Mon Jun 2, 8:44 AM ET

VATICAN CITY (AFP) - Pope John Paul (news - web sites) II stressed that only the existence of two separate states, Israel and a new Palestinian state, could end the violence in the Middle East.

He made the comments Monday in a speech welcoming the new Israeli ambassador to the Vatican (news - web sites) and before a 20-minute, one-one-one meeting with US Secretary of State Colin Powell (news - web sites).

"The Holy See is convinced that the present conflict will be resolved only when there are two independent and sovereign states," the pontiff said in a speech welcoming Israel's ambassador Oded Ben-Hur.

"Two peoples, Israeli and Palestinian, are called to live side-by-side, equally free and sovereign, in mutual respect.

"It is essential that both parties give clear signs of their determined commitment to bring this peaceful coexistence about," the pope said.

The comments came in the run-up to the US-Israeli-Palestinian summit on Wednesday where US President George W. Bush (news - web sites) is to push for both sides to commit to implementing an international roadmap to peace that calls for the creation of a Palestinian state by 2005.

In the speech welcoming Ben-Hur, the pontiff also said "acts of terrorism are always to be condemned as true crimes against humanity."

"Every state has the undeniable right to defend itself against terrorism, but this right must always be exercised with respect for moral and legal limits in its ends and means," he said.

He also recalled that the Vatican opposed any unilateral solution concerning the status of Jerusalem, which remains sacred to Jews, Muslims and Christians.

"Questions concerning Palestininan refugees and Israeli settlements, for example, or the problem of setting territorial boundaries and defining the status of the most sacred places of the city of Jerusalem, need to be the subject of open dialogue and sincere negotiation.

"By no means should a decision be made unilaterally," he stressed.

Powell also met with his Vatican counterpart, Cardinal Angelo Sodano, but a senior US state department spokesman said only the Vatican talks covered a broad range of topics from Middle East peace, Iraqi reconstruction, Africa, and aid to Zimbabwe.

"They talked about what their people on the ground are seeing," the state department spokesman said.

While at the Vatican, Powell had been expected to seek to repair Washington's strained ties with the Vatican, which strongly opposed the intervention in Iraq (news - web sites).