Asked in an interview how we will deal with a right-wing government in Israel led by Benyamin Netanyahu, the leader of the right-wing Likud party, Blair said that Israel had to fulfill its obligations.
"We have to work with whoever the Israeli people elect, let's test it out not just assume it won’t work.
"I have discussed the three points [above] and he [Netanyahu] understands we need to take it to a two-state solution."
Blair's trip is the latest in a number of high-level visits to Gaza since Israel ended its offensive in mid-January and comes a day ahead of a donors' conference in Sharm el-Sheikh, Egypt, on how to reconstruct the Palestinian territory.
The visit is Blair's first to Gaza in the 18 months since he became envoy under the Middle East peacebroker "Quartet" of the United States, Russia, the European Union and the United Nations.
Marwan Bishara, Al Jazeera's senior political analyst, said: "Blair is the last key Western leader to come to Gaza because it was his last chance on the eve of the Sharm el-Sheikh summit.
"The problem is that the diplomatic process has been going into a recession. Now it is in total depression - the person who has been giving the most of the false loans and bad credit to the Israelis is Tony Blair. He has been giving Israel credit by which they have built illegal settlements in the West Bank.
"Blair had been the person who said that the question of Palestine had to be resolved in order to solve problems across the [wider] Middle East," he said.
"He was the person most interested in the issue of Palestine - but he was the last leader to show up there."
Blair met Gaza community representatives, but not members of Hamas, Matthew Doyle, his spokesman said.
He visited a UN school in the northern town of Beit Lahiya, where he met local businessmen to discuss reconstruction efforts in the coastal territory, but did not go to the areas hardest hit by Israel during its offensive.
His visit came as Hillary Clinton, the US Secretary of State, arrived in Egypt for the one-day conference on post-conflict recovery in Gaza.
Donors meeting in Sharm el-Sheik on Monday will be asked to fund a $2.8 billion reconstruction plan designed by Salam Fayyad, the Palestinian prime minister, who wants a large part of the money to be channelled through the West Bank-based government.
Other aid, such as for rebuilding homes, would go directly to Gazans' bank accounts.
The Palestinian Authority already administers foreign aid and has been sending $120 million to Gaza each month to cover civil servants' salaries.
Ban Ki-moon, the UN secretary general and Nicholas Sarkozy, the French president, are also expected to attend the meeting.
Hamas, which has not been invited to the conference in Egypt, has prepared its own reconstruction plan.
Fawzi Barhoum, a spokesman for Hamas, said the group in control of Gaza would be co-operative.
"We will provide all the logistical help to the donors to implement this huge project," he said.
"We are not asking anyone to send money into our accounts."
More than 1,300 Palestinians, at least of a third of that number women and children, died during the war on Gaza, which Israel launched with the stated aim of preventing rocket fire from fighters based in the coastal territory.
At least 13 Israelis, three of them civilians, were killed.