Israeli Foreign Minister Mr Shimon Peres says Israel favours an independent Palestinian state but that Palestinian Authority President Mr Yasser Arafat had to rein in people who attack Israel.
"We want to see an independent Palestinian state successful, flourishing. We think that the better the Palestinians will have it, the better neighbour we shall have," Mr Peres told journalists during a visit to Prague.
"Nothing can substitute in the modern age for good relations. Neither guns nor tanks nor fences nor walls. What we want is to establish a new rapport with our neighbours," he said.
Mr Peres stopped short of commenting on British Prime Minister Mr Tony Blair's support for the creation of a Palestinian state.
Mr Peres said for peace to exist, Mr Arafat had to keep a tight lid on violence.
"It's a problem for him [Arafat], not just for us, if he cannot control his people. We are telling them that a country means that you have free speech and controlled rifles. But if you have controlled speech and free rifles, you cannot run a country," Mr Peres said.
Yesterday, Mr Blair backed the creation of a Palestinian state during a meeting with Mr Arafat. The United States and Britain have urged Israel and the Palestinians to uphold a fragile truce.
Mr Peres did not comment directly on reviving peace talks after yesterday saying that more had to be done by Mr Arafat before talks could continue.
At least 626 Palestinians and 175 Israelis have been killed since a Palestinian revolt against Israeli occupation erupted in September 2000 after peace talks stalled.