Israel says it is willing to immediately begin peace talks with the Palestinians.

Prime Minister Benjamin Netanyahu made this statement following talks with President Barack Obama in Washington. However Mr Netanyahu added as a precondition that the Palestinians must recognise the state of Israel. President Obama stated Washington holds to the formation of a Palestinian state and said Israel must halt the construction of Jewish settlements.

The two leaders also discussed the Iran issue. Mr Obama promised he would check by the end of the year at the latest whether Iran is serious about discussing its nuclear programme. The president said he did not rule out sanctions should Tehran push ahead with its nuclear programme.

Prime Minister Netanyahu feels the US should make haste with taking measures against Iran, which is a declared enemy of Israel. Mr Obama in turn hopes Israeli-Palestinian peace talks will lead to Arab support for a diplomatic offensive against Iran.