The Saudi king said Monday his country will donate $1 billion to help rebuild the Gaza Strip after the devastating Israeli offensive, and told Israel that an Arab initiative offering peace will not remain on the table forever. King Abdullah's comments at an Arab economic summit in Kuwait City were his first since Israel declared a cease-fire to halt three weeks of violence in Gaza that killed more than 1,250 Palestinians. "Israel has to understand that the choice between war and peace will not always stay open and that the Arab peace initiative that is on the table today will not stay on the table," said Abdullah during a speech. The initiative, first proposed by Saudi Arabia in 2002 and relaunched in March 2007, offers Israel collective Arab recognition in exchange for Israeli withdrawal from territory it occupied in the 1967 war, the establishment of a Palestinian state with Jerusalem as its capital and a just solution for the problem of Palestinian refugees. Israel initially rejected the initiative in 2002, but in the past year has said it could be a starting point for discussion. "The position of the Israeli government is that the Arab peace initiative remains a basis for dialogue between Israel and the Arab world," said Israeli spokesman Mark Regev. "And we continue to be willing to negotiate with all of our neighbors on the basis of that initiative." But progress toward finalizing a peace deal has been slow, especially after Hamas seized Gaza from its rival Fatah in June 2007, creating a rift between the two main Palestinian factions. Arab hard-liners discussing Gaza at a gathering in Qatar last week called for putting the peace initiative on hold, a more radical position than the one outlined by Abdullah. Syrian President Bashar Assad has proclaimed the offer already dead and proposed Monday that the Arab summit adopt a resolution declaring Israel a "terrorist entity." The Arab world has struggled to come up with a unified response to the Gaza crisis - with strong Hamas supporters like Iran and Syria facing off against US allies like Egypt, Jordan and Saudi Arabia. The Saudi king called on Arab countries to end their rift Monday and invited the leaders from Egypt, Qatar and Syria to his palace for lunch after the summit's opening session. Abbas on Monday rejected any talk of abandoning the initiative, saying the only option Arabs had was to make peace with Israel. "The Arab peace initiative did not carry the seeds of its demise," Abbas said at the Kuwait summit. "It was our shortcomings." Arab League chief Amr Moussa told the summit that Arab countries would have to come up with an alternative if they decided to abandon the initiative. "The situation cannot take just freezing or suspending [the initiative]," Moussa said. Egyptian President Hosni Mubarak accused Hamas of inviting Israel's three-week offensive against Gaza by not extending their cease-fire when it expired last month. "You all know the efforts Egypt had undertaken to extend the cease-fire, and our warnings that a refusal by factions to extend it was an open invitation to Israeli aggression," Mubarak said. He said Egypt would continue its efforts to achieve a reconciliation between Palestinians. "Without it [Palestinian unity], no stability will be realized for Gaza and no rebuilding and no end for its embargo," Mubarak said. Mubarak pushed Israel to respond to the Arab initiative, saying "peace in the Middle East is an imperative that cannot be delayed." Egyptian liberal intellectual Tarek Heggy said Monday that the Arab peace initiative should have been implemented many years ago. "It should have been pushed by all parties, by the Quartet, by the Europeans, by America; because at the end, every reasonable person on the two sides will say a final settlement will not be far away from the Arab initiative," he said. In addition, Abbas should have also been given something to show his people progress in talks as a way to strengthen him and the peace process, said Heggy. Putting off a resolution to the protracted Arab-Israeli conflict only opened the door for religious extremism to take hold, he added. "Moderate Arabs, the liberal Arabs, the secular Arabs, the modern Arabs and all the Israelis - minus the very extreme religious Israelis - we have one enemy around us, called Sunni fundamentalism, which is al-Qaida, and Shi'ite fundamentalism, which is Iran," he said. "The more we leave the Israeli-Arab conflict pending, the more we leave our historic conflict on the shelf, the greater their chances are. We need to get rid of this. We need a Palestinian state that is a secular state... We need less grounds for these two fundamentalist groups." But prospects for Arab-Israeli peace seem dim following Israel's offensive in Gaza to halt Hamas rocket fire into its territory. The death and destruction enraged many Arabs and further strained relations between Israel and the Palestinians. Abdullah criticized the Israelis for using excessive force in Gaza, saying the Torah called for "an eye for an eye, and did not say an eye for the eyes of a whole city." The king said his country's $1b. donation for Gaza would go to a proposed fund Arabs are setting up to rebuild the seaside territory. "I know that one drop of Palestinian blood is more valuable than the treasures of the world," said Abdullah. But it remains to be seen whether Arab expressions of sympathy for the citizens of Gaza translate into actual funds to rebuild the city. Arabs have often criticized Israel for the plight of Palestinians, but pledges of financial support have not always materialized. Also Monday, Turkey's top envoy for the Middle East offered to mediate between Hamas and Fatah to forge a consensus necessary to a lasting cease-fire in Gaza. The rival factions have been unable to come up with a power-sharing formula since Hamas won 2006 parliamentary elections. "Palestinian reconciliation is a must in order for peace to be lasting," Ahmet Davutoglu told reporters. "If that is achieved, then the road to peace will be opened." France, which has played an active role in efforts to end the Gaza offensive, also urged convening an international conference toward eventually creating a Palestinian state. Foreign Ministry spokesman Eric Chevallier said in an on-line briefing Monday that "an international conference should be quickly organized" for launching "a dynamic for negotiations" on creating a Palestinian state. He gave no other details.