Israel's Defence Minister Ehud Barak has said Israel must, eventually, allow the Palestinians to rule themselves.
In an interview with Army Radio he said in the future there would be a separate Palestinian state "whether you like it or not".
The interview comes as Israelis mark Memorial Day, commemorating Israeli soldiers killed in action.
Mr Barak, a former top ranking soldier, leads the Labour Party which is part of the current government coalition.
"The world isn't willing to accept, and we won't change that in 2010, the expectation that Israel will rule another people for decades more," he said.
"There is no other way, whether you like it or not, than to let them rule themselves," he said, speaking about the idea of a separate Palestinian state.
'Alienation'
He also warned of a growing rift between Israel and the United States. He said the government of Benjamin Netanyahu had "done things that didn't come naturally to it", like agreeing to a 10 month pause in settlement building and moving toward accepting the principle that there should be two states, one for Palestinians and one for Israelis.
"But we shouldn't delude ourselves, the growing alienation between us and the United States is not good for Israel," he said.
Israel's Memorial Day commemorates some 22,600 soldiers killed in action and the 1,750 Israeli citizens killed in attacks by Palestinian militant groups.
It coincides with the celebration of Israel's 62nd independence day.
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