The first Indian Prime Minister to visit Palestine, Mr Modi was speaking after holding bilateral talks with President Mahmoud Abbas.
In addition, a senior official told the press that Abbas will ask India's visiting prime minister to support a multi-country sponsorship that would replace the United States as the sole mediator in future Israeli-Palestinian negotiations.
Governor Heptulla said it was a historic and momentous occasion as Prime Minister visited Palestine to be honoured with the "Grand Collar", Palestine's highest order given to foreign dignitaries. Since the visits, bilateral investments between UAE and India have witnessed an increase.
The prime minister thanked President Abbas for the recognition.
Abbas expressed hope that India, which he described as a "world power that has a big status and weight", would contribute to achieving peace between the Palestinians and Israel.
Noting that he had earlier visited the mausoleum of Yasser Arafat, Modi hailed him as "one of the greatest leaders in history".
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The Crown Prince also said that the Prime Minister Modi's visit is a firm indication that the two leaders are moving closer towards closer joint cooperation in all fields and stated that this is an important visit that adds to the architecture of friendship and mutual cooperation. Almost a dozen agreements and Memoranda of Understanding (MoU) are expected to be signed between the two countries.
After paying homage to Yasser Arafat at the Mausoleum, the Prime Minister will take a short tour, accompanied by Palestinian Prime Minister Rami Hamdallah, of the Yasser Arafat Museum located adjacent to the Mausoleum. Three agreements in the education sector worth U5 million, one MoU for procurement of equipment and machinery for the National Printing Press and one for construction of a centre for empowering women were signed.
He is the first Indian prime minister to visit both Israel and Palestine.
"We count on India, an worldwide force on a strategic and economic level, to help Palestinians achieve a just peace in our region", Abbas said at the press conference.
The visit, which comes weeks after Modi hosted Israeli Prime Minister Benjamin Netanyahu, is seen as an Indian effort to balance its strengthening ties with the Jewish state.
Abbas again denied that he was refusing to return to the negotiating table with Israel, saying he was prepared to do so on the basis of a multilateral mechanism where several countries would sponsor the peace talks. This time Modi skipped Israel in a clear message that India is de-hyphenating its ties with Israel and Palestine.