Netanyahu bends on statehood but not settlements

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By Ori Lewis
RAMAT GAN, Israel (Reuters) - Israeli Prime Minister Benjamin Netanyahu accepted on Sunday the U.S.-backed goal of a Palestinian state but balked at meeting President Barack Obama's demand to stop Jewish settlement expansion.
Netanyahu's reversal on statehood appeared to be a bid to end the worst rift in U.S.-Israeli relations in a decade. But further friction appeared likely over his refusal to budge on settlements.
Netanyahu said he would support the establishment of a Palestinian state -- but only if Israel received in advance international guarantees the new nation would have no military and Palestinians recognized Israel as a Jewish state.
A spokesman for Palestinian President Mahmoud Abbas said Netanyahu had not gone far enough. Palestinians have long resisted calls to declare that Israel is a Jewish state.
"If we receive this guarantee for demilitarization and the security arrangements required by Israel, and if the Palestinians recognize Israel as the nation of the Jewish people, we will be prepared for a true peace agreement (and) to reach a solution of a demilitarized Palestinian state alongside the Jewish state," Netanyahu said.
SETTLEMENTS
But he stood by his refusal to declare a complete settlement freeze sought by Washington under a 2003 peace "road map."
"We have no intention to build new settlements and to expropriate land for new settlements," Netanyahu said at Bar-Ilan University near Tel Aviv.
"But there is a need to allow settlers to lead normal lives, to allow mothers and fathers to raise their children like all families around the world," he said, alluding to the concept of "natural growth" or construction within existing settlements.
Obama, in a speech on June 4 aimed at repairing U.S. relations with Muslims, said such building must stop.
In his address, Netanyahu, leader of right-leaning coalition, reiterated his readiness to meet Arab leaders and urged Palestinians to resume peace talks.
But on the thorny issue of Palestinian refugees, Netanyahu repeated long-standing Israeli policy by saying they could not return to areas in Israel from which they fled or were forced to flee during a 1948 war that led to its creation.
Israel says such an influx would erase the country's Jewish identity.
It was not immediately clear whether Abbas would accept Netanyahu's call to resume talks.
Abbas has said talks with Israel could not be renewed until Netanyahu accepted the goal of a two-state solution and halted settlements. A settlement freeze could fracture the governing coalition that came to power in Israel last March.
(Writing by Jeffrey Heller, Editing by Adam Entous)

Source: Reuters