New York  - Israeli President Shimon Peres on Wednesday invited Arab leaders for a peace summit in Jerusalem and said he expected a comprehensive peace deal with the Palestinians to be in place by next year.

Peres said the initial goal of reaching a peace agreement this year on the creation of a Palestinian state was unlikely, "but I believe it can be accomplished within the next year."

"I know there is growing concern that peace is far away. My life- long experience provides me with a different judgement," Peres said in a speech before the United Nations General Assembly in New York.

The United States and Middle East powers had set a target of the end of this year at a summit in Annapolis in November of 2007, but talks have been hampered in part by inner-Israeli politics. Israeli Foreign Minister Tzipi Livni was formally charged this week with forming a new government.

Peres said Israel was also prepared to seek peace with its Arab neighbours. He pointed to talks with Syria since September and suggested Saudi Arabia expand on a broader peace initiative launched last year.

The Saudi plan "may become an invitation for comprehensive peace," he said, and invited "all leaders" of the Arab world to come to Jerusalem for a "meaningful debate."

Peres condemned Iran for blocking peace efforts and lying "at the centre of this violence and fanaticism."

Iranian President Mahmoud Ahmadinejad's own address before the General Assembly Tuesday was a "disgrace to this house," Peres said. (dpa)