Netanyahu says he seeks peace with Palestinians

Israel's Prime Minister Benjamin Netanyahu speaks during a session of the Knesset, the Israeli parliament, in Jerusalem July 22, 2009.

HERZLIYA, Israel (Reuters) - Israeli Prime Minister Benjamin Netanyahu said on Thursday he hoped to forge peace with the Palestinians and welcomed Arab overtures as a possible starting point, but offered no details on how it could be done.

The right-wing Israeli leader's comments came shortly before U.S. President Barack Obama's peace envoy, George Mitchell, visits the region for a new push to resume negotiations, stalled for months over controversy about settlement building.

Netanyahu told a reception of diplomats gathered near Tel Aviv to celebrate an Egyptian holiday:

"We hope in the months and years ahead to forge peace with the Palestinians and to expand that into a vision of a broader regional peace."

But there was no word on how he planned to get around the settlement issue.

Nabil Abu Rdainah, an aide to Western-backed Palestinian President Mahmoud Abbas, told Reuters the Palestinians were ready to resume talks "immediately" for a state alongside Israel if Israel met world demands to stop Jewish settlement building.

Netanyahu, who took office in March, has said Israel would accept a demilitarized Palestinian state but, in a policy rift with Washington, has rejected U.S. and Palestinian demands to freeze construction in settlements in occupied territory.

Netanyahu said he "deeply valued" comments by Bahrain's Crown Prince Sheikh Salman bin Hamad al-Khalifa in a July 16 opinion piece printed in the Washington Post, under the title: "Arabs Need to Talk to the Israelis."

"I would like to express my appreciation," Netanyahu said. He quoted the article as saying that "all sides need to take action in good faith if peace is to have a chance."

Alluding also to other Arab plans that call for an Israeli withdrawal from territory captured in 1967 as a condition for peace, a condition Israel has rejected, Netanyahu said:

"If these are not final offers, then I believe that this spirit can help create an atmosphere in which a comprehensive peace is possible."

Some half a million Israelis live in the settlements Israel has built in the West Bank and East Jerusalem, land that is home to 3 million Palestinians. Israel has annexed East Jerusalem as part of its capital, a move not recognized internationally.

Egypt was the first Arab country to sign a peace treaty with Israel in 1979, followed by Jordan in 1994.

(Writing by Allyn Fisher-Ilan; additional reporting by Mohammed Assadi in Ramallah; Editing by Kevin Liffey)