U.S. President Barack Obama and Prime Minister Benjamin Netanyahu
U.S. President Barack Obama and Prime Minister Benjamin Netanyahu meeting in the U.S. in January 2010. Photo by (GPO)
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Israel and the Palestinians have a chance to surprise the world and strike a peace deal to end decades of conflict, Prime Minister Benjamin Netanyahu said on Sunday.

"We can surprise all the doubters," Netanyahu told ministers at the beginning of the weekly cabinet meeting in Jerusalem.

"But we need a serious partner," he said. "If we have a serious partner, we can achieve an historic agreement."

Netanyahu's comments follow news on Friday that Israel and the Palestinians will return to direct peace talks on September 2 after an 18-month pause, to be hosted in Washington by U.S. President Barack Obama.

Obama will hold separate meetings with Netanyahu, Palestinian President Mahmoud Abbas, as well as the Egyptian and Jordanian heads of state, on September 1, with U.S. Secretary of State Hillary Clinton to launch the renewed negotiations the following day.

Ahead of his trip to Washington, Netanyahu has repeatedly demanded that talks focus on guaranteeing Israel's security before moving on to determine the borders of a future Palestinian state.

"Any deal will have to be based on security arrangements and a recognition of Israel as a Jewish state," Netanyahu said.

Both Clinton and U.S. special envoy George Mitchell said over the weekend that the negotiations will aim to reach a permanent settlement and the establishment of a Palestinian state in a year. They said the negotiations will focus on all core issues: Jerusalem, borders, refugees, security, settlements and water.

Clinton noted that there will be no preconditions - this is considered a major achievement for Netanyahu, who insisted that the direct talks take place unconditionally.

In her announcement over the weekend, Clinton also did not mention the September 26 expiry of the freeze on settlement construction.