Tutu, visiting the atom-bombed Japanese city of Hiroshima for a symposium of Nobel laureates, said that killing would-be suicide bombers was a short-term strategy.
"The reprisal against the suicide bomber does not bring peace. There is a suicide bomber, a reprisal and then a counter-reprisal. And it just goes on and on," Tutu said.
The 75-year-old Anglican leader led South Africa's Truth and Reconciliation Commission under which perpetrators of atrocities during the racist apartheid regime admitted their deeds in exchange for forgiveness.
Critics "said just wait until a black-led government is in power and you will see such an awful orgy of violence. It did not happen," Tutu said.
"Go to Northern Ireland where the 'eye-for-an-eye' principle works. Has it brought peace? No. Or look at the Middle East," he said.
He said that while he was idealistic, he was convinced reconciliation could happen anywhere.
"We believe in the possibilities of the future. We believe that enemies can become friends. If it can happen in South Africa, it can happen there and there is no way it can't happen everywhere and anywhere in the world."
"That is the only way we will prosper -- together. What are the chances of it happening? If it happens once, it can happen twice, it can happen three times."
Tutu warned against linking Islam to terrorism.
"There are terrorists in Ireland. But are they called Christian terrorists? No, they are called the IRA," he said, referring to the Irish Republican Army in British-ruled Northern Ireland.
"The people who bombed Oklahoma City, they were Christians. But we didn't say Christianity produces these creatures," he said. "There are good Christians and bad Christians and there are good Muslims and bad Muslims."

Copyright AFP (Agence France-Presse), 2006