Iranian President, Mahmoud Ahmadinejad, has made a remarkable announcement. He's admitted that Iran might agree to the existence of the state of Israel.

Ahmadinejad was asked: "If the Palestinian leaders agree to a two-state solution, could Iran live with an Israeli state?"

This was his astonishing reply:

If they [the Palestinians] want to keep the Zionists, they can stay ... Whatever the people decide, we will respect it. I mean, it's very much in correspondence with our proposal to allow Palestinian people to decide through free referendums.

Since most Palestinians are willing to accept a two-state solution, the Iranian president is, in effect, agreeing to Israel's right to exist and opening the door to a peace deal that Iran will endorse.

Ahmadinejad made this apparently extraordinary shift in policy during an

interview last week when he was in New York to address the UN general assembly.

He was interviewed on September 24 by reporters Juan Gonzalez, writing for the New York Daily News, and Amy Goodman for the current affairs TV programme, Democracy Now.

You can watch the full interview and read the full text on the Democracy Now website.

Surprisingly, Ahmadinejad's sensational softening of his long-standing, point-blank anti-Israeli stance was not even headlined by the two reporters. Perhaps this was a decision by their editors? Did they not want to admit that Ahmadinejad may have, for once, said something vaguely progressive?

Equally odd, the story wasn't picked up by the world's media. For many years, the Iranian president has been vilified, usually justifiably. Now, when he says something positive and helpful, the media ignores it. Is this because of some anti-Iran or pro-Israel agenda?

Why ignore a statement that is, from any political and journalistic perspective, a radical departure from Ahmadinejad's previous unyielding anti-Israel tirades? Only a week earlier in Tehran he was saying that the Israeli state would not survive.

Confused? Aren't we all. Will the real Mahmoud Ahmadinejad please stand up?

Is he a deceiver and an unprincipled opportunist who will say anything to further Iran's political agenda? Or could it be that beneath his often demagogic public rhetoric against Israel he is, in fact, open to options more moderate than his reported remarks about wiping the Israeli state off the map?

I am not defending or endorsing Ahmadinejad in any way, shape or form. Indeed, I am on record as being one of Ahmadinejad's harshest critics. I've protested dozens of times outside the Iranian Embassy in London and written scores of articles exposing his regime's persecution of trade unionists, students, journalists, human rights defenders, women's equality campaigners, gay people, Sunni Muslims and ethnic minorities such as the Arabs, Kurds, Azeris and Balochis.

You can watch my Talking with Tatchell online TV programmes on the Iranian regime's anti-Arab racism here, and on the rising popular resistance to its police state methods here.

But I also hope I am open-minded and fair. Even I can see that Ahmadinejad appears to have moderated his position and is now apparently willing, with Palestinian agreement, to accept the co-existence of two states: Israel and Palestine.

Many Israelis and their allies will no doubt say Ahmadinejad can't be trusted; that his comments were part of a manipulative charm offensive during his visit to the UN in New York. They may be right. But even if he is being disingenuous, that fact that he's made this public concession on Israel at all is a softening of sorts.

News of what he said will filter back to Tehran and he'll have to account for his words to his government, including the hardline anti-Israel ayatollahs and revolutionary guards. I wonder what they think?

Call me naive, but in my view Ahmadinejad's words were of major significance. He ought be pressed by world leaders, and Israel, to repeat them and to clarify them. His statement might, and I emphasise might, be evidence that Iran is open to some negotiation on the future of the Israeli state.

If Israel's leaders had any sense, they would ignore past provocations by Iran and seize this moment to have dialogue with the Palestinian and Iranian leaders on a two-state solution. What Ahmadinejad has said could be an opening to diffuse the stand-off between Iran and Israel.

I am not relenting one inch in my condemnation of Ahmadinejad's regime, with its grisly torture chambers, execution of juvenile offenders and neocolonial subjugation of national minorities. But I do find myself in considerable agreement with the Iranian president's analysis of why the Middle East peace process has stalled. He told Gonzales and Goodman:

The first reason is that none of the solutions have actually addressed the root cause of the problem. The root cause is the presence of an illegitimate government regime that has usurped and imposed itself on, meaning they have brought people from other parts of the world, replaced them with people who had existed in the territory and then forced the exit of the old people out, the people who lived there, out of the country or the territories. So there have been two simultaneous displacements. The indigenous people were forced out and displaced, and a group of other people scattered around the globe were gathered and placed in a new place ... A second reason is that none of those peace plans offered so far have given attention to the right to self-determination of the Palestinians. If a group of people are forced out of their country, that doesn't mean their rights are gone, even with the passage of 60 years. Can you ignore the rights of those displaced? How is it possible for people to arrive from far-off lands and have the right to self-determination, whereas the indigenous people of the territory are denied that right?

Much as I loathe his regime, Ahmadinejad is basically right. The key to peace in the Middle East is concessions from the occupying power. As the stronger, wealthier and conquering partner, Israel should take the initiative and help kick-start the peace process by withdrawing unilaterally and totally from the territories it has occupied illegally (according to international law) since the 1967 war. This means pulling out from all of the West Bank and dismantling all the illegal Israeli settlements.

The West Bank, plus Gaza, should become the independent, sovereign state of Palestine, backed with international aid and investment to create the infrastructure for economic development and for social provision (new houses, schools, hospitals, transport links and sports facilities).

Jobs and prosperity in Palestine will undercut and isolate the men of violence. They will lose support and become marginalised in a self-governing state where ordinary Palestinians experience the tangible benefits of peace.

This is so damn obvious. When will Israel's leaders wake up and realise that peace with justice is the only way to give their people lasting security?