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Netanyahu Defies Obama with Harsh Conditions for Palestinian 'Entity'

Prime minister insists on recognition of Israel • Remarks follow growing US pressure for peace

James Hider in Jerusalem

American left-wing activists protest in front of Israeli police against the construction of Jewish settlements in the West Bank outside the Bar Ilan university in Kiryat Uno, near the coastal city of Tel Aviv. Israeli Prime Minister Benjamin Netanyahu will for the first time endorse the establishment of a demilitarised Palestinian state in a keynote address, a senior aide said on Sunday. (AFP/Jonathan Nackstrand)

Binyamin Netanyahu threw down the gauntlet to the US last night, grudgingly
agreeing to a limited Palestinian state that would be demilitarized and not
in control of its airspace or borders.

The hawkish Prime Minister insisted that Israel would never give up a united
Jerusalem as its capital, and said that established Jewish settlements in
the West Bank would continue to expand - despite explicit objections from

In a keynote speech that referred to a Palestinian "entity" far more
frequently than an actual state, Mr Netanyahu tried to advance elements of
his economic peace plan - whereby the Palestinians would get increased
investment but only limited sovereignty - while still conceding to US
insistence on the creation of an independent Palestinian country.

The right-wing Israeli leader said the moderate Palestinian leadership in the
West Bank must agree to recognize Israel as the homeland of the Jewish
people, as well as fight the Islamic hardliners Hamas, who now control Gaza,
in return for the resumption of peace talks.

"The key condition is that the Palestinians recognize in a clear and public
manner that Israel is the state of the Jewish people," he told dignitaries
in an auditorium at Bar Ilan University in Tel Aviv. "If we have the
guarantees on demilitarization, and if the Palestinians recognize Israel as
a state of the Jewish people, then we arrive at a solution based on a demilitarized Palestinian state alongside Israel," Mr Netanyahu said.

"Each will have its flag, each will have its anthem. The Palestinian territory
will be without arms, will not control airspace, will not be able to have
arms enter."

He said that "effective security safeguards" would have to be in place,
without specifying what they might be. Israeli military officers have long
argued that without an Israeli military presence, the Fatah-controlled West
Bank would quickly fall to the Iranian-backed Hamas, which took control of
Gaza two years ago amid fierce fighting.

Mr Netanyahu said that Hamas rocket-fire from Gaza, attacking Israeli cities
in the south, would quickly reach Tel Aviv and its airport if the Islamist
hardliners came to control the West Bank. "Many a worthy person has told us
that withdrawal is the key to peace between us and the Palestinians. But the
fact is that every withdrawal has been accompanied by rockets and suicide
attacks." He said that the Palestinians had to drop the right of return for
hundreds of thousands of refugees to their homes inside Israel.

Mr Netanyahu has been forced to tread a fine line between placating his
largely nationalist-religious coalition while not flying in the face of
Israel's main ally, the US - which wants a total halt to all settlement
growth and recognition of an independent Palestinian state. He said last
night that he would not agree to US demands for a total freeze on the
expansion of Jewish settlements in the West Bank.

"I do not wish to build new settlements or to confiscate lands to that end,
but we have to allow the residents of the settlements to live normal lives,"
he said.

The much anticipated speech, in part a response to President Obama's address
to the Muslim world in Cairo two weeks ago, was condemned by the Palestinian
Authority in the West Bank. "This speech torpedoes all peace initiatives in
the region," said Nabil Abu Rudeina, a spokesman for Mahmoud Abbas, the
Palestinian President. Yasser Abed Rabbo, a senior Palestinian official,
said that Mr Netanyahu "spoke of a Palestinian state while emptying it of
any substance by excluding a stop to settlements".

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