Palestinians have rejected the Israeli prime minister's conditions for a two-state solution, saying he has "paralysed" the peace process.
Israeli Prime Minister Benjamin Netanyahu, in a major policy speech, accepted the creation of a Palestinian state but only if it was demilitarised.
Palestinian leader Mahmoud Abbas's spokesman said his comments challenged Palestinian, Arab and US positions.
But the US said Mr Netanyahu's stance was an "important step forward".
In a landmark speech, weeks after US President Barack Obama urged him to agree a two-state plan, Mr Netanyahu said the Palestinians must accept Israel as a Jewish state.
He said a Palestinian state must have no army, no control of its air space and no way of smuggling in weapons.
Israeli Prime Minister Benjamin Netanyahu, in a major policy speech, accepted the creation of a Palestinian state but only if it was demilitarised.
Palestinian leader Mahmoud Abbas's spokesman said his comments challenged Palestinian, Arab and US positions.
But the US said Mr Netanyahu's stance was an "important step forward".
In a landmark speech, weeks after US President Barack Obama urged him to agree a two-state plan, Mr Netanyahu said the Palestinians must accept Israel as a Jewish state.
He said a Palestinian state must have no army, no control of its air space and no way of smuggling in weapons.
His speech provoked anger among Palestinian officials.
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