Prime Minister Ehud Olmert on Monday used a Jerusalem memorial ceremony for former prime minister Yitzhak Rabin to reiterate that Israel must be willing to cede parts of the capital.

"If we want to keep Israel Jewish and democratic, we need to give up parts of the homeland we have dreamed about for generations and [mentioned] in our prayers, even Arab neighborhoods of Jerusalem, and to return to a 1967 Israel with certain amendments," he said, at the state ceremony on Mount Herzl, where Rabin is buried.

"The decision must be made now. The moment of truth has arrived. There is no escaping it, but [the opportunity] can be missed. If, God forbid, we dither, we will lose the support for the idea of two states. There is no need to expand on the alternative… Rabin will win," he continued.

"The moment of truth has arrived," he repeated. "We can push if off for many years in which blood will be spilled. But we must look at it honestly, proudly and responsibly. The bullets that killed Rabin could not stop the historic path that he led. Even after his death, Rabin will be victorious."

At the ceremony, President Shimon Peres emphasized that even today, there were those who were inciting and causing harm and he said that the state must "utilize the law to its fullest, without fear."

He said that like then, there was now a small minority of extremists that had "the audacity" to undermine the state's authority. "They hurt Palestinians, just because they are Palestinians, and challenge the law enforcement authorities, police and soldiers, who are protecting the country and also protecting them," he said. "The violent and dangerous minority must be condemned and isolated and we must silence their abusive and inciting words. Their damaging and destructive acts must not be tolerated as if they are a state within a state.

"Israel's honor, the power of democracy and rule of law, obligate this. The extremists have no future because they don't act justly. The majority of the electorate won't be frightened by this threatening minority. The people will defend their land, peace and democracy with all their might. They will overcome those struck by blindness, like just one candle can dissolve darkness."

"Yitzhak underwent a difficult metamorphosis," continued the president. "It didn't develop overnight and wasn't devoid of misgivings and deep concerns. As 'Mr. Security,' who for most of his years dealt with strengthening Israel military might and in ensuring its capability to win wars, and also as 'Mr. Peace,' Yitzhak suffered misgivings. But when Yitzhak made the moral and diplomatic decision, he never looked back. He reached forward with a determined and energetic heart."

"The bullets that were fired into Yitzhak's back didn't kill his way, because ideas and visions cannot be killed," stressed Peres. "But they were aimed at delaying, ruining and damaging a huge process, which had enormous regional and international support, for creating a new political and economic reality in this land and on its borders for the nations living here and the surrounding neighbors. The despicable murderer who showed contempt for Israel's democracy, and who assassinated its elected leader, hurt the nation's soul. It is not fitting for his voice to be heard.

"A killer is a killer and there is no need for his fictitious philosophy."

Most of the faces in the crowd had been there when Rabin was buried 13 years ago.

"It's the same autumn, it's the same place, it's the same people. Only time has passed," said his son Yuval, who warned that another political assassination was in the offing.

The gun is loaded, the bullets are in place, the weapon is cocked, the target is marked, "we're just waiting for the sound of the shot," he said, referring to a recent report by Shin Bet (Israel Security Agency) head Yuval Diskin.

"If Yitzhak was with us today," said Peres, he would say: 'You have no right to despair. Stop your tears. Don't give way to emotion. Don't panic. Don't be afraid of extremists. Don't refrain from yearning.'"

Alluding to recently taped interviews with Rabin assassin Yigal Amir, Peres said: "He doesn't deserve to have his voice heard. Murder is murder and there is no need to philosophize about it."

Olmert also spoke later Tuesday at a Knesset memorial session for Rabin.

"I'm not trying to retroactively justify the Oslo accords that I opposed. But they defined a direction - a direction that was unavoidable," he told MKs. "After we learned to live with feelings of guilt and pain over the price of Oslo, a continuation of terror and disappointment over frozen processes, we returned to the heart of the conflict. But now, moments of reckoning are getting closer," he said.

"Every government must tell the truth and this truth will unfortunately make us divide many parts of the homeland, in Judea, Samaria, Jerusalem and the Golan Heights," he told the Knesset. "Whoever thinks that it's possible to duck out of a decision and also to continue to build ties with Arab and Muslim counties, like we are doing today, is living in a dream."

Olmert said that 13 years after Rabin's death, incitement and hate had still not subsided.

"Israeli citizens repeatedly hit with violent cruelty Palestinians who want to harvest olives, as they have done for hundreds of years, in places where their personal and family homes have stood," he said.

"Young Israelis, smitten by messianic dreams, which have no basis in the reality of our lives, hit our soldiers, break their bones and threaten their lives. There is no end to it."

Opposition leader Binyamin Netanyahu hailed Rabin at the Knesset session, saying that that he was a leader who had no ulterior motives.

Referring to plans that were withdrawn at the last minute two weeks ago to air the interviews with Amir on Channels 2 and 10, Netanyahu went on to say that said that children born in the last 13 years and who have lived in a world without Rabin "do not need to hear the thoughts and visions of a killer."

"We must not tolerate calls we are hearing today to harm a prime minister or IDF soldiers," he continued. "The lesson we have all learned is that a responsible leadership must act in time against incitement. We must not allow wild opposition and violence against law enforcement authorities."

Speaking later at the Knesset, Olmert was sharply censured by politicians from Shas and from Likud.

"I will not be deterred from using my authority to handle violence," Olmert responded.

"Rabin was murdered 13 years ago as a result of a crusade of hatred and incitement that many factions took part in until someone despicable and dark pulled the gun and murdered," Olmert said. "Unfortunately, the incitement hasn't calmed down and hatred hasn't waned," he added.

"Any government will have eventually to tell the public the truth and this truth will force us to give up parts of the homeland in Judea, Samaria, Jerusalem and in the Golan Heights," Olmert added.

"I have to turn to all of you, builders and settlers, and to tell you - with great respect and appreciation - that you, too, will have to search your souls and reach an agreement," Olmert added.

Labor chairman Ehud Barak said that the sorrow over the murder of a man who had done great things for the State of Israel and for its security, touched all sectors in Israel.

"Rabin's murder was an act of one man who had the backing of an atmosphere of incitement and ideological justification," Barak said.