Israeli Prime Minister Benjamin Netanyahu Sunday evening declared that he was prepared to see the establishment of a Palestinian state, so long as the international community could guarantee it did not have any military capabilities, Xinhua reported.
Netanyahu made the remarks while he delivered a highly- anticipated foreign policy speech at the Begin-Sadat Center for Strategic Studies at Bar Ilan University.
"Israel can not agree to a Palestinian state unless it gets the guarantee that it is demilitarized," said the Israeli prime minister who took office in late March.
Netanyahu also said that Palestinians must accept Israel as a Jewish state, and cited the root of the regional conflict to "even moderate" Palestinian elements' refusal to do so.
"When Palestinians are ready to recognize Israel as a Jewish state, we will be ready for a true final settlement," he said, emphasizing that the Jewish people have been linked to the land of Israel for over 3,000 years and ruling out the option of granting Palestinians refugees the right to settle within Israeli borders.
The speech at Bar Ilan University came in the wake of the Obama administration's insistence that Israel recognize the two-state solution and impose a complete freeze on West Bank settlement construction.
Netanyahu, who until now had not endorsed U.S. President Barack Obama's goal of Palestinian statehood, used Sunday's policy speech as an opportunity to reverse course and narrow a rare rift between Israel and its closest ally, said local daily Ha'aretz.
Palestinian President Mahmoud Abbas has said peace talks with Israel can not resume until Netanyahu halts settlement and accepts the two-state solution.
During the speech, Netanyahu vowed that Israel would not build any new settlements and would refrain from expanding existing Israeli communities in the West Bank.
However, he said the Israeli government must be allowed to accommodate "natural growth" in these settlements.
Netanyahu also said that Jerusalem must remain the "unified capital of Israel."
Meanwhile, the Israeli prime minister called on the Palestinians to resume Middle East peace talks without preconditions.
"I call on you, our Palestinian neighbors, and to the leadership of the Palestinian Authority (PA): Let us begin peace negotiations immediately, without preconditions," he said, reiterating that Israel has no desire to control the Palestinian people and declaring that both nations should live side by side in peace.
Netanyahu said the leadership of PA must defeat Hamas Islamists who reject interim peace accords.
"They must decide between the way of peace and the way of Hamas, " he said, "the PA must impose law and order... and overcome Hamas. Israel will not negotiate with terrorists trying to destroy it."
Israel is committed to international agreements and expects all the other parties to fulfill their obligations as well, said Netanyahu, adding that he was prepared to meet with the leaders of neighboring Arab countries at any time to promote regional peace and to gain their contribution to the Palestinian economy.
"I turn to Arab leaders: Let's make peace, I am ready," said the Israeli prime minister, "I am willing to go to Damascus, Riyadh, Beirut -- to meet anytime and anywhere."
In his speech, Netanyahu also warned of the threat emanating from Iran, saying that "the biggest threat to Israel, the Middle East and all humanity is the meeting between radical Islamism and nuclear weaponry."