On the question of his former homeland, the exiled spiritual leader of Tibet said that a solution must be found that is acceptable to both China and the people of the province.
Though he noted a growing openness in Beijing to dialogue, the Dalai Lama said that there are still hard-liners who believe that aggression is the answer.
'But they are wrong,' he was quoted as saying by the Hungarian state news agency MTI.
On his seventh visit to Hungary, the 14th Dalai Lama, born Tenzin Gyaco in 1935, also had some advice for the Hungarian people.
'I have heard that you are struggling with economic problems,' he said, before advising Hungarians to work hard and remain optimistic.
Over the previous two days, the Dalai Lama addressed crowds of more than 11,000 in a sold-out Budapest sport arena.
He was named an honorary citizen of the Hungarian capital by Budapest Mayor Gabor Demszky Saturday.
After leaving Hungary Tuesday, he is scheduled to continue his last planned visit to Europe this year with a trip to the German town of Passau.