JERUSALEM (AFP) - The status quo between Israel and the Palestinians cannot go on, President Shimon Peres warned on Wednesday, in a clear call for the government to push forward fledgling peace talks.

He was speaking at an official ceremony marking 18 years since prime minister Yitzhak Rabin was assassinated at a peace rally in Tel Aviv, a commemoration that was also attended by hawkish Prime Minister Benjamin Netanyahu.

Mr Peres said that the right-wing Jewish extremist who shot dead Rabin two years after the signing of the Oslo peace accords "will never be forgiven".

"Those who delude themselves that the status quo between us and the Palestinians will continue may become a victim of their delusions," Mr Peres said, insisting that only a two-state solution could maintain Israel's "future as a Jewish and democratic state".

Mr Peres's remarks appeared to be a direct appeal to the government to move forward with US-brokered peace talks with the Palestinians, which resumed in Washington in late July after a hiatus of nearly three years.

"The peace process is not a luxury," he said.

"Peace is made with enemies for ourselves, to escape the heavy price we already pay today for hostilities and which could become even more costly in the future. And to protect the Jewish character of the State of Israel."

Rabin was shot dead on November 4, 1995 just two years after the signing of the Oslo peace accords, for which he and Mr Peres were awarded the Nobel Peace Prize along with veteran Palestinian leader Yasser Arafat.

"(Rabin) survived the flames of war but was exposed to the gun of the murderer who pulled the trigger and shot him in the back," Mr Peres said.

"His crime will never be forgiven."

Tens of thousands of Israelis gathered in Tel Aviv on Saturday to mark the anniversary of Rabin's murder, most of them young people from across the political spectrum.