Israel's prime minister is suggesting a "new model" for peace with the Palestinians that would allow them to govern themselves but maintain Israeli control over security.

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Speaking at a discussion at the World Economic Forum in Davos, Switzerland, on Thursday, Benjamin Netanyahu declined to endorse a "two-state solution" favored by the Palestinians and most of the international community.

PM Netanyahu (Photo: AFP)

Netanyahu said he wanted to avoid labels, but said the Palestinians can have "the whole trappings" of self-governance, while Israel should maintain responsibility for security in the region.

The Palestinians, who already have limited autonomy in parts of the West Bank, are unlikely to accept such a proposal. They seek all of the West Bank, east Jerusalem and Gaza for an independent state.

The Trump administration is expected to present a peace proposal to the sides that could hew closely to Israeli positions. The Palestinians have preemptively rejected any proposal amid concerns it would fall far below their hopes for an independent state.

Netanyahu, though, claimed there was no substitute for the United States to broker a peace deal between the two.

"I think there’s no substitute for the United States. As the honest broker, as a facilitator, there’s no other international body that would do it," Netanyahu asserted, going on to suggest that Trump offered a "refreshing point of view" by threatening to withhold aid money to the Palestinians unless they resume peace negotiations, as he did earlier that day

Netanyahu with Trump at the World Economic Forum in Davos, Switzerland (Photo: Reuters)

In a discussion at the economic summit, Netanyahu said the international community has "pampered" the Palestinians. He said that Trump's position intends to have the Palestinians "enter the room and negotiate peace."

The Palestinians rejected the US as an honest peace facilitator after Trump recognized Jerusalem as Israel's capital last year. They called Trump's remarks on aid money "unacceptable."