Israel's Deputy Prime Minister Tzipi Livni told the UN General Assembly Monday that peace in the Middle East is possible only if there is an Israeli and Palestinian state living side-by-side in peace and security, according to dpa. But Livni, who is also the foreign minister, showed no sign of optimism in describing the state of negotiations between her government and the Palestinian Authority. Palestinian President Mahmoud Abbas last Friday told the same UN forum that it was time to end the Isaeli-Palestinian conflict, citing progress made in talks with Israeli Prime Minister Ehud Olmert. Abbas promised the Palestinian people that conditions were being readied to create a Palestinian state with East Jerusalem as its capital. Livni made no such references, saying Olmert and Abbas "engaged in sincere and genuine effort to reach the widest possible common ground on political understandings." "The foundation for true peace lies in the vision of two states, Israel and Palestine, living side-by-side in peace and security," Livni said. "The world shares this vision, but it is also important that it clearly embraces the two core principles that emerge from it." She said a secure Israel is in the Palestinian interest, and a viable and prosperous Palestine - in the West Bank and Gaza - is in Israel's interest. "The world cannot afford another terror state," she said, referring to the Hamas-controlled Gaza Strip. She also called for the release of captive Israeli soldiers Gilad Schalit, Udi Goldwasser and Eldad Regev. "As we make progress on concrete political understandings, it is just as important to change reality on the ground - to show Palestinians and Israelis that the promise of peace exists in practice, not just on paper," she said. Livni acknowledged the sufferings of the Palestinian people, but she said Israelis bear a "burden of terror" and have to provide their own security.