Uri Avnery was one of the few Israelis to attend Arafat's burial in Ram Allah on Friday.
"Contrary to the demonisation of Yasir Arafat by the Israeli government, we believe that he was the man who wanted to make peace," Avnery, who is a senior member of the Israeli Gush Shalom peace movement, said.
"More importantly he was the man that was able to make peace and what is even more important, he was the man that was able to get his people to accept the peace. In this respect Arafat was unique, and I think we shall long for him," he added.
Arafat was awarded the Nobel Peace Prize in 1994 along with the late Israeli prime minister Yitzhak Rabin and then foreign minister Shimon Peres for agreeing to the Oslo peace accords.
However, current Israeli Prime Minister Ariel Sharon viewed him differently and effectively confined the Palestinian leader to house arrest in his Muqata headquarters for the last three years of his life.
Frequently visited Arafat
Avnery, who was a regular visitor to the compound where Arafat was laid to rest, feared that the new generation of Palestinian leaders would lack the same clout needed to bring about permanent peace.
"I am worried about the future. There are good decent people who are trying to fill a huge vacuum but I am not sure they will be able to get Israel to accept what Arafat laid down."
Leadership responsibilities of key Palestinian institutions, which had all been headed by Arafat, have been divided among his most senior lieutenants.
Former prime minister Mahmud Abbas has become the effective supreme leader after being installed as Palestine Liberation Organisation (PLO) chairman.
While Arafat was shunned by Sharon and US President George Bush, Abbas was a guest of both men during his brief premiership last year.