Peres backs Palestinian state

In a speech to the General Assembly in New York, Mr Peres said that, while its creation was not yet the formal policy of Israel, he acknowledged it was gaining support among other nations.

Mr Peres has endorsed an independent Palestinian state in the past, but this is the first time he has done so at the UN.

US President George W Bush told the UN on Saturday that Washington was working towards a day when two states, Israel and Palestine, would live peacefully together.

The BBC UN correspondent Greg Barrow says his remarks created a flurry of excitement and drew praise from Palestinian leader Yasser Arafat.

And UK Prime Minister Tony Blair backed this vision during his talks with Mr Arafat last month.

Changing times

"Yesterday, you would hardly find ... support for a Palestinian state," Mr Peres told the General Assembly.

He said this was "not yet formal policy" in Israel's government but added:

"There is support for Palestinian independence and for a Palestinian state. We do not want to dominate the Palestinians. We want them to breathe freedom to initiate a new economy, to maintain their traditions, and enjoy the highest level of education - which will also provide for real security for all parties."

But Mr Peres warned the Palestinian Authority, which he referred to as "a state in being" that it would have to control all the armed groups in the Palestinian territories before there could be peace in the Middle East.

"If you have one political authority and several armed groups, you can have neither democracy nor security," he said.

Defining borders

Neither Mr Peres nor Mr Bush has expounded on the borders of any Palestinian state.

Palestinian leader Arafat said on Thursday, in a speech to mark the day he declared a state from exile in Tunis in 1988, that he remains committed to peace with Israel - but only on the basis of its withdrawal from the entire West Bank, Gaza Strip and east Jerusalem.

Israeli Prime Minister Ariel Sharon has said he accepts the concept of a limited Palestinian state but has opposed any dismantling of settlements.

The US Government is expected to announce fresh plans to bring peace to the region in the coming weeks, a quest that has added urgency given the administration's desire to keep Arab nations on its side in the international struggle to combat terrorism.