Prime Minister Benjamin Netanyahu has nixed the idea of setting up an inquiry committee into alleged Israeli war crimes in the Gaza Strip as a means of dealing with the Goldstone Commission's report.

That report, submitted to the UN Human Rights Council on Tuesday, accuses both Israel and Hamas of war crimes during their three-week conflict in Gaza in January and recommends that both be referred to the International Criminal Court for prosecution unless they carry out in-house investigations that the UN deems adequate within six months. The council is slated to vote on the matter tomorrow.

Various prominent Israelis have therefore argued that the only way to quash the report is to set up an inquiry commission headed by an internationally respected jurist like former Supreme Court president Aharon Barak.

But Netanyahu, who held two meetings on the subject on Wednesday, believes a more effective way of blocking the report would be to make it clear to the international community that referral to the ICC would sound the death knell of the peace process.

And while Yedioth Ahronoth reported on Wednesday that Defense Minister Ehud Barak favors the inquiry commission route, Barak himself denied the report yesterday. His office confirmed that he has asked Aharon Barak to contribute to the legal battle against the report, but said he opposes an inquiry commission.

Netanyahu also denied the Yedioth report, and his associates said the government has never seriously considered such a commission. The prime minister, they explained, fears that setting up an inquiry commission would imply that the probes now being conducted by the Israel Defense Forces are untrustworthy.

In contrast, Foreign Ministry sources said Israeli representatives overseas have been flooded with messages from friendly governments urging the establishment of an inquiry commission as the best way to block the report.

The defense minister's office said the government will therefore try to find some kind of compromise mechanism, headed by a senior legal figure such as Aharon Barak, that would show the international community Israel has stepped up its efforts to investigate the allegations.

From Israel's perspective, the best decision the Human Rights Council could make is to continue dealing with the matter itself, while the worst would be referral to either the General Assembly or the Security Council, and thence, perhaps, the ICC. Jerusalem and Washington are coordinating closely on diplomatic efforts to achieve the former result, and are currently focusing on trying to win over the European Union, whose member states have yet to reach a consensus on the matter.

In a briefing held Wednesday for ambassadors from the Asia-Pacific region, Netanyahu warned that referral to the ICC would deal a mortal blow to the peace process - as well as to democratic states' ability to fight terror.

The report, he said, undermines the UN itself by gutting the legitimate right of self-defense. And if this approach is authorized against Israel, it will ultimately be used against other nations, too, he warned.

As for the peace process, he said, no nation would agree to take risks for peace, such as ceding territory, if they were afterward denied the right of self-defense against attacks from that territory. Hence anyone who cares about peace must block the Goldstone report, he said.