Israeli President Shimon Peres called for the establishment of an independent Palestinian state, in an exclusive interview with CNBC on Tuesday.
"We have to enable the Palestinians to have an independent state of their own, and live like neighbors, not like enemies," said 89-year-old Peres, whose political career has spanned 66 years.
Peres added that barriers to the peace process were more "psychological than real".
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"I think the greatest problem we have is skepticism and a belief that peace is impossible… To have peace we have to overcome the problem," Peres said.
Munib Rashid al-Masri, a Palestinian and Jordanian statesman, said Peres and he agreed that Israel must withdraw from the United Nations-designated occupied territories.
"When I sit with him, I say 'Mr. Peres, end the occupation, stop building settlements and give us a timetable for the withdrawal.' And he agrees with this," al-Masri told CNBC.