"I think there are no two ways about it, and there will be peace," the Nobel laureate president said.
"No on can live in the current intermediate situation. But look what is happening - there is no intifada in the West Bank and in the Gaza Strip, and Hamas is losing support," Peres told news portal 'Ynet' ahead of the Jewish nation's 65th Independence Day tomorrow.
Unlike the government led by hawkish Prime Minister Benjamin Netanyahu, who has shunned Palestinian President Mahmoud Abbas and doesn't see him as a partner in peace, Peres called the Palestinian leader as "courageous" and one who can sign a peace agreement.
"We have already arrived at a line of unprecedented agreements with Abu Mazen (nom de guerre for Abbas). His situation has improved because for the first time he has someone to lean on - he has his security-related power, and that is important since political support in the Arab countries comes from the military," he said.
"He chose peace and he demonstrated courage... And there is an agreement on how to end the conflict - two states for two nations," he stressed.
Peres has generally refrained from publicly criticising Netanyahu, a rule he has broken only once when he feared that the Israeli Prime Minister and former Defence Minister Ehud Barak would lead Israel to a military adventure in Iran.
Peace talks with Palestinians have come to a standstill around the question of settlements with Palestinians demanding a total freeze on all building activities in the West Bank and east Jerusalem, while Netanyahu insisting on talks without any pre-conditions.
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