JERUSALEM, May 7 (UPI) -- Israeli President Shimon Peres said he is "optimistic" about the future of the Jewish state but "not satisfied" with its relationship with the Palestinians.

Peres said in an interview published Wednesday in Haaretz that Israelis felt a sense of cautious pride in the achievements of the state in the world but said the government deserves less credit than the people.

"It's not terrible that there is no rejoicing at the government. Governments all over the world are losing their strength. Besides, the Jews gave the world dissatisfaction. Celebration is not a Jewish thing. Still, I'm optimistic, though I'm not satisfied," he said.

Peres lamented the policy to separate the Palestinian territories into the West Bank and Gaza saying he never imagined groups like Hamas would gain the support of the Palestinian people, Haaretz said.

"I did not imagine that we would leave Gaza and they would fire Qassams from there; I did not imagine that Hamas would show so strongly in the elections," he said.

When asked whether the Israeli negotiations with the late Palestinian leader Yasser Arafat suggested Israeli would gain similar ground by embracing Hamas, he replied Hamas had become too militant to consider a partner.

"We became more flexible and they became more extreme. From this starting point I want to create good will toward Israel, to make friends," he told Haaretz.