Former President Jimmy Carter said Tuesday that he urged Hamas leaders during a high-profile meeting here to take steps necessary to become accepted by the leading Western nations. Carter is the most prominent American figure to have met with the Hamas government that took over Gaza two years ago, after the Palestinian Authority's forces were routed in a brief but bloody factional war. Hamas welcomed Carter's visit as a significant step in its quest for international legitimacy. Ismail Haniya, the leader of the Hamas government in Gaza, and Carter held a joint news conference at which an American flag was displayed alongside a Palestinian national flag behind the speakers. There were no green Hamas flags in sight. It was Haniya's most public appearance since Israel ended its devastating three-week military campaign against Hamas in Gaza in January, an offensive that Israel said was intended to halt rocket fire by Gaza militants against southern Israel. Striking a conciliatory tone, Haniya said Hamas would favor the creation of a Palestinian state within the 1967 borders and with full sovereignty, adding, 'We are pushing for the realization of this Palestinian national dream.' Haniya also said that Carter's visit to Gaza was particularly important after two years of economic 'siege' and after the 'Israeli aggression.' He noted that it followed the change in the American administration and President Barack Obama's address in Cairo, Egypt, in which Haniya said he had heard a 'different language.' Israel and Hamas declared separate, informal cease-fires after last winter's war, but Israel continues to impose a punishing economic blockade that allows in only basic provisions for the 1.5 million residents of the isolated coastal strip. Israel, the United States and the European Union classify Hamas as a terrorist organization. They have set three conditions for dealing with Hamas, saying it must renounce all violence, recognize Israel's right to exist and accept all previous Israeli-Palestinian agreements. Hamas has so far refused to comply. Hamas leaders have said they will never recognize Israel, and will offer only a long-term truce, not a full-fledged peace treaty, in return for a Palestinian state. Carter, 84, emphasized that he was in Gaza as a private citizen, not as a representative of his government. But he said he would write a report on his visit to the region for the Obama administration on his return. In a three-hour meeting with Hamas government officials and senior representatives of the group, Carter told them to find a mechanism that would allow Hamas to meet the conditions set by international players, according to Ahmed Yousef, the Hamas deputy foreign minister who attended the meeting. In a brief interview before the meeting, Carter said that in order to break the Israeli-Palestinian stalemate, 'first of all Hamas has to be accepted by the international community as a legitimate player in the future, and that is what I am trying to do today.' Carter also called for Palestinian unity and elections, and for an end to the economic blockade of Gaza. Earlier, touring the site of the American International School, a private institution in Gaza that was bombed by the Israelis during the war, Carter said, 'I have to hold back tears when I see the deliberate destruction that has been wreaked against your people.' He added that he felt partly responsible because the school had been 'deliberately destroyed by bombs from F-16s made in my country.' Israel said that rockets had been launched from the vicinity of the school. Speaking at a graduation ceremony for Gazan children who had completed a human rights curriculum at the headquarters of the U.N. Relief and Works Agency, which aids Palestinian refugees, Carter denounced the economic embargo. 'Tragically, the international community largely ignores the cries for help, while the citizens of Gaza are treated more like animals than human beings,' he said. Under international pressure, the new Israeli government says it is reviewing its policy and considering allowing more goods into Gaza, but has not yet made any decisions. Carter, who also met leaders in Syria; the West Bank, controlled by the Palestinian Authority; and Israel during his regional tour over several days, handed the Hamas leaders in Gaza a letter from the family of Cpl. Gilad Shalit, an Israeli soldier who was seized and taken into Gaza in June 2006. Carter asked his hosts to pass the letter on to the soldier, presumed to be alive. Haniya said Hamas was hoping to negotiate an 'honorable deal' in the form of a prisoner exchange. An Israeli government official declined to comment on whether Carter could play a mediating role in such negotiations, saying the government does not speak publicly about the Shalit affair. Carter, who brokered the 1979 peace treaty between Egypt and Israel, has fallen out of favor with many Israelis, who see him as hostile to their interests -- especially since the publication of his book 'Palestine Peace Not Apartheid' in 2006. But during this visit he met with the Israeli president, Shimon Peres, and with the speaker and members of parliament. He also visited a Jewish settlement in the Gush Etzion settlement bloc in the West Bank. In a related development on Tuesday, two Israeli advocacy groups for Palestinians, HaMoked and Gisha, revealed a new Israeli procedure that makes it impossible for Gaza residents to move to the West Bank in all but the most exceptional of cases. For example, the groups said, under the policy, chronically ill patients, orphans and elderly invalids will not be able to receive care from their closest relatives living the West Bank if they have any relatives in Gaza capable of caring for them. In a paper presented to Israel's Supreme Court in reply to several petitions against the policy, the Israeli Ministry of Defense contended that it was necessary given the current security and political situation in Gaza. The advocacy groups said the policy served to further isolate Gaza while increasing the geographic and political separation between Gaza and the West Bank. 