In the near future we aspire to fashion the permanent borders of the State of Israel, as a Jewish and democratic state with a permanent Jewish majority. We will attempt this through negotiations with our Palestinian neighbors. That is our hope; it is also our prayer. … There is no peace more stable than that based on an agreement. An agreement can only be based on negotiations, which must be conducted on the basis of mutual recognition, already signed agreements, the principles of the road map, and of course the cessation of violence and the disarming of all terrorist organizations.
At this moment, I turn to the head of the Palestinian Authority, Mahmoud Abbas, and say to him in the simplest, most straightforward way that people can speak to one another: For thousands of years we were bolstered by the dream of the complete Land of Israel in our hearts. This land, in its historic borders, will always remain the yearning of our souls. … In recognition of reality and understanding of our circumstances, however, we are ready to compromise and give up parts of the land that we love, where the best of our sons and fighters are buried and, with a heavy heart, to evacuate from there the Jews who live there in order to allow you to fulfill your dream and live alongside us, in your state, in lasting peace. …
The time has come for Palestinians, like us, to come to terms with the partial fulfillment of their dreams, end terrorism, abandon hatred, embrace democracy for themselves and look to a future of coexistence, compromise, and peace with us. … If the Palestinians manage to act in the near future, we will sit at the negotiating table in order to determine a new future in our region. If they do not, Israel will take its fate in its own hands, on the basis of consensus at home and deep understanding of our friends in the world, first and foremost the United States and President George Bush, and will act in the absence of an agreement with the Palestinians. We will not wait too long, the time has come to act.

Via JPost. See also Naomi Chazan on the need to negotiate.