Peres: Palestinian state first, full peace later

Israeli President Shimon Peres, a longtime advocate of peace with the Palestinians, said Friday that a comprehensive settlement resolving the century-old dispute was not currently achievable.

He called instead for a Palestinian state under a provisional arrangement even without a formal peace deal.

"Israel has decided to make peace on the basis of two states - an Israeli state and a Palestinian state," he told the Ambrosetti Forum, a gathering of political and business leaders on the shores of Italy's Lake Como. "I would like that we do it in one step. Apparently we cannot do it in one step."

Arab League Secretary-General Amre Moussa, who squared off against Peres at the meeting, expressed skepticism at the gradual approach and said the time for a deal was "now or never."

He warned that if Israel didn't move quickly it would find momentum will have shifted away from the two-state idea towards a single state of Israelis and Palestinians in which Jews would not dominate - effectively ending the state of Israel.

The testiness of the encounter between two veterans, who each represent relatively moderate forces among their peoples, illustrated starkly how far apart the sides remain even as they brace for an expected initiative by the Obama administration in coming weeks aimed at restarting negotiations for a regional Middle East peace.

In the run-up, the U.S. has been trying to nudge Israel toward a total freeze on Jewish settlement construction on occupied land, in exchange for various gestures from some Arab nations toward normalization with Israel. The difficulty has been compounded by the fact that in March a right-leaning government replaced the previous more moderate one in Israel.

Several months ago, Israeli Prime Minister Benjamin Netanyahu reluctantly agreed to accept the principle of a Palestinian state - a position his predecessors had already adopted but his Likud party has not - but said it would have to have limits on its rights to have a military or control its airspace.

On Friday, aides to Netanyahu told The Associated Press that he would also agree to a temporary settlement freeze - but only after approving hundreds of new housing units and completing 2,500 other still under construction.

The aides, speaking on condition of anonymity, said that contrary to the U.S. position the freeze would not include east Jerusalem, which Israel occupied in 1967 and has since annexed but which the Palestinians see as the capital of their future state.

Moussa bitterly condemned these proposals, saying they would "suspend the peace process" if enacted, and said that Netanyahu's "interpretation of a Palestinian state makes a Palestinian state a farce therefore the offer cannot be accepted."

He said the Arab League's 2002 offer to Israel - full regional peace in exchange for a full withdrawal from all areas occupied in 1967 and a solution to the question of Palestinian refugees - remained in effect.

"We are ready to recognize Israel, to normalize with Israel," if Israel met the Arab conditions, Moussa said.

Peres, a Nobel Peace laureate and former Israeli prime minister, countered that "peace is not based on ultimatums but on compromises" and noted that the issues of Jerusalem and of the refugees - who, together with their descendants, number in the millions - were extremely difficult to resolve.

"If we have to write it down on paper then we will immediately have an explosion," he said. "We can move on two different tracks (and) solve the refugee problem in itself."

Moussa said that if Israel continued building settlements in the West Bank and dragging its feet the sides may pass the point of no return.

"Time is not on our side and it is certainly not on the side of Israel," he said. "The idea of two states is losing in favor of one state. There is a possibility that a Palestinian state would not be viable. In that case the only possibility is one state - not a Jewish state, not an Arab state ... a state of its citizens."

Moussa referred to the idea that the West Bank and Gaza may become so demographically entwined with Israel that they would have to form a single entity - and one in which, by current birthrate trends, the Arab population may well soon exceed that of the Jews, who number about 5.5 million in today's Israel.

"If we do not move in the next few months under the Obama initiative ... we will have to put the whole (Israeli-Palestinian) file before the international community," Moussa said, alluding to the possibility that the Arabs would conclude some two decades of peace efforts had simple gone nowhere.

Peres - pushing the boundaries on a role that is meant to be ceremonial and somewhat above the political and diplomatic fray - argued that even the borders initially delineated for the Palestinian state could be considered provisional and ultimately expanded.

"You want us to believe that?" thundered the urbane Moussa. "Another one of the tricks!"