CAIRO (Reuters) – Arab states would recognize Israel and normalize ties with the Jewish state after a just and comprehensive Middle East peace is achieved, but not before, Egyptian President Hosni Mubarak said. In an interview with the state-controlled daily al-Ahram on Monday, Mubarak, who is in Washington for talks with the U.S. administration, said the Arab experience with stalled peace talks in the wake of the 1991 Madrid peace conference "did not encourage" taking steps toward normalization with Israel. U.S. Middle East envoy George Mitchell in July called on Arab states to take "meaningful steps toward normalization of relations with Israel." "I affirmed to (U.S.) President (Barack) Obama in Cairo that the Arab initiative offers recognition of Israel and normalization with it after, and not before, achieving a just and comprehensive peace," Mubarak told al-Ahram. In a television interview in the United States, Mubarak, who said he was never comfortable with the Bush administration, praised Obama for visiting the Middle East and sending Mitchell before launching a peace initiative. "This is an endeavor to grasp the issues facing the region, which is a good thing. It's much better than taking a decision without listening to the country's concern," he said on the "The Charlie Rose Show" for broadcast on Monday night on the PBS network. Egypt has a "major role" in the Israeli-Palestinian peace process, he said, noting Cairo is trying to reconcile a deep divide between the rival Palestinian factions Fatah and Hamas. "We should bridge the gap because, unless we reconcile their differences, there will not be stability there, there will not be stability even in Israel. Violence will recur," Mubarak said, according to a transcript of the show. "I think after that the process will go much easier." Mubarak urged that Israeli-Palestinian negotiations not get hung up on the settlement issue, but concentrate instead on an overall peace deal. The suggestion seemed aimed directly at a U.S. policy that urges Israel to stop building settlements in the West Bank as a first step to peacemaking. "Instead of saying stopping more settlements, and we heard this many times, now for over 10 years, and (they) never come to a stop, what I can say is that we have to consider the whole issue holistically, to negotiate on the final resolution," Mubarak said. Asked in the newspaper interview about possible Egyptian participation in an extended U.S. "defense umbrella" referred to in July by U.S. Secretary of State Hillary Clinton as a response to a nuclear Iran, Mubarak said Egypt would not be part of it as it would not allow foreign troops or experts on its land. Additionally, such an umbrella would imply a tacit recognition of a regional nuclear power, which Mubarak said Egypt was opposed to, whether it was Iran or Israel. Independent Egyptian newspapers have suggested the 81-year-old Mubarak could dissolve the assembly to remove the more vocal opponents of his government as a first step to engineering a succession that would bring his son Gamal, 45, to power. Mubarak said he had no reason, for now, to do so. "I don't have any at the moment, but there might be some circumstances that call for the dissolution of the parliament. But at the moment, there is no single point that merits the dissolution of the parliament," Mubarak told interviewer Charlie Rose. A handover to Gamal, a senior official in the ruling National Democratic Party, is not a done deal and is not the only possibility, but analysts see it as a likely scenario and it is frequently mooted in the independent press. "Look, this was never raised between my son and myself," Mubarak said on the PBS television show. "It is not for me to decide that (on his successor). It is the decision of the people to elect the person who they trust. Who would that person be? Well, we have a long time. It's -- we have still two years to come," Mubarak said.

(Writing by Aziz El-Kaissouni in Cairo and Patricia Zengerle in Washington; Editing by Janet Lawrence and Anthony Boadle)

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