Israel has maintained its air and sea blockade for weeks |
Mr Annan has made clear that he intends to press for an end to the blockade throughout his 24-hour visit to Israel.
He flew to Tel Aviv by helicopter after witnessing the scenes of devastation in south Lebanon wrought during a month of fighting between Israel and Hezbollah.
Mr Annan's regional tour is aimed at bolstering the two-week-old truce.
Before leaving Lebanon, Mr Annan described the embargo as "a humiliation and an infringement on [Lebanese] their sovereignty".
The issue was among the key points raised at his meeting with Mr Peretz, his first with a senior politician after arriving in Israel.
Mr Peretz did not specify what conditions would have to be in place before Israel lifted the blockade, but the government has previously made clear its concerns about the possible rearming of Hezbollah would have to be addressed first.
Embattled leaders
Mr Annan will have talks on Wednesday with embattled Prime Minister Ehud Olmert, who - along with Mr Peretz - has been heavily criticised over the way the military action was conducted.
He also held a meeting on Tuesday with the families of the two soldiers whose capture sparked the crisis.
Mr Annan has urged Hezbollah to free the men speedily.
The BBC's Matthew Price in Jerusalem says that it is highly unusual to see the UN chief in Israel - with several Security Council resolutions outstanding against it - and many Israelis view the organisation with suspicion.
But put simply, Israel currently needs the UN, he says.
Mr Olmert's only hope of regaining public support is a secure northern border - and that can only happen through the UN force, our correspondent says.
Before leaving Lebanon for Israel, Mr Annan met Lebanese leaders to discuss the force, which is to be expanded from 2,000 to 15,000.
He later flew by helicopter from Beirut to the UN peacekeepers' headquarters in the southern port of Naqoura, in an area still occupied by Israeli troops and tanks.
There he reviewed an honour guard of UN troops on the lawn of the white-walled UN compound.
After about two-and-a-half hours, Mr Annan set off on an airborne tour of some of the areas in southern Lebanon most heavily bombarded by Israel during the 34-day conflict.
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