ISRAELI prime minister Benjamin Netanyahu voiced acceptance of a limited Palestinian "state" for the first time last night, but defied American demands for a settlement freeze in the occupied West Bank.
His stance, revealed in a much-awaited policy speech at Bar Ilan University, prompted criticism from Palestinian leaders and set the stage for a further deterioration in US-Israeli relations.
Mr Netanyahu – who previously refused the two-state so
lution advocated by the international community – said that before agreeing to a Palestinian state, Israel would seek guarantees it be "demilitarised".
He said: "If we get this guarantee for demilitarisation and necessary security arrangements for Israel, and if the Palestinians recognise Israel as the state of the Jewish people, we will be willing in a real peace agreement to reach a solution of a demilitarised Palestinian state alongside the Jewish state."
US president Barack Obama's landmark 4 June address in Cairo staked out a more even-handed American approach to the Israeli-Palestinian conflict, but Mr Netanyahu flatly rebuffed US pressure for a freeze of all Israeli settlement activity in the occupied West Bank.
He said that among the limitations that would be placed on the Palestinian state would be ensuring they cannot bring in rockets and missiles, cannot establish an army and cannot close their airspace to Israel or forge alliances with Iran or Hezbollah.
Mr Netanyahu was blunt in rejecting the Obama administration's call to freeze all settlement activity. "We will enable mothers and fathers to raise their children," he said.
Palestinian Legislative Council member Abdallah Abdallah said Mr Netanyahu "closed the door on negotiation since he decided by himself the fate of Jerusalem, settlements, borders and the right of return".
He added: "This was a disappointment to anyone betting on Netanyahu playing the role of peacemaker."
