After Obama speech, Israel rejects return to 1967 borders

The Israeli leader's statement suggests that talks could become intense when Netanyahu meets Obama at the White House on Friday. 

In a major speech on the Middle East, Obama said that moving forward based on the 1967 borders could help kick-start stalled peace talks between the Israelis and Palestinians. 

Obama did qualify his statement by saying that final borders should also be the result of "mutually agreed swaps, so that secure and recognized borders are established for both states." But that did not appear to assuage Netanyahu, who has often found himself at odds with Obama over the peace negotiations. 

Netanyahu's previous visits to the U.S. have been contentious, in part because Israel was angered when Obama in 2009 called for a halt to Israeli settlement construction as a precondition for resuming peace negotiations. 

Obama said that final status issues (like the future of Palestinian refugees), are important but that they should not be a roadblock to starting talks. The Israeli leader said that final status issues will ultimately determine whether both parties can reach a peace deal.

"Those commitments also ensure Israel’s well-being as a Jewish state by making clear that Palestinian refugees will settle in a future Palestinian state rather than in Israel," he said. "Without a solution to the Palestinian refugee problem outside the borders of Israel, no territorial concession will bring peace."

Netanyahu's office reiterated its stance that Israel should maintain a military presence along the Jordan River as part of a peace agreement, even though that could position Israeli forces in an area desired by Palestinians.

Netanyahu claims that the forces are necessary to protect Israel against external security threats.

The prime minister also expressed concern about a pending unity agreement between Fatah, the political party that controls the West Bank, and Hamas, which controls the Gaza Strip but is considered a terrorist organization by  the United States.