World News Story

08 January 2009 22:15 BST

Blair looks to M East solution

Middle East envoy Tony Blair says it is "absolutely possible" for a binding Israeli and Palestinian peace deal to be achieved before the end of 2008.

According to Mr Blair, who has acted as the peace representative for the EU, UN, US and Russia since leaving Downing Street, there is "no option" other than two states living side by side.

The former prime minister's comments come as George Bush concludes a state visit to the region, his first since becoming US president.

Mr Bush has already expressed his belief that the Middle East peace process can reach a conclusion in his remaining 12 months in office.

He issued the bold statement alongside Israeli prime minister Ehud Olmert and Palestinian Authority president Mahmoud Abbas following peace talks in Annapolis last year.

And Mr Blair says he is "cautiously optimistic" of such an achievement.

"I think given the determination there is to succeed and given the desire on the part of the American leadership, the Israeli leadership, the Palestinian leadership to see it happen, I think people could be surprised this year," he said in a television interview.

"People in Israel - they don't want to pay the price of the world's desire to have a peace deal, and I totally understand that and I am a strong supporter of the state of Israel, and this should only happen under terms which guarantee Israel's security."

But the ex-Labour leader admitted that "difficult decisions [and] difficult compromises lay ahead", with sticking points including Arab land occupied by Israel, the status of Palestinian refugees and whether East Jerusalem is a viable capital of any future Palestinian state.

Mr Blair explained: "But if we can achieve those terms and give the Palestinian people a state, then I think there is nothing more important in the battle against extremism and terrorism that is fairly deep-rooted in many parts of the world today."