Obama and Netanyahu note their 'differences' after Oval Office talk

President Obama on Friday acknowledged he and Israeli Prime Minister Benjamin Netanyahu have “differences” over a path to Middle East peace but expressed optimism that a deal could ultimately be reached.

In a remarkable on-camera joint appearance with Netanyahu, Obama said he and the prime minister had a “prolonged and extremely useful conversation on a wide range of issues.”

“Obviously there are some differences between us in terms of formulations and language, but that's going to happen between friends,” Obama said. “I believe it is possible for us to shape a deal that allows Israel to secure itself…but also allows it to resolve what has obviously been a wrenching issue for both peoples for decades now.”

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The meeting between Obama and Netanyahu — 96 minutes in all — was expected to be tense after the president insisted in a major policy address Thursday that lines drawn before the 1967 Israeli-Arab war be the basis for negotiations over a future Palestinian state, a demand that suggested Israel would give up territory it sees is vital to its security.

The timing of that dramatic announcement seemed meant to set the terms for Netanyahu’s visit to the U.S., as the conservative prime minister is close to Republicans and is set to give an address to Congress on Tuesday after speaking to the American-Israel Public Affairs Committee on Monday.

The two leaders have had a rocky relationship and displayed no warmth toward one another during their public exchange of views.

Netanyahu reiterated his strong opposition to the 1967 borders, saying they would be “indefensible” during a public conversation with Obama notable both for its frankness and because the Israeli prime minister seemed at once to be appealing to Obama directly while speaking to a global audience.

Giving up land Israel won in the 1967 war with several Arab states would hurt his country’s national security, Netanyahu argued to Obama, and would not reflect demographic changes that has seen no settlements emerge in the decades since the war.

Like Obama, Netanyahu expressed hope that Israelis and Palestinians could reach a peace deal but said such a pact must be “genuine” and not based on what he called “illusions.”

“We agree that a peace based on illusions will crash eventually on the rocks of Middle Eastern reality,” he said.

White House press secretary Jay Carney downplayed reports that Netanyahu was angered by Obama’s speech, saying that the Israeli government was informed of its contents beforehand and that Obama did not take a new position with regards to the borders of a Palestinian state.

“I'm not sure that I accept that [Netanyahu] was mad. I think they had an excellent exchange,” Carney told reporters at his daily press briefing.

Carney also disputed the notion that the president’s position is a new one for the U.S.

“I take issue that he moved in any direction on the issue" of territory,” Carney said. “That is a formulation that has been understood by parties to these negotiations … for years.”

But Obama was the first president to explicitly state that a peace deal would be based on the 1967 borders plus land swaps, and they were viewed by people in both countries as at least a subtle shift in U.S. position.

In an interview with the BBC that aired Thursday night, Obama said the 1967 borders would not be the only starting point for the talks.

“The basis for negotiations will involve looking at that 1967 border, recognizing that conditions on the ground have changed and there are going to need to be swaps to accommodate the interests of both sides,” he said.

He also emphasized the guarantees Israel would need for its security.

“This was an equally important part of the speech, Israel is going to have to feel confident about its security on the West Bank and that security element is going to be important to the Israelis,” Obama said.

Obama said Friday that Israel's security remains the “paramount” issue of any peace deal.

Netanyahu underlined the importance of maintaining his country’s security by recounting the history of the Israeli-Palestinian conflict and other hardships endured by the Jewish people.

“I can say that even at the nadir of the valley of death, we've never lost hope and we've never lost our dream of reestablishing a sovereign state in our ancient homeland,” he said with Obama sitting at his side, looking on with concentration. “And now it falls on my shoulders, as the prime minister of Israel…to work with you to fashion a peace that will ensure Israel's security and will not jeopardize its survival.”

Obama’s call for the 1967 borders to serve as a basis for new talks continued to meet criticism on Capitol Hill, where Sen. Orrin Hatch (R-Utah) said Friday he would introduce a resolution of disapproval.

Brinksmanship has characterized the relationship between the two leaders.

In 2009, Obama angered the prime minister by demanding that Israel halt settlement construction as a precondition to resuming peace negotiations with the Palestinians.

In March 2010, the last time Netanyahu visited the White House, the prime minister was not invited to dine with Obama and was refused press coverage of his meeting.

In addition to the border issue, several substantive issues loom over potential negotiations.

Netanyahu on Friday reiterated his desire to position Israeli military forces along the Jordan River, even though that area could be part of a Palestinian state. Another complication is a pending unity government 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.

‘Israel cannot negotiate with a Palestinian government backed by Hamas,” Netanyahu said, calling the group “the Palestinian version of al Qaeda.”

He also brought up the uncertain final status of Palestinian refugees.

Obama reiterated Friday that the Hamas-Fatah unity agreement could pose problems for negotiations.

“It is not a partner for a significant, realistic peace process,” he said of Hamas.

But on Thursday, the president said that concerns about other issues should not preclude the resumption of peace negotiations.

“I’m aware that these steps alone will not resolve the conflict, because two wrenching and emotional issues will remain:  the future of Jerusalem, and the fate of Palestinian refugees,” Obama said. “But moving forward now on the basis of territory and security provides a foundation to resolve those two issues in a way that is just and fair, and that respects the rights and aspirations of both Israelis and Palestinians.”


 -- Sam Youngman and Daniel Strauss contributed to this report.

This story was posted at 2:35 p.m. and updated at 5:22 p.m.