Israeli Defense Minister Ehud Barak.

Outgoing Israeli Defense Minister Ehud Barak capped the first day of the AIPAC Policy conference by outlining his vision for peace with the Palestinian Arabs, calling for unilateral steps if negotiations fail, but insisting “a daring peace initiative for a two-state solution is the only viable long-term solution” for Israel.

“It’s not a favor to the Palestinians,” he stressed, ” it’s the only solution.”

“They clearly bare most of the responsibility for past failures,” he added, speaking of past attempts at peace efforts. And, in a measured tone, told the AIPAC audience that “a fully fledged agreement is probably not reasonable today,” and that ” [Israel] must reach an interim agreement… if [that is] unobtainable we should consider unilateral action,” he concluded, stating that the Jewish state must drive a “wedge” between Israel and the West Bank, but retain the settlements and ensure a Jewish majority in the state of Israel.

Among Barak’s first comments were congratulations to Chuck Hagel, his current US counterpart, whom he will meet with in Washington on Tuesday. He “will no doubt serve his country in the same way in which he served both on the battlefield and in congress,” Barak said.

On Iran Barak sounded a more skeptical note, saying that negotiations should be given a chance but adding, “I do not believe it will lead to a moment of truce,” where the Ayatollahs will be willing to give up their pursuit of nuclear weapons. Therefore, he said, “All options are on the table and we mean it. Let me repeat: we mean it.”

A clearly emotional Barak finished his speech with a Jewish prayer: May the Lord bestow his people with courage and bless his people with peace. Then he was was presented with a shofar by the AIPAC committee.

Barak’s speech was preceded by that of Senator John Cornyn (R-TX) who reassured the crowd that despite the divisions in Washington, on the “issue of US support for Israel–we’ve been able to maintain an overwhelming bipartisan consensus.”

He also dismissed Hamas, saying “a terrorist group that promotes genocidal violence against Israel and Americans is never going to be reformed by dialogue or concessions. “