Prime Minister Benjamin Netanyahu will lay out his political stance on peace with the Palestinians in a speech at Bar Ilan University next week. The speech comes as a response to the historic address delivered by US President Barack Obama in Egypt last week, officials close to the prime minister said on Sunday.

"These issues aren't decided over the course of a week, but the prime minister is adamant to make clear to Israelis and to the world that Israel is not against peace, and that it is willing to adopt the principles of Obama's vision while maintaining Israel's security interests," the sources said.

Those close to Netanyahu believe the prime minister will not employ the 'two states for two peoples' terminology which the US administration views as a litmus test. Netanyahu is expected to try and abate the tensions that have arisen opposite Washington over the settlement issue and express Israel's willingness to tackle the illegal outposts in the West Bank.

The components of the prime minister's speech are still under wraps as Netanyahu and his close advisors are playing this one close to the chest. The speech is being prepared alongside increased efforts to work out Netanyahu's final stance on the key issues at hand – the Palestinian conflict, the advancement of regional ties with moderate Arab states, and the possible renewal of talks with Syria.

Discussions on these matters are occupying most of the prime minister's time, and the time of his aides. His top political advisors – Uzi Arad, Yitzhak Molcho and Ron Dermer – have been tasked with working the political content into the speech.

Netanyahu will also meet with coalition partners Avigdor Lieberman, Eli Yishai, and Daniel Hershkowitz to get their input before working on the speech himself.