists who use terrorism and suicide bombings and so on as this small group of people unrelated to the broader [Muslim] community in which they exist,” he says. “And I feel that narrative penetrates a lot deeper. And if you can’t take that narrative on, you are left in a position where you end up semi-apologizing for your own position in relation to these things. And I think that’s dangerous.”

The narrative, as Mr. Blair describes it, consists of the view that the West is in cahoots with its client regimes in the Middle East—not just Israel, but also countries like Pakistan, Egypt and the Gulf emirates—to oppress Muslims and denigrate Islam. That narrative has its own subscribers among Western leaders and opinion-makers who believe the right approach is to say, in Mr. Blair’s mocking paraphrase, “We kind of understand why you feel like this about us and maybe it’s our fault but, you know, let’s try and work this out.”

Mr. Blair has little patience with this view: It rubs him wrong not only because he believes the analysis is flawed and the prescription misguided, but also—and here I’m reading between the lines—because it suggests Muslims should be held to a different set of standards and values.

Yes, he says, the Muslim world needs “genuine demonstrations of equality, respect, partnership and so on.” That’s one reason, he adds, why he puts so much stock in the Israeli-Arab peace process. But Mr. Blair also stresses that what the Muslim world—or at last the modernizing forces within it—need from the West is “for us to be really strong about our own confidence in our position, our own way of life and the values we represent.”

Part of that confidence is affirming the rightness of what the U.S., Britain and the rest of the Coalition of the Willing did in Iraq—and what they continue to do in Afghanistan. Regarding the so-called occupation of Iraq, Mr. Blair notes that from the middle of 2003 coalition forces were in the country “with full U.N. authority.” The international community followed up with billions in aid to the country. Democratic elections were held; Iraqis indicated the kind of future they wanted for their country.

And then the effort nearly fell apart on account of the unremitting savagery of Baathist holdouts, al Qaeda recruits, and Iranian-backed militias. Mr. Blair would like to know why Iraq’s tormentors should be let off the hook while its liberators are vilified. “For us to end up in this situation where people say this is an indication that you should never have gone there, that you should have just let Saddam stay—we really need to think about what we’re saying when we’re saying that.”

Mr. Blair feels the same way about the apportionment of blame in the Israeli-Palestinian conflict. He is confident of the good intentions of both Palestinian President Mahmoud Abbas and Israeli Prime Minister Benjamin Netanyahu (about whom, he adds, he is “absolutely sure [he] would sign a deal”). But he is also mindful of the way Israel is mindlessly castigated in the West, “particularly in Europe,” for its every misstep, real or alleged.

“You cannot refuse to accept that Israel has a genuine security problem,” he insists. “What does it mean when, the other day, President Obama launches the [Israeli-Palestinian] talks in the White House . . . and Hamas kill those [Israelis], including a pregnant woman and the parents of six children, and then put out a statement saying that this is an heroic act of courage? What does it say of the nature of what we’re up against?”

Mr. Blair is equally emphatic about the need to confront Iran, which in his memoir he treats as morally equivalent to al Qaeda. Though he says he agrees with President Obama’s approach to the regime—summed up as “here’s a hand of friendship and now it’s your choice”—he is under no illusions about the threat Iran poses. He is particularly enraged at the role it played in Iraq, including the supply of IEDs to insurgent forces that killed British and American troops. Might things in Iraq have gone better had the coalition confronted Iran’s meddling sooner than it did? “I think that’s a very, very good question,” he replies.

The interview turns to the subject of Tehran’s nuclear program. Could an Iran with nuclear weapons be contained, I ask, as it is now so fashionable to argue?

“I wouldn’t take that risk,” he replies without hesitation. “It is perfectly possible that a nuclear-armed Iran might be contained. But I think it’s impossible to guarantee that, and it so drastically changes the balance of power within the region that it’s not responsible” to allow it.

I say that sounds like he’d be prepared to countenance military strikes if other options fail.

Mr. Blair hedges for a moment: “When I’m asked this, [I always] default to the traditional line, which is to say I don’t think you can take any option off the table.”

I press: “But it sounds like you actually mean it.”

He comes back more firmly: “I do mean it. . . . The alternative is to say that you are prepared to contemplate [a nuclear Iran], which, by the way, the moment you send that signal makes it a lot more likely to happen. So I think it’s perfectly possible that we can avoid the situation. But I think the stronger and clearer we are, the more likely we are to avoid it.”

Mr. Blair’s tenure in office—begun, as he accurately puts it in his memoir, as a veritable love affair between him and the British electorate—is widely believed to have soured precisely because he holds these foreign policy views and was willing to act on them. Given that the Labour Party in Britain and the Democrats in the U.S. have now turned their back on the Third Way politics that gave Mr. Blair and Bill Clinton their resounding electoral victories, I wonder whether those politics would not have been more in vogue today had it not been for Iraq.

Mr. Blair demurs. “People forget this, but the closest I came to losing my job in a [parliamentary] vote was actually over tuition fees [for university students], and not over Iraq. The most difficult things were . . . introducing private-sector [reforms] into the health-care system, introducing academy schools, the equivalent of charter schools, and law and order.”

It’s a useful reminder. When Mr. Blair and Gordon Brown first came to office, the New Labour moniker was widely suspected of being a kind of political marketing device rather than representing a real change of heart by a party that had once been a de facto subsidiary of Britain’s trade unions. But if Mr. Blair’s memoir is anything to go by, he for one was a sincere convert to the New Labour faith. Among other things, it explains his current opposition to high rates of marginal taxation.

“The most important thing is to encourage strong growth, for the economy to create wealth. And I just think this is a very basic point . . . you need tax rates that are competitive with the world in which we live and in which people’s hard work and enterprise is rewarded.” As for the notion that the purpose of progressive governance is to tax the wealthy and redistribute it to the rest, Mr. Blair urges caution: “The people you end up hitting are not the very wealthy, because in my experience the very wealthy can make their own arrangements.”

Mr. Blair is similarly worried about the perils of excessive regulation. While he believes that governments were right to respond to the financial crisis as they initially did, he worries that the recovery runs the risk of regulatory strangulation. “How you stabilize the economy is not the same as how you then get it let out of the crisis and back to strong growth, where you will need the private sector to be enterprising, innovative and able to compete.” Nor does he have any patience with the demonization of the financial sector as “the bad guys” in the crisis.

The question arises of how Mr. Blair—a prep school boy and Oxford graduate who came to the Labour Party more from its intellectually Fabian wing than from the trade union movement—came by his views. Partly it’s to do with his own father’s rise from working-class roots, and partly by the pre-political years he spent as a commercial and industrial-relations lawyer, where he learned that “most people aspire to do better and most people actually want their kids to do better than them—and these are actually great engines of growth and progress.”

But he also says his views are informed by traveling to emerging economies such as China. “These are all places where, if we’re not careful, they are going to learn the lessons of our development and, funnily enough, they’re not going to replicate all those lessons. . . . They will learn from our successes as well as our mistakes. And if we’re not careful, they are going to leave us behind.”

So much of what Mr. Blair says is so consonant with the political right-of-center that I ask him if he doesn’t feel closer to John McCain politically than to Barack Obama. He laughs it off, calling himself a straight “Democrat-Labour” kind of guy. But elsewhere in the interview he offers a political warning to his fellow progressives:

“In today’s world, in the 21st century, a progressive party that stands essentially for the state and big government is not going to succeed. Simple as that.” I wonder if anyone in the White House is listening.

Mr. Stephens writes the Journal’s Global View column.

Printed in The Wall Street Journal, page 14

Copyright 2009 Dow Jones & Company, Inc. All Rights Reserved