US President Donald Trump said yesterday he would accept any peace settlement between Israel and the Palestinians, including alternatives to the two-state solution, and would like to see Israel "hold back a little bit" on settlements.
Trump spoke during a joint White House news conference with Israeli Prime Minister Benjamin Netanyahu, who is on his first visit with Trump since he became president.
The Israeli parliament last week passed legislation that legalised thousands of settlements in the West Bank, sparking criticism both at home and abroad.
Trump promptly warned Israel that the expansion of settlements "may not be helpful" for the peace process, a shift from his campaign rhetoric, which slammed the Obama administration's stance on settlements.
Asked yesterday about dropping the insistence on a two-state solution, Trump said: "If Israel and the Palestinians are happy, I'm happy."
Such a move would signal a dramatic shift in the longstanding policy of the United States, as well as the UN and European Union.
The two-state solution, which would see separate Israeli and Palestinian states alongside one another has long been accepted as the best way to finding peace. But a White House official on Tuesday said a peace agreement between Israel and the Palestinians does not necessarily mean a two-state solution.
Palestine Liberation Organisation official Wasel Abu Yousef criticized the statement as an attempt to "deny the Palestinian rights by by-passing what could bring stability and security to the region".
Abu Yousef told dpa it would only further agitate the region because it scraps the possibility of establishing a Palestinian state.
Trump said at the news conference he was optimistic about ending the long-running conflict by reaching a definitive peace deal. Referring to Netanyahu by his nickname Bibi, he said he had known him for a long time.
"He's a smart man, a great negotiator. I think we are going to make a deal," Trump said.
He added that Israel will have to be flexible, which will be hard, but added that he believes Israel "would very much like to make a deal."
The Palestinians, Trump said, "have to get rid of some of that hate that they are taught from a very young age" and must recognise Israel.
Trump also said he favoured having the US embassy in Jerusalem, which both the Jewish state and Palestinians claim as a capital, but has not yet decided the issue.
Netanyahu praised Trump for his calls to confront Iran and for committing to "reverse the rising tide of radical Islam."
After several strained meetings with former US president Barack Obama, Netanyahu was greeted at the White House by a president who has used a noticeably friendlier tone toward Israel.
During his campaign, Trump promised a realignment of US policy toward the Middle East and repeatedly criticised the Iran nuclear deal negotiated under Obama.