President Donald Trump is trying to look at all the possibilities when talking about a peace deal between Israel and Palestine, a former Israeli ambassador to the United States told CNBC on Wednesday.

In a meeting with Israeli Prime Minister Benjamin Netanyahu on Wednesday, Trump avoided any explicit endorsement of a two-state solution to the Israeli-Palestinian conflict.

"What Trump is trying to do is offer a fresh look. I think as a negotiator, as a deal-maker he wants not to pre-empt himself and look at all the contingencies and all the possibilities," Daniel Ayalon said in an interview with "Power Lunch."

In fact, he doesn't think a two-state solution is off the table.

"If you read between the lines, it's not dead. But it is only one option among many options," he pointed out.