"The absolute priority is to try to give effect to what is now the consensus across the international community that the only way of bringing stability and peace in the Middle East is a two state solution," he said at his last appearance before Britain's lawmakers, shortly before standing down.

He said this means "a state of Israel which is secure and confident in its security, and a Palestinian state that is not merely viable in terms of its territory but in terms of its institutions and governance.

"I believe it is possible to do that but it will require a huge intensity of focus and work," added Blair, who was to hand over to his finance minister Gordon Brown later in the day.

His comments came amid mounting signs that the so-called Mideast Quartet -- comprising the United States, the United Nations, the European Union and Russia -- is about to name him as its envoy to the region.