Arab states called on "the government of Israel and all Israelis to accept the Arab peace initiative and seize the opportunity to resume the process of direct and serious negotiations on all tracks."
Israeli officials said negotiations were needed as parts of the initiative, notably on the refugees, were unacceptable to them.
"There is no alternative to negotiations," Peres said.
"With a diktat neither the Palestinians, nor the Arabs nor us will achieve a solution."
The Arab League summit in the Saudi capital Riyadh ends on Thursday with Arab leaders reiterating their commitment to the 2002 initiative.
Prince Saud al-Faisal, the Saudi foreign minister, said in an interview with a British newspaper that Israel should not expect any further diplomatic overtures.
"If Israel refuses [the plan], that means it doesn't want peace and it places everything back in the hands of fate.
"They will be putting their future not in the hands of the peacemakers but in the hands of the lords of war."
Israeli troops shot dead a teenager and wounded two other Palestinians in the occupied West Bank on Thursday, local residents said.
The 16-year-old was shot after he threw stones at the Israeli soldiers near the town of Jenin, the residents said.
An Israeli army spokeswoman in Tel Aviv said soldiers on patrol in the area had come under fire and shot an armed man who had been standing on the roof of a house.
In a separate raid, Israeli forces detained an Islamic Jihad militant in the West Bank city of Nablus, residents and the army said.