Palestinian president Mahmud Abbas was among the mourners at the city’s Mount Herzl national cemetery and was seated in the front row, reportedly at the request of Peres’s family.
Abbas knew Peres well and negotiated with him. In an extremely rare move, he shook hands and spoke briefly with Israeli Prime Minister Benjamin Netanyahu upon arrival.
Security forces were on high alert, with roads closed and thousands of officers deployed.
Some 70 countries were represented, with the range of leaders illustrating the respect Peres gained over the years in his transformation from hawk to committed peace advocate.
“In many ways he reminded me of some other giants of the 20th century that I had the honour to meet: men like Nelson Mandela, women like Her Majesty Queen Elizabeth,” said Obama, who wore a black Jewish skullcap.
Peres’s death on Wednesday at the age of 93 drew tributes from around the world for Israel’s last remaining founding father.
An estimated 50,000 people filed past his coffin as it lay in state outside parliament in Jerusalem throughout the day on Thursday.
Former U.S. president Bill Clinton was among those who paid their last respects there, appearing moved as he stood in silence before the coffin.
Clinton had helped usher in the Oslo peace accords between Israel and the Palestinians in the 1990s, which resulted in the Nobel prize for Peres.
He also spoke at the funeral, giving a warm eulogy in which he said Peres’s “critics often claimed he was a naive, overly optimistic dreamer. They were only wrong about the naive part.”
Netanyahu, in his eulogy, called Peres a “great man of the world.”
The two men had been political rivals, and Netanyahu recalled a late-night discussion on Israel’s future with Peres in which they discussed security and peace.
“There will be peace, Shimon, dear man, exceptional leader,” he said. “I tell you that from the bottom of my heart.”
Obama, who has had a testy personal relationship with Netanyahu, however made a point of mentioning Abbas at the start of his eulogy and said his “presence here is a gesture and a reminder of the unfinished business of peace.”
The funeral took place under a white canopy in the leafy national cemetery, where many Israeli dignitaries are buried.
Around 8,000 police were deployed for the commemorations. Preventative arrests of both Jews and Palestinians were made ahead of the funeral to avoid potential disruptions, police said.
The last time such an event was held in Israel was the 1995 funeral for Yitzhak Rabin, Peres’s rival in the Labour party but partner in negotiating the Oslo accords.
Eulogies were completed before midday and Peres’s coffin was lowered into his grave next to Rabin, who was assassinated in 1995 by a Jewish extremist opposed to the accords.