Most members of the audience made it clear that they saw him as breaking barriers by holding talks with Hamas.
Hamas, which won the Palestinian parliamentary elections in 2006 and has ruled the Gaza Strip since it seized power there in June, is labeled a terrorist organization by the United States.
But after a three-hour long talk with Hamas officials earlier in the day and photos circulating of the ex-US president being embraced by a Hamas official, Mr. Carter seemed to have whole-hearted support by the mostly Arab audience he spoke to.
Mr. Carter, a Nobel Peace Prize winner who brokered the historic peace agreement between Egypt and Israel three decades ago, strongly defended his reasons for meeting with Hamas.
"I don't think anyone would doubt that in order to have peace in the Holy Land you have to have involved Hamas, which won the election as you know in January 2006," said Jimmy Carter. "Got 44 per cent of the votes, majority of parliament members. They have to be involved in some way in the final peace agreement."
During his visit to Israel early this week all of the country's senior political leaders except for ceremonial President Shimon Peres declined to meet with Mr. Carter.
Israeli officials also rejected Mr. Carter's request to visit the Gaza Strip, which is governed by Hamas but whose border is controlled by Israel.
Mr. Carter's speech late Thursday in Cairo comes just one day after an Israeli air strike killed 21 people in the Gaza Strip.
"My hope is that there will be no more rockets coming out of Gaza and that was my primary request to Hamas leaders and I hope they will comply," said Carter. "And if they do comply my hope is that Israel will not launch any more attacks as they did yesterday within which I think 21 people died. If that conflict can stop then I will be quite pleased. I am not blaming one side or another. But any act, any act by Israelis or Palestinians that causes deaths of innocent civilians in my opinion, in my definition is an act of terrorism."
The former U.S. president explained that he is not a mediator between any two parties nor is he representing the U.S.government during this trip. Despite his unofficial tour of the region, Mr.Carter met with Egyptian President Hosni Mubarak and Egypt's intelligence chief Omar Suleiman. He has planned meetings in Damascus Friday with Syrian President Bashar Al-Assad as well as Hamas' top leader Khaled Meshaal.