Palestinian leader Mahmoud Abbas is not exercizing leadership and a settlement with Israel based on two states living side by side in peace is impossible in the immediate future, retired chief of staff Moshe Yaalon said Friday. "He appears as weak. He is not so weak," the lieutenant general said. "He uses weakness as an excuse." Criticizing Abbas for not dismantling violent groups in Palestinian-held areas, Yaalon said, "We thought, and I was one of them, that Mahmoud Abbas will lead the Palestinian Authority in another direction than Yasser Arafat." "He doesn't demonstrate any leadership," Yaalon said. As a result, he said, Gaza is close to anarchy, at the brink of splitting into regions each controlled by a terror group. Yaalon, who retired last June after a 37-year military career, spoke at the Washington Institute for Near East Policy, where he will be a resident for a year. But, Yaalon said, "I haven't seen leadership on the Palestinian side that is ready for a two-state solution." The ex-general said Israel does not want to control millions of Palestinians. "But we don't want to be in a situation without defensible borders," he said.