Prime Minister Benjamin Netanyahu said that he intends to start talks with the Palestinians by the end of September.
Speaking during Sunday's cabinet meeting and ahead of his meeting with US special envoy to the Middle East George Mitchell, Netanyahu added that there has been "a certain closeness" building between the two sides.
Meanwhile, Foreign Minister Avigdor Lieberman offered a more somber prediction as to the fate of the Israeli-Palestinian peace process Sunday, at a press briefing held in Jerusalem.
"Despite giving everything, we were unable to strike peace 16 years after (the Oslo Accords). I'm willing to bet there won't be peace 16 years from now either, certainly not one based on the two-state solution," he said.
Lieberman argued that the peace process must be de-prioritized: "Some conflicts took many years to resolve...We have to improve the (Palestinians') state of the economy and security, but we can't create an illusion.
"Thinking we can have peace with the Palestinians within a year or two in unrealistic. (Former PM Ehud) Olmert and (Opposition Leader Tzipi) Livni couldn’t strike peace despite their offers. (Former PM Ariel) Sharon's government withdrew from Gush Katif and that didn’t bring peace. And didn’t (Defense Minister Ehud) Barak already offer everything in Camp David?"
Many of the gaps between Israel and the Palestinians, continued the foreign minister, simply cannot be bridged, "Like Jerusalem, the refugees and the borders; especially if you consider the resolutions made during the last Fatah Congress, like the demand to make Jerusalem the capital of Palestine, the call for absolute right of return and the conclusion that Israel murdered Yasser Arafat.
"Implementing the two-state solution will not end the conflict – it will introduce it into the 1967 borders. Our problem then would be with people like Ahmad Tibi (United Arab List-Ta'al) calling for "a people's state" and giving the minorities in the Galilee and Negev autonomy."
Nevertheless, Lieberman said that he would not impede the peace process: "We will not interfere in (US President Barack) Obama's efforts. I'm willing to give anyone who thinks they can find a diplomatic solution time to try.
"I don’t want to cause any problems with the US. I think that the prime minister really believes in the process and so I let him lead. It's not that I don’t want to reach a solution," he continued, "But I'm a realist. I hope I'm proven wrong and I will be the first to admit that."
'No lines in the sand'
When asked whether he will resign should Netanyahu decide to adhere to the American demand to halt settlement expansion, Lieberman said that "I'm not drawing any lines in the sand. I think that during a government's first year in office there shouldn’t be any such lines.
"We have to explore things and let others pursue moves they think have a chance to succeed. We joined a coalition with Labor, Shas, Habayit Hayehudi and the Likud and each party has its own way. I think this government will be able to reach a full term in office. I want to let the others have the chance to prove me wrong."
Turning his attention to the peace process with Syria, Lieberman said that "the important thing to understand is, that the thing that's holding (the process) back is the Golan Heights. Or maybe it isn’t. I can't rely only on what (Syrian President Bashar) Assad is saying.
"The Golan Heights are 464 sq. miles, on which some 20,000 Druze reside – hardly something pivotal for Syria," continued Lieberman. "The other thing is that Assad has clearly stated that he will not sever his ties with Iran and will not shut down Hamas and Jihad bureaus.
As for the US' efforts to curb Iran's nuclear activity, Lieberman said that "I don’t think anyone has any illusions about Iran, certainly not now – not after all the bloodshed that followed the presidential elections."