US President Donald Trump halted Washington's quest for a two-state solution to the Israeli-Palestinian conflict Wednesday, saying he would back a single state if it led to peace.

The new president warmly welcomed Israel's Prime Minister Benjamin Netanyahu to the White House and hailed the “unbreakable” bond between their countries.

And — while he urged Netanyahu to “hold back” from building Jewish settlements for a “little bit” — Trump broke with the international consensus insisting on two states.

“So I'm looking at two state and one state, and I like the one that both parties like. I'm very happy with the one that both parties like. I can live with either one,” he said.

“I thought for a while the two-state looked like it may be the easier of the two but, honestly, if Israel and the Palestinians are happy, I am happy with the one they like the best.”

If this change in the US stance was calculated to please Netanyahu and his right-wing coalition, Trump's views on the shortcomings of the Palestinian position will delight them.

“I think the Palestinians have to get rid of some of that hate that they're taught from a very young age,” he said, echoing Netanyahu's argument that Palestinians are not ready for peace.

“They're taught tremendous hate. I have seen what they're taught... it starts in the school room, and they have to acknowledge Israel.”

Netanyahu had warm words for the US alliance, and hammered home his own prerequisites for peace.

“First, the Palestinians must recognise the Jewish state. They have to stop calling for Israel's destruction,” he said.

“Second, in any peace agreement, Israel must retain the overriding security control over the entire area west of the Jordan River,” he added.

This area contains the entire West Bank area that would represent the heart of any Palestinian state as conceived in all previous international agreements.

The change in the US stance, which was trailed overnight by a US official, triggered Palestinian despair and consternation in international capitals.

The second ranking official in the Palestine Liberation Organisation, Saeb Erekat, denounced it as an attempt to “bury the two state solution and eliminate the state of Palestine.” And he warned that any single state that emerged would lose Israel's Jewish character.

“There's only one alternative,” he told a news conference. “A single democratic state that guarantees the rights of all: Jews, Muslims and Christians.”

Victory cry

The new US message deliberately echoed the long-standing Israeli position: No peace deal can be imposed from outside and the agenda for talks must reflect the reality on the ground.

Naftali Bennett, the right-wing leader of the hardliner Jewish Home party and an opponent of any Palestinian state cried victory.

“A new era. New ideas. No need for third Palestinian state beyond Jordan and Gaza. Big day for Israelis and reasonable Arabs. Congrats,” he tweeted.

But Trump's decision flew in the face of an international consensus that any final status agreement must be based on a return to Israel's 1967 border — albeit with land swaps.

Just five days before Trump's January 20 inauguration, Barack Obama's outgoing US administration was among 70 countries to endorse this vision at a peace conference in Paris.

And just a month before that, Obama's ambassador to the United Nations broke with longstanding US policy to allow a UN motion that criticised Israeli settlement building.

Addressing a US-Israeli conference in December, the then secretary of state John Kerry called settlements a “barrier” to progress.

Under Trump, that vision appears dead, and Washington has aligned itself with Netanyahu's government and its supporters in the right-wing settler movement.

Speaking in Cairo after talks with Egypt's President Abdel Fattah al-Sisi, UN chief Antonio Guterres warned that “everything must be done” to preserve the two-state solution.

France, which organised the January peace conference, was also unimpressed. Its ambassador to the UN, Francois Delattre told reporters “our commitment to the two-state solution is stronger than ever.”

Trump has tapped son-in-law Jared Kushner and lawyer Jason Greenblatt to lead peace efforts. Kushner had dinner with Netanyahu — a long time family friend — and US Secretary of State Rex Tillerson on Tuesday night.