TORONTO — Israel should proceed with caution in its increasingly tense confrontation with Iran, Israeli President Shimon Peres said in Toronto.

Iran is a regional “menace” and its nuclear program poses a “real danger” to the Jewish state, but Israel should exhaust all possible options before resorting to military force, said Peres, a former prime minister and defence minister.

“It’s better to start with non-military efforts than to go straight to war,” he said, striking a moderate tone and describing his position as “a reasonable policy.”

Speaking to a near capacity audience at a community event sponsored by UJA Federation of Greater Toronto and the Centre for Israel and Jewish Affairs and held at the Sony Centre for the Performing Arts, Peres hewed to the high road.

 While agreeing that “all options” should remain on the table,” Peres said that economic sanctions and political pressure should be allowed to work before Israel considers a strike on Iran’s nuclear facilities.

Visiting Toronto in the course of a state visit to Canada, Peres said the campaign to stop Iran from acquiring a nuclear arsenal should be spearheaded by the United States and countries such as Canada.

Rather than exclusively being an Israeli source of concern, he added, Iran’s atomic ambitions are really a world problem.

Peres, 88, delivered his comments against the backdrop of media speculation that Israel may be preparing to launch a preemptive attack on Iran.

Looking somewhat physically frail but completely mentally alert, he was formally introduced by Canadian filmmaker Robert Lantos, who called him “the personification of the Zionist dream and Israel’s ambassador to the world.”

Taking questions on a bare stage from conservative Canadian journalist David Frum, Peres was asked his opinion of Israel’s new coalition government, headed by Prime Minister Benjamin Netanyahu and bolstered by the addition of the centrist Kadima party, headed by Shaul Mofaz.

 “The test of this government is if it works for peace,” he said in a reference to the stalled peace process with the Palestinians.

But Israel’s government will also be judged by its stance on Iran, he noted.

Peres, who recently praised Palestinian Authority President Mahmoud Abbas as

“a worthy and serious partner [who] can deliver the goods,” expressed hope regarding the prospects for peace.

Noting that the PA has embarked on a program to build up its economy and a network of institutions in the West Bank, Peres advised Israel “to conclude this process” with a formal peace agreement.

Warning that a peace accord will exact a price from both sides, and may even be imperfect, he observed, “To make peace, you have to make concessions.”

Commenting that compromise is the essence of negotiations, Peres likened peace to romantic love: “You can’t achieve ]it] unless you close your eyes a bit.”

Peres, claiming that the gap between Israel and the Palestinians has narrowed by a considerable degree, declared that an agreement should be based on a two-state solution in which Israel and a future Palestinian state coexist in peace and mutual understanding.

“There is an Israeli consensus that peace should be based on two states.”

If Israel managed to forge a peace agreement with Jordan, there is no reason why Israel cannot live in peace with a Palestinian state, he said.

Asked whether Israeli settlements in the West Bank are provocative, Peres, once a champion of settlements, deflected the question, saying he saw no sense in “criticizing the past.”

Implicitly defending the expansion of existing settlements to accommodate population increases, he suggested that Israel’s retention of settlement blocs should be enshrined in a peace agreement.

In reply to questions about current developments in the Arab world, Peres said he expects Israel’s peace agreement with Egypt to hold and the Baathist regime in Syria to fall.

He also claimed that the problems besetting Arab governments today turn on economics rather than politics.

Peres acknowledged that Israeli Arabs – a minority comprising 20 per cent of Israel’s population – suffer from economic discrimination because the high-tech revolution that has changed Israel has virtually passed them by. But Israel is trying to remedy this problem, he said.

Turning to Israel’s bilateral relations with foreign countries, Peres described its relationship with the United States as “very warm.” As he put it, “Israel enjoys friendship and admiration in the United States.” Still, he admitted, disagreements emerge from time to time.

In a brief survey of Israeli diplomacy, Peres said Israel has good relations with China, India, the Vatican, Canada and the nations of Europe.

He then thanked the Jewish community in Toronto for being so loyal to Israel.

Recalling Israel’s birth in 1948, he mused  that Israel hardly stood a chance against the combined might of seven attacking Arab armies. “We were outmanned and outgunned,” said Peres, who played a key role in procuring weapons for Israel at the time.

In philosophical and humorous reflections about Israel’s early days and the hardships Jewish pioneers endured in settling an inhospitable land short of water, Peres quipped, “We have two lakes. One is dead, the other is dying.”

Warming to his topic, he said, “We had nothing, and that made us a great people. The people enriched the land.”

Peering into the future, he said, “Israel will live more and more on science. We will succeed on the basis of science, daring and a will to improve. We are the people of Facebook.”

In conclusion, Peres maintained that “the force of ideas is greater than the strength of armies,” and said that Israel’s quest for perfection is well worth pursuing, even if it falls short of the mark.

Outside the Sony Centre, with police looking on nervously, pro-Israel and pro-Palestinian groups held aloft Israeli and Palestinian flags and waved placards inscribed with such slogans as “Support Israel” and “Stop Israeli apartheid.”

With the Palestinians and their supporters chanting “Free, free Palestine” and “Viva, viva Palestina,” a man on the opposite side of the road roared into a megaphone, “Israel has wanted peace from day one! Israel strives for peace!”