On the second day of his visit to Israel, Mesic met Israeli President Moshe Katsav, Deputy Prime Minister Shimon Peres and the head of the parliamentary opposition, Tommy Lapid.
All officials agreed that chances of establishing a lasting peace between Israelis and Palestinians were good.
Katsav said he hoped for a good cooperation with the new Palestinian authorities, and Peres said that the the next four months would be critical for speeding up the peace process.
President Mesic positively assessed the new Palestinian leadership. "(Palestinian Authority President) Abbas is fully committed to peace and can do a lot," said Mesic, who travels to Ramallah on Thursday.
Mesic believes that it is crucial to stop financing terrorism and put an end to fundamentalism, adding that this was why religious leaders should issue a message against terrorism. Europe can do more to make Palestinians realise that economic development and creation of new jobs, rather than the spending of foreign aid, is the solution, Mesic said.
The Israeli hosts also inquired about the status of Jews in Croatia. Mesic said that there was no anti-Semitism in Croatia and that activities were under way to rebuild a Jewish cultural centre in downtown Zagreb, which would also include a synagogue and Jewish community offices.
The Croatian president travels to Ramallah on the West Bank on Thursday to meet Palestinian Prime Minister Ahmed Qureia.