JERUSALEM (AP) – Israel’s public security minister, a former intelligence chief with a reputation for toughness, offered a surprisingly optimistic view Monday of prospects for peace between Israelis and Palestinian Arabs, despite what he called a big push by Iran to sow discord in the region.

Asked to explain why he was so upbeat, Avi Dichter – who headed the Shin Bet intelligence service during Israeli crackdowns on Palestinian militants – predicted the Palestinians would ultimately understand they have no choice but to accept Israel.

“I spent more years in Gaza than I spent in Tel Aviv. I think I know (the Palestinians) very well,” Mr. Dichter told a gathering of diplomats and reporters in Jerusalem. “So the probability that I see, the probability to set up a peace agreement and a peace situation … is much stronger than the probability that we are going to get into another round of violence.”

The Palestinians “know that they have no chance to build themselves as a nation without a peace agreement with Israel,” he said.

Mr. Dichter accompanied his comments about peacemaking with an account of the grave dangers posed by Iran, which he said is waging two simultaneous proxy wars against Israel in both the north and south – through Hezbollah guerrillas in Lebanon and Hamas militants in the Gaza Strip.

Still, Mr. Dichter said he believes Israel’s much-criticized 34-day war in Lebanon last summer will make Hezbollah think twice before attacking the Jewish state.

“I believe that the level of deterrence that Israel created toward Hezbollah is probably the main positive issue that we have gained from the last war in Lebanon,” he said.

That’s not a common view in Israel, where most believe the war harmed the country’s long-term deterrence by failing to destroy Hezbollah even after it launched more than 4,000 missiles into Israel.

Mr. Dichter accused Iran of training Hamas militants from Gaza who took advantage of an opening of the Gaza-Egypt border following Israel’s pullout from the coastal strip in 2005.

He called Hamas’ exiled supreme leader, Khaled Mashaal, a “frequent flyer between Damascus and Tehran” and said the militant group is building a sophisticated arsenal of smuggled weaponry in Gaza.

Hamas took over the Palestinian Cabinet and legislature a year ago after winning parliamentary elections. The group is in the process of forming a national unity government with the more moderate Fatah Party of President Mahmoud Abbas.

Hamas has not accepted the international community’s three conditions for doing business with it – recognizing Israel, renouncing violence and accepting past peace deals. As a result, a painful aid boycott remains in place, and a final peace deal seems a long way off, despite renewed Israeli-Palestinian contact, including a summit on Sunday between Mr. Abbas and Israeli Prime Minister Ehud Olmert.

Offering another reason why peace is not out of the question, Mr. Dichter said there was a difference in the outlook between Hamas in Gaza and its exiled leadership in Syria.

“The external leadership of Hamas in Damascus is much more extremist than the leadership in the Gaza Strip because as we all understand, those who count the lashes are not like those who are suffering it,” he said, referring to the impact of Israeli retaliatory strikes that follow Palestinian violence.

Dichter is a senior member of Mr. Olmert’s centrist Kadima Party. He was a confidante of former Prime Minister Ariel Sharon, who suffered a debilitating stroke in January 2006.

With the latest Israeli-Palestinian summit yielding few results, Israeli leaders are showing renewed interest in a regional peace plan they once rejected out of hand. Arab heads of state meeting in Saudi Arabia this month are expected to try to revive a Saudi proposal from 2002 offering a comprehensive peace with Israel in exchange for Israeli withdrawals.

Israeli Foreign Minister Tzipi Livni will discuss the initiative during her meeting Wednesday in Washington with Secretary of State Rice, said a spokesman traveling with her, Ido Aharoni.

“She certainly sees positive elements in the Saudi initiative that could serve as the basis for further progress,” Mr. Aharoni said by telephone.

The plan calls for a full Israeli withdrawal from areas captured in the 1967 Middle East war, and the establishment of an independent Palestinian state. In exchange, Israel would receive full diplomatic recognition from the Arab world.

Israeli media have reported that Israel is seeking to revise the language of the proposal. Top Arab League officials said the peace initiative would be relaunched without changes at a March 28-29 meeting in Riyadh.

However, one League diplomat, speaking on condition of anonymity because he was not authorized to discuss policy, said the Saudis “might offer new ideas.”

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Associated Press writer Salah Nasrawi in Cairo, Egypt, contributed to this report.