"The Middle East crisis is the generator of all crises in the world today. If it is resolved, the world will stabilise and global terrorism, the biggest threat of today's world, will cease to exist," Mesic told reporters during a visit to the eastern town of Ilok in a comment on news on Arafat's death.
Earlier in the day, President Mesic extended condolences to the highest representatives of the Palestinian Authority on Arafat's death.
"His departure does not leave us indifferent. He was a recognisable leader of the Palestinian people in the Arab world, as well as in the international community. Unfortunately, the political crisis in the Near East remains the biggest problem of international relations today," Mesic said in his letter of condolence.
"We strongly believe that the factors of political processes in that region, after the death of your leader, will muster the strength and understanding needed to find a final and peaceful solution that is acceptable to all. That would be the most important political contribution to the realisation of Yasser Arafat's goals".