U.N. Middle East envoy Terje Roed-Larsen has called this a hopeful moment in the search for peace in the region. Mr. Larsen Monday told of renewed efforts to revive the stalled Road Map peace process.

In his final report to the Security Council, special Middle East envoy Terje Roed-Larsen said his tenure has been marked by a series of gloomy assessments. But he said the death of Palestinian leader Yasser Arafat presented an opportunity to look at the longer-term progress.

As a case in point, Mr., Roed-Larsen pointed to the cooperation between Israeli and Palestinian authorities in planning Mr. Arafat's funeral. "The extent and success of coordination in recent days is reminiscent of earlier, happier days and might herald a new beginning - a new beginning that would come not because of President Arafat's passing, but in spite of a very difficult situation," he said.

Mr. Larsen, who is stepping down to take over the leadership of a New York research institute, said the gloomy scenarios and grim day-to-day news stories obscure a gradual but steady progress toward peace. He called it a 'cultural revolution' in both the Israeli and Palestinian street.

"I remember very well how controversial it was only a few years ago to speak of a 'State of Palestine' in Israel," he said. "As a member of the Knesset put it to me: 'A few years ago, muttering the words 'State of Palestine' would have you thrown out of nearly every office here. Now you will hardly seen anyone batting an eyelid'."

Earlier, in comments to reporters, Mr. Roed-Larsen said the quartet behind the Middle East "road map" would probably meet in Egypt next week on the sidelines of an international conference on Iraq. The quartet comprises the United States, Russia, the European Union, and the United Nations.

He told Security Council ambassadors that a lasting peace is only possible if the occupation that began in 1967 ends and leads to the co-existence of two states, Israel and Palestine, living side by side in peace. "This goal can only be reached over the negotiating table in full cooperation with the international community and the Quartet, and not through acts of terror, violence or subjugation," he said. "This is the vision that was embraced by U.S. President George W. Bush in his 24 June 2002 speech."

In support of his thesis of hope, Mr. Roed-Laresen noted that in 1993, Israeli public opinion polls showed only a third favored establishment of a Palestinian state. Ten years later, that figure stood at 59-percent, with more than two-thirds favoring peace negotiations.

He cited similar figures among Palestinians, with 75-percent saying they favor a peace process.

The U.N. envoy told the Security Council there is a growing realization on both sides that a military solution to the conflict does not exist. He said he did not want to pretend the reality prevailing in the Middle East was not grim. But he summed up his final presentation with the words 'hope remains; opportunity remains'.