The prince also said he believes it will be impossible to achieve peace unless Israeli withdraws to the borders it occupied on the eve of the Six Day Way in 1967.
Saudi Arabia announced only on Friday that it intended to participate in the Annapolis conference - its attendance was highly sought after by the Bush administration.
Al-Faisal organized a mini conference of his own on Monday when he held an assembly of 16 foreign ministers from Arab countries in the Saudi embassy in Washington, DC.
Despite Saudi representation at the Annapolis conference, al-Faisal has said that he would neither shake Prime Minister Ehud Olmert's hand nor converse with the Israeli leader during the summit.
"This is not a theatrical production. We are not coming to be photographed and to shake hands. We do not want to give people the wrong impression. The moment the hand opens for peace - we will shake it."
'We fear aftermath of failure'
Before his departure for the US to attend the conference, the Saudi foreign minister was interviewed for Time magazine. In the interview, the statesman was quoted as saying that he was "optimistic because of the sense of determination of the US to see this through."
In reference to his hesitation to attend the peace summit, al-Faisal said: "We were fearful of failure. For us, of course, and what the turn of events after a failure would be.
"We were anxious that the credibility of the United States is maintained. Undoubtedly, failure will increase the trend toward radicalism, and undoubtedly it will provide terrorists with further means of recruitment."
The Saudi prince said that Israel needs to make a decision. "They have lived for the last 60 years basing their policy on force. Yet they are not closer to achieving peace or security than they have been in the past.
"It is time for them to try a different policy, a policy of accepting to live with the Palestinians and live in the neighborhood," he said.
According to al-Faisal, he is participating in the conference in order to "support Mahmoud Abbas, Syria, Lebanon and in order for them to get their territory back."