Prime Minister Ehud Olmert on Monday used a Jerusalem memorial ceremony for former prime minister Yitzhak Rabin to reiterate that Israel must be willing to cede parts of the capital.

"If we want to keep Israel Jewish and democratic, we need to give up parts of the homeland we have dreamed about for generations and [mentioned] in our prayers, even Arab neighborhoods of Jerusalem, and to return to a 1967 Israel with certain amendments," he said.

"The decision must be made now. The moment of truth has arrived. There is no escaping it, but [the opportunity] can be missed. If, God forbid, we dither, we will lose the support for the idea of two states. There is no need to expand on the alternative…Rabin will win," he continued.

"The moment of truth has arrived," he repeated. "We can push if off for many years in which blood will be spilled. But we must look at it honestly, proudly and responsibly. The bullets that killed Rabin could not stop the historic path that he led. Even after his death, Rabin will be victorious."

During the state ceremony at Mount Herzl, President Shimon Peres said that even today, there were those who were inciting and causing harm, saying that the state must "utilize the law to its fullest, without fear."

He said that like then, also now, that was a small minority that had "the audacity" to undermine the state's authority.

"They hurt Palestinians, just because they are Palestinians, and challenge the law enforcement authorities, police and soldiers, who are protecting the country, and also protecting them," he said. "The violent and dangerous minority must be condemned and isolated and we must silence their abusive and inciting words. Their damaging and destructive acts must not be tolerated as if they are a state within a state."