Palestinian officials have condemned a major policy speech by Israeli Prime Minister Binyamin Netanyahu, saying it closed the door to permanent status negotiations. During the speech on Sunday, Netanyahu said for the first time he could accept a two-state solution, but only if the new Palestinian state had no army, no control of its airspace and borders, and would recognize Israel as a Jewish state.

Binyamin Netanyahu: “If we receive a guarantee for demilitarization and the security arrangements required by Israel, and if the Palestinians recognize Israel as the nation of the Jewish people, we will be prepared for a true peace agreement (and) to reach a solution of a demilitarized Palestinian state alongside the Jewish state.”

During the speech Netanyahu also said Jerusalem must remain the united capital of Israel and that israel would not concede to US demands for a complete halt to all settlement expansion in the West Bank.

Palestinian negotiator Saeb Erekat: “He is not with a two-state solution. He is not going to stop settlements, including natural growth. So we have attempts to move a peace process, which was moving like a turtle in the region. Now Netanyahu tonight flipped it on its back. So it’s really up to President Obama tonight. He has the choice. He can treat Israel like a country above the laws of man, apply double standards, and this will be a costly road. Or, he can have the Israeli government oblige with its commitments emanating from the road map: the two-state solution with ’67 borders and stopping settlement activities, including natural growth. Tonight, what Netanyahu told us, there will not be permanent status negotiations.”