Miliband, who attended Tuesday's U.S.-sponsored peace conference in Annapolis, Maryland, told lawmakers he was cautiously optimistic about a deal leading toward an independent Palestinian state.
"The conference represents a determined attempt by both sides, and by the United States, to break the cycle of violence and discord," Miliband told lawmakers at the House of Commons. "Its significance comes as much from the attendance list as from its results."
Palestinian President Mahmoud Abbas and Israeli Prime Minister Ehud Olmert agreed to resume long-stalled talks and hold a review conference in Moscow early in 2008. A second meeting on progress will be held in London later next year, Miliband said.
He rejected criticism that the Annapolis talks lacked legitimacy because of the exclusion of Hamas, the militant Palestinian faction which holds power in Gaza.
Abbas represents all Palestinians, Miliband said. But he acknowledged that "the road from Annapolis will be hard."
Britain has promised US$500million (Ђ336million) in economic aid for the Palestinians if security can be improved.