Prime Minister Benjamin Netanyahu told visiting U.S. envoy George Mitchell on Thursday that his government would condition talks over Palestinian statehood on the Palestinians first recognizing Israel as a Jewish state.

"Israel expects the Palestinians to first recognize Israel as a Jewish state before talking about two states for two peoples," a senior official in Netanyahu's office quoted the new prime minister as telling Mitchell, U.S. President Barack Obama's special envoy to the Middle East.

Another Israeli official said Netanyahu saw Palestinian acceptance of Israel as a Jewish state as "a crucial element in moving forward with the political dialogue".
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The Associated Press quoted an official in Netanyahu's office as saying the prime minister expressed misgivings about creating a Palestinian state in the West Bank because of concern that the militant Hamas group could take it over, as it overran Gaza in 2007.

The official said the experience of Israel's withdrawing from territory only to have it controlled by Palestinian extremists is not going to be repeated.

Netanyahu has yet to unveil his policy on peace efforts but has spoken of shifting the emphasis to stimulating the Palestinian economy instead of supporting the process accepted by the U.S. and Israel up to now ? direct negotiations toward a full peace treaty between two states.

Mitchell had been expected to ask the prime minister during their meeting to clarify Israel's position regarding the resumption of negotiations with the Palestinians and Syria.

In back-to-back meetings with Israeli leaders, Mitchell stressed Obama's commitment to the goal of a two-state solution, "in which a Palestinian state is living in peace alongside the Jewish state of Israel", to end the decades-old conflict.

"That is our objective. That is what we will pursue vigorously in the coming months," Mitchell said.

Meanwhile, a decision has been made in Washington to follow a regional peace plan that will be based on the Arab peace initiative, bolstered by international security guarantees for Israel.

Under this plan, Arab states will proceed with normalization of their ties to Israel in parallel with progress in the negotiations to be held on the Palestinian and Syrian tracks.

A senior administration official told Haaretz several days ago that the U.S. is committed to the rules of the Quartet, which sets the acceptance of a two-state solution as a precondition for talks with a Palestinian unity government that includes Hamas.

The official added that the U.S. expects the Israeli government to adopt the same principle, in line with the commitments made by the previous Israeli government at the Annapolis conference in November 2007.

Palestinian sources said Wednesday that they intend to present clear demands to Israel through the U.S. envoy as preconditions for resuming final status talks with Israel.

In an interview with the daily Al-Ayyam published by the Palestinian Authority, the sources were quoted as saying that PA President Mahmoud Abbas will ask Mitchell to press Israel to recognize the principle of two states for two nations.

Moreover, the Palestinians would like Israel to agree to talk about all aspects of a final settlement that will ultimately result in the establishment of a Palestinian state with Jerusalem as its capital.

According to the report, the Palestinians will also insist on an end to the razing of homes in East Jerusalem and to settlement activity. The Palestinians are also hoping to discuss with Mitchell plans for a visit to the White House by Abbas, which will most likely take place at the end of the month or early next month.