Peled most recently served as an adviser to the defense minister and headed a panel on the privatization of defense industries under the Netanyahu government. He was director-general of Rafael, the arms development authority, from 1987 to 1992, when he retired after learning he had cancer.

Peled joined the Haganah in 1941. He was a Golani commander who reached Eilat in the War of Independence.

Despite breaks in his military service during which he helped develop Nahalal, he served in all of Israel's wars, including the 1967 Six-Day War as deputy commander of the division that captured the Golan Heights and part of the West Bank.

In 1973, Peled led a counterattack against the Syrians on the Golan Heights, a psychological breakthrough that signaled the tide of the war was beginning to turn.