Page last updated at 09:55 GMT, Tuesday, 16 June 2009 10:55 UK

Obama welcomes Netanyahu speech

Israeli Prime Minster Benjamin Netanyahu
The US has pressured Mr Netanyahu to accept a "two-state" solution

US President Barack Obama has welcomed as "positive movement" Israeli PM Benjamin Netanyahu's backing of a demilitarised Palestinian state.

The US leader played down Arab anger over the terms Mr Netanyahu laid out in a major policy speech on Sunday.

But Mr Obama again demanded an end to Israeli settlement activity, over which he and Mr Netanyahu have locked horns.

The Palestinian Authority PM described the speech as "a new blow to efforts to salvage the peace process".

Palestinian and Arab leaders have expressed frustration over Mr Netanyahu's demand that the Palestinians recognise Israel as a Jewish state, which was not included in previous Israeli-Palestinian agreements.

This would rule out any return of Palestinian refugees to Israel, a key issue in peace talks, and also creates Palestinian concern over the status of Israel's one million Israeli-Arab citizens.

Egyptian President Hosni Mubarak said the request "aborts the chance for peace".

If we have guarantees on demilitarisation and if the Palestinians recognise Israel as a state of the Jewish people, then we arrive at a solution based on a demilitarised Palestinian state alongside Israel
Benjamin Netanyhu
Israeli Prime Minister

Until Sunday, Mr Netanyahu had resisted US pressure to overturn his refusal to back the principle of a Palestinian state, a position he had held since coming to office with a right-leaning government earlier this year.

Mr Obama said on Monday the speech raised "at least the possibility that we can restart serious talks", but he admitted Mr Netanyahu outlined "a lot of conditions".

Mr Netanyahu said he wanted to restart negotiations "without preconditions".

But he also said he wanted Jerusalem - where both sides want their capitals - to remain united.

He stressed that a Palestinian state can have no military capability and no control of its airspace, while "natural growth" in Israeli settlements in the occupied West Bank would continue.

The Palestinian Authority wants a total freeze on settlement activity in line with past agreements before it will return to the negotiating table.

Mr Obama said addressing Israel's conditions on security and the Palestinians' conditions on sovereignty was "exactly what negotiations are supposed to be about".

An aide said the US president believed there was "a long way to go" in the peace process, although he was "pleased" with progress so far.

Palestinian Prime Minister Salam Fayyad said Mr Netanyahu had "failed to meet the expectations of the international community", Reuters news agency reported.

In Israel, polls published on Tuesday showed a strong rise in public support for Mr Netanyahu in the wake of the long-anticipated speech.

The prime minister's approval rating had risen from a low of 28% last month to 44%, a poll by the newspaper Haaretz found.

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