"France will always be at Israel's side when its existence is thrown into question," Sarkozy said Monday evening at a dinner in Peres' honor at the French presidential palace the Elysee.

"Those who scandalously call for the destruction of Israel will always find France standing in their way," he said.

Sarkzoy repeatedly described himself as "a friend of Israel", and Peres had, a few days before the start of his historic visit, declared that the current state of French-Israeli relations "could not be better".

Peres, a former Israeli Prime Minister and Nobel Peace Prize laureate, called France "a true friend of the Jewish people, since the Holocaust, and an honest and true friend of the state of Israel since its creation."

This move is seen by analysts as a symbol of Sarkozy's efforts to improve the often-turbulent ties during Chirac's tenure and to build closer relations with Israel.

Though Sarkozy lost no opportunity to show his warmth to Peres, he reacted coldly to Israel's recent announcement that it was stepping up settlement in the West Bank and in disputed east Jerusalem.

On Sunday, Israeli Prime Minister Ehud Olmert was reported to have approved an Israeli Housing Ministry's request to build 750 housing units in the West Bank settlement of Givat Ze'ev.

This aroused a chorus of world criticism and warnings that it could block the faltering peace talks.

"Any settlement expansion is contrary to Israel's obligations under the Road Map and to international law," UN Secretary-General Ban Ki-moon expressed his concern in a statement on Monday.

The Bush administration also said the plan does not help the progress of US-backed peace talks.