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Two days after the US vetoed a Palestinian-sponsored resolution in the UN Security Council condemning the settlements as illegal, ABC on Sunday aired an interview of Secretary of State Hillary Clinton reiterating Washington’s position that settlements are “illegitimate,” while Prime Minister Binyamin Netanyahu hinted that Israel would come up with its own diplomatic initiative.Netanyahu, speaking to Likud ministers before the weekly cabinet meeting, told Education Minister Gideon Sa’ar he was “correct” in saying that despite the failure of the Palestinians to push the resolution through the Security Council, their attempt to “internationalize” the conflict would continue and Israel needed to take the “offensive.”“I agree with that,” Netanyahu said. “We are in the middle of a battle and need to prepare for a very difficult period in the diplomatic realm. This is not something that will come off the agenda. This is something serious that will happen again, and we need to take action on this matter.”Both US and EU officials have been telling their Israeli counterparts in recent weeks that Israel needs to come up with some kind of diplomatic plan to fill the vacuum in the diplomatic process.One such plan, calling for a Palestinians state in provisional borders, has reportedly been drawn up by Foreign Minister Avigdor Lieberman, with the hope being that such a plan would take some of the international heat off of Israel, and place it on the Palestinians, who would be forced to respond to something concrete.Clinton, meanwhile, said in the interview taped just before the US cast its veto, but only aired on Sunday, that “it’s been American policy for many years that settlements were illegitimate and it is the continuing goal and highest priority of the Obama administration to keep working toward a twostate solution with both Israelis and Palestinians.”Netanyahu told the Likud ministers that there was direct and continuous contact between the Prime Minister’s Office and Clinton both before and after the Security Council vote. Channel 2 reported that the US, concerned about how the veto would be perceived in the Arab world, asked Israel to maintain a low profile after the veto, and not give the US a “bear hug.”At Sunday’s cabinet meeting, Netanyahu sufficed with telling the ministers that Israel “deeply appreciates” the US decision to veto the resolution, and that Jerusalem “remains committed to advancing peace both with our neighbors in the region and with the Palestinians.“I believe that the US decision makes it clear that the only way to peace is direct negotiations, and not through the actions of international bodies, which are designed to bypass direct negotiations,” he said.Netanyahu added that recent unrest in the region just highlights the fact that the “security component” will be the most important thing in any future negotiations. Because Israel’s security needs will grow, he said, “the defense budget must grow accordingly” – something that necessitates strengthening and stabilizing the economy.