|Barack Obama and Binyamin Netanyahu affirmed their countries' "enduring friendship" at the White House [Al Jazeera]
Israel is prepared to make "generous" concessions for peace in the Middle East, but cannot go back to the country's "indefensible" 1967 borders, Israeli prime minister Binyamin Netanyahu said after White House talks with Barack Obama.
Netanyahu's comments came after Obama, the US president, had said the 1967 borders, with mutually agreed land swaps, should form the basis for a peace deal between Israel and the Palestinians, in a major speech on the Middle East on Thursday.
"A peace based on illusions will crash upon the rocks of Middle Eastern reality... I think for peace the Palestinians will have to accept some basic realities," Netanyahu said.
He said that a return to those borders was impossible because the region had seen "demographic changes".
"While Israel is prepared to make generous compromises for peace, it cannot go back to the 1967 borders because these borders are indefensible."
A spokesman for the Palestinian Authority president, Mahmud Abbas, responded to the statements, calling on Obama to further press Israel to accept a Palestinian state based on the 1967 borders.
"Netanyahu's position is an official rejection of Mr Obama's initiative, of international legitimacy and of international law," said Nabil Abu Rudeina.
In statements made after their talks, both Obama and Netanyahu rejected the involvement of Hamas in peace negotiations, following the recent Palestinian unity deal involving the group and Abbas' Fatah faction.
Netanyahu said that Abbas would have to choose between "peace with Israel and his pact with Hamas".
He also called Hamas the "Palestinian version of al-Qaeda".
Obama said, "It is very difficult for Israel to negotiate in a serious way with a party that refuses to acknowledge its right to exist... [Hamas] is not a partner for a significant, realistic peace process."
But Ghazi Hamad, a Hamas spokesperson, responded telling Al Jazeera: "Hamas is not a terrorist organisation."
"We've spent 20 years in negotiations. It is enough. It is enough for the Palestinians... Hamas is fighting for our people, for our homeland, for our liberation, for our dignity, for our independence."
He also said that while a successful peace process remained to be seen: "We cannot give Israel the carte blanch that they have to enjoy the occupation... and to say we have to stop the resistance against the occupation."
Right of return
Israeli settlement expansion continued unabated despite the meeting [Al Jazeera]
Both Obama and Netanyahu spoke about refugees from the region, with Obama calling for a right of return for Palestinians, and Netanyahu largely focusing on Arab countries refusing support for Palestinians.
"Palestinian refugees cannot come to Israel... It's not going to happen," he said.
Reporting from Shatti Beach refugee camp in Gaza, Al Jazeera's Nicole Johnston said, "The statement is not surprising or unexpected for Gazans... A lot of people here have lost hope of returning to what is now Israel, returning to their homes."
She added, "People are very frustrated by the situation, but they're also concerned with their more immediate needs", citing unemployment and difficulty of access of resources.
On Thursday, Obama laid down his clearest markers yet on compromises Israel should make towards peace in his speech on the 'Arab spring'.
Among his statements were support of a two-state solution, that Palestinian territories should be demilitarised, and that borders should be re-drawn as they were before Israel captured the West Bank and other Palestinian land in 1967.
That position was seen as a message that Obama expected Israel to eventually make concessions which they have resisted to date.
A senior Palestine Liberation Organisation official, Yasser Abed Rabbo, said the PLO "favourably welcomes the Obama principles on the 1967 borders".
Quartet supports Obama
Before Obama and Netanyahu made statements, the Quartet of Middle East negotiators - the United States, Russia, the European Union and the United Nations voiced strong support for Obama's criteria for Middle Eastern peace.
"The Quartet agrees that moving forward on the basis of territory and security provides a foundation for Israelis and Palestinians to reach a final resolution of the conflict through serious and substantive negotiations and mutual agreement on all core issues," the group said in a statement.
"The Quartet reiterates its strong appeal to the parties to overcome the current obstacles and resume direct bilateral negotiations without delay or preconditions," the Quartet said.