According to Annan, the solution for the refugee problem will be found in the borders of the future Palestinian state, and not by them settling in Israel, while borders of peace will be established opposite Israel's other neighbors – including Syria and Lebanon – and diplomatic and economic relations will be built.
Ahead of his retirement, Annan took advantage of the discussion in order to deliver a concluding speech on the situation in the Middle East, and attempted to present a balanced opinion on the Israeli-Arab conflict.
"One of the most frustrating aspects of the Israeli-Palestinian conflict is the apparent inability of many people on both sides to understand the position of the other, and the unwillingness of some to even try.
"The Arab-Israeli conflict is not just one regional conflict amongst many. No other conflict carries such a powerful symbolic and emotional charge even for people far away.
"I will leave office without an end to the prolonged agony. The Middle East today faces grim prospects. The region is in profound crisis. The situation is more complex, more fragile and more dangerous than it has been for a very long time."
Annan speaks (Photo: Reuters)
According to Annan, in spite of the IDF soldiers' withdrawal and the evacuation of settlements last year, the Gaza Strip has become a cauldron of deepening poverty and frustration.
He added that the situation in the West Bank was also serious, simultaneous to the ongoing activities taking place in some of the settlements and the ongoing works to build the separation fence.
He reviewed the situation in the territories and said that Israel was preventing Palestinians from moving freely and noted that the Palestinian Authority was paralyzed by a political and economic crisis and was unable to provide security or fundamental services.
The outgoing secretary general said that in his opinion the problem lies in the Israeli stance: "It is completely right and understandable that Israel and its supporters should seek to ensure its security by persuading Palestinians, and Arabs and Muslims more broadly, to alter their attitude and behaviour toward Israel.
"But they are not likely to succeed unless they themselves clearly grasp and acknowledge the fundamental Palestinian grievance – namely, that the establishment of the State of Israel involved the dispossession of hundreds of thousands of Palestinian families, turning them into refugees, and was followed 19 years later by a military occupation that brought hundreds of thousands more Palestinian Arabs under Israeli rule."
He stressed that the majority of big political parties in Israel understand that the occupation must end for "Israel's own sake, and for the sake of its own security."
Annan explained that the desperation of the territories' residents, who only see barriers being built on their lands and more than 500 checkpoints to control their movements, was only growing, as well as their determination to resist the occupation.
The UN chief states that he agrees with Israel and its supporters that there is a difference – moral as well as legal – between terrorists, who deliberately target civilians, and regular soldiers who, in the course of military operations, unintentionally kill or wound civilians despite efforts to avoid such casualties.
He added, however, that "the larger the number of civilians killed and wounded during these operations, and the more perfunctory the precautions taken to avoid such losses, the more this difference is diminished."
'Appalling crimes against Israel'
Speaking in favor of Israel, Annan said that Israel is justifiably proud of its democracy and its efforts to build a society based on respect for the rule of law. He stressed that the Israelis continue to live in fear of terrorism and are dismayed by the inadequacy of Palestinian efforts to halt rocket attacks into southern Israel.
Turning to the Arab nations, Annan said that "it is completely right and understandable to support the Palestinian people, who have suffered so much. But Palestinians and their supporters will never be truly effective if they focus solely on Israel’s transgressions, without conceding any justice or legitimacy to Israel’s own concerns, and without being willing to admit that Israel’s opponents have themselves committed appalling and inexcusable crimes. No resistance to occupation can justify terrorism."
The outgoing secretary general also criticized the United Nations itself, saying that "I believe the actions of some UN bodies may themselves be counterproductive. The Human Rights Council, for example, has already held three special sessions focused on the Arab-Israeli conflict.
"I hope the Council will take care to handle the issue in an impartial way, and not allow it to monopolize attention at the expense of other situations where there are no less grave violations, or even worse."
Israel's representative at the council, Deputy Ambassador Daniel Carmon, praised Annan for his balanced remarks.