He was on a trip to Bethlehem which is still torn between Palestine and Israel and currently suffering from a big drop in visitor numbers.
He said it was vital peace was found if people are to start visiting Israel in large numbers again and promised to use his past experience to find a way forward.
"We succeeded in Northern Ireland when we had the leadership, the commitment, the hard work and determination," he said, "And when you've got in the Good Friday agreement a fair agreement that people on both sides could see was fair and then you implemented it."
Because of recent troubles very few visitors to the Holy Land will actually stay in Bethlehem and most will only visit for a few hours accompanied by a tour guide.
According to official figures in 2013, three million people visited Bethlehem but less than half that number actually stayed a night in the city.
Mr Blair, who is an envoy to the Middle East for the UN, the EU, Russia and the US, admitted that fear of trouble was putting people off.
"What is necessary here is that you get a clear agreement of what a Palestinian state should look like, how it is, how it will function and then you've got to implement it," he said.