In the first speech by an Israeli president before a Muslim legislature, Peres said, "Israel is determined to reach a two-state solution."
Peres expressed the gratitude of Israel to the people in Turkey who opened their doors to Jews when they were expelled from Spain in 1492. Turkish Sultan Beyazid II accepted Jews into the Ottoman Empire, the predecessor of modern Turkey, after they were expelled from Spain.
"Here, they found a home of tolerance where they could freely practice their religion," Peres said in his speech, given in Hebrew and translated into Turkish. "I came here to express my gratitude to Turkey."
Turkey also aided Jews fleeing the Holocaust, including Turkish Jews abroad.
Turkey's President Abdullah Gul and Palestinian Authority Chairman Mahmoud Abbas were among those in the audience in Turkey's 550-seat Parliament.
Earlier Tuesday, Abbas expressed optimisim on the prospects for peace, following a meeting with Peres in the Turkish capital.
"If peace comes and the occupation comes to an end, Israel will live in a sea of peace," Abbas said at a joint news conference with Peres.
Abbas said his administration was preparing for the upcoming Middle East conference in Annapolis, Maryland, aimed at relaunching peace negotiations between the two sides after they broke down amid violence seven years ago.
"We are working with our full force to ensure that the meeting in Annapolis is a success," he said.
Turkey asks Peres for a Turkish Cypriot representative office in Tel Aviv
Turkey has requested openning a Turkish Cypriot representative office in Tel Aviv, according to Turkish President Abdullah Gul, who raised the issue at his meeting with President Shimon Peres Monday.
Peres said he would have to discuss the matter with Israel's Foreign Ministry before replying.
The Israeli delegation to Turkey was surprised when Gul broached the matter of Turkish Cyprus at the first meeting. In 1974, following a coup against the democratic Cypriot government by the Greek military junta then ruling in Athens, Turkey invaded Cyprus and occupied the northern half of the island. In 1983 the Turkish minority there declared independence, which is seen by the world, apart from Turkey, as occupied territory of sovereign Cyprus.
Gul told Peres that Israel must halt settlement construction in the West Bank if it wishes to seriously pursue peace efforts with the Palestinians. "Israel's security is important, but one can't ignore Palestinian problems," he said. "Israel must stop building in settlements."
Palestinian leaders, he said, "spread out maps before me and show me the settlement growth. It doesn't leave me much to say on the matter."
Peres told a joint news conference that he believed that Israel could currently make peace with the Palestinians, but cautioned that the process might take time.
Gul told Peres that Damascus should be invited to the Annapolis peace summit at the end of the month, and that Syrian President Bashar Assad "is interested in real peace." Peres said "Assad needs to take action that shows he is serious, and come to Jerusalem."
The two presidents also discussed U.S. congressional legislation - to which Turkey is vehemently opposed - which labels the massacre of Armenians during World War I as a genocide.
"It's not a good idea to spoil relations between Turkey and Israel because of events from 90 years ago," Gul told Peres, "but we can't stand a situation in which every half year the issue is raised in the United States."
Regarding the Iranian nuclear threat, Peres told Gul that it is clear that Iran, which claims its nuclear program is for peaceful purposes, is actually trying to develop nuclear arms. Gul disagreed, but said Turkey would not stand for Iran acquiring nuclear arms.
Peres requested that asked Gul send the Siloam inscription - describing the tunnel digging in King Hezkiya's days in 703 CE and now exhibited in Archaeological Museum of Istanbul - to Jerusalem for Israel's 60th anniversary.
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