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WASHINGTON (Reuters) - Israeli Prime Minister Benjamin Netanyahu said explicitly for the first time on Tuesday he was prepared to give up some settlements for peace, but he laid out familiar demands unlikely to draw the Palestinians back to the negotiating table.
Treated to standing ovations from lawmakers just days after strained talks with President Barack Obama, Netanyahu said he was ready for "painful compromises." But Palestinians swiftly rejected his list of conditions as unacceptable.
The right-wing Israeli leader's speech to Congress capped a turbulent five-day visit to Washington that laid bare his differences with Obama on how to revive the moribund peace process and raised little hope for getting new talks off the ground any time soon.
Though Netanyahu recognized in the clearest terms yet that Israel would have to abandon some Jewish settlements built in the occupied West Bank, he also insisted that others would be annexed under any future agreement.
"I am willing to make painful compromises to achieve this historical peace," he said, echoing a pledge in a speech to Israel's parliament on May 15 in which he hinted at a readiness for territorial compromise but with strings attached.
"Now this is not easy for me. It's not easy because I recognize that in a genuine peace we will be required to give up parts of the ancestral Jewish homeland," he said, referring to the occupied West Bank.
But Netanyahu offered no concrete concessions and instead set strict limits on what Israel would accept.
His frequent standing ovations from the joint meeting of Congress, a bastion of support for Israel, was a pointed message to Obama that pushing Israel too hard could carry political risks as he seeks re-election in 2012.
Netanyahu's speech came after a testy exchange last week with Obama over the contours of a future Palestine and Netanyahu used it to reiterate his demands ahead of any talks.
The conditions Netanyahu laid out included Palestinian recognition of Israel as the homeland of the Jewish people and the scrapping of Western-backed Palestinian President Mahmoud Abbas' unity accord with the Islamist movement Hamas.
But in an explicit recognition of what a peace deal would entail, he said: "In any peace agreement that ends the conflict, some settlements will end up beyond Israel's borders. The precise delineation of those borders must be negotiated."
While Netanyahu was well aware Palestinians were opposed to his terms, he hopes to show the United States and Europe he is serious as Israel seeks to head off a Palestinian bid to win U.N. recognition of statehood in September.
Netanyahu said any "compromise must reflect the dramatic demographic changes that have occurred," referring to Israel's construction of hundreds of settlements on land Palestinians want for a state.
Repeating a message he delivered consistently during his visit, Netanyahu said "Israel will not return to the indefensible boundaries of 1967," narrow lines from before Israel captured the West Bank in a war 44 years ago.
Obama drew Israeli anger when he said on Thursday a Palestinian state in the West Bank and Gaza Strip should largely be drawn along the pre-June 1967 frontiers.
A frosty meeting with Netanyahu followed at the White House on Friday when the Israeli leader, with Obama sitting at his side, rejected those borders.
The White House offered a low-key response to Netanyahu's speech. Ben Rhodes, a deputy national security adviser, said in London that the Israeli leader had "reaffirmed the strength of the U.S.-Israeli relationship" and had "pointed to the importance of peace." Obama is visiting London.
Nabil Abu Rdainah, a spokesman for Abbas, said Netanyahu's vision for ending the conflict put "more obstacles" in front of the Middle East peace process.
"What came in Netanyahu's speech will not lead to peace," Rdainah said in the West Bank city of Ramallah, rejecting Netanyahu's call to hold onto swaths of West Bank land including East Jerusalem, where Palestinians want their capital.
Hani Masry, a Palestinian analyst said Netanyahu "wants the Palestinians to give up everything and get a state of leftovers."
On the other side, settler leaders and members from Netanyahu's own Likud party also voiced their objections, but with no diplomatic breakthrough in sight, his ruling coalition did not seem to be in jeopardy.
Netanyahu's address was greeted warmly by congressional leaders. Some Israelis pointed to that reception as a success while others thought he had not offered enough to break the diplomatic deadlock.
"What he's offering I don't think you would find even the most moderate Palestinians would buy into," David Newman, an Israeli political scientist, said. "He's offering a truncated West Bank. He wants to leave as many settlements as possible."
Additional reporting by Susan Cornwell and John McGowan; Writing by Matt Spetalnick; Editing by Bill Trott and Cynthia Osterman