Netanyahu 'ready for peace talks'

Mr Netanyahu offered 'economic peace' to Palestinians, not statehood

Israeli PM Benjamin Netanyahu has told Palestinian leader Mahmoud Abbas he intends to resume talks and co-operation to promote peace.

It was their first contact since Mr Netanyahu took office on 31 March.

Mr Abbas initiated the telephone call, which Mr Netanyahu's office described as "friendly and warm".

The new Israeli leader has not publicly endorsed the creation of a fully independent Palestinian state - a fundamental demand of the Palestinians.

An Israeli statement said that during his conversation with Mr Abbas, Mr Netanyahu "recalled their past co-operation and conversations, and how he intended to resume this in the future in order to advance peace".

'Not binding'

Mr Netanyahu leads a right-leaning coalition, which combines the centre-right, centre-left and far-right parties.

During his campaign, he said he was willing to negotiate with the Palestinians but that it was premature to talk of statehood. Instead, he offered Palestinians "economic peace".

Israeli Foreign Minister Avigdor Lieberman, who leads the right-wing Yisrael Beiteinu party, has dismissed past peace initiatives by US administrations.

He has also said the previous Israeli government's acceptance of Palestinian statehood was not binding.

On Saturday, chief Palestinian negotiator Saeb Erekat reiterated his administration's position that that for peace talks to resume, Israel must declare its support for a two-state solution.