BEIT-UL-MOQADDAS (AP) -- International mediator Tony Blair says there's skepticism about the prospects for peace because of Israel's new government.

Blair spoke Monday after meeting with Israel's new Prime Minister, Benjamin Netanyahu. Blair said he believes Netanyahu understands that the only formula for peace is a Palestinian state next to Israel.
Netanyahu has pointedly not endorsed creation of a Palestinian state. Blair thought Netanyahu would come around “if the right context can be created for peace.”
Blair noted skepticism over Netanyahu's election and said there must be time for the new governments in Israel and the U.S. to “settle down.”
Blair said “the only solution that will ever work” is two states living side by side in peace.