LONDON - President Shimon Peres told members of the British Parliament Wednesday that Israel would have difficulty dismantling West Bank settlements without causing a civil war in Israel.

On the second day of his state visit to Britain, Peres Wednesday became the first Israeli leader to address members of both houses of Parliament in the House of Lords' Robing room.

"The State of Israel began to take shape as Great Britain, under the leadership of Winston Churchill, saved the world from the Nazi threat. It was a time when many countries closed their gates to Holocaust survivors," Peres said.

"My family arrived in Israel when it was still under British mandate. In our pockets were British Palestinian passports. In our hearts was the Balfour declaration. Israel would not have a vibrant democracy if it hadn't been for the British legacy."

While Peres spoke, some 20 pro-Palestinian protesters called on Britain not to maintain ties with the "apartheid state" Israel and the "war criminal" Peres.

A larger demonstration was held outside Oxford University's theater on Tuesday, when Peres' speech on 'Peace and Globalization" was disrupted by some 150 anti-Israel protesters.

Some of the demonstrating students entered the lecture hall, which was open to all students, and interrupted Peres' speech repeatedly, protesting Israel's conduct in the territories.

The protesting students were removed, except for one who approached the president, but were silenced by a majority of the audience while the president carried on with his speech.

In his address to the parliament members, Peres said he "responded positively" to the Arab peace initiative. "However, it should be clear that agreement can not be achieved by a simple 'take-it-or-leave it' offer. We couldn't accept all the articles of the Arab Initiative. The truth is that it's hard to answer all demands at a time when some parties in the region reject peace. Hamas violently rejects compromise. It continues to fire rockets at Israeli civilians. We can understand land for peace but will not accept land in return for rocket fire."

Peres also said he believed an agreement could be reached with Saudi King Abdullah but was not sure Abdullah was ready to push for peace, at this time, with all the force of his kingdom.

Peres is scheduled to visit Buckingham Palace Thursday and meet Queen Elizabeth II, who will bestow an honorary knighthood on him. He will also meet with Prime Minister Gordon Brown.