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spoke at the opening of the Knesset's winter session.

In his speech, the prime minister challenged his Palestinian counterparts to continue the peace talks by saying he would initiate a cabinet proposal to renew a settlement moratorium if the Palestinian Authority would declare its recognition of Israel as a national home for the Jewish people.

"A Palestinian state could be a cause of continued conflict and terror if it is not handled responsibly." The prime minister said.



"Palestinian recognition of Israel as a Jewish state is central to the dispute between us [and is necessary for its resolution]. If the Palestinians expect a national state, we can expect our own national state for the Jewish people."

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Any peace agreement which requires the Palestinians to recognize Israel as a Jewish state or an exchange of land is out of the question, Palestinian Authority President Mahmoud Abbas said Friday.In a Ramallah meeting with Hadash party Knesset members, Abbas said that it was now up to Israel to recognize a Palestinian state with 1967 borders, and that the PA had already recognised Israel back in 1993, thus negating the need for any further acknowledgment.On Monday, Prime Minister Netanyahu