This paper deals with a synchronization scheme to achieve a high level of consistency in peer-to-peer based virtual environments (VEs) for shared haptics with large time delays. We mainly focus on the VEs with dynamic objects that show physically realistic behaviors. The synchronization scheme utilizes an advanced feedback controller to compensate for the state error between geographically separated sites. Using feedback control theory of time delay systems, the controller is shown to result in closed loop stability and robust to perturbations in the time delay. The maximum allowable delay is determined using stability analysis, which indicates the allowable bound on the communication delay for the system.