Obama with Netanyahu - Reuters - May 20, 2011
U.S. President Barack Obama with Prime Minister Benjamin Netanyahu in the Oval Office in Washington, May 20, 2011. Photo by Reuters
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Middle East envoy Tony Blair says United States President Barack Obama launched his peace initiative because he's concerned about what might happen to Israel if Palestinians unilaterally declare statehood.

Blair told an audience of business leaders gathered in central London on Thursday that Obama is "frankly worried about the position that Israel is in."

The ex-prime minister says that Obama's initiative, which he outline last week in a Middle East policy speech, is an "an attempt to fill a vacuum which he sees as dangerous, particularly dangerous for Israel in the run-up to September."

Mideast watchers have speculated that Washington launched its peace initiative to head off a potentially damaging vote on Palestinian statehood at the United Nations general assembly in September.

Palestinians have been open in declaring their intention to take the issue to the UN, and the effects of their diplomatic campaign have led to several countries announcing their recognition of an independent Palestinian state.

In his speech, Obama said a future Palestinian state must be based in territories captured by Israel in the 1967 Mideast war, with minor adjustments reached through negotiations.

Prime Minister Benjamin Netanyahu rejected the idea of 1967 borders, calling them "indefensible."