Defense Minister Moshe Ya’alon took a philosophical approach Sunday in discussing the prospects for peace with the Palestinians, expressing hope that talks would yield a deal while noting that “if not, we will manage.”

His statements came a day after US Secretary of State John Kerry warned that failure to reach an agreement in the allotted time frame would precipitate unprecedented economic and diplomatic pressure on Israel.

Speaking at the Munich Security Conference, Ya’alon asserted that the Israeli-Palestinian conflict was not about territory, but rather hinged on Palestinian recognition of Israel as a Jewish state and its right to exist in peace after a deal is reached.

“Settlements are not the obstacle to peace,” he said. “The settlements include today less than five percent of the territory in the Palestinian arena. If we are going for peace — we have Arabs living side by side with us in Galilee and Jaffa and Acre — we don’t deny this right. Why does the Palestinian leadership insist on getting the territory without Jews? If we have to live together, we can benefit from each other.”

He was alluding to vehement Palestinian reactions to proposals that would see Israeli settlers remaining in the Palestinian state under a future peace deal.

“I support the negotiations, I support any political engagement,” Ya’alon continued, “but we should tell the truth to ourselves and not delude ourselves and to deceive ourselves regarding Abu Mazen’s intentions,” Ya’alon said, referring to Palestinian Authority President Mahmoud Abbas.

When pressed as to whether Israel was prepared to withdraw from remote settlements in the West Bank, he responded: “I do not sanctify land. But I am not ready to talk about one inch unless we get the approval of the Palestinian Authority… that the framework of the negotiations will include the recognition of our right to exist as a nation-state of the Jewish people, giving up the right of return, and addressing our security needs. That is what is discussed now. Hopefully we’ll get it. If not, we will manage.”

Kerry on Saturday said of the Israeli-Palestinian conflict: “Today’s status quo, absolutely to a certainty, I promise you 100 percent, cannot be maintained. It is not sustainable… It’s illusionary.”

The defense minister has been a vociferous critic of Kerry’s efforts to push forward Israeli-Palestinian peace efforts.

Last month, Ya’alon lashed out at Kerry and savaged Washington-led peace talks in private conversations. The Yedioth Ahronoth daily recounted the defense minister lambasting the security arrangements drawn up by Kerry as part of his peace planning, saying the security proposal was “not worth the paper it is printed on” and would not provide security for Israel.

The report also quoted Ya’alon as calling Kerry “inexplicably obsessive” and “messianic” in his efforts to coax the two sides into a peace agreement. The defense minister reportedly said Kerry has “nothing to teach me about the conflict with the Palestinians. All that can ‘save us’ is for John Kerry to win a Nobel Prize and leave us in peace.”

He later apologized for the tone of his remarks but did not walk back his criticism.