JERUSALEM - President Shimon Peres hosted foreign diplomats stationed in Israel for an Independence Day celebration Tuesday at the presidential residence in Jerusalem. Also attending the event was Foreign Minister Avigdor Lieberman, who centered his speech on former prime minister Menachem Begin's famous words on the subject of Jerusalem.

Addressing the foreign diplomats, Lieberman said, "all of Jerusalem, north, south, east and west, is under Israeli sovereignty. It cannot be divided, directly or indirectly. It is our eternal city."

The foreign minister said that while Israel was prepared to work hard and pay a hefty price for peace - as its government had done in the past - it was necessary to find viable partners with whom to make peace.

During his own speech, meanwhile, Peres called on the Palestinians to return to the negotiating table, reiterating that Israel is in favor of a two-state solution, and wants to see the Palestinians living in peace respect and prosperity. "Our main desire is peace in the Middle East with all our neighbors. It brings us no joy to see other people suffering," he said. "The better our neighbors have it, the better peace we will have. To postpone peace is unnecessary."

Lieberman endorsed Peres's call for the Palestinians to resume negotiations, but was adamant that nothing should be enforced on either side. "We must establish a new reality in the region based on security for Israel and economic prosperity for the Palestinians," he said, but conceded that this could not be done without establishing conditions of mutual trust. "Any attempt to force a solution without establishing mutual trust will only deepen the conflict."

The foreign minister said that the peace agreements with former Egyptian president Anwar Sa'adat and former Jordanian king Hussein were possible because those leaders were viable partners, as also due to international support.

Israel, he said, proved time and time again - especially during the right-wing Begin administration - that it aspires to peace and is able to make peace with partners whose intentions are good and true.

He added as an example that following negotiations for peace with Egypt after the Yom Kippur War, Israel had withdrawn from territory three times as large as its own.