US President Donald Trump has suggested he is open to the idea of a one-state, rather than two-state, solution to the intractable Israeli-Palestinian conflict.

Asked in a media conference with Israeli Prime Minister Benjamin Netanyahu on Wednesday whether the US would continue its policy of support for the creation of a Palestinian state alongside Israel, Mr Trump said: “I’m looking at two-state and at one-state, and I like the one that both parties like... I can live with either one.”

“I thought the two-state [solution] looked easier for a while,” he added, before reaffirming he would let Israeli and Palestinian negotiators take the lead on the issue.

Netanyahu congratulates Trump

It is a marked change from US policy since Bill Clinton’s tenure which, alongside the UN, EU, Arab League and others, has been to promote the idea of a peace deal involving a Palestinian state.

Speaking alongside Mr Trump, Mr Netanyahu said that rather than deal with “labels” he would like to work on “substance” in making peace with the Palestinians.

Mr Trump also said that both sides would have to be prepared to make “compromises” for a lasting peace deal.

“I would like to see you hold back on settlements for a little bit,” Mr Trump told the prime minister.

The Israeli government recently announced more than 11,000 new settler homes in the West Bank, as well as the retroactive legalisation of 4,000 "outpost"Jewish homes built on private Palestinian land. The bold moves are believed to have been encouraged by Mr Trump's unexpected election victory.

Mr Trump said that there was an “unbreakable bond” between the two countries, calling Israel a “cherished ally”.

He is widely viewed in Israel, and the wider Middle East, as far more sympathetic to Israeli interests, including the contentious issue of settlement building, than his predecessor Barack Obama.

During his campaign, Mr Trump had said the Israeli government should “keep going” with the construction of new settlements. He walked back some of that language last week when he said that new construction “is not good for peace” and “doesn't help the process”.

Mr Trump was also noncommittal about his campaign pledge to move the US embassy from Tel Aviv to Jerusalem – to which he had previously referred as Israel’s “undivided” capital. The city is contested by the two parties, who both claim it as their capital.

During his media conference with Mr Netanyahu, however, Mr Trump did not say whether he would fulfil the promise.

“I’d love to see that happen,” he said of moving the embassy. “We’re looking at that very, very strongly. We're looking at that with great care, and we'll see what happens.”

Current US policy is to recognise the status of Jerusalem in a final peace agreement.

On Tuesday, the eve of Mr Netanyahu's visit, a White House official told reporters that while the new president was keen to broker a peace deal in the conflict, a lasting solution may not be achieved through continuing to pursue the Palestinian dream of a recognised state.

“A two-state solution that doesn’t bring peace is not a goal that anybody wants to achieve. Peace is the goal, whether it comes in the form of a two-state solution, if that’s what the parties want, or something else,” the senior official told reporters on condition of anonymity.

Palestinians have reacted with fear and anger to the suggestion that the US may be ready to break with decades of Middle Eastern peace process policy.

“If the Trump administration rejects [a two-state solution] it would be destroying the chances for peace and undermining American interests, standing and credibility abroad,” Hanan Ashrawi, a senior member of the Palestine Liberation Organisation (PLO), said on Wednesday.

Her colleague Xavier Abu Eid reiterated Ms Ashwari's statement on Thursday, after the President himself said he was open to changes. “If it’s going to be one state, it must be a secular and democratic state for everyone,” he told The Independent.

The Israeli prime minister arrived in Washington DC for a two-day visit on Wednesday, which marks the first meeting between the two men since Mr Trump won the US election last November.

But the two are old friends and Mr Trump's son-in-law Jared Kushner has close links to Israel, a fact which was reiterated during the presser.

The President’s sincerity in wanting to secure peace in the region – demonstrated by the fact Mr Kushner is in charge of brokering a peace deal – has caught some Israeli hard-liners off guard, who assumed that Mr Trump's friendliness would leave the Netanyahu coalition government to its own devices.