Jerusalem (CNN) -- Israel's president is calling for an "urgent" peace deal with Palestinians, saying time is running out for an agreement.
"It is very urgent," President Shimon Peres told CNN in an exclusive interview Sunday. "I think neither side has much time. We have to act dynamically."
The Palestinian Authority has said that, in the absence of peace talks, it will ask the United Nations to recognize an independent Palestinian state in September.
But the 87-year-old Israeli statesman warned the Palestinian leadership not to make a "mistake" of declaring independence outside of a peace deal.
"If you go for a declaration, you have a declaration. You won't have a change in the situation. It's not enough to declare, you have to agree," he said.
Peres told CNN he believes Israeli Prime Minister Benjamin Netanyahu's government is "trying to arrive at peace."
He repeated his call for a two-state solution, saying the failure to reach a deal threatens the Jewish character of the Israeli state.
"If there will be one state without a clear majority or an un-Jewish majority, that is against everything we are trying to work for," Peres said.
CNN's interview with Peres was conducted ahead of this week's Israeli Presidential Conference, which Peres is hosting for the third time. It will include leaders in industry, government, education, science and entertainment from around the world.
In a wide-ranging speech last month, U.S. President Barack Obama renewed his push for a two-state solution, declaring that the borders of Israel and a future Palestinian state should be based on pre-1967 lines "with mutually agreed swaps, so that secure and recognized borders are established for both states."
"The full and phased withdrawal" of Israeli security forces from the West Bank has to be accompanied by evidence of a Palestinian state that can help secure peace and prevent attacks against Israel, Obama said.
But, he added, a continued Israeli presence in the West Bank is inconsistent with long-term dreams of a secure Jewish and democratic state. "The Palestinian people must have the right to govern themselves, and reach their potential, in a sovereign and contiguous state," he said.
Ongoing Israeli settlement construction in the West Bank and East Jerusalem, along with Palestinian steps toward a unilateral declaration of statehood, have driven the two sides further apart since Obama took office. Former Sen. George Mitchell resigned last month as the Obama administration's Mideast envoy.
Additional doubts about the viability of the stalled peace process were raised last month after a formal reconciliation agreement between the two largest Palestinian factions: Palestinian Authority President Mahmoud Abbas' party, the West Bank-based Fatah, and the Islamist group Hamas, which rules Gaza.
Both Israel and the United States consider Hamas a terrorist organization and have voiced strong opposition to the inclusion of the group in any unity government, demanding that it first renounce violence, recognize the state of Israel and abide by all previous agreements.
On Sunday, the district committee for planning and building at the Israeli Interior Ministry approved the construction of an additional room to 2,000 already-existing housing units in the East Jerusalem neighborhood of Ramat Shlomo.
"Only in Israel (is) the extension of one room in a house ... considered news," Interior Ministry spokesman Efrat Orbach told CNN. "These are all existing apartments and now each family is entitled to add another room, should it wish to."
A plan to build 1,600 new houses in Ramat Shlomo, announced during U.S. Vice President Joe Biden's visit to the area in March of last year, caused a rift between Israel and the United States.