Italian Prime Minister Silvio Berlusconi told the Palestinians on Wednesday that "as it is right to cry for the victims of the Holocaust, it is right to express sorrow for the Palestinian victims [in Gaza]."

During a joint news conference with Palestinian President Mahmoud Abbas in the West Bank town of Bethlehem on Wednesday, he said that while in Israel he had felt a "desire" to move forward to launch peace negotiations and reach an agreement quickly.

Berlusconi, who before his visit to Israel had called Israel's settlement policy "a mistake" which could be an obstacle to any future peace agreement, told a news conference Wednesday that he understands the importance of halting Israeli settlement expansion, which he termed "a basic condition to launching productive negotiations."

He also renewed his call for a type of Marshall-plan for the Palestinians.

"I urge all countries to support the Palestinian economy. There will be no peace without prosperity," he said.

Berlusconi's one-hour meeting with Abbas in the southern West Bank biblical city was the last stop on his three-day tour of Israel and the Palestinian areas.

Earlier Wednesday, the Italian premier told Israeli lawmakers at the Knesset that the United Nations' Goldstone Report on the Gaza war tried to incriminate Israel's justifiable actions.

Berlusconi is on the third day of his visit to Israel and the Palestinian territories.

"We objected to the Goldstone Report, which tried to incriminate Israel for its justified firing on Hamas' rockets," the Italian premier said.

Addressing the issue of Iran's controversial nuclear program, Berlusconi said the international community needed to strive toward a wider understanding "in order to thwart the dangerous ambitions of the Iranian regime."

"The right way is multi-lateral supervision on the military developments the Iranian program may produce, and the demand of assurances from Tehran's government as well as to demand that the IAEA conducts regular visits to the facilities and an ongoing supervision of nuclear talks."

The Italian premier said that "signs of good will from the Iranians should not be rejected, but it should be clearly stated that the dialogue efforts will not suffer intentional stalling and wasting of time."

At the onset of his speech, Berlusconi emphasized the strong friendship between Jerusalem and Rome, saying that "As both Pope John Paul II and Rabbi Eliyahu Tuaf said, Italy is like a 'big brother' to Israel, a bond which originates in the friendship and fraternity and common fate, and in the appreciation we share to understanding and a peaceful coexistence between the nations of the world."

But the Italian premier also hinted at his country's less distinguished history in the 20th century, acknowledging that, "unfortunately, in 1938, Italy was stained with the disgrace of racial laws, which stood in complete contrast to centuries of a cosmopolitan and humanist culture, which reveres man and his dignity."

"However," Berlusconi added, "the Italian people have found the strength to purge itself through the struggle to release itself from Nazism and fascism, with the courage of many civilian heroes."

"Today, the safeguarding of Israel's safety and its right to exist as a Jewish state," the Italian premier continued, " is an ethical choice and a moral decree against the possibility of the return of anti-Semitism, Holocaust denial and a loss of memory by the West."

Berlusconi added that he believed "Israel, your country, is without a doubt a symbol to our possibility to be free and maintain a democracy even outside the boundaries of the West."

It is for this reason, he continued, that Israel "constitutes an unbearable presence for fanatics worldwide."

"For that reason, liberals worldwide see your country as a positive symbol, a painful and proud one of a great history which tells a story of live, freedom, justice, and resurrection against evil," the Italian PM said.

Turning to peace talks between Israel and the Palestinians, Berlusconi said, that "As you know, we have always striven for the two-state solution, a Jewish state alongside a Palestinian one in peace full and secure coexistence," Berlusconi said.

"Today it seems that this solution is not only acceptable to you and the Palestinian leadership, but also to the EU, the United States, and the West's most important allies," the Italy PM added, congratulating Netanyahu for "courageously choosing to go down this path and to explain his position to his people."

Prime Minister Benjamin Netanyahu, speaking ahead of Berlusconi's address, praised the Italian premier as a true friend of Israel, which was reflected by the attendance of the entire Knesset, "in a rare show of unity."

Netanyahu highlighted the long, shared relationship between Rome and Jerusalem, conjuring historical events such as the Great Rebellion of the Jewish settlement against the Roman Empire in 66 CE, as well as the two cities' cultural contributions to the world in the arts, philosophy and religion.

The premier also mentioned Italy's friendship with the modern State of Israel, as well as Berlusconi's denouncement of Gaza rulers Hamas as a terrorist organization. "We know that we have a friend in Europe with Italy," Netanyahu said.

The Italian premier had been expected to express his support of Israel regarding its stance against Iran's nuclear program, as well as reiterating the strong commitment Rome has to Israel's continued and safe existence.

On Monday, Berlusconi made a connection between his visit to the Yad Vashem Holocaust Museum in Jerusalem, the Iranian nuclear program, and Iranian President Mahmoud Ahmadinejad's denial of the Holocaust and calls for Israel's destruction.

"We must watch out," he said. "We've already had one such madman in history."