TEL AVIV | Israeli Prime Minister Benjamin Netanyahu partially mended a public rift with President Obama Sunday by backing a Palestinian state, but he set down conditions that Palestinians condemned for closing the door on negotiations toward that goal.
In a speech at Israel’s Bar-Ilan University that was widely viewed as a response to Mr. Obama’s address to the Muslim world a week ago, Mr. Netanyahu went further than any past leader in his hawkish Likud Party in recognizing the need for a Palestinian state.
“The truth is that in the heart of our homeland there is a big Palestinian public. We don’t want to govern them, or to run their lives, or to impose our flag on them,” he said.
Instead, he said, peace would consist of “two free peoples” living as “good neighbors with mutual respect, each with its own flag and national anthem.”
In Washington, White House press secretary Robert Gibbs said that Mr. Obama welcomed the speech as an important step forward.
“The president is committed to two states, a Jewish state of Israel and an independent Palestine, in the historic homeland of both peoples,” Mr. Gibbs said. “He believes this solution can and must ensure both Israel’s security and the fulfillment of the Palestinians’ legitimate aspirations for a viable state.”
Still, in a nod to his hard-line coalition partners, Mr. Netanyahu rejected the Obama administration’s call for an end to building homes for Jewish settlers in the West Bank and in traditionally Arab neighborhoods of East Jerusalem.
He said that construction in existing communities was needed for settlers to live “normal lives.”
Differences over Israel’s commitment to a two-state solution and a settlement freeze have opened up the most serious foreign policy gap with the United States in at least two decades.
Mr. Netanyahu made the speech a day after Iranian President Mahmoud Ahmadinejad was declared the victor in disputed Iranian elections and said the result highlights Tehran’s threat to Israel’s survival.
“The biggest threat to Israel, the Middle East and all humanity is the meeting between extremist Islam and nuclear weapons,” he said, referring to Tehran’s rapidly expanding uranium enrichment capacity that many fear will be used to make nuclear bombs.
The Israeli prime minister spelled out two main conditions for the birth of Palestine: that such a nation be demilitarized and that it recognize Israel as a Jewish state.
Recognition of Israel as the Jewish state would mean that Palestinian refugees from the 1948 Israeli-Arab war and their descendants could not be repatriated to Israel because it would erode the Jewish majority, Mr. Netanyahu said.
He called on the Palestinians to sit down to the negotiating table “without preconditions.”
Palestinian officials said Mr. Netanyahu’s conditions had closed the door for peace talks by ruling out the repatriation of refuges to Israel and by insisting that Jerusalem remain united under Israeli rule.
Palestinian negotiator Saeb Erekat called the speech a “slap in the face” to Mr. Obama’s efforts to restart peace talks.
“His speech was deceitful, and I call on those who listened to this speech not to be deceived,” he said.
“Netanyahu can wait 1,000 years to find one single Palestinian who accepts his plans he mentioned in his speech.”
Itamar Rabinovich, a former Israeli ambassador to the U.S., said, “The speech saved Netanyahu and his government from a head-on dispute at this time with the U.S. and definitely lays the foundation for the return to negotiations.”
Yuli Edelstein, a member of Mr. Netanyahu’s Likud Party who lives in a Jewish settlement in the West Bank, said the prime minister “proved why it was he who was elected to lead the state of Israel.”
He praised the speech for “meeting the expectations of the international community” and for Israel’s need to “ensure its security for generations,” according to the Ha’aretz newspaper.
Yitzhak Herzog, a minister from the dovish Labor Party, called the speech positive. It “lays out a clear path for the political process, which will ultimately lead to the creation of a Palestinian state,” he said.
Settler leader Pinchas Wallerstein praised Mr. Netanyahu’s speech for its “high level of Zionism.”
“No settlement evacuations were mentioned or a freeze,” the Israeli Web site Ynet quoted Mr. Wallerstein as saying.
Ariyeh Eldad, a far-right member of parliament, said Mr. Netanyahu had conceded his leadership of the “nationalist camp.”
“There’s no such animal as a demilitarized state. Netanyahu knows well that there’s no power in the world that can prevent such a state from arming itself,” he said.
Christina Bellantoni contributed to this report in Washington.
• Joshua Mitnick can be reached at 125854@example.com.
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