Israeli PM in guarded call on Palestine; STATEHOOD.
But Binyamin Netanyahu said he would only back it if the new nation had no military capability and recognised Israel as a Jewish state.
And he appeared to draw the line at meeting US President Obama's demand to end Jewish expansion in the occupied territories.
Mr Netanyahu said: "There is a need to allow settlers to lead normal lives" - a statement taken to endorse expansion of existing settlements.
But a spokesman for Palestinian President Mahmoud Abbas called on President Obama to intervene to force Israel to abide by previous interim agreements, including freezing Israeli settlement activity in the West Bank.