President Shimon Peres again created controversy when he used his neutral position to support a leftwing political agenda. During a meeting with 1000 high school students in the city of Holon as part of an official visit, Peres called for the establishment of a Palestinian State.

"In my opinion, proximity talks can open the path to renewing the peace negotiations. I can say, on this stage, to our Palestinian neighbors and to whoever is listening-Israel has already made a historic decision to establish two states for two peoples. An Arabic state named Palestine and a Jewish state named Israel. I do not believe or think it possible that there is any other solution."