"I say to Israeli citizens, including Jews, Muslims and others, that there is no such thing as a state in which all the citizens are Jews," Mubarak told Israel's Channel One network.
"In Egypt, we have Muslims, Christians and Jews and there is no problem. When they wanted to establish a Muslim state in Kosovo, the world came out against it because it did not want a Muslim state in central Europe," he said in the interview broadcast Saturday night.
The Egyptian leader cautioned Israel against renewing construction in West Bank settlements once the building freeze expires Sept. 26, saying such a move could torpedo current peace efforts and plunge the region into violence.
A continued settlement freeze and serious negotiations could lead to a framework peace agreement within a few months, the Egyptian leader said.
"This issue requires tough decisions to be made by courageous leaders and I think that Prime Minister (Binyamin) Netanyahu can make tough decisions," Mubarak said.